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EXHIBIT 2.17
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into and is effective this
18 day of September, 1997, by and among Balanced Care Corporation, a Delaware
corporation (together with its permitted assigns, "Purchaser"); and Butler
Senior Care, Inc., a Pennsylvania corporation ("Seller").
RECITALS:
Seller owns all of the assets in connection with the operation of
three licensed residential care facilities located at the following addresses
(the "Facilities"): (i) Silver Haven Summit ("Silver Haven"); (ii) Sterling
Care of Sarver ("Sarver"); and (iii) Sterling Care of Saxonburg ("Saxonburg").
Purchaser desires to purchase substantially all of the assets of Seller and the
Business (as hereinafter defined) related thereto and Seller desires to sell
such assets to Purchaser.
This Agreement sets forth the terms and conditions upon which
Purchaser will purchase the assets (other than Excluded Assets, as hereinafter
defined) owned by Seller and used in the conduct of the Business, and Seller
will sell to Purchaser said assets (other than Excluded Assets).
In consideration of the mutual agreements, covenants, representations
and warranties contained herein, and in reliance thereon, Purchaser and Seller
hereby agree as follows:
ARTICLE I. CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 "Accounts Receivable" shall mean as of any date any trade
accounts receivable (including, without limitation, any third party receivables
arising in connection with any Third Party Payor Programs), notes receivable,
bid or performance deposits, employee advances and other miscellaneous
receivables associated with the Business through and as of such date.
1.2 "Accreditation Body" shall mean CARF, JCAHO, the Department of
Public Welfare, the Division of Personal Care Homes and all other Persons having
jurisdiction over the accreditation, certification, evaluation or operation of
the Business.
1.3 "Accrued Expenses" shall mean as of any date, insurance
premiums, payroll and benefits (including, without limitation, vacation, sick
pay, disability pay) and other accrued expenses as would appear on a balance
sheet of Seller as of such date prepared in accordance with GAAP consistently
applied, including those described in Schedule 1.3.
1.3A "Addition" shall mean a twenty-eight personal care bed
addition to Saxonburg currently being constructed by Seller, at Seller's expense
and in accordance with all requirements of the applicable municipality and other
governmental units having jurisdiction thereover, including but not limited to
the Pennsylvania Department of Public Welfare and the Department of Labor and
Industry with respect to building and licensing of personal care homes, which
addition will be completed on or about the Closing Date.
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1.4 "Affiliate" shall mean any company or other entity which
controls, is controlled by or is under common control with the designated Party.
For the purpose of the foregoing, ownership, directly or indirectly, of 20% or
more of the voting stock or other equity interest shall be deemed to constitute
control.
1.5 "Agreement" shall mean this Asset Purchase Agreement.
1.6 "Ancillary Agreements" shall mean the real property conveyance
described in Section 5.2.1 and the xxxx of sale, assignment and assumption
described in Section 5.2.2.
1.7 "Assumed Liabilities" shall have the meaning given to it in
Section 4.2.
1.8 "Books and Records" shall have the meaning given to it in
Section 6.16.
1.9 "Business" shall mean the current operation of the Facilities
and any other ancillary health care services owned, operated, delivered,
managed, developed, constructed, maintained, used, occupied or possessed by
Seller in connection therewith (including, without limitation, any outpatient
and contract rehabilitation therapy services or any Alzheimer's units).
1.10 "CARF" shall mean the Commission on Accreditation of
Rehabilitation Facilities.
1.11 "Champus" shall mean the Civilian Health and Medical Program
of the Uniform Service, a program of medical benefits covering retirees and
dependents of members or former members of a uniformed service provided,
financed and supervised by the United States Department of Defense and
established by 10 U.S.C Sections 1071 et seq.
1.12 "Closing" shall have the meaning given to it in Section 5.1.
1.13 "Closing Date" shall have the meaning given to it in Section
5.1.
1.14 "Closing Inventory" shall mean all Inventory relating to the
Business on the Closing Date.
1.15 "Code" shall mean the Internal Revenue Code of 1986, as it may
be amended from time to time, and any successor thereto. Any reference herein to
a specific section or sections of the Code shall be deemed to include a
reference to any corresponding provision of future law.
1.16 "Contract" shall mean all alliance agreements, transfer
agreements, other agreements (including, without limitation, Resident's
Agreements described on Schedule 1.58, Management Agreements and Provider
Agreements), contracts, contract rights, commitments, customer accounts, orders,
leases, guarantees, warranties and representations, franchises and books and
records of account benefiting, relating to the Business or the ownership,
construction, development, maintenance, repair, management, use, occupancy,
possession or operation thereof, or the operation of any of the programs or
services in conjunction with the Business and all
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renewals, replacements and substitutions therefor, issued by any Governmental
Authority, Accreditation Body or Third Party Payor or maintained or used by
Seller with any third Person.
1.17 "Current Liabilities" shall mean all liabilities classified as
current liabilities in accordance with GAAP.
1.18 "Damages" shall have the meaning given to such term in Section
14.4.
1.19 "Department of Public Welfare" shall mean the Commonwealth of
Pennsylvania, Department of Public Welfare.
1.20 "Division of Personal Care Homes" shall mean the Commonwealth
of Pennsylvania, Department of Public Welfare, Division of Personal Care Homes.
1.21 "Employee" shall mean any individual employed by Seller in the
conduct of the Business as listed on Schedule 1.21 (such Schedule being subject
to change between the date hereof and the Closing Date as a result of employee
changes in the ordinary course of business consistent with past practices).
1.22 "Encumbrance" shall mean any right to, or interest in,
property, which subsists in a third-party and which constitutes a claim, lien,
charge or liability attached to and binding upon or an interest in the
property, including, but not limited to, a mortgage, judgment lien, mechanic's
lien, lease, security interest, easement and right-of-way.
1.23 "Environmental Law" shall mean any federal statute [including
but not limited to the Federal Water Pollution Control Act (33 U.S.C. Sections
1251 et seq.), the Toxic Substances Control Act (15 U.S.C. Sections 2601 et
seq.), the Clean Air Act (42 U.S.C. Sections 7401 et seq.), the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Sections
9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sections
6901 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Sections
1801 et seq.), and the Federal Insecticide Fungicide and Rodenticide Act (7
U.S.C. Sections 136 et seq.)], other Legal Requirements, any common law
doctrine and any provision or condition of any Permit, license or other
operating authorization relating to (i) the protection of the environment or
the public welfare from actual or potential exposure (or the effects of
exposure) to any actual or potential release, discharge, disposal or emission
(whether past or present) of any Regulated Substance or (ii) the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of any Regulated Substance.
1.24 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
1.25 "ERISA Plans" shall mean defined benefit pension plans and
defined contribution pension plans qualified under Section 401(a) of the Code.
1.26 "Excluded Assets" shall mean those assets that are not
included in the sale contemplated hereby and as are further defined in Section
2.2.
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1.27 "Facilities" shall mean Silver Haven, Sarver, and Saxonburg,
as defined in the Recitals of this Agreement and shall include the Addition.
1.28 "GAAP" shall mean generally accepted accounting principles in
the United States of America.
1.29 "Governmental Authorities" shall mean all agencies,
authorities, bodies, boards, commissions, courts, instrumentalities,
legislatures and offices of any nature whatsoever of any government,
quasi-governmental unit or political subdivision, whether with a federal,
state, county, district, municipality, city or otherwise.
1.30 "Indemnifying Party" shall have the meaning given to such
term in Section 14.4.
1.31 "Indemnified Party" shall have the meaning given to such term
in Section 14.4.
1.32 "Inventory" shall mean the inventory of Seller, including,
without limitation, dry storage goods, janitorial supplies, food and beverage
supplies, office supplies, medical supplies and pharmaceutical supplies.
1.33 "JCAHO" shall mean the Joint Commission on Accreditation of
Healthcare Organizations.
1.34 "Knowledge" and words of similar import shall mean, with
respect to any Party, actual knowledge of a particular fact or other matter
being possessed by an individual, and the knowledge that reasonably could be
expected to be obtained in the course of conducting a reasonably comprehensive
investigation concerning the subject matter.
1.35 "Legal Requirements" shall mean all statutes, ordinances,
by-laws, codes, rules, regulations, restrictions, orders, judgments, decrees
and injunctions (including, without limitation, all applicable building, health
code, zoning, subdivision and other land use and health care licensing
statutes, ordinances, by-laws, codes, rules and regulations), promulgated or
issued by any Governmental Authority, Accreditation Body or Third Party Payor.
Without limiting the foregoing, the term Legal Requirements includes all
Environmental Laws and all Permits and Contracts issued or entered into by any
Governmental Authority, any Accreditation Body and/or any Third Party Payor and
all Permitted Encumbrances.
1.36 "Managed Care Plans" shall mean all health maintenance
organizations, preferred provider organizations, individual practice
associations, competitive medical plans and similar arrangements.
1.37 "Management Agreement" shall mean any agreement, whether
written or oral, between Seller and any other Person pursuant to which Seller
provides any payment, fee or other consideration to any other Person to operate
or manage the Business (except any employment agreements).
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1.38 "Medicaid" shall mean the medical assistance program
established by Title XIX of the Social Security Act (42 U.S.C. Sections 1396 et
seq.) and any statute succeeding thereto.
1.39 "Medicare" shall mean the health insurance program for the
aged and disabled established by Title XVIII of the Social Security Act (42
U.S.C. Sections 1395 et seq.) and any statute succeeding thereto.
1.40 "NOI" shall mean earnings before interest, depreciation,
rent, taxes, and amortization and such other items mutually agreed upon between
Purchaser and Seller.
1.41 "Party" shall mean either the Seller or Purchaser,
individually, as the context so requires, and the term "Parties" shall mean the
Seller and Purchaser together.
1.42 "Payables" as of any date shall mean any of the trade
accounts payable of Seller with respect to the Purchased Assets or the Business
as of such date in accordance with GAAP consistently applied.
1.43 "Payroll Practice/Employee Arrangement" shall have the
meaning given to such term in Section 6.19.
1.44 "Permits" shall mean all permits, licenses, approvals,
qualifications, rights, variances, permissive uses, accreditations,
certificates, certifications, consents, contracts, interim licenses, Permits
and other authorizations of every nature whatsoever required by, or issued to
or on behalf of Seller under any Legal Requirements benefiting, relating or
effecting the Business or the construction, development, maintenance,
management, use or operation thereof, or the operation of any programs or
services in conjunction with the Business and all renewals, replacements and
substitutions therefor, now or hereafter required or issued by any Governmental
Authority, Accreditation Body or Third Party Payor.
1.45 "Permitted Encumbrances" shall mean those Encumbrances as
specifically set forth on Schedule 1.45 hereto.
1.46 "Person" shall mean any individual, corporation, company,
limited or general partnership, trust or estate, joint venture, association or
other entity.
1.47 "Prepaid Expenses as of any date shall mean payments made by
Seller with respect to the Purchased Assets or the Business, which constitute
prepaid expenses in accordance with GAAP consistently applied.
1.48 "Proprietary Rights" shall have the meaning given to such
term in Section 6.10.1.
1.49 "Provider Agreements" shall mean all participation, provider
and reimbursement agreements or arrangements for the benefit of Seller in
connection with the operation of the Business relating to any right to payment
or other claim arising out of or in connection with Seller's participation in
any Third Party Payor Program.
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1.50 "Purchase Price" shall have the meaning given to such term in
Section 3.1.1 and 3.1.2 herein.
1.51 "Purchased Assets" shall have the meaning given to such term
in Section 2.1.
1.52 "Purchaser" shall have the meaning given to such term in the
preamble of this Agreement.
1.53 "Purchaser Damages" shall have the meaning given to such term
in Section 14.2.
1.54 "Purchaser Indemnitees" shall have the meaning given to such
term in Section 14.2.
1.55 "Real Property" shall mean the real property owned by Seller,
and used in connection with the Facilities and the Business as more fully
described in Schedule 1.55 hereto, and shall include the Addition.
1.56 "Regulated Substance" shall mean petroleum, petroleum
hydrocarbons or petroleum products and any other chemical, material, substance
or waste that is identified as "hazardous" or "toxic" (by listing or
characteristic) and regulated (or the clean-up of which can be required) by any
Legal Requirement or Environmental Law intended to protect the environment or
the public health or welfare, including but not limited to Legal Requirements
and/or Environmental Laws relating to clean air, clean water, hazardous and
solid waste disposal, safe drinking water, endangered species, occupational
safety and health, oil spill prevention, groundwater protection, and toxic
substances control.
1.57 "Related Party" means (i) Seller, (ii) any Affiliate of
Seller, (iii) any officer, director, shareholder or partner of any Person
identified in clauses (i) or (ii) preceding, and (iv) any spouse, sibling,
ancestor or lineal descendant of any natural Person identified in any one of
the preceding clauses.
1.58 "Resident's Agreements" shall mean copies of all contracts,
agreements and consents executed by or on behalf of any resident or other
Person seeking services at the Facilities as more fully described in Schedule
1.58 hereto, including, without limitation, assignments of benefits and
guarantees, and such resident's related medical and/or other records.
