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ASSET PURCHASE AGREEMENT
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This Asset Purchase Agreement ("Agreement") is made and entered into
this 12th day of November, 1999, by and between ESEMTU LLC, an Ohio limited
liability company (hereinafter referred to as the "Buyer"), and SUNNYLAND LAND
CORPORATION, an Ohio corporation, ETHAN XXXXX CARE CENTER, INC., DBA BRISTOL
HOUSE OF SPRINGFIELD, an Ohio corporation, and AMERICAN LIVING CENTERS, INC., an
Ohio corporation (hereinafter collectively referred to as the "Sellers").
RECITALS
WHEREAS, SUNNYLAND LAND CORPORATION, owns the real property, which is
more particularly described in Exhibit "A" attached hereto (the "Real
Property"), and all buildings associated with the 100-bed nursing home known as
Bristol House of Springfield (the "Home") located at 0000 0/0 Xxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxx 00000; and
WHEREAS, SUNNYLAND LAND CORPORATION, currently leases the Real Property
to ETHAN XXXXX CARE CENTERS, INC., DBA BRISTOL HOUSE OF SPRINGFIELD, and
AMERICAN LIVING CENTERS, INC., pursuant to a long term lease executed on July
31, 1990 (the "Lease"); and
WHEREAS, ETHAN XXXXX CARE CENTERS, INC., DBA BRISTOL HOUSE OF
SPRINGFIELD, and AMERICAN LIVING CENTERS, INC., own all of the equipment,
furniture, inventory, trade names, goodwill, leasehold improvements, licenses,
and the rights to operate 100 long term care beds, including the Certificate(s)
of Need necessary to permit the operation of the Home, associated with the Home,
all as listed on Exhibit "B," attached hereto (collectively the "Assets"); and
WHEREAS, for purposes of this transaction only, SUNNYLAND LAND
CORPORATION, ETHAN XXXXX CARE CENTERS, INC., DBA BRISTOL HOUSE OF SPRINGFIELD,
and AMERICAN LIVING CENTERS, INC., agree to waive any right of first refusal or
option to purchase contained in the Lease; and
WHEREAS, Sellers now desire to sell, transfer, convey and assign to
Buyer, and Buyer desires to purchase from Sellers, subject to the Lease, the
Home, Real Property and Assets;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and conditions herein contained, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties agree as
follows:
1. RECITALS. All provisions in the Recitals above are hereby
incorporated by reference into this Agreement.
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2. PURCHASE AND SALE OF ASSETS. Sellers agree that at Closing they
shall sell, assign, transfer, convey and deliver the Real Property and the
Assets to Buyer, for the consideration hereinafter provided, free and clear of
all liabilities, obligations, security interests and encumbrances. The Real
Property shall be conveyed by general warranty deed, and the Assets by xxxx of
sale in the form attached hereto as Exhibit "C."
3. PURCHASE PRICE AND TERMS OF PAYMENT. Subject to the terms and
conditions of this Agreement, and in full consideration for the sale, transfer,
assignment, and delivery of the Assets and Real Property described herein to
Buyer, Buyer shall pay Sellers a total purchase price of Four Million Dollars
and No Cents ($4,000,000.00), payable at Closing with a subordinated thirty-day
Note. The Note shall accrue interest at a rate of prime plus one (1) percent per
annum with principal and interest due and payable in thirty days from the date
of Closing. There will be no penalty for early prepayment of the Note.
4. ALLOCATION OF PURCHASE PRICE. The purchase price as set forth above
shall be allocated as set forth in Exhibit "D" attached hereto. Buyer and
Sellers have made the allocations contained herein with the knowledge and
understanding that they will be used by both parties hereto for income tax
purposes. The parties declare that these valuations were determined in good
faith by arm's length bargaining, and represent a fair and reasonable value for
the assets described. Each party agrees that it will report the transaction for
income tax purposes in accordance with the allocations recited herein, and will
not take a position inconsistent with the allocations except with the prior
written consent of the other party to this Agreement.
5. CONDITIONS TO BUYER'S OBLIGATIONS. The obligation of Buyer to
consummate the transactions contemplated by this Agreement is conditioned upon
the satisfaction, or waiver by Buyer, on or before the Closing, of the following
conditions:
A. REPRESENTATIONS AND WARRANTIES. The material representations and
warranties of Sellers contained in this Agreement and the Exhibits hereto, or in
any certificate or document delivered by Sellers to Buyer in connection with the
transactions contemplated hereby, shall be true on and as of the Closing with
the same effect as though such representations and warranties were made on such
date.
B. PERFORMANCE OF COVENANTS. Sellers shall have performed and
complied with all of the agreements, covenants and conditions required by this
Agreement to be performed or complied with by them prior to or on the Closing.
C. ADVERSE CHANGES. There shall not have been any materially adverse
change in the assets, properties, condition (financial or otherwise), prospects
or results of the operations of the Home from the date hereof to the Closing,
nor shall there exist any condition which could reasonably be expected to result
in such a materially adverse change.
