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Exhibit 10.1
ASSET PURCHASE AGREEMENT
by and between
BALANCED CARE CORPORATION,
a Delaware corporation
(and certain Subsidiaries),
and
CHRISTIAN HEALTH CARE OF MISSOURI, INC.,
a Missouri nonprofit corporation
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into and is
effective this 15th day of October, 1999 by and between Balanced Care
Corporation, a Delaware corporation ("BCC"), on its behalf and the behalf of its
wholly owned subsidiaries (each a "Subsidiary" and collectively the
"Subsidiaries," and together with BCC the "Seller") listed on Exhibit A, each
with corporate offices at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx, XX 00000 except as
otherwise set forth on Exhibit A; and Christian Health Care of Missouri, Inc., a
Missouri nonprofit corporation, with offices at 000 X. 0xx Xxxxxx, Xxxxx X,
Xxxxxx, Xxxxxxxx 00000, or its permitted nominees ("Purchaser").
RECITALS:
WHEREAS, the Subsidiaries own two skilled nursing facilities (the
"Owned Facilities") and have lease rights to eight skilled nursing facilities
and nine independent living and/or residential care facilities (the "Leased
Facilities," and together with the Owned Facilities the "Facilities") all of
which are listed on Exhibit B. Purchaser desires to purchase, subject to the
terms and conditions of this Agreement, all of the ownership or leasehold rights
in the Facilities and the Business (as hereinafter defined) related thereto and
the Purchased Assets (as hereinafter defined) and Seller desires to sell all
such assets to Purchaser; and
WHEREAS, this Agreement sets forth the terms and conditions upon which
Purchaser is purchasing the assets to be sold hereunder, and Seller is selling
to Purchaser such assets.
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained herein, Purchaser and Seller, each
intending to be legally bound hereby and in reliance upon the matters set forth
herein, do hereby agree as follows:
ARTICLE I. CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1. "Accounts Receivable" shall mean as of any date any trade accounts
receivable (including, without limitation, any third party receivables arising
in connection with any Third Party Payor Programs), notes receivable, bid or
performance deposits, employee advances and other miscellaneous receivables
associated with the Business through and as of such date, whether or not yet
billed by Seller.
1.2. "Accreditation Body" shall mean JCAHO, the Department of Health,
the Bureau of Home Health Licensing and Certification, the Missouri Department
of Social Services, Divisions of Aging and Medical Services and Persons having
jurisdiction over the accreditation, certification, evaluation or operation of
the Business.
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1.3. "Accrued Expenses" shall mean as of any date accrued rents,
insurance premiums, payroll and benefits (including, without limitation,
vacation, sick pay, disability pay) and other accrued expenses as would appear
on a balance sheet of the Business as of such date prepared in accordance with
GAAP consistently applied.
1.4. "Affiliate" shall mean any company or other entity which
controls, is controlled by or is under common control with the designated Party.
For the purpose of the foregoing, ownership, directly or indirectly, of 50% or
more of the voting stock or other equity interest shall be deemed to constitute
control.
1.4A. "Aging Reports" shall have the meaning given to it in Section
12.2.2.
1.5. "Agreement" shall mean this Asset Purchase Agreement.
1.6. "Ancillary Agreements" shall mean the real property conveyances
described in Section 5.2.1 and the xxxx of sale, assignment and assumption
described in Exhibit D.
1.7. "Assumed Liabilities" shall have the meaning given to it in
Section 4.2.
1.8. "Books and Records" shall have the meaning given to it in Section
6.13.
1.9. "Business" shall mean the operation of the Facilities as
independent living/residential care facilities and skilled nursing facilities
and any other ancillary health care services owned, leased, operated, delivered,
managed, developed, constructed, maintained, used, occupied or possessed by
Seller in connection therewith (including, without limitation, any home health
and hospice, outpatient and contract rehab therapy services).
1.10. "Capital Expenditures" shall mean any outlay of funds for the
acquisition or improvement of a fixed asset which extends the life or increases
the productivity of the asset.
1.11. "Champus" shall mean the Civilian Health and Medical Program of
the Uniform Service, a program of medical benefits covering retirees and
dependents of members or former members of a uniformed service provided,
financed and supervised by the United States Department of Defense and
established by 10 U.S.C. Sections 1071 et seq.
1.12. "Closing" shall have the meaning given to it in Section 5.1.
1.13. "Closing Date" shall have the meaning given to it in Section 5.1.
1.14. "Closing Inventory" shall mean all Inventory relating to the
Business on hand on the Closing Date.
1.15. "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time, and any successor thereto. Any reference herein to a
specific
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section or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
1.16. "Contract" shall mean all alliance agreements, transfer
agreements, other agreements (including, without limitation, Resident/Patient's
Agreements, Management Agreements and Provider Agreements), contracts, contract
rights, commitments, customer accounts, orders, leases, guaranties, warranties
and representations, franchises and books and records of account benefiting,
relating to the Purchased Assets or the operation of the Business or the
ownership, construction, development, maintenance, repair, management, use,
occupancy, possession or operation thereof, or the operation of any of the
programs or services in conjunction with the Business and all renewals,
replacements and substitutions therefor, issued by any Governmental Authority,
Accreditation Body or Third Party Payor or maintained or used by Seller with any
third Person.
