EXHIBIT 10.50
PURCHASE AND SALE AGREEMENT
BY AND AMONG
MPT OPERATING PARTNERSHIP, L.P. AND
MPT OF REDDING, LLC
(COLLECTIVELY, THE "PURCHASER PARTIES");
AND
VIBRA HEALTHCARE, LLC ("VIBRA")
AND
NORTHERN CALIFORNIA REHABILITATION HOSPITAL, LLC ("VIBRA SUB")
(COLLECTIVELY, THE "SELLER PARTIES ")
DATED AS OF JUNE 30, 2005
Table of Contents
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ARTICLE I DEFINED TERMS......................................................................................... 2
Section 1.1. Certain Defined Terms...................................................................... 2
Section 1.2. Interpretation; Terms Generally............................................................ 8
ARTICLE II PURCHASE AND SALE OF ASSETS, ASSUMPTION OF LIABILITIES............................................... 9
Section 2.1. Purchase and Sale of Assets................................................................ 9
Section 2.2. Excluded Liabilities....................................................................... 9
ARTICLE III PURCHASE PRICE...................................................................................... 10
Section 3.1. Purchase Price............................................................................. 10
Section 3.2. Taxes, Rentals, Utilities.................................................................. 10
Section 3.3. Allocation of Purchase Price............................................................... 10
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER PARTIES..................................... 10
Section 4.1. Organization............................................................................... 11
Section 4.2. Authorization and Enforceability........................................................... 11
Section 4.3. Absence of Conflicts....................................................................... 11
Section 4.4. Consents and Approvals..................................................................... 12
Section 4.5. Financial Statements....................................................................... 12
Section 4.6. No Undisclosed Liabilities................................................................. 12
Section 4.7. Accounts Receivable........................................................................ 12
Section 4.8. Absence of Changes......................................................................... 13
Section 4.9. Licenses................................................................................... 14
Section 4.10. Accreditation; Medicare and Medicaid; Third Party Payors.................................. 14
Section 4.11. HIPAA Compliance.......................................................................... 15
Section 4.12. Healthcare Regulatory Matters............................................................. 15
Section 4.13. Taxes..................................................................................... 16
Section 4.14. Good Title to Assets...................................................................... 17
Section 4.15. Title and Condition of the Real Property.................................................. 17
Section 4.16. Condition of Personal Property............................................................ 18
Section 4.17. Compliance with Environmental Laws........................................................ 18
Section 4.18. Insurance................................................................................. 19
Section 4.19. Litigation................................................................................ 19
Section 4.20. Contracts, Obligations and Commitments.................................................... 20
Section 4.21. Compliance with Law....................................................................... 20
Section 4.22. Xxxx-Xxxxxx Obligations................................................................... 20
Section 4.23. Brokers................................................................................... 21
Section 4.24. Records................................................................................... 21
Section 4.25. Existing Leases........................................................................... 21
Section 4.26. Representations Complete.................................................................. 21
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Table of Contents
(continued)
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ARTICLE V REPRESENTATIONS AND WARRANTIES BY THE PURCHASER PARTIES............................................... 21
Section 5.1. Organization............................................................................... 21
Section 5.2. Authorization; Enforcement, Absence of Conflicts........................................... 22
Section 5.3. Binding Agreement.......................................................................... 22
Section 5.4. Litigation................................................................................. 22
Section 5.5. Brokers.................................................................................... 22
Section 5.6. Compliance with Law........................................................................ 22
ARTICLE VI TITLE AND SURVEY..................................................................................... 23
Section 6.1. Survey..................................................................................... 23
Section 6.2. Title Insurance............................................................................ 23
ARTICLE VII PRE-CLOSING COVENANTS............................................................................... 24
Section 7.1. No Shop.................................................................................... 24
Section 7.2. Access; Confidentiality.................................................................... 24
Section 7.3. Schedule Updates........................................................................... 25
Section 7.4. Conduct of Business by the Seller Parties Pending the Closing.............................. 25
Section 7.5. Cooperation................................................................................ 27
Section 7.6. Regulatory and other Authorizations, Notices and Consents.................................. 27
Section 7.7. Mutual Covenants........................................................................... 28
Section 7.8. Public Announcements....................................................................... 28
ARTICLE VIII CLOSING CONDITIONS................................................................................. 28
Section 8.1. Conditions to the Obligations of the Seller Parties........................................ 28
Section 8.2. Conditions to the Obligations of the Purchaser Parties..................................... 28
ARTICLE IX CLOSING.............................................................................................. 29
Section 9.1. Closing Date............................................................................... 29
Section 9.2. The Seller Parties' Closing Date Deliverables.............................................. 29
Section 9.3. Purchaser Parties' Closing Date Deliverables............................................... 31
ARTICLE X TERMINATION........................................................................................... 32
Section 10.1. Termination............................................................................... 32
Section 10.2. Notice and Effect......................................................................... 32
ARTICLE XI CERTAIN POST-CLOSING COVENANTS....................................................................... 32
Section 11.1. Post-Closing Access to Information........................................................ 32
Section 11.2. Licensure, LTAC Conversion................................................................ 33
Section 11.3. Ocadian Purchase Agreement Indemnification................................................ 33
ARTICLE XII INDEMNIFICATION..................................................................................... 33
Section 12.1. The Seller Parties' Agreement to Indemnify................................................ 33
Section 12.2. The Purchaser Parties' Agreement to Indemnify............................................. 34
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Table of Contents
(continued)
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Section 12.3. Notification and Defense of Claims........................................................ 35
Section 12.4. Investigations............................................................................ 36
Section 12.5. Treatment of Indemnification Payments..................................................... 36
Section 12.6. Exclusive Remedy.......................................................................... 36
ARTICLE XIII DISPUTE RESOLUTION................................................................................. 37
Section 13.1. GOVERNING LAW, JURISDICTION AND VENUE..................................................... 37
ARTICLE XIV MISCELLANEOUS....................................................................................... 37
Section 14.1. Assignment................................................................................ 37
Section 14.2. Notice.................................................................................... 37
Section 14.3. Calculation of Time Period................................................................ 39
Section 14.4. Captions.................................................................................. 39
Section 14.5. Entire Agreement; Modification............................................................ 39
Section 14.6. Schedules and Exhibits.................................................................... 39
Section 14.7. Further Assurances........................................................................ 39
Section 14.8. Counterparts.............................................................................. 39
Section 14.9. Expenses.................................................................................. 40
Section 14.10. Syndication.............................................................................. 40
Section 14.11. Securities Offering and Filings.......................................................... 40
Section 14.12. Binding Effect........................................................................... 40
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as
of June 30, 2005 by and among MPT OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership ("MPT"), and MPT OF REDDING, LLC, a Delaware limited
liability company (the "Acquisition Sub") (MPT and the Acquisition Sub being
herein referred to, collectively, as the "Purchaser Parties"); and VIBRA
HEALTHCARE, LLC, a Delaware limited liability company ("Vibra"), and NORTHERN
CALIFORNIA REHABILITATION HOSPITAL, LLC, a Delaware limited liability company
(the "Vibra Sub") (Vibra and the Vibra Sub being herein referred to,
collectively, as the "Seller Parties").
W I T N E S S E T H:
WHEREAS, Vibra is a party (and has assigned certain of its rights and
obligations thereunder to Vibra Sub) to that certain Asset Purchase Agreement
dated June 15, 2005 between Ocadian Care Centers, LLC ("Ocadian") and Vibra (the
"Ocadian Purchase Agreement") pursuant to which Ocadian has agreed to sell and
assign to Vibra, and Vibra has agreed to purchase and assume from Ocadian, the
Northern California Rehabilitation Hospital located in Redding California (the
"Hospital"), including all of the buildings, structures and improvements related
to the Hospital and owned by Ocadian (the "Owned Real Property"), as well as
Ocadian's leasehold interest in the real property on which the Owned Property is
situated, as more particularly described in the Ocadian Purchase Agreement;
WHEREAS, Ocadian leases the real property on which the Owned Real Property is
situated (the "Leased Real Property") (the Owned Real Property and the Leased
Real Property being hereinafter referred to, collectively, as the "Real
Property") pursuant to the terms and conditions of that certain Ground Lease
Agreement dated November 14, 1997 by and between National Medical Specialty
Hospital of Redding, Inc. and Guardian Postacute Services, Inc., the
predecessor-in-name of Ocadian (the "Ground Lease");
WHEREAS, subject to the terms and conditions hereinafter set forth, Seller
Parties desires to sell and assign to the Acquisition Sub, and the Acquisition
Sub desires to purchase and assume from Seller Parties, the Owned Real Property,
the Leased Real Property and certain other assets associated or used in
connection with the Hospital, all on the terms and conditions set forth in this
Agreement; and
WHEREAS, contemporaneously with the closing of such purchase and sale, Vibra Sub
shall lease back the Real Property from the Acquisition Sub pursuant to a lease
in the form of Exhibit A hereto (the "Lease").
WHEREAS, until its change in ownership application is approved by the California
Department of Health Services ("DHS"), Vibra Sub intends to sublease the Real
Property and other assets back to Ocadian and to operate the same for Ocadian
pursuant to licenses and provider numbers pursuant to terms and conditions of
the Management Agreement (as hereinafter defined).
NOW, THEREFORE, in consideration of the promises and mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1. CERTAIN DEFINED TERMS. Capitalized terms used herein shall have the
respective meanings ascribed to them in this Section 1.1.
"Acquisition Sub" shall have the meaning set forth in the preamble to this
Agreement.
"Affiliate" "means, with respect to any Person (i) any Person that, directly or
indirectly, controls or is controlled by or is under common control with such
Person, (ii) any other Person that owns, beneficially, directly or indirectly,
10% or more of the outstanding capital stock, shares or equity interests of such
Person, or (iii) any officer, director, employee, partner, member, manager or
trustee of such Person or any Person controlling, controlled by or under common
control with such Person (excluding trustees and persons serving in similar
capacities who are not otherwise an Affiliate of such Person). For the purposes
of this definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
through the ownership of voting securities or otherwise.
"Appraisal" means that certain appraisal of the Real Property in form and
substance, and prepared by a Person, satisfactory to MPT in its sole discretion.
"Appraised Value" means the fair market value of the Real Property as set forth
in the Appraisal.
"Assets" shall have the meaning set forth in Section 2.1 hereof.
"Assumed Liabilities" shall have the meaning set forth in Section 2.2 hereof.
"Balance Sheet" shall have the meaning set forth in Section 4.5 hereof.
"Balance Sheet Date" shall have the meaning set forth in Section 4.5 hereof.
"Business" means the operation of the Hospital and the engagement in and pursuit
and conduct of any business venture or activity related thereto.
"Business Day" means any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which banking institutions in New York, New York are
authorized or required by law, regulation or executive order to close.
"CMS" means the Centers for Medicare and Medicaid Services.
"Claim" shall have the meaning set forth in Section 4.19 hereof.
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"Closing" shall have the meaning set forth in Section 9.1 hereof.
"Closing Date" shall have the meaning set forth in Section 9.1 hereof.
"Code" means the United States Internal Revenue Code of 1986, as amended through
the date hereof, and all regulations thereunder. Any reference herein to a
specific section or sections of the Code shall be deemed to include a reference
to any corresponding provision of future law.
"Confidentiality Agreement" shall have the meaning set forth in Section 7.2(c)
hereof.
"Contracts" shall have the meaning set forth in Section 4.20 hereof.
"Deed" shall have the meaning set forth in Section 9.2(b) hereof.
"DHS" shall have the meaning set forth in the recitals to this Agreement.
"Environmental Claim" means any Claim, action, cause of action, investigation or
notice (written or oral) by any Governmental Entity or other Person alleging
actual or potential liability for investigatory, cleanup or governmental
response costs, or natural resources or property damages, or personal injuries,
attorney's fees or penalties relating to (i) the presence, or release into the
environment, of any Hazardous Materials at any location owned, leased or
operated by the Seller Parties or Ocadian, now or in the past, or (ii)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Law" means each federal, state, local and foreign law and
regulation relating to pollution, protection or preservation of human health or
the environment, including ambient air, surface water, ground water, land
surface or subsurface strata, and natural resources, and including each law and
regulation relating to emissions, discharges, releases or threatened releases of
Hazardous Materials, or otherwise relating to the manufacturing, processing,
distribution, use, treatment, generation, storage, containment (whether above
ground or underground), disposal, transport or handling of Hazardous Materials,
or the preservation of the environment or mitigation of adverse effects thereon
and each law and regulation with regard to record keeping, notification,
disclosure and reporting requirements respecting Hazardous Materials, including,
without limitation, the Resource Conservation and Recovery Act of 1976, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, the
Hazardous Materials Transportation Act, the Federal Water Pollution Control Act,
the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the
Safe Drinking Water Act, and all similar federal, state and local environmental
statutes, ordinances and the regulations, orders, or decrees now or hereafter
promulgated thereunder, in each case as amended from time to time.
"Equity Constituents" means, with respect to any Person, as applicable, the
members, general or limited partners, shareholders, stockholders or other
Persons, however designated, who are the owners of the issued and outstanding
equity or ownership interests of such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
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"Exception Documents" means true, correct, current and legible copies of each
document listed as an exception to title on the Title Commitment.
"Existing Leases" means those certain six (6) lease agreements in effect as of
the date hereof (other than the Lease) between Affiliates of MPT and Affiliates
of Vibra.
"Excluded Liabilities" shall have the meaning set forth in Section 2.2 hereof.
"Financial Statements" shall have the meaning set forth in Section 4.5 hereof.
"Fixtures" means all permanently affixed non-medical equipment, machinery,
fixtures, and other items of real property, including all components thereof,
now and hereafter located in, on or used in connection with, and permanently
affixed to or incorporated into the Improvements, including, without limitation,
all furnaces, boilers, heaters, electrical equipment, heating, plumbing,
lighting, ventilating, refrigerating, incineration, air and water pollution
control, waste disposal, air-cooling and air-conditioning systems and apparatus,
sprinkler systems and fire and theft protection equipment, and built-in vacuum,
cable transmission, oxygen and similar systems, all of which, to the greatest
extent permitted by law, are hereby deemed by the parties hereto to constitute
real estate, together with all replacements, modifications, alterations and
additions thereto.
