EXHIBIT 2.2
AMENDMENT NUMBER 1 TO
ASSET PURCHASE AGREEMENT
This Amendment Number 1 to Asset Purchase Agreement (the "Agreement")
is entered into as of this 2nd day of October, 1996, by and among Mariner Health
Group, Inc., a Delaware corporation ("Mariner"), its wholly-owned subsidiary
Mariner Health of Maryland, Inc., a Delaware corporation (the "Buyer"), the
Sellers and the Principals;
WHEREAS, Mariner, Buyer, Sellers and Principals entered into that
certain Asset Purchase Agreement dated as of July 31, 1996 (the "Asset Purchase
Agreement"); and
WHEREAS, the parties to the Asset Purchase Agreement desire to amend
the Asset Purchase Agreement to provide for a later closing with respect to the
purchase and sale of the Purchased Assets and assumption of the Assumed
Liabilities relating to Xxxx Burnie (as defined herein); and
WHEREAS, the parties to the Asset Purchase Agreement desire to further
amend the Asset Purchase Agreement to provide for a Closing Date of October 3,
1996.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mariner, Buyer, Sellers and
Principals hereby agree as follows:
I. AMENDMENTS TO ASSET PURCHASE AGREEMENT.
1. SECTION 2.1 SHALL BE AMENDED BY ADDING THE FOLLOWING SENTENCE TO THE END OF
THE FIRST PARAGRAPH OF SUCH SECTION:
"Notwithstanding the foregoing, the Purchased Assets conveyed at
Closing shall not include the assets owned by Bay Meadow Nursing and
Rehabilitation Center, LLC, a Maryland Limited Liability Company, and used in
the operation of the 200-bed licensed nursing facility known as Allegis Health
and Rehabilitation Center - Xxxx Burnie ("Xxxx Burnie") until such time as the
closing with respect to the purchase and sale of such assets (the "Xxxx Burnie
Asset Closing"), nor shall Buyer assume the Assumed Liabilities with respect to
Xxxx Burnie until the Xxxx Burnie Asset Closing. At the time of the Xxxx Burnie
Asset Closing, the Purchased Assets shall include only the Purchased Assets
associated with Xxxx Burnie and the Assumed Liabilities shall include only the
Assumed Liabilities associated with Xxxx Burnie.
2. SECTION 2.7 IS AMENDED BY ADDING THE FOLLOWING SENTENCE AT THE END OF
SUBSECTION (A):
"Notwithstanding the foregoing, the parties agree that the portion of
the Purchase Price payable at Closing and which would have been allocable to
Xxxx Burnie (which amount is stipulated to be $14,041,708, prior to making any
adjustment for prepaid expenses or similar apportionments required hereunder)
shall not be due and payable until the Xxxx Burnie Asset Closing.
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3. SECTION 2.7 SHALL BE FURTHER AMENDED BY ADDING THE FOLLOWING NEW SUBSECTION
(n):
"(n) On the Closing Date, the foregoing adjustments shall not be made
to the extent such adjustment relates to the assets or liabilities of Xxxx
Burnie. On the date of the Xxxx Burnie Asset Closing, the foregoing adjustments
shall be made only to the extent they relate to the assets and liabilities of
Xxxx Burnie."
4. SECTION 2.7 SHALL BE AMENDED BY ADDING THE FOLLOWING SENTENCE TO THE END OF
SUBSECTION (i):
"The parties agree that in full satisfaction of any reduction in
Purchase Price contemplated by this Section 2.7(i), the Seller Parties shall
make the payment referred to in Section 6.22 of this Agreement."
5. SECTION 2.8 SHALL BE AMENDED BY ADDING THE FOLLOWING SENTENCE AT THE END OF
SECTION 2.8(b):
"Notwithstanding anything above or in the previous Section 2.8(a), the
purchase and sale of the Purchased Assets and assumption of the Assumed
Liabilities relating to Xxxx Burnie and the payment therefore shall not take
place on the Closing Date, but will instead take place on November 1, 1996."