1.59 "Retained Liabilities" has the meaning given that term in
Section 4.2.
1.60 "Sarver" shall mean Sterling Care of Sarver, a 41-bed
personal care home with four independent units, located at 000 Xxxxxxx Xxxx,
Xxxxxx, XX 00000.
1.61 "Saxonburg" shall mean Sterling Care of Saxonburg, a 55-bed
personal care home, 24-bed Alzheimer unit, and 16 independent living
apartments, with a mailing address of X.X. Xxx 000, Xxxxxxxxx, XX 00000, and
shall include the Addition.
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1.62 "Security Right" means, with respect to any security, any
option, warrant, subscription right, preemptive right, other right, proxy, put,
call, demand, plan, commitment, agreement, understanding or arrangement of any
kind relating to such security, whether issued or unissued, or any other
security convertible into or exchangeable for any such security. "Security
Right" includes any right relating to issuance, sale, assignment, transfer,
purchase, redemption, conversion, exchange, registration or voting and includes
rights conferred by statute, by the issuer's governing documents or by
agreement.
1.63 "Seller" shall have the meaning given to such term in the
preamble of this Agreement.
1.64 "Seller Damages" shall have the meaning given to such term in
Section 14.3.
1.65 "Seller Indemnitees" shall have the meaning given to such
term in Section 14.3.
1.66 "Silver Haven" shall mean Silver Haven Summit, a 36-bed
Alzheimer center located at 000 Xxxxxxxx Xxxx, Xxxxxx, XX 00000.
1.67 "Taxes" shall mean all taxes, duties, charges, fees, levies or
other assessments imposed by any Governmental Authority, including, without
limitation, income, gross receipts, value-added, excise, withholding, personal
property, real estate, sales, use, ad valorem, license, lease, service,
severance, stamp, transfer, payroll, employment, customs, duties, alternative,
add-on minimum, estimated and franchise taxes (including any interest,
penalties or additions attributable to or imposed on or with respect to day such
assessment).
1.68 "Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to any Tax, including any
schedule or attachment thereto, and including any amendment thereof.
1.69 "Third Party Payor Programs" shall mean all third party payor
programs which Seller participates, including, without limitation, Medicare,
Medicaid, Champus, Blue Cross and/or Blue Shield, Managed Care Plans, other
private insurance plans and employee assistance programs.
1.70 "Third Party Payors" shall mean Medicare, Medicaid, Blue Cross
and/or Blue Shield, private insurers and any other Person which maintains Third
Party Payor Programs.
1.71 "Tissue" shall mean Xxxx Tissue.
ARTICLE II. TRANSFER OF ASSETS AND PROPERTIES
2.1 Purchased Assets. Subject to the terms and conditions of this
Agreement, Seller shall sell and convey to Purchaser, free and clear of all
Encumbrances whatsoever (other than Permitted Encumbrances and except as
expressly provided herein), and Purchaser shall purchase from Seller, all of
Seller's right, title and interest in and to the assets, properties and rights
of every kind and description, real, personal and mixed, tangible and
intangible, wherever situated
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owned by Seller and used or useful in connection with the Business (the
"Purchased Assets") as the same shall exist on the Closing Date (other than the
Excluded Assets), including, without limitation, the following:
2.1.1 Real Property. The Real Property, together with the
buildings, structures, improvements and fixtures located thereon,
including the Addition, and all rights, privileges, easements,
licenses, hereditaments and other appurtenances relating thereto;
2.1.2 Equipment, Machinery and Other Tangible Personal
Property. All machinery, equipment, leasehold improvements, vehicles,
supplies, office furniture and office equipment, computing and
telecommunications equipment and other items of personal property,
including those described in Schedule 2.1.2 hereto;
2.1.3 Contracts Relating to the Business. All Contracts
relating to the acquisition or ownership of the Purchased Assets or
the operation of the Business, including, without limitation, the
Contracts listed on Schedule 2.1.3 and the Resident's Agreements
listed on Schedule 1.58 hereto, to the extent such Contracts are
transferable to Purchaser;
2.1.4 Sales, Rental and Marketing Materials. Manuals. All
sales data, rental data, catalogs, brochures, reference sources,
suppliers' names, mailing lists, art work, photographs, public
relations and advertising material used in the Business, whether in
electronic form or otherwise;
2.1.5 Permits, Licenses. All Permits relating to the
acquisition or ownership of the Purchased Assets or the operation of
the Business, including, without limitation, those Permits listed in
Schedule 2.1.5 hereto, to the extent such Permits are transferable to
Purchaser;
2.1.6 Trade Secrets. All policies and procedures, methods
of delivery of services, trade secrets, designs, architectural plans,
drawings and specifications, market studies, consultants' reports,
prototypes, and all similar property of any nature, tangible or
intangible, used in connection with the Business;
2.1.7 Intellectual Property. All patents, trademarks,
trademark registrations, trade names, service marks, copyrights and
copyright registrations of used in connection with the Business,
including, without limitation, those described in Schedule 2.1.7;
2.1.8 Goodwill. All goodwill incident to the Business,
including but not limited to the value of the names associated with
the Business and the value of good customer relations;
2.1.9 Inventory. All Closing Inventory;
2.1.10 Resident Funds. All deposits and escrow accounts
paid to Seller by, or for the benefit of, any of the Facilities'
residents, all prepaid rents, and all rents
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attributable to the month of Closing, prorated beginning on the
Closing Date and through the end of said month.
2.1.11 Computer Software. All computer applications software,
owned or licensed, whether for general business usage (e.g.,
accounting, word processing, graphics, spreadsheet analysis, etc.), or
specific, unique-to-the-business usage, and all computer operating,
security or programming software, owned or licensed and used in the
operation of the Business;
2.1.12 Records. All personnel and resident records; and
2.1.13 Name. All rights to the names "Sterling Care of
Sarver", "Sterling Care of Saxonburg," and "Silver Haven Summit" and
any other trade names which were or are used by Seller with respect to
the Facilities or by which the Facilities were or are known by
residents, suppliers, employees, governmental entities or agencies, or
the community.
2.1.14 Other Intangible Assets. All other intangible assets
(including all causes of action, rights of action, contract rights and
warranty and product liability claims against third parties) relating
to the Purchased Assets or the Business.
2.2 Excluded Assets. Notwithstanding Section 2.1, the following
assets (collectively, the "Excluded Assets") shall be excluded from this
Agreement, and shall not be assigned or transferred to Purchaser:
2.2.1 Cash. All other cash, cash equivalents on hand or in
bank accounts, and short-term notes receivable as of the Closing Date;
2.2.2 Consideration. The consideration paid to Seller
pursuant to this Agreement;
2.2.3 Prepaid Expenses. All Prepaid Expenses of, or for
the benefit of, the Purchased Assets or the Business at the Closing
Date including those described in Schedule 2.2.3, to the extent the
benefits thereof are transferable to Purchaser;
2.2.4 Corporate Books. Corporate minute book and stock
book of Seller;
2.2.5 Third Party Claims. Any claims and rights against
third parties (including, without limitation, insurance carriers) to
the extent they relate to liabilities or obligations that are not
assumed by Purchaser hereunder (except the amount of costs and
expenses Purchaser shall have incurred with respect to such claims and
rights);
2.2.6 Taxes. Claims for refunds of Taxes and other charges
imposed by any Governmental Authority for a period prior to Closing;
2.2.7 Accounts Receivable. All Accounts Receivable
existing on and attributable to periods prior to the Closing Date;
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2.2.8 Other Excluded Assets. Assets listed on Schedule
2.2.8.
2.2.9 Pensions Assets constituting any pension or other
funds for the benefit of Employees existing on the Closing Date;
2.3 License to Use Certain Assets. To the extent that there are
any tangible or intangible assets used by Seller in connection with the
Purchased Assets or the Business that are not specifically designated as
Excluded Assets by Section 2.2 (without reference to this Section), the
Purchased Assets shall include an irrevocable, nonexclusive, perpetual,
paid-up, royalty-free, transferable license to utilize such assets in
connection with the operation of the Business after the Closing Date. To the
extent that any such assets may not be licensed, Seller shall take all steps
required to assure that Purchaser obtains the benefit of such assets.
ARTICLE III. CONSIDERATION AND TERMS
3.1 Consideration for Purchased Assets.
3.1.1 Purchase Price. The amount of the purchase price
("Purchase Price") to be paid by Purchaser for the Assets hereunder
shall be determined in accordance with the following:
(a) At Closing, Purchaser will pay an amount representing the
product of the actual NOI for the Facilities for the year ended December 31,
1996 (the "Facilities' 1996 NOI"), as determined by Purchaser in its due
diligence, times seven-and-one-half, less $450,000.
(b) At Closing, Purchaser also will pay to Seller an amount
representing the difference, if any, between the actual 1997 calendar
year-to-date NOI, annualized, for the Facilities, as of the most recent
complete month, as determined by Purchaser in its due diligence, (the
"Facilities' YTD NOI"), less the Facilities' 1996 NOI, times
seven-and-one-half, and multiplying the product thereof by eighty (80%)
percent;
(c) Purchaser will pay $450,000 to Seller within thirty days
after Purchaser's confirmation that the first new resident has been admitted to
the Addition;
(d) On or before January 15, 1998, Seller shall provide to
Purchaser the 1997 year-end financial statements for the Facilities. If the
actual 1997 NOI for the Facilities, as determined by Purchaser (the
"Facilities' 1997 NOI") exceeds the Facilities' 1996 NOI, Purchaser will pay to
Seller an additional amount representing the difference between the Facilities'
1997 NOI less the Facilities' 1996 NOI, multiplied by seven-and-one-half, less
the amount already paid in Section (b) hereof, to be paid within thirty (30)
days of Purchaser's confirmation of the 1997 Facilities' NOI, but in no event
later than February 15, 1998. If the
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Facilities' 1997 NOI is less than the Facilities' 1996 NOI, as determined by
Purchaser, the amount of such difference, multiplied by seven-and-one-half (the
product of which shall be the "Deficit"), will be deducted from future
payments, if any, under (e), (f) and/or (g) herein, with the amount of the
Deficit has been recovered by Purchaser.
(e) If Seller achieves an eighty (80%) percent occupancy rate for
thirty consecutive days for Saxonburg and the Addition, collectively ("80%
Occupancy"), prior to December 31, 1998, Purchaser will pay to Seller an amount
representing the product of the actual NOI for the Addition, from the date of
the first resident's occupancy of the Addition through the most recent complete
month prior to 80% Occupancy, as defined herein and as determined by Purchaser,
multiplied by seven-and-one-half, less the amount of the Deficit as defined in
(d) herein, if any, which payment will be paid within thirty (30) days of
Purchaser's confirmation of said 80% Occupancy and of said actual NOI for the
Addition.
(f) If Seller further achieves a ninety (90%) percent occupancy
rate for thirty consecutive days for Saxonburg and the Addition, collectively
("90% Occupancy"), on or before December 31, 1995, Purchaser will pay an amount
representing the actual NOI for the Addition from the date of 80% Occupancy, up
to the date of 90% Occupancy, as determined by Purchaser, multiplied by
seven-and-one-half, less the amount of the Deficit not yet recovered by
Purchaser under (e) herein, if any, which payment will be paid within thirty
days of Purchaser's confirmation of said 90% Occupancy and of said actual NOI.
(g) Purchaser will pay a final payment representing the NOI for
the final six months of calendar year 1998 for the Addition, annualized,
multiplied by seven-and-one-half, less the payments made in (e) and (f) hereof,
if any, and less any of the Deficit as defined in (d) herein not yet recovered
by Purchaser, if any, to be paid within thirty days of Purchaser's confirmation
thereof, but in no event later than February 15, 1999.
Purchaser shall pay a cash payment in the amount of $50,000 at the
time of execution of this Agreement (the "Initial Payment"), and, unless
earlier terminated by Purchaser, a second $50,000 payment on October 6, 1997
(the "Second Payment"), to the First American Title Insurance Company as escrow
agent ("Escrow Agent"), to be held in accordance with the terms and conditions
of an Escrow Agreement, in the form of Exhibit 3.1.1 attached hereto, executed
simultaneously herewith by Purchaser, Seller, and Escrow Agent. (The Initial
Payment and the Second Payment are individually and collectively the "Escrowed
Property".) The Initial Payment shall be refundable to Purchaser by Escrow
Agent, upon written notice by Purchaser to Seller, with a copy to Escrow Agent,
on or before October 6, 1997, that it is terminating this Agreement. After
October 6, 1997, the Escrowed Property made shall be paid by Escrow Agent to
Seller at Closing and applied to the Purchase Price, or, if this Agreement is
terminated by either party after October 6, 1997, then the Escrowed Property
shall be distributed by Escrow Agent in accordance with Section 13.1 hereof.
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3.1.2 Other Consideration. As additional consideration,
Purchaser shall also assume the Assumed Liabilities, specified in
Section 4.2 herein, at the time of Closing.
