EXHIBIT 10.47
PURCHASE, SALE AND LOAN AGREEMENT
BY AND AMONG
MPT OPERATING PARTNERSHIP, L.P.
MPT OF XXXXXXXXX, L.L.C.
MPT OF XXXXXX SPRINGS, LLC
(COLLECTIVELY, THE "PURCHASER PARTIES");
AND
XXXXXXXXX HEALTHCARE PROPERTIES, L.L.C.,
XXXXXX SPRINGS HEALTHCARE PROPERTIES, L.L.C.,
GULF STATES LONG TERM ACUTE CARE OF XXXXXXXXX, L.L.C.
GULF STATES LONG TERM ACUTE CARE OF XXXXXX SPRINGS, L.L.C.
(COLLECTIVELY, THE "SELLER PARTIES")
DATED AS OF JUNE 9, 2005
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PURCHASE AND SALE AGREEMENT...................................................................................... 1
WITNESSETH:...................................................................................................... 1
ARTICLE I DEFINED TERMS......................................................................................... 2
SECTION 1.1. CERTAIN DEFINED TERMS...................................................................... 2
SECTION 1.2. INTERPRETATION; TERMS GENERALLY............................................................ 9
ARTICLE II PURCHASE AND SALE OF ASSETS, ASSUMPTION OF LIABILITIES............................................... 10
SECTION 2.1. PURCHASE AND SALE OF XXXXXXXXX ASSETS...................................................... 10
SECTION 2.2. PURCHASE AND SALE OF XXXXXX SPRINGS ASSETS................................................. 10
SECTION 2.3. EXCLUDED LIABILITIES....................................................................... 10
SECTION 2.4. SPECIAL PURPOSE ENTITY..................................................................... 11
ARTICLE III PURCHASE PRICE...................................................................................... 11
SECTION 3.1. PURCHASE PRICE FOR XXXXXXXXX............................................................... 11
SECTION 3.2. PURCHASE PRICE FOR XXXXXX SPRINGS.......................................................... 11
SECTION 3.3. TAXES, RENTALS, UTILITIES.................................................................. 11
SECTION 3.4. ALLOCATION OF PURCHASE PRICE............................................................... 11
SECTION 3.5 COMMITMENT FEE............................................................................. 12
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER PARTIES...................................... 11
SECTION 4.1. ORGANIZATION............................................................................... 12
SECTION 4.2. AUTHORIZATION AND ENFORCEABILITY........................................................... 12
SECTION 4.3. ABSENCE OF CONFLICTS....................................................................... 12
SECTION 4.4. CONSENTS AND APPROVALS..................................................................... 12
SECTION 4.5. FINANCIAL STATEMENTS....................................................................... 13
SECTION 4.6. ACCOUNTS RECEIVABLE........................................................................ 13
SECTION 4.7. NO UNDISCLOSED LIABILITIES................................................................. 13
SECTION 4.8. ABSENCE OF CHANGES......................................................................... 13
SECTION 4.9. LICENSES................................................................................... 15
SECTION 4.10. ACCREDITATION; MEDICARE AND MEDICAID; THIRD PARTY PAYORS.................................. 15
SECTION 4.11. HIPAA COMPLIANCE.......................................................................... 16
SECTION 4.12. HEALTHCARE REGULATORY MATTERS............................................................. 17
SECTION 4.13. TAX MATTERS REQUIRED TO BE DISCLOSED...................................................... 18
SECTION 4.14. GOOD TITLE TO ASSETS...................................................................... 18
SECTION 4.15. TITLE AND CONDITION OF THE REAL PROPERTY.................................................. 18
SECTION 4.16. CONDITION OF PERSONAL PROPERTY............................................................ 21
SECTION 4.17. COMPLIANCE WITH ENVIRONMENTAL LAWS........................................................ 21
SECTION 4.18. INSURANCE................................................................................. 22
SECTION 4.19. LITIGATION................................................................................ 23
SECTION 4.20. CONTRACTS, OBLIGATIONS AND COMMITMENTS.................................................... 23
SECTION 4.21. INTANGIBLE PROPERTY....................................................................... 23
SECTION 4.22. EMPLOYEES AND EMPLOYEE RELATIONS.......................................................... 24
SECTION 4.23. COMPLIANCE WITH LAW....................................................................... 25
SECTION 4.24. XXXX-XXXXXX OBLIGATIONS................................................................... 25
SECTION 4.25. MEDICAL STAFF MATTERS..................................................................... 25
SECTION 4.26. BROKERS................................................................................... 26
SECTION 4.27. RECORDS................................................................................... 26
SECTION 4.28. REPRESENTATIONS COMPLETE.................................................................. 26
ARTICLE V REPRESENTATIONS AND WARRANTIES BY THE PURCHASER PARTIES............................................... 26
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SECTION 5.1. ORGANIZATION............................................................................... 26
SECTION 5.2. AUTHORIZATION; ENFORCEMENT, ABSENCE OF CONFLICTS........................................... 26
SECTION 5.3. BINDING AGREEMENT.......................................................................... 27
SECTION 5.4. LITIGATION................................................................................. 27
SECTION 5.5. BROKERS.................................................................................... 27
SECTION 5.6. COMPLIANCE WITH LAW........................................................................ 27
ARTICLE VI TITLE AND SURVEY..................................................................................... 27
SECTION 6.1. SURVEY..................................................................................... 27
SECTION 6.2. TITLE INSURANCE............................................................................ 28
ARTICLE VII PRE-CLOSING COVENANTS............................................................................... 28
SECTION 7.1. NO SHOP.................................................................................... 28
SECTION 7.2. ACCESS; CONFIDENTIALITY.................................................................... 29
SECTION 7.3. SCHEDULE UPDATES........................................................................... 30
SECTION 7.4. CONDUCT OF BUSINESS BY THE SELLER PARTIES PENDING THE CLOSING.............................. 30
SECTION 7.5. COOPERATION................................................................................ 31
SECTION 7.6. REGULATORY AND OTHER AUTHORIZATIONS, NOTICES AND CONSENTS.................................. 31
SECTION 7.7. MUTUAL COVENANTS........................................................................... 32
SECTION 7.8. PUBLIC ANNOUNCEMENTS....................................................................... 32
ARTICLE VIII CLOSING CONDITIONS................................................................................. 33
SECTION 8.1. CONDITIONS TO THE OBLIGATIONS OF THE SELLER PARTIES........................................ 33
SECTION 8.2. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER PARTIES..................................... 33
ARTICLE IX CLOSING.............................................................................................. 34
SECTION 9.1. CLOSING DATE............................................................................... 35
SECTION 9.2. SELLER PARTIES' CLOSING DATE DELIVERABLES.................................................. 34
SECTION 9.3. PURCHASER PARTIES' CLOSING DATE DELIVERABLES............................................... 36
ARTICLE X TERMINATION........................................................................................... 37
SECTION 10.1. TERMINATION............................................................................... 37
SECTION 10.2. NOTICE AND EFFECT......................................................................... 37
ARTICLE XI CERTAIN POST-CLOSING COVENANTS....................................................................... 38
SECTION 11.1. POST-CLOSING ACCESS TO INFORMATION........................................................ 38
ARTICLE XII INDEMNIFICATION..................................................................................... 38
SECTION 12.1. SELLER PARTIES AGREEMENT TO INDEMNIFY..................................................... 38
SECTION 12.2. THE PURCHASER PARTIES' AGREEMENT TO INDEMNIFY............................................. 39
SECTION 12.3. NOTIFICATION AND DEFENSE OF CLAIMS........................................................ 40
SECTION 12.4. INVESTIGATIONS............................................................................ 41
SECTION 12.5. TREATMENT OF INDEMNIFICATION PAYMENTS..................................................... 41
SECTION 12.6. EXCLUSIVE REMEDY.......................................................................... 41
ARTICLE XIII DISPUTE RESOLUTION................................................................................. 42
SECTION 13.1. GOVERNING LAW, JURISDICTION AND VENUE..................................................... 42
ARTICLE XIV MISCELLANEOUS....................................................................................... 42
SECTION 14.1. ASSIGNMENT................................................................................ 42
SECTION 14.2. NOTICE.................................................................................... 42
SECTION 14.3. CALCULATION OF TIME PERIOD................................................................ 43
SECTION 14.4. CAPTIONS.................................................................................. 43
SECTION 14.5. ENTIRE AGREEMENT; MODIFICATION............................................................ 43
SECTION 14.6. SCHEDULES AND EXHIBITS.................................................................... 43
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SECTION 14.7. FURTHER ASSURANCES........................................................................ 44
SECTION 14.8. COUNTERPARTS.............................................................................. 44
SECTION 14.9. EXPENSES.................................................................................. 44
SECTION 14.10. SYNDICATION.............................................................................. 44
SECTION 14.11. SECURITIES OFFERING AND FILINGS.......................................................... 44
SECTION 14.12. BINDING EFFECT........................................................................... 44
EXHIBIT X. Xxxxxxxxx Lease............................................................................... A-1
EXHIBIT B Intentionally Omitted B-1
EXHIBIT C. Legal Description of the Xxxxxxxxx Land/Real Property......................................... C-1
EXHIBIT D. Legal Description of the Xxxxxx Springs Land/Real Property.................................... D-1
EXHIBIT 9.2(b). Xxxxxxxxx Deed
EXHIBIT 9.2(c). Intentionally Omitted
EXHIBIT 9.2(q). Lease Guaranty Agreement
EXHIBIT 9.2(r). Assignment of Rents and Leases
EXHIBIT 9.2(s). Security Agreement
EXHIBIT 9.2(u). Legal Opinion of Xxxxxx Xxxxxxx
EXHIBIT 9.2(x). Noncompete Agreement
EXHIBIT 9.2(z). Xxxxxx Springs Lease
EXHIBIT 9.3(g). Legal Opinion of Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C.
