Exhibit 10.135
Master Agreement
between
CareMatrix Corporation
and
North Shore Health System
This Agreement is entered into by and between CareMatrix Corporation, a Delaware
corporation and North Shore Health System, a New York not-for-profit corporation
and shall be effective as of December 31, 1996.
WHEREAS, North Shore (as such term is defined below) has experience in the
provision of in patient and out patient health care services, has active
physician-hospital and management services organizations and is experienced in
managed care arrangements; and
WHEREAS, CareMatrix (as such term is defined below) is interested in the
acquisition, development, ownership, financing, management and operation of
Assisted Living Facilities, Independent Living Facilities, Skilled Nursing
Facilities and Medical Office Buildings (as such terms are defined below); and
WHEREAS, the parties desire to cooperate and compliment each others efforts in
applying their respective expertise and skills to the acquisition, development,
ownership, financing, management and operation of certain Projects (defined
below); and
WHEREAS, CareMatrix and North Shore have reached a general understanding
regarding the essential features relating to the acquisition, development,
ownership, financing, management and operation of certain Projects in the
Designated Area (defined below), and wish to enter into an alliance in
accordance with the principles established under this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants in this
Agreement, the parties agree as follows:
1.0 Definitions
1.1 Acquisition Documents -- All documents related to the option,
purchase, lease or other acquisition of any Site.
1.2 Affiliates -- With respect to either CareMatrix or North Shore, any
other Person which, directly or indirectly, controls or is controlled by or is
under common control with either CareMatrix or North Shore. For purposes of this
definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with") shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, through the ownership of voting
securities, partnership interests or
other equity interests. Notwithstanding the foregoing, in no event shall
CareMatrix or its Affiliates be deemed or construed to be Affiliates of
PhyMatrix Corp. or its Affiliates.
1.3 Approvals -- All permits, licenses, approvals, variances,
permissive uses, accreditations, certificates, certifications, consents,
agreements, contracts, contract rights, franchises, interim licenses, and other
authorizations of every nature whatsoever required by, or issued under,
applicable legal requirements benefiting or relating to the construction or
development of a Site or Project required or issued by any agency, authority,
body, board, commission, court, instrumentality, legislature, and office of any
nature whatsoever of any government unit or political subdivision, whether
federal, state, county, district, or municipality.
1.4 Assisted Living Facilities -- Any facility offering a combination
of housing, supportive services, personalized assistance and health care
designed to meet the needs of individuals who need help with activities of daily
living (e.g., dressing, bathing, transferring, eating, toileting, incontinence
management, personal hygiene and assistance with medications).
1.5 Base Rent -- With respect to each Project, a sum equal to (i) debt
service on the Project Financing for such project; (ii) all operating expenses
of the applicable Joint Venture; (iii) debt service on any working capital loan
for the applicable Joint Venture; (iv) interest on any unreimbursed Development
Costs for the applicable Project; (v) interest on any unpaid Development Fees
for the applicable Project; (vi) any unpaid guarantee fees, to the extent
provided herein, for the applicable Project; (vii) Development Costs for the
applicable Project to the extent not paid as provided herein; and (viii)
Development Fees for the applicable Project to the extent not paid as provided
herein.
1.6 Budget -- A preliminary financial plan and statement of estimated
revenues and expenditures including estimated cash flows and anticipated capital
outlays, which Budget shall be sufficient in detail to allow the parties to make
an informed decision concerning the Project to which such Budget is applicable
as contemplated by the terms of this Agreement.
1. 7 CareMatrix -- CareMatrix Corporation, a Delaware corporation or
its Affiliate(s) formed for any particular Project.
1.8 Designated Area -- Nassau, Suffolk, Queens, Kings, and Richmond
counties of New York.
1.9 Development Agreement -- The agreement between CareMatrix and the
Joint Venture (or such other entity that shall own or operate the Project in
question as provided in this Agreement) for each of the Projects, pursuant to
which CareMatrix shall provide services related to the development of the
Projects.
1.10 Development Costs -- The costs for obtaining the Approvals,
together with the Site Costs and all out of pocket expenses paid to unrelated
third parties, including all reasonable costs necessary to complete final
architectural and engineering plans for the applicable Project and such other
costs required to obtain the permits necessary to commence construction.
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1.11 Development Fee -- A-fee equal to six percent (6%) and a general
overhead fee equal to two and one-half percent (2-1/2%) of the construction
costs, Site Costs and costs for fixed equipment, furnishings and finishes of the
applicable Project.
1.12 Due Diligence Documents -- Complete and accurate copies of all
information, records and documentation concerning the Sites or the Projects in
the possession of each of CareMatrix or North Shore and representatives,
including, without limitation (but only for informational purposes and without
warranties or representations of any kind regarding accuracy), a Budget, plans
and surveys, construction, architect and engineer agreements, soil tests,
service contracts, governmental permits and approvals, legal opinions regarding
zoning or environmental matters affecting Projects, engineering reports,
environmental site assessments, and title policies or abstracts.
1.13 Due Diligence Period -- The sixty (60) day period following the
Site Identification Date during which time CareMatrix and North Shore, and their
respective agents, representatives, lender(s), architect(s), engineer(s) and
employees shall have access to each Site at any time during normal business
hours and from time to time in order to perform Tests and access to Due
Diligence Documents.
1.14 Equity -- The equity required to be contributed by CareMatrix and
North Shore to fund the difference between one hundred percent (100%) of the
amount necessary to acquire, develop or construct any Project and the amount of
any Project Financing for such Project.
1.15 Independent Living Facilities -- Any residential facility
designed primarily for a senior population providing access to residential
services, including, but not limited to, food service, housekeeping, laundry,
transportation and social activities.
1.16 Joint Venture -- Any Person formed by or existing pursuant to the
terms of any Joint Venture Agreement.
1.17 Joint Venture Agreement -- The agreement(s) between CareMatrix
and North Shore that sets forth the terms, conditions and responsibilities of
the parties concerning the acquisition, development, ownership, financing and
management of the applicable Project.
1.18 Joint Venture Cash Flow -- All cash received from or by reason of
the acquisition, development, ownership, financing or leasing (to CareMatrix,
North Shore or otherwise) of the applicable Project, including the Base Rent and
Participation Rent for such Project.
1.19 Licensed Projects -- All Projects which, due to the nature of the
goods or services provided, are required by applicable State law (as in effect
from time to time) to be operated by North Shore as opposed to the Joint Venture
for such Project.
1.20 Medical Office Building -- Any office building in which 50% or
more of its net leasable area is leased to physicians, groups of physicians or
other legal entities owned or
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controlled by physicians and engaged in the practice of medicine or other legal
entities providing ancillary medical services in such building.
1.21 North Shore -- North Shore Health System, a New York
not-for-profit corporation or its Affiliate(s) formed for the purpose of any
particular Project.
1.22 Operating Entity--With respect to a Licensed Project, North
Shore; with respect to an Unlicensed Project, until execution of the Lease
referred to in Section 5.1, the Joint Venture for such Project and, thereafter,
CareMatrix.
1.23 Participation Rent -- With respect to each Unlicensed Project, an
amount equal to 50% of the applicable Project Cash Flow after the payment of all
operating expenses of the Project (including, without limitation, the fees under
the terms of the Services Agreement and the Base Rent) other than the
Participation Rent.
1.24 Person -- Any individual, corporation, general partnership,
limited partnership, joint venture, stock company or association, company, bank,
trust, trust company, land trust, business trust, unincorporated organization,
governmental authority or other entity of any kind or nature.
1.25 Project Cash Flow -- All cash received from or by reason of the
operation of the applicable Project, including, without limitation, to the
extent applicable to such Project, all cash received for or on account of any
and all goods provided and services rendered, the gross dollar amount of all
xxxxxxxx by the Project to or on behalf of guests, residents, tenants or
patients directly or indirectly connected with the Project (including, without
limitation, such xxxxxxxx to all governmental payors, including Medicare and
Medicaid, such xxxxxxxx to self-paying patients, and such xxxxxxxx to all other
third-party insurance carriers) and all cash received (whether from tenants or
otherwise) by reason of any leasing, subleasing, licensing or other arrangements
with third parties relating to the possession or use of any part of the Project.
1.26 Project Components -- The Assisted Living Facility(ies),
Independent Living Facility(ies), Skilled Nursing Facility(ies) and/or Medical
Office Building(s) that comprise any applicable Project.
1.27 Project Financing -- The construction financing and permanent
financing for the Projects sufficient, in conjunction with any equity financing
by CareMatrix and North Shore to fund all costs associated with the development
and construction of the Projects.
1.28 Projects -- The Assisted Living Facilities, Independent Living
Facilities, Skilled Nursing Facilities and/or Medical Office Buildings developed
by any Joint Venture pursuant to this Agreement.
1.29 Services Agreement -- The agreement between CareMatrix and the
Joint Venture (or such other entity as shall own or operate the Project in
question as provided in this Agreement) for each of the Projects, pursuant to
which CareMatrix shall provide certain agreed upon operational services for the
Projects upon completion thereof.
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1.30 Site Costs -- All costs and expenses incurred in connection with
acquiring, owning and maintaining the Site other than the purchase price for
such Site, including, without limitation, option payments, deposits, taxes,
insurance and legal fees associated with any land option or purchase contracts.
1.31 Site Identification Date -- The date upon which the Site for any
Project is approved by each of CareMatrix and North Shore pursuant to Section
3.0 of this Agreement.
1.32 Skilled Nursing Facilities -- Any subacute long-term care
facility providing geriatric and/or rehabilitation service on an inpatient
basis.
1.33 System PHO -- North Shore Health System Physician Hospital
Organization, a New York taxable not-for-profit corporation, or its successors
or assigns (provided such successors or assigns are controlled by North Shore
Health System or hospitals in which North Shore Health System is the sole
member).
1.34 Tests -- Such financial analyses, topographical and engineering
surveys, environmental site assessments and other tests, surveys and studies of
a Site as each party to this Agreement or their Affiliates may deem necessary or
appropriate.
1.35 Unlicensed Projects -- Any Project which is not a Licensed
Project.
Roles and Responsibilities
2.0 Global Plan
CareMatrix and North Shore shall cooperate to prepare, as soon as
practicable, a global plan tentatively outlining the number and types of
Projects to be developed pursuant to this Agreement over the next two (2) years
and the likely equity contributions of the parties for such Projects.
3.0 Site Identification Period
North Shore shall use commercially reasonable efforts to locate and
identify appropriate sites (each a "Site" and, collectively, the "Sites") within
the Designated Area for development of Projects. CareMatrix may identify
appropriate Sites. The final determination whether to engage in a Project at any
Site shall be subject to the mutual agreement of CareMatrix and North Shore.