D. SUBSTANTIAL COMPLIANCE WITH MEDICARE AND MEDICAID. The Home shall
be in substantial compliance with Medicare and Medicaid program participation
requirements for
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nursing facilities with no outstanding proposals of sanctions or remedies by the
Ohio Department of Health or the Health Care Financing Administration.
6. PRORATION OF EXPENSES. Except as otherwise set forth herein, it is
expressly agreed that the Buyer will not assume and will not discharge or be
liable for any debts, expenses, liabilities, or obligations of Sellers, whether
or not related to the operation and ownership of the Home, incurred or accrued
prior to Closing, including, without limitation: (a) liabilities or obligations
of Sellers to creditors including, without limitation, Medicare and Medicaid
audit liability(ies), recoupments or other overpayments; (b) liabilities or
obligations of Sellers with respect to any transactions or actions of Sellers
occurring after Closing; (c) sales tax, income tax, personal property tax,
transfer tax, use tax, filing fees, or other liabilities or obligations of
Sellers incurred in connection with the sale of its Assets pursuant to the
Agreement; or (d) any contingent liabilities or obligations of Sellers. Real
estate taxes and assessments shall be prorated to the day of closing.
To the extent any of the foregoing liabilities, such as real estate
tax assessments, are unpaid or accrued and payment is provided for at the time
of Closing, all such liabilities shall be paid by Sellers as they become due.
7. BULK SALES ACT. Sellers shall, to the extent required, comply with
the Ohio Bulk Sales Act.
8. EVIDENCE OF TITLE, REAL ESTATE. Within thirty days of execution of
this Agreement, Buyer shall obtain, at Buyer's expense, an Owner's Title
Insurance Commitment and Policy in the amount of the purchase price or the price
allocated to the real estate, with a copy of the subdivision or condominium
plat, or engineer's map, as applicable. The title evidence shall be certified to
within thirty (30) days prior to closing with an endorsement as of 8:00 a.m. on
the business day prior to the date of closing, and shall show Sellers have
marketable title in fee simple free and clear of all liens and encumbrances
except: (a) those created by or assumed by Buyer; (b) those specifically set
forth in this contract; (c) zoning ordinances; (d) legal highways; and (e)
covenants, restrictions, conditions and easements of record which shall not
unreasonably interfere with Buyer's intended lawful use. Buyer shall pay any
additional costs incurred in connection with mortgagee insurance issued for the
protection of Buyer's lender.
If upon Buyer's receipt of the title evidence it is determined, in
accordance with Ohio law, that all or part of the real estate is unmarketable or
is subject to liens, encumbrances, easements, conditions, restrictions or
encroachments other than those accepted in this Agreement, Buyer shall notify
Sellers in writing within ten (10) days of any objection to such encumbrance(s).
Sellers shall, within either thirty (30) days of such written notice from Buyer
or by Closing, whichever occurs first, remedy or remove any such defect, lien,
encumbrance, easement, condition, restriction or encroachment or obtain title
insurance without exception therefor. At Closing, Sellers shall sign an
Affidavit with respect to off record title matters in accordance with the
community custom.
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9. UCC SEARCH. Within thirty (30) days of the execution of this
Agreement, Buyer shall obtain, at Buyer's expense, from the Ohio Secretary of
State and the Xxxxx County Recorder's Office a Uniform Commercial Code search of
the Assets. In the event that such search reveals the Assets are subject to
security interests, chattel mortgages, liens or other encumbrances, Buyer shall
notify Sellers in writing of such encumbrances within ten (10) days of receipt
of the search results and Sellers shall cause the same to be terminated and
released as a matter of record prior to Closing, or if such encumbrance is to be
satisfied with the proceeds of the Closing, Sellers shall obtain written
verification of the secured party setting forth the current outstanding
principal balance of any encumbrance along with accrued interest thereon, and
agreement of the secured party to execute a "Termination Statement" upon payment
thereof.
10. DELIVERIES AT CLOSING. Sellers shall deliver to Buyer at Closing
the following documents:
A. Such deeds, bills of sale, endorsements, affidavits, assignments,
resolutions, Court Orders and approvals, and other good and sufficient
instruments of conveyance and transfer containing full warranties of title, as
shall be effective to vest in Buyer good, absolute and marketable title to the
Real Property and the Assets being transferred to Buyer by Sellers free and
clear of all liens, charges, encumbrances, and restrictions whatsoever, except
those set forth in this Agreement and those set forth in Exhibit F.
B. Any and all contracts, agreements, commitments, equipment
warranties, licenses, and rights pertaining to the operation of the Home,
including certificate(s) of need, trade names and copyrights owned by Sellers
and related to the Real Property and Assets.