SCHEDULE 2.3. Assumed Liabilities
SCHEDULE 3.4. Allocation of Purchase Price
SCHEDULE 4.1. Ownership of Each Seller Party
SCHEDULE 4.3. Disclosure of Affected Rights of Seller
SCHEDULE 4.4. Consents and Approvals
SCHEDULE 4.5. Financial Statements
SCHEDULE 4.6. Accounts Receivable
SCHEDULE 4.7. Seller Parties' Liabilities
SCHEDULE 4.8. Changes since the Balance Sheet Date
SCHEDULE 4.8(m). Disclosures of Capital Expenditure or Commitment
SCHEDULE 4.8(n). Changes to Governing Documents
SCHEDULE 4.9. Licenses and Permits
SCHEDULE 4.10. Uncorrected Deficiencies
SCHEDULE 4.11. HIPPA Compliance Plans
SCHEDULE 4.12. Disclosure of Health Care Regulatory Matters
SCHEDULE 4.13. Taxes
SCHEDULE 4.14. Good Title Disclosures by Seller Parties
SCHEDULE 4.15(a). Title and Condition of Real Property - Xxxxxxxxx Seller
SCHEDULE 4.15(b). Title and Condition of Real Property - Xxxxxx Springs Seller
SCHEDULE 4.15(d). Conditions affecting Property
SCHEDULE 4.15(f). Public Takings
SCHEDULE 4.15(g). Claims Against the Real Property
SCHEDULE 4.15(j). Tenant Leases
SCHEDULE 4.15(k). Brokerage, Leasing Commissions or Other Compensation
SCHEDULE 4.15(m). Conditions of Tenant Leases
SCHEDULE 4.16. Conditions of Personal Property
SCHEDULE 4.17. Exception to Environmental Representations
SCHEDULE 4.18. List of all Insurances Held by Sellers
SCHEDULE 4.19. Judgment, Decrees, Orders Against Seller Parties
SCHEDULE 4.20. Contractual Agreements Affecting Property of Seller Parties
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SCHEDULE 4.21. Intangible Property
SCHEDULE 4.22(a). Employees and Employee Relations
SCHEDULE 4.22(b). Labor Union, Trade Associations and Collective Bargaining Agreements
SCHEDULE 4.22(c). Labor Proceedings
SCHEDULE 4.22(d). Management Employees
SCHEDULE 4.22(f). Employee Pension Benefit Plan
SCHEDULE 4.24. Xxxx-Xxxxxx Obligations
SCHEDULE 4.25. Medical Staff Matters
SCHEDULE 7.4. Conduct of Business by the Seller Parties Pending the Closing
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as
of June 9, 2005 by and among MPT OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership ("MPT"), MPT OF XXXXXXXXX, LLC, a Delaware limited liability company
(the "Xxxxxxxxx Acquisition Sub"), MPT OF XXXXXX SPRINGS, LLC, a Delaware
limited liability company (the "Xxxxxx Springs Acquisition Sub") (Collectively,
the "Acquisition Subs") (MPT, MPT Development and the Acquisition Sub being
herein referred to, collectively, as the "Purchaser Parties"); and XXXXXXXXX
HEALTHCARE PROPERTIES, L.L.C., a Louisiana limited liability company ("Covington
Seller"), XXXXXX SPRINGS HEALTHCARE PROPERTIES, L.L.C., a Louisiana limited
liability company ("Xxxxxx Springs Borrower"), GULF STATES LONG TERM ACUTE CARE
OF COVINGTON, L.L.C., a Louisiana limited liability company ("Covington
Operator"), and GULF STATES LONG TERM ACUTE CARE OF XXXXXX SPRINGS, L.L.C., a
Louisiana limited liability company ("Xxxxxx Springs Operator") (collectively,
the "Seller Parties").
WITNESSETH:
WHEREAS, Covington Operator is the operator of that certain general acute care
hospital (the "Covington Hospital") facility located in the Xxxxxxxxx, Louisiana
area;
WHEREAS, Xxxxxx Springs Operator is the operator of that certain general acute
care hospital (the "Xxxxxx Springs Hospital") (the Xxxxxxxxx Hospital and the
Xxxxxx Springs Hospital being herein referred to, collectively, as the
"Hospitals") facility located in the Xxxxxx Springs, Louisiana area;
WHEREAS, subject to the terms and conditions hereinafter set forth, Covington
Seller desires to sell, and the Covington Acquisition Sub desires to purchase,
the Xxxxxxxxx Real Property (as defined in Section 2.1(a)) and certain other
assets associated or used in connection with the Xxxxxxxxx Hospital, all on the
terms and conditions set forth in this Agreement;
WHEREAS, subject to the terms and conditions hereinafter set forth, Xxxxxx
Springs Borrower desires to borrow, and Xxxxxx Springs Acquisition Sub desires
to lend, the sum of Six Million Dollars ($6,000,000) (the "Loan"), all on the
terms and conditions set forth in this Agreement; and
WHEREAS, contemporaneously with the closing of the Xxxxxxxxx purchase and sale,
Xxxxxxxxx Operator shall lease back the Xxxxxxxxx Real Property from the
Acquisition Sub pursuant to a lease in the form of Exhibit A (the "Lease").
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 Subs" 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.
"Assets" shall mean the Xxxxxxxxx Assets, as well as those certain tracts of
land consisting of approximately Seven and 93/100 (7.93) acres located in Xxxxxx
Springs, Louisiana the legal descriptions of which are set forth on Exhibit D
attached hereto (the "Xxxxxx Springs Land") (the Covington Land and the Xxxxxx
Springs Land being herein referred to, collectively, as the "Land") and all
Improvements located thereon ("Xxxxxx Springs Real Property") (the Xxxxxxxxx
Real Property and the Xxxxxx Springs Real Property being herein referred to,
collectively, as the "Real Property");
"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 or Businesses" means the operation of the Hospitals and the engagement
in and pursuit and conduct of any business venture or activity related thereto
or related to the provision of "physician admit" services at the Xxxxxxxxx
and/or Xxxxxx Springs Real Property.
"Business Day" shall mean 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.
"Business Employees" shall have the meaning set forth in Section 4.22(a) hereof.
"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.
"Xxxxxxxxx Acquisition Sub" shall have the meaning set forth in the preamble to
this Agreement.
"Xxxxxxxxx Appraisal" means that certain appraisal of the Xxxxxxxxx Real
Property in form and substance, and prepared by a Person, satisfactory to MPT in
its sole discretion.
"Xxxxxxxxx Appraised Value" means the fair market value of the Xxxxxxxxx Real
Property as set forth in the Xxxxxxxxx Appraisal.
"Xxxxxxxxx Assets" shall have the meaning set forth in Section 2.1 hereof.
"Xxxxxxxxx Deed" shall have the meaning set forth in Section 9.2(b) hereof.
"Xxxxxxxxx Hospital" shall have the meaning set forth in the recitals hereof.
"Xxxxxxxxx Land" shall have the meaning set forth in Section 2.1(a) hereof.
"Xxxxxxxxx Real Property" shall have the meaning set forth in Section 2.1
hereof.
"Xxxxxxxxx Seller" shall have the meaning set forth in the preamble to this
Agreement.
"Xxxxxx Springs Acquisition Sub" shall have the meaning set forth in the
preamble to this Agreement.
"Xxxxxx Springs Appraisal" means that certain appraisal of the Xxxxxxxxx Real
Property in form and substance, and prepared by a Person, satisfactory to MPT in
its sole discretion.
"Xxxxxx Springs Appraised Value" means the fair market value of the Xxxxxx
Springs Real Property as set forth in the Xxxxxx Springs Appraisal.
"Xxxxxx Springs Borrower" shall have the meaning set forth in the preamble to
this Agreement.
"Xxxxxx Springs Hospital" shall have the meaning set forth in the recitals
hereof.
"Xxxxxx Springs Land" shall have the meaning set forth in the definition of
"Assets" set forth above.
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"Xxxxxx Springs Real Property" shall have the meaning set forth in the
definition of "Assets" set forth above.
"Dispute" shall have the meaning set forth in Section 7.6 hereof.
"Environmental Claim" means any Claim, action, cause of action, investigation or
notice (written or oral) by any 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 any Seller Party, now or in the
past, or (ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.
"Environmental Issues" shall mean those issues relating to the Xxxxxx Springs
Real Property set forth in that certain report by Land America dated May 19,
2005.
"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.
"Exception Documents" means true, correct, current and legible copies of each
document listed as an exception to title on the Title Commitment.
"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
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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 of competent jurisdiction.
"Government Programs" shall have the meaning set forth in Section 4.10 hereof.
"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.
"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.
"Hospitals" 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 Land, 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
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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.
"Intangible Property" shall have the meaning set forth in Section 4.21 hereof.