"GAAP" means United States generally accepted accounting principles as in effect
from time to time. Any accounting term used herein and not specifically defined
herein shall be construed in accordance with GAAP.
"Governing Documents" means, with respect to any Person, as applicable, such
Person's charter, articles or certificate of incorporation, formation or
organization, bylaws or other documents or instruments which establish and/or
set forth the rules, procedures and rights with respect to such Person's
governance, including, without limitation, any stockholders, limited liability
company, operating or partnership agreement related to such Person, in each case
as amended, restated, supplemented and/or modified and in effect as of the
relevant date.
"Governmental Entity" means any national, federal, regional, state, local,
provincial, municipal, foreign or multinational court or other governmental or
regulatory authority, administrative body or government, department, board,
body, tribunal, instrumentality or commission.
"Government Programs" shall have the meaning set forth in Section 4.10 hereof.
"Ground Lease" shall have the meaning set forth in the recitals to this
Agreement.
"Hazardous Materials" means any substance deemed hazardous under any
Environmental Law, including, without limitation, asbestos or any substance
containing asbestos, the group of organic compounds known as polychlorinated
biphenyls, flammable explosives, radioactive materials, infectious wastes,
biomedical and medical wastes, chemicals known to cause cancer or reproductive
toxicity, lead and lead-based paints, radon, pollutants, effluents,
contaminants, emissions or related materials and any items included in the
definition of hazardous or toxic wastes, materials or substances under any
Environmental Law.
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"Healthcare Fraud Laws" shall have the meaning set forth in Section 4.12(a)
hereof.
"HIPAA" shall have the meaning set forth in Section 4.11 hereof.
"Hospital" shall have the meaning set forth in the recitals to this Agreement.
"Improvements" means all buildings, improvements, structures and Fixtures now or
on the Closing Date located on the Leased Real Property, including, without
limitation, landscaping, parking lots and structures, roads, drainage and all
above ground and underground utility structures, equipment systems and other
so-called "infrastructure" improvements.
"Indebtedness" of any Person means, without duplication, (a) all liabilities and
obligations, contingent or otherwise, of such Person: (i) in respect of borrowed
money (whether secured or unsecured), (ii) under conditional sale or other title
retention agreements relating to property or services purchased and/or sold by
such Person, (iii) evidenced by bonds, notes, debentures or similar instruments,
(iv) for the payment of money relating to a capitalized lease obligation, (v)
evidenced by a letter of credit or a reimbursement obligation of such Person
with respect to any letter of credit, (vi) pursuant to any guarantee, or (vii)
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) a Lien on the assets or property of
such Person, and (b) all liabilities and obligations of others of the kind
described in the preceding clause (a) and otherwise that (i) such Person is
responsible or liable for, directly or indirectly, as obligor, guarantor, surety
or otherwise, or (ii) which are secured by a Lien on any of the assets or
property of such Person.
"Indemnified Party" shall have the meaning set forth in Section 12.3(a) hereof.
"Indemnifying Party" shall have the meaning set forth in Section 12.3(a) hereof.
"Knowledge," "to the knowledge or best knowledge of" or similar words or phrases
means, with respect to any Person, such Person's actual or deemed knowledge of a
particular fact or matter if (i) any of such Person's current or former officers
or directors (or other Persons however denominated, currently or formerly
exercising similar authority with respect to such Person) (a Person's "Knowledge
Group"), including, but not limited to, in the case of the Seller Parties, Xxxx
X. Xxxxxxxxx and/or Xxxxx Xxxxx, has actual knowledge of such fact or matter; or
(ii) any of such Person's Knowledge Group would be expected to discover or
otherwise become aware of such fact or matter after conducting a reasonably
diligent inquiry.
"Law" means any federal, state or local statute, rule, regulation, ordinance,
order, code, policy or rule of common law, now or hereafter in effect, and in
each case as amended, and any judicial or administrative interpretation thereof
by a Governmental Entity or otherwise, including, without limitation, any
judicial or administrative order, consent, decree or judgment.
"Lease" shall have the meaning set forth in the recitals to this Agreement.
"Leased Real Property" shall have the meaning set forth in the recitals to this
Agreement.
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"Lien" means any mortgage, adverse Claim, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, lien (statutory or otherwise) or
preference, security interest or other encumbrance of any kind or nature
whatsoever.
"Management Agreement" means that certain Interim Management Agreement dated as
of the closing date by and between the Vibra Sub and Ocadian.
"Material Adverse Effect" means, with respect to any Person, any change,
event(s), occurrence(s) or effect(s), whether direct or indirect, that, both
before and after giving effect to the transactions contemplated by this
Agreement, could, individually or in the aggregate, have a material adverse
effect on (i) the business, properties, results of operations, assets, revenue,
income, prospects or condition (financial or otherwise) of, or the ability to
timely satisfy the obligations or liabilities (whether absolute or contingent)
of, such Person, (ii) such Person's business or assets, or (iii) the ability of
such Person to perform its obligations under, and/or consummate the transactions
contemplated by, this Agreement within the time periods specified herein.
"Medicaid" shall have the meaning set forth in Section 4.10 hereof.
"Medicare" shall have the meaning set forth in Section 4.10 hereof.
"Minimum Aggregate Liability Amount" shall have the meaning set forth in Section
12.1(b) hereof.
"Ocadian" shall have the meaning set forth in the recitals to this Agreement.
"Ocadian Claim" shall have the meaning set forth in Section 11.3 hereof.
"Ocadian Purchase Agreement" shall have the meaning set forth in Section 11.3
hereof.
"Owned Real Property" shall have the meaning set forth in the recitals to this
Agreement.
"Permitted Exceptions" shall have the meaning set forth in the Ocadian Purchase
Agreement.
"Permits" shall have the meaning set forth in Section 4.9 hereof.
"Person" means an individual, a corporation, a limited liability company, a
partnership, an unincorporated association, a joint venture, a Governmental
Entity or another entity or group.
"Personal Property" shall have the meaning set forth in Section 4.16 hereof.
"Personal Property Leases" shall have the meaning set forth in Section 4.16
hereof.
"Public Taking" shall means any condemnation, requisition or other taking by any
Governmental Entity.
"Purchase Price" shall have the meaning set forth in Section 3.1 hereof.
"Purchaser Damages" shall have the meaning set forth in Section 12.1(a) hereof.
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"Purchaser Parties" shall have the meaning set forth in the preamble to this
Agreement.
"Purchaser Indemnified Party" shall have the meaning set forth in Section
12.1(a).
"Purchaser's Indemnity Periods" shall have the meaning set forth in Section
12.1(b) hereof.
"Real Property" shall have the meaning set forth in the recitals to this
Agreement.
"Search Reports" means reports of searches made of the uniform commercial code
records of the county in which the Real Property is located, and of the office
of the secretary of state of the state in which the Real Property is located and
in the state in which the principal office of the Seller Parties is located.
"Seller Damages" shall have the meaning set forth in Section 12.2(a) hereof.
"Seller Indemnified Parties" shall have the meaning set forth in Section 12.2(a)
hereof.
"Seller Indemnity Period" shall have the meaning set forth in Section 12.2(b)
hereof.
"Seller Instruments" shall have the meaning set forth in Section 4.2 hereof.
"Seller Parties" shall have the meaning set forth in the preamble to this
Agreement.
"Service Provider" means any Person who has rendered or is rendering services to
or on behalf of Vibra or any of its Subsidiaries.
"Special Purpose Entity" means an entity which (i) exists solely for the purpose
of owning and/or leasing all or any portion of the Real Property and conducting
the operation of the Business, (ii) conducts business only in its own name,
(iii) does not engage in any business other than the ownership and/or leasing
all or any portion of the Real Property and the operation of the Business, (iv)
does not hold, directly or indirectly, any ownership interest (legal or
equitable) in any entity or any real or personal property other than the
interest which it owns in the Real Property and the other assets incident to the
operation of the Business, (v) does not have any debt other than as permitted by
the Lease or arising in the ordinary course of the Business and does not
guarantee or otherwise obligate itself with respect to the debts of any other
Person other than as approved by MPT, (vi) has its own separate books, records,
accounts, financial statements and tax returns (with no commingling of funds or
assets), (vii) holds itself out as being a company separate and apart from any
other entity, (viii) maintains all corporate formalities independent of any
other entity.
"Subsidiary" means with respect to Vibra, those certain subsidiaries of Vibra
listed and described on Schedule 4.1 hereto and with respect to any Person, any
other Person of or with respect to which Fifty Percent (50%) or more of the
total voting power of the voting securities is beneficially owned by such
Person.
"Survey" means a current "as-built" ALTA survey, certified to ALTA requirements,
prepared by an engineer or surveyor licensed in the state in which the Real
Property is located acceptable to
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MPT in its sole discretion, which shall be prepared in accordance with the
provisions set forth in Section 6.1 of this Agreement.
"Taxes" means any and all taxes, charges, fees, levies or other assessments,
including, without limitation, any and all income, gross receipts, excise, real
and personal property (including leaseholds and interests in leaseholds), sales,
use, occupation, transfer, license, ad valorem, gains, profits, gift, minimum
estimated, social security, unemployment, disability, premium, recapture,
credit, payroll, withholding, severance, stamp, capital stock, value added
leasing, franchise and other taxes or similar charges of any kind including any
interest and penalties on or additions thereto or attributable to any failure to
comply with any requirement regarding any Tax Return.
"Tax Return" means any return, declaration, filing, report, claim for refund or
information return or other statement relating to Taxes (whether filed with or
submitted to, or required to be filed with or submitted to, any Governmental
Entity), including any schedule or attachment thereto, and including any
amendment or extension thereof.
"Tax Structure" shall have the meaning set forth in Section 7.2(c) hereof.
"Tax Treatment" shall have the meaning set forth in Section 7.2(c) hereof.
"Tenant" means the lessees or tenants under the Tenant Leases, if any.
"Third Party Claim" shall have the meaning set forth in Section 12.3(a) hereof.
"Title Commitment" means a current commitment issued by the Title Company to the
Purchaser Parties pursuant to the terms of which the Title Company shall commit
to issue the Title Policy to the Purchaser Parties in accordance with the
provisions of this Agreement, and reflecting all matters which would be listed
as exceptions to coverage on the Title Policy.
"Title Company" means First American Title Company.
"Title Policy" means a title insurance policy in form and substance satisfactory
to MPT in its sole discretion.
"Warranties" means all warranties, representations and guaranties with respect
to any of the Assets, whether express or implied, which the Seller Parties now
hold or under which the Seller Parties are the beneficiary.
SECTION 1.2. INTERPRETATION; TERMS GENERALLY. The definitions set forth in
Section 1.1 and elsewhere in this Agreement shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. Unless otherwise indicated, the words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
The words "herein", "hereof" and "hereunder" and words of similar import shall
be deemed to refer to this Agreement (including the Schedules and Exhibits) in
its entirety and not to any part hereof, unless the context shall otherwise
require. All references herein to Articles, Sections, Schedules and Exhibits
shall be deemed to refer to Articles, Sections and Schedules of, and
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Exhibits to, this Agreement, unless the context shall otherwise require. Unless
the context shall otherwise require, any references to any agreement or other
instrument or statute or regulation are to it as amended and supplemented from
time to time (and, in the case of a statute or regulation, to any corresponding
provisions of successor statutes or regulations). Any reference in this
Agreement to a "day" or number of "days" that does not refer explicitly to a
"Business Day" or "Business Days" shall be interpreted as a reference to a
calendar day or number of calendar days. If any action or notice is to be taken
or given on or by a particular calendar day, and such calendar day is not a
Business Day, then such action or notice shall be deferred until, or may be
taken or given on, the next Business Day.
ARTICLE II
PURCHASE AND SALE OF ASSETS, ASSUMPTION OF LIABILITIES
SECTION 2.1. PURCHASE AND SALE OF ASSETS. Based upon the representations and
warranties of the Seller Parties as set forth herein, and subject to the terms
and conditions hereof, at the Closing, the Seller Parties, in consideration for
the payment of the Purchase Price in accordance with Section 3.1, shall grant,
sell, assign, transfer, convey and deliver to the Acquisition Sub, and the
Acquisition Sub shall purchase and acquire from the Seller Parties, free and
clear of all Liens, other than Permitted Exceptions, the following assets of the
Seller Parties (collectively, the "Assets"):
(a) all of the Seller Parties' rights under and interest in the Leased Real
Property and the Ground Lease;
(b) all of the Seller Parties' right, title and interest in the Owned Real
Property;
(c) to the extent assignable, all of Seller Parties' rights in all intangible
property relating exclusively to the Real Property, including, but limited to,
zoning rights, Permits and indemnification or similar rights and all Warranties
affecting or inuring to the benefit of the Real Property or the owner thereof
(including, without limitation, any indemnification or similar rights and
Warranties related to the Real Property);
(d) all of the Seller Parties' right, title and interest in and to site plans,
surveys, soil and substrata studies, architectural drawings, plans and
specifications, inspection reports, engineering and environmental plans and
studies, title reports, floor plans, landscape plans and other plans relating to
the Real Property and the Improvements; and
(e) all of the Seller Parties' right, title and interest in and to all causes of
action, claims and rights in litigation (or which could result in litigation
against any party) pertaining or relating to the Real Property (including,
without limitation, any causes of action, claims or rights in litigation or
other rights related to or arising under any purchase contracts (including,
without limitation, all of Seller Parties' rights to indemnification and claims
for breach or default under the Ocadian Purchase Agreement) respecting the Real
Property).
SECTION 2.2. EXCLUDED LIABILITIES. Notwithstanding anything in this Agreement to
the contrary, except as set forth on Schedule 2.2 (the "Assumed Liabilities") no
Purchaser Party shall assume or agree to pay, satisfy, discharge or perform, or
shall be deemed by virtue of the execution and delivery of this Agreement or any
other document delivered at the Closing
9
pursuant to this Agreement, or as a result of the consummation of the
transactions contemplated by this Agreement or such other document, to have
assumed, or to have agreed to pay, satisfy, discharge or perform, or shall be
liable for, any liability, obligation, contract or Indebtedness of the Seller
Parties or any other Person, whether primary or secondary, direct or indirect,
including, without limitation, any liability or obligation relating to the
ownership, use or operation of any of the Assets or the Hospital prior to
Closing, any liability or obligation arising out of or related to any breach,
default, tort or similar act committed by either Seller Party or for any failure
of either Seller Party to perform any covenant or obligation for or during any
period prior to Closing, and any liability arising out of the ownership and
operation of the Assets and the Hospital by Ocadian or any other Person prior to
Closing (collectively, the "Excluded Liabilities").