3.2 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets and the Business in accordance with the
allocation set forth in Schedule 3.2. Purchaser and Seller shall report the
federal, state and local income and other tax consequences of the purchase and
sale contemplated hereby in a manner consistent with such allocation, and
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shall not take any position inconsistent therewith upon examination of any tax
return, in any refund claim, in any litigation or otherwise.
ARTICLE IV. ASSUMPTION OF LIABILITIES; EMPLOYEE MATTERS
4.1 General Limitation on Assumption of Liabilities. Except for
Permitted Encumbrances and as otherwise provided in Sections 4.2, 4.3 and 4.4
below, Seller shall transfer the Purchased Assets to Purchaser free and clear
of all Encumbrances, and without any assumption of liabilities and obligations,
and Purchaser shall not, by virtue of its purchase of the Purchased Assets,
assume or become responsible for any liabilities or obligations of Seller or
any other Person. For purposes of this Section 4.1 the phrase "liabilities and
obligations" shall include, without limitation, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, xxxxxx or inchoate, liquidated or unliquidated, secured
or unsecured.
4.2 Assumed Liabilities and Obligations of Seller. On the Closing
Date, Purchaser shall acquire the Purchased Assets subject only to, and shall
undertake, assume, perform and otherwise pay, satisfy and discharge, and hold
Seller harmless from the following liabilities and obligations, excluding any
liabilities and obligations to Affiliates of Seller (collectively, the "Assumed
Liabilities"):
(i) all obligations of Seller occurring before but accruing on or
after the Closing Date under the Contracts contemplated by
Section 2.1.3, provided that the rights thereunder have been
duly and effectively assigned to Purchaser; and
(ii) all obligations of Seller accruing on or after the Closing
Date under the Permits described in Section 2.1.5, provided
that the rights thereunder have been duly and effectively
assigned to Purchaser.
Except for the Assumed Liabilities, Purchaser does not and shall not
assume or in any way undertake to pay, perform, satisfy or discharge any other
liability of Seller existing on the Closing Date or arising out of any
transactions entered into, or any state of facts existing, prior to the Closing
Date (the "Retained Liabilities"), and Seller agrees to pay and satisfy when
due all of the Retained Liabilities. Except for the obligations and liabilities
included in the Assumed Liabilities, the term "Retained Liabilities" shall
include, without limitation, liabilities:
(i) for or in connection with any dividends, distributions,
redemptions, or Security Rights with respect to any security
of Seller;
(ii) arising out of any transaction affecting Seller or
obligations incurred by Seller after Closing;
(iii) for expenses or fees incident to or arising out of the
negotiation, preparation, approval or authorization of this
Agreement and the consummation of the
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transactions contemplated hereby, including, without
limitation, all legal and accounting fees and all brokers or
finders fees or commissions payable by Seller;
(iv) under or arising out of this Agreement;
(v) against which Seller is insured or otherwise indemnified or
which would have been covered by insurance (or
indemnification) but for a claim by the insurer (or the
indemnitor) that the insured (or the indemnities) had
breached its obligations under the policy of insurance (or
the contract of indemnity) or had committed fraud in the
insurance application;
(vi) to any Related Party;
(viii) to indemnify Seller's officers, directors, shareholders,
Employees or agents;
(ix) federal, state or local tax liabilities or obligations of
Seller accrued or relating to a period prior to Closing, and
the transactions contemplated hereunder, including, without
limitation, income taxes payable under the Code, any income
tax, any franchise tax, any tax recapture, any FICA, workers'
compensation, vacation liability and other employee benefits,
any insurance premiums, rents, or other accruals and any and
all other taxes or amounts due or payable for a period prior
to Closing; notwithstanding the foregoing, all sales and use
taxes, transfer taxes, and all other impositions of tax
arising solely by reason of the transfers contemplated by
this Agreement (excluding all federal, state and local income
and gross receipt taxes on the earnings or gross receipts of
Seller prior to the Closing Date, which shall remain the sole
responsibility of Seller) shall be the responsibility of and
shall be paid equally by Seller and Purchaser (any real
estate and personal property taxes for the year in which
Closing occurs shall be pro-rated to the Closing Date [based
on a calendar year or fiscal year for which such taxes are
levied basis], if the tax rates for the year in which Closing
occurs shall not be fixed prior to the Closing Date for a
particular item of the Purchased Assets, the pro-ration of
taxes thereon shall be based upon the tax rate for the year
prior to Closing applied to the latest assessment valuation;
however, in the event that any such taxes are increased or
decreased for the year in which Closing occurs, Seller or
Purchaser shall then reimburse the other party for amounts in
excess of or less than the proration as determined as of the
Closing Date);
(x) for long term indebtedness and other obligations or
guarantees of Seller;
(xi) for Current Liabilities of Seller as of the Closing Date;
(xii) if applicable, for or in connection with any cost reports
required to be filed by Seller with respect to periods prior
to Closing; and
(xii) for Accrued Expenses and Payables of Seller at the Closing Date.
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4.3 Offer of Employment. Purchaser may offer employment on and as
of Closing, on an at-will basis, to Employees now or previously employed by
Seller.
4.4 Vacation Workers' Compensation and Disability Claims.
4.4.1 Seller's Liability. Seller shall remain solely liable
for all accrued vacation entitlements, workers' compensation,
disability and occupational diseases of or with respect to the
Employees attributable to entitlements, injuries, claims, conditions,
events and occurrences occurring before the Closing Date.
4.4.2 Purchaser's Liability. Purchaser shall be liable for
all vacation entitlements, workers' compensation, disability and
occupational diseases of or with respect to the Employees hired by
Purchaser attributable to entitlements, injuries, claims, conditions,
events and occurrences first occurring on or after the Closing Date.
4.4.3 Workers' Compensation; Unemployment Compensation.
Schedule 4.4.3 attached hereto sets forth a true and correct summary
of the following with respect to Seller and the Employees:
(i) a listing of all workers' compensation contracts;
(ii) the workers' compensation loss experience for the
past three years:
(iii) a summary report and experience rating for
unemployment compensation; and
(iv) the turnover rates for the Facilities.
ARTICLE V. CLOSING
5.1 Time; Location. The consummation of the purchase and sale of
the Purchased Assets (the "Closing") shall take place on or before October 31,
1997, or such other date mutually agreed upon in writing by the parties (the
"Closing Date"). The Closing shall take place at such time, date and place as
may be mutually agreed upon by the Parties.
5.2 Documents. At Closing, Seller shall execute and deliver the
following instruments of transfer and assignment:
5.2.1 Deed. Duly executed general warranty deeds in favor
of Purchaser or Purchaser's assignee, in recordable form, transferring
good and marketable fee simple title to the Real Property, subject
only to Permitted Encumbrances, and such affidavits, releases,
satisfactions or other instruments as Purchaser's title insurance
company may reasonably request, with respect to, but not limited to,
(i) exceptions for (A) judgments, bankruptcies, taxes and municipal
claims, (B) parties in possession other than current occupants
pursuant to agreements with either Seller, (C) mechanics' or
materialmen's
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liens and (D) encroachments or survey discrepancies of any nature;
(ii) mortgages or security interests and (iii) gap indemnities;
5.2.2 Xxxx of Sale. A general xxxx of sale, assignment and
assumption substantially in the form of Exhibit 5.2.2 hereto,
transferring to Purchaser good and indefeasible title to all of the
tangible personal property included in the Purchased Assets, subject
only to Permitted Encumbrances and the Assumed Liabilities and
assigning to Purchaser, to the extent assignable, Seller's right,
title and interest in each of the Contracts, Permits and other
agreements included in the Purchased Assets, together with all
consents of third parties that are required to make each such
assignment effective;
5.2.3 Title Certificates. Certificates of title to all
vehicles, if any, included in the Purchased Assets with assignments to
Purchaser;
5.2.4 Property Tax Statements. To the extent not delivered
prior to Closing, all real estate and personal property tax statements
or bills for or relating to the Real Property or any of the other
Purchased Assets for the applicable current tax year or years, and all
tax assessments or notices thereof upon which such taxes are based;
5.2.5 Plans and Specifications. To the extent not
delivered prior to Closing, all plans, specifications and other
drawings used in the construction of the Facilities, including the
Addition, or any renovations thereof (including, without limitation,
the most current as-built plans and architectural specifications) and
all guarantees and warranties made by third parties with respect to
the improvements, buildings, personalty or any of the other Purchased
Assets;
5.2.6 Building Permits. To the extent not delivered prior
to Closing, all building permits, zoning permits, occupancy permits,
subdivision plans, surveys and hazardous waste studies and soil
studies prepared within two years before the date hereof, for or
relating to the Facilities, including the Addition;
5.2.7 Contracts and Other Permits. To the extent not
delivered prior to Closing, all Contracts, Permits, or other
instruments or agreements relating to the ownership, operation, use,
occupancy, licensure, accreditation or maintenance of the Business;
5.2.8 Rent Roll. The rent roll listing all residents of
the Facilities and their respective rent payments current as of two
days prior to Closing;
5.2.9 Closing Documents. To the extent not delivered prior
to Closing, the documents referred to in Section 8.1.2 and Section
8.1.8; and
5.2.10 Other Documents. The Ancillary Agreements, and such
additional instruments of conveyance and transfer as Purchaser may
reasonably require in order to more effectively vest in it, and put it
in possession of, the Purchased Assets.
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5.3 Reasonable Steps. Seller shall make such reasonable efforts
as may be appropriate so that on the Closing Date, Purchaser shall be placed in
actual possession and control of all of the Purchased Assets.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller represents and warrants
to Purchaser, that each of the following representations and warranties is true
and correct as of the date hereof:
6.1 Organization, Good Standing and Power. Seller is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation, and has all requisite corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements to
which it is a party, to consummate the transactions contemplated hereby and
thereby and to perform all the terms and conditions hereof and thereof and to
be performed by it.
6.2 Authorization of Agreement. Seller has taken all necessary
corporate action to authorize the execution and delivery of this Agreement and
the Ancillary Agreements to which it is a party, the performance by it of all
terms and conditions hereof and thereof to be performed by it and the
consummation of the transactions contemplated hereby and thereby.
6.3 Enforceability. This Agreement constitutes, and the Ancillary
Agreements to which Seller is party, upon such Seller's execution and delivery
thereof, will constitute the legal, valid and binding obligations of such
Seller, enforceable in accordance with their terms except to the extent that
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws presently or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law).
6.4 No Violation; Consents. The execution, delivery and
performance by Seller of this Agreement and the Ancillary Agreements to which
Seller is a party, and the consummation of the transactions contemplated hereby
and thereby will not (with or without the giving of notice or the lapse of
time, or both) (i) with respect to Seller, violate any provision of the charter
or bylaws of Seller; (ii) except with respect to notices and consents (if any)
required to be given by either Seller to any Accreditation Body or Governmental
Authority in connection with the sale and change of ownership of the Purchased
Assets and the Business, violate or require any consent, authorization or
approval of, or exemption by, or filing under any provision of any law,
statute, rule or regulation to which either Seller, the Business or the
Purchased Assets are subject; (iii) violate any judgment, order, writ or decree
of any court applicable to either Seller, the Business or the Purchased Assets;
(iv) except as identified on Schedule 2.1.3, conflict with, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval
under any Contract or other instrument, document or undertaking to which either
Seller is a party or any of the Purchased Assets is bound or (v) result in the
creation or imposition of any Encumbrances upon the Purchased Assets.
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6.5 Financial Statements. Seller has delivered to Purchaser true
and complete copies of the audited, or if unavailable, unaudited (i) balance
sheets of the Business at December 31, 1996, 1995 and 1994 and the related
statements of income and cash flows for the years then ended and (ii) monthly
statements of profit and loss and cash flows for the first six months of 1997
with respect to the operation of the Facilities and, in addition, Seller shall
provide Purchaser, as promptly as the same become available through the Closing
Date, but no later than 15 days after the last day of each month, monthly
statements of profit and loss and cash flows of Seller for the Facilities. In
the event that the Closing Date occurs within the first 15 days of a month,
notwithstanding anything to the contrary herein, Seller shall furnish Purchaser
statements of profit and loss and cash flows for the then immediately preceding
month no later than three days prior to the Closing Date. True and correct
copies of such financial statements are attached hereto as Schedule 6.5. The
foregoing financial statements have been prepared from the Books and Records of
Seller in accordance with GAAP consistently applied throughout the periods
involved except as may be noted therein. Such financial statements, including
the related notes, are true and correct and fairly present the financial
position of the Business at the dates indicated and the results of operations
and cash flow statements of the Business for the periods then ended in
accordance with GAAP.
6.6 Accounts Receivable. All Accounts Receivable (i) have or will
have arisen only in the ordinary course of business consistent with past
practice for goods actually sold and delivered or services actually performed;
and (ii) are or will be collectible in full at the recorded amounts thereof
(subject to no defenses, setoffs or counterclaims) in the ordinary course of
business (without resort to litigation or assignment to a collection agency) no
later than 90 days after the Closing Date, net of any allowance for bad debts
calculated in accordance with GAAP reflected on the Books and Records of
Seller.