"JCAHO" shall have the meaning set forth in Section 4.10 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, exercising similar authority
with respect to such Person) including, but not limited to, in the case of any
Seller Party, S. Xxxxx Xxxxxxx and Xxxxxxx X. Xxxxxx (a Person's "Knowledge
Group"), 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.
"Labor Proceeding" shall have the meaning set forth in Section 4.22(c) hereof.
"Land" shall have the meaning set forth in the definition of "Assets" set forth
above.
"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.
"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.
"Loan" shall have the meaning set forth in the recitals hereof.
"Loan Documents" shall have the meaning set forth in Section 9.2(p) hereof.
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"Material Adverse Effect" means 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 or condition (financial or
otherwise) of, or the ability to timely satisfy the obligations or liabilities
(whether absolute or contingent) of, any Seller Party, (ii) the Business or the
Assets, or (iii) the ability of any Seller Party 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.
"Permitted Encumbrances" means (i) Liens for or arising from current taxes not
yet due and payable; (ii) easements and other restrictions of record; (iii)
matters set forth in the Title Commitment issued by the Title Company; (iv)
matters disclosed on the Survey; and (v) other matters, encumbrances and defects
approved by MPT in writing.
"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.
"Physician" means any physician rendering services, within, at or on either
Hospital or its premises within the five (5) year period ending on the date of
this Agreement.
"Public Taking" shall have the meaning set forth in Section 4.16(e) hereof.
"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.
"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 definition of "Assets"
set forth above.
"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
7
state in which the Real Property is located and in the state in which the
principal office of each Seller Party 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 Party 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.
"Seller Party Plan" shall have the meaning set forth in Section 4.22(f) hereof.
"Sentinel Events" shall have the meaning set forth in Section 4.10 hereof.
"Service Provider" means any Person who has rendered or is rendering services to
or on behalf of any of the Seller Parties.
"Special Purpose Entity" means an entity which (i) exists solely for the purpose
of owning and/or leasing all or any portion of the Xxxxxxxxx Real Property or
the Xxxxxx Springs Real Property and conducting the operation of the respective
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 respective 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 Xxxxxxxxx Real Property or the Xxxxxx Springs 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
respective 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.
"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 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.
8
"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.
"Tenant Leases" shall have the meaning set forth in Section 4.15(i) hereof.
"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 the national service office of a title insurance company
licensed in the state in which the Real Property is located and selected by MPT
in its sole discretion.
"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 any Seller Party now
holds or under which any Seller Party is 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 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.
9
ARTICLE II
PURCHASE AND SALE OF ASSETS, LOAN, ASSUMPTION OF LIABILITIES
SECTION 2.1. PURCHASE AND SALE OF XXXXXXXXX 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, Xxxxxxxxx Seller, in
consideration for the payment of the Purchase Price in accordance with Section
3.1, shall grant, sell, assign, transfer, convey and deliver to Acquisition Sub,
and Acquisition Sub shall purchase and acquire from Xxxxxxxxx Seller, free and
clear of all Liens, other than Permitted Encumbrances, the following assets of
Xxxxxxxxx Operator (the "Covington Assets"):
(a) those certain tracts of land consisting of approximately Seven and 07/100
(7.07) acres located in Covington, Louisiana the legal descriptions of which are
set forth on Exhibit C attached hereto (the "Covington Land") and all
Improvements located thereon (the `Xxxxxxxxx Real Property");
(b) to the extent assignable, all rights in all intangible property relating
exclusively to the Xxxxxxxxx Real Property, including, but limited to, zoning
rights, Permits (other than operating permits) and indemnification or similar
rights and all Warranties affecting or inuring to the benefit of the Xxxxxxxxx
Real Property or the owner thereof (including, without limitation, any
indemnification or similar rights and Warranties related to the Xxxxxxxxx Real
Property);
(c) 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 Xxxxxxxxx Real Property and the Improvements; and
(d) 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 Xxxxxxxxx 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
respecting the Xxxxxxxxx Real Property).
SECTION 2.2. XXXXXX SPRINGS LOAN. 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, Xxxxxx Springs Acquisition Sub shall loan to
Xxxxxx Springs Borrower the sum of Six Million and No/100 Dollars
($6,000,000.00), Five Hundred Thousand and No/100 Dollars ($500,000.00) of which
is being deposited in escrow by Xxxxxx Springs Borrower as provided in the Loan
Documents.
SECTION 2.3. EXCLUDED LIABILITIES. Notwithstanding anything in this Agreement to
the contrary, except as set forth on Schedule 2.3 (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 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
10
any Seller Party 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 either Hospital prior to
Closing, any liability or obligation arising out of or related to any breach,
default, tort or similar act committed by any of the Seller Parties or for any
failure of any of the Seller Parties to perform any covenant or obligation for
or during any period prior to Closing (collectively, the "Excluded
Liabilities").
SECTION 2.4. SPECIAL PURPOSE ENTITY. Seller Parties agree that the Xxxxxxxxx
Operator and the Xxxxxx Springs Operator shall each be a Special Purpose Entity
at all times during the terms of the Leases and the Loan.
ARTICLE III
PURCHASE PRICE
SECTION 3.1. PURCHASE PRICE FOR XXXXXXXXX. The purchase price for the Xxxxxxxxx
Assets shall be Eleven Million Five Hundred Thousand and No/100 Dollars
($11,500,000.00) (the "Xxxxxxxxx Purchase Price"). Subject to the terms and
conditions hereof, at Closing, the Acquisition Sub shall pay the Xxxxxxxxx
Purchase Price via transfer of immediately available federal funds to an account
specified in writing by S. Xxxxx Xxxxxxx not less than three (3) Business Days
prior to the Closing Date.
SECTION 3.2. PURCHASE PRICE FOR XXXXXX SPRINGS. Intentionally Deleted.
SECTION 3.3. 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 the Xxxxxxxxx Operator pursuant to the terms of the Lease
and Xxxxxx Springs Operator pursuant to the terms of its lease with the Xxxxxx
Springs Borrower.
SECTION 3.4. ALLOCATION OF PURCHASE PRICE. The Xxxxxxxxx Purchase Price shall be
allocated among the Xxxxxxxxx Assets for purposes of Section 1060 of the Code as
set forth on Schedule 3.4. 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).
SECTION 3.5. COMMITMENT FEE. At Closing, the Seller Parties shall pay the
Purchaser Parties a nonrefundable commitment fee equal to One Percent (1%) of
sum of the Purchase Price and the amount of the Loan, reduced by Twenty-Five
Thousand Dollars ($25,000) of previously-paid commitment fees.
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, the
Lease and the Loan, each Seller Party hereby jointly and severally represents,
warrants and covenants to the Purchaser Parties as of the date hereof and as of
the Closing Date as follows:
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SECTION 4.1. ORGANIZATION. Each Seller Party is a limited liability company duly
organized, validly existing and in good standing under the laws of its state of
organization and is duly licensed in each jurisdiction in which the nature of
the business conducted, or the assets owned, operated and/or leased, by such
Seller Party requires or makes such qualification necessary. Xxxxxxxxx Operator
and Xxxxxx Springs Operator are, and have at all times since their organization
been, Special Purpose Entities. Schedule 4.1 sets forth the ownership of each
Seller Party and, except as set forth therein, no other party has any equity
interest in any Seller Party or any option, warrant or other right to acquire
same.
SECTION 4.2. AUTHORIZATION AND ENFORCEABILITY. Each Seller Party has the
requisite corporate or 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 this Agreement, together with all
documents and agreements necessary to give effect to the provisions of this
Agreement, including the Lease and the Loan, 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 board of directors, managers and Equity Constituents of such
Seller Party) to authorize the execution, delivery and performance of this
Agreement as well as all documents, agreements and instruments executed by such
Seller Party which are necessary to give effect to 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, as applicable, 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 any Seller Party is necessary to authorize the execution, delivery
and performance of this Agreement, the Seller Party Instruments and all
transactions contemplated hereby and thereby. This Agreement, the Seller Party
Instruments and all agreements to which any Seller Party will become a party
hereunder, including the Lease and the Loan, are and will constitute the valid
and legally binding obligations of such Seller Party, and are and will be
enforceable against such Seller 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 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, will not, with or without the giving of notice and/or the
passage of time: (i) violate or conflict with any provision of such Seller
Party's 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, agreement or other instrument to
which such Seller Party is a party or by which such Seller Party or any of the
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,
12
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 any Seller Party
in connection with the execution, delivery and performance of this Agreement or
the Seller Party Instruments by any Seller Party or the consummation of the
transactions contemplated hereby or thereby.
SECTION 4.5. FINANCIAL STATEMENTS. Schedule 4.5 sets forth (i) the unaudited
balance sheets of each applicable Seller Party for the fiscal year ended 2004,
(ii) the unaudited balance sheet of each Seller Party at April 30, 2005 (the
"Balance Sheet Date") (the balance sheets described in subsections (i) and (ii)
above being herein referred to, collectively, as the "Balance Sheets"), (iii)
the unaudited statement of income and cash flows of each applicable Seller Party
for the fiscal year ended 2004 and (iv) the unaudited statement of income of
each Seller Party for the three (3) month period ended April 30, 2005 (the
financial statements described in this sentence, being herein 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 the Seller Parties and fairly
present the financial condition and results of operations, cash flows and
shareholders' equity of the Seller Parties 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. ACCOUNTS RECEIVABLE. The accounts receivable of each Seller Party
include only accounts receivable arising from bona fide transactions in the
conduct of the ordinary course of business of such Seller Party, are in all
material respects true and genuine, represent legal, valid and binding
obligations of the respective debtors enforceable in accordance with their terms
and are collectible net of reserves. 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 4.6, all such receivables are free of all
security interests and encumbrances created by any Seller Party. Except as set
forth on Schedule 4.6, no defense, counterclaim, offset or adjustment exists as
to any such account receivable.