ARTICLE III
PURCHASE PRICE
SECTION 3.1. PURCHASE PRICE. Subject to obtaining the Appraisal in accordance
with Section 8.2(m) hereof and subject to adjustment as provided herein, the
purchase price for the Assets shall be Twenty Million Seven Hundred and Fifty
Thousand and No/100 Dollars ($20,750,000.00) (the "Purchase Price"). Subject to
the terms and conditions hereof, at Closing, the Acquisition Sub shall pay the
Purchase Price, less (i) the sum of Two Million and No/100 Dollars
($2,000,000.00) which will be paid to the Seller Parties only if and when the
Purchaser Parties are satisfied in their sole discretion that the Hospital's
existing skilled nursing facility beds have been or will be converted to
long-term acute care beds and (ii) Seven Hundred Fifty Thousand and No/100
Dollars ($750,000.00) which shall be paid as provided in Section 9.4 of the
Lease. Such portion of the Purchase Price payable at Closing shall be paid via
transfer of immediately available federal funds to an account specified in
writing by Vibra not less than three (3) Business Days prior to the Closing
Date. In the event that Purchaser Parties do not become satisfied that the
conversion described above has or will occur within eighteen (18) months from
the date hereof, then said Two Million Dollars ($2,000,000.00) described in
clause (i) above shall be forfeited and the Purchase Price adjusted accordingly.
SECTION 3.2. TAXES, RENTALS, UTILITIES. The parties acknowledge that all utility
charges and all real and personal property Taxes related to the Assets shall be
the responsibility of Vibra Sub pursuant to the terms of the Lease.
SECTION 3.3. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Assets for purposes of Section 1060 of the Code as set forth on
Schedule 3.3. The parties agree to use, and to not take any position which is
inconsistent with, such allocation in the preparation and filing of any Tax
Return (including Form 8594).
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SELLER PARTIES
With the understanding that the Purchaser Parties shall rely hereon, and as a
material inducement to the Purchaser Parties to enter into this Agreement and
the Lease, the Seller Parties hereby
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jointly and severally represent, warrant and covenant to the Purchaser Parties
as of the date hereof and as of the Closing Date as follows:
SECTION 4.1. ORGANIZATION. Each Seller Party is a limited liability company duly
organized, validly existing and in good standing under the laws of the state of
Delaware and is duly registered in California. The Vibra Sub is, and has at all
times since its organization been, a Special Purpose Entity. Schedule 4.1 sets
forth the ownership of Vibra, Senior Real Estate Holdings, LLC, Vibra
Management, LLC, all of Vibra's Subsidiaries and the Vibra Sub and, except as
set forth therein, no other party has any equity interest in Vibra, any of its
Subsidiaries or the Vibra Sub, or any option, warrant or other right to acquire
same.
SECTION 4.2. AUTHORIZATION AND ENFORCEABILITY. Each Seller Party has the
requisite limited liability company power and authority to conduct its business
as it is now being conducted and as proposed to be conducted and to execute,
deliver and carry out the terms of the Ocadian Purchase Agreement, this
Agreement, together with all documents and agreements necessary to give effect
to the provisions of this Agreement, including the Lease, and to consummate the
transactions contemplated hereby and thereby. All limited liability company
actions required to be taken by each Seller Party (including, without
limitation, all necessary actions by the manager and/or members of such Seller
Party) to authorize the execution, delivery and performance of the Ocadian
Purchase Agreement, this Agreement, as well as all documents, agreements and
instruments executed by such Seller Party which are necessary to give effect to
the Ocadian Purchase Agreement and this Agreement (collectively, the "Seller
Party Instruments"), and all transactions contemplated hereby and thereby, have
been duly and properly taken or obtained in accordance and compliance with such
Seller Party's Governing Documents. Each Seller Party has heretofore delivered
to the Purchaser Parties true, correct and complete copies of such Seller
Party's Governing Documents. No other action on the part of either Seller Party
is necessary to authorize the execution, delivery and performance of the Ocadian
Purchase Agreement, this Agreement, the Seller Party Instruments and all
transactions contemplated hereby and thereby. This Agreement, the Ocadian
Purchase Agreement, the Seller Party Instruments and all agreements to which
either Seller Party will become a party hereunder, including the Lease, are and
will constitute the valid and legally binding obligations of such Seller
Parties, and are and will be enforceable against such Seller Parties in
accordance with the respective terms hereof or thereof, except as enforceability
may be restricted, limited or delayed by applicable bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and except as
enforceability may be subject to and limited by general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
SECTION 4.3. ABSENCE OF CONFLICTS. Each Seller Party's execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby (or by the Ocadian Purchase Agreement), will not, with or
without the giving of notice and/or the passage of time: (i) violate or conflict
with any provision of either Seller Parties' Governing Documents; (ii) violate
any provision of any Law to which such Seller Party is subject; (iii) violate or
conflict with any judgment, order, writ or decree of any court applicable to
such Seller Party; (iv) result in or cause the creation of a Lien on any of the
Assets; or (v) except as disclosed on Schedule 4.3, result in the breach or
termination of any provision of, or create rights of acceleration or constitute
a default under, the terms of any indenture, mortgage, deed of trust, contract,
11
agreement or other instrument to which such Seller Party is a party or by which
such Seller Party or any of its assets is bound.
SECTION 4.4. CONSENTS AND APPROVALS. Except as set forth on Schedule 4.4, no
license, permit, qualification, order, consent, authorization, approval or
waiver of, or registration, declaration or filing with, or notification to, any
Governmental Entity or other Person is required to be made or obtained by or
with respect to either Seller Party in connection with the execution, delivery
and performance of the Ocadian Purchase Agreement, this Agreement or the Seller
Instruments by the Seller Parties or the consummation of the transactions
contemplated hereby or thereby.
SECTION 4.5. FINANCIAL STATEMENTS. Schedule 4.5 sets forth (i) the audited
balance sheets of Vibra and its Subsidiaries for the fiscal year ended December
31, 2004, (ii) the unaudited balance sheet of Vibra and its Subsidiaries as of
March 31, 2005 (the "Balance Sheet Date") (the balance sheets described in
subsections (i) and (ii) being hereinafter referred to, collectively, as the
"Balance Sheets"), (iii) the audited statement of income and cash flows of Vibra
and its Subsidiaries for the fiscal year ended December 31, 2004, (iv) the
unaudited income statement and cash flows of Vibra and its Subsidiaries for the
three (3) months ended March 31, 2005 (the financial statements described in
this sentence, being hereinafter referred to, collectively, as the "Financial
Statements"). Except as set forth on Schedule 4.5, the Financial Statements have
been prepared in accordance with GAAP, are based on the books, records and
accounts of Vibra and its Subsidiaries and fairly present the financial
condition and results of operations, cash flows and partners' or members' equity
or capital of Vibra and its Subsidiaries as of the respective dates thereof and
for the respective periods indicated therein, except (i) that the unaudited
interim statements do not include complete note (including footnote) disclosure
as required by GAAP; and (ii) that the unaudited interim statements are subject
to normal, year-end adjustments which are not, and will not be, material in
amount or effect, either individually or in the aggregate.
SECTION 4.6. NO UNDISCLOSED LIABILITIES. Except as set forth on Schedule 4.6,
neither Vibra nor any of its Subsidiaries or the Vibra Sub, has any material
liability or obligation (other than obligations to close the transactions
contemplated by the Ocadian Purchase Agreement and this Agreement), whether
absolute, accrued, contingent or otherwise, including any potential future
liability arising out of acts or omissions which have already occurred, which is
not fully and accurately reflected or reserved against in the Balance Sheets
except for liabilities or obligations that may have arisen in the ordinary
course of business consistent with the past practice, since the Balance Sheet
Date (none of which results from, arises out of, relates to, is in the nature
of, or was caused by any breach of contract, breach of warranty, tort,
infringement or violation of law) and neither Seller Party has Knowledge of any
fact, condition or circumstance which could form the basis of any such liability
or obligation.
SECTION 4.7. ACCOUNTS RECEIVABLE. The accounts receivable of Vibra and its
Subsidiaries include only accounts receivable arising from bona fide
transactions in the conduct of the ordinary course of business, are in all
material respects true and genuine, represent legal, valid and binding
obligations of the respective debtors enforceable in accordance with their
terms. No material payment of said receivables is contingent upon performance of
any obligations or contract, past or future, and, except as set forth on
Schedule 4.7, all such receivables are free of all security interests and
encumbrances created by Vibra or any of its Subsidiaries. Except as set
12
forth on Schedule 4.7, no defense, counterclaim, offset or adjustment exists as
to any such account receivable.
SECTION 4.8. ABSENCE OF CHANGES. Except as set forth on Schedule 4.8, since the
Balance Sheet Date, Vibra and its Subsidiaries have, as applicable:
(a) conducted their respective businesses only in the ordinary course of
business and consistently with past practices;
(b) not suffered any change, event or circumstance which has had, or could have,
a Material Adverse Effect;
(c) preserved their legal existences and retained their respective business
organizations intact;
(d) maintained their relationships with all suppliers, trade creditors and trade
debtors;
(e) paid or satisfied all of their debts, liabilities or obligations as the same
became due;
(f) paid all compensation and other obligations to their respective employees
when the same were due and payable;
(g) timely made all applicable filings with Governmental Entities;
(h) not mortgaged, pledged, subjected to Lien, charged, encumbered or granted a
security interest in or to any of its assets;
(i) except as otherwise provided in this Agreement, not sold or transferred any
of their respective assets except for sales of inventory in the ordinary course
of business and consistently with past practices;
(j) not suffered any material damage, destruction or loss (whether or not
covered by insurance) affecting their respective assets;
(k) not cancelled any debts owing to it or otherwise granted or waived any right
of substantial value;
(l) not terminated or materially modified any material contract, lease,
agreement or arrangement with any payor, vendor or supplier or received notice
of termination or become aware of any threat of termination with respect to any
such contract, lease, agreement or arrangement;
(m) except for the Ocadian Purchase Agreement, not made any capital expenditure
or commitment for the acquisition of assets in excess of Fifty Thousand Dollars
($50,000);
(n) not made or suffered any change to their respective Governing Documents;
(o) not made or received any loans or advances to or from any Person, other than
renewals or extensions of existing Indebtedness and uses of lines of credit;
13
(p) maintained their respective books and records in accordance with GAAP,
consistent with past practices;
(q) not incurred, assumed or guaranteed any Indebtedness;
(r) not experienced any material defections in their respective medical staffs;
or
(s) not agreed or offered, whether in writing or otherwise, to take action
described in Sections 4.8(a) through 4.8(r) above.
SECTION 4.9. LICENSES. Vibra and its Subsidiaries have all material licenses,
permits, certificates of need and other authorizations from Governmental
Entities (the "Permits") necessary or proper in order to enable them to own and
operate their facilities and conduct their respective businesses. Without
limiting the generality of the foregoing, and except as set forth on Schedule
4.9, Vibra Sub shall have all necessary Permits to operate the Hospital and
conduct the Business following Closing. Except as set forth on Schedule 4.9,
Vibra and each of its Subsidiaries, including the Vibra Sub, previously have
substantially complied and are currently complying with its obligations under
each of the Permits in all material respects and all such Permits are in full
force and effect. No written notice from any authority in respect to the
threatened, pending or possible revocation, termination, suspension or
limitation of any of the Permits has been issued or given to Vibra or any of its
Subsidiaries and Vibra has no Knowledge of the proposed or threatened issuance
of any such notice or of any grounds or basis therefor. The Hospital is
currently licensed as a general acute-care hospital with 38 general acute-care
beds, 24 of which are qualified to provide rehabilitation services, and 50
skilled-nursing beds, and will remain so licensed through the Closing Date in
compliance with and subject only to the usual and customary laws and government
regulations pertaining to the operation of an acute-care hospital in the State
of California. The Hospital does not operate any emergency department, as more
specifically defined or intended under Title 22 of the California Code of
Regulations Section 70411 (basic emergency medical services), Section 70451
(comprehensive emergency medical service), or Section 70649 (standby emergency
medical service), and does not hold itself out to the public as a provider of
"emergency" or "urgent" care.
SECTION 4.10. ACCREDITATION; MEDICARE AND MEDICAID; THIRD PARTY PAYORS. Except
as set forth on Schedule 4.10 attached hereto, all operating Subsidiaries of
Vibra participate without restriction under Title XVIII of the Social Security
Act ("Medicare") the applicable state equivalent ("Medicaid"), and the
TRICARE/CHAMPUS programs (collectively, the "Government Programs"). Except as
set forth on Schedule 4.10, all operating Subsidiaries of Vibra are in
substantial compliance with the conditions of participation for the Government
Programs, have received all approvals or qualifications necessary for capital
reimbursement and has been found by CMS to be in compliance with 42 C.F.R.