1.17. "Current Liabilities" shall mean all liabilities classified as
current liabilities in accordance with GAAP consistently applied.
1.18. "Damages" shall have the meaning given to such term in Section
14.4.
1.19. "Department of Health" shall mean the Department of Health of the
State of Missouri.
1.20. "Department of Social Services" shall mean the Department of
Social Services, Divisions of Aging and Medical Services of the State of
Missouri.
1.21. "Deposit Escrow Agreement" means an agreement in the form of and
containing the terms and conditions set forth in Exhibit C hereto among
Purchaser, Seller and Escrow Agent.
1.22. "Employee" shall mean any individual employed by Seller in the
conduct of the Business as listed on Schedule 1.22 (such Schedule being subject
to change between the date hereof and the Closing Date as a result of employee
changes in the ordinary course of Seller's business consistent with past
practices).
1.23. "Encumbrance" shall mean any right to, or interest in, property,
which subsists in a third-party and which constitutes a claim, lien, charge or
liability attached to and binding upon the Purchased Assets, including, but not
limited to, a mortgage, judgment lien, mechanic's lien, lease, security
interest, easement and right-of-way.
1.24. "Environmental Law" shall mean any Federal, state or local law,
statute, charter or ordinance, and any rule, regulation, binding interpretation,
binding policy, permit, order, court order or consent decree issued pursuant to
any one of the foregoing, which pertains to, governs or otherwise regulates any
of the following activities: the emission, discharge, release or spilling of any
substance into the air, surface water, ground water, soil or substrata; the
generation, treatment, storage, or disposal of any waste, hazardous substance,
hazardous or infectious waste. The terms "waste",
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"hazardous substance", "infectious waste", and "hazardous waste" include any
substance as defined as such by an applicable Environmental Law.
1.25. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.26. "ERISA Plans" shall mean defined benefit pension plans and
defined contribution pension plans qualified under Section 401(a) of the Code.
1.27. "Escrow Agent" means Chicago Title Insurance Company, the title
agent designated to administer the terms and conditions of the Deposit Escrow
Agreement entered into by and among Escrow Agent, Purchaser, and Seller.
1.28. "Escrow Amount" shall have the meaning given to such term in
Section 3.1.2.
1.29. "Excluded Assets" shall mean those assets that are not included
in the sale contemplated hereby and as are further defined in Section 2.2.
1.30. "Facilities" shall have the meaning given to such term in the
Recitals of this Agreement.
1.31. "Facility Leases" shall mean the leases pertaining to the Leased
Facilities set forth in Schedule 2.1.1.
1.32. "GAAP" shall mean generally accepted accounting principles in the
United States of America.
1.33. "Governmental Authorities" shall mean all agencies, authorities,
bodies, boards, commissions, courts, instrumentalities, legislatures and offices
of any government, quasi-governmental unit or political subdivision, whether
federal, state, county, district, municipal, city or otherwise including,
without limitation, the Securities and Exchange Commission and the American
Stock Exchange.
1.34. "Home Health and Hospice Assets" shall mean the Contracts, cash
on hand, Accounts Receivable, and all other tangible or intangible personal
property used exclusively in connection with the operation of the Balanced Care
Home Health and Hospice.
1.35. "Indemnifying Party" shall have the meaning given to such term in
Section 14.4.
1.36. "Indemnified Party" shall have the meaning given to such term in
Section 14.4.
1.37. "Inventory" shall mean the inventory of Seller, including,
without limitation, dry storage goods, janitorial supplies, food and beverage
supplies, office supplies, medical supplies and pharmaceutical supplies.
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1.38. "JCAHO" shall mean the Joint Commission on Accreditation of
Healthcare Organizations.
1.39. "Knowledge" shall mean the host of actual knowledge of a
particular fact or any other matter being possessed or which would be possessed
after due and reasonable inquiry by an officer or other individual having
principal responsibility for a business or administrative function of such
Party, including individuals serving in such a capacity in or for the Business.
1.40. "Leased Facilities" shall have the meaning given to such term in
the Recitals of this Agreement.
1.41. "Legal Requirements" shall mean all statutes, ordinances,
by-laws, codes, rules, regulations, restrictions, orders, judgments, decrees and
injunctions (other land use and health care licensing statutes, ordinances,
by-laws, codes, rules and regulations), promulgated or issued by any
Governmental Authority, Accreditation Body or Third Party Payor.
1.42. "Managed Care Plans" shall mean all health maintenance
organizations, preferred provider organizations, individual practice
associations, competitive medical plans and similar arrangements.
