FACILITIES PURCHASE AGREEMENT
AMONG
MONARCH PROPERTIES, LP,
INTEGRATED HEALTH SERVICES, INC.
AND
THE ENTITIES LISTED ON ATTACHED EXHIBIT A
DATED AS OF JUNE 23, 1998
TABLE OF CONTENTS
Section Page
ARTICLE I - DEFINITIONS........................................................2
1.1 Agreement.......................................................2
1.2 Bills of Sale...................................................2
1.3 Closing.........................................................2
1.4 Closing Date....................................................2
1.5 Closing Escrow Agreement. .....................................2
1.6 Consent and Subordination Agreement. ..........................2
1.7 Contracts.......................................................2
1.8 Deeds...........................................................3
1.9 Deferred Maintenance Adjustment.................................3
1.10 Effective Date..................................................3
1.11 Environmental Laws..............................................3
1.12 Environmental Remediation.......................................3
1.13 Escrow Agent....................................................4
1.14 Escrow Agreement................................................4
1.15 Facilities......................................................4
1.16 Facility Franchise Agreement....................................4
1.17 Facility Management Agreement...................................4
1.18 Facility Sublease...............................................4
1.19 Final Financial Statements; Final Balance Sheet.................4
1.20 Financial Statements of the Facilities..........................4
1.21 Franchisor......................................................4
1.22 Guaranty........................................................5
1.23 IHS.............................................................5
1.24 IHS Indemnity...................................................5
1.25 Improvements....................................................5
1.26 Intangible Property.............................................5
1.27 Knowledge.......................................................5
1.28 Law.............................................................5
1.29 MAI Appraisal...................................................5
1.30 Manager.........................................................6
1.31 Master Franchise Agreement......................................6
1.32 Master Lease....................................................6
1.33 Master Management Agreement.....................................6
1.34 Monarch.........................................................6
1.35 Offering........................................................6
1.36 Permits.........................................................6
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TABLE OF CONTENTS
Section Page
1.37 Permitted Liens.................................................6
1.38 Personal Property...............................................6
1.39 Pledge Agreements...............................................7
1.40 Purchase Price..................................................7
1.41 Real Property...................................................7
1.42 Release.........................................................7
1.43 Security Agreement..............................................7
1.44 Sellers' Liabilities............................................7
1.45 Seller Licenses.................................................7
1.46 Sellers' Assets.................................................7
1.47 Survey..........................................................8
1.48 Title Commitment................................................8
1.49 Title Company...................................................8
1.50 Title Insurance Policy..........................................8
1.51 Transaction Documents...........................................8
1.52 UCC Search Report...............................................8
ARTICLE II - PURCHASE AND SALE.................................................9
2.1 Agreement to Sell and Buy.......................................9
2.2 No Assumption of Liabilities....................................9
ARTICLE III - PURCHASE PRICE...................................................9
ARTICLE IV - CLOSING...........................................................9
ARTICLE V - TRANSACTION COSTS AND EXPENSES.....................................9
5.1 Transfer Taxes; Sales Taxes.....................................9
5.2 MAI Appraisals.................................................10
5.3 Title Insurance................................................10
5.4 Surveys/UCC Search Reports.....................................10
5.5 Environmental Reports/Remediation..............................10
5.6 Attorneys' Fees................................................10
5.7 Recording Costs................................................10
5.8 Releases.......................................................10
5.9 Deferred Maintenance Adjustment................................10
5.10 Fee; Commitment Fee............................................10
5.11 Other Items....................................................10
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TABLE OF CONTENTS
Section Page
ARTICLE VI - POSSESSION.......................................................11
ARTICLE VII - REPRESENTATIONS AND WARRANTIES OF SELLERS.......................11
7.1 Corporate Organization; Good Standing; Corporate Information...11
7.2 Authorization; Enforceability..................................11
7.3 No Violation or Conflict.......................................12
7.4 Assets.........................................................12
7.5 No Litigation..................................................12
7.6 Personal Property and Improvements.............................13
7.7 Real Property and Improvements.................................13
7.8 Zoning.........................................................13
7.9 Leases.........................................................13
7.10 Liabilities....................................................13
7.11 Taxes..........................................................13
7.12 Contracts......................................................14
7.13 Contracts and Leases...........................................14
7.14 Financial Statements of the Facilities.........................14
7.15 No Adverse Change..............................................14
7.16 Employment Agreements and Benefits.............................14
7.17 Insurance......................................................15
7.18 Compliance with the Law........................................15
7.19 Transactions with Affiliates...................................16
7.20 Obligations....................................................16
7.21 No Broker......................................................16
7.22 Environmental Compliance.......................................16
7.23 No Attachments.................................................17
7.24 No Options.....................................................17
7.25 Seller Licenses................................................17
7.26 Disclosure.....................................................18
ARTICLE VIII - REPRESENTATIONS AND WARRANTIES OF IHS..........................18
8.1 Status of IHS.............................................18
8.2 Validity of Conflicts.....................................18
8.3 Authority.................................................18
8.4 Truth of Representations..................................18
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TABLE OF CONTENTS
Section Page
ARTICLE IX - REPRESENTATIONS AND WARRANTIES OF PURCHASER......................19
9.1 Organization...................................................19
9.2 Authorization; Enforceability..................................19
9.3 No Violation or Conflict.......................................19
9.4 No Broker......................................................19
ARTICLE X - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER..............19
10.1 Compliance with this Agreement.................................19
10.2 Proceedings and Instruments Satisfactory.......................20
10.3 No Litigation..................................................21
10.4 Representations and Warranties.................................21
10.5 Deliveries at the Closing......................................21
10.6 Regulatory Approvals...........................................22
10.7 Default........................................................22
10.8 Approvals......................................................22
10.9 Offering.......................................................22
ARTICLE XI - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS...............23
11.1 Compliance with this Agreement.................................23
11.2 Proceedings and Instruments Satisfactory.......................23
11.3 No Litigation..................................................23
11.4 Representations and Warranties.................................23
11.5 Deliveries at the Closing......................................23
11.6 Restraints.....................................................24
11.7 Regulatory Approvals...........................................24
11.8 Approvals......................................................24
ARTICLE XII - ADDITIONAL COVENANTS AND INDEMNIFICATIONS.......................24
12.1 Transfer Taxes and Fees........................................24
12.2 Cooperation....................................................24
12.3 Additional Instruments.........................................24
12.4 Publicity......................................................25
12.5 Confidentiality................................................25
12.7 Liability for Representations and Warranties Before the
Effective Date................................................28
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TABLE OF CONTENTS
Section Page
ARTICLE XIII - MISCELLANEOUS..................................................28
13.1 Entire Agreement; Amendment....................................28
13.2 Governing Law..................................................29
13.3 Assignment.....................................................29
13.4 Notices........................................................29
13.5 Counterparts; Headings.........................................30
13.6 Interpretation.................................................30
13.7 Severability...................................................30
13.8 No Reliance....................................................30
13.9 Binding........................................................30
13.10 Survival.......................................................31
13.11 Allocation of Purchase Price...................................31
13.12 Dispute Attorneys' Fees and Expenses...........................31
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FACILITIES PURCHASE AGREEMENT
THIS FACILITIES PURCHASE AGREEMENT (this "Agreement"), is made and entered
into as of the ___ day of June, 1998, among Monarch Properties, LP, a Delaware
limited partnership, with principal offices at 0000 Xxxxxxx Xxx Xxxxxxxxx,
Xxxxxx, Xxxxxxx 00000 ("Purchaser"), Integrated Health Services, Inc., a
Delaware corporation, with principal offices at 00000 Xxx Xxx Xxxxxxxxx, Xxxxxx
Xxxxx, Xxxxxxxx 00000 ("IHS") and each of the entities described on attached
Exhibit A (each, a "Seller" and, collectively, "Sellers").
W I T N E S S E T H:
The circumstances underlying the execution and delivery of this Agreement
are as follows:
A. Capitalized terms used but not otherwise defined herein have the
respective meanings given them in Article I herein.
X. Xxxxxxx are corporations that are each wholly owned by IHS. Sellers also
are the respective owners of Sellers' Assets. Sellers desire to sell, and
Purchaser desires to acquire, Sellers' Assets on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained in this Agreement and other good and valuable consideration,
the receipt and sufficiency of which hereby are acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
specified herein. The meanings specified in this Article and elsewhere in this
Agreement are for purposes of this Agreement only and do not purport to have any
significance for any other purpose, including, but not limited to, any
applicable reporting requirements under tax or securities laws, except as the
terms may be used by reference in other agreements between the parties to this
Agreement. Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular shall be held
to include the plural and vice versa, unless this Agreement requires otherwise.
1.1 Agreement. "Agreement" shall mean this Facilities Purchase Agreement,
together with the Exhibits and Schedules attached hereto, as the same may be
amended from time to time in accordance with the terms hereof.