Sections 489.20 and 489.24. Except as set forth on Schedule 4.10, there is no
pending, nor, to the best of the Seller Parties' Knowledge, threatened,
proceeding or investigation under the Government Programs involving Vibra or any
of its Subsidiaries. Vibra has previously delivered to the Purchaser Parties
true, correct and complete copies of the most recent Medicare and Medicaid
certification survey reports for its operating Subsidiaries, including any
statements of deficiencies and plans of correction, and the corrective action
plans related thereto. Vibra has taken all reasonable steps to correct all such
deficiencies and a description of any uncorrected deficiency is set forth on
Schedule 4.10. Except
14
as set forth on Schedule 4.10, neither Vibra or any of its Subsidiaries, nor any
of their respective officers, directors, Equity Constituents or, to Vibra's
Knowledge, any of their employees or Service Providers (i) has been excluded,
suspended or debarred from, or otherwise adjudicated, deemed or determined
ineligible for, participation in any Government Program, including Medicare or
Medicaid, (ii) has been convicted of a criminal offense related to conduct that
would trigger an exclusion from any Government Program, (iii) committed any act
or omission which could result in, or form the basis of, any of the actions
described in clauses (i) or (ii) of this sentence; and (iv) no Medicare funds
will be used to make any payment for any items or services furnished by any such
excluded individual. Vibra or its applicable operating Subsidiaries have timely
filed or caused to be timely filed all cost reports required by third party
payors, including, but not limited to, Government Programs and other insurance
carriers, and, except as disclosed on Schedule 4.10, all such reports are or
will be complete and accurate when filed. Except as disclosed on Schedule 4.10,
Vibra and its Subsidiaries are in compliance with filing requirements with
respect to cost reports, including appropriate allocation of expenses associated
with any management or consulting services, and such reports do not claim and
neither Vibra nor any of its Subsidiaries have received, payment or
reimbursement in excess of the amount provided or allowed by applicable law or
any applicable agreement, except where excess reimbursement was noted on the
cost report. Except as disclosed on Schedule 4.10, neither Vibra nor any
Subsidiary has received any written notice of any dispute with any Governmental
Entity, including any fiscal intermediary or carrier, federal, state or local
governmental body or entity, with respect to any Government Program cost reports
or claims filed on or before the date of this Agreement.
SECTION 4.11. HIPAA COMPLIANCE. Vibra and its Subsidiaries are in substantial
compliance with the Standards for Privacy of Individually Identifiable Health
Information and the Transaction and Code Set Standards which were promulgated
pursuant to the Health Insurance Portability and Accountability Act of 1996
("HIPAA").
SECTION 4.12. HEALTHCARE REGULATORY MATTERS.
(a) Neither Vibra, nor, to Seller Parties' Knowledge, Ocadian, any physician,
Service Provider or other Person rendering services (including directly or
indirectly referring patients) to or at, or in any way affiliated with any of
the facilities or operations of Vibra or its Subsidiaries or affiliated with the
Hospital (i) is a party to, or has received notice of, the commencement of any
investigation or debarment proceedings or any governmental investigation or
action (including any civil investigative demand or subpoena) under the False
Claims Act (31 U.S.C. Section 3729 et seq.), the Anti-Kickback Act of 1986 (41
U.S.C. Section 51 et seq.), the Federal Health Care Programs Anti-Kickback
statute (42 U.S.C. Section 1320a-7a(b)), the Ethics in Patient Referrals Act of
1989, as amended (Xxxxx Law) (42 U.S.C. 1395nn), the Civil Money Penalties Law
(42 U.S.C. Section 1320a-7a), or the Truth in Negotiations (10 U.S.C. Section
2304 et seq.), Health Care Fraud (18 U.S.C. 1347), Wire Fraud (18 U.S.C. 1343),
Theft or Embezzlement (18 U.S.C. 669), False Statements (18 U.S.C. 1001), False
Statements (18 U.S.C. 1035), and Patient Inducement Statute and equivalent state
statutes or any rule or regulation promulgated by a Governmental Entity with
respect to any of the foregoing (collectively, the "Healthcare Fraud Laws")
affecting the Hospital, Vibra, any of its Subsidiaries or any of their
respective businesses (and no grounds for any such proceeding, investigation or
action exist); and (ii) is not in substantial compliance with all applicable
Healthcare Fraud Laws.
15
(b) Except as set forth on Schedule 4.12, neither Vibra or any Subsidiary, nor,
to Seller Parties' Knowledge, Ocadian, any physician, Service Provider or other
Person rendering services (including directly or indirectly referring patients)
to or at, or in any way affiliated with, the Hospital or any facilities or
operations conducted by Vibra or its Subsidiaries, is currently being
investigated, charged or implicated in any violation of any state or federal
statute or regulation involving false, fraudulent or abusive practices relating
to participation in state or federally sponsored reimbursement programs,
including, but not limited to, false or fraudulent billing practices. Neither
Vibra or any Subsidiary, nor, to Vibra's Knowledge, Ocadian, any physician,
Service Provider or other Person rendering services (including directly or
indirectly referring patients) to or at, or in any way affiliated with, the
Hospital or any of the facilities or operations conducted by Vibra or its
Subsidiaries, has ever engaged in any of the following: (i) knowingly and
willfully making or causing to be made a false statement or representation of a
material fact in any applications for any benefit or payment under Medicare or
Medicaid program; (ii) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment under Medicare or Medicaid program; (iii)
failing to disclose knowledge of any event affecting the initial or continued
right to any benefit or payment under Medicare or Medicaid program on its own
behalf or on behalf of another, with intent to secure such payment or benefit
fraudulently; (iv) knowingly and willfully soliciting, paying, or receiving any
remuneration (including kickback, bribe or rebate), directly or indirectly,
overtly or covertly, in cash or in kind or offering to pay such remuneration (A)
in return for referring an individual to a Person for the furnishing or
arranging for the furnishing of any item or service for which payment may be
made in whole or in part by Medicare or Medicaid, or (B) in return for
purchasing, leasing or ordering or arranging for or recommending the purchasing,
leasing or ordering of any good, facility, service, or item for which payment
may be made in whole or in part by Medicare or Medicaid; (v) presenting or
causing to be presented a claim for reimbursement for services that is for an
item or service that was known or should have been known to be (A) not provided
as claimed, or (B) false or fraudulent; or (vi) knowingly and willfully making
or causing to be made or inducing or seeking to induce the making of any false
statement or representation (or omitting to state a fact required to be stated
therein or necessary to make the statements contained therein not misleading) of
a material fact with respect to (A) a facility in order that the facility may
qualify for Governmental Entity certification or (B) information to be provided
under 42 USC Section 1320a-3.
SECTION 4.13. TAXES. Vibra and its Subsidiaries have filed or caused to be filed
all Tax Returns which have become due (taking into account valid extensions of
time to file) prior to the date hereof. Such Tax Returns are accurate and
complete in all material respects, and Vibra and its Subsidiaries have paid or
caused to be paid all Taxes for the periods covered thereby, whether or not
shown to be due on such Tax Returns. There are (i) no outstanding Liens for any
Taxes that have been filed by any Governmental Entity against any assets of
Vibra Sub, Vibra or any of its Subsidiaries, or to Seller Parties Knowledge, any
of the assets to be purchased from Ocadian (other than for ad valorem taxes not
yet due and payable), and (ii) no claims being asserted with respect to any
Taxes relating to Vibra Sub, Vibra, any of its Subsidiaries, the Assets or the
Business for which any Purchaser Party could be held liable, and, to Seller
Parties Knowledge, there is no basis for the assertion of any such claim. Except
as disclosed with reasonable specificity on Schedule 4.13, there are no
outstanding waivers or agreements extending the statute of limitations for any
period with respect to any Tax to which the Assets or any Purchaser Party may be
subject following the Closing.
16
SECTION 4.14. GOOD TITLE TO ASSETS. Except as set forth on Schedule 4.14, the
Seller Parties have good, absolute and marketable title to, and unrestricted
possession of, all of the Assets (other than the Real Property, which is
addressed in Section 4.15 below), free and clear of all Liens (other than
Permitted Exceptions) and any adverse Claims of third parties.
SECTION 4.15. TITLE AND CONDITION OF THE REAL PROPERTY.
(a) Exhibit B hereto sets forth a legal description of the Leased Real Property
and a description of the Owned Real Property. At Closing, the Seller Parties
will have and convey to the Acquisition Sub good and marketable title in their
interests in the Real Property, free and clear of any and all Liens,
encumbrances, restrictions or easements of any kind whatsoever (other than
Permitted Exceptions).
(b) To Seller Parties' Knowledge, the location, construction, occupancy,
operation, use and sale of the Real Property (including the Improvements) do not
violate any applicable law, statute, ordinance, rule, regulation, order or
determination of any Governmental Entity or any restrictive covenant or deed
restriction (recorded or otherwise) affecting the Real Property, including,
without limitation, any applicable zoning or subdivision ordinance or building
code, flood disaster law or health and environmental law or regulation.
(c) With regard to the Real Property, except as set forth on Schedule 4.15(c),
to the Knowledge of the Seller Parties, there are no (i) encroachments onto or
from adjacent properties; (ii) violations of set-back, building or side lines;
(iii) encroachments onto any easements or servitudes located on such Real
Property; (iv) pending or threatened boundary line disputes; (v) portions of
such Real Property located in a flood plain or in an area defined as a wetland
under applicable state or federal law; (vi) cemeteries or gravesites located on
the Real Property; or (vii) mine shafts under the Real Property or any other
latent defects, such as sinkholes, regarding or affecting the Real Property.
(d) To the Knowledge of the Seller Parties, the existing water, sewer, gas and
electricity lines, storm sewer and other utility systems are adequate to serve
the utility needs of the Real Property. To the Knowledge of the Seller Parties,
all of said utilities are installed and operating, and all installation and
connection charges have been paid in full.
(e) To Seller Parties' Knowledge, no notice has been received by any Person of a
Public Taking of any portion of the Real Property and the Seller Parties have no
Knowledge of any such Public Taking being threatened or contemplated.
(f) To the Knowledge of the Seller Parties, permanent certificates of occupancy,
all licenses, permits, certificates of need (if applicable), authorizations and
approvals required by all Governmental Entities having jurisdiction, have been
issued for the Improvements, and, as of the Closing, all of the same will be in
full force and effect. To the Knowledge of the Seller Parties, Improvements, as
designed and constructed, comply with all statutes, restrictions, regulations
and ordinances applicable thereto, including but not limited to the Americans
with Disabilities Act and Section 504 of the Rehabilitation Act of 1973. No
Seller Party has in its possession or has Knowledge of any studies or reports
which specify or suggest the presence of any defects in the design or
construction of any of the Improvements.
17
(g) The Seller Parties have no Knowledge of any fact or condition which would
result in the termination of the current access from the Real Property to any
presently existing public highways and/or roads adjoining or situated on the
Real Property or to sewer or other utility services to serve the Real Property.
(h) Except for the Ground Lease, there are no leases, subleases, commitment
letters, letters of intent and other rental agreements, whether written or oral,
now or hereafter in effect, that grant or will grant a possessory interest in
and to any space in the Real Property, or that otherwise assign or convey rights
with regard to the Real Property or the Improvements. There are no purchase
contracts, leases of space, options, rights of first refusal or other written or
oral agreements of any kind whereby any person or entity will have acquired or
will have any basis to assert any right, title or interest in, or right to the
possession, use, enjoyment or proceeds of, any part or all of the Real Property
or the Improvements.
(i) To Seller Parties Knowledge, the Real Property constitutes all the land and
improvements used by Ocadian in connection with the operation of the Hospital.
SECTION 4.16. CONDITION OF PERSONAL PROPERTY. Schedule 4.16 sets forth a list of
all equipment and other items of tangible personal property used by Ocadian in
the operation of the Hospital and to be purchased by Vibra (the "Personal
Property"). Except as set forth on Schedule 4.16, at Closing Vibra may grant
Acquisition Sub a first priority security interest in and to the Personal
Property. Schedule 4.16 sets forth an accurate and complete list of all leases
of personal property used in the operation of the Hospital (the "Personal
Property Leases"). The Seller Parties have made available the Purchaser Parties
with complete, correct and current copies of all of the Personal Property
Leases. Except as set forth on Schedule 4.16: (i) the Seller Parties may, upon
the closing of the transaction under the Ocadian Purchase Agreement, grant a
first priority security interest in the Personal Property Leases to the
Acquisition Sub, (ii) the Personal Property Leases have not been modified,
amended or assigned, are legally valid, binding and enforceable in accordance
with their respective terms and are in full force and effect; (iii) there are no
monetary defaults and no material nonmonetary defaults by any party to the
Personal Property Leases; and (iv) to the Knowledge of Seller Parties, no
condition or event has occurred which with the passage of time or the giving of
notice or both would constitute a default or breach by any Party of the terms of
any Personal Property Lease. Except as set forth on Schedule 4.16, all Personal
Property is in good operating condition and repair, ordinary wear and tear
excepted, and is located on the Real Property.
SECTION 4.17. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth on
Schedule 4.17:
(a) to the Seller Parties Knowledge, the ownership and operation of the Real
Property and the Hospital are and have at all times been, in compliance with all
Environmental Laws in all material respects;
(b) to the Seller Parties Knowledge, no Governmental Entity or any
nongovernmental third party has notified Ocadian or any other Person of any
alleged violation or investigation of any suspected violation under the
Environmental Laws in connection with the ownership, operation and/or leasing of
the Real Property or the Hospital, including any litigation or cause of action
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alleging personal injury or property damage caused by exposure to, or the
disposal, release or migration of, any Hazardous Materials;
(c) to the Seller Parties Knowledge, with respect to the ownership, operation
and/or leasing of the Real Property and the Hospital, all storage and disposal
of Hazardous Materials has been done in compliance with the Environmental Laws;
(d) to the Seller Parties Knowledge, there have been no actions nor, any
activities, circumstances, conditions, events or incidents, including, without
limitation, the generation, transportation, treatment, storage, release,
emission, discharge, presence or disposal of any Hazardous Materials on or from
any of the Real Property or the Hospital that could form the basis of any claim
under the Environmental Laws against Ocadian, any Seller Party or any Purchaser
Party;
(e) To the Knowledge of the Seller Parties, no Person has installed, used,
generated, manufactured, treated, handled, refined, produced, processed, stored
or disposed of, any Hazardous Materials in, on or under the Real Property,
except in compliance with the Environmental Laws. The Seller Parties have no
Knowledge that any Person has undertaken any activity, on the Real Property
which would cause (i) the Real Property to become a hazardous waste treatment,
storage or disposal facility within the meaning of, or otherwise bring the Real
Property within the ambit of, any Environmental Law, (ii) a release or
threatened release of Hazardous Material from the Real Property within the
meaning of, or otherwise bring the Real Property within the ambit of, any
Environmental Law, or (iii) the discharge of Hazardous Material into any
watercourse, body of, surface or subsurface water or wetland, or the discharge
into the atmosphere of any Hazardous Material which would require a permit under
any Environmental Law. To Seller Parties' Knowledge, no notice has been served
on Ocadian or any other Person from any Governmental Entity claiming any
violation of any Environmental Law, or requiring compliance with any
Environmental Law, or demanding payment or contribution for environmental damage
or injury to natural resources. Seller Parties have no Knowledge of any reason
Acquisition Sub will be required to obtain, any permits, licenses, or similar
authorizations to occupy, operate or use the Improvements or any part of the
Real Property by reason of any Environmental Law.