C. An affidavit of title in the form set forth in Exhibit "E,"
attached hereto, attesting to the absence of any liens other than any permitted
encumbrances on the Real Property and satisfactory in form and substance to
Buyer and its title company insuring marketable title to the Real Property and
in a form sufficient to remove the Schedule B exceptions from the title
commitment, duly executed by Sellers;
D. Certificates of the secretaries of Sellers certifying copies of
(i) the Articles of Incorporation of Sellers; (ii) all requisite resolutions or
actions of Sellers approving the execution and delivery of this Agreement and
the consummation of the transactions contemplated herein and therein; and (iii)
the identification and signature of each officer of each Seller;
E. Separate assignments conveying the interests of Sellers in and to
(i) any assumed contracts, all warranties, guarantees and assurances (if any)
given by third parties with respect to any of the Assets and all licenses
relating to the Home (to the extent such licenses are transferable);
F. An assignment of all amounts held by Sellers in trust for the
benefit of the residents (the "Patients' Trust Funds Assignment"), including
patients occupying the nursing home beds at the Home, and a certificate of
Sellers itemizing all such amounts and for whom they are held and certifying
that: (i) such amounts represent all amounts so held by Sellers; and (ii) no
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person has or may have any claim against Sellers with respect to their custody,
management or application of any such amounts, provided, however, Buyer shall
thereby assume responsibility for said Patient Trust Funds and agree to
indemnify Sellers for any claims, losses, damages or other expenses (including
attorney's fees) of or made against Sellers for such Patient Trust Funds.
Sellers will indemnify Buyer for any pre-Closing claim and Buyer will indemnify
Sellers for any post-Closing claim;
G. An opinion of counsel to Seller dated as of the Closing Date in
the form which shall be negotiated in good faith between Buyer and Seller on or
before the Closing Date; and
Simultaneously with such delivery, Sellers will take all steps
required to put Buyer in actual possession and control of the Home, Real Estate,
and Assets.
Through the date of Closing, Sellers will not enter into any
transactions which could unfavorably affect the ability of Buyer to continue as
Lessor of the Real Property and Assets in the manner in which they have been
operated, and will not cause or allow any diminution in the value of the Home,
Real Property and Assets as a going business.
11. REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers represent and
warrant to Buyer that each of the following is true in all material respects;
provided, however, that each Seller is making these representations and
warranties only with respect to the Assets or Real Property owned by that Seller
as set forth herein. These representations and warranties shall survive the
termination of this Agreement, and shall be effective for any subsequent bona
fide purchaser of the Real Estate and/or Assets provided any such subsequent
purchase is made within one year of the Closing:
A. ORGANIZATION. Sellers are duly organized, validly existing
corporations in good standing under the laws of the State of Ohio, have the
power and authority to own all of their property and assets and to carry on
their businesses as they are now being conducted, and are duly qualified to do
business and are in good standing in all jurisdictions where the ownership or
leasing of property by them or the conduct of their businesses require them to
be so qualified.
B. AUTHORITY. The Home is currently being operated as a 100-bed
nursing home licensed to operate in the State of Ohio. All 100 beds are
certified to participate in the Medicaid and Medicare Programs.
C. AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement and the performance of the transactions contemplated hereby have been
duly and validly authorized by Sellers, and no other person or entity has, may
have, or is claiming or has claimed any interest in or rights to the Real
Property or Assets, except as set forth in this Agreement.
D. OWNERSHIP. As of the date of Closing, SUNNYLAND LAND CORPORATION
shall own the Real Property, and ETHAN XXXXX CARE CENTER, INC.,
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DBA BRISTOL HOUSE OF SPRINGFIELD and AMERICAN LIVING CENTERS, INC., shall own
the Assets, free and clear of any liens, claims, encumbrances or restrictions of
any kind, except as otherwise set forth herein and in Exhibit F.
E. MECHANICS AND OTHER LIENS. No labor, services or material will
have been made or furnished to the Sellers or the Home by any person or entity,
including, without limitation, contractors, subcontractors, mechanics or
materialmen, which could give rise to any lien as provided under the laws of the
State of Ohio, except as otherwise set forth herein.
F. TAX MATTERS. All Medicaid cost reports and tax reports required
to be filed relative to the Home have been filed with appropriate governmental
agencies. All taxes required to be paid with respect to the Home and all
interest and penalties hereon, whether disputed or not have been paid or
accrued, and Sellers have no liability for such taxes in excess of the amounts
so paid. There are no federal, state or local tax liens upon the Assets. As used
herein, the term "tax" includes, without limitation, all federal, state, local
and foreign income, profits, sales, use, occupancy, bed, excise, added value,
employees' income withholding, social security, unemployment, workers'
compensation, franchise, property, and all other governmental taxes, license
fees and other charges of every kind and description imposed by the laws and
regulations of any governmental jurisdiction, whether federal, state, local or
foreign taxing authorities.
G. TITLE TO AND CONDITION OF THE ASSETS. ETHAN XXXXX CARE CENTER,
INC., DBA BRISTOL HOUSE OF SPRINGFIELD, and AMERICAN LIVING CENTERS, INC., have
good, marketable and insurable title to the Assets, free and clear of all liens,
charges, security interests, physical and financial encumbrances, leases,
covenants, restrictions, rights of way, easements, encroachments, other matters
affecting title, and adverse claims of any kind, direct or indirect, whether
accrued, absolute, contingent or otherwise except (i) liens for current taxes
not yet due and payable; and (ii) restrictions which do not materially interfere
with the Home. The Assets are in good operating condition, are adequate and
sufficient for all current operations of the Home and are and have been properly
serviced and maintained.
