MANAGEMENT AGREEMENTS ACQUISITION AGREEMENT
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THIS MANAGEMENT AGREEMENTS ACQUISITION AGREEMENT (this "Agreement"),
dated as of January 24, 1997, by and between INTEGRATED LIVING COMMUNITIES OF
REDGATE, INC., a Delaware corporation ("Ghent Arms Buyer"), INTEGRATED LIVING
COMMUNITIES OF VIRGINIA BEACH, INC., a Delaware corporation ("Xxxx'x Xxxxx House
Buyer"), INTEGRATED LIVING COMMUNITIES OF GLOUCESTER, INC., a Delaware
corporation ("Gloucester House Buyer"), INTEGRATED LIVING COMMUNITIES OF
PORTSMOUTH, INC., a Delaware corporation ("Churchland House Buyer" and, together
with Ghent Arms Buyer, Xxxx'x Xxxxx House Buyer and Gloucester House Buyer,
collectively, the "Buyers" and individually, a "Buyer"), on the one hand, and
AMERICAN RETIREMENT HOMES, INC., a Virginia corporation (the "Seller"), on the
other hand.
RECITALS
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WHEREAS, Ghent Arms Buyer, Ghent Arms Limited Partnership, a
Virginia limited partnership ("Ghent Arms"), and Xxxxxxx Corporation, a Virginia
corporation ("Xxxxxxx Corporation"), are parties to that certain Asset Purchase
Agreement dated as of January 24, 1997 (the "Ghent Arms Asset Purchase
Agreement");
WHEREAS, Xxxx'x Xxxxx House Buyer, Retirement Home of Virginia
Beach Limited Partnership, a Virginia limited partnership ("Xxxx'x Xxxxx
House"), and Xxxxxxx Corporation are parties to that certain Asset Purchase
Agreement dated as of January 24, 1997 (the "Xxxx'x Xxxxx House Asset Purchase
Agreement");
WHEREAS, Gloucester House Buyer, Xxxxxxx Corporation as
successor to Retirement Home of Gloucester Limited Partnership, formerly a
Virginia limited partnership, and the Seller are parties to that certain Asset
Purchase Agreement dated as of January 24, 1997 (the "Gloucester House Asset
Purchase Agreement");
WHEREAS, Churchland House Buyer, Retirement Home of Portsmouth
Limited Partnership, a Virginia limited partnership ("Churchland House"), and
Xxxxxxx Corporation are parties to that certain Asset Purchase Agreement dated
as of January 24, 1997 (the "Churchland House Asset Purchase Agreement" and,
together with the Ghent Arms Asset Purchase Agreement, the Xxxx'x Xxxxx House
Asset Purchase Agreement and the Gloucester House Asset Purchase Agreement,
collectively, the "Asset Purchase Agreements" and individually, an "Asset
Purchase Agreement");
WHEREAS, in connection with the transactions contemplated by
the Asset Purchase Agreements, the Seller desires to convey to the Buyers, and
the Buyers desire to acquire from the Seller, on the terms and for the
consideration hereinafter provided, all of the Seller's right, title and
interest in and to each of: (i) the Management Agreement, dated December 30,
1987 (the "Ghent Arms Management Agreement"), between the Seller and Ghent Arms,
pursuant to which the Seller has provided operational, management, consulting
and advisory services (collectively, "Management Services") to Ghent Arms in
connection with the operation of the Facility (as defined in
the Ghent Arms Asset Purchase Agreement); (ii) the Management Agreement, dated
April 1, 1987 (the "Xxxx'x Xxxxx House Management Agreement"), between the
Seller and Xxxx'x Xxxxx House, pursuant to which the Seller has provided
Management Services to Xxxx'x Xxxxx House in connection with the operation of
the Facility (as defined in the Xxxx'x Xxxxx House Asset Purchase Agreement);
(iii) the Management Agreement, dated October 1, 1994 (the "Gloucester House
Management Agreement"), between the Seller and Gloucester House, pursuant to
which the Seller has provided Management Services to Gloucester House in
connection with the operation of the Facility (as defined in the Gloucester
House Asset Purchase Agreement); and (iv) the Management Agreement, dated June
4, 1987 (the "Churchland House Management Agreement" and, together with the
Ghent Arms Management Agreement, the Xxxx'x Xxxxx House Management Agreement and
the Gloucester House Management Agreement, collectively, the "Management
Agreements" and, individually, a "Management Agreement"), between the Seller and
Gloucester House, pursuant to which the Seller has provided Management Services
to Churchland House in connection with the operation of the Facility (as defined
in the Churchland House Asset Purchase Agreement); and
WHEREAS, it is a condition precedent to the obligations of the
Buyers, on the one hand, and the Seller, on the other hand, under the respective
Asset Purchase Agreement and the Unification Agreement (as hereinafter defined),
that each other party, respectively, execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