6.7 Inventory. The Inventory was or will be acquired and
maintained in accordance with the regular business practices of Seller,
consists or will consist of new and unused items of a quality and quantity
usable or salable in the ordinary course of business consistent with past
practice, and is or will be valued in accordance with GAAP consistently
applied.
6.8 Absence of Certain Changes or Events.
6.8.1 Seller. Except as set forth in Schedule 6.8 hereto,
since June 30, 1997 in connection with the Purchased Assets or the
Business, Seller has not:
(i) amended in any material respect or terminated any
Contract or Permit other than in the ordinary course
of business consistent with past practice;
(ii) suffered the occurrence of any events that,
individually or in the aggregate, have had, or could
reasonably be expected to have, a material adverse
effect on the results of operations of the Business
or on the Purchased Assets, including, without
limitation, the Real Property, including any damage
or destruction by fire, storm or similar casualty,
whether or not covered by insurance;
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(iii) sold, transferred, replaced or leased any of the
Purchased Assets, except for transactions in the
ordinary course of business consistent with past
practice;
(iv) waived or released any material rights with respect
to the Purchased Assets or the Business;
(v) transferred or granted any rights to any Proprietary
Rights;
(vi) entered into any transaction or made any commitments
(for capital expenditures or otherwise) other than
in the ordinary course of business consistent with
past practice;
(vii) changed its methods of accounting;
(viii) increased the compensation of any of the Employees,
except following normal review procedures or as
reasonably deemed necessary in the ordinary course
of business consistent with past practice;
(ix) suffered any major or key personnel changes;
(x) materially altered its conduct in its relations with
suppliers and residents;
(xi) materially altered its marketing efforts with
respect to the Business; or
(xii) received any notice nor has any knowledge that its
license or Permits to operate the Facilities has
been or will be suspended, revoked, or restricted in
any manner.
6.9 Real Property.
6.9.1 Title to Properties; Absence of Liens and
Encumbrances. Seller owns and will transfer to Purchaser at Closing
good, marketable and indefeasible title to all of the Purchased
Assets, including, without limitation, the Real Property and the
Addition, free and clear of all Encumbrances, other than Permitted
Encumbrances. Copies of all title insurance policies and surveys
written in favor of Seller relating to the Real Property have been
delivered to Purchaser.
6.9.2 Structures and Improvements. Seller represents and
warrants that all structures and other improvements, including the
Addition, on the Real Property are in good order and repair and free
from any structural defects.
6.9.3 Boundaries; Location. Seller represents and warrants
that the structures and other improvements, including the Addition, on
the Real Property are within the lot lines and do not encroach on the
properties of any other Person and that the Real Property is
considered a separate parcel of land for taxing and conveyancing
purposes and that no
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portion of the Real Property is located in a flood plain, flood hazard
area or designated wetlands area and has no subsidence problems due to
natural or manmade sub-surface conditions.
6.9.4 Use and Operation. Seller represents and warrants
that the use and operation of the Real Property, including the
Addition, conforms to all applicable building, zoning, safety and
subdivision laws, Environmental Laws and other Legal Requirements, and
all restrictive covenants and restrictions and conditions affecting
title.
6.9.5 Utilities. Seller represents and warrants that all
public utilities (including water, gas, electric, storm and sanitary
sewage and telephone utilities) required to operate the Facilities are
available to the Facilities, including the Addition, and such
utilities enter the boundaries of such Facilities through adjoining
public streets, permanent easements or rights-of-way of record in
favor of Seller. Such public utilities are all connected pursuant to
valid Permits, are all in good working order and are adequate to
service the operations of the Facilities as currently conducted and
permit full compliance with all Legal Requirements. Seller has not
received any written notice of any proposed, planned or actual
curtailment of service of any utility supplied to the Facilities.
6.9.6 Assessments; Notices. Seller has not received any
written or oral notice of assessments for public improvements against
the Real Property or any written or oral notice or order by any
Governmental Authority, any insurance company that has issued a policy
with respect to any of such properties or any board of fire
underwriters or other body exercising similar functions that relates
to violations of building, safety or fire ordinances or regulations,
that claims any defect or deficiency with respect to any of such
properties or requests the performance of any repairs, alterations or
other work to or in any of such properties or in the streets bounding
the same.
6.9.7 Condemnation. Seller represents and warrants that
there is no pending condemnation, expropriation, eminent domain or
similar proceeding affecting all or any portion of the Real Property.
6.9.8 Access. Seller represents and warrants that all
present driveways and other access routes to the Real Property are
from public streets and no other Person has any right to use any such
driveways or other access routes.
6.10 Proprietary Rights.
6.10.1 Logos and Tradenames. Schedule 2.1.7 hereto sets
forth a correct and complete list of all patents, logos, trademarks,
trade names, service marks, copyrights and applications or
registrations therefor used in and material to the Business
(collectively, the "Proprietary Rights").
6.10.2 Licenses. Except as disclosed in Schedule 2.1.5: (i)
Seller owns or possesses adequate licenses or other valid rights to
use (without the making of any payment to others or the obligation to
grant rights to others in exchange) all the
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Proprietary Rights; (ii) the Proprietary Rights included in the
Purchased Assets constitute all the material rights necessary to
conduct the Business in accordance with past practice and are being
conveyed to Purchaser together with the other Purchased Assets; (iii)
the validity of the Proprietary Rights and the rights therein of
Seller have not been questioned in any litigation to which Seller is a
party, nor, to Seller's Knowledge, is any such litigation threatened;
and (iv) the conduct of the Business does not conflict with patent
rights, licenses, trademark rights, trade name rights, copyrights or
other intellectual property rights of others.
6.10.3 Infringement. Except as disclosed in Schedule 2.1.7
hereto, Seller does not have Knowledge that any material use of any
Proprietary Rights owned by Seller has heretofore been, or is now
being, made by any Person other than Seller, and Seller has no
Knowledge of any infringement of any Proprietary Rights owned or
licensed by Seller. No present or former director, officer, Employee
or consultant of Seller has any interest in any of the Proprietary
Rights.
6.11 Contracts and Commitments. Except as listed and described on
Schedule 1.58 and Schedule 2.1.3, with respect to the Purchased Assets or the
Business, Seller is not a party to any written or oral:
(i) Contract for the future purchase of, or payment for,
supplies or products, or for the performance of
services by another party, involving in any one case
$10,000 or more, except such costs and expenses
relating to the Addition which shall be the
liability of Seller;
(ii) Contract to sell or supply products or to perform
services, involving in any one case $10,000 or more
(except for any Resident's Agreement);
(iii) Contract continuing over a period of more than six
months from the date hereof or exceeding $10,000 in
value (except for any Resident's Agreement);
(iv) representative, sales agency, dealer or distributor
Contract;
(v) note, debenture, bond, conditional sale agreement,
equipment trust agreement, letter of credit
agreement, loan agreement or other Contract or for
the borrowing or lending of money (including without
limitation loans to or from Employees) or guarantee,
pledge or undertaking of the indebtedness of any
other Person;
(vi) Contract for any charitable or political
contribution;
(vii) Contract limiting or restraining Seller or any
successor or assign from engaging or competing in
any likeness of business with any Person;
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(viii) license, franchise, distributorship or other
agreement, including those that relate in whole or
in part to any patent, trademark, trade name,
service xxxx or copyright or to any ideas, technical
assistance or other know-how of or used by the
Business;
(ix) Contract or commitment to assign, option, sell,
transfer or otherwise convey any right, title or
interest of Seller in and to all or any portion of
the Business; or
(x) any other material Contract not made in the ordinary
course of business consistent with past practice.
Each of the Contracts and other instruments, documents and
undertakings listed on Schedule 1.58 and Schedule 2.1.3 is valid and
enforceable in accordance with its terms, the parties thereto are in compliance
with the provisions thereof, neither party is in default in the performance,
observance or fulfillment of any material obligation, covenant or condition
contained therein, and no event has occurred that with or without the giving of
notice or lapse of time, or both, would constitute a default thereunder and
(ii) except as set forth on Schedule 1.58 and Schedule 2.1.3, no advance
payments have been received by Seller by or on behalf of any party to any of
the Contracts and other instruments, documents and undertakings listed thereon
for services to be rendered or products to be delivered by such party after the
Closing Date. Any Contracts that cannot be transferred or require consent or
approval for the transfer thereof are specifically identified on Schedule 1.58
and Schedule 2.1.3 hereto as nontransferable or requiring such consent or
approval.
6.12 Permits. Seller has all Permits that are required to operate
the Facilities, and if completed, the Addition, as a personal care facility as
that term is defined by the Department of Public Welfare, Division of Personal
Care Homes and the Business (including without limitation those required under
any Environmental Law) and Seller is in compliance with the terms and
conditions of the Permits Schedule 2.1.5 hereto sets forth a correct and
complete list of all Permits, each one of which is in full force and effect. To
Seller's Knowledge, no suspension or cancellation of any of the Permits is
threatened and no cause exists for such suspension, revocation, restriction or
cancellation. Any Permits that cannot be transferred or require consent or
approval for the transfer thereof are specifically identified on Schedule 2.1.5
hereto as nontransferable or requiring such consent or approval.
6.13 Compliance with Laws. Except as described in Schedule 6.13
hereto, Seller has at all times conducted, and is presently conducting, the
Business so as to comply in all material respects with all Legal Requirements
applicable to the conduct of operation of the Business or the ownership or use
of the Purchased Assets.
6.14 Legal Proceedings. Except as described in Schedule 6.14
hereto, there is no claim, action, suit, proceeding, investigation or inquiry
pending before any Governmental
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Authority or, to Seller's Knowledge, threatened against Seller with respect to
the Business or any of the Purchased Assets owned or used by it in connection
therewith, including the Addition, or relating to the transactions contemplated
by this Agreement, nor to Seller's Knowledge is there any basis for any such
claim, action, suit, proceeding, investigation, or inquiry. Except as set forth
on Schedule 6.14 hereto, Seller is not a party to or subject to the provisions
of any judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental, regulatory or administrative official, body or
authority that relates to the Business or the Purchased Assets owned or used by
Seller in connection therewith that might affect the transactions contemplated
by this Agreement.
6.15 Absence of Undisclosed Liabilities. Except as set forth in
Schedule 6.15, Seller has no liabilities or obligations (as defined in Section
4.1) relating to the Business except (i) those liabilities and obligations set
forth on the financial statements of Seller previously provided to Purchaser
and not heretofore paid or discharged; (ii) those liabilities and obligations
arising in the ordinary course of business consistent with past practice under
any Contract or commitment specifically disclosed on Schedule 2.1.3 hereto or
not required to be disclosed because of the term or amount involved; and (iii)
those liabilities and obligations incurred in the ordinary course of business
consistent with past practice since the financial statements dated July 31,
1997, provided to Purchaser.
6.16 Books and Records. All books of account and other financial
records of Seller directly relating to the Business (the "Books and Records")
are materially complete and correct and have been made available to Purchaser.
All of the Books and Records have been prepared and maintained in accordance
with good business practices and, where applicable, in conformity with GAAP
(except as otherwise stated therein) and in compliance in all material respects
with all Legal Requirements.
6.17 Employees. Schedule 1.21 sets forth a true and correct list
of the following for the Facilities: (i) all individuals employed by Seller in
the conduct of the Business; (ii) total wage costs; (iii) wage/salary grade
structure and (iv) each Employee's (A) present position and department, (B) job
description, (C) rate of compensation and (D) service credited for purposes of
vesting and eligibility under each Payroll Practice/Employee Arrangement.
6.18 Labor Disputes. Except as described in Schedule 6.18 hereto,
there are no material discrimination complaints nor any other kind of
employment or labor related disputes against Seller in connection with the
Business pending before or, to Seller's Knowledge, threatened before any
federal, state or local court or agency, and to Seller's Knowledge, no material
dispute respecting minimum wage or overtime claims or other conditions or terms
of employment exists. The Business has not experienced any material labor
disputes or any material work stoppage due to labor disagreements within the
past three years. With respect to the Business and except to the extent set
forth in Schedule 6.18: (i) there is no unfair labor practice charge or
complaint against Seller pending or, to Seller's Knowledge, threatened, before
the National Labor Relations Board; (ii) there is no labor strike, slowdown or
stoppage pending
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or, to Seller's Knowledge, threatened against or affecting Seller; and (iii) no
question concerning representation has been raised within the past three years,
or to Seller's Knowledge, is threatened respecting the Employees.
6.19 Payroll Practice/Employee Arrangement.
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6.19.1 Benefit Plans. Schedule 6.19 contains a complete
list of each employee benefit plan subject to ERISA, and/or holiday,
vacation or other bonus practice or any other employee pay practice,
arrangement, agreement or commitment (the "Payroll Practice/Employee
Arrangement") and maintained by or with respect to which Seller has
any liability or obligation, whether actual or contingent, with
respect to the Employees or their respective beneficiaries.