SECTION 4.7. NO UNDISCLOSED LIABILITIES. Except as set forth on Schedule 4.7, no
Seller Party has any material liability or obligation, 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 of the Seller Parties, consistent with the past practice of the Seller
Parties, 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 no Seller Party
has Knowledge of any fact, condition or circumstance which could form the basis
of any such liability or obligation.
SECTION 4.8. ABSENCE OF CHANGES. Except as set forth on Schedule 4.8, since the
Balance Sheet Date, each Seller Party has, as applicable:
13
(a) conducted its business only in the ordinary course of business and
consistently with its past practices;
(b) not suffered any change, event or circumstance which has had, or could have,
a Material Adverse Effect;
(c) preserved its legal existence and retained its business organization intact;
(d) maintained its relationships with all suppliers, trade creditors and trade
debtors;
(e) paid or satisfied all of its debts, liabilities or obligations in the
ordinary course of business;
(f) paid all compensation and other obligations to its 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 the Assets;
(i) except as otherwise provided in this Agreement, not sold or transferred any
of its assets except for sales of inventory in the ordinary course of business
and consistently with its past practices;
(j) not suffered any damage, destruction or loss (whether or not covered by
insurance) affecting the 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 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) not made any capital expenditure or commitment for the acquisition of assets
in excess of Fifty Thousand Dollars ($50,000) except as disclosed on Schedule
4.8(m);
(n) not made or suffered any change to its Governing Documents except as
disclosed on Schedule 4.8(n);
(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;
(p) maintained its books and records in accordance with GAAP, consistent with
past practices;
(q) not incurred, assumed or guaranteed any Indebtedness;
14
(r) not experienced any defections in its medical staff; or
(s) not agreed or offered, whether in writing or otherwise, to take, and neither
any Seller Party nor its board of directors (or by any Person or group of
Persons possessing and/or exercising similar authority with respect to such
Seller Party) have authorized the taking of, any action described in Sections
4.8(a) through 4.8(r) above.
SECTION 4.9. LICENSES. Seller Parties have all licenses, permits, certificates
of need and other authorizations of Government Entities (the "Permits") from all
applicable Governmental Entities necessary or proper in order to operate their
respective Hospitals and to conduct their respective Businesses. All Permits
issued to and held by the Seller Parties are identified and described on
Schedule 4.9, and true, correct and current copies of each such Permit have
previously been delivered to the Purchaser Parties by the Seller Parties. Except
as set forth on Schedule 4.9, the Seller Parties previously have complied and
are currently complying with their respective obligations under each of the
Permits 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 any Seller Party and no Seller Party has any Knowledge of the proposed
or threatened issuance of any such notice or of any grounds or basis therefor.
SECTION 4.10. ACCREDITATION; MEDICARE AND MEDICAID; THIRD PARTY PAYORS.
Xxxxxxxxx Operator and Xxxxxx Springs Operator are currently accredited by the
Joint Commission on Accreditation of Healthcare Organizations ("JCAHO") and
Seller Parties have previously delivered to the Purchaser Parties true, correct
and complete copies of the following documents: (i) the most recent JCAHO
accreditation survey reports for each Hospital and deficiency list and plan of
correction, if any, and a list and description of events at each Hospital since
the date of the acquisition of each Hospital by the respective Seller Party that
constitute "Sentinel Events" (as defined by JCAHO), if any, and any
documentation that was created prepared and/or produced by or on behalf of any
Seller Party to satisfy JCAHO requirements relating to addressing such Adverse
Events; (ii) any state licensing survey reports with respect to each Hospital
since the date of the acquisition of each Hospital by the respective Seller
Party, as well as any statements of deficiencies and plans of correction in
connection with such reports; (iii) the fire marshal's surveys since the date of
the acquisition of each Hospital by the respective Seller Party and list of
deficiencies, if any, for each Hospital; and (iv) the boiler inspection reports
since the date of the acquisition of each Hospital by the respective Seller
Party and list of deficiencies, if any, for each Hospital. Seller Parties have
taken all reasonable steps to correct all such deficiencies and a description of
any uncorrected deficiency is set forth on Schedule 4.10. Except as set forth on
Schedule 4.10 attached hereto, Xxxxxxxxx Operator and Xxxxxx Springs Operator
participate without restriction under Title XVIII of the Social Security Act
("Medicare") and Title XIX of the Social Security Act ("Medicaid"), the Medicare
and the Medicaid programs of the State of Louisiana and the TRICARE/CHAMPUS
programs (collectively, the "Government Programs"). Covington Operator and
Xxxxxx Springs Operator have received Medicare or Medicaid reimbursement with
respect to each Hospital and are eligible to receive payment without restriction
under Medicare and Medicaid. Except as set forth on Schedule 4.10, each Hospital
is in compliance with the conditions of participation for the Government
Programs, has 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
15
489.24, Sections 412.505 to 412, 511, and the applicable provisions of Section
412.23, and its medicare provider agreement will not be terminated for failure
to so comply. 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 any Seller Party, either
Hospital or any of the Assets. Xxxxxxxxx Operator and Xxxxxx Springs Operator
have previously delivered to the Purchaser Parties true, correct and complete
copies of the most recent Medicare and Medicaid certification survey reports for
each Hospital including any statements of deficiencies and plans of correction,
and the corrective action plans related thereto. Xxxxxxxxx Operator and Xxxxxx
Springs Operator have taken all reasonable steps to correct all such
deficiencies and a description of any uncorrected deficiency is set forth on
Schedule 4.10. With respect to the operation of each Hospital, except as set
forth on Schedule 4.10, none of the Seller Parties, nor any of their officers,
directors or any of the Business Employees (as hereinafter defined), or Service
Provider (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 (v) no Medicare funds will be used to make any payment for
any items or services furnished by any excluded individual. Xxxxxxxxx Operator
and Xxxxxx Springs Operator have timely filed, caused to be timely filed and, as
to reports due after the Closing, shall timely file, 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, Xxxxxxxxx Operator and Xxxxxx Springs Operator are and have been
and, to the Seller Parties' Knowledge, its predecessors in interest in the
Hospital have been, in compliance with filing requirements with respect to cost
reports of each Hospital, including appropriate allocation of expenses
associated with any management or consulting services provided by the Seller
Parties (or its predecessors in interest) or any employees of the Seller Parties
(or its predecessors in interest) and such reports do not claim and neither
Hospital has 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. True and correct copies of the cost
reports to third parties for each Hospital since the date of the acquisition of
each Hospital by the respective Seller Party with respect to which Xxxxxxxxx
Operator and Xxxxxx Springs Operator received such cost reports have been made
available to the Purchaser Parties. Except as disclosed on Schedule 4.10, no
Seller Party has received any written notice of any dispute relating to either
Hospital between any Seller Party and any Governmental Entity, including any
fiscal intermediary or carrier, federal, state or local governmental body or
entity, or the Administrator of the Center for Medicare and Medicaid Services,
with respect to any Government Program cost reports or claims filed with respect
to the Hospital, on or before the date of this Agreement.
SECTION 4.11. HIPAA COMPLIANCE. Each Seller Party is in full 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"). Schedule 4.11
includes, but is not limited in any manner whatsoever to, any privacy, security
or transaction and code set standards compliance plan of each Seller Party in
place or in development, and any plans, analyses or budgets relating
16
to information systems, including but not limited to necessary purchases,
upgrades or modifications to effect HIPAA compliance.
SECTION 4.12. HEALTHCARE REGULATORY MATTERS.
(a) No Seller Party, or, to the Knowledge of any Seller Party, any Physician,
Service Provider or other Person rendering services (including directly or
indirectly referring patients) to or at, or in any way affiliated with either of
the Hospitals (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-7, 7(a) and 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 any Seller Party, either Hospital or the
Business of either Hospital (and no grounds for any such proceeding,
investigation or action exist); and (ii) is not in full compliance with all
applicable Healthcare Fraud Laws.
(b) Except as set forth on Schedule 4.12, since the date of the acquisition of
each Hospital by the respective Seller Party, or, to the Seller Parties'
Knowledge, for any period prior thereto, no Seller Party, or, to the Seller
Parties' Knowledge, any Physician, Service Provider or other Person rendering
services (including directly or indirectly referring patients) to or at, or in
any way affiliated with, either Hospital, has ever been 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. No Seller Party, or, to the Seller
Parties' Knowledge, any Physician, Service Provider or other Person rendering
services (including directly or indirectly referring patients) to or at, or in
any way affiliated with, either of the Hospitals, 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
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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. Each Seller Party has filed or caused to be filed all Tax
Returns of such Seller Party 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 each Seller Party has 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 the Assets or any
other assets of any Seller Party used in the Business (other than for ad valorem
taxes not yet due and payable), and (ii) no claims being asserted with respect
to any Taxes relating to any Seller Party, the Assets or the Business for which
any Purchaser Party could be held liable, and there is no basis for the
assertion of any such claim. No Seller Party has made or agreed or offered to
make, or revoked or agreed or offered to revoke, a Tax election with respect to
or affecting the Assets at any time during the last two (2) years. Except as set
forth on Schedule 4.13, no Seller Party is a party to any tax abatement
agreement relating to the Assets. 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.