H. REAL PROPERTY. SUNNYLAND LAND CORPORATION, has good and
marketable title in fee simple to the Real Property described in Exhibit A free
and clear of all liens, charges, security interests, physical and financial
encumbrances, covenants, restrictions, rights of way, easements, encroachments,
other matters affecting title, and adverse claims of any kind, direct or
indirect, whether accrued, absolute, contingent or otherwise, except as
otherwise specified herein. None of the buildings, structures or appurtenances
(or any equipment therein), nor the operation or maintenance thereof, violates
any restrictive covenant or any provision of any federal, state or local law,
ordinance, rule or regulation, or encroaches on any property owned by others. No
condemnation proceeding is pending or threatened which would preclude or impair
the use of any such property for the purposes for which it is currently used.
I. ACCESS. The Home has direct access to a public street adjoining
the parcel of land on which the Home is situated. Neither the Home nor any
portion thereof is dependent for its access, operation or utility on any land,
building or other improvement not included in the Real Property. There is no
fact or condition known to Sellers which would result in the
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termination or reduction of the current access to and from the Home or Real
Property to existing public roadways adjoining the Real Property.
J. ZONING. The zoning applicable to the Real Property is believed by
Sellers to permit the use of the Real Property in the manner the Home is
presently operated and a valid, final and permanent certificate of occupancy has
been duly issued. The Real Property is believed to meet all dimensional, set
back, parking and other requirements of applicable zoning ordinances.
K. COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS:
(1) Sellers are not in violation of any term or provision of any
charter, by-law, mortgage, indenture, contract, agreement, instrument, judgment,
decree, order, statute, rule or regulation, and the execution and delivery of
and performance and compliance with this Agreement will not result in the
violation of or be in conflict with or constitute default under any such term or
provision or result in the creation of any mortgage, lien, encumbrance, or
charge upon any of the properties or assets of Sellers pursuant to any such term
or provision. There have been no notices of violation of any applicable law,
order, ordinance, rule, regulation or requirements, or of any covenant,
condition or restriction affecting or relating to the use or occupancy of the
Home as a nursing home issued by any governmental agency or any person entitled
to enforce same. The Home is in compliance with all relevant governmental laws
and regulations relative to operation of the Home and participation in the
Medicaid program, or has received a waiver for the same.
(2) Any licensure requirements of the Department of Health, or
any other governmental agency, not now met by the Home or physical plant are
currently waived by the Department of Health or such governmental agency, and
such waivers have not been canceled. Buyer has been provided with a copy of the
Medicaid certification inspection reports and is aware of the contents of same
and the status of any waivers on the building.
(3) There are currently no pending legal proceedings in any court
or agency of any nature whatsoever affecting the use of the Home as a nursing
home.
L. REPORTS. All reports which have been provided at any time by
Sellers to Buyer or to any and all governmental agencies are truthful, complete,
and accurate in all material respects, and accurately reflect the operations and
financial condition of the Home, in all material respects.
M. LITIGATION. No litigation or other judicial, administrative or
investigative proceeding, at law or in equity or otherwise, is pending or
threatened before any court or by eminent domain or before or in any court of
federal, state, local or other governmental department, commission, board,
bureau, or agency or non-governmental arbitration board or commission against or
affecting Sellers or the Home, and neither Sellers nor the Home are operating
under, subject to or in default with respect to any order, writ, injunction or
decree of any court or federal, state, local or other governmental department,
commission, board, bureau, or agency or non-governmental arbitration board or
commission.
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N. NO IMPENDING MATERIAL ADVERSE EVENTS. Sellers do not have any
knowledge of any impending loss of business, or of any other presently existing
facts or circumstances which would be reasonably likely to have a material
adverse effect upon the financial condition, results of operations, business or
prospects of the Home.
O. NO LEGAL OBSTACLE TO AGREEMENT. The execution, delivery and
performance of this Agreement, the consummation of any transactions herein
referred to or contemplated and the fulfillment of the terms hereof do not and
will not conflict with, or, with or without notice or passage of time, result in
a material breach or violation of, or constitute a material default under any
applicable law or regulations or any judgment, order or decree binding upon
Sellers, or conflict with, or result in a material breach or violation of, or
constitute a material default in the performance, observance, or fulfillment of
any obligation, covenant or condition contained in, or constitute an event of
default by Sellers under any applicable lease, mortgage, or other contractual
obligation to which Sellers are bound, or result in, or require, the creation or
imposition of any lien, charge or encumbrance upon the Assets.