1.2 Bills of Sale. "Bills of Sale" shall mean, collectively, the xxxx of
sale to be executed by each Seller and conveying to Purchaser all of the
Personal Property for each Facility owned by such Seller.
1.3 Closing. "Closing" shall mean the closing held at 10:00 a.m., local
time, on the Closing Date, at the offices of LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx. All transactions occurring at
the Closing shall be deemed to have occurred simultaneously, and no one
transaction shall be deemed to be complete until all transactions are completed.
1.4 Closing Date. "Closing Date" shall mean June 23, 1998.
1.5 Closing Escrow Agreement. "Closing Escrow Agreement" shall mean the
escrow agreement executed by each Seller, Purchaser and IHS, concurrently with
the Closing, pursuant to which the Escrow Agent will hold in escrow certain
Transaction Documents pending the Effective Date.
1.6 Consent and Subordination Agreement. "Consent and Subordination
Agreement" shall mean the agreement to be executed among Manager, Franchisor,
Lyric Holdings, the Subsidiaries of Lyric Holdings to which the Facilities are
to be subleased and Purchaser pursuant to which certain management and franchise
fees payable under the Facility Management Agreement and Facility Franchise
Agreement are subordinated to Purchaser's rights under the Master Lease upon an
Event of Default under the Master Lease.
1.7 Contracts. "Contracts" shall mean those contracts, agreements, leases,
rights of renewal thereto and commitments with respect to each of the Facilities
or with respect to the
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operation of any of the Facilities (a) to which Sellers or any of the Facilities
is a party or (b) by which Sellers or any of the Facilities is bound and that
are listed on Schedule 1.7 hereto.
1.8 Deeds. "Deeds" shall mean, collectively, the general warranty deed (or
such other form of deed applicable to the state in which the Facility is
located) in recordable form, executed by each Seller and conveying to Purchaser
fee simple title to the real property owned by such Seller, free and clear of
all liens and encumbrances other than the Permitted Liens.
1.9 Deferred Maintenance Adjustment. "Deferred Maintenance Adjustment"
shall mean, with respect to each Facility, the amount set forth opposite such
Facility's name on Schedule 1.9 hereto to cover the potential costs to be
incurred after the Effective Date in making the repairs or modifications
required at such Facility and described on Schedule 1.9 hereto.
1.10 Effective Date. "Effective Date" shall mean the date that is no more
than twenty (20) days following the closing of the Offering.
1.11 Environmental Laws. "Environmental Laws" shall mean all federal,
state, and local laws, statutes, ordinances, regulations, policies, rules,
directives, guidelines, Permits, licenses, criteria and rules of common law now
or hereafter in effect, and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the regulation and protection of
human health, safety, the environment and natural resources (including, without
limitation, ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, and wildlife, aquatic species and vegetation), including,
without limitation, relating to emissions, discharges, releases or threatened
releases of Hazardous Materials (as defined in Section 7.22 hereof) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials. Environmental Laws
include, but are not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Federal Insecticide, Fungicide, and
Rodenticide Act, the Resource Conservation and Recovery Act, the Toxic
Substances Control Act, the Clean Air Act, the Clean Water Act, the Occupational
Safety and Health Act, and the Safe Drinking Water Act, and as the same may be
amended, modified or supplemented, the regulations promulgated pursuant thereto,
and their state and local counterparts or equivalents.
1.12 Environmental Remediation. "Environmental Remediation" shall mean,
with respect to each Facility, the work described opposite such Facility's name
on Schedule 1.12 hereto to be performed after the Closing for the investigation
and/or remediation of the environmental conditions at such Facility described on
Schedule 1.12 hereto.
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1.13 Escrow Agent. "Escrow Agent" shall mean Fidelity National Title
Insurance Company of New York.
1.14 Escrow Agreement. "Escrow Agreement" shall mean the agreement among
Sellers, Lyric Holdings, Purchaser and Escrow Agent pursuant to which the
Deferred Maintenance Adjustment is to be held and disbursed.
1.15 Facilities. "Facilities" shall mean the Real Property, Improvements
and Personal Property constituting the health care facilities described on
Exhibit B hereto. Reference to any one of the Facilities individually and not
specifically shall be referred to herein as a "Facility".
1.16 Facility Franchise Agreement. "Facility Franchise Agreement" shall
mean the facility franchise agreement, in form and substance satisfactory to
Purchaser, to be executed by each Seller and Franchisor, pursuant to which
Franchisor grants to such Seller the right to use Franchisor's names, marks,
systems and proprietary information.
1.17 Facility Management Agreement. "Facility Management Agreement" shall
mean the facility management agreement, in form and substance satisfactory to
Purchaser, to be executed by each Seller and Manager, pursuant to which Manager
agrees to manage the Facility leased by such Seller pursuant to the Facility
Sublease.
1.18 Facility Sublease. "Facility Sublease" shall mean the facility
sublease, in form and substance satisfactory to Purchaser, executed and
delivered by Lyric III and each Seller, concurrently with the Closing, pursuant
to which Lyric III subleases to each Seller, and each Seller subleases from
Lyric III, the respective Facilities.
1.19 Final Financial Statements; Final Balance Sheet. "Final Financial
Statements" shall mean the unaudited Financial Statements of the Facilities as
of the Effective Date, including a balance sheet for each of the Facilities as
of such date, together with the related unaudited statement of income and
statement of cash flows for the period from January 1, 1998 through the
Effective Date, and the notes thereto. "Final Balance Sheet" shall mean the
balance sheet included in the Final Financial Statements.
1.20 Financial Statements of the Facilities. "Financial Statements of the
Facilities" shall mean the unaudited Financial Statements for each of the
Facilities as of December 31, 1997, as described in Schedule 1.20 hereto.
1.21 Franchisor. "Franchisor" shall mean Integrated Health Services
Franchising Co., Inc., a Delaware corporation, with principal offices at 00000
Xxx Xxx Xxxxxxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000, which is a Subsidiary of IHS.
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1.22 Guaranty. "Guaranty" shall mean the guaranty, in form and substance
satisfactory to Purchaser, executed and delivered by Lyric to Purchaser
concurrently with the execution and delivery of the Master Lease and the
Facility Subleases, pursuant to which Lyric guarantees to Purchaser the payment
and performance by Lyric Holdings and the respective Sellers of their respective
obligations under the Master Lease and the Facility Subleases.
1.23 IHS. "IHS" shall mean Integrated Health Services, Inc., a Delaware
corporation, with principal offices at 00000 Xxx Xxx Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxxxxxx 00000.
1.24 IHS Indemnity. "IHS Indemnity" shall mean the indemnity agreement, in
form and substance satisfactory to Purchaser, to be executed by IHS and
Purchaser, pursuant to which IHS agrees to indemnify Purchaser with respect to
certain environmental matters in respect of the Facilities.
1.25 Improvements. "Improvements" shall mean, collectively, the buildings
and all attached fixtures constituting the nursing home/adult care facilities
and related improvements, Related Rights and Fixtures, constructed on each of
the Real Properties.
1.26 Intangible Property. "Intangible Property" shall mean (a) all
transferable consents, authorizations, variances or waivers, licenses, permits
and approvals given or issued by any governmental or quasi-governmental agency,
department, board, commission, bureau or other entity or instrumentality having
jurisdiction over the respective Facilities and (b) all rights to use the names
of the Facilities set forth on Schedule 1.26 hereto, but excluding any right to
use the name "Integrated" or the name "Integrated Health Services".
1.27 Knowledge. "Knowledge" of a party shall mean (a) actual knowledge of
an officer or management level employee of such party, with respect to a
corporation, (b) actual knowledge of a general partner or management level
employee of such party, with respect to a partnership, or (c) actual knowledge
of the person with respect to a natural person.
1.28 Law. "Law" shall mean any federal, state, local or other law,
ordinance, code, or governmental agency requirement of any kind, and the rules,
regulations and orders promulgated thereunder including, without limitation, the
Environmental Laws.
1.29 MAI Appraisal. "MAI Appraisal" shall mean with respect to each
Facility, an appraisal, in form and substance satisfactory to Purchaser,
prepared by an appraiser who is a Member of the Appraisal Institute and is
experienced in appraising properties of the same nature, and in the same
geographical vicinity, as each Facility.
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1.30 Manager. "Manager" shall mean IHS Facility Management, Inc., a
Delaware corporation, with principal offices at 00000 Xxx Xxx Xxxxxxxxx, Xxxxxx
Xxxxx, Xxxxxxxx 00000, which is a Subsidiary of IHS.
1.31 Master Franchise Agreement. "Master Franchise Agreement" shall mean
the master franchise agreement, in form and substance satisfactory to Purchaser,
to be executed by Franchisor and Lyric, pursuant to which Franchisor grants to
Lyric the right to use Franchisor's names, marks, systems and proprietary
information.