6. SECTION 2.12 SHALL BE AMENDED BY (i) INSERTING THE LANGUAGE UNDERLINED BELOW
IN THE FIRST SENTENCE OF SUCH SECTION 2.12 (ii) CHANGING OCTOBER 2 TO OCTOBER 3
AND (iii) ADDING A NEW LAST SENTENCE TO SUCH SECTION SO THAT SECTION 2.12, AS
AMENDED, READS IN ITS ENTIRETY AS SET FORTH BELOW:
"2.12 Closing. Subject to the satisfaction or waiver of all conditions
precedent set forth in Article IX, the closing of the purchase and sale of the
Purchased Assets and the assumption of the Assumed Liabilities other than the
Purchased Assets and Assumed Liabilities of Xxxx Burnie (the "Closing") shall be
held at the offices of Xxxxxxxxx, Xxxxxxx & Xxxxx, Xxxx Xxxxxxx, 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, on October 3, 1996 as of October 1,
1996 or on such later date as the parties may agree, but in any event prior to
November 2, 1996; provided, however, if the Closing occurs any time after the
second day of a calendar month the Purchase Price shall be increased by an
amount calculated as interest on the portion of the Purchase Price payable at
Closing at a rate of 8.25% per annum, for each day between the second of the
month and the Closing Date (excluding the first day of the month and including
the Closing Date). If any condition in Article IX is not satisfied in any
material respect (or is not duly waived) at the Closing, any party whose
obligations are subject to such condition may extend (but in no event later than
November 2, 1996) the period in which the Closing must be consummated (during
which period each other party shall use its respective reasonable efforts to
cause all such conditions to be satisfied in all material respects) and the
Closing shall occur four (4) business days after the satisfaction of such
conditions in accordance with the extension granted (assuming all other
conditions contained in Article IX are satisfied as of such fourth business
day). If all conditions are determined to be satisfied in all material respects
(or are duly waived) at the Closing (whether or not delayed), the Closing shall
be consummated. Buyer and each of the
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Seller Parties shall use all reasonable efforts, on or prior to the Closing, to
execute and deliver all such instruments, documents or certificates as may be
necessary or advisable for the consummation at the Closing of the transactions
contemplated by this Agreement, including all warranty deeds, bills of sale,
instruments of assumption, endorsements, consents, assignments and other
agreements and instruments of conveyance and assignment reasonably necessary or
appropriate to vest in Buyer all right, title and interest in, to and under the
Purchased Assets. The parties agree that if the Closing is delayed beyond
October 5, 1996 solely by reason of a dispute under Section 2.7(c), the Closing
will occur three business days after such dispute is resolved, but in any event
prior to November 2, 1996. Subject to the satisfaction or waiver of all
conditions precedent set forth in Article IX as the same apply to Xxxx Burnie,
the closing of the purchase and sale of the Purchased Assets and Assumed
Liabilities of Xxxx Burnie shall be held at the offices of Xxxxxxxxx, Xxxxxxx &
Xxxxx on November 1, 1996."
7. SECTION 2.13 SHALL BE AMENDED BY ADDING THE LANGUAGE UNDERLINED BELOW TO THE
DEFINITION OF "FIRST POST-CLOSING AMOUNT" SO THAT SUCH DEFINITION, AS AMENDED,
READS IN ITS ENTIRETY AS SET FORTH BELOW:
"First Post-Closing Amount" means the product obtained by Multiplying
(x) 6.7 (or 6.4 if the Bethesda Sale does not occur prior to Closing) by (y) the
product obtained by multiplying the Second Annualized Ratio by Net Operating
Income for the period reported in the Interim Income Statement after deducting
from Net Operating Income (i) (if the Bethesda Sale occurs prior to the Closing)
fifty percent (50%) of the Net Operating Income of Bethesda L.L.C., as adjusted
to reflect the net effect of all Purchase Price adjustments set forth in Section
2.7 (other than those in Section 2.7(c)) and (ii) (if the Xxxx Burnie Asset
Closing does not occur) 100% of the Net Operating Income of Xxxx Burnie.
Provided that the amount determined above shall in no event be less than, the
Base Amount. Attached hereto as Exhibit E is an example, for purposes of
illustration only of this calculation based on Sellers' budgeted results for the
eight months ending August 31, 1996.