Upon location or identification of a potential Site, each party shall present
the Site to the other party in writing, which writing shall include in
reasonable detail the terms of, and facts and circumstances surrounding, such
Site (including the type of Project to be developed at the Site) and shall be
sufficient in detail to allow the party receiving the notice to make an informed
decision concerning such Site and Project. If within sixty (60) days the party
receiving such notice has not indicated, in writing, its intention to proceed
further with such Site, then the party giving the notice shall be entitled to
pursue the intended Project at the Site independent of the other party and not
subject to the terms of this Agreement, except for the provisions of Sections
6.2 through 6.11; provided, however, that construction or renovation of such
intended Project
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must be commenced within fourteen (14) months after termination of the sixty
(60) day period described herein. If construction or renovation of such Project
is not commenced within such fourteen (14) month period, then the identification
and presentation requirements of this Section are revived with respect to such
Site before a Project may be commenced on the Site independent of the other
party. Notwithstanding any provision to the contrary contained herein, such
fourteen (14) month period shall be extended by a reasonable period of time in
the event of force majeure and/or to the extent necessary given the governmental
approval process in the applicable jurisdiction(s).
4.0 Development Period
4.1 Acquisition of the Site
Following the Site Identification Date for a Site, CareMatrix shall
negotiate with the owner of such Site to option, purchase, lease or
otherwise acquire the Site and shall negotiate all Acquisition
Documents. The Site shall be optioned, purchased, leased or otherwise
acquired, if at all, in accordance with the terms of the Acquisition
Documents, and the closing of which shall in no event occur earlier
than the end of the Due Diligence Period for the applicable Site.
CareMatrix shall provide North Shore with copies of the Acquisition
Documents three (3) business days prior to their execution by
CareMatrix. Title to any Site shall be taken and held only in the name
of the Joint Venture or in such other name as the parties may agree.
4.2 Due Diligence on Site
4.2.1 The Due Diligence Period for such Site and Project shall
begin upon the Site Identification Date for such Site. Within a
reasonable time after commencement thereof, CareMatrix and North
Shore will furnish to the other, for review, the Due Diligence
Documents. Each party to this Agreement agrees to hold in strict
confidence all documents, data and information obtained from the
other, and if the closing of the applicable Site does not occur,
will, upon request, return the same to the other.
4.2.2 If CareMatrix or North Shore each in its sole discretion, is
dissatisfied with the results of any of the Tests, with the
content of any of the Due Diligence Documents, or with any
proposed financing, then it may terminate any further activities
with respect to any Site and/or Project under this Agreement by
written notice to the other within 30 days of the end of the Due
Diligence Period. Upon such termination, the other party shall be
entitled to pursue the intended Project at the Site independent of
the other party and not subject to the terms of this Agreement,
except for the provisions of Sections 6.2 through 6.11; provided,
however, that construction of such intended Project must be
commenced within fourteen (14) months after such termination. If
construction of such intended Project is not commenced within such
fourteen (14) month period, then the identification and
presentation requirements of this Agreement are revived with
respect to such Site before a Project may be commenced on the Site
independent
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of the other party. Notwithstanding any provision to the contrary
contained herein, such fourteen (14) month period shall be
extended by a reasonable period of time in the event of force
majeure and/or to the extent necessary given the governmental
approval process in the applicable jurisdiction(s).
4.3 Negotiation of Definitive Documents
4.3.1 Promptly after the Site Identification Date, but in any
event during the Due Diligence Period, CareMatrix and North Shore,
shall engage in good faith negotiations to agree upon the Project
Components for the applicable Project. In addition, during the Due
Diligence Period, CareMatrix and North Shore, shall engage in good
faith negotiations to agree upon the terms of a final Joint
Venture Agreement. The Joint Venture shall be in the form of a
limited liability company, general partnership, limited
partnership or other joint venture entity as is mutually agreed
upon by CareMatrix and North Shore. Each of CareMatrix and North
Shore shall own 50% of the ownership interests in each Joint
Venture and such ownership interest percentage shall be set forth
in the Joint Venture Agreement for each such Joint Venture. The
Joint Venture Agreement shall, subject to the terms and conditions
of the applicable Project Financing, provide that the applicable
Joint Venture Cash Flow shall be distributed in the following
order of priority: (i) payment of debt service on the Project
Financing; (ii) payment of all operating expenses of the Joint
Venture; (iii) payment of debt service on any initial or ongoing
working capital loan for the Joint Venture; (iv) payment of (1)
interest on any unreimbursed Development Costs, (2) interest on
any unpaid Development Fees, and (3) any unpaid guarantee fees, to
the extent provided herein, such payments to be made pro-rata,
based upon the unreimbursed or unpaid amount, as the case may be,
outstanding for each of the foregoing; (v) payment of Development
Costs to the extent not paid as provided herein; (vi) payment of
the Development Fees to the extent not paid as provided herein;
and (vii) thereafter, to CareMatrix in the case of Licensed
Projects and to North Shore in the case of Unlicensed Projects.
4.3.2 During the Due Diligence Period, CareMatrix and North Shore,
shall engage in good faith negotiations to agree upon the final
terms of a Services Agreement substantially in the form of Exhibit
B attached hereto, and as more fully described in Section 5.2. Any
modifications or amendments of the Services Agreement shall be
subject to the approval of CareMatrix and North Shore.
4.4 Development of Budget
Promptly after the Site Identification Date, but in any event
during the Due Diligence Period, CareMatrix shall prepare a Budget
for the first five (5) operating years of the applicable Project.
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4.5 Pursuit of Approvals
During the Due Diligence Period for the applicable Site,
CareMatrix and North Shore, shall determine all Approvals
necessary to acquire, development and construct the applicable
Project and shall agree upon a time schedule pursuant to which
such Approvals shall be pursued. CareMatrix shall be responsible
for pursuing all Approvals and shall pay all costs and expenses
associated therewith (subject to reimbursement as provided in
Section 4.7 hereof).
4.6 Project Plans
4.6.1 During the Due Diligence Period for a Project, CareMatrix
shall select a project architect (a "Project Architect") and a
project engineer (a "Project Engineer") for such Project;
provided, however, that CareMatrix shall ensure that any Project
Architect or Project Engineer is adequately insured given the
nature, scope and construction cost of the applicable Project and
in no event shall CareMatrix select a Project Architect or Project
Engineer which, directly or indirectly, controls or is controlled
by or is under common control with CareMatrix, PhyMatrix,
Meditrust, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx or Xxxxxx X.
Xxxxxx without the prior consent of North Shore. Notwithstanding
the foregoing, in no event shall CareMatrix be liable in any
manner to North Shore or the applicable Joint Venture for any act
or omission of the Project Architect or the Project Engineer.
North Shore covenants and agrees not to bring any action or
proceeding of any type against CareMatrix arising out of or
related to any act or omission of any Project Architect or Project
Engineer and each of CareMatrix and North Shore shall look to the
applicable Project Architect and/or Project Engineer for any loss,
claim or damage which either of them may suffer arising out of or
related to any act or omission of any Project Architect or Project
Engineer. The Project Architect(s) and the Project Engineer(s)
shall contract directly with the Joint Venture upon its formation.
The Joint Venture shall direct the Project Architect(s) and the
Project Engineer(s) to develop a preliminary site plan and
facility schematics. CareMatrix and North Shore, shall approve the
design criteria, including overall size and layout, which criteria
shall be incorporated in the development of the applicable
Project.
4.6.2 After the applicable Project has received the necessary
Approvals, CareMatrix shall fund or cause to be funded the
reasonable costs necessary to complete final architectural and
engineering plans (the "Plans") for the Project, subject to
reimbursement as provided in Section 4.7 hereof. The Plans shall
be consistent with the preliminary site plan and facility
schematics and shall be mutually agreed upon by North Shore and
CareMatrix; provided, however, that each of CareMatrix and North
Shore agree that CareMatrix's prototype plans shall be utilized
for the Projects to the extent feasible.
4.7 Initial Financing
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4.7.1 Following the Site Identification Date for each Project,
CareMatrix shall use commercially reasonable efforts to
obtain the Project Financing for the applicable Project.
Carematrix shall consider, as appropriate, tax-exempt
financing available to North Shore. The terms and conditions
of each Project Financing shall be subject to the approval
of each of CareMatrix and North Shore. Each Project
Financing shall be non-recourse or substantially
non-recourse to CareMatrix and North Shore.
4.7.2 Notwithstanding the foregoing, in the event that any lease
or debt obligation for any Project Financing is required to
be guaranteed, North Shore and CareMatrix shall each provide
guarantees in proportion to their percentage ownership
interest in such Joint Venture. In the event the ownership
interests of the parties are unequal, each shall be entitled
to an annual guarantee fee equal to two percent (2%) of the
outstanding amount guaranteed by such party. Such guarantee
fee shall be paid on a priority basis from the Joint Venture
Cash Flow as set forth in the particular Joint Venture
Agreement.
4.7.3 Prior to the closing of the applicable Project Financing,
CareMatrix shall present an accounting to North Shore of
Development Costs. Simultaneously with the closing of the
applicable Project Financing, the Development Fee and the
Development Costs shall be paid to CareMatrix, each in full
from the first advance under the construction financing for
the applicable Project. In the event that, for any reason,
the total amount of the Development Fee or the Development
Costs for any Project is not so paid to CareMatrix, then the
balance shall accrue interest at a rate equal to the rate
announced by Fleet Bank of Massachusetts, N.A. from time to
time as its prime rate (the "Prime Rate") plus two percent
(2%) (such balance, together with such interest, the
"Balance") and the Balance shall be repaid to CareMatrix on
a priority basis from the applicable Project Cash Flow as
set forth in the Joint Venture Agreement for the applicable
Project.
4.7.4 In the event that the amount of any Project Financing is
less than one hundred percent (100%) of the amount necessary
to acquire, develop and construct the applicable Project,
each of CareMatrix and North Shore agrees to contribute
Equity to the Joint Venture at the closing of the applicable
Project Financing in proportion to their percentage
ownership interest in such Project sufficient to make
available 100% of the Project Financing.
4.8 Development
CareMatrix shall be the developer for each of the Projects. Upon the
completion and approval of the Plans, CareMatrix shall present to the
Joint Venture a Development Agreement upon the general terms and
conditions set forth in the Development Agreement attached hereto as
Exhibit A. CareMatrix shall make the Plans available to general
contractors (it being agreed that Suffolk Construction is an
acceptable contractor) in order to allow the applicable Project to be
competitively bid, and CareMatrix shall, in accordance with the terms
of the
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Development Agreement, act as construction manager and provide
construction management services in exchange for a Development Fee.
CareMatrix shall cause the general contractor to provide North Shore
or its representatives complete and customary access to books and
records relating to the construction of the Project.
5.0 Operation Period
5.1 Unlicensed Projects
5.1.1 Upon completion of any Unlicensed Project and the
stabilization of the income thereof (as determined by
CareMatrix in its sole and absolute discretion), at the
option of CareMatrix, such Project shall be leased to
CareMatrix in accordance with the terms and conditions set
forth in a Lease in a form mutually agreeable to the parties
(a "CareMatrix Lease"). The term of each CareMatrix Lease
shall be for fifteen (15) years with, at the option of
CareMatrix, two (2) renewal terms of five (5) years each,
and shall provide for rent equal to the Base Rent and
Participation Rent for such Project. CareMatrix shall apply
the Project Cash Flow for each Project in the following
order of priority; (i) payment of all operating expenses of
the Project, including, without limitation, the Base Rent
and Participation Rent; (ii) payment of any debt service on
any working capital loan for the Project (whether provided
by a third party or the applicable Joint Venture); (iii)
thereafter, to CareMatrix. In the event CareMatrix elects
not to lease the Project, the Project Cash Flow shall be
applied in the same manner as the Joint Venture Cash Flow
would have been applied had CareMatrix leased the Project
except with respect to the distribution set forth in Section
4.3.l(vii), which shall be made to the parties in
proportion to their ownership interests in the Joint
Venture.