P. HAZARDOUS SUBSTANCES. ETHAN XXXXX CARE CENTER, INC., and AMERICAN
LIVING CENTERS, INC., represent and warrant that no "reportable quantity" (as
hereinafter defined) of any Hazardous Substance (as hereinafter defined) has
ever been removed from and stored off-site of the Real Property. Further, there
has been no "Release" (as hereinafter defined) of a reportable quantity of any
Hazardous Substance on or from the Real Property. The Real Property is in
compliance with all applicable federal, state and local laws, administrative
rulings and regulations of any court, administrative agency or other
governmental or quasi-governmental authority, relating to the protection of the
environment (including, but not limited to, laws prohibiting the creation of a
public nuisance). Neither the Home nor Sellers nor any owner or user of the Real
Property is a potentially responsible party under Section 107 of the
"Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended ("CERCLA"), or Section 7003 of the Resource Conservation and Recovery
Act of 1976, as amended ("RCRA"), and neither Sellers nor the Home has received
notification from any federal, state or local government, agency or regulatory
body, of a violation under any federal, state or local law regulating the
disposal or discharge of any toxic, explosive or other disposal or discharge of
any toxic, explosive or other Hazardous Substance. The Real Property is free
from the presence and/or harmful effects of asbestos or asbestos-containing
materials. For purposes of this Agreement:
(1) "Hazardous Substance" means any one or more of the following:
(a) Any substance deemed hazardous under Section 101 (1-4) of
CERCLA;
(b) Any other substance deemed hazardous by the United States
Environmental Protection Agency pursuant to Section 102(a) of CERCLA;
(c) Petroleum (including crude oil or any fraction thereof);
(d) Any substance deemed hazardous pursuant to Section
1004(5) of RCRA; or
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(e) Any other hazardous or toxic substance, materials,
compound, mixture, solution, element, pollutant or waste regulated under any
federal, state or local statute, ordinance or regulation;
(2) "Release" shall have the meaning given to such term in
Section 101(22) of CERCLA; and
(3) "Reportable Quantity" shall have the meaning given to such
term in, and shall be those quantities specified by the Administrator of the
United States Environmental Protection Agency pursuant to, Section 102 of
CERCLA.
Q. FINDER'S FEES. No person or entity is entitled to any brokerage
commission, finder's fee or similar compensation from any of the parties hereto
in connection with the execution and delivery of this Agreement or the
consummation of the transactions herein contemplated.
R. FULL DISCLOSURE. No representation or warranty made herein, and
no schedule, list, certificate, or other instrument or exhibit furnished or to
be furnished by Sellers pursuant to this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit any material fact
necessary to make the statements contained herein not misleading, or necessary
in order to provide a prospective Buyer with adequate information. There is no
fact known to the Sellers, which materially and adversely affects the Real
Property, Assets or the Home, which has not been set forth in this Agreement or
in the schedules, exhibits or certificates or statements in writing furnished in
connection with this Agreement.
12. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants the following to the Sellers as of the Closing.
A. ORGANIZATION. Buyer is a duly organized, validly existing limited
liability company formed under the laws of the State of Ohio, has the power and
authority to own all of its property and assets and to carry on its business as
it is now being conducted, and is duly qualified to do business and is in good
standing in all jurisdictions where the ownership or leasing of property by it
or the conduct of its business require it to be so qualified.
B. AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement and the performance of the transactions contemplated hereby shall be
duly and validly authorized by the Member(s) of Buyer.
C. NO LEGAL PROCEEDINGS. There is no suit, action or other
proceeding against Buyer pending or threatened before any court or governmental
agency in which it is or will be sought to restrain or prohibit, or to obtain
damages or other relief in connection with, this Agreement, or the transactions
contemplated hereby.
D. FINDER'S FEES. No person or entity is entitled to any brokerage
commission, finder's fee or similar compensation from any of the parties hereto
in connection with
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the execution and delivery of this Agreement or the consummation of the
transactions herein contemplated.
13. ACTIONS OF SELLERS PENDING CLOSING. Sellers agree that from the
date hereof through the date of Closing, unless Buyer consents in writing to the
contrary, Sellers will not enter any transaction or perform any act which would
constitute a breach of the representations, warranties, or agreements contained
herein.
14. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein and made pursuant to this
Agreement shall be reaffirmed on the Closing date as true and correct and shall
survive the execution, Closing and delivery of this Agreement and related
documents of transfer.
15. INDEMNIFICATION. Each Seller agrees to indemnify Buyer, with
respect to the Assets or Real Property owned by that Seller as set forth herein,
against (i) all liabilities and obligations of Sellers not expressly assumed by
Buyer under this Agreement, (ii) any damage, loss, or expense due to any breach
of warranty, misrepresentation, or breach of this Agreement by Sellers, and
(iii) against any actions, suits, judgments, and legal expenses arising out of
such liabilities, obligations, damages, losses, or expenses.
Buyer agrees to indemnify Sellers against (i) all liabilities and
obligations expressly assumed by Buyer under this Agreement, (ii) any damage,
loss, or expense due to any breach of warranty, misrepresentation, or breach of
this Agreement by Buyer, and (iii) against any action, suits, judgments and
legal expenses arising out of such liabilities, obligations, damages, losses or
expenses.