6.19.2 Plan Liability. Seller has not taken any action that
may result in Purchaser being a party to, or bound by, an ERISA Plan,
and Purchaser shall have no liability under, or be subject to any
liability on account of, any ERISA Plan or Payroll Practice/Employee
Arrangement following the consummation of the transaction contemplated
hereby.
6.19.3 Retirement Benefits. No ERISA Plan or other employee
arrangement has provided for the payment of retiree benefits by
Purchaser.
6.20 No Finder. Seller has not taken any action that would give to
any Person a right to a finder's fee or any type of brokerage commission in
relation to, or in connection with, the transactions contemplated by this
Agreement.
6.21 Condition of Equipment. Except as set forth on Schedule 6.21,
all equipment that is part of the Purchased Assets is in good operating
condition and repair (subject only to routine maintenance and repair) and
usable in the conduct of the Business consistent with past practice.
6.22 Affiliate Transactions. Except as set forth in Schedule 6.22
hereto, Seller and its Affiliates provide no services or products to the
Business.
6.23 Environmental Matters. Except as disclosed in Schedule 6.23:
6.23.1 Compliance; No Liability. Seller has operated the
Business and the Real Property in material compliance with all
applicable Environmental Laws. Seller is not subject to any liability,
penalty or expense (including legal fees), and Purchaser will not
suffer or incur any loss, liability, penalty or expense (including
legal fees) by virtue of any violation of any Environmental Law
occurring prior to the Closing, any environmental activity conducted
on or with respect to any property by such Seller at or prior to the
Closing or any environmental condition existing on or with respect to
any property at or prior to the Closing, in each case whether or not
such Seller permitted or participated in such act or omission.
6.23.2 Treatment; CERCLA. Seller has not treated, stored,
recycled or disposed of any hazardous material, and to Seller's
Knowledge, no other Person has treated, stored, recycled or disposed
of any hazardous material on any part of the Real Property. There has
been no release of any hazardous material at, on or under any Real
Property. Seller has not transported any hazardous material or
arranged for the transportation of any hazardous material to any
location that is listed or proposed for listing on the National
Priorities List pursuant to Superfund, on CERCLA or any other location
that is the subject of federal, state or local enforcement action or
other investigation that may lead to claims
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against Seller for cleanup costs, remedial action, damages to natural
resources, to other property or for personal injury including claims
under Superfund. The Real Property is not listed or, to Seller's
Knowledge, proposed for listing on the National Priorities List
pursuant to Superfund, CERCLA or any state or local list of sites
requiring investigation or cleanup.
6.23.3 Notices; Existing Claims; Certain Hazardous
Materials; Storage Tanks. Seller has not received any request for
information, notice of claim, demand or other notification that it is
or may be potentially responsible with respect to any investigation,
abatement or cleanup of any threatened or actual release of any
hazardous material. Seller is not required to place any notice or
restriction relating to the presence of any hazardous material on the
Real Property or in any deed relating to the Real Property. Seller
has provided to Purchaser a list of all sites to which such Seller has
transported any hazardous material for recycling, treatment, disposal,
other handling or otherwise. There has been no past, and there is no
pending or contemplated, claim by Seller under any Environmental Law
or Legal Requirement based on actions of others that may have impacted
on the Real Property, and Seller has not entered into any agreement
with any Person regarding any Environmental Law, remedial action or
other environmental liability or expense. All storage tanks located on
the Real Property, whether underground or aboveground, are disclosed
on Schedule 6.23, and, to Seller's Knowledge, all such tanks and
associated piping are in sound condition and are not leaking and have
not leaked.
6.24 Insurance. Schedule 6.24 sets forth a complete list of all
insurance policies maintained with respect to the Business for the past three
years and all insurance policies known by Seller to have been maintained by any
other Person which may provide any coverage for liabilities relating in any
manner to any Environmental Law. Schedule 6.24 also sets forth a true and
correct summary of the loss experiences for the past three years under each
such policy. Except as set forth on Schedule 6.24, no insurance has ever been
canceled or denied. Following the Closing, Seller shall, to the extent that
coverage under its insurance policies extends to include the Business, (i) take
no action to eliminate or reduce such coverage, other than normal elimination
or reduction of coverage as they occur by virtue of the filing of claims in the
ordinary course under such insurance policies, (ii) pay when due any premiums
under such policies for periods, including retrospective or retroactive premium
adjustments (iii) use its best efforts to assist in filing and processing
claims under and otherwise cooperate with Purchaser to allow Purchaser, in its
own name, or on behalf of Seller, to obtain all coverage benefits applicable to
the Business under such insurance policies, including the execution of
assignments or powers of attorney for the benefit of Purchaser and (iv)
maintain "key man" insurance coverage, at its own expense, on the life of Xxxx
Tissue until the final payment has been made by Purchaser to Seller under
Section 3.1.1 hereof. Any proceeds of insurance paid by an insurer to Seller
for claims of Purchaser made in accordance with (i), (ii) and (iii) of this
Section shall be promptly paid to Purchaser. Any proceeds of insurance paid by
an insurer to Seller for claims under (iv) of this Section may be retained by
Seller.
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6.25 No Significant Items Excluded. Except for Excluded Assets,
there are no assets, properties, Contracts, Permits or other items of Seller or
any Related Party that are of material importance to the ongoing operation of
the Business by Purchaser in substantially the same manner in which the
Business has been conducted by Seller prior to the date of this Agreement.
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6.26. Surveys. Seller has provided Purchaser with copies of
Seller's federal and/or state surveys or inspections and any plans of
correction for the current year and the two immediately preceding years for the
Facilities. Each such survey or inspection was prepared in material compliance
with all applicable Legal Requirements.
6.27. Occupancy Reports. Seller has provided Purchaser with copies
of Seller's occupancy reports for the Facilities for the last year. Each such
occupancy report was prepared based on the number of operational beds (i.e.,
double occupancy rooms were only counted as such when both beds were
occupied).
6.28 Discounted Rates; Rate limitations; Free Care. Attached
hereto is Schedule 6.28 that sets forth a true and complete list of the
following for the Facilities: (i) any services that are provided based on a
discount factor from the rates regularly charged at the Facilities; (ii) any
restrictions or limitations on rates which may be charged to private pay
residents for services provided at the Facilities; (iii) any percentage of beds
or slots in any program at the Facilities that must be reserved for Medicare or
Medicaid eligible residents and (iv) any amount of welfare, free or charity
care or discounted government assisted resident care provided at the
Facilities.
6.29. Tax Returns. Seller has filed or caused to be filed, or will
file or cause to be filed, all Tax Returns that are required to be filed by it
prior to or on the Closing Date, pursuant to all Legal Requirements of each
Governmental Authority with taxing power over it. All such Tax Returns were or
will be, as the case may be, correct and complete in all material respects.
Seller has paid or will pay all Taxes that have or will become due as shown on
such Tax Returns or pursuant to any assessment received as an adjustment to
such Tax Returns, except (i) such Taxes, if any, as are being contested in good
faith and disclosed on Schedule 6.29, (ii) in the case of Seller, such Taxes
that are fully reserved against on the financial statements of Seller
previously provided to Purchaser and (iii)Taxes accruing that are not yet due.
Except as set forth on Schedule 6.29, neither Seller is currently the
beneficiary of any extension of time within which to file any Tax Return. No
claim has been made by any taxing authority of a jurisdiction other than one in
which one of the Facilities is located. Seller has paid, or will withhold and
pay, all Taxes required to have been withheld in connection with amounts paid
or owing to any Employee, independent contractor, creditor, stockholder or
other third party.
6.30 NOI. Seller represents and warrants that, for the calendar
year ending December 31, 1996 (i) the collective NOI of the Facilities,
calculated in accordance with GAAP, before amortization, depreciation,
interest, rent expense and income taxes, was $1,080,000; and (ii) the gross
operating revenues for the Facilities were $2,518,000. As used herein, gross
operating revenues shall be all revenues generated as a result of operation of
the Facilities.
6.31 Completeness and Accuracy. All information set forth on any
Schedule hereto is true, correct and complete. No representation or warranty of
Seller contained in this Agreement contains or will contain any untrue
statement of material fact, or omits or will omit to state any material fact
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. All Contracts, Permits and other
documents and instruments furnished or made available to Purchaser by Seller
are or will be true, complete and
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accurate originals or copies of originals and include all amendments,
supplements, waivers and modifications thereto.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Purchaser represents and
warrants to Seller, that each of the following representations and warranties
is true and correct as of the date of Closing:
7.1 Organization, Good Standing, Power. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has, or will have on or before the Closing Date, all
requisite corporate power and authority to purchase the Purchased Assets, to
carry on the Business and to execute and deliver this Agreement and the
Ancillary Agreements to which Purchaser is a party, to consummate the
transactions contemplated hereby and thereby and to perform all the terms and
conditions hereof and thereof to be performed by it.
7.2 Authorization of Agreement and Enforceability. Purchaser has
or will have taken all necessary corporate action to authorize the execution
and delivery of this Agreement and the Ancillary Agreements to which Purchaser
is a party, the performance by it of all terms and conditions hereof and
thereof to be performed by it and the consummation of the transactions
contemplated hereby and thereby, on or before the Closing Date. This Agreement
constitutes, and the Ancillary Agreements, upon Purchaser's execution and
delivery thereof, will constitute, the legal, valid and binding obligations of
Purchaser, enforceable in accordance with their terms except to the extent that
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws presently or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law).
7.3 No Violations; Consents. Except as set forth on Schedule 7.3,
the execution, delivery and performance by Purchaser of this Agreement and the
Ancillary Agreements to which Purchaser is a party and the consummation of the
transactions contemplated hereby and thereby will not (with or without the
giving of notice or the lapse of time, or both) (i) violate any provision of
the charter or bylaws of Purchaser, (ii) except with respect to notices and
consents required to be given by Purchaser to any Accreditation Body or
Governmental Authority in connection with the sale and change of ownership of
the Purchased Assets and the Business, violate, or require any consent,
authorization or approval of, or exemption by, or filing under any provision of
any contract, law, statute, rule or regulation to which Purchaser is subject,
(iii) violate any judgment, order, writ or decree of any court applicable to
Purchaser, (vi) conflict with, result in a breach of, constitute a default
under, or accelerate or permit the acceleration of the performance required by,
or require any consent, authorization or approval under any agreement,
contract, commitment, lease or other instrument, document or undertaking to
which Purchaser is a party; or (v) result in the creation or imposition of any
Encumbrance upon its assets.
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7.4. Legal Proceedings. There is no claim, action, suit,
proceeding, investigation or inquiry pending before any Governmental Authority
or, to Purchaser's Knowledge, threatened against Purchaser or any of
Purchaser's properties, assets, operations or businesses that might prevent or
delay the consummation of the transactions contemplated hereby.
7.5 No Finder. Purchaser has not taken any action which would
give to any Person a right to a finder's fee or any type of brokerage
commission in relation to, or in connection with, the transactions contemplated
by this Agreement.
ARTICLE VIII. COVENANTS OF SELLER PRIOR TO CLOSING DATE
8.1 Required Actions. Between the date of this Agreement and the
Closing Date, Seller covenants that it will:
8.1.1 Access to Information. Give to Purchaser and its
counsel, accountants, consultants and other representatives, for the
purpose of audit, review and copying, reasonable access to such of the
properties, books, accounts and records of such Seller as are relevant
to the Purchased Assets and the Business, and furnish or otherwise
make available to Purchaser all such information concerning the
Purchased Assets and the Business as Purchaser may reasonably request.
8.1.2 Surveys; Occupancy; Operations. With respect to
Seller, provide Purchaser with the following:
(i) occupancy reports for the Facilities, as soon as the
same become available through the Closing Date, but
no later than 5 days after the last day of any given
month (which reports shall be prepared based on the
number of operational beds);
(ii) federal and/or state surveys or inspections and any
plans of correction for the Facilities, as soon as
the same become available through the Closing Date,
but no later than 5 days after received by Seller;
(iii) if applicable, Seller's cost reports for the current
year and the two immediately preceding years for the
Facilities, together with the current rate schedule
for the Facilities; and
(iv) monthly statements of profit and loss of Seller for
the Facilities, as soon as the same become available
through the Closing Date, but no later than 15 days
after the last day of each month;
8.1.3 Conduct of Business. With respect to Seller, operate
the Business in the usual, regular and ordinary manner as such
Business was conducted prior to the date hereof and use its best
efforts until the Closing Date to (i) preserve and keep intact the
Business; (ii) keep available the services of the Employees; (iii)
preserve its relationships
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with residents, suppliers and others having business dealings with
Seller in connection with the Business and (iv) maintain current
marketing activities;
8.1.4 Maintenance of Properties. Maintain the Purchased
Assets, whether owned or leased, in their good repair, order and
condition reasonable wear and tear excepted;
8.1.5 Maintenance of Books and Records. With respect to
Seller, maintain the Books and Records in the usual, regular and
ordinary manner, on a basis consistent with past practice;
8.1.6 Compliance with Applicable Law. Comply in all
material respects with all Legal Requirements applicable to the
Purchased Assets and to the conduct of the Business;
8.1.7 Performance of Obligations. Perform all the material
obligations of Seller relating to the Purchased Assets and the
Business in accordance with the past practices;
8.1.8 Approvals, Consents. Use its best efforts to obtain
in writing as promptly as possible any approvals and consents as
required to be obtained by Seller in order to effectuate the
transactions contemplated hereby and deliver to Purchaser copies of
such approvals and consents. Accordingly, Seller shall cooperate with
Purchaser's efforts to obtain the necessary licenses to operate the
Facilities from the appropriate Accreditation Bodies, including,
without limitation, the Department of Public Welfare, Division of
Personal Care Homes. Upon execution and delivery of this Agreement,
Seller shall:
(i) promptly provide Purchaser with copies of all
Permits;
(ii) assist Purchaser in notifying each applicable
Accreditation Body and Third Party Payor as required
by any Legal Requirement of the pending change of
ownership of the Facilities; and
(iii) provide to Purchaser all information necessary for
Purchaser to prepare such other notices as required
by all Legal Requirements including, if required,
(i) notices to the Facilities' residents and (ii)
notices to referral or human service agencies.