1.43. "Management Agreement" shall mean any agreement, whether written
or oral, between Seller and any other Person pursuant to which Seller provides
any payment, fee or other consideration to any other Person to operate or manage
the Business (except any employment agreements).
1.44. "Medicaid" shall mean the medical assistance program established
by Title XIX of the Social Security Act (42 U.S.C. Sections 1396 et seq.) and
any statute succeeding thereto.
1.45. "Medicare" shall mean the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act (42 U.S.C.
Sections 13965 et seq.) and any statute succeeding thereto.
1.45A "Noncompetition Agreement" shall mean the noncompetition
agreement entered into between Seller and Purchaser, in the form of and
containing terms and conditions mutually agreeable by the Parties.
1.46. "Other Agreements" shall mean the Lease Guaranty Fee Agreement(s)
(if necessary and required due to the guaranty obligations of BCC required by
Seller's landlords and lenders) and the other agreements set forth on Schedule
1.46, including any other agreements executed and delivered under or in
connection therewith.
1.47. "Owned Facilities" shall have the meaning given to such term in
the Recitals of this Agreement and as legally described in Schedule 2.1.1.
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1.48. "Party" shall mean either Seller or Purchaser (or its permitted
nominees), individually, as the context so requires, and the term "Parties"
shall mean Seller and Purchaser (or its permitted nominees) together.
1.49. "Payables" as of any date shall mean any of the trade accounts
payable associated with the Business as of such date in accordance with GAAP
consistently applied.
1.50. "Payroll Practice/Employee Arrangement" shall have the meaning
given to such term in Section 6.16.
1.51. "Permits" shall mean all permits, licenses, approvals,
qualifications, rights, variances, permissive uses, accreditations,
certificates, certifications, consents, contracts, interim licenses, permits and
other authorizations of every nature whatsoever required by, or issued to or on
behalf of Seller under, any Legal Requirements benefiting, relating or affecting
the Business or Facilities or the construction, development, maintenance,
management, use or operation thereof, or the operation of any programs or
services in conjunction with the Business and all renewals, replacements and
substitutions therefor, now or hereafter required or issued by any Governmental
Authority, Accreditation Body or Third Party Payor.
1.52. "Permitted Encumbrances" shall mean those encumbrances as
specifically set forth on Schedule 1.52 hereto.
1.53. "Person" shall mean any individual, corporation, company, limited
or general partnership, trust or estate, joint venture, association or other
entity and includes Affiliates.
1.54. "Prepaid Expenses" as of any date shall mean payments made by
Seller with respect to the Business which constitute prepaid expenses of the
Business in accordance with GAAP consistently applied and are set forth in
Schedule 2.1.10.
1.55. "Provider Agreements" shall mean all participation, provider and
reimbursement agreements or arrangements for the benefit of Seller in connection
with the operation of the Business relating to any right to payment or other
claim arising out of or in connection with Seller's participation in any Third
Party Payor Program.
1.56. "Purchase Price" shall have the meaning given to such term in
Section 3.1.1.
1.57. "Purchased Assets" shall have the meaning given to such term in
Section 2.1 and shall include the Facilities, Business, and the Facility Leases.
1.58. "Purchaser" shall have the meaning given to such term in the
preamble of this Agreement.
1.59. "Purchaser Damages" shall have the meaning given to such term in
Section 14.2.
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1.60. "Purchaser Indemnitees" shall have the meaning given to such term
in Section 14.2.
1.61. "Real Property" shall have the meaning given to such term in
Section 2.1.1.
1.62. "Related Party" means (i) Seller, (ii) any Affiliate of Seller,
and (iii) any officer, director, shareholder or partner of any Person identified
in clauses (i) or (ii) preceding, and (iv) any spouse, sibling, ancestor or
lineal descendant of any natural Person identified in any one of the preceding
clauses.
1.63. "Resident/Patient's Agreements" shall mean all contracts,
agreements and consents executed by or on behalf of any resident, patient or
other Person seeking services at any of the Facilities, including, without
limitation, assignments of benefits and guarantees, and such resident/patient's
related medical and/or other records.
1.64. "Resident Payments" has the meaning given that term in Section
12.2.2.
1.65. "Retained Liabilities" has the meaning given that term in Section
4.2.
1.66. "Security Right" means, with respect to any security, any option,
warrant, subscription right, preemptive right, other right, proxy, put, call,
demand, plan, commitment, agreement, understanding or arrangement of any kind
relating to such security, whether issued or unissued, or any other security
convertible into or exchangeable for any such security. "Security Right"
includes any right relating to issuance, sale, assignment, transfer, purchase,
redemption, conversion, exchange, registration or voting and includes rights
conferred by statute, by the issuer's governing documents or by agreement.
1.67. "Seller" shall have the meaning given to such term in the
preamble of this Agreement, individually and collectively, as the context may
require.
1.68. "Seller Damages" shall have the meaning given to such term in
Section 14.3.