Sellers agree to notify, file claims for and pursue with its
present insurer, prior to Closing, all potential and actual claims which arise
prior to Closing.
16. RISK OF LOSS. Sellers assume all risk of destruction, loss, damage
or liability due to fire or other casualty up to and including the date of
Closing. Within ten (10) days of the execution of this Agreement, ETHAN XXXXX
CARE CENTER, INC., and AMERICAN LIVING CENTERS, INC., shall add Buyer as an
additional insured on any fire or casualty insurance policy currently covering
the Real Property, Assets, and Home for loss of damage and destruction. Upon any
said destruction, loss or damage due to fire or other casualty or a substantial
portion of the Assets, Buyer shall have the right to receive the insurance
proceeds relating to the loss of building and equipment, subject to the Buyer
closing on the purchase and specifically the granting of a Certificate of Need
to Buyer as contemplated by this Agreement. In the event of damage, loss or
destruction of the premises, any insurance proceeds shall be placed in an
interest bearing trust account by Xxxxxxxx X. Xxxxxxx, Esq., in the names of the
Buyer and Sellers. The funds held in the account will be distributed to Buyer at
Closing or to the Insured in the event there is no Closing.
17. SELLERS' HISTORICAL ASSETS COSTS. At the Closing, Sellers shall
provide or make available to Buyer copies of financial records maintained
regarding the historical asset costs,
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including, but not limited to, buildings, moveable and fixed equipment,
furniture and any renovation costs attributed to the beds that are the subject
of this Agreement. In no event are the Sellers required to create records not in
existence on the date of execution of this Agreement or not made and kept in the
ordinary, routine course of business. Sellers are not required to keep these
records any longer than any applicable records retention period required by the
state and federal law governing the operation of a nursing home business.
18. ARBITRATION. The arbitration procedure set forth below shall be the
exclusive procedure used to resolve any allegation that a party to this
Agreement has failed to comply with a term or condition of this Agreement.
A. MEDIATION. After any dispute arises, or when an alleged event of
default and dispute notice have been exchanged by the parties, the aggrieved
party shall give the other party written notice within a reasonable time
requesting that the parties meet to resolve the dispute. Within one week of this
notice of meeting, unless an extension is consented to by all parties, a
representative of each party will meet to resolve the dispute utilizing their
best efforts. Either party may be represented by such other and additional
individuals as is deemed necessary by them to assist in attempting to resolve
any item of dispute.
B. METHOD OF ARBITRATION. Following a meeting between the parties,
and only if such meeting has occurred or the non-aggrieved party has refused to
meet with the aggrieved party, any party to this Agreement may commence
arbitration by filing a demand to arbitrate with the other. The Arbitrator shall
be selected from the panel of the American Health Lawyers Association using that
Association's methods for selection of an independent, impartial arbitrator.
Each party shall bear its own costs in respect to the prosecution or defense of
any claim or dispute. The Arbitrator shall apply the substantive and procedural
laws of the State of Ohio to any disputes. The determination of the Arbitrator
shall be binding upon the parties to this Agreement and shall be final and
nonappealable.
19. LIKE-KIND EXCHANGE. SUNNYLAND LAND CORPORATION may assign its
rights under this Agreement to a qualified intermediary in order to complete a
like-kind exchange under Section 1031 of the Internal Revenue Code. Buyer agrees
to cooperate with Sellers and the intermediary as reasonably requested; provided
Buyer will not be required to incur any costs, fees, liability or undertake any
additional responsibilities as a result of the exchange or said assignment. The
parties understand that the qualified intermediary will not be assuming Sellers'
obligations set forth in this Agreement; accordingly, Buyer will look solely to
Seller for the performance of Sellers' obligations, and will release the
qualified intermediary from any responsibility for the breach of Sellers'
obligations under this Agreement.
20. MISCELLANEOUS:
A. EXPENSES. Except as otherwise provided, each of the parties
shall bear all expenses incurred by them in connection with this Agreement and
in the consummation of the transactions contemplated hereby and in preparation
thereof.
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B. AMENDMENT AND WAIVER. This Agreement may be amended or modified
at any time and in all respects, or any provision may be waived, by an
instrument in writing executed by Buyer and Sellers, or either of them in the
case of a waiver.
C. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given (a) when delivered
personally, (b) when transmitted by telecopy (receipt confirmed), (c) on the
fifth business day following mailing by registered or certified mail (return
receipt requested), or (d) on the next business day following deposit with an
overnight delivery service of national reputation, to the parties at the
following addresses and telecopy numbers (or at such other address or telecopy
number for a party as may be specified by like notice):
If to Sellers, to: SUNNYLAND LAND CORPORATION
Liberty Center
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
and copy to: Xxxxxx X. Xxxxxxx
Xxxxxxx, XxXxxxxxx, Xxxx & Xxxxxxx Co., L.P.A.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
and ETHAN XXXXX CARE CENTERS, INC., DBA
BRISTOL HOUSE OF SPRINGFIELD
Two Nationwide Plaza
000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
and AMERICAN LIVING CENTERS, INC.