Seller shall sign said notices and cooperate with
Purchaser to comply with all Legal Requirements.
8.1.9 Notice of Material Damage. Give to Purchaser prompt
notice in writing of any fact that, if known on the date hereof, would
have been required to be set forth or disclosed in or pursuant to this
Agreement, or which would result in the breach in any material respect
by Seller of any of its representations, warranties, covenants or
agreements hereunder;
8.1.10 Pay Employees to Closing Date. Pay all wages,
salaries and other sums due Employees through the close of business on
the day prior to the Closing Date;
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8.1.11 Cost Reports. If applicable, file, or cause to be
filed, all Medicare and Medicaid cost reports that are required to be
filed after the Closing Date, without regard to any extensions,
pursuant to all applicable Legal Requirements. Any liability of Seller
required to be paid as a result of any such cost report for any period
prior to the Closing Date shall be paid by Seller. Purchaser shall
cause any refund which may be received after the Closing Date as a
result of any such cost report to be paid to Seller;
8.1.12 Transfer of Employees. Take all reasonably necessary
steps to transfer to Purchaser the employment of all Employees
electing to continue their employ with Purchaser as of the Closing
Date;
8.1.13 Compliance with Agreement. Not undertake any course
of action inconsistent with satisfaction of the conditions applicable
to it set forth in this Agreement, and use all reasonable efforts to
do all such acts and take all such measures as may be reasonably
necessary to comply with the representations, agreements, conditions
and other provisions of this Agreement; and
8.1.14 Update Schedule. Promptly disclose to Purchaser any
information contained in the representations and warranties of Seller
contained in Article VI or in the Schedules to this Agreement which is
no longer complete or correct (including furnishing updated financial
statements); provided that no such disclosure shall be deemed to
modify, amend or supplement such Seller's representations and
warranties; and
8.1.15 Surveys. Execute such affidavits or other
instruments as are commercially reasonable and necessary in order for
Purchaser to remove title exceptions for encroachments or survey
discrepancies relating to the Real Property.
8.1.16 Compliance with Bulk Sales Laws. Seller shall (i)
provide notice to the Pennsylvania Department of Revenue ("Revenue"),
and the Pennsylvania Department of Labor and Industry ("L&I") at least
ten days prior to Closing, of the sale of the Business and the
Purchased Assets contemplated hereunder, in accordance with 72 P.S.
Section 1403 and 43 P.S. 788.3, respectively, and shall provide
Purchaser with a copy of said notice; and (ii) file all State tax
reports with Revenue and L&I, covering the period to and including the
Closing Date, pay all taxes due to the Commonwealth in accordance
therewith, and provide Purchaser with evidence of such payment on or
before the Closing Date.
8.2 Prohibited Actions. Between the date of this Agreement and
the Closing Date, Seller shall not, except as otherwise agreed by Purchaser in
writing:
8.2.1 Sale of Purchased Assets. Sell, transfer, assign,
lease, encumber or otherwise dispose of any of the Purchased Assets
other than in the ordinary course of business consistent with past
practices;
8.2.2 Business Changes. Change in any material respect the
character of the Business;
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8.2.3 Incurrence of Material Obligations. Incur any
material fixed or contingent obligation or enter into any material
agreement, commitment or other transaction or arrangement, commitment
or other transaction or arrangement that is not in the ordinary course
of business consistent with past practices and with respect to which
Purchaser will be bound subsequent to Closing;
8.2.4 Incurrence of Liens. Subject to lien, security
interest or any other Encumbrance, other than Permitted Encumbrances,
any of the Purchased Assets;
8.2.5 Change in Employee Compensation and Benefits.
Increase the rate of compensation paid, or pay any bonus, to anyone
connected with the Business, except for those increases or bonuses
planned, in the ordinary course of business consistent with past
practices, or establish or adopt any new pension or profit-sharing
plan, deferred compensation agreement or employee benefit arrangement
of any kind whatsoever covering or affecting Employees;
8.2.6 Publicity; Advertisement. Except as required by law,
publicize, advertise or announce to any third-party, except as
required pursuant to this Agreement to obtain the consent of such
third-party, the entering into of this Agreement, the terms of this
Agreement or the transactions contemplated hereby;
8.2.7 No Release. Except in the ordinary course of
business consistent with past practices, cancel, release or relinquish
any material debts of or claims against others held by Seller with
respect to the Business or waive any material rights relating to the
Business; and
8.2.8 No Termination or Modification. Terminate or
materially modify any material Contract or Permit (including, without
limitation, those items listed on Schedule 1.44, Schedule 1.58 and
Schedule 2.1.3) or other authorization or agreement affecting the
Purchased Assets or the Business or the operation thereof.
ARTICLE IX. COVENANTS OF PURCHASER PRIOR TO CLOSING DATE
9.1 Required Actions. Between the date of this Agreement and the
Closing Date, Purchaser shall, except as otherwise agreed by Seller in writing:
9.1.1 Advise of Changes. Advise Seller promptly in writing
of any fact that, if known at the Closing Date, would have been
required to be set forth or disclosed in or pursuant to this
Agreement, or which would result in the breach by Purchaser of any of
its representations, warranties, covenants or agreements hereunder;
9.1.2 Compliance with Agreement. Not undertake any course
of action inconsistent with satisfaction of the conditions applicable
to it set forth in this Agreement, and Purchaser shall use its best
efforts to do all such acts and take all such measures as
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may be reasonably necessary to comply with the representations,
agreements, conditions and other provisions of this Agreement;
9.1.3 Examinations. Promptly undertake all examinations,
inspections, surveys and audits, including, without limitation, title
searches and surveys of the Real Property, environmental assessments
and audits and engineering surveys, as Purchaser deems necessary in
connection with the acquisition of the Purchased Assets or the
Business; and
9.1.4 Seller's Employees. Take all reasonable steps to
ensure the transfer of employment of the Employees listed on Schedule
1.21 and who are offered employment and who elect to continue their
employ with Purchaser as are able to be accomplished prior to or on
the Closing Date.
9.2 Investigation. Purchaser shall use reasonable efforts to
conduct an investigation of the Business of Seller in such a manner as to
prevent disruption of relations with the Employees, residents and suppliers of
Seller, which investigation shall include such due diligence as is customary
for transactions of the type contemplated herein. Such investigation shall be
(i) conducted by Purchaser and its representatives (including Purchaser's
lender) in Seller's presence; and (ii) scheduled with Seller's prior approval.
9.3 Approvals, Consents. Purchaser shall use its best efforts to
obtain in writing as promptly as possible any approvals and consents as
required to be obtained by Purchaser in order to effectuate the transactions
contemplated hereby and deliver to Purchaser copies of such approvals and
consents. Accordingly, Purchaser shall take all reasonable action to obtain the
necessary licenses to operate each of the Facilities from the Department of
Public Welfare, Division of Personal Care Homes, including:
(i) providing notice to each applicable Accreditation
Body and Third Party Payor as required by any Legal
Requirement of the pending change of ownership of
each of the Facilities; and
(ii) preparing such other notices as required by all
Legal Requirements including, if required, (i)
notices to the Facilities' residents and (ii)
notices to referral and human service agencies.
Purchaser shall provide such notices to Seller for
mailing.
9.4 Publicity; Advertisement. Except as required by law,
Purchaser shall not publicize, advertise or announce to any third-party, except
as required pursuant to this Agreement to obtain the consent of such
third-party, the entering into of this Agreement, the terms of this Agreement
or the transactions contemplated hereby; provided, however, the foregoing shall
not be applicable to disclosures made by Purchaser to Purchaser's lender in
response to such lender's requests.
ARTICLE X. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
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The obligation of Purchaser to proceed with Closing under this
Agreement is subject to the fulfillment prior to the Closing Date of the
following conditions with respect to Seller, any one or more of which may be
waived in whole or in part by Purchaser:
10.1 Accuracy of Representations and Warranties. The
representations and warranties of Seller contained in this Agreement and the
Ancillary Agreement to which Seller is a party shall have been true in all
material respects on the date hereof and shall be true in all material respects
on and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date.
10.2 Performance of Agreement. Seller shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement and the
Ancillary Agreements to be performed or complied with by it at or prior to the
Closing Date.
10.3 Seller's Certificate. Purchaser shall have received a
certificate from Seller, dated as of the Closing Date, reasonably satisfactory
in form and substance to Purchaser and its lender, certifying as to the matters
specified in Section 10.1 and Section 10.2 hereof. The matters set forth in
such certificate shall constitute representations and warranties of Seller
hereunder.
10.5 Injunction. On the Closing Date, there shall be no
injunction, writ, preliminary restraining order or any order of any nature in
effect issued by a court of competent jurisdiction directing that the
transactions provided for herein, or any of therm, not be consummated as herein
provided and no suit, action, investigation, inquiry or other legal or
administrative proceeding by any Governmental Authority or other Person shall
have been instituted or threatened which questions the validity or legality of
the transactions contemplated hereby or which if successfully asserted might
otherwise have a material adverse effect on the conduct of the Business or
impose any additional material financial obligation on, or require the
surrender of any material right by, Purchaser.
10.6 Actions and Proceedings. With respect to Seller, all actions,
proceedings, instruments and documents required to carry out the transactions
contemplated by this Agreement or incidental hereto and all other related legal
matters shall be reasonably satisfactory to counsel for Purchaser, and such
counsel shall have been furnished with such certified copies of such actions
and proceedings and such other instruments and documents as it shall have
reasonably requested, including, if applicable, without limitation:
(i) certificates of the appropriate public officials to
the effect that Seller is a validly existing
corporation in good standing in its state of
incorporation as of a date not more than 10 days
prior to the Closing Date;
(ii) incumbency and specimen signature certificates dated
the Closing Date, signed by the officers of Seller
and certified by its Secretary; and
(iii) true and correct copies of (A) the charter documents
of Seller as of a date not more than 10 days prior
to the Closing Date, certified by the Secretary
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of State of its state of incorporation and (B) the
bylaws of Seller as of the Closing Date, certified
by the Secretary of Seller.
10.7 Consents. Any third-party consents, approvals, authorizations
or Permits (including, without limitation, those required by any Governmental
Authorities) necessary for the conveyance of the Purchased Assets or valid
consummation of the transactions contemplated hereby shall have been obtained.
10.8 Arrangements with Employees. Substantially all of Seller's
Employees shall have accepted employment with Purchaser effective as of the
Closing Date and Purchaser shall have entered into arrangements with key
Employees of Seller satisfactory to Purchaser in its sole discretion.
10.9 Business Investigation. Purchaser shall have completed its
investigation, as contemplated in Section 9.2, the results of which shall be
satisfactory to Purchaser in its sole discretion.
10.10 Physical Inspection. At its own cost and expense, Purchaser
shall have inspected and approved the physical condition of the Real Property
including the improvements and the HVAC, electrical, plumbing and other
systems, and shall receive the written report in form and substance
satisfactory to Purchaser from a qualified engineering firm approved by
Purchaser or any engineer employed by Purchaser to the effect that the
improvements on the Real Property have been constructed in compliance with, and
currently are in compliance with, all governmental requirements, including
without limitation the Americans With Disabilities Act, and with all
restrictions of record applicable thereto which materially affect the
Purchaser's intended use of the Real Property.
10.11 Environmental Report. At its own cost and expense, Purchaser
shall have obtained a written report from a qualified geotechnical or
engineering firm or other environmental consultant, in a form and substance,
satisfactory to Purchaser, concerning the presence, handling, treatment and
disposal of Regulated Substances on, in or under the Real Property and the
presence of asbestos on, in or under any of the improvements thereon and
disclosing (i) the results of a review of prior uses of the Real Property and
the Facilities disclosed by local public records, including the chain of title;
(ii) contacts with local officials to determine whether any records exist with
respect to the disposal of Regulated Substances on the Real Property or the use
of asbestos in the construction of the improvements thereon; and (iii) if
recommended to or required by Purchaser, soil samples and groundwater samples
consistent with good engineering practice.