1.32 Master Lease. "Master Lease" shall mean the master lease, in form and
substance satisfactory to Purchaser, executed and delivered by Purchaser and
Lyric III, concurrently with the Closing, pursuant to which Purchaser leases to
Lyric III, and Lyric III leases from Purchaser, the respective Facilities.
1.33 Master Management Agreement. "Master Management Agreement" shall mean
the master management agreement, in form and substance satisfactory to
Purchaser, to be executed by Lyric and Manager, pursuant to which Manager agrees
to manage the Facilities.
1.34 Monarch. "Monarch" shall mean Monarch Properties, Inc., a Maryland
corporation, with principal offices at 0000 Xxxxxxx Xxx Xxxxxxxxx, Xxxxxx,
Xxxxxxx 00000.
1.35 Offering. "Offering" shall mean the public offering of shares of
common stock of Monarch.
1.36 Permits. "Permits" shall mean all permits, consents, waivers,
exemptions, orders, certificates of need, licenses and governmental and agency
authorizations, registrations and approvals with respect to each of the
Facilities, as listed on Schedule 1.36 hereto. For purposes of this definition,
the term "license" shall mean the permit to own a nursing home and to operate a
nursing home issued to any operator of a nursing home upon application to, and
approval by, the health care facilities branch, pursuant to the relevant state
nursing home licensure act, as in effect on the Effective Date.
1.37 Permitted Liens. "Permitted Liens" shall mean those liens,
encumbrances, mortgages, charges, claims, restrictions, pledges, security
interests, impositions and other matters affecting any of the Facilities, as
listed on Schedule 1.37 hereto.
1.38 Personal Property. "Personal Property" shall mean, collectively, the
vehicles, equipment, machinery, furniture, fixtures, furnishings, moveable walls
or partitions, computers or trade fixtures, office equipment, operating supplies
and other tangible real or personal property owned or leased by Sellers on the
Closing Date.
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1.39 Pledge Agreements. "Pledge Agreements" shall mean, collectively, (a)
the pledge agreement, executed and delivered from Lyric Health Care LLC
("Lyric") to Purchaser, pursuant to which Lyric pledged to Purchaser the stock
of Lyric Health Care Holdings III, Inc. ("Lyric III") and (b) the pledge
agreement, executed and delivered from Lyric III to Purchaser, pursuant to which
Lyric III pledged to Purchaser the stock of Sellers.
1.40 Purchase Price. "Purchase Price" shall mean the sum of
$[359,663,039.00].
1.41 Real Property. "Real Property" shall mean, collectively, all of the
land and Improvements located thereon, situated at the addresses as listed on
Exhibit B hereto, that is currently owned by Sellers.
1.42 Release. "Release" shall mean the release, deposit, disposal or
leakage of any Hazardous Material into, upon or under any land or water or air,
or otherwise into the environment, including, without limitation, by means of
burial, disposal, discharge, emission, injection, spillage, leakage, seepage,
leaching, dumping, pumping, pouring, escaping, emptying, placement and the like.
1.43 Security Agreement. "Security Agreement" shall mean the security
agreement, in form and substance satisfactory to Purchaser, pursuant to which
Sellers and Lyric Holdings grant to Purchaser a security interest in the
Personal Property and Intangible Property in order to secure the obligations of
Lyric Holdings under the Master Lease and each Seller under the Facility
Subleases.
1.44 Sellers' Liabilities. "Sellers' Liabilities" shall mean any and all
liabilities of Sellers or any of the Facilities, whether actual or contingent,
relating to each of the Facilities that are (a) reflected on the Financial
Statements of the Facilities or on Schedule 1.44 hereto or (b) except for
liabilities arising from operation of the Facilities on or prior to the Closing
Date, arising under the Contracts.
1.45 Seller Licenses. "Seller Licenses" shall mean, if and as applicable,
all material licenses, Permits and authorizations necessary for the lawful
operation of the respective Facilities, as the Facilities currently are
operated, including all licenses, Permits and authorizations necessary to (a)
lawfully operate all beds contained in the Facilities as nursing home beds, (b)
provide licensed nursing services and any other services currently provided at
the respective Facilities, and (c) receive payment under the Medicare and
applicable state Medicaid programs.
1.46 Sellers' Assets. "Sellers' Assets" shall mean, collectively, the Real
Property, the Facilities, the Personal Property and the Intangible Property.
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1.47 Survey. "Survey" shall mean, with respect to a Facility, a survey that
is (a) certified to Purchaser, the applicable Seller, Lyric III and the Title
Company, (b) prepared in accordance with the minimum standard detail
requirements and classifications for ALTA/ASCM land title surveys, as adopted in
1992 by ALTA/ASCM, including Table A responsibilities and specifications 1-4,
6-11 and 13, and (c) otherwise in form satisfactory to Purchaser.
1.48 Title Commitment. "Title Commitment" shall mean, with respect to a
Facility, a title insurance commitment, issued by the Title Company, dated after
the date of this Agreement and committing the Title Company to insure
Purchaser's fee simple title to the applicable Facility, without the so-called
"standard exceptions", in the amount of the portion of the Purchase Price
allocated to such Facility pursuant to Section 13.12 hereof, together with
legible copies of all recorded documents referred to therein.
1.49 Title Company. "Title Company" shall mean Fidelity National Title
Insurance Company of New York.
1.50 Title Insurance Policy. "Title Insurance Policy" shall mean, with
respect to a Facility, a title insurance policy, issued pursuant to the
applicable Title Commitment by the Title Company concurrently with the Closing,
that insures Purchaser's fee simple title to the applicable Facility, without
the so-called "standard exceptions", and subject only to the Permitted Liens.
Each Title Insurance Policy shall include the following endorsements, to the
extent available under the law of the state in which the applicable Facility is
located: (a) Form 3.1 completed zoning endorsement, (b) comprehensive
endorsement, (c) access endorsement, (d) survey endorsement, (e) separate tax
parcel endorsement, (f) contiguity endorsement (if the Real Property on which
the applicable Facility is located consists of more than one parcel), and (g)
such other endorsements as Purchaser reasonably may require.
1.51 Transaction Documents. "Transaction Documents" shall mean this
Agreement, the Master Lease, the Facility Subleases, the Memorandum of Lease,
the Memoranda of Sublease, the Guaranty, the Security Agreement, the Escrow
Agreement, the Closing Escrow Agreement, the IHS Indemnity, the Pledge
Agreements and all other agreements related thereto executed and delivered by
the parties to this Agreement.
1.52 UCC Search Report. "UCC Search Report" shall mean a UCC search report
in the name of the applicable Seller and Facility conducted at the state and
county level in the state in which the applicable Facility is located and, if
different, in the state in which the applicable Seller is organized and in the
state in which the applicable Seller's chief executive office is located.
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ARTICLE II
PURCHASE AND SALE
2.1 Agreement to Sell and Buy. On the terms and subject to the conditions
set forth in this Agreement, Sellers agree to sell to Purchaser, and Purchaser
agrees to acquire from Sellers, Sellers' Assets.
2.2 No Assumption of Liabilities. Except as specifically set forth in this
Agreement, Purchaser is not acquiring or assuming any liabilities of Sellers,
IHS, or the Facilities whatsoever, including, without limitation, those of
Sellers with respect to Sellers' Assets.
2.3 "As Is" Purchase. Purchaser is acquiring Sellers' Assets without any
express or implied warranties other that those specifically set forth in this
Agreement.
ARTICLE III
PURCHASE PRICE
The Purchase Price shall be payable on the Effective Date by wire transfer
in accordance with wire transfer instructions to be provided by IHS and Sellers.
The Purchase Price shall be allocated among the Facilities as set forth in
Section 13.12 hereof. Sellers and Purchaser agree that, for purposes of this
Agreement, no portion of the Purchase Price shall be allocated to the Personal
Property or the Intangible Property.
ARTICLE IV
CLOSING
On the Closing Date, at the offices of LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the documents to be
delivered by Sellers, Purchaser, IHS, Lyric and Lyric III, pursuant to Sections
10.5 and 11.5 hereof, shall be delivered to the Escrow Agent, to be held in
escrow until the Effective Date, subject to and in accordance with the Closing
Escrow Agreement.
ARTICLE V
TRANSACTION COSTS AND EXPENSES
The costs of the transaction and the expenses related to the ownership and
operation of the Sellers' Assets shall be paid as follows:
5.1 Transfer Taxes; Sales Taxes. Sellers shall pay all state and county
transfer or excise taxes due on the transfer to Purchaser of title to the Real
Property and the respective
9
Facilities and all assessments and taxes related to the recording of the
corresponding deeds. Sellers shall pay any sales tax due on the transfer to
Purchaser of title to the Personal Property, although the parties believe no
such tax is due.
5.2 MAI Appraisals. Sellers shall pay the cost of the MAI Appraisals
delivered by Sellers to Purchaser.
5.3 Title Insurance. Sellers shall pay the cost of the Title Commitments
and the premium for the Title Insurance Policies (including any leasehold
policies desired by Sellers) for the respective Facilities.