Two Nationwide Plaza
000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
and a copy to Xxxxxxxx X. Xxxxxxx
Attorney at Law
00 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
If to Buyer, to: ESEMTU LLC.
x/x Xxxxxxx Xxxxxxx, Xxx.
Xxxxxxx & Xxxxxxx
000 X. Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxx 00000
D. CHOICE OF LAW. Except as otherwise provided herein, it is the
intention of the parties that the laws of Ohio should govern the validity of
this Agreement, the construction of its terms, and the interpretation of the
rights and duties of the parties.
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E. SECTION AND OTHER HEADINGS. Section, paragraph, and other
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
F. COUNTERPART EXECUTION. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
G. GENDER. All personal pronouns used in this Agreement shall
include the other genders whether used in the masculine or feminine or neuter
gender, and the singular shall include the plural whenever and as often as may
be appropriate.
H. PARTIES IN INTEREST. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by Sellers and Buyer and their heirs, successors and assigns.
I. INTEGRATED AGREEMENT. This Agreement and the attached Exhibits
constitute the entire Agreement between the parties hereto, and there are no
agreements, understandings, restrictions, warranties, or representations between
the parties other than those set forth herein or herein provided for.
J. ASSIGNMENT. Neither Buyer nor Sellers may assign this Agreement
to any other entity without the prior written consent of the other parties.
K. SEVERABILITY. The invalidity of any term or terms of this
Agreement shall not affect any other term of this Agreement, which shall remain
in full force and effect.
L. NO THIRD PARTY BENEFICIARIES. There are no third party
beneficiaries of this Agreement or of the transactions contemplated hereby and
nothing contained herein shall be deemed to confer upon any one other than the
parties hereto (and their permitted successors and assigns) any right to insist
upon or to enforce the performance of any of the obligations contained herein,
except as set forth in paragraph 11.
M. TIME OF THE ESSENCE. The Parties hereto agree that timing is of
the essence with respect to all actions required by the Sellers and Buyer
hereunder.
N. WAIVER OF OPTION AND RIGHT OF FIRST REFUSAL. For purposes of
this sale transaction only, Sellers agree to waive the right of first refusal
and option to purchase contained in the Lease between them; provided, however,
that any such waiver shall not be effective if this
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transaction is not closed or if the property returns to Sellers for any reason
whatsoever in a manner such that the relationship between the present lessor and
lessee remains unchanged.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above set forth.
BUYER: SELLERS:
ESEMTU LLC. SUNNYLAND LAND
CORPORATION
By: ESEMTU CORP., Member
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxxxxx
-------------------------- ----------------------------
Xxxxxxx Xxxxxxx, President Xxxxxx Xxxxxxxxxx, President
ETHAN XXXXX CARE CENTERS,
INC., DBA BRISTOL HOUSE OF
SPRINGFIELD
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx, Board Chairman
AMERICAN LIVING CENTERS,
INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx, Board Chairman
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EXHIBIT A
{INSERT LEGAL DESCRIPTION}
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EXHIBIT B
{LIST ALL EQUIPMENT, FURNITURE, FIXTURES, TRADE NAMES, LICENSES, AND THE
CERTIFICATE OF NEED}
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EXHIBIT C
XXXX OF SALE
KNOW ALL MEN BY THESE PRESENTS:
That ETHAN XXXXX CARE CENTERS, INC., DBA BRISTOL HOUSE OF SPRINGFIELD,
and AMERICAN LIVING CENTERS, INC., the Grantors, for good and valuable
consideration, the receipt and sufficiency of which is acknowledged by ESEMTU
LLC., the Grantee, hereby sell, assign, transfer, convey and deliver to ESEMTU
LLC., its heirs, successors and assigns to the extent transferable by law, any
and all title, holdings and interest in the assets of the nursing home known as
Bristol House of Springfield (the "Home") located at 0000 0/0 Xxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxx 00000 (the "Facility"), to wit:
(a) All furnishings, furniture, machinery, equipment,
supplies, inventory, linens, medicine, foodstuffs, consumable and other
personal property of any type or description, including, without
limitation, all beds, chairs, sofas, wheelchairs, tables, kitchen and
laundry equipment;
(b) All licenses, permits, certificates, consents, approvals,
waivers and other authorizations (including, without limitation, any
authorizations to participate in any state or federal reimbursement
program such as Medicaid or Medicare), whether issued or granted by any
governmental authority or by any other person, to the extent the same
are transferable, and all operating, license and certification rights
with respect to the One Hundred (100) licensed beds which are included
in Sellers' Certificate of Need for the Facility;
(c) All books of account, records, files, invoices, customer
lists, supplier lists, consultants' reports, budgets and projections
and other similar data relating to the Facility and all medical records
of patients and residents of the Facility;
(d) All telephone numbers, telephone listings, yellow page
ads, sales literature, promotional literature and other selling
materials relating to the Facility;
(e) The right to the name "Bristol House of Springfield;"
(f) All technology and know-how related to the Facility,
including, without limitation, specifications, drawings, and
documentation owned by Grantors, and
(g) All other assets of Sellers of the foregoing nature
purchased or acquired by Seller between the date hereof and the
Closing.