5.1.2 With respect to any Projects which are Medical Office
Buildings, the Joint Venture or CareMatrix, as applicable,
shall grant North Shore a right of first refusal with
respect to all leasable space in such Medical Office
Building pursuant to a right of first refusal agreement
mutually agreeable to the parties. Additionally, the Joint
Venture or CareMatrix, as applicable, shall grant CareMatrix
a right of first refusal with respect to all leasable space
in such Medical Office Building pursuant to a right of first
refusal agreement mutually agreeable to the parties, which
right of first refusal shall apply only if North Shore shall
elect not to exercise its right of first refusal. Any such
lease to North Shore or CareMatrix shall be pursuant to a
lease mutually agreeable to the parties, which lease shall
grant to the lessee exclusivity within such Medical Office
Building for the ancillary medical services offered in the
space leased other than (i) in-office laboratory services,
(ii) services in connection with X-ray machines, ultrasound
machines, EKG machines or (iii) ancillary services utilizing
other machines or equipment not requiring substantial
capital outlay and
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which services do not account for a disproportionately large
portion of a physician's revenue.
5.2 Operational Services
CareMatrix shall provide certain agreed upon operational services
for each Project upon completion thereof in accordance with the
general terms and conditions set forth in a Services Agreement in
a form mutually agreeable to the parties. The term of each
Services Agreement shall be for fifteen (15) years with, at the
option of CareMatrix, two (2) renewal terms of five (5) years
each, and shall provide for a fee to be negotiated between the
parties and subject to a fair market valuation determination.
Other terms and conditions of each Services Agreement shall be as
mutually agreed upon by North Shore and CareMatrix. Any
modifications or amendments to the Services Agreement shall
require the approval of North Shore and CareMatrix.
5.3 Transfer Agreements
The parties shall cause each Operating Entity which operates a
Skilled Nursing Facility or Assisted Living Facility which is
required by applicable state law to enter into transfer agreements
to enter into an appropriate transfer agreement with North Shore
for each Project (each a "Transfer Agreement"). The term of each
Transfer Agreement shall be for fifteen (15) years with, at the
option of North Shore, two (2) renewal terms of five (5) years
each. Other terms and conditions of each Transfer Agreement shall
be as mutually agreed upon by the Joint Venture and North Shore.
5.4 Managed Care Contracting
5.4.1 The parties shall cause each Operating Entity to enter into
a participating provider agreement with the System PHO for
its Project (each a "Provider Agreement") pursuant to which
the System PHO shall be, except as hereinafter provided, the
exclusive provider of managed care contracts for the
services provided by the applicable Project; provided,
however, that nothing contained herein shall prohibit,
restrict or impair any such Operating Entity from
contracting directly with any third party payor to provide
such services in the event (i) the System PHO shall refuse
to enter into a Provider Agreement with such Operating
Entity on the terms provided in this Section 5.4.1 with
respect to any managed care contract between the System PHO
and such third party payor or (ii) the System PHO shall not
be a party to a managed care contract with such third party
payor (provided, however, that should the System PHO then be
in negotiations with such third party payor, the Operating
Entity shall not contract with such third party payor prior
to the earlier of (a) the termination of negotiations
between the System PHO and such third party payor or (b)
forty-five (45) days following the date of a written notice
from the Operating Entity to the System PHO that it intends
to contract with such third party payor). North Shore shall
use its best
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efforts to have the System PHO enter into Provider
Agreements with each Operating Entity and each Operating
Entity shall be entitled to participate in any such managed
care contracts held by the System PHO based upon terms and
conditions as favorable as the most favorable provided by
the System PHO to any party.
5.4.2 The parties shall use their best efforts to cause each
entity owning or operating a Project described in Section
6.6 of this Agreement to enter into a Provider Agreement
with the System PHO for such Project pursuant to which the
System PHO shall be, except as hereinafter provided, the
exclusive provider of managed care contracts for the
services provided by the applicable Project; provided,
however, that nothing contained herein shall prohibit,
restrict or impair any such entity from (i) contracting
directly with any third party payor to provide such services
in the event (a) the System PHO shall refuse to enter into a
Provider Agreement with such entity on the terms provided in
this Section 5.4.2 with respect to any managed care contract
between the System PHO and such third party payor or (ii)
the System PHO shall not be a party to a managed care
contract with such third party payor (provided, however,
that should the System PHO then be in negotiations with such
third party payor, such entity shall not contract with such
third party payor prior to the earlier of (x) the
termination of negotiations between the System PHO and such
third party payor or (y) forty-five (45) days following the
date of a written notice from such entity to the System PHO
that it intends to contract with such third party payor) or
(ii) completing the term of any provider agreement which
such entity may be a party to at the time of the
consummation of the transaction described in Section 6.6.
North Shore shall use its best efforts to have the System
PHO enter into Provider Agreements with each entity owning a
Project described in Section 6.6 and each such entity shall
be entitled to participate in any such managed care
contracts held by the System PHO based upon terms and
conditions as favorable as the most favorable provided by
the System PHO to any party.
5.4.3 The parties shall cause each Operating Entity operating a
Medical Office Building to provide the System PHO with the
names and contact persons for all persons or entities
expressing an interest in leasing space within such Medical
Office Building.
5.4.4 Neither of the parties intend, and nothing contained herein
shall be construed to imply, that the System PHO is or shall
be a third party beneficiary or any other type of
beneficiary of any term or provision of this Agreement and
the System PHO shall have no rights against any party to
this Agreement arising out of or related to this Agreement.
5.5 Working Capital Loans
CareMatrix will use reasonable efforts to obtain third party
working capital financing for each Joint Venture to pay such funds
as are necessary for the start-
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up costs of the applicable Project and the ongoing working capital
needs of the applicable Project established in the annual budget
for the applicable Project approved by both CareMatrix and North
Shore on such terms and conditions as CareMatrix shall determine
in its sole and absolute discretion, subject, however, to
CareMatrix providing North Shore with notification of the terms of
such financing prior to closing such financing. To the extent that
third party working capital financing is not available, each of
CareMatrix and North Shore shall contribute (as capital or loan)
to the applicable Joint Venture such funds as are necessary to
provide such working capital financing to the Operating Entity. In
turn, each Joint Venture shall loan such funds (whether obtained
from third party financing or contributed by CareMatrix or North
Shore) to the applicable Operating Entity as an operating loan. To
the extent not prohibited by either North Shore's or CareMatrix's
corporate indebtedness covenants, each such loan shall be secured
by the revenues of the applicable Project but shall otherwise be
nonrecourse to the Operating Entity. Such loan shall bear interest
and be payable on the same terms and conditions as are provided
for in any third party financing pursuant to which such funds were
obtained or shall otherwise be upon market terms and conditions.
5.6 Licensed Projects
The parties acknowledge that the structure referred to in this
Section 5 shall apply only to Unlicensed Projects due to the
inability of any Joint Venture or CareMatrix to operate certain
Projects due the nature of the goods or services provided by such
Project. Accordingly, the parties intend to coordinate on Licensed
Projects recognizing that certain fundamental provisions of this
Section 5, such as the identity of the party operating the Project
and the method of compensation contemplated hereby, may not be
permitted pursuant to applicable state law at this time. The
parties agree to negotiate in good faith on Licensed Projects
wherein North Shore will be required to own and operate the
Licensed Project, be paid an imputed services fee for the medical
and medical management services it provides and CareMatrix shall
own all or a portion of the underlying real estate and improvements
and shall provide such services as may be permitted by applicable
law upon such terms as may be permitted by applicable law using,
insofar as is lawful and prudent, the fundamental economic
arrangement contemplated by this Section 5.
6.0 Exclusivity
6.1 For the term of this Agreement, the relationship among
CareMatrix, North Shore and the Joint Ventures shall be exclusive
for Projects within the Designated Area except as provided in
Sections 3.0, 4.2.2 and the remainder of this Section 6.0. Such
exclusivity shall be binding upon each Affiliate of CareMatrix and
North Shore regardless of whether such Affiliate was formed for any
particular Project.
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6.2 Should either of Carematrix or North Shore decline to participate
in a Project pursuant to this Agreement (a "Declining Party"), and
the other party (the "Proceeding Party") proceeds independent of
the other, with a Project the Proceeding Party shall offer the
Declining Party, the opportunity to provide, on a contract basis,
the Development Agreement or Services Agreement functions in the
event CareMatrix is the Declining Party and/or Transfer Agreement
function in the event North Shore is the Declining Party
with respect to such Project upon terms hereinafter set forth.
6.2.1 The Proceeding Party shall, by written notice to the
Declining Party, notify the Declining Party of its intent to
proceed with the applicable Project ("Proposed Project"),
which notice shall set forth in reasonable detail the nature
and scope of the Proposed Project and shall set forth the
date by which the Declining Party must respond as provided
herein. The Declining Party shall have thirty (30) days from
the receipt of such notice within which to exercise its
rights hereunder. The Declining Party may exercise this
right with respect to all or any function (e.g., CareMatrix
may elect to act as the developer and/or manager of the
Proposed Project). In the event the Declining Party
determines to exercise its rights hereunder, the Declining
Party shall provide written notice of such election to the
Proceeding Party within the thirty (30) day period, which
notice shall disclose the fee for the applicable functions
but shall otherwise be upon the general terms set forth in
the respective agreements attached to this Agreement as
Exhibits (a "Proposal"). In the event the Proposal is
acceptable to the Proceeding Party, the Proceeding Party and
Declining Party shall thereafter enter into the appropriate
agreement(s) upon the terms and conditions set forth in the
Proposal. In the event the Declining Party elects not to
exercise its rights hereunder or does not respond in writing
to the Proceeding Party within the thirty (30) day period,
the Declining Party shall be deemed to have waived its
rights hereunder with respect to Proposed Project and the
Proceeding Party shall then be entitled to enter into such
agreement(s) with any third party in connection with the
Proposed Project or to provide such function(s) itself;
provided, however, that if the Proceeding Party shall not
enter into such agreement(s) with a third party(ies) within
thirty (30) days after the expiration of the Declining
Party's rights hereunder for any reason other than it having
elected to provide such function(s) itself or if such
agreement(s) is (are) executed but is (are) not fully
performed as specified in the relevant agreement, the
Declining Party's rights hereunder shall apply to all future
development and/or management of the Proposed Project.