5.4 Surveys/UCC Search Reports. Sellers shall pay the cost of the Surveys
and the UCC Search Reports for the respective Facilities.
5.5 Environmental Reports/Remediation. Sellers shall pay for the cost of
Phase I environmental assessments for the respective Facilities, for any
additional assessments recommended in the original Phase I environmental
assessments, and for the cost of the Environmental Remediation agreed upon by
the parties and as described on Schedule 1.11 hereto. Sellers shall cause the
Phase I environmental assessments and any additional assessments or reports
provided by Sellers to be certified to the Purchaser for reliance by Purchaser
thereon.
5.6 Attorneys' Fees. Sellers shall pay its own attorneys' fees and the
reasonable and documented attorneys' fees, costs and disbursements of Purchaser
and Sellers.
5.7 Recording Costs. Sellers shall pay all recording fees relating to the
recording of the deeds.
5.8 Releases. Sellers shall pay the cost of obtaining and recording any
releases necessary to deliver title to Sellers' Assets in accordance with the
terms of this Agreement.
5.9 Deferred Maintenance Adjustment. At the Closing, each Seller shall
deposit into escrow with the Escrow Agent the Deferred Maintenance Adjustment
attributable to the Facility currently owned by it.
5.10 Fee; Commitment Fee. At the Closing, Sellers shall pay to Purchaser a
commitment fee equal to an aggregate of $[Insert Amount]. [TO BE 50 BASIS POINTS
TIMES PURCHASE PRICE]
5.11 Other Items. Purchaser has no duty to operate any Facility from and
after the Closing Date, such operations to be accomplished solely by the
applicable Seller, as sublessee of Lyric III under a Facility Sublease, subject
to the provisions of the Master Lease, or by
10
Manager pursuant to the Facility Management Agreement. Accordingly, each Seller
shall be responsible for (a) all revenues and expenses attributable to the
Facility owned by it, where attributable to the period before or after the
Effective Date, (b) the real and personal property taxes, assessments and
similar charges that are levied against the Facility currently owned by it,
whether attributable to the period before or after the Effective Date, (c) all
utilities provided to the Facility currently owned by it, whether before or
after the Effective Date, and (d) any amounts that have been prepaid, or that
remain to be paid, under any of the Contracts affecting Sellers' Assets.
ARTICLE VI
POSSESSION
At the Effective Date, Purchaser shall be entitled to possession of
Sellers' Assets, subject only to (a) the rights of the patients and residents of
the respective Facilities, (b) any possessory rights granted to any person under
the Permitted Liens and (c) the rights of Lyric III under the Master Lease and
each Seller under the applicable Facility Sublease.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller hereby represents and warrants to Purchaser that:
7.1 Corporate Organization; Good Standing; Corporate Information. Such
Seller is a corporation, duly organized, validly existing and in good standing
under the laws of the state set forth opposite its name on Exhibit B hereto, and
it has the corporate power and authority to develop, own, operate and lease the
Facility owned by it, to carry on its businesses as and in the places where such
businesses are now conducted and where such properties are now developed, owned,
leased or operated, and to enter into the transactions and perform its
obligations under this Agreement, the other Transaction Documents and any other
documents and instruments required to be delivered to which it is or is to
become a party and it is duly qualified as a foreign corporation to do business
in the jurisdiction in which the Facility owned by it is located or in which
failure so to qualify would impair its ability to perform its obligations under
this Agreement or any other Transaction Document.
7.2 Authorization; Enforceability. The execution, delivery and performance
by such Seller of this Agreement, the other Transaction Documents and of all of
the documents and instruments contemplated hereby to be executed and delivered
by it are within the legal and corporate power and authority of such Seller and
have been duly authorized by all necessary legal and corporate action of such
Seller. This Agreement is, the other Transaction Documents are, and the other
documents and instruments required hereby to be delivered by it will be, when
executed and delivered, the valid and binding obligations of such Seller,
enforceable against it in accordance with their respective terms.
11
7.3 No Violation or Conflict. The execution, delivery and performance of
this Agreement, the Transaction Documents and all of the other documents and
instruments contemplated hereby to be executed and delivered by such Seller does
not and will not conflict with or violate any material Law, judgment, or any
order or decree binding on it or the Articles of Incorporation or By-Laws of
such Seller. Except as indicated on Schedule 7.3(a) hereto, no notice to, filing
or registration with, or authorization, consent or approval of, any person,
entity or governmental or regulatory agency is necessary or required by such
Seller in connection with the execution and delivery of this Agreement, the
Transaction Documents and all of the other documents and instruments
contemplated hereby to be executed and delivered by such Seller or the
consummation by such Seller of the transactions contemplated hereby or the
performance by such Seller of its obligations hereunder. Except as indicated on
Schedule 7.3(b) hereto, since January 1, 1998, such Seller has received no
written notice from any governmental or regulatory agency having jurisdiction
over such Seller's Facility (a) claiming any violation of any Law (which
violation has not been cured or otherwise remedied), or (b) requiring or calling
attention to the need for any work, repairs, construction, alterations or
installation in connection with the Facility owned by it which is or may be
required in order to comply with any Law (which work, repairs, construction,
alterations or installation has not been completed).
7.4 Assets. The Personal Property, Real Property and Intangibles constitute
all of the assets used in the operation of the Facility owned by it. Such Seller
owns good, valid and clear title to all of the Personal Property owned by it and
to all the other assets, if any, owned by it and used in the operation of the
Facility owned by it, and also including, but not limited to, all assets owned
by such Seller that are reflected in the Financial Statements of the Facilities
related to the Facility owned by it and all assets acquired by it since the date
thereof related to the Facility owned by it (except for assets that have been
sold or otherwise disposed of in the ordinary course of business), free and
clear of any and all mortgages, liens, encumbrances, charges, claims,
restrictions, pledges, security interests or impositions except Permitted Liens.
7.5 No Litigation. Except as listed on Schedule 7.5 hereto, and the matters
set forth on Schedule 7.3(b) and on Schedule 7.22 hereto, there is no material
litigation, arbitration proceeding, governmental investigation, citation, suit,
action proceeding or claim of any kind pending or threatened, against it or the
Facility owned by it that relates to such Facility or any portion thereof or the
ability of such Seller to perform its obligations under this Agreement or under
any other Transaction Documents. The matters described on Schedule 7.5 hereto,
if adversely determined, considered in the aggregate, would not have a material
adverse effect on the business or financial condition of such Seller or the
Facility or on any material portion of the assets of such Seller or the Facility
owned by it and would not preclude such Seller from performing its obligations
under this Agreement and under any other Transaction Documents.
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7.6 Personal Property and Improvements. Except as provided on Schedule 7.6
hereto, the Personal Property and Improvements used in the operation of the
Facility owned by such Seller, as of the Effective Date, are (a) in good
operating condition and in a state of good maintenance and repair, normal wear
and tear excepted, and (b) the Improvements have no structural defects and are
adequate and suitable for the purpose for which they are presently being used.
7.7 Real Property and Improvements. Such Seller owns good, indefeasible and
insurable title to the Real Property owned by it, free and clear of any and all
mortgages, liens, encumbrances, charges, claims, restrictions, pledges, security
interest or impositions except the Permitted Liens. There are no existing or
impending Improvement liens or special assessments to be made, or which have
been made, against the Real Property or Improvements owned by it by any
governmental authority. Neither the Improvements owned by it, nor the use
thereof, any Personal Property therein, nor the operation or maintenance
thereof, violate any restrictive covenant or encroach on any property owned by
others in any material respect. No condemnation or similar proceeding is
pending, nor, has such Seller or the Facility owned by it, received any written
notice of any condemnation or similar proceeding, threatened or contemplated
that would preclude or impair the use of the Real Property, the Improvements or
Personal Property owned by it or any portion thereof by Purchaser for the
purposes for which it is currently used.
7.8 Zoning. There exists no judicial, quasi-judicial, administrative or
other proceeding which might adversely affect the validity of the current zoning
of the Real Property and Improvements owned by it, nor is there any threatened
action or proceeding which could result in the modification and termination of
any such zoning.
7.9 Leases. Schedule 1.7 hereto contains an accurate and complete list of
each lease of Personal Property to which such Seller or the Facility owned by it
is a party or by which such Seller or any Facility owned by it is bound.
7.10 Liabilities. (a) The Sellers' Liabilities include all liabilities of
such Seller in connection with the Facility owned by it for money borrowed or
credit purchases, other than obligations that will be discharged prior to
Closing, (b) such Seller is not in material default under any obligation
included in the Sellers Liabilities, and no event has occurred or is
contemplated by it, that would constitute a material default, or an event that
with the giving of notice or passage of time or both would constitute a default
thereunder, and (c) such Seller has paid, and through the Effective Date shall
pay, all amounts due and payable to the Effective Date under the terms of each
obligation included in the Sellers Liabilities.