1.69. "Seller Indemnitees" shall have the meaning given to such term in
Section 14.3.
1.70. Intentionally Omitted;
1.71. "Survival Date" shall have the meaning given to such term in
Section 14.1.
1.72. "Taxes" shall mean all taxes, duties, charges, fees, levies or
other assessments imposed by any Governmental Authority, including, without
limitation, income, gross receipts, value-added, excise, withholding, personal
property, real estate, sales, use, ad valorem, license, lease, service,
severance, stamp, transfer, payroll, employment, customs, duties, alternative,
add-on minimum, estimated and franchise
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taxes (including any interest, penalties or additions attributable to or imposed
on or with respect to any such assessment).
1.73. "Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to any Tax, including any
schedule or attachment thereto, and including any amendment thereof.
1.74. "Third Party Payor Programs" shall mean all third party payor
programs in which Seller participates, including, without limitation, Medicare,
Medicaid, Champus, Blue Cross and/or Blue Shield, Managed Care Plans, other
private insurance plans and employee assistance programs.
1.75. "Third Party Payors" shall mean Medicare, Medicaid, Blue Cross
and/or Blue Shield, private insurers and any other Person which maintains Third
Party Payor Programs.
ARTICLE II. TRANSFER OF ASSETS AND PROPERTIES
2.1. Purchased Assets. Subject to the terms and conditions of this
Agreement and other than the Excluded Assets, Seller shall bargain, sell and
convey and deliver on the Closing Date to Purchaser, free and clear of all
Encumbrances whatsoever (other than Permitted Encumbrances or except as
expressly provided herein), and Purchaser shall purchase from Seller, the
Business as a going concern and all Seller's rights, title and interest in and
to the Facilities, the assets, properties and rights of every kind and
description, real, personal and mixed, tangible and intangible (including real
property, furniture, fixtures and equipment, inventories, patient contracts,
contracts of leases and commitments concerning the operation of the Facilities,
operating certificates, operational records, and all other items used concerning
the operations of the Facilities), wherever situated, owned by Seller, or which
Seller has a right to use, and used in the Business (the "Purchased Assets"),
including, without limitation, the following:
2.1.1. Real Property.
a. All those certain lots or pieces of ground
described on Schedule 2.1.1 hereto, together with the
buildings, structures, improvements and fixtures located
thereon, all of which relate to the Owned Facilities and any
parking lots adjacent thereto, and all rights, privileges,
easements, licenses, hereditaments and other appurtenances
relating thereto (the "Real Property");
b. The certain leases described on Schedule 2.1.1,
which relate to the Leased Facilities (the "Facility Leases");
and
c. All plans and specifications relating to any and
all of the Leased Facilities which are in the possession of
Seller.
2.1.2. Equipment, Machinery and Other Tangible Personal
Property. All machinery, equipment, leasehold improvements,
automobiles, supplies, office
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furniture and office equipment, computing and telecommunications
equipment and other items of personal property that are owned or leased
by Seller located at any of the Facilities and used in connection with
the Business, including but not limited to those described in Schedule
2.1.2 hereto;
2.1.3. Contracts Relating to the Business. All of the interest
of Seller in all Resident/Patient's Agreements and those Contracts
listed on Schedule 2.1.3 and those other Contracts assumed by Purchaser
in writing by separate agreement within 30 days after the Closing Date.
Those other Contracts not assumed by Purchaser in writing by separate
agreement may be terminated by either Seller or Purchaser within 90
days of the Closing Date;
2.1.4. Permits, Licenses. All of Seller's interest in Permits
relating to the Business, including those listed in Schedule 2.1.4
hereto, to the extent such Permits are transferable to Purchaser and
Medicare and Medicaid provider agreements/numbers to the extent
transferable;
2.1.5. Goodwill. All of the interest of Seller in and to the
goodwill incident to the Business, including but not limited to the
value of the names of the Facilities associated with the Business and
the value of good customer relations;
2.1.6. Inventory. All Closing Inventory;
2.1.7. Resident/Patient Funds and Records. All deposits and
escrow accounts of, or for the benefit of, any of Seller's
residents/patients at the Closing Date that relate to the Business,
including any amounts held in trust for residents/patients. All
resident records and all records, reports, studies and documentation
relating to resident records.
2.1.8. Computer Software. Except as set forth in Section
2.2.9, all computer applications software, owned or licensed, whether
for general business usage (e.g., accounting, word processing,
graphics, spreadsheet analysis, etc.), or specific,
unique-to-the-Business usage, and all computer operating, security or
programming software, including all passwords relating thereto, owned
or licensed by Seller and used in the operation of the Business at the
Facilities to the extent transferable to Purchaser without the consent
of any third party. An inventory of the computer software is listed on
Schedule 2.1.8 hereto;
2.1.9. Other Intangible Assets. All other intangible assets
(including all causes of action, rights of action, contract rights and
warranty and product liability claims against third parties) relating
to the Purchased Assets or the Business, to the extent permitted by law
or contract.