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To have and to hold the same unto the said Grantee, its successors and
assigns, to its own proper use forever.
ETHAN XXXXX CARE CENTERS, INC., DBA BRISTOL HOUSE OF SPRINGFIELD, and
AMERICAN LIVING CENTERS, INC., warrant that they own all the title, holdings and
interest in the property and assets described above and have the authority to
transfer same, that said property and assets are free and clear of all liens and
encumbrances whatsoever, and that they are not subject of any litigation or
similar proceeding. ETHAN XXXXX CARE CENTERS, INC., DBA BRISTOL HOUSE OF
SPRINGFIELD, and AMERICAN LIVING CENTERS, INC., will defend same against all
lawful claims and demands whatsoever.
In witness whereof, ETHAN XXXXX CARE CENTERS, INC., DBA BRISTOL HOUSE
OF SPRINGFIELD, and AMERICAN LIVING CENTERS, INC., have executed this Xxxx of
Sale as of this _____ day of November, 1999.
WITNESES ETHAN XXXXX CARE CENTERS,
INC., DBA BRISTOL HOUSE OF
______________________________ SPRINGFIELD
______________________________ By: _____________________________
Xxxxxx Xxxxxx, Board Chairman
WITNESES AMERICAN LIVING CENTERS,
INC.
______________________________
By: _____________________________
______________________________ Xxxxxx Xxxxxx, Board Chairman
This instrument prepared by:
J. Xxxxxxx Xxxxxxxx (0061106)
Attorney at Law
00 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
(000)000-0000
FAX (000)000-0000
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EXHIBIT D
ALLOCATION OF PURCHASE PRICE
SUNNYLAND LAND CORPORATION:
Land: $100,000
Building: $2,750,000
ETHAN XXXXX CARE CENTER, INC., DBA BRISTOL HOUSE OF
SPRINGFIELD, and AMERICAN LIVING CENTERS, INC.:
Certificate of Need: $750,000
Equipment: $400,000
TOTAL PURCHASE PRICE: $4,000,000
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EXHIBIT E
SELLERS' AFFIDAVIT
------------------
THE UNDERSIGNED Affiant, being first duly sworn, deposes and says that
it is the owner of the real estate described in Exhibit "A," attached hereto.
Affiant further states for the purpose of selling said real estate to
ESEMTU LLC:
1. That there are no unpaid bills incurred by Affiant for work
performed upon or materials delivered to the above described
premises for construction or improvement thereof during the
past one hundred twenty (120) days.
2. That there are no mortgages, judgment liens, or security
interests arising under the Uniform Commercial Code, tax liens
or other encumbrances of any nature whatsoever affecting the
said premises except as set forth in the title policy for the
same.
3. That there are no rights of possession, use or otherwise,
outstanding in third persons by reasons of unrecorded leases,
land contracts, sale contracts, options or other documents.
4. That, in relation to the sale of the Assets and Real Property,
Affiant is not indebted to the federal government or any other
state, county, local or federal public authority for taxes,
assessments, or other charges against said premises, due or
delinquent, or any nature whatsoever except as set forth in
said abstract or title policy.
5. That Affiant has not received notice, either orally or in
writing, of the existence of or the intention to create
assessments affecting the premises above described from any
public authority, nor any notice of condemnation or other
exercise of the power of eminent domain.
Affiant further makes this Affidavit supplemental to the Warranty Deed
to said premises this day delivered to ESEMTU LLC, specifically as an inducement
to said Buyer to pay to Affiant the balance of the purchase price to the
Sellers, and to induce any title insurance company involved to issue its title
policy.
The undersigned further certifies that the representations and
warranties contained in and made pursuant to the Purchase Agreement between and
among ESEMTU LLC, and the undersigned dated November ___, 1999, are reaffirmed
as of this date as true and correct.
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The undersigned hereby acknowledges that this Sellers' Affidavit is
given as an inducement to ESEMTU LLC, to complete the transaction set forth in
the aforementioned Asset Purchase Agreement and that in reliance thereon they
did close said transaction and that they would not have done so if this
Affidavit were not so furnished.
SUNNYLAND LAND
CORPORATION
By: ____________________________
Xxxxxx Xxxxxxxxxx, President
State of Ohio
} ss
County of _________
The foregoing instrument was acknowledge before me this _____ day of
November, 1999, by Xxxxxx Xxxxxxxxxx, President of SUNNYLAND LAND CORPORATION
_____________________
Notary Public
My commission expires: ________________
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EXHIBIT F
PERMITTED ENCUMBRANCES
1. Paragraphs 8, 9, 10, and 11 as seth forth in the Commitment for
Title, Schedule B - Section 1, attached.
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