6.2.2 In addition to the rights established under Section 6.2.1
above, in the event North Shore is the Proceeding Party and
receives a bonafide third party proposal or offer to act as
the developer and/or manager of any Proposed Project (an
"Offer"), which Offer North Shore determines to accept,
North Shore shall, by written notice to CareMatrix, first
offer CareMatrix the right to act as the developer and/or
manager of the Proposed Projects upon the same terms and
conditions as the Offer, which notice shall set forth the
date by which the CareMatrix must respond as provided
herein. CareMatrix shall have fifteen (15) days from the
date of receipt of such notice within which to exercise the
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right granted hereby. If the Offer contemplates the offeree
acting in more than one function (e.g., an Offer in which
the offeree intends to act as both developer and manager),
CareMatrix may exercise this right with respect to all or
any of such functions (e.g., CareMatrix may elect to act as
both the developer and manager or only as developer or
manager). In the event CareMatrix determines to exercise
this right, CareMatrix shall provide written notice of such
election to North Shore within the fifteen (15) day period
and the North Shore and CareMatrix shall thereafter enter
into the appropriate agreement(s) upon the same terms and
conditions as contained in the original Offer. In the event,
CareMatrix elects not to exercise this right with respect to
any Offer, or does not respond in writing to North Shore
within the fifteen (15) day period, the Declining Party
shall be deemed to have waived its rights hereunder with
respect to such Offer; provided, however that if the
applicable agreement(s) is (are) not entered into or is
(are) entered into but is (are) not fully performed as
specified in the relevant agreement, the CareMatrix's rights
hereunder shall not be deemed to be waived and shall apply
to all future offers with respect to the Proposed Project.
6.2.3 In addition to the rights established under Section 6.2.1
above, in the event CareMatrix is the Proceeding Party, the
Proposed Project is a Medical Office Building and CareMatrix
receives a bonafide third party proposal or offer to lease
all or any portion of Proposed Project (an "Offer"), which
Offer CareMatrix determines to accept, CareMatrix shall, by
written notice to North Shore, first offer North Shore the
right to lease the space contemplated by the Offer upon the
same terms and conditions as the Offer, which notice shall
set forth the date by which North Shore must respond as
provided herein. North Shore shall have fifteen (15) days
from the date of receipt of such notice within which to
exercise the right granted hereby. In the event North Shore
determines to exercise this right, North Shore shall provide
written notice of such election to CareMatrix within the
fifteen (15) day period and CareMatrix and North Shore shall
thereafter enter into a lease upon the same terms and
conditions as contained in the original Offer. In the event
North Shore elects not to exercise this right with respect
to any Offer, or does not respond in writing to CareMatrix
within the fifteen (15) day period, North Shore shall be
deemed to have waived its rights hereunder with respect to
such Offer; provided, however, that if the applicable lease
is not entered into, North Shore's rights hereunder shall
not be deemed to be waived and shall apply to all future
offers with respect to the space to be leased pursuant to
the Offer.
6.2.4 In addition to the rights established under Section 6.2.1
above, in the event CareMatrix is the Proceeding Party, the
Proposed Project is an unlicensed Assisted Living Facility,
CareMatrix determines to lease space in such Assisted Living
Facility to a physician and receives a bonafide third party
proposal or offer to lease such space (an "Offer"), which
Offer CareMatrix determines to accept, CareMatrix shall, by
written notice to North Shore, first offer North Shore the
right to lease the space contemplated by the Offer upon
15
the same terms and conditions as the Offer, which notice
shall set forth the date by which North Shore must respond
as provided herein. North Shore shall have fifteen (15) days
from the date of receipt of such notice within which to
exercise the right granted hereby. In the event North Shore
determines to exercise this right, North Shore shall provide
written notice of such election to CareMatrix within the
fifteen (15) day period and CareMatrix and North Shore shall
thereafter enter into a lease upon the same terms and
conditions as contained in the original Offer. In the event
North Shore elects not to exercise this right with respect
to any Offer, or does not respond in writing to CareMatrix
within the fifteen (15) day period, North Shore shall be
deemed to have waived its rights hereunder with respect to
such Offer; provided, however, that if the applicable lease
is not entered into, North Shore's rights hereunder shall
not be deemed to be waived and shall apply to all future
offers with respect to the space to be leased pursuant to
the Offer.
6.3 In no event shall CareMatrix acquire, develop, own, finance,
manage or operate any Project other than an Assisted Living
Facility or Independent Living Facility within two (2) miles of
the hospital(s) listed on Exhibit B attached hereto, five (5)
miles of the hospital(s) listed on Exhibit C attached hereto or
ten (10) miles of the hospital(s) listed on Exhibit D attached
hereto, without the prior written consent of North Shore.
6.4 In no event shall either party acquire, develop, own, finance,
manage or operate any Project containing any Project Components
which are the same as any Project Components of any Project of any
Joint Venture which is within two (2) miles of the contemplated
Project without the prior written consent of the other party;
provided, however, that this restriction shall not apply to any
medical office building acquired by either party as part of the
acquisition of a physician practice (whether through an asset or
ownership interest acquisition) provided such office building has
no more than 15,000 square feet of leasable space and 80% or more
of such space is leased to such physician practice or an entity
controlled by such physicians and providing ancillary medical
services.
6.5 In no event shall a Declining Party acquire, develop, own,
finance, manage or operate any Project within two (2) miles of a
Project pursued independently by a Proceeding Party in accordance
with the terms of this Agreement without the prior written consent
of the Proceeding Party; provided, however, that this restriction
shall not apply to any medical office building acquired by either
party as part of the acquisition of a physician practice (whether
through an asset or ownership interest acquisition) provided such
office building has no more than 15,000 square feet of leasable
space and 80% or more of such space is leased to such physician
practice or an entity controlled by such physicians and providing
ancillary medical services.
6.6 In no event shall any of the restrictions set forth above apply to
any Project which either party may acquire, develop, own, finance,
manage or operate as a result of or in connection with such party
merging with another entity, acquiring all of the stock or
16
other equity interests in or having its stock acquired by another
entity or selling all or substantially all of its assets to or
purchasing all or substantially all of the assets of another
entity provided any such Project(s) does not account for more than
25% of the gross revenues of such party or the resulting entity.
6.7 In no event shall any of the restrictions set forth in this
Agreement prevent:
6.7.1 North Shore from serving as a member of a not-for-profit
hospital which may own, finance, manage, operate or
affiliate with a facility or facilities which would
constitute a Project as defined in this Agreement provided
any such hospital does not thereafter acquire, develop, own,
finance, manage, operate or otherwise engage in any joint
enterprise with another person or entity with respect to any
additional facility or facilities which would constitute a
Project as such term is defined in this Agreement; or
6.7.2 Franklin Hospital, Southside Hospital, Huntington Hospital
or Staten Island University Hospital (collectively, the
"Existing Sponsored Hospitals") from owning, financing,
managing, operating or affiliating with a facility or
facilities which would constitute a Project as defined in
this Agreement; provided, however, that North Shore shall
use its best efforts (which best efforts shall not include
North Shore being required to exercise its right to remove
the board of directors or management of any of the Existing
Sponsored Hospitals) to have the Existing Sponsored
Hospitals agree not to enter into any sponsorship or other
relationship to own, finance, manage, operate or otherwise
engage in any joint enterprise with another person or entity
with respect to any facility or facilities which would
constitute a Project as such term is defined in this
Agreement following the effective date of this Agreement
other than a facility or facilities which they own, finance,
manage, operate or are affiliated with as of the effective
date of this Agreement.
6.8 The parties acknowledge and agree that none of the terms or
provisions of this Agreement, including any restrictions set forth
herein, shall apply to Meditrust, a Delaware corporation, or any
of its affiliates.
6.9 Notwithstanding any other provision in this Agreement, North Shore
shall have the right to perform managed care contracting for any
Project within the Designated Area as and to the extent described
in Section 5.4 of this Agreement (including any Project described
in Section 6.6).
6.10 The parties acknowledge and agree that, notwithstanding any other
provision in this Agreement (including Section 6.7), the terms or
provisions of this Agreement shall not prohibit, restrict or
impair either party from pursuing the transactions identified on
Exhibit E attached hereto as such transactions are described in
such Exhibit.
17
6.11 CareMatrix acknowledges and agrees that none of the terms or
provisions of this Agreement shall prohibit, restrict or impair
North Shore from pursuing the transactions identified in that
certain Master Agreement of even date herewith entered into
between North Shore and PhyMatrix Corp.
7.0 Agreement Limited in Scope
This Agreement is not intended to abridge, limit, or restrict the rights of
the parties to pursue, either independently or in conjunction with any other
person or entity, other business opportunities outside the scope of this
Agreement. Without limiting the generality of the foregoing, each of the
parties acknowledge and agree that this Agreement, and the rights of the
parties hereunder, apply solely to the acquisition, development, ownership,
financing, management and operation of Assisted Living Facilities,
Independent Living Facilities, Skilled Nursing Facilities and/or Medical
Office Buildings and to no other types of facilities or businesses (such as,
but not limited to, ancillary medical services and/or physician practices)
and apply to such types of facilities within the Designated Area and to no
other geographic area.
8.0 Warranties, Representations and Indemnity
8.1 Except as otherwise contemplated by this Agreement or any Joint
Venture Agreement, neither party at any time shall enter into,
incur, or hold itself out to third parties as having authority to
enter into or incur, on behalf of the other party, any commitment,
expense or liability whatsoever.
8.2 Each party represents and warrants that it is free to enter into
this Agreement, that it has obtained any necessary approvals to do
so, and is not in violation of any existing agreements or
obligations it may have with other Persons or entities.
8.3 Each party agrees to defend, indemnify and hold the other party
harmless for any costs, damages or expenses which are caused by
its gross negligence or willful misconduct.
9.0 Term
The term of this Agreement shall commence upon the date hereof and expire
upon the earliest to occur of (i) the second (2nd) anniversary of the date
hereof unless the parties shall have entered into a Joint Venture Agreement
during such two (2) year period, (ii) any subsequent annual anniversary of
the date hereof unless the parties shall have entered into a Joint Venture
Agreement during the preceding year, (iii) for each Project, the execution
of the Joint Venture Agreement for the applicable Project, or (iv) Xxxxxxx
X. Xxxxxx, Xxxxxx X. Xxxxxx and/or Xxxxxxx X. Xxxxxx, or entities controlled
by all or any of them, ceasing to own ten percent (10%) or more of issued
and outstanding stock of CareMatrix Corporation (provided, however, that at
the election of either CareMatrix or North Shore (which election must be
exercised within 30 days following notice of such cessation or the intention
to cause such cessation to occur) this Agreement shall not terminate upon
the occurrence of such event).
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10.0 Waiver
The failure or delay of any party at any time to require performance by
another party of any provision of this Agreement, even if known, shall not
affect the right of such party to require performance of that provision or
to exercise any right, power or remedy hereunder. Any waiver by any party
of any breach of any provision of this Agreement should not be construed as
a waiver of any continuing or succeeding breach of such provision, a waiver
of the provision itself, or a waiver of any right, power or remedy under
this Agreement. No notice to or demand on any party in any circumstance
shall, of itself, entitle such party to any other or further notice or
demand in similar or other circumstances.
11.0 Severability
If any provision of this Agreement or any other agreement entered into
pursuant hereto is contrary to, prohibited by or deemed invalid under
applicable law or regulation, such provision shall be inapplicable and
deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given full
force and effect so far as possible. If any provision of this Agreement may
be construed in two or more ways, one of which would render the provision
invalid or otherwise voidable or unenforceable and another of which would
render the provision valid and enforceable, such provision shall have the
meaning which renders it valid and enforceable.