10.12 Title Insurance. Purchaser shall have obtained for all Real
Property final marked commitments to issue to Purchaser and its lender ALTA
(1990-Form B with appropriate state endorsements) leasehold and/or owner's
policies of title insurance in coverage amounts equal to the fair market values
of such Real Property, insuring good and marketable title to such Real Property
with mechanic's liens coverage and such other endorsements as Purchaser or its
lender may reasonably request and with exceptions only for ALTA standard
printed exceptions (other than mechanic's and materialmen's liens and rights of
possession) and Permitted Encumbrances.
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10.13 Employment Agreements. Tissue shall have executed and
delivered the Employment Agreement with Purchaser.
10.14 Closing Documents. Purchaser shall have received the other
documents referred to in Section 5.2 which shall be in form and substance
satisfactory to Purchaser in its reasonable discretion.
10.15 Other Deliveries. At its own cost and expense, Purchaser
shall have received with respect to the Real Property:
10.15.1 Surveys. Surveys of the Real Estate which conform to
the standards set forth in the ALTA/American Congress on Surveying and
Mapping Minimum Standard Detail Requirements for Land Title Surveys
and which disclose no state of facts inconsistent with the
representations and warranties of Seller set forth in Section 6.9
hereof and are otherwise acceptable to Purchaser;
10.15.2 Affidavits. ALTA extended coverage
statements/affidavits in form and substance satisfactory to
Purchaser's title insurer regarding title, mechanic's liens and such
other customary matters as may be reasonably requested by Purchaser or
Purchaser's title insurer; and
10.15.3 FIRPTA Certificates. A certificate, duly executed
and acknowledged by Seller under penalties of perjury, in the form
prescribed by Treasury Regulation Section 1.1445-2(b)(2)(iii), stating
Seller's name, address and Federal tax identification number, and that
Seller is not a "foreign person" within the meaning of Section 1445 of
the Internal Revenue Code.
10.16 Financing. Purchaser shall have received, on terms that shall
be satisfactory to Purchaser in its sole discretion, a written binding
commitment from a real estate investment trust or other financing source in an
amount sufficient to enable Purchaser to pay the Purchase Price in full.
10.17 Opinion of Counsel. Purchaser shall have received the
favorable opinion of Seller's counsel, addressed to Purchaser and Purchaser's
lender, reasonably satisfactory to Purchaser and its lender as to the matters
set forth in Sections 6.1, 6.2 and 6.3 hereof.
10.18 Authorization. Purchaser shall have obtained approval of the
transactions contemplated herein by its board of directors and shareholders (if
necessary).
ARTICLE XI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligation of Seller to proceed with the Closing under this
Agreement is subject to the fulfillment prior to the specified date or at the
time of Closing of the following conditions with respect to Purchaser, any one
or more of which may be waived in whole or in part by Seller:
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11.1 Accuracy of Representations and Warranties. The
representations and warranties of Purchaser contained in this Agreement shall
have been true in all material respects on the date hereof and shall be true in
all material respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date.
11.2 Performance of Agreement. Purchaser shall have performed in
all material respects all obligations and agreements and complied in all
material respects with all covenants and conditions contained in this Agreement
to be performed or complied with by it at or prior to the Closing Date.
11.3 Purchaser's Certificate. Seller shall have received a
certificate from Purchaser, dated as of the Closing Date, reasonably
satisfactory in form and substance to Seller and its counsel, certifying as to
the fulfillment of all matters specified in Section 11.1 and Section 11.2
hereof. The matters set forth in such certificate shall constitute
representations and warranties of Purchaser hereunder.
11.4 Secretary's Certificate. Seller shall have received a
certificate, dated as of the Closing Date, of the Secretary or any Assistant
Secretary of Purchaser, certifying the name and office held by each officer or
representative of Purchaser executing this Agreement, the certificate referred
to in Section 11.3 and the Ancillary Agreements to which Purchaser is a party.
11.5 Injunction. On the Closing Date, there shall be no
injunction, Writ, preliminary restraining order or any order of any nature in
effect issued by a court of competent jurisdiction directing that the
transactions provided for herein, or any of them, not be consummated as herein
provided and no suit, action, investigation, inquiry or other legal or
administrative proceeding by any Governmental Authority or other Person shall
have been instituted, threatened or anticipated which questions the validity or
legality of the transactions contemplated hereby.
11.6 Employment Agreement. Purchaser shall have executed and
delivered the Employment Agreement with Tissue.
ARTICLE XII. OBLIGATIONS AFTER THE CLOSING DATE
12.1 Covenant Not to Interfere. Seller covenants and agrees that
for a period of three years after the Closing Date, Seller will not solicit for
employment by such Seller or any Affiliates any Person who is an Employee of
the Business as of the Closing Date. Notwithstanding the foregoing, if Buyer
terminates its Employment Agreement with Xxxx Tissue during the term thereof,
Seller may solicit Mr. Tissue for employment.
12.2 Noncompetition. For a period of three years following the
Closing Date, Seller will not, directly or indirectly, unless acting in
accordance with Purchaser's written consent, own, manage, operate, finance or
participate in the ownership, management, operation or financing of or permit
its name to be used by or in connection with any business or enterprise engaged
in the Business acquired by Purchaser hereunder and located within a 25-mile
radius of the Facilities. Seller acknowledges that the provisions of this
Section are reasonable and necessary to protect the interests of Purchaser,
that any violation of this Section will result in an irreparable injury to
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Purchaser and that damages at law would not be reasonable or adequate
compensation to Purchaser for violation of this Section and that, in addition
to any other available remedies, Purchaser shall be entitled to have the
provisions of this Section specifically enforced by preliminary and permanent
injunctive relief without the necessity of proving actual damages or posting a
bond or other security to an equitable accounting of all earnings, profits and
other benefits arising out of any violation of this Section. In the event that
the provision of this Section shall ever be deemed to exceed the time,
geographic scope or other limitations permitted by applicable law, then the
provisions shall be deemed reformed to the maximum extent permitted by
applicable law.
12.3 Transition of Employees. From and after the Closing Date,
Purchaser and Seller shall cooperate to ensure an orderly transition of the
Employees who accept employment with Purchaser.
12.4 Certain Transitional Matters.
12.4.1 Transfer of Assets. Seller agrees that Purchaser,
from and after the Closing Date, shall have the right and authority to
collect for Purchaser's own account all items which shall be
transferred to Purchaser as provided herein.
12.4.2 Endorsement of Checks. From and after the Closing
Date, Purchaser shall have the right and authority to retain and
endorse without recourse the name of Seller on any check or any other
evidence of indebtedness received by Purchaser on account of any of
the Purchased Assets and, with respect to Seller, the Business
transferred to Purchaser hereunder.
12.4.3 Seller's Remittance of Funds. After the Closing
Date, Seller shall promptly transfer and deliver to Purchaser any cash
or other property, if any, that Seller may receive related to the
Purchased Assets other than the Excluded Assets and, with respect to
Seller, the Business.
12.4.4 Purchaser's Remittance of Funds. After the Closing
Date, Purchaser shall promptly transfer and deliver to Seller any cash
or other property, if any, that Purchaser may receive related to the
Excluded Assets.
12.4.5 Assumed Liabilities Controlled by Purchaser. From and
after the Closing, Purchaser shall have complete control over the
payment, settlement or other disposition of, or any dispute involving
any Assumed Liability, and Purchaser shall have the right to conduct
and control all negotiations and proceedings with respect thereto.
Seller shall notify Purchaser promptly of any claim made with respect
to any Assumed Liability and shall not, except with the prior written
consent of Purchaser, voluntarily make any payment of, or settle or
offer to settle, or consent to any compromise with respect to, any
such Assumed Liability. Seller shall cooperate with Purchaser in
connection with any negotiations or proceedings involving any Assumed
Liability.
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12.5 Audits. To the extent reasonably requested by Purchaser,
prior to the Closing Date, at Purchaser's cost and expense, Seller shall
cooperate and request Seller's accountants to cooperate, with Purchaser and its
auditors in the preparation of audited financial statements for the Facilities
for the years ended December 31, 1996, 1995 and 1994 and for the period from
January 1, 1997 through the date of Closing, prepared in accordance with GAAP,
to the extent required, in connection with any registration statement or other
form filed by Purchaser with the Securities and Exchange Commission under the
Securities Act of 1933 for a public offering and sale of securities of
Purchaser.
12.6 Further Assurances of Seller. From and after the Closing
Date, Seller shall, at the request of Purchaser, execute, acknowledge and
deliver to Purchaser, without further consideration, all such further
assignments, conveyances, endorsements, deeds, special powers of attorney,
consents and other documents, and take such other action, as Purchaser may
reasonably request (i) to transfer to and vest in Purchaser, and protect its
rights, title and interest in, all the Purchased Assets and (ii) otherwise to
consummate the transactions contemplated by this Agreement. In addition, from
and after the Closing Date, Seller shall afford Purchaser and its attorneys,
accountants and other representatives access, during normal business hours, to
any Books and Records and other information relating to the Business that
Seller may retain as may reasonably be required in connection with the
preparation of financial information or tax returns of Purchaser.
12.7 Further Assurances of Purchaser. From and after the Closing
Date, Purchaser shall afford to Seller and its attorneys, accountants and other
representatives access, during normal business hours, to such Books and Records
relating to the Business as may reasonably be required in connection with the
preparation of financial information or Tax Returns for periods concluding on
or prior to the Closing Date. Purchaser shall cooperate in all reasonable
respects with Seller with respect to its former interest in the Business and in
connection with financial account closing and reporting and claims and
litigation asserted by or against third parties, including, but not limited to,
making Purchaser's employees available at reasonable times to assist with, or
provide information in connection with financial account closing and reporting
and claims and litigation, provided that Seller reimburses Purchaser for its
reasonable out-of-pocket expenses (including costs of employees so assisting)
in connection therewith.
12.8 Completion of the Addition. Seller expects the Addition to be
completed and made ready for occupancy prior to Closing. If, however, the
Addition has not been completed by the Closing Date, including all punch list
items, Seller shall undertake and complete the Addition expeditiously,
continuously and without delay, in accordance with the plans and specifications
approved by L&I, until the Addition has been completed and a Certificate of
Occupancy is issued by the appropriate governmental authorities, permitting the
occupancy of the Addition and the Facility for use as a personal care home.
12.9 No Name Change. Purchaser covenants and agrees that it shall
continue to operate each of the Facilities under its present name at least
until December 31, 1998.
ARTICLE XIII. TERMINATION
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13.1 Termination of Agreement. This Agreement may be terminated:
(i) By the mutual consent of Seller and Purchaser, in
which case the Escrowed Property shall be returned
by Escrow Agent to Purchaser;
(ii) By Purchaser upon written notice of such termination
to Seller on or before October 6, 1997, in which
case the Escrowed Property shall be returned by
Escrow Agent to Purchaser, in accordance with
Section 3.1.1 of this Agreement;
(iii) By Purchaser or Seller if Closing has not taken
place on or before October 31, 1997 or such other
extension date mutually agreed to in writing by the
parties; provided, however, that no Party then in
material breach of any of its obligations hereunder
shall have the right to terminate. Except as
provided in Section 3.1.1 hereof, upon termination
under this Section 13.1(ii), the Escrowed Property
shall be returned by Escrow Agent to the
non-breaching, terminating party;
(iv) By Purchaser upon notice to Seller if any of the
conditions set forth in Article X hereof have not
been satisfied or become impossible to satisfy by
the Closing Date, as the case may be (other than by
reason of the material failure of Purchaser to
fulfill its obligations under this Agreement).
Except as provided in Section 3.1.1 hereof, upon
termination under this Section 13.1(iii), the
Escrowed Property shall be returned by Escrow Agent
to Purchaser;
(v) By Seller upon notice to Purchaser if any of the
conditions set forth in Article XI hereof have not
been satisfied or become impossible to satisfy by
the Closing Date (other than by reason of the
material failure of such Seller to fulfill its
obligations under this Agreement). Except as
provided in Section 3.1.1 hereof; upon termination
under this Section 13.1(iv), the Escrowed Property
shall be returned by Escrow Agent to Seller;
(vi) By Seller if Purchaser materially breaches or fails
to fulfill its obligations under this Agreement,
which failure continues and remains uncured for 30
consecutive calendar days after such Seller gives
written notice of such failure to Purchaser. Except
as provided in Section 3.1.1 hereof, upon
termination under this Section 13.1(v), the Escrowed
Property shall be returned by Escrow Agent to
Seller; and
(vii) By Purchaser if either Seller materially breaches or
fails to fulfill its obligations under this
Agreement, which failure continues and
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remains uncured for 30 consecutive calendar days
after Purchaser gives written notice of such failure
to such Seller. Except as provided in Section 3.1.1
hereof, upon termination under this Section
13.1(vi), the Escrowed Property shall be returned by
Escrow Agent to Purchaser.