I. Purchase and Sale of Interest.
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A. The Seller hereby sells, assigns, transfers,
conveys and delivers to the Buyers, and the Buyers hereby purchases and accepts
from the Seller, for the aggregate purchase price of Five Million Seventy-Six
Thousand Five Hundred Dollars ($5,076,500) (the "Purchase Price"), all of the
Seller's right, title and interest in, to and under each Management Agreement,
free and clear of all liens, charges, claims or encumbrances of any kind
whatsoever.
A. The Purchase Price shall be payable on the
date hereof as follows:
(i) if the Closing Date (as defined in each Asset
Purchase Agreement) shall occur on or prior to January 31, 1997:
A. by delivery of a certified or official bank
check payable to the Seller in the amount of Four Million Seven
Hundred Fifty-Six Thousand Five Hundred Dollars ($4,756,500); and
B. by release to the Seller of the Escrow Funds
under and as defined in the Cash Escrow Agreement, dated as of
November 25, 1996, among Xxxxxxx Corporation, the Seller,
Integrated Living Communities, Inc., a Delaware corporation
("ILC"), and First American Title Insurance Company of New York as
escrow agent, pursuant to the terms of the Unification Agreement,
dated of even date herewith (the "Unification Agreement"), among
ILC, the Buyers and the Operator Affiliates (as therein defined);
or
(ii) if the Closing Date shall occur after January
31, 1997 but on or prior to July 31, 1997:
A. by delivery of a certified or official bank
check payable to the Seller in the amount of Four Million Seven
Hundred Fifty-Six Thousand Five Hundred Dollars ($4,756,500); and
B. by application of the Escrow Funds, pursuant
to the terms of the Unification Agreement.
I. Representations and Warranties of the Seller. The
Seller hereby represents and warrants to the Buyers that, as of the Closing Date
(as defined in each Asset Purchase Agreement):
A. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Virginia
with full corporate power and authority to own or lease its properties and to
conduct its business in the manner such business is conducted by it.
A. The Seller has full corporate power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by the Seller of
this Agreement and of all other documents, instruments and agreements
contemplated hereby to be executed and delivered by the Seller do not and will
not conflict with or breach, or constitute a default under, the Seller's
Articles of Incorporation or By-laws. The execution, delivery and performance of
this Agreement and each such other document, instrument and agreement by the
Seller have been duly authorized and approved by the Seller's Board of Directors
and shareholder(s) and no further corporate action is required to authorize the
execution, delivery and performance by the Seller of this Agreement or such
other document, instrument or agreement. This Agreement and each such other
document, instrument and agreement have been duly executed and delivered by a
duly authorized officer of the Seller and constitute the legal, valid and
binding obligations of the Seller enforceable against the Seller in accordance
with their terms.
A. The execution, delivery and performance of this
Agreement and of all other documents, instruments and agreements contemplated
hereby or in connection herewith to be executed and delivered by the Seller and
the
consummation of the transactions contemplated hereby and thereby do not and will
not conflict with or breach, or constitute a default under, the terms,
provisions or conditions of any contract, indenture, agreement, mortgage, or
other instrument, commitment or obligation to which the Seller is a party or by
which the Seller is bound, including, but not limited to, the Management
Agreements, or, of any statute, order, rule or regulation of any court or of any
government or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign. No consent, license, approval, order or
authorization of, or registration, filing or declaration with any government
authority is required for the execution, delivery and performance by the Seller
of this Agreement and no consent of any third party is required to be obtained
by the Seller to assign to the Buyers all of the Seller's right, title and
interest in, to and under the Management Agreements.
A. Each Management Agreement constitutes the legal,
valid and binding obligations of the Seller enforceable against the Seller in
accordance with its terms.
A. No party to any Management Agreement has the right to
terminate such Management Agreement pursuant to the terms thereof. There exists
no default by either party to any Management Agreement in the observance or
performance of such party's obligations thereunder.