7.11 Taxes. All tax returns required under applicable Law relating to the
Facility owned by such Seller, to have been filed by or on behalf of it have
been filed. All taxes of such Seller and taxes with respect to the Facility
owned by it for all periods covered by such
13
returns have been paid or adequately provided for. No unpaid deficiencies for
any such taxes have been officially asserted or assessed against such Seller or
any Facility owned by it.
7.12 Contracts. Schedule 1.7 hereto constitutes a true and complete list of
all Contracts to which such Seller or the Facility owned by it is a party or by
which such Seller or the Facility owned by it is bound.
7.13 Contracts and Leases. With respect to those Contracts and leases
listed on Schedule 1.6 hereto, such Seller shall continue such Contracts and
leases, as provided for in the Master Lease, and such Seller shall defend,
indemnity and hold harmless Purchaser from and against any and all covenants,
duties and obligations under such Contracts and leases, including, without
limitation, any and all costs and expenses arising out of or in connection with
any such covenants, duties and obligations.
7.14 Financial Statements of the Facilities. (a) The Financial Statements
of the Facilities, taken as a whole, fairly present the financial position and,
if applicable, the results of operations of the Facility owned by such Seller as
of the dates thereof and the periods then ended and were prepared in accordance
with generally accepted accounting principles consistently applied and (b) the
Final Financial Statements when delivered will present fairly the financial
position and the results of operations of the Facility owned by such Seller as
of the Closing Date and the period then ended and will be prepared in accordance
with generally accepted accounting principles consistently applied.
7.15 No Adverse Change. Except as set forth in Schedule 7.15 hereto, since
January 1, 1998 there has not been: (a) any material adverse change in the
financial condition or business of the Facility owned by such Seller, or any
material adverse change in the net operating income of the Facility owned by it,
(b) any material loss, damage, condemnation or destruction to the Facility owned
by such Seller, (c) any labor dispute or disturbance, litigation or any event or
condition that could materially adversely affect the operation of the Facility
owned by such Seller, (d) any borrowings by such Seller secured by the Facility
owned by it, or (e) any sale, transfer or other disposition of assets of the
Facility owned by such Seller other than in the ordinary course of business.
7.16 Employment Agreements and Benefits. (a) Schedule 7.16 hereto is a true
and complete list of all agreements or contracts relating to the compensation
and other benefits of present and former employees, salesmen, individual
consultants, individuals and other individual agents of such Seller relating to
the Facility owned by it, including all collective bargaining agreements and all
pension, retirement, bonus, stock option, profit sharing, health, disability,
life insurance, hospitalization, education or other similar plans or
arrangements (whether or not subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), true and complete copies of which, including
any trust, insurance or other funding agreements (or true and complete
descriptions of which, in the case of oral
14
agreements) have been delivered to Purchaser, (b) such Seller has not
contributed to or maintained any "multiemployer plan", as defined in Section
3(37) of ERISA, in respect of present or former employees at the Facility owned
by it, and (c) except as set forth in Schedule 7.16 hereto, no such agreements
require Purchaser to assume or make payments with respect to any employment,
compensation, fringe benefit, pension, profit sharing or deferred compensation
plan in respect of any employee or former employee or the dependent or
beneficiary of any employee or former employee of such Seller although such
Seller will have such liabilities in accordance with the terms of such
arrangements to the extent such liabilities exist.
7.17 Insurance. (a) Schedule 7.17 hereto (i) contains an accurate and
complete list of all material policies of property, fire and casualty, product
liability, workers' compensation and other forms of insurance owned or held by
such Seller in connection with the Facility owned by it and (ii) includes for
each such policy its type, term, limits and retentions, deductibles, name of
insurer, and (b) all such policies are in full force and effect with all
premiums billed or otherwise due having been paid in full.
7.18 Compliance with the Law.
(a) Except as set forth on Schedule 7.3(b) and Schedule 7.22 hereto,
the use, maintenance and operation of the Facility owned by such Seller does not
violate or conflict in any material respect with any Law.
(b) The Permits constitute all permits, consents, waivers, exemptions,
orders, certificates of need, licenses and governmental agency authorizations,
registrations and approvals necessary for the development, construction,
ownership, licensure, use, maintenance and operation of the Facility owned by
such Seller in compliance with all applicable Laws (as such Facility is being
operated on the Effective Date). Except as shown on Schedule 1.36 hereto, all
such Permits are in full force and effect, have been duly obtained, made, given
or taken and are being complied with in all material respects, subject to
approvals required in connection with the transactions contemplated by this
Agreement and the other Transaction Documents.
(c) To the best of its Knowledge, no governmental authority having
jurisdiction over the Facility owned by such Seller has issued any citations
with respect to any deficiencies or other matters that fail to conform to any
applicable statute, regulation, ordinance or bylaw and that have not been
corrected as of the date hereof or that shall not have been corrected on or
prior to the Effective Date, except to the extent that either (i) a waiver has
been issued by the appropriate authority, in which case a copy of such waiver is
included on Schedule 7.18(c) hereto, or (ii) the deficiency or non-conformity
will not have a material and adverse effect on the financial condition or
results of the operations of the Facility owned by such Seller.
15
(d) Such Seller has not received written or oral notice from any
licensing or certifying agency supervising or having authority over the Facility
owned by it, requiring such Facility to be reworked or redesigned or additional
furniture, fixtures, equipment or inventory to be provided at such Facility so
as to conform to or comply with any existing and applicable Law, code or
standard, except where the requirement either (i) has been fully satisfied prior
to the Closing Date, (ii) will, as of the Effective Date, be in the process of
being satisfied pursuant to the terms of a Plan of Correction or other
documentation submitted to and approved by the appropriate authority or (iii)
will, as of the Closing Date, be the subject of a valid written waiver issued by
the applicable licensing or certifying agency.
(e) To the best of its Knowledge, the Facility owned by it and
participating in the Medicare or Medicaid Programs is in compliance with all
Conditions and Standards of Participation in those Programs, except as set forth
on Schedule 7.18(e) hereto.
7.19 Transactions with Affiliates. Except as set forth on Schedule 7.19
hereto, as of the Effective Date, the Facility owned by such Seller shall not be
bound by and will not owe any amount or have any contractual obligation or
commitment to any Affiliate (other than compensation for current services and
reimbursement of expenses arising in the ordinary course of business).
"Affiliate" shall mean any employee of such Seller, any person, firm or
corporation that directly or indirectly controls, is controlled by or is under
common control with such Seller.
7.20 Obligations. Except as set forth on Schedule 7.20 hereto, none of the
patients at the Facility owned by it have been given any concession, rebate or
consideration for the rental of any room, which concession, rebate or other
consideration shall not have been paid or delivered prior to the Effective Date.
7.21 No Broker. Except as set forth on Schedule 7.21 hereto, such Seller
has not incurred any liability for broker's or finder's fees or commissions to
any broker, financial advisor or other intermediary in connection with the
transactions contemplated by this Agreement. Such Seller agrees to pay and to
hold Purchaser harmless from and against any amounts due and payable to any such
adviser not scheduled with respect to the transactions contemplated herein.
7.22 Environmental Compliance. "Hazardous Materials", as used herein, shall
mean, collectively, (a) any petroleum or petroleum product, explosive,
radioactive material, radon gas, asbestos, urea formaldehyde foam insulation,
and PCBs and (b) materials which are now or hereafter become defined as
"hazardous substances", "hazardous wastes", "extremely hazardous substances",
"hazardous materials", "restricted hazardous wastes", "toxic chemicals",
"pollutants", "toxic pollutants", "hazardous air pollutants", "air
contaminants", "hazardous chemicals", or words of similar import under any
applicable Environmental Laws. "Reasonable Inquiry", as used herein, shall mean
review of (i) the Phase I environmental site
16
assessment reports and Phase I update reports listed on Schedule 7.22 hereto,
(ii) the asbestos survey reports listed on Schedule 7.22 hereto, and (iii) the
Phase II environmental reports listed on Schedule 7.22 hereto. Except as set
forth on Schedule 7.22 hereto, in connection with the Facility owned by such
Seller, to the best of its Knowledge, after Reasonable Inquiry, such Seller has
complied and is in compliance with all applicable Environmental Laws, and such
Seller has no Knowledge, and has not received notice, (i) that the Facility
owned by it or any property contiguous to the Facility owned by it is in
violation of any Environmental Law and (ii) of any pending or threatened claims
involving the Facility owned by it. Except as set forth on Schedule 7.5 or
Schedule 7.22 hereto, neither such Seller nor the Facility owned by it is the
subject of any administrative or judicial action or proceeding pursuant to any
Environmental Laws at the Effective Date in connection with the Facility owned
by it. Promptly upon learning thereof, at or following the Effective Date, such
Seller shall provide written notice to Purchaser of any written notification of
(i) the assertion of any claim or any threatened claim relating to the Facility
owned by it under any Environmental Law or (ii) the assertion of any claim of
non-compliance with or violation of any Environmental Law. Except as set forth
on Schedule 7.22 hereto, to the best of such Seller's Knowledge, after
Reasonable Inquiry, no Hazardous Materials have at any time been generated,
used, treated or stored at; transported to or from; or disposed of, released,
emitted, discharged or deposited at or in connection with, the Facility owned by
it in any way contrary to that which is allowed or permitted under any
Environmental Laws.