8. SECTION 2.14 SHALL BE AMENDED BY ADDING THE LANGUAGE UNDERLINED BELOW TO THE
DEFINITION OF "POST-CLOSING AMOUNT" SO THAT SUCH DEFINITION, AS AMENDED, READS
IN ITS ENTIRETY AS SET FORTH BELOW:
"Post-Closing Amount" means the product obtained by multiplying (x) 6.7
(or 6.4 if the Bethesda Sale does not occur prior to Closing) by (y) Net
Operating Income for the period reported in the Final Income Statement after
deducting from Net Operating Income (i) (if the Bethesda Sale occurs prior to
the Closing) fifty percent (50%) of the Net Operating Income of Bethesda L.L.C.,
as adjusted to reflect the net effect of all Purchase Price adjustments set
forth in Section 2.7 (other than those in Section 2.7(c)) and (ii) (if the Xxxx
Burnie Asset Closing does not occur) 100% of the Net Operating Income of Xxxx
Burnie. Provided that the amount determined above shall in no event be less than
the Base Amount. Attached hereto as Exhibit H is an example, for purposes of
illustration only, of this calculation based on Sellers' budgeted results for
the year ending December 31, 1996.
9. THE FOLLOWING NEW SECTION 6.22 SHALL BE ADDED TO THE ASSET PURCHASE
AGREEMENT:
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"6.22 Beechwood Project Payments: If Buyer proceeds with the
acquisition and development of the Beechwood Project pursuant to the contracts
of Heritage Harbour and Beechwood related thereto (the "Beechwood Contracts")
and Buyer or Beechwood is thereby required to pay any or all of the liabilities
identified as Beechwood Project liabilities on the attached Schedule 6.22, the
Seller Parties will reimburse Buyer upon the later of thirty (30) days from the
receipt by Seller Parties of notice of such payment obligation or five (5) days
from the date of actual payment up to a maximum amount of $436,000. Sellers
shall not be required to pay any other amounts payable under the Beechwood
Contracts."
10. SECTION 11.2 SHALL BE AMENDED BY ADDING THE FOLLOWING CLAUSE TO THE END OF
THE LAST SENTENCE THEREOF:
"provided, further, that the immediately preceding clause (i) above
shall not apply to any failure by Seller Parties to discharge their obligations
under Section 6.22 of the Agreement."
11. THE FOLLOWING NEW SECTION 12.17 SHALL BE ADDED TO THE ASSET PURCHASE
AGREEMENT:
12.17 Xxxx Burnie Amendment. Notwithstanding anything in the this
Agreement to the contrary, all deliveries, calculations, assignments,
certifications, covenants, payments, assumptions, representations and
warranties, indemnities, or action of whatever nature which is required by the
terms of this Agreement to occur or exist on or before the Closing Date shall,
with respect to the purchase and sale of the assets of Xxxx Burnie be required
to occur or exist on or prior to the date on which the purchase and sale of the
Xxxx Burnie assets shall occur and not on or prior to the Closing Date. The
parties agree that the terms of the Agreement are hereby modified so as to
achieve the foregoing.
12. THE AGREEMENT IS HEREBY AMENDED BY ADDING THE ATTACHED SCHEDULE 6.22.
II. REPRESENTATIONS AND WARRANTIES; COVENANTS
1. Mariner, Buyer, Sellers and Principals each hereby represents and
warrants that it has the right, power and authority to execute, deliver and
perform this Agreement and that it shall, upon execution, constitute a valid and
binding amendment to the Asset Purchase Agreement pursuant to the terms of
Section 12.7 of the Asset Purchase Agreement.
III. MISCELLANEOUS.
1. This Amendment Number 1 to Asset Purchase Agreement may be signed in
any number of counterparts, which together will be one and the same instrument.
This Amendment Number 1 to Asset Purchase Agreement shall be effective whenever
each party shall have signed at least one such counterpart.
2. This Amendment Number 1 to Asset Purchase Agreement shall be
governed by the laws of the State of Maryland and for all purposes shall be
construed in accordance with the laws of such state.
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3. All terms not otherwise defined herein shall have the meanings
ascribed in the Asset Purchase Agreement.