SECTION 4.18. INSURANCE. Schedule 4.18 sets forth a complete and accurate list
and brief description of all insurance policies currently held by Vibra and its
Subsidiaries, including the Vibra Sub, with respect to their respective
businesses, including the proposed conduct of the operations of the Hospital and
the professional liability, negligence and other acts of the physicians and
Service Providers, it being acknowledged that such insurance coverages are, at a
minimum, those required by the terms of the Existing Leases and the Lease. All
such Insurance policies are in full force and effect, all premiums due thereon
have been paid in full and Vibra and its Subsidiaries are in compliance with the
terms of such Insurance Policies.
SECTION 4.19. LITIGATION. Except as set forth on Schedule 4.19, there is no
dispute, suit, action, proceeding, inquiry or investigation against or involving
Vibra or any of its Subsidiaries or any of their respective properties or
rights, pending or, to the Knowledge of the Seller Parties, threatened, that, if
decided adversely, would reasonably be expected to result in damages exceeding
Ten Thousand Dollars ($10,000) (including, without limitation any suit, action,
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proceeding or investigation pursuant to Title 11 of the Civil Rights Act of
1964, the Americans with Disabilities Act, the Age Discrimination in Employment
Act, the Family and Medical Leave Act of 1993, or any other federal, state or
local law regulating employment) (a "Claim") nor do Seller Parties have
Knowledge of any facts which might result in any such Claim. Except as set forth
on Schedule 4.19, there is no judgment, decree, injunction, rule or order of any
Governmental Entity or any other Person (including, without limitation, any
arbitral tribunal) outstanding against Vibra or any of its Subsidiaries and
neither Vibra nor any of its Subsidiaries is in violation of any term of any
judgment, decree, injunction or order outstanding against it. Furthermore, there
is no Claim by or before any Governmental Entity or other Person pending or, to
the Knowledge of the Seller Parties, threatened, which questions or challenges
the validity of the Ocadian Purchase Agreement or this Agreement or any action
taken or to be taken by the Seller Parties pursuant to the Ocadian Purchase
Agreement or this Agreement or in connection with the transactions contemplated
thereby or hereby, nor is there any basis for any such Claim.
SECTION 4.20. CONTRACTS, OBLIGATIONS AND COMMITMENTS. Schedule 4.20 sets forth a
list of all contractual agreements, whether written or oral, relating to or
affecting the Assets, the Hospital and/or the operation of the Business to which
Ocadian is a party which will be assigned to and assumed by the Seller Parties
pursuant to the terms of the Ocadian Purchase Agreement (the "Contracts"). The
Seller Parties have made available to the Purchaser Parties complete and correct
copies of all of the Contracts. Except as set forth on Schedule 4.20, (i) the
Contracts are legally valid, binding and enforceable against the parties in
accordance with their respective terms and are in full force and effect; (ii)
there are no defaults by any party to the Contracts; (iii) no party has not
received notice of any default, offset, counterclaim or defense under any
Contract; and (iv) no condition or event has occurred which with the passage of
time or the giving of notice or both would constitute a default or breach under
the terms of any Contract; and (v) the Contracts are freely assignable by
Ocadian to the Seller Parties.
SECTION 4.21. COMPLIANCE WITH LAW. Vibra, along with each of its Subsidiaries
(including Vibra Sub) (a) is in compliance in all material respects with every
applicable law, rule, regulation, ordinance, license, permit and other
governmental action and authority and every order, writ, and decree of every
Governmental Entity in connection with the ownership, conduct, operation and
maintenance of its business and its ownership and use of its assets and no event
has occurred or circumstance exists which (with notice or lapse of time) would
result in any noncompliance with any such law, rule, regulation, ordinance,
license permit, order, writ or decree; and (b) has timely made or given all
filings and notices required to be made by such entity with the regulatory
agencies of any Governmental Entity.
SECTION 4.22. XXXX-XXXXXX OBLIGATIONS.
(a) Except as set forth on Schedule 4.22, neither Vibra or any of its
Subsidiaries (including Vibra Sub), nor, to the Knowledge of the Seller Parties,
any predecessor in interest of Vibra or any of its Subsidiaries (including Vibra
Sub), has received any loans, grants or loan guarantees pursuant to the United
States Xxxx-Xxxxxx Act (42 U.S.C. 291a, et seq.) program, the Health Professions
Educational Assistance Act, the Nurse Training Act, the National Health Pharmacy
and Resources Development Act or the Community Mental Health Centers Act. All of
the obligations set forth on Schedule 4.22 have been fully satisfied. The
transactions contemplated
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hereby will not result in any obligation of any Purchaser Party to repay any
such loan, grant or loan guarantee or to provide uncompensated care in
consideration thereof.
(b) None of the Assets are subject to any liability in respect of amounts
received by the Seller Parties or others for the purchase or improvement of the
Assets or any part thereof under restricted or conditioned grants or donations,
including monies received under the Public Health Service Act, 42 U.S.C. Section
291, et seq.
SECTION 4.23. BROKERS. Except as set forth on Schedule 4.23 hereto, no Person is
or will be entitled to any brokerage, finder's or other fee, commission or
payment in connection with or as a result of the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Seller
Parties.
SECTION 4.24. RECORDS. True, complete and current copies of the Seller Parties'
Governing Documents have been delivered to the Purchaser Parties prior to the
execution and delivery of this Agreement. The books of account, minute books,
stock record books and other records of Seller Parties, all of which have been
made available to the Purchaser Parties, are complete and correct. The minute
books of Seller Parties contain records of all meetings and other limited
liability company actions of the manager and/or members of Seller Parties, and
have been delivered to the Purchaser Parties prior to the execution and delivery
of this Agreement.
SECTION 4.25. EXISTING LEASES. Vibra and its Subsidiaries are in compliance in
all respects with the terms of the Existing Leases and no default or breach (or
event which with notice and/or passage of time would constitute such a default
or breach) has occurred by any party thereto. None of the facilities and none of
the Vibra Subsidiaries subject to the existing Leases has suffered a Material
Adverse Effect since December 31, 2004 and no event has occurred which would
reasonably likely to result in such a Material Adverse Effect.
SECTION 4.26. REPRESENTATIONS COMPLETE. The representations and warranties made
by the Seller Parties in this Agreement (and, to the Knowledge of Seller
Parties, by Ocadian in the Ocadian Purchase Agreement) and the statements made
in or information contained on any Schedules or certificates furnished by the
Seller Parties pursuant to this Agreement (and, to the Knowledge of Seller
Parties, by Ocadian in the Ocadian Purchase Agreement) do not contain and will
not contain, as of their respective dates and as of the Closing Date, any untrue
statement of a material fact, nor do they omit or will they omit, as of their
respective dates or as of the Closing Date, to state any material fact necessary
in order to make the statements contained herein or therein, in the light of the
circumstances under which they were made, not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES BY THE PURCHASER PARTIES
The Purchaser Parties hereby jointly and severally represent and warrant to the
Seller Parties as of the date hereof, and as of the Closing Date as follows:
SECTION 5.1. ORGANIZATION. MPT is a limited partnership duly formed, validly
existing and in good standing under the laws of the State of Delaware. The
Acquisition Sub is a limited liability company duly formed, validly existing and
in good standing under the laws of the State of Delaware and qualified to do
business in the State of California.
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SECTION 5.2. AUTHORIZATION; ENFORCEMENT, ABSENCE OF CONFLICTS. Each Purchaser
Party has the requisite power and authority to execute, deliver and carry out
the terms of this Agreement, to consummate the transactions contemplated hereby
and to conduct its businesses as now being conducted. All actions required to be
taken by each to authorize the execution, delivery and performance of this
Agreement, all documents executed by the Purchaser Parties which are necessary
to give effect to this Agreement and all transactions contemplated hereby and
thereby, have been duly and properly taken or obtained. No other action on the
part of either Purchaser Party is necessary to authorize the execution, delivery
and performance of this Agreement, all documents necessary to give effect to
this Agreement and all transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not, with or without the giving of notice
and/or the passage of time: (i) violate or conflict with any provision of the
Governing Documents of either Purchaser Party; (ii) violate any provision of
law, statute, rule or regulation to which either Purchaser Party is subject;
(iii) violate or conflict with any judgment, order, writ or decree of any court
applicable to either Purchaser Party; (iv) violate or conflict with any law or
regulation applicable to either Purchaser Party; or (v) result in the breach or
termination of any provision of, or create rights of acceleration or constitute
a default under, the terms of any debt or obligation to which either Purchaser
Party is a party or by which either Purchaser Party is bound.
SECTION 5.3. BINDING AGREEMENT. This Agreement and all agreements to which any
Purchaser Party will become a party hereunder is and will constitute the valid
and legally binding obligations of such Purchaser Party, and are and will be
enforceable against such Purchaser Party in accordance with the respective terms
hereof or thereof, except as enforceability may be restricted, limited or
delayed by applicable bankruptcy, insolvency or other laws affecting creditors'
rights generally and except as enforceability may be subject to and limited by
general principles of equity.
SECTION 5.4. LITIGATION. There is no Claim pending or, to the Knowledge of the
Purchaser Parties, threatened against or affecting any Purchaser Party that has
or would reasonably be expected to have a material adverse effect on the ability
of the Purchaser Parties to perform their respective obligations under this
Agreement or any aspect of the transactions contemplated hereby.
SECTION 5.5. BROKERS. Except as set forth on Schedule 5.5 hereto, no Person is
or will be entitled to any brokerage, finder's or other fee, commission or
payment in connection with or as a result of the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Purchaser
Parties.
SECTION 5.6. COMPLIANCE WITH LAW. The Purchaser Parties, where applicable (a)
are in compliance with every applicable law, rule, regulation, ordinance,
license, permit and other governmental action and authority and every order,
writ, and decree of every Governmental Entity in connection with the ownership,
conduct, operation and maintenance of their businesses, and their ownership and
use of their assets, except where non-compliance would not prevent or impede the
Purchaser Parties from consummating the transactions contemplated hereby or the
ability of the Purchaser Parties to perform their respective obligations under
this Agreement and, to the Knowledge of the Purchaser Parties, no event has
occurred or circumstance exists which (without notice or lapse of time) would
result in any noncompliance with any such law, rule,
22
regulation, ordinance, license permit, order, writ or decree which would prevent
or impede the Purchaser Parties from consummating the transactions contemplated
hereby; and (b) have timely made or given all filings and notices required to be
made by the Purchaser Parties with the regulatory agencies of any Governmental
Entity, except where such failure would not prevent or impede the Purchaser
Parties from consummating the transactions contemplated hereby.
ARTICLE VI
TITLE AND SURVEY
SECTION 6.1. SURVEY. Purchaser Parties shall cause to be prepared, at the
expense of the Seller Parties, a current ALTA/ACSM Land Title Survey of the Real
Property, prepared by a duly licensed land surveyor. The survey shall be
currently dated, shall show the location on the Real Property of any
improvements, fences, evidence of abandoned fences, ponds, creeks, streams,
rivers, easements, roads, rights-of-way, means of ingress and egress, location
of all utilities serving the Real Property, and encroachments, and shall contain
a legal description of the boundaries of the Real Property by metes and bounds
and the appropriate flood zone designation and the total number of acres
constituting the Real Property. The surveyor shall certify to the Purchaser
Parties and to the Title Company that the survey is correct and that there are
no visible discrepancies, conflicts, encroachments, overlapping of improvements,
fences, evidence of abandoned fences, ponds, creeks, streams, rivers, easements,
roads or rights-of-way except as are shown on the survey plat. Any and all
matters shown on such survey shall be legibly identified by appropriate volume
and page recording references with dates of recording noted. If Purchaser
Parties shall disapprove such survey for any reason in Purchaser Parties' sole
discretion, Purchaser Parties may either (i) treat such objection as a title
objection and request that it be cured, or (ii) terminate this Agreement and the
parties hereto shall have no further liability or obligations hereunder, expect
as otherwise expressly set forth herein. If the Seller Parties are unable to
cure any objection to the survey within ten (10) days following delivery of
notice to the Seller Parties thereof, then Purchaser Parties may terminate this
Agreement upon written notice to the Seller Parties.
SECTION 6.2. TITLE INSURANCE. Purchaser Parties will cause to be prepared, at
the Seller Parties' expense, a title commitment for the issuance of an ALTA
Owner's Policy Form dated October 17, 1992, issued by a title insurance company
acceptable to MPT and qualified to insure titles in the State of California (the
"Title Company"), in the amount of the Purchase Price, covering title to the
Real Property at a date not earlier than the date hereof and showing good and
marketable title, subject only to the Permitted Exceptions. All of the standard
exceptions within the policy and the exceptions for mechanic's and materialmen's
liens and the survey exception shall be deleted. If Purchaser Parties shall
disapprove any items stated in the Title Commitment or the Exception Documents,
Purchaser Parties may either (i) treat such objection as a title objection and
request that it be cured, or (ii) terminate this Agreement and, upon such
termination, the parties hereto shall have no further liability or obligations
hereunder, except as otherwise expressly provided herein. If the Seller Parties
are unable to cure any exception or objection to title that is not a Permitted
Encumbrance within ten (10) days following delivery of notice to the Seller
Parties thereof, then Purchaser Parties may terminate this Agreement upon
written notice to the Seller Parties.
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ARTICLE VII
PRE-CLOSING COVENANTS
From and after the execution and delivery of this Agreement to and including the
Closing Date, the applicable party shall observe the following covenants:
SECTION 7.1. NO SHOP. Neither the Seller Parties, nor any investment banker,
attorney, accountant, representative or other Person retained by or on behalf of
the Seller Parties, shall directly or indirectly, initiate contact with, respond
to, solicit or encourage any inquiries, proposals or offers by, or participate
in any discussions or negotiations with, enter into any agreement with, disclose
any information concerning the Seller Parties or the Assets to, afford any
access to the properties, books or records of the Seller Parties to, or
otherwise assist, facilitate or encourage, any Person in connection with any
possible proposal regarding a sale, lease, transfer, disposition or other
transaction related to or affecting all or any portion of the Assets (including
all or any portion of the Real Property). The Seller Parties shall notify
Purchaser Parties immediately if any discussions or negotiations are sought to
be initiated, any inquiry or proposal is made, or any such information is
requested.