12.0 Notices
All notices, requests, consents and other communications required or
permitted under this Agreement shall be in writing (including electronic
transmission) and shall be (as elected by the person giving such notice)
hand delivered by messenger or courier service, electronically transmitted,
or mailed (airmail if international) by registered or certified mail
(postage prepaid), return receipt requested, addressed to:
With a copy to:
CareMatrix Corporation Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
000 Xxxxx Xxxxxx Xxxxx 000 Xxxx
Xxxxxxx, XX 00000 000 Xxxxx Xxxxxxx Xxxxx
Attn: General Counsel Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxx, Esquire
With a copy to:
North Shore Health System Winston & Xxxxxx
000 Xxxxxxxxx Xxxxx 0000 X Xxxxxx, X.X.
Xxxxx Xxxx, Xxx Xxxx 00000 Xxxxxxxxxx, X.X. 00000
Attn: General Counsel Attn: Xxxxxx X. Xxxxx, Esquire
19
or to such other address as any party may designate by notice complying
with the terms of this Section. Each such notice shall be deemed delivered
(a) on the date delivered if by personal delivery; (b) on the date of
transmission with confirmed answer back if by electronic transmission; and
(c) on the date upon which the return receipt is signed or delivery is
refused or the notice is designated by the postal authorities as not
deliverable, as the case may be, if mailed.
13.0 Assignment
No party shall assign his or its rights and/or obligations under this
Agreement, other than to an Affiliate, without the prior written consent of
each other party to this Agreement. Notwithstanding the foregoing,
CareMatrix shall have the right to designate any Person which, directly or
indirectly, is controlled by Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx or Xxxxxx
X. Xxxxxx, to act as its participant in any Joint Venture and/or serve as
the CareMatrix party to any Service Agreement, Management Agreement and/or
CareMatrix Lease.
14.0 Technology Ownership and Transfer
During the course of this Agreement and any Joint Venture by the parties to
this Agreement, the ownership and rights to use any and all technology,
proprietary information or intellectual property developed jointly by
employees of both parties shall be agreed to prior to engaging in such
initiatives by both parties. Any and all technology, proprietary
information or intellectual property developed solely by the employees of
one party shall be owned solely by that one party. However, if any such
solely owned technology, proprietary information or intellectual property
is required to be used by the other party in performance of a task with
respect to which the parties are engaged in a Joint Venture, the parties
shall provide for such use by entering into a mutually acceptable
royalty-bearing license agreement.
15.0 Applicable Law
This Agreement shall be construed in accordance with the laws of the State
of New York.
16.0 Jurisdiction and Venue
Any civil action or legal proceeding arising out of or relating to this
Agreement shall be brought in the courts of record of the State of New York
held in and for the County of Nassau or the United States District Court,
Eastern District of New York. Each party consents to the jurisdiction of
such court in any such civil action or legal proceeding and waives any
objection to the laying of venue of any such civil action or legal
proceeding in such court. Service of any court paper may be effected on
such party by mail, as provided in this Agreement, or in such other manner
as may be provided under applicable laws, rules of procedure or local
rules.
17.0 Relationship of the Parties.
17.1 As contemplated by this Agreement, either party may acquire,
develop, own, finance, manage and/or operate any Project by or
through one or more of its Affiliates;
20
provided, however, that such party shall guarantee the fu11 and
timely payment and the full and timely performance of all sums,
duties and obligations whatsoever of such Affiliate with respect
to such Project pursuant to the terms of a Guaranty in the form
attached hereto as Exhibit F.
17.2 It is acknowledged and agreed that CareMatrix and North Shore,
and their related Affiliates, are at all times acting and
performing under this Agreement as independent contractors.
Unless and until a Joint Venture Agreement is entered into by
the parties with respect to a Project, nothing contained herein
shall be construed as making the parties hereto, or their
respective Affiliates, partners, joint venturers or any other
similar relationship and, upon execution of a Joint Venture
Agreement for a Project, the scope of such joint enterprise shall
be limited as provided therein. Neither CareMatrix or North
Shore, nor their respective Affiliates, shall, by entering into
and performing their obligations under this Agreement, become
liable for any obligations, liabilities or debts of the other
parties hereto except as specifically provided for under the
terms of this Agreement. Neither party shall be permitted to use
the name of the other party hereto without such party's prior
written consent other than in connection with the acquisition,
development, ownership, financing, management or operation of any
Project.
18.0 Compliance with Law.
The parties acknowledge and agree that it is their intent that all Projects
and transactions undertaken by them in accordance with the terms of this
Agreement be in compliance with all applicable local, state and federal
laws, rules, regulations and the like, now existing or enacted or
promulgated after the date of this Agreement (collectively, "Applicable
Law") but that such Project and/or transactions provide the parties with
the underlying economic and financial arrangements contemplated by this
Agreement. In the event any Applicable Law is interpreted by judicial
decision, regulatory agency or legal counsel of both parties in such a
manner as to indicate that the structure of any Project or transaction
contemplated by this Agreement may be in violation of such Applicable Law,
the parties shall negotiate in good faith to restructure this Agreement
and/or the definitive documents for such Project or transaction to the
maximum extent possible to comply with such Applicable Law while preserving
the underlying economic and financial arrangements between the parties as
contemplated by this Agreement. If such a restructuring is not possible,
neither party shall pursue such Project or transaction without the prior
written consent of the other.
19.0 Use of Names.
Neither party shall use the name of the other party or its Affiliates in
any manner without the prior written consent of such other party.
21
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
CareMatrix Corporation North Shore Health System
/s/ Xxxxx X. Xxxxx Xx. /s/ Xxxx S.T. Xxxxxxxxx
By: Xxxxx X. Xxxxx Xx. By: Xxxx S.T. Xxxxxxxxx
Its: EVP Its: President
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Exhibit A
Form of Development Agreement
(See Attached Copy)
DEVELOPMENT AGREEMENT
Between
[CAREMATRIX OR PHYMATRIX AFFILIATE]
And
[APPLICABLE JOINT VENTURE]
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this "Agreement") is by and between [CAREMATRIX OR
PHYMATRIX AFFILIATE], a __________, with an office at __________, (the
"Developer"), and [APPLICABLE JOINT VENTUREl, with an office at __________, (the
"Owner"), and is entered into for the purpose of reducing to a formal writing
all of the parties understandings with respect to the development and
construction of a _______________ project to be comprised of __________ (the
"Project") to be located in __________, New York described below (the
"Property").
In consideration of the undertakings of each of the parties to the other:
IT IS AGREED:
ARTICLE I
Representations
The parties make each of the following material representations:
Section 1.1 - Title to Property. The Owner shall have or has good, record and
marketable title in fee simple to the Property consisting of approximately
________ acres of land as more fully described in Exhibit "A". Exhibit "A" and
each of the other Exhibits referred to in this Agreement shall be incorporated
into this Agreement by such reference as if fully set forth in this Agreement.
The Property shall be (i) free and clear of any and all encumbrances which
would, in the Developer's sole discretion, impair the construction or operation
of the Project except as set forth on Exhibit "B", and (ii) free of any
hazardous wastes or materials except as set forth on Exhibit "C".
Section 1.2 - Encumbrances.
(a) The Owner and the Developer acknowledge that the Property will be subject to
the easements, assessments, conditions, contracts, rights, claims,
encroachments, restrictions and other encumbrances as set forth on Exhibit "B"
(the "Existing Encumbrances"), to physical conditions disclosed by a boundary
survey to be prepared by __________ entitled __________, dated __________, for
the Property, and will be subject to those easements, conditions, contracts,
rights, licenses, encroachments, restrictions and other encumbrances resulting
from the Developer securing regulatory, development and construction approvals
for the Project and attendant site improvements. The Owner and the Developer
each represents to the other that it has reviewed or shall review the boundary
survey and the topographical survey of the Property and has made a physical
inspection of the Property and is satisfied as to the site characteristics and
other attributes in all material respects.
(b) Concurrently with the execution of this Agreement, the Owner shall provide
the Developer with copies of all engineering, architectural and any other plans,
studies and
surveys, title reports, environmental assessments, appraisals and other
information regarding the Property or the Project which are in the Owner's
possession, custody or control.
(c) The Owner represents, to the best of its knowledge, that the Property has
only the apparent site and off-site conditions, if any, as set forth on Exhibit
"D" which require the implementation of the measures, if any, as set forth on
Exhibit "D".
(d) Commencing on the date that the Developer commences construction in
accordance with the terms of this Agreement, the Owner shall provide the
Developer with full possession and complete control of the Property for purposes
of performing the Developer's obligations hereunder.
Section 1.3 - Permit and Approvals.
(a) The Developer represents that it shall use its best efforts to obtain, prior
to the date of Physical Completion (as hereinafter defined), all state, federal,
county and municipal land use approvals and permits, licenses, easements, and
utility agreements which are necessary for the development, construction and
opening of the Project on the Property as set forth on Exhibit "E" (the
"Developer's Approvals"). The Developer covenants to diligently use its best
efforts to obtain all of the Developer's Approvals in an expeditious manner. In
the event that the Developer is unable to obtain the Developer's Approvals, the
Developer shall have no liability whatsoever to the Owner, or any other party
and at the Owner's or the Developer's option, this Agreement shall be terminated
without recourse to either party hereto at law or in equity.
(b) The Owner represents that it shall use its best efforts to obtain, prior to
the date of Physical Completion, all state, federal, county and municipal land
use approvals and permits, licenses, easements, and utility agreements which are
necessary for the development, construction and operation of the Project on the
Property as set forth on Exhibit "F" (the "Owner's Approvals"). The Owner
covenants to diligently use its best efforts to obtain all of the Owner's
Approvals in an expeditious manner. In the event that the Owner is unable to
obtain the Owner's Approvals, the Owner shall have no liability whatsoever to
the Developer, or any other party and at the Owner's or the Developer's option,
this Agreement shall be terminated without recourse to either party hereto at
law or in equity.
(c) For the sole purpose of permitting the Developer to construct the Project,
the Owner grants to the Developer, to the extent required by the Developer in
order that the purpose of this Agreement be effectuated, the rights under the
Developer's Approvals and the Owner's Approvals (collectively, the "Approvals")
and any other grants of rights, permits, approvals, or licenses, which may be
necessary to complete the performance of the Developer's obligations hereunder;
provided, however that no transfer or assignment of any of the foregoing shall
occur which is prohibited by applicable law or the respective terms hereof.
Section 1.4 - Documentation. The Developer shall use its best efforts to
obtain, on behalf of the Owner, construction and permanent financing for the
Property, the Project, the Personal Property (as
2
defined herein) and related development costs (collectively, the "Project Loan")
which shall be sufficient, together with the Owner's equity contributions, if
necessary (which shall in no event exceed ten percent (10%) of the total costs
to construct the Project in accordance with the development budget), to pay the
full amount of the total costs to construct the Project in accordance with the
development budget. The Owner covenants that it will provide fully and in a
timely fashion all reasonable documentation required by the lender in connection
with the Project Loan. Such documentation shall include, but is not limited to,
all zoning and plan approvals, all utility letters indicating positive
availability of service, inventory of concessions made to and agreements with
any or all municipal bodies, site plans, title policies, and all other
regulatory body approvals. The Owner also covenants that it will, in a timely
manner, provide whatever financial or other information the lender might
reasonably require in connection with the Developer's applications for financing
for the construction of the Project and as required by such lender in connection
with the Project Loan.