SECTION 4.14. GOOD TITLE TO ASSETS. Except as set forth on Schedule 4.14, each
Seller Party has good, absolute and marketable title to, and unrestricted
possession of, all of its assets (other than the Real Property, which is
addressed in Section 4.15 below), free and clear of all Liens (other than
Permitted Encumbrances) and any adverse Claims of third parties.
SECTION 4.15. TITLE AND CONDITION OF THE REAL PROPERTY.
(a) Exhibit C sets forth a legal description of the Xxxxxxxxx Real Property.
Except as set forth on Schedule 4.15(a), Xxxxxxxxx Seller is the sole and
exclusive legal and equitable owner of all right, title and interest in the
Xxxxxxxxx Real Property and at Closing will have and convey to the Acquisition
Sub good and marketable title in fee simple to the Xxxxxxxxx Real Property, free
and clear of any and all Liens, encumbrances, restrictions or easements of any
kind whatsoever (other than Permitted Encumbrances).
(b) Exhibit D sets forth a legal description of the Xxxxxx Springs Real
Property. Except as set forth on Schedule 4.15(b), Xxxxxx Springs Borrower is
the sole and exclusive legal and equitable owner of all right, title and
interest in the Xxxxxx Springs Real Property and at Closing will have good and
marketable title to the Xxxxxx Springs Real Property, free and clear of any and
all Liens, encumbrances, restrictions or easements of any kind whatsoever (other
than Permitted Encumbrances).
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(c) 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.
(d) With regard to the Real Property, except as set forth on Schedule 4.15(d),
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, to the Knowledge of any Seller Party, 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.
(e) 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.
All of said utilities are installed and operating, and all installation and
connection charges have been paid in full.
(f) Except as set forth on Schedule 4.15(f), neither the whole nor any portion
of the Real Property has been condemned, requisitioned or otherwise taken by any
public authority (a "Public Taking"), and no notice of any Public Taking has
been received by any Seller Party with regard to any of the Real Property. No
Seller Party has any Knowledge of any Public Taking being threatened or
contemplated. No Seller Party has any Knowledge of any public improvements which
have been ordered to be made and/or which have not heretofore been assessed,
and, to the Knowledge of the Seller Parties, there are no special, general or
other assessments pending or threatened against or affecting any of the Real
Property (except those expressly identified in the Title Commitment).
(g) Except as set forth on Schedule 4.15(g), there are no Claims, actions,
suits, proceedings or investigations pending or, to the Knowledge of any Seller
Party, threatened, against or affecting all or any portion of the Real Property.
(h) 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. The 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 either 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.
(i) No Seller Party has 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.
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(j) Schedule 4.15(j) attached hereto sets forth an accurate and complete list of
all leases, subleases, commitment letters, letters of intent and other rental
agreements, whether written or oral, now or hereafter in effect, if any, 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 (collectively referred to as the "Tenant Leases").
Schedule 4.15(j) designates which of the Tenant Leases described therein are
with the referral sources (as determined by any of the Healthcare Fraud Laws) of
Seller Party. Schedule 4.15(j) specifies the rent and security deposit, if any,
for each Tenant Lease. The Seller Parties have provided the Purchaser Parties
with complete, correct and current copies of all Tenant Leases. The Seller
Parties shall provide to the Purchaser Parties prior to Closing Tenant Lease
estoppels in form satisfactory to the Purchaser Parties from all Tenants under
the applicable Tenant Leases. Except for the Tenant Leases and any other items
listed on Schedule 4.15(j), 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.
(k) No Seller Party has accepted the payment of rent or other sums due under any
of the Tenant Leases for more than one (1) month in advance. As of the Closing,
none of the Tenant Leases and none of the rents or other charges payable
thereunder, if any, will have been assigned, pledged or encumbered. Except as
set forth on Schedule 4.15(k), as of the Closing, no brokerage or leasing
commissions or other compensation will be due or payable to any Person with
respect to, or on account of, either Lease or any Tenant Lease or any extensions
or renewals thereof, if any, excepting those agreements entered into or accepted
in writing by the Purchaser Parties.
(l) All tenant improvements, repairs and other work and obligations, if any,
then required to be performed by the landlord under each of the Tenant Leases
will be fully performed and paid for in full on or prior to the Closing.
(m) Except as set forth on Schedule 4.15(m): (i) the Tenant Leases are freely
assignable by the Seller Parties, have not been modified, amended or assigned,
are legally valid, binding and enforceable against the applicable Seller Parties
(and, to the best of the Seller Parties' Knowledge, against the other parties to
such Tenant Leases) in accordance with their respective terms and are in full
force and effect; (ii) there are no monetary defaults and no material
nonmonetary defaults by the applicable Seller Party or, to the best of the
Seller Parties' Knowledge, any other party to the Tenant Leases; (iii) no Seller
Party has received written notice of any default, offset, counterclaim or
defense under any of the Tenant Leases; 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 by any Seller Party of the terms of any of the
Tenant Leases.
(n) The Xxxxxxxxx Real Property constitutes all the land and improvements used
by Xxxxxxxxx Operator in connection with the operation of Xxxxxxxxx Hospital and
the Xxxxxx Springs Real Property constitutes all the land and improvements used
by Xxxxxx Springs Real Property in connection with the operation of Xxxxxx
Springs Hospital, it being understood that certain administrative activities
relating to such operations are not conducted at the Real Property.
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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 Xxxxxxxxx
Operator and Xxxxxx Springs Operator in the operation of their respective
Hospitals (the "Personal Property"). Except as set forth on Schedule 4.16,
Xxxxxxxxx Operator and Xxxxxx Springs Operator have good, clear and indefeasible
title to and ownership of all of their respective Personal Property, subject
only to the Liens set forth on Schedule 4.16, and may grant a second priority
security interest in and to their respective Personal Property. Schedule 4.16
sets forth an accurate and complete list of all leases of personal property used
in the operation of the Hospitals (the "Personal Property Leases"). The Seller
Parties have provided 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) Xxxxxxxxx Operator and Xxxxxx Springs Operator may grant a second
priority security interest in their respective Personal Property Leases, (ii)
the Personal Property Leases have not been modified, amended or assigned, are
legally valid, binding and enforceable against Xxxxxxxxx Operator and Xxxxxx
Springs Operator (and, to the Seller Parties' Knowledge, against the other
parties to such Personal Property Leases) 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 either Xxxxxxxxx Operator or Xxxxxx Springs
Operator, to the Seller Parties' Knowledge, or any other party to the Personal
Property Leases; (iv) no Seller Party has received notice of any default,
offset, counterclaim or defense under any Personal Property Lease; and (v) 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 either Xxxxxxxxx Operator
or Xxxxxx Springs Operator of the terms of any Personal Property Lease. Except
as set forth on Schedule 4.16, all personal property, whether owned by Xxxxxxxxx
Operator and Xxxxxx Springs Operator or subject to any Personal Property Lease,
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) with respect to the ownership and operation of the Real Property and the
Hospitals, including any operations at or from any real property currently or
formerly owned, used, leased, occupied or managed by any Seller Party, each
Seller Party is and has at all times been, in compliance with all Environmental
Laws;
(b) no Governmental Entity or any nongovernmental third party has notified any
Seller Party 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 Hospitals, including any
litigation or cause of action alleging personal injury or property damage caused
by exposure to, or the disposal, release or migration of, any Hazardous
Materials;
(c) with respect to the ownership, operation and/or leasing of the Real Property
and the Hospitals, no Seller Party has stored, disposed of or arranged for the
disposal of any Hazardous Materials, except in compliance with the Environmental
Laws;
(d) there have been no actions nor, to the Knowledge of Seller Parties, 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 Hospitals that could form the
21
basis of any claim under the Environmental Laws against any Seller Party or any
Purchaser Party;
(e) no Seller Party has, whether contractually or by operation of law (including
any Environmental Law), assumed or succeeded to any liability of any direct or
indirect predecessors or any other Person (including, without limitation, HCP)
related or with respect to any Environmental Law;
(f) to the Seller Parties' Knowledge, there are no underground storage tanks
located at, on or under the Xxxxxx Springs Land, and the Real Property does not
contain any asbestos-containing building material;
(g) there is an underground storage tank (approximately 1,000 gallons of diesel
used for emergency generator(s) only) located under the Xxxxxxxxx Land, which
tank, to the Seller Parties' Knowledge, was permitted and installed in 2003 by
the previous owner of the Xxxxxxxxx Land. Seller Parties have recently filed
change of ownership documents with Department of Environmental Quality to have
the permit issued in the name of Xxxxxxxxx Seller;
(h) there are no conditions presently existing on, at or emanating from the Real
Property, that may result in any liability, investigation or clean-up cost under
any Environmental Law; and
(i) no Seller Party, nor to the Seller Parties' Knowledge any other 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. No Seller Party
has undertaken any activity, and the Seller Parties have no Knowledge that any
other 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. No
activity has been undertaken by any Seller Party with respect to the Real
Property which would cause a violation or support a claim under any
Environmental Law. No investigation, administrative order, litigation or
settlement with respect to any Hazardous Material is in existence, or, to the
Seller Parties' Knowledge, threatened with respect to the Real Property. No
notice has been served on any Seller Party 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. No Seller Party has obtained or is required to
obtain, and no Seller Party has any Knowledge of any reason either 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 any Seller
Party with respect to the Real
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Property, the operation of the Hospitals and the professional liability,
negligence and other acts of the Physicians and the Service Providers. All such
Insurance policies are in full force and effect, all premiums due thereon have
been paid in full and each Seller Party is 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 (a "Claim") against
or involving any of the Seller Parties or any of their properties or rights,
which involves or could reasonably be expected to involve damages in excess of
Fifty Thousand Dollars ($50,000), pending or, to the Knowledge of the Seller
Parties, threatened (including, without limitation any suit, action, 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) nor do the Seller Parties know of any facts which might
result in any such Claim. There is no Claim pending, or, to the Seller Parties'
Knowledge, threatened, against any Physician or Service Provider which could, by
operation of law, through contract or otherwise, result in a Claim against any
Seller Party, and no Seller Party has any Knowledge of any facts which could
result in such a 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 any Seller Party and no Seller Party is not 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 this Agreement or any action taken or to be taken by
any Seller Party pursuant to this Agreement or in connection with the
transactions contemplated 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, either Hospital and/or the operation of the Business to
which any Seller Party is a party (the "Contracts"). The Seller Parties have
provided to the Purchaser Parties complete and correct copies of all written
Contracts with a physician or a physician owned entity or with annual
expenditures in excess of $25,000. Except as set forth on Schedule 4.20, (i) the
Contracts are legally valid, binding and enforceable against the applicable
Seller Party (and, to the Seller Parties' Knowledge, against the other parties
thereto) in accordance with their respective terms and are in full force and
effect; (ii) there are no defaults by any Seller Party, or to the Seller
Parties' Knowledge, any other party to the Contracts; (iii) no Seller Party has
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 by any
Seller Party of the terms of any Contract.