SECTION 7.2. ACCESS; CONFIDENTIALITY.
(a) Between the date hereof and the Closing, the Seller Parties shall (i) afford
the Purchaser Parties and their authorized representatives full and complete
access to Seller Parties' employees, medical staff, and other agents and
representatives and during normal working hours to all books, records, offices
and other facilities of Seller Parties and shall use their best efforts to cause
Ocadian to afford to Purchaser Parties similar access to its personnel and
records relating to the Assets and the Business, (ii) permit the Purchaser
Parties to make such inspections and to make copies of such books and records as
they may reasonably require and (iii) furnish the Purchaser Parties with such
financial and operating data and other information related to the Hospital, the
Business, Vibra, its Subsidiaries and Vibra Sub as the Purchaser Parties may
from time to time reasonably request. The Purchaser Parties and their authorized
representatives shall conduct all such inspections under the supervision of
personnel of the Seller Parties in a manner that will minimize disruptions to
the business and operations of the Seller Parties and in a manner as to maintain
the confidentiality of this Agreement.
(b) The Purchaser Parties and their authorized representatives (including their
designated engineer, architects, surveyors and/or consultants) may, subject to
Ocadian's approval, upon reasonable notice and at any time enter into and upon
all or any portion of the Real Property in order to investigate and assess, as
the Purchaser Parties deem necessary or appropriate in their sole and absolute
discretion, the condition (including the structural and environmental condition)
of the Assets. The Seller Parties shall cooperate with the Purchaser Parties and
their authorized representatives in conducting such investigation, shall use
their best efforts to cause Ocadian to allow the Purchaser Parties and their
authorized representatives full access to the Assets and the Business, together
with full permission to conduct such investigation, and shall provide to the
Purchaser Parties and their authorized representatives all information
maintained by the Seller Parties and related to the condition of the Assets and
the Business, including the Real Property, and all plans, soil or surface or
ground water tests or reports, any environmental investigation results, reports
or assessments previously or contemporaneously conducted or prepared by or on
24
behalf of, or in the possession of or reasonably available to the Seller Parties
or any of their engineers, consultants or agents and all other information
relating to environmental matters in respect of their properties and businesses.
(c) The provisions of Confidentiality Agreement currently in effect among the
parties (the "Confidentiality Agreement") shall remain binding and in full force
and effect until the Closing. Notwithstanding anything to the contrary contained
herein or in the Confidentiality Agreement, the confidentiality obligations as
they relate to the transactions contemplated by this Agreement shall not apply
to the purported or claimed Federal income tax treatment of the transactions
(the "Tax Treatment") or to any fact that may be relevant to understanding the
purported or claimed Federal income tax treatment of the transactions (the "Tax
Structure"), and each party hereto (and any employee, representative, or agent
of any party hereto) may disclose to any and all persons, without limitation of
any kind, the Tax Treatment and Tax Structure of the transactions contemplated
by this Agreement and any materials of any kind (including any tax opinions or
other tax analyses) that relate to the Tax Treatment or Tax Structure. In
addition, each party hereto acknowledges that it has no proprietary or exclusive
rights to any tax matter or tax idea related to the transactions contemplated by
this Agreement. The preceding sentence is intended to ensure that the
transactions contemplated by this Agreement shall not be treated as having been
offered under conditions of confidentiality for purposes of the Confidentiality
Regulations and shall be construed in a manner consistent with such purpose. The
information contained herein, in the Schedules hereto or delivered to the
Purchaser Parties or its authorized representatives pursuant hereto shall be
subject to the Confidentiality Agreement as Information (as defined and subject
to the exceptions contained therein) until the Closing and, for that purpose and
to that extent, the terms of the Confidentiality Agreement are incorporated
herein by reference.
SECTION 7.3. SCHEDULE UPDATES. From the date hereof until the Closing Date, the
Purchaser Parties, on the one hand, and the Seller Parties on the other hand,
shall immediately advise the other in writing of any additions or changes to any
Schedule to reflect any deficiencies or inaccuracies in such Schedule or to
reflect circumstances or matters which occur after the date of this Agreement
which, if existing prior to such date, would have been required to be described
on such Schedule; provided, however, that no additions or changes made to any
Schedule by any party to correct deficiencies or inaccuracies on such Schedule
shall be deemed to cure any breach or inaccuracy of a representation or
warranty, covenant or agreement or to satisfy any condition unless otherwise
agreed to in writing by the other party, but provided further, however, that an
addition or change made to any Schedule by any party to reflect circumstances or
matters which occur after the date of this Agreement shall be deemed to cure a
breach or inaccuracy of a representation or warranty, covenant or agreement, but
shall not be deemed to satisfy any condition unless agreed to in writing by the
other party.
SECTION 7.4. CONDUCT OF BUSINESS BY THE SELLER PARTIES PENDING THE CLOSING. The
Seller Parties covenant and agree that, during the period from the date hereof
and continuing until the earlier of the termination of this Agreement or the
Closing Date, unless the Purchaser Parties shall otherwise agree in writing, the
Seller Parties shall conduct their respective businesses only in, and the Seller
Parties shall not take any action except in, the ordinary course of business and
in a manner consistent with past practice and in compliance in all material
respects with all applicable laws and regulations, and that the Seller Parties
shall use reasonable best efforts to
25
preserve substantially intact their respective business organizations, to keep
available the services of their current officers, employees and consultants and
to preserve their present relationships with patients, suppliers and other
persons with which they have significant business relations. By way of
amplification and not limitation, except as contemplated by this Agreement or
set forth on Schedule 7.4, no Seller Party shall, during the period from the
date hereof and continuing until the earlier of the termination of this
Agreement or the Closing Date, directly or indirectly do, or propose to do, any
of the following without the prior written consent of Purchaser Parties:
(a) amend, repeal or otherwise change in any way its Governing Documents;
(b) make or revoke any Tax election related to or affecting the Assets;
(c) fail to perform its obligations in all respects under agreements relating to
or respecting its assets, properties and rights;
(d) reduce the coverage of, fail to timely renew or pay the premiums on or
cancel any insurance policy;
(e) cause to lapse or fail to renew any license and certification necessary to
conduct its business;
(f) fail to timely make all applicable filings with Governmental Entities;
(g) create, assume or, other than those presently in existence, permit to exist
any Lien upon any of the Assets;
(h) modify or amend Ocadian Purchase Agreement;
(i) purchase, sell, assign, lease or otherwise acquire, transfer or dispose of
any material assets, except in the ordinary course of business and consistent
with its past practice;
(j) enter into or agree to enter into any agreement or arrangements granting any
rights to purchase any of its assets, properties or rights, except for purchases
of inventory in the ordinary course of business and consistent with its past
practice;
(k) engage in any business other than the business currently conducted by such
Seller Party;
(l) terminate or modify any contract, lease or other agreement to which it is a
party (excluding expiration or satisfaction in accordance with the terms of such
contract or agreement); or
(m) take, agree or offer, in writing or otherwise, to take, any of the actions
described in Sections 7.4 (a) through (l) above, or any action which would make
any of the representations or warranties of such Seller Party contained in this
Agreement untrue, incorrect or incomplete or prevent such Seller Party from
performing or cause such Seller Party not to perform its covenants hereunder, in
each case, such that the conditions set forth in Sections 8.2(a) or 8.2(b), as
the case may be, would not be satisfied.
26
SECTION 7.5. COOPERATION. Subject to compliance with applicable law, from the
date hereof until the Closing Date, (a) the Seller Parties shall confer on a
regular and frequent basis with one or more representatives of the Purchaser
Parties to report operational matters that are material and the general status
of ongoing operations and (b) each of the Purchaser Parties and the Seller
Parties shall promptly provide the other or their counsel with copies of all
filings made by such party with any Governmental Entity in connection with this
Agreement and the transactions contemplated hereby.
SECTION 7.6. REGULATORY AND OTHER AUTHORIZATIONS, NOTICES AND CONSENTS.
(a) Each party hereto shall use all commercially reasonable efforts to obtain
all authorizations, consents, orders and approvals of all Governmental Entities
and officials that may be or become necessary for its execution and delivery of,
and the performance of its obligations pursuant to, this Agreement and each such
party will cooperate fully with the other parties hereto in promptly seeking to
obtain all such authorizations, consents, orders and approvals.
(b) The Seller Parties shall promptly give such notices to third parties and use
its commercially reasonable efforts to obtain such third party consents and
estoppel certificates as Purchaser Parties may in their sole and absolute
discretion deem necessary or desirable in connection with the transactions
contemplated by this Agreement, including, without limitation, all third party
consents that are necessary or desirable in connection with the transfer of the
Assets.
(c) The Purchaser Parties shall cooperate and use commercially reasonable
efforts to assist the Seller Parties in giving such notices and obtaining such
consents and estoppel certificates; provided, however, that the Purchaser
Parties shall have no obligation to give any guarantee or other consideration of
any nature in connection with any such notice, consent or estoppel certificate
or to consent to any change in the terms of any Asset which Purchaser Parties in
their sole and absolute discretion may deem adverse to the interests of the
Purchaser Parties.
(d) Anything in this Agreement to the contrary notwithstanding, this Agreement
shall not constitute an agreement to assign any Asset if an attempted assignment
thereof, without the consent of the other party thereto, would constitute a
breach or other contravention thereof, noncompliance by the Seller Parties or
their Affiliates thereunder or in any way adversely affect the rights of any
Purchaser Party thereunder. The Seller Parties and the Purchaser Parties agree
that, in the event any consent, approval or authorization necessary or desirable
to preserve for the Purchaser Parties any right or benefit with respect to any
such Asset is not obtained prior to the Closing, the Seller Parties will,
subsequent to the Closing, cooperate with the Purchaser Parties in attempting to
obtain such consent, approval or authorization as promptly thereafter as
practicable. If such consent, approval or authorization cannot be obtained, the
Seller Parties will use commercially reasonable efforts to provide the Purchaser
Parties with the rights and benefits of such affected Asset, and, if the Seller
Parties provide such rights and benefits, the Purchaser Parties shall assume the
obligations and burdens thereunder in accordance with this Agreement, including,
subcontracting, sublicensing, or subleasing to the Purchaser Parties, or under
which the Seller would enforce for the benefit of the Purchaser Parties, with
the Purchaser Parties assuming the Seller Parties' obligations, any and all
rights of the Seller Parties against a third party thereto.
27
SECTION 7.7. MUTUAL COVENANTS. The parties shall use their good faith reasonable
efforts to satisfy the conditions to the closing of the transactions
contemplated hereby. Without limiting the generality of the foregoing, the
respective parties shall execute and/or deliver, or use their respective good
faith reasonable efforts to cause to be executed and/or delivered, the documents
contemplated to be executed and/or delivered by them at Closing.
SECTION 7.8. PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, the parties agree
to consult with each other before any party hereto or any of their respective
affiliates issues any press release or makes any public statement with respect
to this Agreement or the transactions contemplated hereby and, except as may be
required by applicable law or any listing agreement with any national securities
exchange, will not issue, or permit to be issued, any such press release or
make, or permit to be made, any such public statement prior to such
consultation.
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.1. CONDITIONS TO THE OBLIGATIONS OF THE SELLER PARTIES. The
obligations of the Seller Parties to effect the transactions contemplated hereby
shall be further subject to the fulfillment of the following conditions, any one
or more of which may be waived by the Seller Parties:
(a) All of the representations and warranties of Purchaser Parties set forth in
this Agreement shall be true and correct when made and as of the Closing Date as
if made on the Closing Date.
(b) The Purchaser Parties shall have delivered, performed, observed and complied
in all material respects with all of the items, instruments, documents,
covenants, agreements and conditions required by this Agreement to be delivered,
performed, observed and complied with by them prior to, or as of, the Closing.
(c) The Purchaser Parties shall have executed, where applicable, and delivered
to the Seller Parties he documents referenced in Section 9.3 hereof.
(d) The closing of the transactions contemplated by the Ocadian Purchase
Agreement shall have occurred.
SECTION 8.2. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER PARTIES. The
obligations of the Purchaser Parties to effect the transactions contemplated
hereby shall be further subject to the fulfillment of the following conditions,
any one or more of which may be waived by the Purchaser Parties:
(a) All of the representations and warranties of the Seller Parties set forth in
this Agreement shall be true and correct when made and as of the Closing Date as
if made on the Closing Date.
(b) The Seller Parties shall have delivered, performed, observed and complied
with all of the items, instruments, documents, covenants, agreements and
conditions required by this Agreement to be delivered, performed, observed and
complied with by them prior to, or as of, the Closing.
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(c) The Seller Parties shall not have suffered any change, event or circumstance
which has had, or could have, a Material Adverse Effect.
(d) The closing of the transactions contemplated by the Ocadian Purchase
Agreement shall have occurred.
(e) All necessary approvals, consents, estoppel certificates and the like of
third parties to the validity and effectiveness of the transactions contemplated
hereby have been obtained.
(f) No portion of the Assets shall have been damaged or destroyed by fire or
casualty.
(g) No condemnation, eminent domain or similar proceedings shall have been
commenced or threatened with respect to any portion of the Assets.
(h) The Purchaser Parties shall have received copies of all permits, licenses
and other approvals of governmental authorities required for the operation of
the Assets for their intended uses and written evidence satisfactory to the
Purchaser Parties that the operation and use of the Hospital are in accordance
with all applicable governmental requirements.
(i) The Purchaser Parties shall have received evidence that the Seller Parties
are maintaining insurance on the Assets and that the Purchaser Parties are named
as additional insureds and, where applicable, loss payees.
(j) The Seller Parties shall have executed where applicable, and delivered to
Purchaser Parties, the documents referenced in Section 9.2 hereof.
(k) There shall not have been instituted by any creditor of the Seller Parties,
any Governmental Entity or any other third party, any suit, action or proceeding
which would affect the Assets or seek to restrain, enjoin or invalidate the
transactions contemplated by the Ocadian Purchase Agreement or this Agreement.
(l) The Appraisal shall have been delivered and shall reflect an Appraised Value
that equals or exceeds the Purchase Price.