2.1.10. Prepaid Expenses. All prepaid expenses of the Business
as more specifically set forth on Schedule 2.1.10 hereto.
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2.1.11 Other Assets. Any other tangible assets relating to the
Business that are not removed within 120 days after the Closing, except
as otherwise provided for in Sections 2.2.10 and 2.2.11.
2.2. Excluded Assets. Notwithstanding Section 2.1, only the following
assets (collectively, the "Excluded Assets") shall be excluded from this
Agreement, and shall not be assigned or transferred to Purchaser:
2.2.1. Accounts Receivable. All Accounts Receivable of Seller
existing as of 11:59 p.m. on the Closing Date;
2.2.1. Cash. All other cash, cash equivalents on hand or in
bank accounts (other than accounts for the benefit of Seller's
residents/patients as described in Section 2.1.7), notes and other
securities and unbilled costs and fees up through and including the
Closing Date;
2.2.2. Corporate Books. Corporate minute books and stock books
of Seller;
2.2.3. Third Party Claims. Any claims and rights against third
parties (including, without limitation, insurance carriers) to the
extent they relate to liabilities or obligations that are not assumed
by Purchaser hereunder and that are not included within Section 2.1.9;
2.2.4. Taxes. Claims for refunds of Taxes and other charges
imposed by any Governmental Authority for periods prior to the Closing
Date;
2.2.5. Other Assets. Assets listed on Schedule 2.2.5;
2.2.6. Reimbursement Claims. All reimbursement claims and
appeal rights Seller has or may have with respect to services provided
prior to the Closing Date and/or cost reports pertaining to any period
of time prior to the Closing Date;
2.2.7. Intellectual Property. Subject to the conditions
regarding limited use in Sections 2.2.10 and 2.2.11, all right, title
and interest of Seller in the patents, trademarks, trademark
registrations, trade names, service marks, copyrights and copyright
registrations described in Schedule 2.2.7.;
2.2.8. Intentionally Omitted;
2.2.9 Certain Computer Software. All computer software set
forth in Section 2.1.8 that, by the terms of the contract, agreement,
lease or license pursuant to which the software is owned, leased or
licensed by Seller, is not capable of being (or requires consent to be)
assigned or transferred and that is identified in Schedule 2.2.9;
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2.2.10 Signs. Except to the extent used by Purchaser during
the 120 days immediately following the Closing, all signs indicating
that the Facilities are in any way affiliated with Seller. After the
expiration of such 120 day period, Purchaser shall remove all such
signs and cooperate with Seller in arranging for the transfer and
storage of the signage at Seller's expense; and
2.2.11 Marketing Materials. Except to the extent used by
Purchaser during the 120 days immediately following the Closing, all
catalogs, brochures, art work, photographs, public relations material
and advertising material used in the Business, whether in electronic
form or otherwise, to the extent any of the foregoing reference Seller
in any manner. After the expiration of such 120 day period, Purchaser
shall return to Seller all such materials at Seller's expense.
ARTICLE III. CONSIDERATION AND TERMS
3.1. Consideration for Purchased Assets.
3.1.1. Purchase Price. The aggregate consideration to be paid
by Purchaser to Seller for the Purchased Assets and the Business (the
"Purchase Price") shall be $9,200,000 to be paid as set forth in
Section 3.1.2
3.1.2. Form of Payment. The Purchase Price (subject to any
adjustments as set forth in Schedule 2.1.3) shall be paid by Purchaser
as follows:
(i) Escrow Amount. $250,000 (the "Escrow Amount") to be
paid by Purchaser to Escrow Agent on the date of
execution of this Agreement and held by Escrow Agent
pursuant to the terms and subject to the conditions
of the Deposit Escrow Agreement and this Agreement.
The Seller and Purchaser shall simultaneously
herewith enter into a Deposit Escrow Agreement
substantially in the form attached to Exhibit C
hereto.
(ii) Cash Consideration. $8,425,000 in cash (Purchase
Price less the Escrow Amount and Promissory Note
amount), by wire transfer of immediately available
funds to BCC at the time of Closing.
(iii) Promissory Note. At Closing, Purchaser shall deliver
a Promissory Note to BCC in the principal amount of
$525,000 (unless Purchaser, in its sole discretion,
agrees to pay the entire Purchase Price in cash
consideration at Closing). The Promissory Note shall
provide for the payment of interest at a rate equal
to ten percent (10%) per annum, with monthly payments
and a maturity date of forty eight (48) months after
the Closing Date. In addition and as additional
security for the repayment of the Promissory Note,
the principal(s) of Purchaser and Seller shall enter
into an Agreement of Guaranty, Suretyship, and
Indemnity whereby the Purchaser shall unconditionally
guarantee the Purchaser's obligations under the terms
and conditions of the Promissory Note. The Promissory
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Note and Guaranty shall each be in a form mutually
agreeable between Seller and Purchaser and shall be
finalized in form and content within 30 days after
the date of execution of this Agreement.