SECTION 4.21. INTANGIBLE PROPERTY. A true and complete list of the trademarks,
service marks, and other intangible assets of the Seller Parties used in the
operation of the Businesses and either Hospital is set forth on Schedule 4.21
(the "Intangible Property"). The Seller Parties own, or possess adequate,
enforceable licenses or other rights to use, all of the Intangible Property, and
no rights thereto have been granted to others by any Seller Party. Except as set
forth on Schedule 4.21, all of the Intangible Property is owned or used by the
Seller Parties' free and clear of all assignments, licenses, restrictions,
encumbrances, charges or claims for infringement, and
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none is subject to any outstanding order, decree, judgment, stipulation or
charge. There is no unauthorized use, disclosure, infringement or
misappropriation of any of the Intangible Property by any third party. The
Seller Parties' use of the Intangible Property does not infringe upon or
otherwise violate the rights of others. No one has asserted to any Seller Party
that the use of the Intangible Property by the Seller Parties infringes upon the
patents, trade secrets, trade names, trademarks, service marks, copyrights or
other intellectual property rights of any other Person and no Seller Party has
any Knowledge of any fact or circumstance which could provide the basis for any
such assertion.
SECTION 4.22. EMPLOYEES AND EMPLOYEE RELATIONS.
(a) Except as set forth on Schedule 4.22(a), all of the employees who are or
will provide services at either Hospital (collectively the "Business Employees")
are "at will" employees. Except as set forth on Schedule 4.22(a), no Seller
Party is a party to any oral (express or implied) or written: (i) employment
agreement, or (ii) agreement that contains any severance or termination pay
obligations, with any Business Employee. The Seller Parties have provided true,
correct and current copies (or, if not written, accurate descriptions of the
parties and terms) of such agreements to the Purchaser Parties.
(b) Except as set forth on Schedule 4.22(b), no Business Employee is represented
by any labor union, trade association or other employee organization, no demand
for recognition has been made by any labor union with respect to the Business
Employees, and there is not and has not been any labor union organizing activity
at either Hospital during the periods it has been operated by any Seller Party.
Except as set forth on Schedule 4.22(b), no Seller Party is a party to any
collective bargaining agreement or understanding with any labor union, trade
association or other employee organization with respect to any Business Employee
and no such agreements are currently being proposed and/or negotiated.
(c) Except as set forth on Schedule 4.22(c), there is no labor dispute, work
stoppage, strike, slowdown, walkout, lockout, or any other interruption or
disruption of operations at either Hospital as a result of labor disputes or
disturbances with respect to the Business Employees and there is no
investigation, grievance, arbitration, complaint, claim or other dispute or
controversy (collectively, the "Labor Proceeding") pending or threatened,
between any Seller Party and any present or former Business Employee, nor have
any discharges or terminations of any former Business Employee occurred which
would form the basis for any claim of discrimination against any Seller Party.
Except as set forth on Schedule 4.22(c), no Seller Party has any Knowledge of
any facts or past, current or contemplated event that could form the basis for
any such Labor Proceeding, nor has there been any such Labor Proceeding within
the past twelve (12) months.
(d) Except as set forth on Schedule 4.22(d), no Seller Party has received any
notice that any vice president, director or director-level employee, or higher,
of any Seller Party or any group of Business Employees, has any plans to
terminate his or her employment or affiliation with any Seller Party.
(e) Each Seller Party has complied with and is currently in compliance with, and
no Seller Party has received any notice of noncompliance with, any and all
applicable laws relating to the employment of labor, including, without
limitation, any provisions relating to wages, hours,
24
equal employment, occupational safety and health, workers' compensation,
unemployment insurance, collective bargaining, immigration, affirmative action
and the payment and withholding of social security and other taxes. Each Seller
Party has withheld all amounts required by law or agreement to be withheld from
the wages or salaries of the Business Employees, and no Seller Party is liable
for any arrears of any tax or penalties for failure to comply with the
foregoing.
(f) Schedule 4.22(f) sets forth each Employee Pension Benefit Plan (as defined
in Section 3(2) of ERISA) maintained by any Seller Party (each a "Seller Party
Plan") and applicable to the Business Employees. The Seller Parties are in
compliance in all material respects with all applicable laws and regulations
respecting such Seller Party Plans.
SECTION 4.23. COMPLIANCE WITH LAW. To Seller Parties' Knowledge, each Seller
Party 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 the
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. Each Seller Party has timely made or given all filings
and notices required to be made by such Seller Party with the regulatory
agencies of any Governmental Entity.
SECTION 4.24. XXXX-XXXXXX OBLIGATIONS.
(a) Except as set forth on Schedule 4.24, neither any Seller Party, nor, to the
Knowledge of the Seller Parties, any predecessor in interest of any Seller
Party, 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 4.24 have been fully satisfied. The
transactions contemplated 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 any Seller Party 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 4.25. MEDICAL STAFF MATTERS. Except as set forth on Schedule 4.25, there
are no pending or, to the Knowledge of the Seller Parties, threatened
investigations, appeals, challenges, disciplinary or corrective actions, or
disputes involving applicants to the medical staff of either Hospital, current
members of the medical staff of either Hospital or affiliated health
professionals. Since the Balance Sheet Date, no member of the medical staff of
either Hospital has resigned or been terminated therefrom and no Seller Party
has received notice that any Physician or medical staff member intends to resign
from its medical staff. For confidentiality purposes, all persons identified on
Schedule 4.25 are identified by a hospital-assigned number
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rather than name. True and correct copies of Medical Staff Bylaws of each
Hospital, each Hospital's Medical Staff Rules and Regulations, and each
Hospital's Medical Staff Hearing Procedures, all as presently in effect, have
been previously delivered by the Seller Parties to the Purchaser Parties.
SECTION 4.26. BROKERS. 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 any Seller Party.
SECTION 4.27. RECORDS. True, complete and current copies of each Seller Party's
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 each Seller Party, all of which have
been made available to the Purchaser Parties, are complete and correct. The
minute books of each Seller Party contain records of all meetings and other
corporate actions of the directors and shareholders of such Seller Party, and
have been delivered to the Purchaser Parties prior to the execution and delivery
of this Agreement.
SECTION 4.28. REPRESENTATIONS COMPLETE. The representations and warranties made
by the Seller Parties in this Agreement and the statements made in or
information contained on any Schedules or certificates furnished by any Seller
Party pursuant to this 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 Subs are limited liability companies 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 Louisiana.
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
26
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. 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, 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. MPT shall cause to be prepared, at Seller Parties' expense,
a current ALTA/ACSM Land Title Survey of the Xxxxxxxxx Real Property and the
Xxxxxx Springs Real Property, each prepared by a duly licensed land surveyor.
Each survey shall be currently dated,
27
shall show the location on the respective 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 respective Real Property, and encroachments, and shall contain a
legal description of the boundaries of the respective Real Property by metes and
bounds and the appropriate flood zone designation and the total number of acres
constituting the respective Real Property. The surveyor shall certify to the
Purchaser Parties and to the Title Company that the surveys are 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 MPT shall disapprove either survey for any reason in MPT's sole discretion,
MPT 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 either
survey within twenty (20) days following delivery of notice to Seller Parties
thereof, then MPT may terminate this Agreement upon written notice to the Seller
Parties.