7.23 No Attachments. There are no attachments, executions, assignments for
the benefit of creditors, receiverships, conservatorship or voluntary or
involuntary proceedings in bankruptcy or pursuant to any debtor relief laws
contemplated being filed by such Seller or pending against such Seller or the
Real Property or Improvements owned by it.
7.24 No Options. As of the Effective Date, there are no options, contracts
or other obligations outstanding for the sale, exchange or transfer of any of
the Real Property, Personal Property or Improvements owned by such Seller or any
portion thereof or business operated therein.
7.25 Seller Licenses. Such Seller has all Seller Licenses applicable to the
Facility owned by it. Schedule 7.25 hereto contains true and correct copies of
the licenses issued most recently by the applicable health care authorities with
respect to the operation of the Facility owned by such Seller. Such Seller has
not received written or verbal notice (a) that any action or proceeding has been
initiated or is proposed to be initiated by the appropriate state or federal
agency having jurisdiction thereof, to revoke, withdraw or suspend any of the
Seller Licenses applicable to the Facility owned by it in either the Medicare or
Medicaid Programs or (b) of any judicial or administrative agency judgment or
decision not to renew any of the Seller Licenses applicable to the Facility
owned by it or (c) of any licensure or certification action of any other type
applicable to the Facility owned by it.
17
7.26 Disclosure. Such Seller has provided to Purchaser access to all
relevant documents, materials and information in its possession or control
relative to the Facility owned by it and has not withheld any documents or
information that are material to the condition, assets, liabilities, businesses,
operations and prospects of such Seller or the Facility owned by it. Such Seller
has disclosed or provided information to Purchaser with respect to all facts
that are material to the condition, assets, liabilities, businesses, operations
and prospects of the Facility owned by it. No representation or warranty of such
Seller contained in this Agreement (which shall include any Exhibit or Schedule
hereto) and no certificate or document furnished to Purchaser pursuant to the
provisions hereof, contains any untrue statement of a material fact which is
untrue in any material respect or omits to state a material fact necessary in
order to make the statements contained therein not misleading.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF IHS
IHS represents and warrants to Purchaser that:
8.1 Status of IHS. IHS is a corporation that is duly organized, validly
existing and in good standing under the laws of the State of Delaware.
8.2 Validity of Conflicts. This Agreement is, and all of the Transaction
Documents to be executed by IHS pursuant hereto will be, the valid obligations
of IHS, enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to the enforcement of creditors'
rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The execution
of this Agreement and the applicable Transaction Documents have been approved by
all required corporate action on the part of IHS and does not and will not
result in a breach of the terms and conditions of, nor constitute a default
under or violation of, the Certificate of Incorporation and By-Laws of IHS or
any Law, regulation, court order, mortgage, note, bond, indenture, agreement,
license or other instrument or obligation to which IHS is now a party or by
which any of its assets may be bound or affected.
8.3 Authority. IHS has full power and authority to execute and deliver this
Agreement and the applicable Transaction Documents to which it is a party.
8.4 Truth of Representations. The representations and warranties of each
Seller pursuant to Article VII hereof are true and complete in all material
respects.
18
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to each of the other parties
hereto that:
9.1 Organization. Purchaser is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has full power and authority to enter into and perform its obligations under
this Agreement, the other Transaction Documents and any other documents and
instruments required hereby to be delivered to which it is or is to become a
party.
9.2 Authorization; Enforceability. The execution, delivery and performance
by Purchaser of this Agreement, the other Transaction Documents and all of the
documents and instruments contemplated hereby are within the power of Purchaser
and have been duly authorized by all necessary action of Purchaser. This
Agreement is, the other Transaction Documents are, and the other documents and
instruments required hereby to be delivered by Purchaser will be, when executed
and delivered, the valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their respective terms.
9.3 No Violation or Conflict. The execution, delivery and performance of
this Agreement, the other Transaction Documents and all of the documents and
instruments contemplated hereby to be executed and delivered by Purchaser does
not and will not conflict with or violate the Limited Partnership Agreement of
Purchaser or any material Law, judgment, order or decree binding on Purchaser.
9.4 No Broker. Except as set forth on Schedule 9.4 hereto, Purchaser has
incurred no liability for broker's or finder's fees or commissions to any broker
or other intermediary in connection with the transactions contemplated by this
Agreement. Purchaser agrees to pay and to hold Sellers, and IHS harmless from
and against any amounts due and payable to any such adviser not scheduled with
respect to the transactions contemplated herein.
ARTICLE X
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
Each and every obligation of Purchaser to be performed on the Effective
Date shall be subject to the satisfaction as of both the Closing Date and the
Effective Date of the following express conditions precedent (it being the
understanding of the parties that any of such condi tions may be waived by
Purchaser):
10.1 Compliance with this Agreement. Sellers shall have performed and
complied in all material respects with all of their obligations under this
Agreement that are to be performed or complied with by them prior to or on the
Closing Date, including, but not
19
limited to, the payment of all costs, fees and expenses that Sellers are
required to pay pursuant to this Agreement.
10.2 Proceedings and Instruments Satisfactory. All proceedings, corporate
or other, to be taken by Sellers in connection with the transactions
contemplated by this Agreement, the other Transaction Documents and any other
documents incident thereto, shall be reasonably satisfactory in form and
substance to Purchaser and Purchaser's counsel, and Sellers shall have made
available to Purchaser and Purchaser's counsel (or Purchaser shall have obtained
itself prior to the Closing Date or waived the necessity for receipt thereof
prior to the Closing Date) for examination the originals or true and correct
copies of all documents that Purchaser and Purchaser's counsel may reasonably
request in connection with the transactions contemplated by this Agreement and
the other Transaction Documents, including, but not limited to:
(a) an MAI Appraisal for each of the Facilities;
(b) a Title Commitment for each of the Facilities;
(c) acceptable engineering, architectural and Phase I environmental site
assessments for each of the Facilities;
(d) a Survey for each of the Facilities;
(e) a UCC Search Report for each of the Facilities;
(f) the Seller's Licenses for each of the Facilities;
(g) valid permanent Certificates of Occupancy, if reasonably available and
required under the Law, for each of the Facilities as well as any
other licenses or Permits reasonably available and required to be
obtained from applicable governmental authorities with respect to the
use and occupancy of each of the Facilities;
(h) for each Seller, Articles of Incorporation, Certificates of Good
Standing and Certificates of Authority to Transact Business in the
state in which each Facility owned by such Seller is located;
(i) for IHS, Articles of Incorporation and Certificate of Good Standing;
(j) certified resolutions of the Board of Directors of each Seller and
certified resolutions of the Board of Directors of IHS, in each case
authorizing and approving the execution, delivery and performance of
Sellers and IHS's obligations under this Agreement and the other
Transaction Documents;
20
(k) the opinions of IHS's and Sellers' local healthcare counsel in each
state where a Facility is located, as special healthcare counsels to
IHS and Sellers, in a form reasonably acceptable to Purchaser; and
(l) the opinion of counsel to IHS and the Sellers, in a form reasonably
acceptable to Purchaser.
10.3 No Litigation. Except as provided on Schedule 10.3 hereto, no
investigation, suit, action or other proceeding shall be instituted, threatened
or pending before any court or governmental agency or body that seeks restraint,
prohibition, damages or other relief in connection with this Agreement, the
other Transaction Documents or the consummation of the transactions contemplated
by this Agreement and the other Transaction Documents.
10.4 Representations and Warranties. The representations and warranties
made by Sellers and IHS in this Agreement and the other Transaction Documents
shall be true and correct in all material respects at and as of the Closing Date
and the Effective Date.
10.5 Deliveries at the Closing. Sellers and IHS shall have, or shall cause
to have, delivered to Purchaser the following documents, each properly executed
and dated as of the Closing Date:
(a) this Facilities Purchase Agreement;
(b) the Deeds;
(c) the Bills of Sale;
(d) the Master Lease;
(e) a memorandum of lease in recordable form with respect to the Master
Lease;
(f) the Facility Subleases;
(g) memoranda of sublease in recordable form with respect to each of the
Facility Subleases;
(h) the Consent and Subordination Agreement;
(i) the Escrow Agreement;
(j) the Facility Franchise Agreement;
21
(k) the Facility Management Agreement;
(l) the IHS Indemnity;
(m) the Guaranty;
(n) the Security Agreement;
(o) the Master Franchise Agreement;
(p) the Master Management Agreement;
(q) the Closing Escrow Agreement; and
(r) any such other documents or instruments as Purchaser and Purchaser's
counsel shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Transaction Documents.