13.2 Return of Documents. If this Agreement is terminated for any
reason pursuant to this Article XIII, each Party shall return to the other
Party all documents and copies thereof which shall have been furnished to it by
such other Party or, with the agreement of the other Party, shall destroy all
such documents and copies thereof.
13.3 Remedies. If this Agreement is terminated by Purchaser or
Seller as permitted under Section 13.1 and not as a result of a breach of a
representation or warranty or the failure of any Party to perform its
obligations hereunder, such termination shall be without liability of any
Party. If a Party terminates this Agreement as a result of a breach of a
representation or warranty by the other Party or the failure of the other Party
to perform its obligations hereunder, the nonbreaching Party, in addition to
any other legal remedies that may be available, shall be entitled to
reimbursement from the breaching Party for all out-of-pocket expenses and
reasonable attorneys' fees incurred by the nonbreaching Party in connection
with this Agreement and the transactions contemplated hereby.
ARTICLE XIV. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
14.1 Survival of Representations and Warranties. All
representations and warranties of the Parties shall survive for two (2) years
after the Closing Date; provided that there shall be no termination of any such
representation or warranty as to which a claim has been asserted prior to the
termination of such survival period. Except as otherwise expressly provided in
this Agreement, all covenants, agreements, undertakings and indemnities set
forth in this Agreement shall survive indefinitely. Any Party's right to the
indemnification or other remedies based upon the representations and
warranties, covenants, agreements and undertakings of any other Party will not
be affected by any investigation, knowledge or waiver of any condition by such
Party. Any investigation by such Party shall be for its own protection only
and shall not affect or impair any right or remedy hereunder.
14.2 Indemnification by Seller. Seller shall respectively
indemnify, defend, save and hold Purchaser, its successors and assigns, and
their officers, directors, employees, agents and Affiliates (collectively,
"Purchaser Indemnitees") harmless from and against all demands, claims,
allegations, assertions, actions or causes of action, assessments, losses,
damages, deficiencies, liabilities, costs and expenses (including reasonable
attorneys' fees, interest, penalties, and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing and whether or not
any such demands, claims, allegations, etc., of third parties are meritorious;
collectively, "Purchaser Damages") asserted against, imposed upon, resulting
to, required to be paid by, or incurred by any Purchaser Indemnitees, directly
or indirectly:
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(i) in connection with, arising out of, which could result in, or
which would not have occurred but for (A) a breach of any
representation or warranty made by Seller in this Agreement, any
certificate or document furnished pursuant hereto or any Ancillary
Agreement to which Seller is or is to become a party; (B) a breach or
nonfulfillment of any covenant or agreement made by Seller in or
pursuant to this Agreement and in any Ancillary Agreement to which
Seller is or is to become a party; or (C) Seller's failure to pay any
Retained Liability;
(ii) that arise as a result of the presence in, on or under the
Real Property, or in, on or under the buildings, structures,
improvements or fixtures located thereon, of any toxic or Hazardous
Substances, including but not limited to asbestos, of which presence
Purchaser gives Seller written notice within three years from the date
hereof. Without limiting the generality of the foregoing, Seller's
indemnity obligation shall include costs incurred in connection with
any site investigation or any remedial, removal, or restoration work
required by any local, state, or federal agency because of the
presence or suspected presence of Hazardous Substances in, on or under
the said Real Property, or in, on or under the said buildings,
structures, improvements or fixtures located thereon, whether in the
soil, groundwater, air, or any Other receptor, but shall not include
incidental or consequential damages; and
(iii) that arise as a result of Seller's failure to pay any federal,
state or local tax attributable to a period prior to Closing, whether
or not then assessed, including but not limited to income tax,
corporate tax, employee withholding or other tax or any other fee,
assessment, or liability, which failure results in or could result in
the imposition of a lien on the Real Property or on any of the
Purchased Assets.
14.3 Indemnification by Purchaser. Purchaser shall indemnify,
defend, save and hold Seller and its successors and assigns (collectively,
"Seller Indemnitees") harmless from and against all demands, claims, actions or
causes of action, assessments, losses, damages, deficiencies, liabilities,
costs and expenses (including reasonable attorneys' fees, interest, penalties,
and all reasonable amounts paid in investigation, defense or settlement of any
of the foregoing and whether or not any such demands, claims, allegations,
etc., of third parties are meritorious; collectively, "Seller Damages")
asserted against, imposed upon, resulting to, required to be paid by, or
incurred by any Seller Indemnitees, directly or indirectly, in connection with,
arising out of, or which would not have occurred but for (i) a breach of any
representation or warranty made by Purchaser in this Agreement, any certificate
or document furnished hereunder, or any Ancillary Agreement to which Purchaser
is a party; (ii) a breach or nonfulfillment of any covenant or agreement made
by Purchaser in or pursuant to this Agreement and in any Ancillary Agreement to
which Purchaser is a party; and (iii) Purchaser's failure to pay any Assumed
Liability.
14.4 Notice of Claims. If any Purchaser Indemnitee or Seller
Indemnitee (an "Indemnified Party") believes that it has suffered or incurred
or will suffer or incur any Purchaser Damages or Seller Damages, as the case
may be ("Damages") for which it is entitled to indemnification under this
Article XIV, such Indemnified Party shall so notify the party or parties
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from whom indemnification is being claimed (the "Indemnifying Party") with
reasonable promptness and particularity in light of the circumstances then
existing. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any
Damages, such Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give any notice
required by this Section shall not affect any of such party's rights under this
Article XIV or otherwise except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.
14.5 Third Party Claims. The Indemnified Party shall have the
right to conduct and control, through counsel of its choosing, the defense of
any third party claim, action or suit, and may compromise or settle the same,
provided that it shall give the Indemnifying Party advance notice of any
proposed compromise or settlement. The Indemnified Party shall permit the
Indemnifying Party to participate in the defense of any such action or suit
through counsel chosen by the Indemnifying Party, provided that the fees and
expenses of such counsel shall be borne by the Indemnifying Party. If the
Indemnified Party permits the Indemnifying Party to undertake, conduct and
control the conduct and settlement of such action or suit, the Indemnifying
Party shall not thereby permit to exist any Encumbrance upon any asset of the
Indemnified Party; the Indemnifying Party shall not consent to any settlement
that does not include as an unconditional term thereof the giving of a complete
release from liability with respect to such action or suit to the Indemnified
Party; the Indemnifying Party shall permit the Indemnified Party to participate
in such conduct or settlement through counsel chosen by the Indemnified Party
(at its own cost and expense); and the Indemnifying Party shall agree promptly
to reimburse the Indemnified Party for the full amount of any Damages including
fees and expenses of counsel for the Indemnified Party incurred after giving
the foregoing notice to the Indemnifying Party and prior to the assumption of
the conduct and control of such action or suit by the Indemnifying Party.
14.6 Other Remedies. The indemnification rights of any Indemnified
Party under this Article XIV are independent of and in addition to such rights
and remedies as such Indemnified Party may have at law, in equity or otherwise
for any misrepresentation, breach of warranty or failure to fulfill any
covenant or agreement under or in connection with this Agreement on the part of
any Party, none of which rights or remedies shall be affected or diminished
hereby.
ARTICLE XV. GENERAL
15.1 Expenses. Except as otherwise provided in this Agreement, and
whether or not the transactions herein contemplated shall be consummated,
Purchaser and Seller shall pay their own fees, expenses and disbursements,
including the fees and expenses of their respective counsel, accountants and
other experts in connection with the subject matter of this Agreement and all
other costs and expenses incurred in performing and complying with all
conditions to be performed under this Agreement.
15.2 Publicity. All notices to third-parties and all other
publicity concerning the transactions contemplated by this Agreement shall be
jointly planned and coordinated by and among Purchaser and Seller. Except as
may be required by law, no Party shall act unilaterally in
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this regard without prior written approval of every other Party, such approval
not be unreasonably withheld.
15.3 Waivers. The waiver by any Party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.
15.4 Binding Effect; Benefits. This Agreement shall inure to the
benefit of the Parties hereto, and shall be binding upon the Parties hereto and
their respective successors, assigns, heirs, executors, administrators and
legal representatives. Nothing in this Agreement, express or implied, is
intended to confer on any Person other than the Parties hereto, or their
respective successors, assigns, heirs, executors, administrators and legal
representatives any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
15.5 Notices. All notices, requests, demands, elections and other
communications which any Party to this Agreement may be required to give
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, by a reputable courier service which requires a signature
upon delivery, by mailing the same by registered or certified first class mail,
postage prepaid, return receipt requested, or by telecopying with receipt
confirmation (followed by a first class mailing of the same) to the Party to
whom the same is so given or made. Such notice, request, demand, waiver,
election or other communication will be deemed to have been given as of the
date so delivered or electronically transmitted or two days after mailing
thereof.
15.5.1 Notice to Seller.
Xxxxxx Senior Care, Inc.
X.X. Xxx 000
000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Tissue
FAX: (000) 000-0000
Phone: (000) 000-0000
15.5.2 Notice to Purchaser.
Balanced Care Corporation
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx
With a required copy to:
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Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esquire
Or to such other addresses as such Party shall have specified by notice to
every other Party hereto.
15.6 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) and the Ancillary Agreements and documents delivered at
Closing pursuant hereto and thereto constitute the entire agreement and
understanding between the Parties hereto as to the matters set forth herein and
therein and supersede and revoke all prior agreements and understandings, oral
and written, between the Parties hereto or thereto or otherwise with respect to
the subject matter hereof or thereof. No change, amendment, termination or
attempted waiver of any of the provisions hereof or thereof shall be binding
upon any Party unless set forth in an instrument in writing signed by the Party
to be bound or their respective successors in interest.
15.7 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
15.8 Headings. The article, section and other headings contained
in this Agreement are for reference purposes only and shall not be deemed to be
a part of this Agreement or to affect the meaning or interpretation of this
Agreement.
15.9 Construction. Within this Agreement, the singular shall
include the plural and the plural shall include the singular, and any gender
shall include all other genders, all as the meaning and the context of this
Agreement shall require.
15.10 Governing Law and Choice of Forum. The validity and
interpretation of this Agreement shall be construed in accordance with, and
governed by the internal laws of the Commonwealth of Pennsylvania. All claims,
disputes or causes of action relating to or arising out of this Agreement shall
be brought, heard and resolved solely and exclusively by and in federal or
state court situated in Pittsburgh, Pennsylvania. The Parties hereto agree to
submit to the jurisdiction of such courts and agree that such jurisdiction
shall be proper for all purposes of this Agreement.
15.11 Cooperation. The Parties hereto shall cooperate fully at
their own expense, except as otherwise provided in this Agreement, with each
other and their respective counsel and accountants in connection with all steps
to be taken as part of their obligations under this Agreement.
15.12 Severability. If any term, covenant, condition or provision
of this Agreement or the application thereof to any circumstance shall be
invalid or unenforceable to any extent, the remaining terms, covenants,
conditions and provisions of this Agreement shall not be affected
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thereby and each remaining term, covenant, condition and provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law. If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only as broad as is
enforceable.
15.13 Attorneys' Fees. If a dispute arises among the Parties as a
result of which an action is commenced to interpret or enforce any of the terms
of this Agreement, the non-prevailing Parties shall pay the prevailing Party's
reasonable attorneys' fees, costs and expenses incurred in connection with the
prosecution or defense of such action.
15.14 Successors and Assigns. The covenants, agreements, and
conditions contained herein or granted hereby shall be binding upon and shall
inure to the benefit of Purchaser and Seller, and each of their respective
successors, assigns, heirs, executors, administrators and legal
representatives. Seller shall not assign, or otherwise transfer any interest in
this Agreement to any other Person without the prior written consent of
Purchaser, which consent shall not unreasonably be withheld. Purchaser may
assign and transfer its interest in this Agreement without Seller's consent to
any of Purchaser's Affiliates or to any lender providing financing for the
transactions contemplated hereby. In addition, Purchaser anticipates financing
the transactions contemplated hereby through sale-leaseback(s). Purchaser shall
have the right to assign this Agreement, in whole or in part, in such manner as
Purchaser may desire in order to facilitate such sale-leasebacks. Purchaser
will promptly provide Seller with a copy of any such assignment, and Seller
agrees to execute and deliver any consents reasonably required by Purchaser's
lender in connection therewith, provided such assignment does not expand either
of Seller's respective obligations and liabilities hereunder. Notwithstanding
any permitted assignment of this Agreement by Purchaser, Purchaser shall remain
liable to Seller for all obligations and liabilities to be performed by or on
behalf of Purchaser hereunder with respect to such Seller.
IN WITNESS WHEREOF, intending to be legally bound hereby, the Parties
have caused this Agreement to be signed in their respective names by an officer
thereof duly authorized as of the date first above written.
PURCHASER:
BALANCED CARE CORPORATION,
a Delaware corporation
By: /s/ XXXXX X. XXXXX
------------------
Xxxxx X. Xxxxx
Vice President
SELLER:
XXXXXX SENIOR CARE, INC.,
a Pennsylvania corporation
By: /s/ XXXXXXX X. XXXXXX
---------------------
Xxxxxxx x. Xxxxxx
President