Section 1.5 - Other Agreements. The Owner and the Developer each represents to
the other that neither entering into this Agreement nor performing their
respective obligations hereunder will violate any other agreements or documents
by which either may be bound.
Section 1.6 - Utility Services. The Owner represents that, to the best of its
knowledge, all utility services required to construct and operate the Project
(including, without limitation, public water, sewer and electricity) are
currently available to the Property in the capacities required to operate the
Project. No work need be performed by or on behalf of the Developer to make such
utilities available to the Property for the construction or operation of the
Project, except for the matters, if any, set forth on Exhibit "D". Copies of
letters from the providers of such utility services confirming such availability
are annexed hereto as Exhibit "G".
Section 1.7 - Good Standing of the Developer. The Developer represents that it
is duly organized, validly existing and in good standing under the laws of the
State of __________. The Developer represents that it is empowered and
authorized to execute, deliver and perform its obligations under this Agreement,
and, upon such execution and delivery and subject to the conditions subsequent
set forth in Section 5.1, this Agreement shall be valid, binding and legal
obligation of the Developer, enforceable in accordance with its terms and in
compliance with its certificate of incorporation and bylaws and all applicable
laws of the state of its incorporation.
Section 1.8 - Good Standing of the Owner. The Owner represents that it is duly
organized and validly existing under the laws of the State of __________. The
Owner represents that it is empowered and authorized to execute, deliver and
perform its obligations under this Agreement, and upon such execution and
delivery and subject to Section 5.1, this Agreement shall be the valid, binding
and legal obligation of the Owner, enforceable in accordance with its terms and
in compliance with its certificate of [limited partnership or incorporation] and
[partnership agreement or bylaws] and all applicable laws of the state of its
organization.
3
ARTICLE II
Construction of the Project
Section 2.1 - Control of Construction. Subject to the express provisions
contained herein, it is the intention of the parties that the Owner shall have
sole, complete and absolute authority and discretion to decide any and all
issues pertaining to the construction of the Project, including, without
limitation, the expenditure of funds, the incurring of costs and all of the
other matters referred to herein.
Section 2.2 - Architectural and Engineering Services. The parties acknowledge
that __________ and their consulting engineers (the "Architect and Engineers")
have or will be retained by the Owner. The Owner represents and warrants to the
Developer that a true, accurate and complete copy of the Architectural Contract
is attached hereto as Exhibit "H," (the "Architect Contract"). The Developer
shall not be responsible to the Owner, or any other party for any errors,
omissions, breaches or failures thereof, or any damages resulting from the acts
or omissions of the Architect. At the Developer's option, the Owner shall assign
to the Developer all of its right, title and interest in the Architectural
Contract and any and all architectural, engineering and other contracts with
respect to the Project free of any claims other than outstanding amounts owed
under the Architectural Contract. In no event shall the Developer be obligated
to assume any of said contracts.
Section 2.3 - Other Professionals and General Assumed Obligations. The Owner
represents that it has not engaged any architects or any engineers, lawyers,
consultants, accountants, or other professionals with respect to the Project,
other than the Architect, which the Owner shall be obligated to pay. The
Developer neither assumes nor shall be obliged for any debts, liabilities or
obligations of the Owner or related to the Property or the Project.
Section 2.4 - Plans and Specifications.
(a) The Architect and Engineers retained by the Owner shall, under the
direction of the Developer and after consultation with the Owner, prepare
basic design plans (the "Basic Plans"). As a part of this process, the
Developer may engage engineers, including the site engineers, to perform
test borings and other soil testing at the Property for purposes of properly
locating the Property on the Project. The Developer, the Architects and
Engineers shall consult with the Owner during the process of preparing the
Basic Plans. The Developer, Architect and the Engineers shall have access to
the Project for all such tests and surveys.
(b) Within two (2) weeks after the date of the Architect's and the
Engineer's completion and delivery of the Basic Plans, the Owner, the
Developer, the Architect and Engineers shall meet to review and approve the
Basic Plans. The parties shall initial the Basic Plans to indicate their
approval of such Basic Plans.
(c) Upon the approval by the parties of the Basic Plans, the Developer shall
direct the Architect and Engineers to prepare final plans, specifications
and a site plan (collectively the "Final Plans") based upon the Basic Plans.
Within two (2) weeks after the completion of the Final Plans and their
delivery to the Owner, the parties will meet to review and approve the
4
same, and make any necessary revisions. The Owner agrees that it will not
unreasonably withhold its approval of the Final Plans if they conform in all
material respects to the Basic Plans. The parties agree to use their best
efforts to reach a prompt and reasonable conclusion concerning the
acceptability of the Final Plans (and the Personal Property, see Section
2.6). The parties shall initial the Final Plans as an indication of their
approval of the same.
Section 2.5 - Construction. The Developer shall cause the Project to be
constructed in a good and workmanlike manner and in accordance with the Final
Plans, the Approvals, and all applicable laws subject to field changes and minor
design changes. The Project is to be licensed for the unit complement described
above and shall be constructed in accordance with the requirements in effect on
the date of this Agreement as set forth by all federal, state and local
governmental agencies having jurisdiction of the Project, including Life Safety
Code requirements imposed by the Federal Department of Health and Human
Services.
Section 2.6 - Personal Property.
(a) The Developer will furnish the specific items of personal property
contained in Exhibit "I" (the "Furniture, Furnishings & Equipment" or the
"FF&E") required for the Project.
(b) In order to reduce the risk that the FF&E will be delivered prior to the
Closing contemplated herein, the Owner covenants that it shall approve the
FF&E as soon as practicable but not later than approximately six (6) months
prior to the estimated date of Physical Completion (defined below).
(c) The FF&E does not include kitchen and laundry equipment.
Section 2.7 - Changes. The Owner agrees that the Developer shall also have the
right to make changes in the Final Plans and in the Personal Property if
required by any federal, state or local governmental authority having
jurisdiction over the Project or if required due to the unavailability of any
construction materials or the Personal Property. The Owner shall be notified of
any such changes or substitutions in the Personal Property, however, the Owner
shall have final authority to make all decisions with respect to such changes;
provided, that, such changes result in construction, space, design, personal
property, equipment and interior and exterior design comparable in overall
design and quality to that shown on the Final Plans. Any change that results in
the loss or adjustment of square footage in the Project will require approval by
the Owner.
Section 2.8 - Commencement of Construction. Construction of the Project will
start within thirty (30) days after notification to the Developer by the Owner,
or as soon thereafter as weather and ground conditions permit.
Section 2.9 - Continuity of Construction. Construction, once undertaken, shall
proceed in a continuous and reasonably expeditious manner until Physical
Completion is achieved.
5
Section 2.10 - Completion of Construction.
(a) For the purposes of this agreement, the terms "Physical Completion" or
"Physically Completed" shall mean the date on which the building and
improvements described and set forth in the Final Plans have been completed
and the Project shall have been approved for and received a certificate for
temporary or permanent occupancy by the local building inspector, and by the
State Fire Xxxxxxxx in the event his or her approval is required (the
"Certificate of Occupancy"). Physical Completion shall be deemed to have
been achieved notwithstanding that any of such officials or agencies have
issued a Certificate of Occupancy with conditions or a Punch-List (as
hereinafter defined) listing items requiring completion or correction, so
long as such conditions or Punch-List items do not prevent or prohibit
occupancy as determined by the Owner, in its sole discretion.
(b) The Developer will use its reasonable best efforts to notify the Owner
at least ninety (90) days prior to the time that the Developer estimates
that the Project will be Physically Completed, whereupon the Owner will
diligently proceed to fulfill all other conditions necessary for licensure
and the Owner will apply in a timely manner for all licenses and permits
necessary to commence operation of the Project as set forth on Exhibit
"C-2". After such notice from the Developer, the Owner, to the extent
necessary to perform administrative activities may, so long as it does not
interfere with completion of construction, enter upon the Property in an
effort to coordinate initial licensure.
Section 2.11 - The Owner's Access. The Owner shall have access to the
construction site while construction is in progress.
Section 2.12 - Punch-List. If, at any time after the Project has been Physically
Completed, there shall exist any item or items requiring completion or
correction, then the Developer agrees to use all reasonable diligence to
complete or correct such item or items so that each conforms to the Final Plans.
The parties shall make a Punch-List of the items requiring completion or
correction (the "Punch List"). Each item on the Punch-List shall be assigned a
reasonable value based upon the reasonable cost of completion or correction of
the same or such other value as may be required by the Owner's lender
("Punch-List Amount"). The Developer shall give its written undertaking to
complete each such item within forty-five (45) days (or such other period of
time as is mutually agreed upon by the parties).
Section 2.13 - Work and Warranties. Upon completion of construction, landscaping
and installation of the Personal Property, the Developer will assist in
obtaining any and all warranties and guarantees received from designers, the
Architect, the general contractor and suppliers of equipment and furnishings.
The Developer will cause the applicable contractor to remedy any defect in
construction caused by poor workmanship or materials which are brought to its
attention by written notice within a period of one (1) year from the date of the
issuance of the Certificate of Occupancy. Aside from the foregoing, the Owner
hereby waives and the Developer hereby disclaims all other express and implied
warranties of every kind or nature with respect to the Project and the Personal
Property, including, without limitation, waiving all IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6
Section 2.14 - Financing Arrangements.
(a) The Owner will obtain the Project Loan which shall be sufficient,
together with the Owner's equity contributions, to pay the full amount of
the costs to construct the Project in accordance with the development
budget.
The Owner and the Developer also contemplate that the Property and the
Project, together with all fixtures, furnishing, equipment, and articles of
personal property now owned or hereafter acquired by the Owner which are or
may be attached to or used in connection with the Property or the Project,
together with any and all replacements thereto and substitutions therefor,
and all proceeds thereof; and all present and future rents, issues, leases,
and profits of the Property and the Project will serve as security for the
payment obligations to any lenders relating to the Project Loan or
otherwise, and that the Owner will be the principal obligor for the
repayment of all financial obligations thereunder after the transfer of
title to the Owner. The Owner therefore, agrees to execute and deliver all
commitments, promissory notes, mortgages, collateral assignments, documents,
certificates, affidavits, and other writings required to be executed by any
lender in connection with such financing.
ARTICLE III
Development Fee
Section 3.1 - Amount of Development Fee. The price to be paid by the Owner to
the Developer for development and design services rendered pursuant to this
Agreement (the "Development Fee") is _______________ Dollars ($__________).
Section 3.2 - Payment of Development Fee. The Development Fee shall be paid to
the Developer upon the closing of the Project Loan. In the event that, for any
reason, the total amount of the Development Fee is not so paid to the Developer,
then the balance shall accrue interest at a rate equal to the rate announced by
Fleet Bank of Massachusetts, NA, from time to time as its prime rate ("Prime
Rate") plus two percent (2%) (such balance, together with such interest, the
"Balance") and the Balance shall be repaid to the Developer on a priority basis
from the cash flow of the Project as set forth in that certain Agreement of
Limited Partnership of the Owner dated _______________,19__.
Section 3.3 - Form of Conveyance and Status of Title. The Personal Property
shall be conveyed by warranty xxxx of sale and may be subject to the mortgages
and security interests described in Section 2.14.