10.6 Regulatory Approvals. All required licenses, authorizations,
registrations, Permits and approvals from federal and state regulatory agencies
with jurisdiction over each of the Facilities to permit the transactions
contemplated by this Agreement and the other Transaction Documents shall have
been obtained or completed to the reasonable satisfaction of Purchaser and any
and all conditions to the effectiveness thereof shall have been satisfied.
10.7 Default. Each Seller and IHS shall not be in default, where said
default cannot be cured by the Closing Date, under any mortgage, contract, lease
or other agreement to which such Seller and IHS is a party or by which such
Seller and IHS is bound and that materially affects of relates to the Real
Property, the Personal Property or any of the Facilities.
10.8 Approvals. The Board of Directors of Monarch shall have approved the
transactions contemplated by this Agreement and the Transaction Documents.
10.9 Offering. Monarch shall have completed the Offering.
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ARTICLE XI
CONDITIONS PRECEDENT TO
THE OBLIGATIONS OF SELLERS
Each and every obligation of Sellers to be performed on the Effective Date
shall be subject to the satisfaction as of both the Closing Date and the
Effective Date of the following express conditions precedent (it being the
understanding of the parties that any of such conditions may be waived by
Sellers):
11.1 Compliance with this Agreement. Purchaser shall have performed and
complied in all material respects with all of its obligations under this
Agreement and the other Transaction Documents that are to be performed or
complied with by it prior to or on the Closing Date, including, but not limited
to, the payment of the Purchase Price by Purchaser.
11.2 Proceedings and Instruments Satisfactory. All proceedings, corporate
or other, to be taken by Purchaser in connection with the transactions
contemplated by this Agreement, the other Transaction Documents and any other
documents incident thereto, shall be reasonably satisfactory in form and
substance to Sellers and Sellers' counsel, and Purchaser shall have made
available to Sellers and Sellers' counsel (or Sellers shall have obtained
themselves prior to the Closing Date or waived the necessity for receipt thereof
prior to the Closing Date) for examination the originals or true and correct
copies of all documents that Sellers and Sellers' counsel may reasonably request
in connection with the transactions contemplated by this Agreement and the other
Transaction Documents.
11.3 No Litigation. Except as provided on Schedule 11.3 hereto, no
investigation, suit, action or other proceeding shall be threatened or pending
before any court or governmental agency that seeks restraint, prohibition,
damages or other relief in connection with this Agreement, the other Transaction
Documents or the consummation of the transactions contemplated by this Agreement
and the other Transaction Documents.
11.4 Representations and Warranties. The representations and warranties
made by Purchaser in this Agreement and the other Transaction Documents shall be
true and correct in all material respects at and as of the Closing Date and the
Effective Date.
11.5 Deliveries at the Closing. Purchaser shall have, or shall cause to
have, delivered to Sellers and IHS the following documents, each properly
executed and dated as of the Closing Date:
(a) the agreements identified in subparagraphs (a) through (r) of Section
10.5 hereof;
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(b) Certificate of Formation, Certificate of Good Standing and Certificate
of Authority to Transact Business of Purchaser;
(c) certified resolutions of Monarch and Purchaser, authorizing and
approving the execution, delivery and performance of Purchaser's
obligations under this Agreement and the other Transaction Documents;
and
(d) any such other documents or instruments as Sellers and Sellers'
counsel shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Transaction Documents.
11.6 Restraints. No action or proceeding before a court or any other
governmental agency or body of or in the United States shall have been
instituted or threatened to restrain or prohibit the consummation of the
transactions contemplated by this Agreement or the other Transaction Documents.
11.7 Regulatory Approvals. All required authorizations, registrations,
Permits and approvals from federal and state regulatory agencies with
jurisdiction over each of the Facilities to permit the transactions contemplated
by this Agreement and the other Transaction Documents shall have been obtained
or completed to the reasonable satisfaction of Sellers.
11.8 Approvals. The Board of Directors of each of the Sellers and IHS and
the requisite lenders under IHS's Revolving Credit and Term Loan Agreement shall
have approved the transactions contemplated by this Agreement and the
Transaction Documents.
ARTICLE XII
ADDITIONAL COVENANTS AND INDEMNIFICATIONS
12.1 Transfer Taxes and Fees. Sellers shall pay all fees, transfer taxes or
assessments, if any, charged to grantors, lessors, sub-lessors, transferors or
assignors under applicable Law in connection with the transactions contemplated
by this Agreement and the other Transaction Documents.
12.2 Cooperation. The parties hereto shall cooperate in all respects in
connection with the giving of any notices to any governmental authority or
self-regulatory organization or securing the permission, approval,
determination, consent or waiver of any governmental authority or other party
required in connection with the consummation of the transactions contemplated by
this Agreement and the other Transaction Documents.
12.3 Additional Instruments. At any time and from time to time after the
Closing, at Purchaser's reasonable request and without further consideration,
Sellers shall execute and
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deliver such other instruments of sale, transfer, conveyance, assignment and
confirmation and take such other action as Purchaser may reasonably deem
necessary to consummate the transactions contemplated by this Agreement and the
other Transaction Documents. At any time and from time to time after the
Closing, at the reasonable request of Sellers and without further consideration,
Purchaser shall execute and deliver such other instruments and take such other
action as Sellers may reasonably deem necessary to consummate the transactions
contemplated by this Agreement and the other Transaction Documents.
12.4 Publicity. All general notices, releases, statements and
communications to employees and patients of Purchaser, Sellers and each of the
Facilities relating to the transactions contemplated by this Agreement shall be
made only at such times and in such manner as may be mutually agreed upon by
Purchaser and Sellers. All general notices, releases, statements and
communications to the general public and the press relating to the transactions
contemplated by this Agreement shall be made only with such content and at such
times and in such manner as may be mutually agreed upon by Purchaser and
Sellers; provided, however, that each party shall be entitled to make a public
announcement of the transaction if, in the opinion of its counsel, such
announcement is required to comply with the Law.
12.5 Confidentiality. Purchaser shall not disclose to any person or company
or use for its own benefit any material information related to the ownership or
operation of the Facilities by Sellers, including customer or patient-related
information, without Sellers' express prior written permission except for
disclosure by Purchaser to its counsel, its lenders and their counsel and
appropriate regulatory agencies, except any such information that is now or
hereafter becomes available to the public without breach of any confidentiality
agreement.
12.6 Indemnifications.
(a) Sellers and IHS, jointly and severally, shall indemnify and hold
harmless Purchaser and its partners, officers, directors, shareholders,
employees, agents, and assigns (collectively, the "Purchaser Indemnified
Parties"), from any and all liabilities, obligations, losses, demands,
judgments, actions, suits, causes of action, claims, proceedings,
investigations, citations, matters, damages, penalties, sanctions, costs,
expenses, and disbursements (including, without limitation reasonable attorneys'
and consultants' fees and expenses), whether or not subject to litigation
(hereinafter collectively referred to as the "Claims") of any kind or character
imposed upon, arising out of, in connection with, incurred or in any way
attributed or relating to the following:
(i) the ownership, use, operation, possession, or management of
each of the Facilities prior to the Effective Date;
(ii) the breach or failure of any representation, warranty or
covenant made by Sellers or IHS that is contained in this Agreement or
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contained in any other certificates, agreements or Transaction
Documents to which Sellers or IHS is a party;
(iii) any and all Claims relating to any current or former
employee, consultant or independent contractor of the Sellers or any
of the Facilities, including, but not limited to, (A) the termination
or discharge of any current or former employee, consultant, or
independent contractor of Sellers or any of the Facilities, (B) Claims
under federal, state, or local laws, rules or regulations, related to
wages, hours, fair employment practices, unfair labor practices, or
other terms and conditions of employment and claims arising under the
Worker Adjustment and Retraining Notification Act or any analogous
state statute, (C) matters arising from any severance policy, claim,
agreement or contract or (D) any and all Claims with respect to the
matters provided for in Section 7.16 herein;
(iv) any and all Claims that relate to information provided by or
on behalf of any of the Sellers or IHS concerning the Facilities,
Sellers' Assets, Sellers or IHS and their respective affiliates, to
third parties which was used or relied upon to effect the transactions
contemplated in this Agreement and by the other Transaction Documents;
(v) other than for the liens, claims or encumbrances necessary to
effect the transactions contemplated in this Agreement and the other
Transaction Documents, any mortgage, pledge, lien, or encumbrance made
before the Effective Date on any of the Sellers' Assets or the
Facilities and any claims asserted therefrom, other than and except
for the Permitted Liens;
(vi) any and all Claims with respect to any qualified or
non-qualified retirement or benefit plans or arrangements involving
any current or former employee, consultant or independent contractor
of the Sellers or any of the Facilities;
(vii) any and all Claims with respect to admission agreements,
patient contracts, or agreements entered into prior to the Effective
Date with patients or others at any of the Facilities;
(viii) any deficiencies or inaccuracies occurring prior to the
Effective Date with respect to patient funds and accounts associated
therewith at any of the Facilities;
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(ix) any Claims arising out of Sellers' failure to have kept or
maintained patient records and other related records at any of the
Facilities in accordance with applicable Law;
(x) any sums due by any Seller for Medicare and Medicaid
adjustments arising from the operation of any of the Facilities
conveyed pursuant to this Agreement;
(xi) any action or proceeding by an appropriate state or federal
agency having jurisdiction thereof, to revoke, withdraw or suspend any
of the Sellers Licenses or Permits of a Seller applicable to the
Facility owned by such Seller or to terminate the participation of the
Facility owned by any Seller in either the Medicare or Medicaid
Programs, as a result of or caused by the transactions contemplated by
this Agreement and the other Transaction Documents, including, but not
limited to, the execution and delivery of the Master Lease and each of
the Facility Subleases; or
(xii) the violation of any Environmental Law or the existence,
presence or Release of any Hazardous Material based on an event or
condition at or relating to any Facility that commenced or existed
prior to the Effective Date.