ARTICLE IX
CLOSING
SECTION 9.1. CLOSING DATE. The closing of the purchase and sale of the Assets
pursuant hereto (the "Closing") shall be held at the offices of Baker, Donelson,
Bearman, Xxxxxxxx and Xxxxxxxxx, P.C. on June 30, 2005 (the actual date of
closing being herein referred to as the "Closing Date"), or on such other date
(the "Closing Date") and such other place as the parties hereto shall mutually
agree.
SECTION 9.2. THE SELLER PARTIES' CLOSING DATE DELIVERABLES. On the Closing Date,
the Seller Parties shall deliver to the Purchaser Parties the documents listed
below.
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(a) Duly executed bills of sale and assignments transferring all Assets
(including all of the Seller Parties' rights under and with respect to the
Ground Lease) other than the Owned Real Property in form and substance
satisfactory to MPT;
(b) A duly executed general warranty deed in substantially the form as Exhibit
9.2(b) (the "Deeds") conveying the Owned Real Property to the Acquisition Sub;
(c) A certified copy of the resolutions of the governing body of the Seller
Parties dated as of the date hereof and authorizing the Seller Parties'
execution, delivery and performance of this Agreement and all other documents to
be executed in connection herewith;
(d) Certificates of existence and good standing of the Seller Parties from the
Secretary of State of the State of Delaware, dated the most recent practical
date prior to the Closing Date;
(e) Certificates of good standing and foreign qualification of the Seller
Parties from the Secretary of State of the State of California dated the most
recent practical date prior to the Closing Date;
(f) The Title Commitment and Title Policy in form and substance satisfactory to
MPT;
(g) A Survey dated the most recent practical date prior to the Closing Date in
form and substance satisfactory to MPT;
(h) A Phase I Environmental Site Assessment Report dated the most recent
practical date prior to the Closing Date in form and substance satisfactory to
MPT (and a Phase II if recommended by the Phase I Report);
(i) Property condition and seismic reports for the Real Property, dated the most
recent practical date prior to the Closing Date and in form and substance
satisfactory to MPT;
(j) A Zoning Compliance Letter/Certificate dated the most recent practical date
prior to the Closing Date in form and substance satisfactory to MPT;
(k) Tenant Estoppel Certificates, if any, in form and substance satisfactory to
MPT;
(l) Owner's Affidavits in form and substance satisfactory to MPT;
(m) The Search Reports dated the most recent practical date prior to the Closing
Date in form and substance satisfactory to MPT;
(n) A Non-Foreign Affidavit in form and substance satisfactory to MPT;
(o) The Lease, together with a Memorandum of Lease Agreement, in form and
substance satisfactory to MPT;
(p) A Lease Guaranty Agreement substantially in the form of Exhibit 9.2(p)
(q) The Assignment of Rents and Leases in substantially the form attached hereto
as Exhibit 9.2(q);
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(r) The Security Agreement in substantially the form attached hereto as Exhibit
9.2(r);
(s) The Subordination of Management Agreement in form and substance satisfactory
to MPT.
(t) The legal opinion of Latsha, Davis, Xxxx & XxXxxxx, P.C., as counsel for the
Seller Parties, substantially in the form attached hereto as Exhibit 9.2(t);
(u) At the Closing, the Seller Parties shall have furnished to the Purchaser
Parties a certificate dated the Closing Date signed by the Seller Parties to the
effect that all of the representations and warranties of the Seller Parties
contained in this Agreement (considered collectively) and each of these
representations and warranties (considered individually) remain in all respects
true and correct as of the Closing Date as if made on such date and that the
Seller Parties have performed and satisfied in all material respects all
covenants and conditions required by this Agreement to be performed or satisfied
by the Seller Parties on or prior to Closing;
(v) All necessary approvals, consents, estoppel certificates and the like of
third parties or Governmental Entities to the validity and effectiveness of the
transactions contemplated hereby;
(w) The Noncompete Agreements substantially in the form attached as Exhibit
9.2(w);
(x) Such other instruments and documents as the Purchaser Parties reasonably
deem necessary to effect the transactions contemplated hereby.
SECTION 9.3. PURCHASER PARTIES' CLOSING DATE DELIVERABLES. On the Closing Date,
the Purchaser Parties shall deliver to the Seller Parties the documents listed
below.
(a) A certified copy of the resolutions of the governing body of each Purchaser
Party dated as of the date hereof authorizing the execution, delivery and
performance of this Agreement and all other documents to be executed in
connection herewith;
(b) Certificates of existence and good standing of each Purchaser Party from the
Secretary of State of the State of Delaware, dated the most recent practical
date prior to the Closing Date;
(c) Certificates of good standing and foreign qualification of the Acquisition
Sub from the Secretary of State of the State of California, dated the most
recent practical date prior to the Closing Date;
(d) The Lease, together with a Memorandum of Lease, in form and substance
satisfactory to MPT;
(e) The Assignment of Rents and Leases in substantially the form attached hereto
as Exhibit 9.2(q);
(f) An Opinion of Xxxxx Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C., as
counsel for the Purchaser Parties substantially in the form attached as Exhibit
9.3(f);
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(g) At the Closing, each Purchaser Party shall have furnished to the Seller
Parties a certificate dated the Closing Date signed by such Purchaser Party to
the effect that all of the representations and warranties of such Purchaser
Party contained in this Agreement (considered collectively) and each of these
representations and warranties (considered individually) remain in all respects
true and correct as of the Closing Date as if made on such date and that such
Purchaser Party has performed and satisfied in all material respects all
covenants and conditions required by this Agreement to be performed or satisfied
by such Purchaser on or prior to Closing;
(h) Any bills of sale and assignments requiring the signature of any Purchaser
Party;
(i) The Security Agreement in substantially the form attached hereto as Exhibit
9.2(r); and
(j) The Noncompete Agreements substantially in the form attached as Exhibit
9.2(w).
ARTICLE X
TERMINATION
SECTION 10.1. TERMINATION. Notwithstanding anything to the contrary in this
Agreement, the remaining obligations of the parties hereunder may be terminated
and the transactions contemplated hereby abandoned at any time prior to Closing:
(i) by mutual written consent of the parties; (ii) by the Seller Parties if the
conditions set forth in Section 8.1 shall not have been satisfied on or before
June 30, 2005; or (iii) by the Purchaser Parties if the conditions set forth in
Section 8.2 shall not have been satisfied on or before June 30, 2005.
SECTION 10.2. NOTICE AND EFFECT. In the event of the termination of this
Agreement pursuant to this Article X, the party terminating this Agreement shall
give prompt written notice thereof to the parties, and the transactions
contemplated hereby shall be abandoned, without further action by any party.
Each filing, application and other submission relating to the transactions
contemplated hereby shall, to the extent practicable, be withdrawn from the
person to which it was made. The confidentiality provisions set forth in Article
VII of this Agreement shall survive any termination of this Agreement.
Notwithstanding any statement contained in this Agreement to the contrary,
termination of this Agreement shall not relieve any party from liability for any
breach or violation of this Agreement that arose prior to such termination.
ARTICLE XI
CERTAIN POST-CLOSING COVENANTS
SECTION 11.1. POST-CLOSING ACCESS TO INFORMATION. The Parties acknowledge that,
subsequent to Closing, each may need access to the Assets and to information,
documents or computer data in the control or possession of the other for
purposes of concluding the transactions contemplated herein and for audits,
investigations, compliance with governmental requirements, regulations and
requests, the prosecution or defense of third party claims. Accordingly, the
Parties agree that they will make available to the other and their agents,
independent auditors and/or governmental entities such documents and information
as may be available relating to the Assets and the Hospital and will permit the
other to make copies of such documents and information at the requesting party's
expense.
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SECTION 11.2. LICENSURE, LTAC CONVERSION. To the extent not obtained as of
Closing, the Seller Parties shall use their best efforts, including the
scheduling of all applicable surveys of state or federal governmental agencies,
to obtain, as soon as possible following the Closing, all provider numbers
permitting Vibra Sub to participate in the Government Programs and all other
licenses and permits from Governmental Entities necessary to conduct the
Business. The Seller Parties shall immediately notify the Purchaser Parties in
the event of any controversy relating to such efforts, including any
deficiencies identified by applicable governmental agencies with respect to the
aforementioned surveys, and shall use its best efforts to remedy any such
deficiencies immediately. In addition, Seller Parties shall use their best
efforts to obtain, as soon as possible, necessary approvals from applicable
Governmental Entities for the conversion of the Hospital's existing skilled
nursing beds to long term acute care beds. Seller Parties shall immediately
notify Purchaser Parties of any developments or controversies with respect to
such efforts.
SECTION 11.3. OCADIAN PURCHASE AGREEMENT INDEMNIFICATION. The parties
acknowledge that Seller Parties now has or may hereafter have certain
indemnification rights and claims against Ocadian pursuant to the terms of
Ocadian Purchase Agreement. In the event that any such indemnification right or
claim under the Ocadian Purchase Agreement shall arise or accrue after the
Closing with respect to or affecting any of the Assets which are delivered and
conveyed as of such Closing (an "Ocadian Claim"), the Seller Parties shall,
after notification to Purchaser Parties (i) immediately notify Ocadian of the
Ocadian Claim (including all material facts related thereto) and make a claim
for indemnity against Ocadian with respect thereto pursuant to the terms of the
Ocadian Purchase Agreement; (ii) immediately notify the Purchaser Parties of any
and all communications, notices or other information, whether written or oral,
it receives with respect to the Ocadian Claim; (iii) coordinate with Purchaser
Parties in the exercise all of the Seller Parties' rights with respect to the
Ocadian Claim (including, without limitation, the selection, engagement and/or
approval of counsel) it being understood that no Seller Party shall take any
action with respect to any Ocadian Claim (except for those actions set forth in
(i) and (ii) above) without the Purchaser Party's prior written consent; (iv)
hold in trust for the benefit of the Purchaser Parties and account for any
amounts received by any Seller Party in respect of any Ocadian Claim until the
final resolution of any of the Purchaser Parties' indemnity claims against the
Seller Parties hereunder which may be based on, or arise as a consequence of,
the facts and circumstances giving rise to the Ocadian Claim; and (v) not take
or agree to take any action which would conflict with its obligations to
Purchaser Parties with respect to such Ocadian Claim pursuant to this Section
11.3 or which would otherwise adversely affect any rights of the Seller Parties
with respect to such Ocadian Claim.
ARTICLE XII
INDEMNIFICATION
SECTION 12.1. THE SELLER PARTIES' AGREEMENT TO INDEMNIFY.
(a) Subject to the limitations set forth in this Article, the Seller Parties
agrees to jointly and severally indemnify, defend and hold harmless the
Purchaser Parties, their affiliates and their respective officers, directors,
members, (general and limited) partners, shareholders, employees, agents and
representatives (collectively, the "Purchaser Indemnified Parties") from and
against all demands, claims, actions, losses, damages, liabilities, penalties,
Taxes, costs and expenses
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(including, without limitation, attorneys' and accountants' fees, settlement
costs, arbitration costs and any reasonable other expenses for investigating or
defending any action or threatened action) asserted against or incurred by the
Purchaser Indemnified Parties or any of them arising out of or in connection
with or resulting from (i) any breach of, misrepresentation associated with or
failure to perform under any covenant, representation, warranty or agreement
under this Agreement or the other agreements contemplated hereby on the part of
the Seller Parties; (ii) any Excluded Liabilities (including Taxes arising prior
to Closing and any liability arising out of the ownership and operation of the
Assets prior to Closing) or (iii) any liability arising out of or relating to a
breach or default by Ocadian under the Ocadian Purchase Agreement or any
liability or obligation with respect to which Ocadian is required to indemnify
Seller Parties under the Ocadian Purchase Agreement (collectively, "Purchaser
Damages").
(b) The indemnification of the Purchaser Indemnified Parties by the Seller
Parties provided for under this Article XII shall be limited in certain respects
as follows: (i) the right of the Purchaser Indemnified Parties to seek
indemnification under this Section 12.1 shall terminate on the third anniversary
of Closing (the "Purchaser's Indemnity Periods"), except that the Purchaser'
Indemnity Period shall terminate on the fifth anniversary of the Closing Date
for claims under Sections 4.15 and 4.17 and (ii) the Seller Parties shall not be
required to indemnify the Purchaser Indemnified Parties for indemnification
claims under this Section 12.1 unless and until the aggregate amount of all
losses resulting in Purchaser' Damages exceeds Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00) (the "Minimum Aggregate Liability Amount") in which
event the foregoing indemnification obligation shall apply to the aggregate
amount of Purchaser Damages that exceeds Two Hundred Fifty Thousand and No/100
Dollars ($250,000.00); provided, however, that the maximum liability of the
Seller Parties under this Agreement shall be an amount equal Eight Million and
No/100 Dollars ($8,000,000.00). The foregoing limitations on time and amount
shall not apply to any Purchaser Damages arising or resulting from (i) any act
or omission of the Seller which constitutes fraud, (ii) any breach by the Seller
Parties of their post-closing covenants; or (iii) the Excluded Liabilities
(which for this purpose shall include all liabilities referred to in clause
(iii) of Section 12.1(a) above).
SECTION 12.2. THE PURCHASER PARTIES' AGREEMENT TO INDEMNIFY.
(a) Subject to the limitations set forth in this Article, the Purchaser Parties
jointly and severally agree to indemnify, defend and hold harmless the Seller
Parties, their Affiliates and their respective officers, directors, members,
purchasers, shareholders, employees and representatives (collectively, the
"Seller Indemnified Parties") from and against all demands, claims, actions,
losses, damages, liabilities, penalties, Taxes, costs and expenses (including,
without limitation, reasonable attorneys' fees, settlement costs, arbitration
costs and any reasonable other expenses for investigating or defending any
action or threatened action) asserted against or incurred by any of the Seller
Indemnified Parties or any of them arising out of or in connection with or
resulting from (i) any breach of, misrepresentation associated with or failure
to perform under any covenant, representation, warranty or agreement under this
Agreement or the other agreements contemplated hereby on the part of any
Purchaser Party; or (ii) the use, ownership or operation of any of the Assets
after Closing (collectively, "Seller Damages").
