December 22, 1994
Salick Health Care, Inc.
0000 Xxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000-0000
Atkemix Thirty-nine Inc.
c/o Zeneca Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Re: Xxxxxxx Boulevard Property
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Dear Ladies and Gentlemen:
This letter sets forth the understandings and agreements between Salick Health
Care, Inc., a Delaware corporation, Atkemix Thirty-nine, Inc., a Delaware
corporation ("Atkemix"), Xxxxxxx Xxxxxx, Trustee of the Xxxxxxx and Xxxxxx
Xxxxxx Trust, dated April 24, 1979, as amended, a trust existing under the laws
of the State of California, (the "Trust"), Xx. Xxxxxxx Xxxxxx, a resident of the
State of California, and Xxxxxx Xxxxxx, a resident of the State of California
(the Trust, Xx. Xxxxxxx Xxxxxx and Xxxxxx Xxxxxx collectively, "B&G Salick") in
connection with the real property and improvements commonly known as 0000
Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, XX 00000 (the "Xxxxxxx Boulevard Property").
Each capitalized term used herein and not otherwise defined herein shall have
the meaning provided therefor in the Agreement and Plan of Merger (the "Merger
Agreement") among Salick Health Care, Inc., Zeneca Limited and Atkemix Thirty-
nine Inc. dated as of the date hereof.
1. Option Notice. The parties hereto agree that, subject to Section 2
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hereof, before the Effective Time B&G Salick shall elect, by written notice to
the Company (the "Option Notice"), either of the following two options, which
election shall be at B&G Salick's sole discretion:
A. Option 1. B&G Salick will continue to own the Xxxxxxx Boulevard Property,
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in which event the Lease dated May 15, 1991 by and between B&G Salick as Lessor
and the Company as Lessee, as modified (the "Lease") shall continue in full
force and effect without amendment to any of the terms thereof, provided that
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B&G Salick would waive any rights (including, without limitation, under
paragraph 4 of the Modification to Lease Agreement dated June 20, 1991 (the
"Modification") to require the Surviving Corporation to purchase the Xxxxxxx
Boulevard Property as a result of the transactions contemplated by the Merger
(including, without limitation, acquisition by Buyer of all capital stock of the
Surviving Corporation outstanding after the Effective Time) but without waiving
their right under paragraph 4 of the Modification as to any future events of
change of control. This transaction shall be referred to as "Option 1."
B. Option 2. B&G Salick shall convey the Xxxxxxx Boulevard Property to the
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Surviving Corporation, and the Surviving Corporation shall purchase the Xxxxxxx
Boulevard Property on the terms and conditions set forth in paragraph 4 of the
Modification except that (w) the purchase price of the Xxxxxxx Boulevard
Property, which is the result of an arm's-length negotiation, shall be
$14,650,000 in cash; (x) the closing of the conveyance and purchase of the
Xxxxxxx Boulevard Property from B&G Salick to the Surviving Corporation shall
occur on the earlier of (A) 120 days after the Effective Time or (B) the date
set forth in a notice from B&G Salick to the Surviving Corporation of a date for
such closing, which date shall be not less than 10 business days after such
notice from B&G Salick to the Surviving Corporation; (y) B&G Salick intend to
effect the conveyance of the Xxxxxxx Boulevard Property to the Surviving
Corporation by means of a tax-deferred
EXHIBIT 10(j-1)
exchange meeting all of the requirements of Section 1031 of the Code and reserve
the right to convey the Xxxxxxx Boulevard Property to a third party who would be
required to sell the Xxxxxxx Boulevard Property to the Surviving Corporation on
the terms set forth in this Option 2; and (z) the conveyance of the Xxxxxxx
Boulevard Property to the Surviving Corporation shall be effected through an
escrow at City National Bank and each party shall share the escrow and title
charges in accordance with customary practices for real estate transactions in
Los Angeles County, California. Until the Closing, the Surviving Corporation
will continue to pay rent and perform its obligations under the Lease and rent
shall be prorated through the date of close of escrow. This transaction shall be
referred to as "Option 2."
2. Option Election. In the event B&G Salick fail to give the Surviving
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Corporation the Option Notice on or before the Effective Time, then B&G Salick
shall be deemed to have elected Option 1. In the event B&G Salick elect Option
2, Surviving Corporation shall purchase the Xxxxxxx Boulevard Property "AS IS,
WHERE IS, WITH ALL FAULTS" without representations or warranties, other than a
grant deed. In the event B&G Salick elect Option 2, the Surviving Corporation
shall not be required, as part of such exchange, to take title to any other real
property other than the Xxxxxxx Boulevard Property or to incur any additional
escrow, title or other charges as a result of the exchange but the Surviving
Corporation agrees to cooperate with B&G Salick in such a tax-deferred exchange,
including purchasing the Xxxxxxx Boulevard Property from a third party who
acquired it from B&G Salick. In the event B&G Salick elect Option 2 but fail to
effect an exchange, the conveyance of the Xxxxxxx Boulevard Property to the
Surviving Corporation shall nevertheless be effected on terms described above
within 120 days of the Effective Time as a straight purchase and sale between
B&G Salick and the Surviving Corporation.
3. Representations. Each party to this letter agreement represents and
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warrants that the execution, delivery and performance by such party to this
letter agreement (A) are within such party's powers, (B) in the case of
corporate parties, have been duly authorized by any necessary corporate action
and (C) require no material consents or approvals.
4. Broker's Fees. No real estate broker or investment banker, broker or
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finder is entitled to a commission or fee in respect of the Xxxxxxx Boulevard
Property based upon any arrangement or agreement made by or on behalf of Xxxxxxx
Xxxxxx, Xxxxxx Xxxxxx, the Trust or Atkemix.
5. Amendments; Termination. (a) This letter agreement may not be modified,
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amended, altered or supplemented, except upon the execution and delivery of a
written agreement executed by the parties hereto.
(b) This letter agreement shall terminate on the date of the termination of
the Merger Agreement in accordance with its terms.
6. Governing Law. This letter agreement shall be governed by and construed
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in accordance with the laws of the State of New York without regard to its
conflict of law provisions.
7. Costs and Expenses. Except as otherwise provided for herein, all costs
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and expenses incurred in connection with this letter agreement shall be paid for
by the party incurring such cost or expense.
8. Limited Obligation. Other than pursuant to the Merger Agreement, Atkemix
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undertakes no obligation to buy the Xxxxxxx Boulevard Property or any other
obligation whatsoever in respect of the Xxxxxxx Boulevard Property.
EXHIBIT 10(j-1)
9. Counterparts. This letter agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
10. Entire Agreement. This letter agreement contains the entire agreement of
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the parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior understandings and agreements (oral and written) of the
parties with respect to the subject matter hereof.
If the foregoing correctly sets forth the understanding between you and us,
please so indicate in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement between us.
Very truly yours,
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX, individually
/s/ Xxxxxx Xxxxxx
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XXXXXX XXXXXX, individually
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX, as sole
trustee of Xxxxxxx and
Xxxxxx Xxxxxx Trust
Accepted and agreed:
SALICK HEALTH CARE, INC.
By: /s/ Xxxxxx X. Xxxx
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Title: Executive Vice President,
Chief Financial Officer &
Secretary
ATKEMIX THIRTY-NINE INC.
By: /s/ Xxxxx Xxxxxxxxx
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Title: Vice President
EXHIBIT 10(j-1)