Sellers and IHS further covenant and agree to defend the Purchaser
Indemnified Parties on account of said Claims and to pay any judgment against
the Purchaser Indemnified Parties, or any other amount as indicated in this
Section 12.6(a), along with all reasonable costs and expenses relative to any
such Claims, including reasonable and documented attorneys' fees and expenses;
provided, however, that the Purchaser Indemnified Parties shall, nevertheless,
have the right, if they so elect, to participate (with counsel of their
choosing, which counsel must be approved by Sellers and IHS, which approval may
not be unreasonably withheld) in the defense of any such Claim in which they may
be a party without relieving Sellers and IHS, of the obligation to defend the
same. To the extent applicable, the Purchaser Indemnified Parties covenant not
to settle or compromise any Claim under this section without the written consent
of Sellers and IHS, which consent may not be unreasonably withheld or delayed
under the circumstances. Failure to comply with the preceding covenant shall be
deemed a complete waiver of any rights that the Purchaser Indemnified Parties
have or may have under this Section 12.6(a).
(b) Purchaser shall indemnify and hold harmless Sellers and IHS, and
their officers, directors, shareholders, employees, agents, and assigns (the
"Seller Indemnified Parties") from any and all liabilities, obligations, losses,
demands, judgments, actions, suits, causes of action, claims, proceedings,
investigations, citations, matters, damages, penalties, sanctions, costs,
expenses, and disbursements (including, without limitation reasonable
27
attorneys' and consultants' fees and expenses), whether or not subject to
litigation, (hereinafter collectively referred to as the "Claims") of any kind
or character imposed upon, arising out of, in connection with, incurred or in
any way attributed or relating to breach or failure of any representation,
warranty or covenant made by Purchaser that is contained in this Agreement or
contained in any other certificates, agreements or Transaction Documents to
which Purchaser is a party.
Purchaser further covenants and agrees to defend the Seller
Indemnified Parties on account of said Claims and to pay any judgment against
the Seller Indemnified Parties, or any other amount as indicated in this Section
12.6(b), along with all reasonable costs and expenses relative to any such
Claims, including attorneys' fees and expenses; provided, however, that the
Seller Indemnified Parties shall, nevertheless, have the right, if they so
elect, to participate (with counsel of their choosing, which counsel must be
approved by Purchaser, which approval may not be unreasonably withheld) in the
defense of any such Claim in which they may be a party without relieving
Purchaser of the obligation to defend the same. To the extent applicable, the
Seller Indemnified Parties covenant not to settle or compromise any Claim under
this section without the written consent of Purchaser, which consent may not be
unreasonably withheld or delayed under the circumstances. Failure to comply with
the preceding covenant shall be deemed a complete waiver of any rights that the
Seller Indemnified Parties have or may have under this Section 12.6(b).
(c) The indemnities set forth in this Section 12.6 shall remain
operative and in full force and shall survive the execution and performance
hereof and the execution and delivery of this Agreement and the other
Transaction Documents.
12.7 Liability for Representations and Warranties Before the Effective
Date. Until the release of the Closing documents to the parties from escrow
pursuant to the Closing Escrow Agreement on the Effective Date, Purchaser's,
Sellers' and IHS's sole remedy for any breach of Sellers', IHS's or Purchaser's
representations and warranties hereunder shall be to terminate this Agreement,
whereupon the parties hereto shall have no further obligations to each other in
respect of this Agreement.
ARTICLE XIII
MISCELLANEOUS
13.1 Entire Agreement; Amendment. This Agreement and the Transaction
Documents constitute the entire agreement among the parties pertaining to the
subject matter hereof, and supersede all prior and contemporaneous agreements,
understandings, negotiations and discussions of the parties, whether oral or
written, and there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof, except as
specifically set forth herein or therein. No amendment, supplement,
28
modification, waiver or termination of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision of this Agreement, whether or not similar, nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
13.2 Governing Law. THIS AGREEMENT AND THE TRANSACTION DOCUMENTS SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH LAWS OF THE STATE OF NEW YORK. SELLERS
AND IHS CONSENT TO IN PERSONAM JURISDICTION BEFORE THE STATE AND FEDERAL COURTS
OF THE STATE OF NEW YORK, AND AGREE THAT ALL DISPUTES CONCERNING THIS AGREEMENT
MAY BE HEARD, AT PURCHASER'S OPTION, IN THE STATE AND FEDERAL COURTS LOCATED IN
THE STATE OF NEW YORK. SELLERS AND IHS AGREE THAT SERVICE OF PROCESS MAY BE
EFFECTED UPON SELLERS AND IHS UNDER ANY METHOD PERMISSIBLE UNDER THE LAWS OF THE
STATE OF NEW YORK AND IRREVOCABLY WAIVE ANY OBJECTION TO VENUE IN THE STATE AND
FEDERAL COURTS OF THE STATE OF NEW YORK.
13.3 Assignment. This Agreement and each party's respective rights
hereunder may not be assigned at any time without the prior written consent of
the other parties hereto.
13.4 Notices. All communications, notices and disclosures required or
permitted by this Agreement shall be in writing and shall be deemed to have been
given at the earlier of the date when actually delivered to an officer of the
other party or when deposited in the United States mail, certified or registered
mail, postage prepaid, return receipt requested, by personal delivery or by
overnight courier service with signed receipt, and addressed as follows, unless
and until either of such parties notifies the other in accordance with this
Section of a change of address:
To IHS and any Seller: Integrated Health Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
Copy to: Blass & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
29
To Purchaser: Monarch Properties, LP
0000 Xxxxxxx Xxx Xxxxxxxxx - Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
Copy to: LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Xx., Esq.
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
13.5 Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof or be used as
interpreting the meaning of this Agreement.
13.6 Interpretation. To the extent any conflict exists between the terms
and conditions of this Agreement and the terms and conditions of any other
Transaction Documents, the terms and conditions of such other Transaction
Documents shall govern and control.
13.7 Severability. If any provision, clause or part of this Agreement, or
the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
13.8 No Reliance. No third party, other than a successor by operation of
law or an assignee permitted by this Agreement, is entitled to rely on any of
the representations, warranties and agreements contained in this Agreement and
no party to this Agreement assumes any liability to any third party, other than
an assignee permitted by this Agreement, because of any reliance on the
representations, warranties and agreements contained in this Agreement.
13.9 Binding. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors and assigns.
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13.10 Survival. All covenants and agreements of the parties to be performed
in this Agreement and all representations, warranties, covenants and indemnities
of the parties in this Agreement shall survive the Closing Date.
13.11 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Facilities as set forth on Schedule 13.11 hereto. The parties agree
that the Personal Property has nominal value and therefore no amount of the
Purchase Price is being allocated to it. Each party agrees to timely file tax
Form 8594 in accordance with the allocations to which the parties have so
agreed.
13.12 Dispute Attorneys' Fees and Expenses. In the event of a dispute
between the parties to this Agreement with respect to the interpretation of
enforcement of the terms hereof, the prevailing party in any action resulting
therefrom shall be entitled to collect from the other its reasonable and
documented attorneys' fees and expenses, including its attorneys' fees and
expenses on appeal.
SIGNATURE PAGES FOLLOW
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IN WITNESS WHEREOF, the parties have caused this Facilities Purchase
Agreement to be duly executed and delivered as a sealed instrument as of the day
and year first above written.
MONARCH PROPERTIES, LP
By: MP Operating Inc.,
its General Partner
By:
-----------------------------------------
Name: Xxxx X. Xxxxx
---------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
INTEGRATED HEALTH SERVICES, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
---------------------------------------
Title: Senior Vice President
--------------------------------------
[INSERT ALL SELLERS]
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
---------------------------------------
Title: Senior Vice President
--------------------------------------
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