4. Except as amended or modified hereby, all provisions of the Asset
Purchase Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties on the date first above written.
MARINER:
MARINER HEALTH GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxx
-------------------------
Title: Vice President
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BUYER:
MARINER HEALTH OF MARYLAND, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
-------------------------
Title: Vice President
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SELLER PARTY SIGNATURE PAGE
IN WITNESS WHEREOF, and intending to be legally bound, the Indemnitors
have hereunto set their hands and seals as of the day and year first above
written.
WITNESS: SELLERS:
ALLEGIS HEALTH SERVICES, INC.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
Chief Executive Officer
CIRCLE MANOR NURSING HOME, INC.
/s/ Xxxxxxx Xxxx By: /s/ Xxxxxx Xxxxxxxx
------------------------ ----------------------------
Xxxxxx Xxxxxxxx
Vice President
ARCOLA NURSING AND REHABILITATION
CENTER, INC.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
Chief Executive Officer
TECHNICARE, L.L.C.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx Xxxxx
------------------------ ----------------------------
Xxxx Xxxxx
President/CEO
REHAB SOLUTIONS, L.L.C.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
Vice President
BAY MEADOW NURSING AND
REHABILITATION CENTER, L.L.C.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
Chief Executive Officer
CAMDEN YARDS NURSING AND
REHABILITATION CENTER L.L.C.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
Chief Executive Officer
GLOBAL HEALTHCARE CENTER-
BETHESDA, L.L.C.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
President
KENSINGTON GARDENS NURSING AND
REHABILITATION CENTER, L.L.C.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Chief Executive Officer
GLOBAL HEALTHCARE CENTER-
OVERLEA, L.L.C.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
Chief Executive Officer
ALLEGIS HEALTH AND REHABILITATION
CENTER -- SOUTHERN MARYLAND, L.L.C.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
Chief Executive Officer
PRINCIPALS:
TECHNICARE PHARMACY, INC.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
President
GLOBAL HEALTH INVESTMENT
ASSOCIATES, L.L.C.
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
Chief Executive Officer
/s/ Xxxxxxx Xxxx By: /s/ Xxxx X. Xxxx
------------------------ ----------------------------
Xxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxxx
/s/ Xxx Xxxxxxxx
--------------------------------
Xxx Xxxxxxxx
Amendment Number 1 to Asset Purchase Agreement dated October 3, 1996 between and
among Mariner Health Group, Inc.; Mariner Health of Maryland, Inc.; Allegis
Health Services, Inc.; Technicare, L.L.C.; Rehab Solutions, L.L.C.; Bay Meadow
Nursing and Rehabilitation Center, L.L.C.; Camden Yards Nursing and
Rehabilitation Center, L.L.C.; Global Healthcare Center-Overlea, L.L.C.; Allegis
Health and Rehabilitation Center - Southern Maryland, L.L.C.; Global Healthcare
Center - Bethesda, L.L.C.; Circle Manor Nursing Home, Inc.; Arcola Nursing and
Rehabilitation Center, Inc.; Technicare Pharmacy, Inc.; Global Health Investment
Associates, L.L.C.; Xxxx X. Xxxx; Xxxxxx X. Xxxxxxxx; Xxxxxx X. Xxxxxxxx; Xxxxx
X. Xxxxxx; Xxxx X. Xxxxxxxxx and Xxx Xxxxxxxx.
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Schedules and Exhibits Omitted in Accordance With
Item 601(b)(2) of Regulation S-K
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Schedules
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Schedule 6.22 Summary of Accrued Obligations of Third Parties as of 9/30/96.
Exhibits
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Exhibit E -- Sample of Calculation of Sellers' Budgeted Results for the
Eight Months Ending August 31, 1996
Exhibit H -- Sample Calculation of Sellers' Budgeted Results for the
Year Ending December 31, 1996
Mariner Health Group, Inc. will furnish supplementally a copy of any omitted
schedule or exhibit to the Securities and Exchange Commission upon request,
provided however that Mariner Health Group, Inc. may request confidential
treatment pursuant to Rule 24B-2 of the Exchange Act for any schedule or exhibit
so furnished.