SECTION 6.2. TITLE INSURANCE. MPT will cause to be prepared, at Seller Parties'
expense, title commitments for the issuance of an ALTA Owner's Policy Form dated
October 17, 1992, issued by a title insurance company mutually-selected by the
parties and qualified to insure titles in the State of Louisiana (the "Title
Company"), in the amount of the Xxxxxxxxx Purchase Price, covering title to the
Xxxxxxxxx Real Property and of the Xxxxxx Springs Purchase Price, covering title
to the Xxxxxx Springs Real Property at a date not earlier than the date hereof
and showing good and marketable title, subject only to the Permitted
Encumbrances. 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 MPT shall disapprove any items stated in either Title Commitment
or the Exception Documents, MPT 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 twenty (20) days following delivery of notice
to the Seller Parties thereof, then MPT may terminate this Agreement upon
written notice to Seller Parties.
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 any Seller Party nor any investment banker,
attorney, accountant, representative or other Person retained by or on behalf of
any Seller Party, 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 any Seller Party or the Assets to, afford any access
to the properties, books or records of any Seller Party to, or otherwise assist,
facilitate or
28
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 MPT 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, (including the Business Employees) medical
staff, and other agents and representatives and during normal working hours to
all books, records, offices and other facilities of the Seller Parties, (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 Hospitals, the Business or the Seller Parties 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, 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 allow the Purchaser
Parties and their authorized representatives full access to the Assets, 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,
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
behalf of, or in the possession of or reasonably available to the Seller Parties
or any of their engineers, consultants or agents.
(c) The provisions of that certain Confidentiality Agreement dated February 21,
2005 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
29
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 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 preserve substantially intact the business
organization of each Seller Party, to keep available the services of their
current officers, employees and consultants and to preserve the present
relationships of each Seller Party with patients, suppliers and other persons
with which each Seller Parties 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 MPT:
(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;
30
(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) 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;
(i) 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;
(j) engage in any business other than the Business;
(k) 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);
(l) waive any right of substantial value other than in exchange for reasonable
consideration; 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 any Seller Party contained in this
Agreement untrue, incorrect or incomplete or prevent any Seller Party from
performing or cause any 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.
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.
31
(b) The Seller Parties shall give promptly such notices to third parties and use
its commercially reasonable efforts to obtain such third party consents and
estoppel certificates as MPT may in its 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 any 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, or consent to any change in terms, in connection with any such
notice, consent or estoppel certificate.
(d) Anything in this Agreement to the contrary notwithstanding, this Agreement
shall not constitute an agreement to assign any Assets if an attempted
assignment thereof, without the consent of the other party thereto, would
constitute a breach or other contravention thereof, noncompliance by any Seller
Party or its 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 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 Parties would enforce for the benefit of the Purchaser
Parties, with the Purchaser Parties assuming the applicable Seller Party's
obligations, any and all rights of the applicable Seller Party against a third
party thereto.
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.
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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 the documents referenced in Section 9.3 hereof.
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 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.
(c) The board of directors of Medical Properties Trust, Inc. shall have approved
the transactions contemplated hereby.
(d) No Seller Party shall have suffered any change, event or circumstance which
has had, or could have, a Material Adverse Effect.
(e) The Purchaser Parties shall have satisfactorily completed their due
diligence investigations of the Assets and shall be satisfied with the results
of such investigations.
(f) 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.
(g) No portion of the Assets shall have been damaged or destroyed by fire or
casualty.
(h) No condemnation, eminent domain or similar proceedings shall have been
commenced or threatened with respect to any portion of the Assets.
33
(i) 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 Hospitals are in accordance
with all applicable governmental requirements.
(j) 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.
(k) The Seller Parties shall have executed where applicable, and delivered to
Purchaser Parties the documents referenced in Section 9.2 hereof.
(l) There shall not have been instituted by any creditor of any Seller Party,
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 this Agreement.
(m) The Xxxxxxxxx Appraisal shall have been delivered and shall reflect a
Xxxxxxxxx Appraised Value that equals or exceeds the Xxxxxxxxx Purchase Price.
(n) The Xxxxxx Springs Appraisal shall have been delivered and shall reflect a
Xxxxxx Springs Appraised Value that equals or exceeds the Loan amount.
(o) The Xxxxxx Springs Borrower and the Xxxxxx Springs Operator shall have
terminated their existing lease and entered into a new lease in the form
attached hereto as Exhibit 9.2(z).
ARTICLE IX
CLOSING
SECTION 9.1. CLOSING DATE. The closing of the transactions contemplated hereby
(the "Closing") shall be held at the offices of Baker, Donelson, Bearman,
Xxxxxxxx & Xxxxxxxxx, P.C. in Birmingham, Alabama on June 8, 2005, or on such
other date and such other place as the parties hereto shall mutually agree (the
actual date of closing being herein referred to as the "Closing Date").
SECTION 9.2. SELLER PARTIES' CLOSING DATE DELIVERABLES. On the Closing Date, the
Seller Parties shall deliver to the Purchaser Parties the documents listed
below.
(a) Duly executed bills of sale and assignments transferring the Xxxxxxxxx
Assets other than the Xxxxxxxxx Real Property in form and substance satisfactory
to MPT;
(b) A duly executed Act of Cash Sale in substantially the form as Exhibit 9.2(b)
(the "Xxxxxxxxx Deed") conveying the Xxxxxxxxx Real Property to the Acquisition
Sub;
(c) Intentionally Deleted;
34
(d) A certified copy of the resolutions of the governing body of each Seller
Party dated as of the date hereof and authorizing such Seller Party's execution,
delivery and performance of this Agreement and all other documents to be
executed in connection herewith;
(e) Certificates of existence and good standing of each Seller Party from the
secretary of state of such Seller Party's state of incorporation or
organization, dated the most recent practical date prior to the Closing Date;
(f) Certificates of good standing and foreign qualification of each Seller Party
from the secretary of state of the State of Louisiana dated the most recent
practical date prior to the Closing Date;
(g) The Title Commitment and Title Policy for the Xxxxxxxxx Real Property and
the Xxxxxx Springs Real Property in form and substance satisfactory to MPT;
(h) Surveys for the Xxxxxxxxx Real Property and the Xxxxxx Springs Real Property
dated the most recent practical date prior to the Closing Date in form and
substance satisfactory to MPT;
(i) Phase I Environmental Site Assessment Reports for the Xxxxxxxxx Real
Property and the Xxxxxx Springs Real Property 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);
(j) Property condition reports for the Xxxxxxxxx Real Property and the Xxxxxx
Springs Real Property dated the most recent practical date prior to the Closing
Date and in form and substance satisfactory to MPT;
(k) Zoning Compliance Letters/Certificates for the Xxxxxxxxx Real Property and
the Xxxxxx Springs Real Property dated the most recent practical date prior to
the Closing Date 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) Non-Foreign Affidavits in form and substance satisfactory to MPT;
(o) The Xxxxxxxxx Lease, together with a Memorandum of Lease Agreement in form
and substance satisfactory to MPT;
(p) The Promissory Note, Loan Agreement, Loan Guaranty Agreement, Mortgage,
Security Agreement, Assignment of Leases and Rents and Fixture Filing and other
documents evidencing the Loan in form and substance satisfactory to MPT (the
"Loan Documents");
(q) A Lease Guaranty Agreement for the Lease substantially in the form of
Exhibit 9.2(q)
35
(r) The Assignment of Rents and Leases for the Lease in substantially the form
attached hereto as Exhibit 9.2(r);
(s) The Security Agreements in substantially the form attached hereto as Exhibit
9.2(s);
(t) An Environmental Indemnity Agreement in form and substance satisfactory to
MPT;
(u) The legal opinion of Xxxxxx Xxxxxxx as counsel for the Seller Parties,
substantially in the form attached hereto as Exhibit 9.2(u);
(v) At the Closing, each Seller Party shall have furnished to the Purchaser
Parties a certificate dated the Closing Date signed by such Seller Party to the
effect that all of the representations and warranties of each Seller Party
contained in the 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
Seller Party has performed and satisfied in all material respects all covenants
and conditions required by this Agreement to be performed or satisfied by such
Seller Party on or prior to Closing;
(w) 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;
(x) The Noncompete Agreements substantially in the form attached as Exhibit
9.2(x);
(y) Subordinations of Management Agreement in form and substance satisfactory to
MPT;
(z) The Xxxxxx Springs Borrower and Xxxxxx Springs Operator shall have
terminated the existing lease and entered into a new lease as provided in
Section 8.2(o) hereof, substantially in the form attached as Exhibit 9.2(z); and
(aa) 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
Delaware 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 Louisiana, dated the most recent
practical date prior to the Closing Date;
36
(d) The Xxxxxxxxx Lease, together with a Memorandum of Lease Agreement in form
and substance satisfactory to MPT;
(e) The Loan Documents to which any of the Purchaser Parties are parties;
(f) The Assignment of Rents and Leases for the Lease in substantially the form
attached hereto as Exhibit 9.2(r);
(g) 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(g);
(h) 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 the 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;
(i) Any bills of sale and assignments requiring the signature of any Purchaser
Party;
(j) The Security Agreements in substantially the form attached hereto as Exhibit
9.2(s); and
(k) The Noncompete Agreements substantially in the form attached as Exhibit
9.2(x).
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 8, 2005, unless such date is extended in writing by MPT; or (iii) by the
Purchaser Parties if the conditions set forth in Section 8.2 shall not have been
satisfied on or before June 8, 2005, unless such date is extended in writing by
MPT.