A. To the Seller's knowledge, no representation or
warranty or other statement made by any Operator (as defined in each Asset
Purchase Agreement) in any Asset Purchase Agreement, in the Disclosure Letter
(as defined in each Asset Purchase Agreement) or in any document, certificate or
instrument furnished or to be furnished by any Operator to any Buyer is or will
be false or misleading as to any material fact, or omits or will omit to state a
material fact necessary to make the statements contained therein, in light of
the circumstances in which they were made, not misleading. To the Seller's
knowledge, the Operators have provided to the Buyers all material information
related to the Acquisition Assets and the Business (each as defined in each
Asset Purchase Agreement).
A. Except as set forth in Sections 4.7, 6.5(b) and
6.21(b) of the Disclosure Letter (as defined in each Asset Purchase Agreement),
there is no fact known to the Seller (other than general economic or industry
conditions) that would have, or as far as the Seller can reasonably foresee,
could have a Material Adverse Effect (as defined in each Asset Purchase
Agreement).
I. Representations and Warranties of the Buyers. Each
Buyer hereby represents and warrants to the Seller that, as of the Closing Date:
A. Each Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with full
corporate power and authority to own or lease its properties and to conduct its
business in the manner such business is conducted by it.
A. Each Buyer has full corporate power and authority to
execute, deliver and perform this Agreement and the transactions contemplated
hereby. The execution, delivery and performance by each Buyer of this Agreement
and all other documents, instruments and agreements contemplated hereby do not
and will not conflict with or breach, or constitute a default under, such
Buyer's Certificate of Incorporation or By-Laws. The execution, delivery and
performance of this Agreement by each Buyer has been duly authorized and
approved by its Board of Directors. This Agreement constitutes the legal, valid
and binding obligations of each Buyer enforceable against such Buyer in
accordance with its terms.
A. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not conflict with or breach, or constitute a default under, the terms,
provisions or conditions of any contract, indenture, agreement, mortgage, or
other instrument, commitment or obligation to which such Buyer is a party or by
which such Buyer is bound, or, of any statute, order, rule or regulation of any
court or of any government or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign. No consent, license,
approval, order or authorization of, or registration, filing or declaration with
any government authority is required for the execution, delivery and performance
by any Buyer of this Agreement and no consent of any third party is required to
be obtained by such Buyer to acquire from the Seller all of the Seller's right,
title and interest in, to and under the Management Agreements.
I. Notices. Any notice, consent, approval, demand or
other communication required or permitted to be given under this Agreement (a
"notice") shall be in writing, shall be delivered to the addressee at the
address set forth below (or at such other address as shall be designated
hereunder by notice to the other parties) personally, by FedEx (or other
equivalent national overnight courier) or by registered or certified United
States mail, return receipt requested, in each case with the cost of delivery
prepaid or for the account of the sender and shall be deemed to have been given
(a) when delivered, if delivered in person, (b) on the next Business Day (as
defined in each of the Asset Purchase Agreements), if sent by FedEx or other
equivalent national overnight courier or (c) five Business Days after mailing,
if mailed by registered or certified United States mail return receipt
requested. The respective addresses of the parties for notice are as follows:
If to Ghent Arms Buyer:
Integrated Living Communities of Redgate, Inc.
Bernwood Centre
00000 Xxx 00 Xxxx, Xxxxx 00
Xxxxxx Xxxxxxx, Xxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: General Counsel
If to Xxxx'x Xxxxx House Buyer:
Integrated Living Communities of Virginia Beach, Inc.
Bernwood Centre
00000 Xxx 00 Xxxx, Xxxxx 00
Xxxxxx Xxxxxxx, Xxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: General Counsel
If to Gloucester House Buyer:
Integrated Living Communities of Gloucester, Inc.
Bernwood Centre
00000 Xxx 00 Xxxx, Xxxxx 00
Xxxxxx Xxxxxxx, Xxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: General Counsel
If to Churchland House Buyer:
Integrated Living Communities of Portsmouth, Inc.
Bernwood Centre
00000 Xxx 00 Xxxx, Xxxxx 00
Xxxxxx Xxxxxxx, Xxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: General Counsel
in each case with a copy to:
Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Paretts Xxxxxx, Esq.
If to Seller:
American Retirement Homes, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx X
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xx. Xxxxxxxxx X. Xxxxxxx, President
with a copy to:
Xxxxxx, Hamlett, Lowry, Xxxxxxxxx and Xxxxx, P.C.
000 Xxxxx Xxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxxx Xxxxxxxx, Esq.
The failure to send a copy to any person designated to receive the same does not
affect the validity of a notice duly given to a party.