3.1.3. Home Health and Hospice Assets. Notwithstanding Section
3.1.2, in the event that the Home Health and Hospice Assets cannot be
transferred on the Closing Date because the 90-day notice period to the
Department of Health has not elapsed, the Closing will nevertheless
take place as contemplated hereunder and $15,000 of the Purchase Price
will be retained by Purchaser until Closing on the Home Health and
Hospice Assets which is to occur upon waiver of the notice period by
the Department of Health or expiration of such 90-day period, whichever
occurs first but in no event later than May 1, 2000. Such closing shall
be effective as of the Closing Date for accounting purposes. During the
interim notice period, Seller and Purchaser agree to fully cooperate
with each other and enter into any such other agreements necessary to
carry on the operations of the Balanced Care Home Health and Hospice.
3.1.4. Entitlement to Escrow Amount. The Escrow Amount shall
be distributed in accordance with and subject to the terms and
conditions of the Deposit Escrow Agreement.
3.1.5. Prorated Expenses. All ad valorem and property taxes,
and similar assessments by Governmental Authorities based upon or
measured by Seller's interest in the Purchased Assets shall be prorated
between Seller and Purchaser as of the Closing Date based upon such
taxes assessed against the Purchased Assets for the tax period in
question, or if there is insufficient information for such tax period,
based upon taxes assessed for the immediately preceding tax period just
ended. All utility deposits, other Prepaid Expenses listed on Schedule
2.1.10 and amounts relating to any material Contract listed on Schedule
2.1.3 shall be prorated between Seller and Purchaser as of the Closing
Date based upon or measured by the period of Seller's ownership on or
before the Closing Date and Purchaser's ownership after the Closing
Date. All such amounts will be prorated on the basis of a 365-day year.
To the extent practicable, all such prorations and payments shall be
made at the Closing. In the event that Closing occurs on a day other
than a payroll day, with respect to the Employees, Seller shall
reimburse Purchaser at Closing for pay attributable to the period prior
to Closing which will be paid by Purchaser post-Closing. To the extent
exact amounts of any item are not known on the Closing Date, the
Parties agree to cooperate and use their diligent and good faith
efforts to make any such post closing adjustments within 30 days after
Closing or as soon thereafter as practicable.
3.1.6. Other Consideration. As additional consideration,
Purchaser shall also assume the Assumed Liabilities at the time of
Closing.
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3.2. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets, Facilities and the Business in accordance
with the allocation set forth in Schedule 3.2 as mutually agreed. Purchaser and
Seller shall report the federal, state and local income and other tax
consequences of the purchase and sale contemplated hereby in a manner consistent
with such allocation.
3.3 Risk of Loss. Prior to and including the Closing Date, all risk of
loss shall be borne by Seller; after the Closing Date, all risk of loss shall be
borne by Purchaser. In the event there is any material damage to or loss of any
of the Purchased Assets (whether by fire, theft, vandalism, terrorism, act of
God or other cause or casualty, damage or loss) between the date hereof and
Closing, such Purchased Assets shall be replaced or repaired at Seller's
expense. If it is impossible or impracticable to repair or replace such
Purchased Assets before the Closing Date, the Purchase Price shall be reduced by
the amount of the loss or damage as mutually determined and agreed upon by the
Parties; provided, however, that in the event of a casualty that in Purchaser's
reasonable judgment adversely and materially affects the Business or the
Purchased Assets, Purchaser may terminate this Agreement without any further
liability or penalty and the Escrow Amount shall be returned to Purchaser by
Escrow Agent in accordance with the procedures set forth in the Escrow
Agreement.
ARTICLE IV. ASSUMPTION OF LIABILITIES; EMPLOYEE MATTERS
4.1. General Limitation on Assumption of Liabilities. Except for
Permitted Encumbrances and as otherwise provided in Sections 4.2 below, Seller
shall transfer the Purchased Assets to Purchaser free and clear of all
Encumbrances, and without any assumption of liabilities and obligations, and
Purchaser shall not, by virtue of its purchase of the Purchased Assets, assume
or become responsible for any liabilities or obligations of:
(i) the Facilities arising prior to the Closing Date; or
(ii) Seller or any other Person whether known or unknown,
liquidated or unliquidated, contingent or otherwise.