ARTICLE IV
Additional Responsibilities of Parties
Section 4.1 - The Developer's Responsibilities. In addition to its obligations
elsewhere expressed in this Agreement, the Developer (subject to reimbursement)
shall have the following responsibilities:
7
(a) To obtain the necessary building permits and the Certificate of
Occupancy;
(b) To arrange for and coordinate the obtaining of all labor and materials
required to develop, construct and furnish the Project in accordance with
the Final Plans (except as otherwise expressly set forth herein);
(c) To at all times, commencing with the date upon which construction
begins, carry the following types of insurance with an insurance carrier or
carriers acceptable to the Owner and the Owner's lender:
(i) Xxxxxxx'x compensation insurance fully covering all persons engaged
in the performance of this Agreement, in accordance with applicable law.
(ii) Public liability insurance covering death or bodily injury with
limits of not less than $300,000 for one person and $1,000,000 for any
one accident or disaster; and property damage coverage limits of not
less than $100,000; all of which insurance shall name the Owner's lender
as an additional insured.
The Developer shall furnish to the Owner and the Owner's lender if
required by such lender, duplicate policies of insurance as set forth in
subparagraphs (i) and (ii) hereof. Each of such policies shall, if the
insurance carriers so permit, contain a provision to the effect that
they may not be canceled except upon ten (10) days prior written notice
to the Owner and the Owner's lender.
(d) Upon Physical Completion, the Developer shall deliver to the Owner, at
the Owner's option, duly executed waivers of mechanic's liens signed by each
contractor and subcontractor which provided labor or materials on the
Project.
(e) To expeditiously pursue obtaining commitments for financing the
contemplated construction as provided herein.
(f) To pay for all professional and other staff personnel required for the
pre-opening and operation of the Project in sufficient time to permit
licensure by the applicable governmental agency(ies) at the date of Physical
Completion.
Section 4.2 - Indemnification. The Developer hereby agrees to indemnify and hold
the Owner harmless from all liabilities, claims, and demands for personal injury
or property damage arising out of or caused by any act or omission of the
Developer, its subcontractors, agents, or employees, or arising in or about the
Property at any time from the date of this Agreement until Physical Completion.
8
ARTICLE V
Contingencies
Section 5.1 - Required Occurrences. This Agreement and the undertakings of the
Developer shall, at the election of the Owner be contingent upon the occurrence
of each of the following:
(a) Approvals. All of the Approvals (to the extent then obtainable) and
current utility availability letters shall have been obtained by
_______________, 199__.
(b) Title. An Owner's title insurance policy and Class A-2 ALTA survey,
satisfactory to the Developer, in its sole discretion, shall have been
obtained by the Owner which confirms that there are no exceptions or
conditions which would render title to the Property unmarketable or which
will prohibit or restrict the construction or operation of the Project or
which would prevent an institutional lender from closing a construction or
permanent mortgage loan for the Project in the usual course of its business.
(c) Additional Due Diligence Regarding the Property. The Developer shall
have received due diligence information concerning the Property,
satisfactory to the Developer in its sole discretion, including, without
limitation, soil tests and utility service confirmations to the extent not
currently available.
(d) Purchase of the Property. The Owner shall have purchased good record,
marketable fee simple title to the Property as set forth in Section 1.1.
Section 5.2 - Failure of Contingencies. In the event that any one or more of the
contingencies set forth in this Article is not satisfied, waived or deferred by
the parties in writing, within the period of time set forth above, then, upon
written notice, either party may terminate this Agreement. In such event,
neither party shall have any further responsibility or liability to the other.
The Developer reserves the right, at its option, to waive or defer any one or
more of the conditions precedent.
9
ARTICLE VI
Additional Covenants of The Owner
Section 6.1 - Confidentiality. The Owner, its partners, affiliates,
agents, and employees hereby agree:
(a) to maintain in the strictest confidence the identity of the Developer;
the contents of this Agreement; the negotiations between the parties on the
terms of this Agreement; and any of the Developer's proprietary information,
including, without limitation, financial information, projects, copies of
leases, real estate appraisals, and other information regarding the Project
and the business affairs and operations of the Developer which any of said
parties obtain from the Developer in the course of negotiations for the
transactions contemplated hereby (the "Confidential Information");
(b) not to disclose, without the Developer's prior written consent (except
to the extent disclosure is required by applicable law or regulation), any
Confidential Information except to such parties' own agents, servants and
employees, bankers, consultants and other advisors to whom disclosure is
necessary in order to effectuate the transactions contemplated hereby; and
(c) to comply therewith for a period of one (1) year commencing on the date
of this Agreement.
Section 6.2 - Provision of Further Information. The Owner agrees to supply
complete financial information and any other data required in connection with
the construction or permanent financing for the Project and to execute, and
cause to execute, any and all documents which are required by the terms thereof.
ARTICLE VII
Concluding Provisions
Section 7.1 - Entire Agreement. This Agreement, together with the other written
agreements between the parties executed prior to or concurrently herewith or
referenced herein, contain the entire understanding of the parties. There are no
oral understandings, terms or conditions, and no party has relied upon any
representation, express or implied, not contained in this Agreement or in other
written agreements between the parties executed prior to or concurrently
herewith or referenced herein.
Section 7.2 - Representations. None of the parties shall be bound by any
promises, representations, or agreements except as herein expressly set forth.
Section 7.3 - Amendments. This Agreement may not be amended, waived, modified,
altered or changed in any respect whatsoever except by a further agreement, in
writing, executed by each of the parties and consented to by the Owner.
Section 7.4 - Joint Effort. The preparation of this Agreement has been a joint
effort of the parties, and
10
the resulting document shall not be construed more severely against one of the
parties than the other.
Section 7.5 - Brokers. Each of the Owner and the Developer represents and
warrants to the other that no broker or finder has acted on its behalf in
connection with this Agreement or the transactions contemplated hereby or
referred to herein; and each agrees to indemnify and hold and save the other
harmless from any claim or demand for commission or other compensation by any
broker, finder or similar agent claiming to have been employed by or on behalf
of such party.
Section 7.6 - Assignment. The Developer shall have no right to assign his rights
nor delegate its obligations under this Agreement to another entity or person
without the prior written consent of the Owner except that the Developer shall
have the right to assign this Agreement to, merge with or consolidate with an
"Affiliate" (defined herein as defined in the Securities and Exchange Act of
1934 and the regulations thereunder) in connection with a public offering,
merger or other transfer.
Section 7.7 - Notices. All notices which may be given to any of the parties
hereunder shall be in writing and shall be hand delivered or sent by registered
or certified mail, return receipt requested, or by Federal Express, and postage
prepaid as follows:
(a) In the event that notice is directed to the Owner, it shall be sent to
it at the address set forth above and a copy therefore sent to
_______________, Attention: _______________, or at such other address or
addresses the Owner shall from time to time designate by notice to the
Developer.
(b) In the event that notice is directed to the Developer, it shall be sent
to _______________, Attention: _______________, with a copy to
_______________ at the same address; or at such other address or addresses
as the Developer shall from time-to-time designate by notice to the Owner.
The effective date of any such notice shall be the earlier of actual receipt by
the addressee or three (3) days after such notice is properly deposited for
mailing.
Section 7.8 - Arbitration. Any dispute or controversy arising between the
parties involving the interpretation or application of any provisions of the
Agreement, or arising out of this Agreement, or concerning the construction of
the proposed Project or the furnishing thereof shall be submitted to and
determined by arbitration in accordance with the rules of the American
Arbitration Association then in effect.
Section 7.9 - Captions. The captions of this Agreement are for convenience and
reference only and in no way define, describe, extend or limit the scope or
intent of this Agreement or the intent of any provision hereof.
Section 7.10 - Successors. This Agreement shall be binding upon the parties
hereto, their respective heirs, executors, administrators, successors, and
assigns.
Section 7.11 - Counterparts. This Agreement may be executed in counterparts,
each of which shall be
11
deemed an original.
Section 7.12 - Severability. The invalidity or unenforceability of one or more
of the phrases, sentences, provisions, clauses, Sections or Articles contained
in this Agreement shall not affect the validity or enforceability of this
remaining portions so long as the material purposes of this Agreement can be
determined and effectuated.
Section 7.13 - Effective Date. This Agreement shall be deemed to be effective as
of the date set forth below.
Section 7.14 - No Offer. The delivery of an unexecuted copy of this Agreement
shall not be deemed an offer. No rights are to be conferred upon any party until
this Agreement has been executed and delivered to each party.
Section 7.15 - Governing Law. This Agreement shall be governed by the laws of
the State of New York.
Dated this _____ day of __________ 199_ and executed under seal.
Witness: ___________________________________
________________________________ By: _______________________________
Name: Name:
Title:
___________________________________
________________________________ By: _______________________________
Name: Name:
Title:
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Exhibit B
Two Mile Exclusion Hospitals
North Shore University Hospital at Forest Hill
24
Exhibit C
Five Mile Exclusion Hospitals
North Shore University Hospital, Manhasset
North Shore University Hospital at Xxxx Cove
North Shore University Hospital at Plainview
North Shore University Hospital at Syosset
Franklin General Medical Center
Staten Island University Hospital-North Division
Staten Island University Hospital-South Division
25
Exhibit D
Ten Mile Exclusion Hospitals
Huntington Hospital
Stonybrook Hospital
Southside Hospital
26
Exhibit E
Excluded Transactions
As to North Shore:
1. Long Island Jewish Medical Center/Xxxxxx Geriatric ("LIJ")
North Shore and LIJ are discussing a potential affiliation of the two
health systems. Xxxxxx Geriatric, an existing not-for-profit long term care
affiliate of LIJ, may become part of the combined system.
2. Episcopal Health System (EHS)
North Shore and EHS are discussing a potential affiliation of the two
health systems. EHS has existing non-for-profit long term care and continuing
care community affiliates that may become part of the combined system.
As to CareMatrix:
1. Xxxxxx-Xxxxxx Senior Housing ("HBSI")
CareMatrix and HBSI have affiliated to develop, manage, own and operate assisted
living and senior housing facilities in the area described on Exhibit E-1.
27
Exhibit E-1
Xxxxxx-Xxxxxx Designated Area
(See attached Map)
28
[map of Long Island]
Exhibit F
Form of Guarantee
(See Attached Copy)
29
GUARANTEE
To induce [INSERT NAME OF APPLICABLE AFFILIATE], a [INSERT TYPE OF ENTITY] (the
"Obligee") to enter into that or those certain [INSERT NAME(S) OF DOCUMENT(S) TO
BE ENTERED INTO] (individually, an "Agreement" and collectively, the
"Agreements") with [INSERT NAME OF APPLICABLE AFFILIATE], a [INSERT TYPE OF
ENTITY] (the "Obligor"), the undersigned guarantor (the "Guarantor") does
hereby absolutely and unconditionally guarantee the full and timely performance
of all duties and obligations whatsoever of the Obligor to the Obligee, whether
now existing or hereafter arising, under the Agreements and the full and timely
payment to the Obligee of all debts and liabilities whatsoever of the Obligor to
the Obligee, whether now existing or hereafter arising, under the Agreements and
agrees, in the event Obligor fails to fully and timely perform any of said
duties and obligations or fails to fully and timely pay any of said debts or
liabilities, to fully and timely perform and/or pay the same, and to pay any
reasonable fees, costs and expenses incurred with respect to or arising out of
such duties, obligations, debts or liabilities or any collateral therefore, any
reasonable fees, costs, liabilities or damages incurred by or awarded against
the Obligee in connection with any proceeding against the Obligor, the
Guarantor, any other guarantor or any collateral (including, without limitation,
all reasonable attorneys fees, costs and other legal expenses (including fees of
paraprofessionals such as paralegals, investigators, etc.) including those
incident to litigation and any appellate, bankruptcy and postjudgment
proceedings), any monies paid by the Obligee on account of taxes, wages,
insurance or to any other person as a result of this Guaranty or arising out of
or connected with the duties, obligations, debts or liabilities of the Obligor
(all such duties, obligations, debts, liabilities, costs, fees, expenses and
damages herein collectively called the "Obligations").