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.
37
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 any of the Assets and either Hospital and will
permit the other to make copies of such documents and information at the
requesting party's expense.
SECTION 11.2. SURVEY. At the Seller Parties' sole cost and expense, the
Purchaser Parties shall obtain and deliver, surveys of the Real Property in form
and substance reasonably satisfactory to MPT. The Parties acknowledge that
Seller Parties are retaining certain parcels of property adjoining the Real
Property. At the request of the Purchaser Parties, Seller Parties shall execute
all necessary documents and take such actions as shall be necessary to convey
easements or other rights with respect to such retained parcels to enable
Purchaser Parties to realize the full use of the portion of the Real Property
the Purchaser Parties own.
SECTION 11.3. PURCHASE OF XXXXXX SPRINGS REAL PROPERTY. The Parties acknowledge
that, subject to Purchaser Parties satisfaction in its sole discretion that the
Environmental Issues are resolved, it is their intent to consummate a
sale/leaseback transaction for the Xxxxxx Springs Real Property for a purchase
price of Six Million and No/100 Dollars ($6,000,000.00) (which will be paid, at
least in part, by delivering the Promissory Note evidencing the Loan marked
"paid-in-full" and releasing to Borrower the remaining balance of all funds
escrowed by Borrower pursuant to the Loan Documents) and upon terms and
conditions substantially the same as set forth herein for the purchase and sale
of the Xxxxxxxxx Assets. Seller Parties shall use their commercially reasonable
efforts to cause the Environmental Issues to be resolved and shall keep the
Purchaser Parties apprised of any and all developments with respect to such
efforts. Upon notice from Purchaser Parties to Seller Parties that the
Environmental Issues have been resolved to its satisfaction, the Parties shall
proceed to close the sale/leaseback transaction within thirty (30) days
following such notice and in accordance with substantially the same terms and
conditions representations, warranties, deliveries, indemnifications and other
provisions as are provided herein for the sale of the Xxxxxxxxx Assets. The
provisions of Section 7.1 shall continue to apply with respect to the Xxxxxx
Springs Real Property for a period of one (1) year following the Closing Date.
In the event that the Purchaser Parties do not deliver notice of satisfaction
with the resolution of the Environmental Issues within said one (1) year period,
then neither party shall have any further obligation to comply with the
provisions of this Section 11.3.
ARTICLE XII
INDEMNIFICATION
SECTION 12.1. SELLER PARTIES AGREEMENT TO INDEMNIFY.
38
(a) Subject to the limitations set forth in this Article, the Seller Parties
jointly and severally agree to 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 (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 any Seller Party; or (ii) any
Excluded Liabilities (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's
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 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's Damages exceeds One Hundred Thousand and No/100
Dollars ($100,000.00) (the "Minimum Aggregate Liability Amount") in which event
the foregoing indemnification obligation shall apply to the aggregate amount of
Purchaser Damages that exceeds One Hundred Thousand and No/100 Dollars
($100,000.00); provided, however, that the maximum liability of the Seller
Parties under this Agreement shall be an amount equal to the Purchase Price. The
foregoing limitations on time and amount shall not apply to any Purchaser
Damages arising or resulting from (i) any act or omission of any Seller Party
which constitutes fraud, (ii) any breach by any Seller Party of its post-closing
covenants; or (iii) the Excluded Liabilities.
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,
(general and limited) partners, shareholders, employees, agents 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'
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 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").
39
(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 Indemnified Parties to seek
indemnification under this Section 12.2 shall terminate on the third 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 One Hundred Thousand and No/100 Dollars
($100,000.00) in which event the foregoing indemnification obligation shall
apply to the aggregate amount of Seller Damages that exceeds One Hundred
Thousand and No/100 Dollars ($100,000.00); provided, however, that the maximum
liability of the Purchaser Parties under this Agreement shall be an amount equal
to the Purchase Price. 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 or 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.
40
(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 prosecute 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 MATERIAL 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.
41
ARTICLE XIII
DISPUTE RESOLUTION
SECTION 13.1. GOVERNING LAW, JURISDICTION AND VENUE. EXCEPT AS MAY BE SET FORTH
IN ANY EXHIBIT OR SCHEDULE ATTACHED TO THIS AGREEMENT, 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 IN THE 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 parties hereto. Notwithstanding the
foregoing, the Purchaser Parties may at any time and without the consent of any
Seller Party 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: Xxxxxxxxx Healthcare Properties, L.L.C.
00000 Xxxx Xxxxxxxxx Xxxxx
Xxxx Xxxxxx Xxx 00000
Xxxxx Xxxxx, Xxxxxxxxx 00000-0000
Attention: S. Xxxxx Xxxxxxx
With a copy to: Xxxxxx Xxxxxxx
42
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Xx.
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.
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 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.
43
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 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 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 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.
SECTION 14.10. SYNDICATION. Subject to applicable healthcare regulatory
requirements, MPT will offer up to thirty percent (30%) of the equity interests
in the Xxxxxxxxx Acquisition Sub to local or area physicians at such time
following closing as determined by MPT. In compliance with the Healthcare Fraud
Laws, MPT and the Seller Parties will work together to decide which physicians
receive an opportunity to invest in the Xxxxxxxxx Acquisition Sub.
SECTION 14.11. SECURITIES OFFERING AND FILINGS. Notwithstanding anything
contained herein to the contrary, the Seller Parties agree, at no cost to Seller
Parties, to cooperate with MPT in connection with any securities offerings and
filings 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.]
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers on the date first written above.
SELLER PARTIES:
XXXXXXXXX HEALTHCARE PROPERTIES, L.L.C.
By: Team Rehab, L.L.C., Manager
By: Xxxxxxx Interests, L.L.C., Manager
By: /s/ S. Xxxxx Xxxxxxx 6/9/05
--------------------------------
S. Xxxxx Xxxxxxx, Date
Co-Manager
XXXXXX SPRINGS HEALTHCARE PROPERTIES, L.L.C.
By: Team Rehab, L.L.C., Manager
By: Xxxxxxx Interests, L.L.C., Manager
By: /s/ S. Xxxxx Xxxxxxx 6/9/05
--------------------------------
S. Xxxxx Xxxxxxx, Date
Co-Manager
GULF STATES LONG TERM ACUTE CARE OF
XXXXXXXXX, L.L.C.
By: Gulf States Health Services, Inc.,
Co-Manager
By: /s/ Xxxxxxx X. Xxxxxx 6/9/05
------------------------------------
Xxxxxxx X. Xxxxxx, Date
Chief Executive Officer
By: Team Rehab, L.L.C., Co-Manager
By: Xxxxxxx Interests, L.L.C., Manager
By: /s/ S. Xxxxx Xxxxxxx 6/9/05
--------------------------------
S. Xxxxx Xxxxxxx, Date
Co-Manager
45
GULF STATES LONG TERM ACUTE CARE OF XXXXXX
SPRINGS, L.L.C.
By: Gulf States Health Services, Inc.,
Co-Manager
By: /s/ Xxxxxxx X. Xxxxxx 6/9/05
------------------------------------
Xxxxxxx X. Xxxxxx, Date
Chief Executive Officer
By: Team Rehab, L.L.C., Co-Manager
By: Xxxxxxx Interests, L.L.C., Manager
By: /s/ S. Xxxxx Xxxxxxx 6/9/05
--------------------------------
S. Xxxxx Xxxxxxx, Date
Co-Manager
46
PURCHASER PARTIES:
MPT OPERATING PARTNERSHIP, L.P.
By: /s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: President and Chief Executive Officer
MPT OF XXXXXXXXX, LLC
By: MPT Operating Partnership, L.P.
Its: Sole Member
By: /s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: President and Chief Executive Officer
MPT OF XXXXXX SPRINGS, LLC
By: MPT Operating Partnership, L.P.
Its: Sole Member
By: /s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: President and Chief Executive Officer
47
EXHIBIT A
Xxxxxxxxx Lease
[See Attached.]
A-1
EXHIBIT B
Intentionally Omitted
B-1
EXHIBIT C
Legal Description of the Xxxxxxxxx Land/Real Property
[See Attached.]
C-1
EXHIBIT D
Legal Description of the Xxxxxx Springs Land/Real Property
[See Attached.]
D-1
EXHIBIT 9.2(b)
Xxxxxxxxx Deed
[See Attached.]
Exhibit 9.2(b) - 1
EXHIBIT 9.2(c)
Intentionally omitted
Exhibit 9.2(c) - 1
EXHIBIT 9.2(q)
Lease Guarantee Agreement
[See Attached.]
Exhibit 9.2(q) - 1
EXHIBIT 9.2(r)
Assignment of Rents and Leases
[See Attached.]
Exhibit 9.2(r) - 1
EXHIBIT 9.2(s)
Security Agreement
[See Attached.]
Exhibit 9.2(s) - 1
EXHIBIT 9.2(u)
Legal Opinion of Xxxxxx Xxxxxxx
[See Attached.]
Exhibit 9.2(u) - 1
EXHIBIT 9.2(x)
Noncompete Agreements
[See Attached.]
Exhibit 9.2(x) - 1
Exhibit 9.2(z)
Xxxxxx Springs Lease
[See Attached.]
Exhibit 9.2(z) - 1
EXHIBIT 9.3(g)
Legal Opinion of Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C.
[See Attached.]
Schedule 9.3(g) - 1