4.2. Assumed Liabilities and Obligations. On the Closing Date,
Purchaser shall acquire the Purchased Assets subject only to, and shall
undertake, assume, perform and otherwise pay, satisfy and discharge, and hold
Seller harmless from only the following liabilities and obligations
(collectively, the "Assumed Liabilities"):
(i) all Facility Leases;
(ii) all obligations of Seller accruing after the Closing
Date under the Contracts that are listed on Schedule
2.1.3 or as otherwise assumed pursuant to Section
2.1.3; and
(iii) for claims or other debts or other obligations
arising out of any cost
15
settlements or other repayments to the Business
relating to periods after the Closing Date
Except for the Assumed Liabilities, Purchaser does not and shall not
assume or in any way undertake to pay, perform, satisfy or discharge any other
liability of Seller existing on, prior to, or after the Closing Date or arising
out of any transactions entered into, or any state of facts existing on, prior
to, or after the Closing Date (the "Retained Liabilities"), and Seller agrees to
pay and satisfy when due all Retained Liabilities and indemnify and hold
Purchaser harmless therefrom. Except for the obligations and liabilities
included in the Assumed Liabilities, the term "Retained Liabilities" shall
include, without limitation, liabilities:
(i) for or in connection with any dividends,
distributions, redemptions, or Security Rights with
respect to any security of Seller;
(ii) for expenses or fees incident to or arising out of
the negotiation, preparation, approval or
authorization of this Agreement and the consummation
of the transactions contemplated hereby, including,
without limitation, all legal and accounting fees and
all brokers or finders fees or commissions;
(iii) under or arising out of this Agreement;
(iv) to indemnify Seller's officers, directors or
shareholders;
(v) Federal, state or local tax liabilities or
obligations of Seller in respect to periods prior to
Closing, and the transactions contemplated hereunder,
including, without limitation, income taxes payable
under the Code, any income tax, any franchise tax,
any tax recapture, any FICA, workers' compensation,
employee benefits, any insurance premiums, rents, or
other accruals and any and all other taxes or amounts
due or payable for a period prior to Closing;
notwithstanding the foregoing, all sales and use
taxes, transfer taxes, and all other impositions of
tax arising solely by reason of the transfers
contemplated by this Agreement (excluding all
federal, state and local income and gross receipt
taxes on the earnings or gross receipts of Seller
prior to the Closing Date, which shall remain the
sole responsibility of Seller) shall be the
responsibility of and shall be borne equally by
Seller and Purchaser;
(vi) for long term indebtedness and other obligations or
guarantees of Seller;
(vii) for Accrued Expenses and Payables of Seller except to
the extent such amounts are expressly assumed by
Purchaser;
(viii) for claims or other debts arising out of any cost
settlements or
16
other repayments to the business relating to periods
prior to the Closing Date;
(ix) for any obligations under BCC's 401(k) plan and the
ERISA Plans;
(x) any obligations of Seller accruing under the Permits
prior to or after the Closing; and
(xi) for any liability incurred as a result of any
violation of any Environmental Laws that
noncompliance would have a material adverse effect on
the Business.
4.3. Offer of Employment. Purchaser shall offer employment on and as of
Closing, on an at-will basis, to all Employees (except regional office
employees) on terms of employment that Purchaser may determine in its sole
discretion. Seller shall not be required to terminate any Employees prior to
Closing.
4.4. Workers' Compensation and Disability Claims.
4.4.1. Seller's Liability. Seller shall remain liable for all
claims made by any of Seller's Employees for any and all claims of
Employees including, but not limited to, all claims for workers'
compensation, disability and occupational diseases and safety; ERISA
Plans; rate of pay and overtime payments and any other Payroll
Practice/Employee Arrangement; discrimination claims; collective
bargaining agreements or unionization of any of Seller's Employees; or
any other claims whatsoever that arise out of activities prior to the
Closing Date, provided that such claims are made no later than the
expiration of the applicable statute of limitations.
4.4.2. Purchaser's Liability. Purchaser shall be liable for
all claims made by any Employees for all workers' compensation,
disability and occupational diseases of or with respect to all
Employees hired by Purchaser and attributable to events and occurrences
first occurring after the Closing date and not otherwise the Seller's
retained responsibility under Section 4.4.1.
4.5. Vacation Pay.
4.5.1. Seller's Liability. Seller shall be liable for the cost
and expense related to all vacation entitlements, personal days and
attendance incentives for all Employees for the period up to the
Closing Date. As of the Closing Date, Seller shall pay to Purchaser an
amount equal to employee benefits or reimbursements which may have
accrued or may be owed by Seller to its Employees.
4.5.2. Purchaser's Liability. Purchaser shall assume and be
liable for the cost and expense related to all vacation entitlements,
personal days and attendance incentives for all Employees for the
period on or following the Closing Date.
17
ARTICLE V. CLOSING
5.1. Time; Location. The Parties shall use their commercially
reasonable best efforts to consummate the purchase and sale of the Purchased
Assets on the earlier to occur of the following: (i) as soon as the
contingencies to Purchaser's and Seller's obligations to close are fully
satisfied or at such time such contingencies have been waived by Purchaser or
Seller, as applicable, or (ii) December 31, 1999 (the "Closing"). The date of
the Closing shall be referred to as the "Closing Date." The Closing shall take
place at such time, date and place as may be mutually agreed upon by the
Parties, but if the Parties are unable to agree, the Closing shall take place at
a place of public accommodation in Springfield, Missouri. Notwithstanding the
foregoing, the Closing Date may be extended but only upon the mutual agreement
of the Parties hereto.