I. Successors and Assigns; Assignment. All covenants,
promises and agreements by or on behalf of the parties contained in this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective legal representatives, successors and assigns;
provided, however, that nothing in this Agreement, express or implied, shall
confer on the Seller the right to assign any of its rights or delegate any of
its obligations hereunder at any time, whether prior to or after the date
hereof.
I. Amendments, Supplements, Waivers. Except as otherwise
expressly provided herein, no amendment, supplement or waiver of any provision
of this Agreement shall be effective unless the same shall be in writing and
signed by each Buyer and the Seller (in the case of an amendment or supplement)
or, except as otherwise provided herein, by the waiving party (in the case of a
waiver).
I. Applicable Law. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the Commonwealth of
Virginia, without giving effect to choice or conflicts of law principles.
I. Arbitration. The parties hereto shall submit to
arbitration any dispute, controversy or claim arising out of or relating to this
Agreement or any agreement executed or delivered in connection herewith
(including any claim for indemnification) that the parties are unable to
resolve. Any such arbitration proceeding shall be conducted in the City of
Fairfax, Commonwealth of Virginia before a panel of three arbitrators, in
accordance with the then applicable rules of the American Arbitration
Association. One arbitrator shall be appointed by the Buyers, one arbitrator
shall be appointed by the Seller and one arbitrator shall be appointed by the
other two arbitrators. In the event the two arbitrators selected by the parties
hereto are unable to agree on a third arbitrator within 10 days following the
appointment of the second arbitrator, then the third arbitrator shall be
appointed by the American Arbitration Association in accordance with its rules
then applicable. In making any determination hereunder, the arbitrators shall
apply Virginia law. All determinations made by a majority of the arbitrators
shall be final, conclusive and binding on the parties hereto and judgment upon
the award entered by a majority of the arbitrators may be entered in any court
having jurisdiction. The
arbitrators shall designate the respective amounts (which may be 100%) of the
expenses of the arbitration proceeding (including each party's legal and
accounting fees, if any, and the expenses of the arbitrators and the arbitration
proceeding). Any award rendered in any such arbitration proceeding shall be
final and binding upon the parties hereto, and judgment thereon may be entered
in any court of competent jurisdiction.
I. Section Headings. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
I. Entire Agreement; Survival. This Agreement sets forth
the entire agreement of the parties hereto with regard to the subject matter
hereof and supersedes and replaces all prior agreements, understandings and
representations, oral or written, with regard to such matters. The covenants and
agreements contained in this Agreement shall survive the execution and delivery
of this Agreement.
I. Severability. If any term or provision of this
Agreement shall be held to be illegal, invalid or unenforceable under applicable
law, it shall not affect the continued legality, validity and enforceability of
each remaining term and provision hereof, each of which shall continue in full
force and effect.
I. Effectiveness of Agreement. This Agreement shall not
become effective and binding upon any of the parties hereto unless and until it
is duly executed by each of the parties set forth below.
I. Counterparts. This Agreement may be executed in one
or more counterparts and shall become effective when one or more counterparts
have been signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
INTEGRATED LIVING COMMUNITIES
OF REDGATE, INC.
By:
Xxxx Xxxxx, Chief Financial Officer
INTEGRATED LIVING COMMUNITIES
OF VIRGINIA BEACH, INC.
By:
Xxxx Xxxxx, Chief Financial Officer
INTEGRATED LIVING COMMUNITIES
OF GLOUCESTER, INC.
By:
Xxxx Xxxxx, Chief Financial Officer
INTEGRATED LIVING COMMUNITIES
OF PORTSMOUTH, INC.
By:
Xxxx Xxxxx, Chief Financial Officer
AMERICAN RETIREMENT HOMES, INC.
By:
Xxxxxxxxx X. Xxxxxxx, President
ACCEPTED and AGREED TO as of
the date first above written by:
GHENT ARMS LIMITED PARTNERSHIP
By: XXXXXXX CORPORATION,
General Partner
By: ____________________________________
Xxxxx X. Xxxxxxx, President
ACCEPTED and AGREED TO as of
the date first above written by:
RETIREMENT HOME OF VIRGINIA BEACH LIMITED PARTNERSHIP
By: XXXXXXX CORPORATION,
General Partner
By: ____________________________________
Xxxxx X. Xxxxxxx, President
ACCEPTED and AGREED TO as of
the date first above written by:
RETIREMENT HOME OF PORTSMOUTH LIMITED PARTNERSHIP
By: XXXXXXX CORPORATION,
General Partner
By: ____________________________________
Xxxxx X. Xxxxxxx, President