Additionally, the Guarantor specifically agrees that this Guarantee shall be a
continuing Guarantee of all duties, obligations, debts and liabilities of the
Obligor to the Obligee under the Agreements and it shall apply and be binding on
the Guarantor until all Obligations to the Obligee have been satisfied in full,
regardless of how long before or after the date hereof any of the Obligations
were or are incurred. The Guarantor further agrees that he, she or it shall not
become subrogated to any of the Obligee's rights in connection with the
Obligations, even if the Guarantor makes payments or performs duties or
obligations hereunder, nor shall the Guarantor have any interest in any of the
collateral securing any of the Obligations. The Guarantor subordinates all debts
and obligations now or hereafter owing by the Obligor to the Guarantor, and any
liens securing the same, to the Obligations and any liens securing any of the
Obligations. The Guarantor shall not be entitled to receive payment on, or
enforce, any such debts and liens during any period in which the Guarantor is in
default of its obligations hereunder.
The Guarantor hereby assents to all terms and agreements heretofore or hereafter
made by the Obligor with the Obligee and further agrees and consents that the
Obligee may, without in anyway releasing or affecting the liability of the
Guarantor hereunder and with all rights against
the Guarantor being expressly reserved: exchange, release, or surrender any
collateral to the Obligor or to any other person; waive, release or subordinate
any security interest, in whole or in part, now or hereafter held as security in
any of the Obligations; substitute any collateral held as security for the
Obligations for other collateral of any kind, regardless of value; waive or
delay the exercise of any of its rights or remedies against the Obligor, any
other guarantor or any other person; release or agree not to xxx any other
guarantor or any other person other than the Obligor or any collateral granted
as security for the Obligations; modify the terms of the Agreements; and apply
payments received from the Obligor, the Guarantor, or any other person, or from
any security, in whole or in part, to any of the Obligations, all as the Obligee
deems appropriate.
The Guarantor hereby specifically waives any and all defenses to any action or
proceeding brought to enforce this Guarantee or any part of this Guarantee,
either at law or in equity, except for defenses that Obligor may have against
the Obligee and the defense that the duty, obligation, debt or liability claimed
by the Obligee to be due has actually been performed for the benefit of or paid
to the Obligee. The Guarantor specifically, without limiting the foregoing in
any way, waives any right to claim that the Obligee has unjustifiably impaired
the collateral or released any other guarantor from its obligations and waives
any defenses with respect to any other acts or omissions of the Obligee which
change the scope of the Guarantor's risk.
The Guarantor hereby waives all notices whatsoever with respect to the
Obligations or any security therefor including, but without limitation, notice
of: the Obligee's acceptance of this Guarantee or its intention to act, or its
action, in reliance thereon; the present existence or future creation or
modification of the Agreements or any of the Obligations or any terms or amounts
thereof; any default by the Obligor, or other person; any disposition of
collateral; and the release of any guarantee or surety agreement (in addition to
this Guarantee), or the release of any guarantor, security, or surety for any of
the Obligations hereunder. The Guarantor also waives presentment, demand, and
notice of protest, dishonor and nonpayment in relation to any instrument
evidencing any of the Obligations, and any other demands and notices required by
law, except as such waiver may be expressly prohibited by law. The Guarantor
represents that he, she or it has independent means of obtaining financial
information about the Obligor, and that the Obligee has no obligation, either
prior to the execution of this Guarantee or at any time thereafter, to notify
the Guarantor of the Obligor's financial condition or of any event or occurrence
affecting the Obligor's financial condition. Nothing contained in this Guarantee
shall be considered a waiver by Obligor of any notice required under the
Agreements.
Should any of the Obligations not be performed or paid when due or should there
be any default under any document in connection therewith, the Obligee may sell,
assign or deliver or otherwise dispose of any property or security of the
Guarantor in the possession of the Obligee in the manner prescribed by law for
realizing upon collateral security upon default. The Guarantor hereby grants to
the Obligee a security interest under the New York Uniform Commercial Code all
such property or security of the Guarantor from time to time in the possession
of the Obligee, in order to secure the Guarantor's obligations hereunder.
2
The liability of the Guarantor under this Guarantee is absolute and
unconditional, without regard to the liability of any other person, and shall
not in any manner be affected by reason of: (i) the failure of any other
guarantor to execute a guarantee; (ii) any action taken or not taken by the
Obligee, which action or inaction is herein consented and agreed to; (iii) any
delay in making demand on the Guarantor for satisfaction of its liability
hereunder; (iv) any delay in the Obligee enforcing, or the failure of the
Obligee to enforce, any rights or remedies against the Obligor or any other
party liable to the Obligee on account of the Obligations; or (v) any delay in
the Obligee seeking, or the failure of the Obligee to seek, the enforcement of
any remedies with respect to any security interest, lien or encumbrance granted
to the Obligee by the Obligor or any other party in connection with the
Obligations. All of the Obligee's rights and remedies shall be cumulative and
any failure of the Obligee to exercise any right hereunder shall not be
construed as a waiver of the right to exercise the same or any other right at
any time, and from time to time, thereafter.
This Guarantee shall be operative and binding upon the Guarantor and possession
of this Guarantee by the Obligee shall be conclusive evidence that this
Guarantee was not delivered in escrow or pursuant to any agreement that it
should not be effective until any conditions precedent or subsequent had been
complied with, unless at the time of receipt of this Guarantee the Obligee
delivers to the Guarantor a letter setting out any terms and conditions that may
affect the enforceability of this Guarantee.
The liability of the Guarantor hereunder shall continue until 90 days after this
Guarantee is marked "cancelled" by the Obligee and returned to the Guarantor.
Guarantor may not cancel the Guarantor's liability under this Guarantee and
hereby waives any right to do so.
Upon the filing of a petition in bankruptcy with respect to the Obligor, any
assignment for the benefit of creditors of the Obligor, or any other
circumstances necessitating the Obligee to file its claim against the Obligor,
the Guarantor agrees that, notwithstanding any stay, injunction or other
prohibition preventing the maturity, acceleration or collection of all or any
portion of the Obligations, the Obligations (whether or not then due and payable
by the Obligor) shall forthwith become due and payable by the Guarantor for
purposes of this Guarantee, on demand. The Obligations of the Guarantor
hereunder shall not be affected or impaired by the Obligee's omission or failure
to prove its claim against the Obligor. Notwithstanding that this Guarantee may
have been returned to the Guarantor and marked "cancelled" by the Obligee, the
Obligations of the Guarantor hereunder shall continue at all times for any
amounts guaranteed hereunder that were paid by the Obligor to the Obligee within
90 days after the date of cancellation of this Guarantee. If for any reason
whatsoever, including, without limitation, the bankruptcy of the Obligor, the
Obligee is not permitted to retain any amounts guaranteed hereunder that were
paid by the Obligor to the Obligee during said 90-day period, the Guarantor
shall be liable under this Guarantee for the amount of such payments as if this
Guarantee had never been cancelled and the Obligee shall be entitled to recover
such amounts from the Guarantor.
In the event the Obligor named herein is a corporation or a partnership, this
Guarantee shall cover all Obligations to the Obligee purporting to be made on
behalf of the Obligor by any
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officer, director, general partner or agent of the Obligor without regard to the
actual authority of such officer, director, general partner or agent. The term
"corporation" shall include cooperatives and associations of all kinds, and all
purported corporations, whether correctly and legally chartered and organized or
not. The term "partnership" shall include limited partnerships and general
partnerships.
The Guarantor agrees that this Guarantee shall be governed exclusively by the
laws of the State of New York.
The Guarantor further agrees to pay all costs of collection, including
reasonable attorneys' fees, costs and other legal expenses (including those
incident to appellate, bankruptcy or post-judgment proceedings) incurred by the
Obligee in attempting to enforce the Guarantor's liability under this Guarantee.
Any notice relative to this Guarantee shall be in writing and shall be deemed
delivered if delivered in person or if sent by registered mail, postage prepaid,
return receipt requested, as follows, unless such address is changed by written
notice hereunder:
(a) If to the Obligee: (b) If to the Guarantor:
This Guarantee shall inure to the benefit of the Obligee, its successors and
assigns, and to any person to whom the Obligee may grant an interest in any of
the Obligations, and shall be binding upon the Guarantor and his or her
respective heirs, personal representatives, successors and assigns.
In this Guarantee, the use of any gender shall be deemed to include all genders,
and the use of the singular shall include the plural and vice-versa, wherever it
appears appropriate from the context. The term "person" shall include natural
persons and corporations, partnerships, limited partnerships, trusts, estates
and all other artificial persons or entities.
If any part of this Guarantee is contrary to, prohibited by or deemed invalid
under any applicable law or regulation, such provision shall be inapplicable and
deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given full force
and affect so far as possible.
Any terms or statements contained herein which may be interpreted as being
ambiguous or misleading shall be strictly construed against the Guarantor and
for the enforcement of this Guarantee and the payment of the Obligations of the
Obligor to the Obligee. The Guarantor
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agrees to do, sign and execute all things, deeds and documents which the Obligee
may deem necessary or advisable for the protection of its rights hereunder.
The Guarantor hereby acknowledges and agrees that he, she or it has received and
reviewed a copy of this Guarantee and all documents referred to herein and that
he, she or it has received or has had an opportunity to have received the advice
of legal counsel in connection herewith and therewith. This Guarantee shall be
deemed and treated as being drafted jointly by the Guarantor and the Obligee. No
term, condition or provision of this Guarantee shall be construed more strictly
against the Guarantor or the Obligee because the Obligee, or its counsel, was
responsible for the physical preparation hereof.
This instrument covers all agreements between the parties hereto relative to
this Guarantee, and none of the parties shall be bound by any representations or
promises made by any person relative hereto which is not embodied herein. No
course of dealing, course of performance or trade usage, and no parol evidence
of any nature, shall be used to supplement or modify any terms hereof.
IN WITNESS WHEREOF, the Guarantor, intending to be legally bound
hereby, has duly executed this Guarantee as of the ______ day of __________,
199_.
[INSERT SIGNATURE BLOCK]
STATE OF _____________
COUNTY OF __________
The foregoing instrument was acknowledged before me this ______ day of
_______________, 199_, by
___________________________________________________________________, the
_______________ of _______________.
___________________________________________
Notary Public
My Commission Expires:
(NOTARIAL SEAL)
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