(b) The indemnification of the Seller Indemnified Parties by the Purchaser
Parties provided for under this Article XII shall be limited in certain respects
as follows: (i) the right of the Seller
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Indemnified Parties to seek indemnification under this Section 12.2 shall
terminate on the first anniversary of Closing (the "Seller Indemnity Period"),
and (ii) the Purchaser Parties shall not be required to indemnify the Seller
Indemnified Parties for indemnification claims under this Section 12.2 unless
and until the amount of all losses resulting in Seller Damages exceeds Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00) in which event the
foregoing indemnification obligation shall apply to the aggregate amount of
Seller Damages that exceeds Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00); provided, however, that the maximum liability of the Purchaser
Parties under this Agreement shall be an amount equal to the Eight Million and
No/100 Dollars ($8,000,000.00). The foregoing limitation on time and amount
shall not apply to any Seller Damages arising or resulting from any act or
omission of any Purchaser Party which constitutes fraud, any breach by any
Purchaser Party of its post-closing covenants.
SECTION 12.3. NOTIFICATION AND DEFENSE OF CLAIMS.
(a) A party entitled to be indemnified pursuant to Section 12.1 or Section 12.2
(the "Indemnified Party") shall notify the party liable for such indemnification
(the "Indemnifying Party") in writing of any claim or demand which the
Indemnified Party has determined has given or could give rise to a right of
indemnification under this Agreement, as soon as possible after the Indemnified
Party becomes aware of such claim or demand; provided, that the Indemnified
Party's failure to give such notice to the Indemnifying Party in a timely
fashion shall not result in the loss of the Indemnified Party's rights with
respect thereto except to the extent the Indemnified Party is materially
prejudiced by the delay.
If the Indemnified Party shall notify the Indemnifying Party of any claim or
demand pursuant to the provisions hereof, and if such claim or demand relates to
a claim or demand asserted by a third party against the Indemnified Party (a
"Third Party Claim"), the Indemnifying Party shall have the obligation either
(i) to pay such claim or demand, or (ii) defend any such Third Party Claim with
counsel reasonably satisfactory to the Indemnified Party. After the Indemnifying
Party has assumed the defense of such Third Party Claim, the Indemnifying Party
shall not be liable to the Indemnified Party under this Section 12 for any legal
or other expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof other than reasonable costs of investigation, provided
that the Indemnified Party shall have the right to employ counsel, at the
Indemnifying Party's expense, to represent it if (A) in the Indemnified Party's
reasonable opinion the Indemnifying Party is not diligently prosecuting the
defense of such Third Party Claim, (B) such Third Party Claim involves remedies
other than monetary damages and such remedies, in the Indemnified Party's
reasonable judgment, could have a material adverse effect on such Indemnified
Party, (C) the Indemnified Party may have available to it one or more defenses
or counterclaims that are inconsistent with one or more defenses or
counterclaims that may be alleged by the Indemnifying Party, or (D) the
Indemnified Party believes in its reasonable discretion that a conflict of
interest exists between the Indemnifying Party and the Indemnified Party with
respect to such Third-Party Claim or action, and in any such event the
reasonable fees and expenses of such separate counsel for the Indemnified Party
shall be paid by the Indemnifying Party. The Indemnified Party shall make
available to the Indemnifying Party or its agents all records and other
materials in the Indemnified Party's possession reasonably required by it for
its use in contesting any Third-Party Claim or demand.
35
(b) No Indemnified Party may settle or compromise any claim or consent to the
entry of any judgment with respect to which indemnification is being sought
hereunder without the prior written consent of the Indemnifying Party, unless
(i) the Indemnifying Party fails to assume and diligently prosecuting the
defense of such claim or (ii) such settlement, compromise or consent includes an
unconditional release of the Indemnifying Party from all liability arising out
of such claim and does not contain any equitable order, judgment or term which
includes any admission of wrongdoing or could result in any liability (including
regulatory liability) of the Indemnifying Party or which would otherwise in any
manner affect, restrain or interfere with the business of the Indemnifying Party
or any Affiliate of the Indemnifying Party. An Indemnifying Party may not,
without the prior written consent of the Indemnified Party, settle or compromise
any claim or consent to the entry of any judgment with respect to which
indemnification is being sought hereunder unless such settlement, compromise or
consent includes an unconditional release of the Indemnified Party from all
liability arising out of such claim and does not contain any equitable order,
judgment or term which includes any admission of wrongdoing or could result in
any liability (including regulatory liability) of the Indemnified Party or which
would otherwise in any manner affect, restrain or interfere with the business of
the Indemnified Party or any of the Indemnified Party's Affiliates.
SECTION 12.4. INVESTIGATIONS. The right to indemnification based upon breaches
or inaccuracies of representations, warranties and covenants will not be
affected by any investigation conducted with respect to, or knowledge acquired
(or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, whether as a
result of disclosure by a party pursuant to this Agreement or otherwise, with
respect to the accuracy or inaccuracy of or compliance with any such
representation, warranty or covenant. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant, will not affect a party's right to
indemnification, payment of damages or other remedies based on such
representations, warranties and covenants.
SECTION 12.5. TREATMENT OF INDEMNIFICATION PAYMENTS. All indemnification
payments made pursuant to this Article XII shall be treated by the parties for
income Tax purposes as adjustments to the Purchase Price, unless otherwise
required by applicable Law.
SECTION 12.6. EXCLUSIVE REMEDY. FROM AND AFTER THE APPLICABLE CLOSING, THE
PARTIES AGREE AND ACKNOWLEDGE THAT THE INDEMNIFICATION RIGHTS PROVIDED IN THIS
ARTICLE XII SHALL BE THE SOLE AND EXCLUSIVE REMEDY OF THE PARTIES TO THIS
AGREEMENT FOR BREACHES OF THIS AGREEMENT AND FOR ALL DISPUTES ARISING UNDER OR
RELATING TO THIS AGREEMENT AND ANY ADDITIONAL AGREEMENTS OR DOCUMENTS EXECUTED
OR DELIVERED IN OR ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT
FOR POST-CLOSING COVENANTS, CASES WHERE SPECIFIC PERFORMANCE IS AVAILABLE AS A
REMEDY AND EXCEPT IN CASES OF FRAUD.
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ARTICLE XIII
DISPUTE RESOLUTION
SECTION 13.1. GOVERNING LAW, JURISDICTION AND VENUE. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS PRINCIPLES. EACH OF THE PARTIES HERETO IRREVOCABLY
AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT SITTING IN NEW CASTLE COUNTY, STATE OF DELAWARE, OVER ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO, THIS AGREEMENT. EACH OF THE PARTIES
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF
ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR
DOCUMENT BY REGISTERED MAIL ADDRESSED TO A PARTY AT THE ADDRESS DESIGNATED
PURSUANT TO SECTION 14.2 OF THIS AGREEMENT SHALL BE EFFECTIVE SERVICE OF PROCESS
AGAINST SUCH PARTY FOR ANY ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE
ENFORCED IN ANY OTHER COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY
BE SUBJECT.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. ASSIGNMENT. This Agreement is not assignable by any party without
the prior written consent of the other party hereto. Notwithstanding the
foregoing, the Purchaser Parties may at any time and without the consent of the
Seller Parties assign all of their respective rights and obligations hereunder
to one or more of its Affiliates; provided, however, that no such assignment
shall relieve or release such Purchaser Parties from their obligations
hereunder.
SECTION 14.2. NOTICE. All notices, demands, requests and other communications or
documents required or permitted to be provided under this Agreement shall duly
be in writing and shall be given to the applicable party at its address or
facsimile number set forth below or such other address or facsimile number as
the party may later specify for that purpose by notice to the other party:
If to any Seller Party Vibra Healthcare, LLC
0000 Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
With a copy to: Latsha, Davis, Xxxx & XxXxxxx, P.C.
0000 Xxxx Xxxxx Xxxxxxxxx
00
Xxxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Esq.
If to any Purchaser Party c/o Medical Properties Trust, Inc.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx.
38
With a copy to: Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, PC
000 00xx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Each notice shall, for all purposes, be deemed given and received:
(i) if by hand, when delivered;
(ii) if given by nationally recognized and reputable overnight delivery
service, the Business Day on which the notice is actually received by the
party; or
(iii) if given by certified mail, return receipt requested, postage
prepaid, the date shown on the return receipt.
SECTION 14.3. CALCULATION OF TIME PERIOD. When calculating the period of time
before which, within which or following which any act is to be done or step
taken, the date that is the reference date in calculating such period shall be
excluded. If the last day of such period is a non-Business Day, the period in
question shall end as of the next succeeding Business Day.
SECTION 14.4. CAPTIONS. The section and paragraph headings or captions appearing
in this Agreement are for convenience only, are not a part of this Agreement,
and are not to be considered in interpreting this Agreement.
SECTION 14.5. ENTIRE AGREEMENT; MODIFICATION. This Agreement, including the
Exhibits and Schedules attached hereto, and other written agreements executed
and delivered at Closing by the parties hereto, constitute the entire agreement
and understanding of the parties with respect to the subject matter of this
Agreement. This Agreement supersedes any prior oral or written agreements
between the parties with respect to the subject matter of this Agreement. It is
expressly agreed that there are no verbal understandings or agreements which in
any way change the terms, covenants, and conditions set forth in this Agreement,
and that no modification of this Agreement and no waiver of any of its terms and
conditions shall be effective unless it is made in writing and duly executed by
the parties hereto.
SECTION 14.6. SCHEDULES AND EXHIBITS. All Schedules and Exhibits referred to in
this Agreement and attached hereto shall be deemed a part of this Agreement and
are hereby incorporated herein by reference.
SECTION 14.7. FURTHER ASSURANCES. From time to time after the Closing and
without further consideration, the Seller Parties shall execute and deliver to
the Purchaser Parties such instruments of sale, transfer, conveyance,
assignment, consent or other instruments as may be reasonably requested by the
Purchaser Parties in order to vest all right, title and interest of the
applicable Seller Parties in and to the Assets conveyed and delivered at the
Closing or as otherwise required to carry out the purpose and intent of this
Agreement.
SECTION 14.8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the
39
same instrument. Executed signature pages to this Agreement may be delivered by
facsimile transmission and any such signature page shall be deemed an original.
SECTION 14.9. EXPENSES. The Seller Parties shall pay all costs and expenses
incurred by the Seller Parties and Purchaser Parties in connection with the
transactions contemplated hereby, including, without limitation, all document
stamps, transfer, excise, recording, gains, sales, bulk sales, use and similar
conveyance Taxes and fees imposed by reason of and associated with the
transactions contemplated hereby and by deficiency, interest or penalty asserted
with respect thereto, as well as the cost of the survey, the title insurance and
all title endorsements required by the Purchaser Parties and its lenders, and
all attorneys' fees and expenses. The parties acknowledge that the Seller
Parties have already paid MPT the sum of Twenty Five Thousand Dollars ($25,000)
which sum shall be credited against the expense reimbursement obligations of the
Seller Parties set forth herein.
SECTION 14.10. SYNDICATION. Subject to applicable healthcare regulatory
requirements, MPT will offer up to twenty percent (20%) of the equity interests
in Acquisition Sub to local or area physicians at such time following closing as
determined by MPT. MPT and the Seller Parties will work together to decide which
physicians receive an opportunity to invest in the Acquisition Sub.
SECTION 14.11. SECURITIES OFFERING AND FILINGS. Notwithstanding anything
contained herein to the contrary, the Seller Parties agree to cooperate with MPT
in connection with any securities offerings and filings or financing
transactions with lenders or other third parties and, in connection therewith,
the Seller Parties shall furnish MPT with such financial and other information
as MPT shall request. MPT shall have the right of access, at reasonable business
hours and upon advance notice, to all documentation and information relating to
the Real Property and Improvements and have the right to disclose any
information regarding this Agreement, the Seller Parties, the Real Property and
Improvements and all other agreements executed in connection herewith and all
other documents in connection with the transactions contemplated hereby, and
such other additional information which MPT may reasonably deem necessary.
SECTION 14.12. BINDING EFFECT. This Agreement shall bind and inure to the
benefit of the parties hereto and their successors and assigns; provided,
however, that this Agreement shall not inure to the benefit of any assignee
pursuant to an assignment which violates the terms of this Agreement
[Signatures appear on the following page.]
40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers on the date first written above.
PURCHASER PARTIES:
MPT OPERATING PARTNERSHIP, L.P.
By: /s/ Xxxxxx X. XxXxxx
-------------------------------
Name: Xxxxxx X. XxXxxx
Executive Vice President, Chief
Title: Operating Officer and Treasurer
MPT OF XXXXXXX, LLC
By: MPT Operating Partnership, L.P.
Its: Sole Member
By: /s/ Xxxxxx X. XxXxxx
-------------------------------
Name: Xxxxxx X. XxXxxx
Executive Vice President, Chief
Title: Operating Officer and Treasurer
SELLER PARTIES:
VIBRA HEALTHCARE, LLC
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
NORTHERN CALIFORNIA
REHABILITATION HOSPITAL, LLC
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
41
EXHIBIT A
Lease
[See attachment.]
A-1
EXHIBIT B
Legal Description of the Land/Real Property
Parcels A and B as set forth and shown on that certain Map entitled "Parcel Map
No. LS 104-78 for Xxxxx Xxx XxXxxxxx and Xxxxxxx Xxxx XxXxxxxx, as Co-Trustees
of Xxxxx Mac., Inc. Profit Sharing Trust, being a portion of Tract E, Division 2
of the P.B. Reading Grant, in the City of Xxxxxxx, Xxxxxx County, California,"
filed in the Office of the County Recorder, February 7, 1979 in Book 17 of
Parcel Maps at Page 87, Shasta County Records.
APN: 000-000-000
B-1
EXHIBIT 9.2(b)
Deed
[See attachment.]
EXHIBIT 9.2(p)
Lease Guaranty Agreement
[See attachment.]
EXHIBIT 9.2(q)
Assignment of Rents and Leases
[See attachment.]
EXHIBIT 9.2(r)
Security Agreement
[See attachment.]
EXHIBIT 9.2(t)
Legal Opinion of Latsha, Davis, Xxxx & XxXxxxx, P.C.
[See attachment.]
EXHIBIT 9.2(w)
Noncompete Agreements
[See attachment.]
EXHIBIT 9.3(f)
Legal Opinion of Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C.
[See attachment.]