5.2. Seller's Documents. At Closing, Seller shall execute and deliver
the following instruments of transfer and assignment:
5.2.1. Deeds. Duly executed and acknowledged special warranty
deeds, in recordable form, transferring the Real Property and such
affidavits or other instruments as Purchaser may reasonably request and
which are customary in transactions of this type.
5.2.2. Xxxx of Sale. A general xxxx of sale, assignment and
assumption substantially in the form of Exhibit D attached hereto,
transferring to Purchaser good and indefeasible title to all of the
tangible personal property included in the Purchased Assets, subject
only to Permitted Encumbrances and the Assumed Liabilities and
assigning to Purchaser, to the extent assignable, Seller's right, title
and interest in each of the Contracts, Permits and other agreements
included in the Purchased Assets, including without limitation, the
Facility Leases.
5.2.3. Memorandum of Leases. Duly executed and acknowledged
Memorandums of Leases in recordable form for each of the Leased
Facilities in a form mutually agreed upon between Purchaser and Seller
(and Seller's Landlords) if any of the Facility Leases or memorandums
thereof for the Leased Facilities have not been recorded.
5.2.4. Consents to Transfer. Duly executed and acknowledged
Consents to Transfer in a recordable form for each of the Leased
Facilities in a form reasonably agreed upon between Purchaser and
Seller (and Seller's Landlords) in which the respective Landlords for
each of the Leased Facilities approve the transfer of the Facility
Leases to Purchaser.
5.2.5. Assignment of Leases. Duly executed and acknowledged
Assignment of Leases for each of the Leased Facilities in a form
reasonably agreed upon between Purchaser and Seller (and Seller's
Landlords) which provide for the transfer of all of Seller's right,
title, and interest in and to the Leased Facilities.
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5.2.6. Landlord Estoppels. Duly executed Landlord Estoppel
Certificates in a form reasonably agreed upon between Purchaser and
Seller (and Seller's Landlords) in which the respective Landlords for
each of the Leased Facilities represent and warrant
certain facts and other matters relating to the Leased Facilities;
provided, however, the Parties agree that any such facts and other
matters contemplated pursuant to this section may be satisfied in the
other document deliveries required by Seller under this section.
5.2.7. Subordination and Attornment. Duly executed and
acknowledged Subordination and Attornment Agreements in recordable form
with any person having an Encumbrance on any of the Leased Facilities
in a form reasonably agreed upon between Purchaser and Seller (and
Seller's Landlords) which provide that the quiet and lawful enjoyment
of the Leased Facilities shall not be disturbed as long as the
Purchaser complies in all material respects with the Facility Leases.
5.2.3. Contracts and Other Permits. To the extent not
delivered prior to Closing, all Contracts identified in Schedule 2.1.3
and all Permits.
5.2.4. Title Insurance and Surveys. To the extent not
delivered prior to Closing, all title insurance policies (or
commitments) and surveys relating to any of the Facilities and which
are in the possession of Seller.
5.2.5. Rent Roll. The rent roll of Seller listing all
residents/patients and their respective rent payments current as of
five days or fewer prior to the Closing Date.
5.2.6. Covenant Not to Compete. Seller shall deliver to
Purchaser the Noncompetition Agreement as provided for in Section 12.5
below.
5.2.7. Other Documents. The Other Agreements, Ancillary
Agreements and such additional instruments of conveyance and transfer
as Purchaser may reasonably require in order to more effectively vest
in it, and put it in possession of, the Purchased Assets, including,
but not limited to, the Seller's Certificate and Secretary's
Certificate referred to in Sections 10.3 and 10.4 hereinafter, and all
other documents required to be delivered by Seller hereunder.
5.3. Purchaser's Documents. At Closing, Purchaser shall execute and
deliver the following instruments of transfer and assignment:
5.3.1. Xxxx of Sale. An executed xxxx of sale, assignment and
assumption as set forth above;
5.3.2. Other Documents. The Ancillary Agreements and such
other additional instruments as Seller may reasonably require in order to
consummate the transactions hereunder and to otherwise affect the agreements of
the Parties hereto, including, but not limited to, the Purchaser's Certificate
and Secretary's Certificate
19
referred to in Sections 11.3 and 11.4 hereinafter, and all other documents
required to be delivered by Purchaser hereunder; and
5.3.3. Opinion of Counsel. Purchaser shall provide the opinion
of counsel referred to in Section 11.9 hereinafter but only to the extent
required by any of Seller's Landlords.
5.4 Reasonable Steps. Seller shall make such commercially reasonable
best efforts as may be appropriate so that on the Closing Date, Purchaser shall
be placed in actual possession and control of all of the Purchased Assets.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller represents and warrants
to Purchaser that each of the following representations and warranties is true
and correct as of the date hereof:
6.1. Organization, Good Standing and Power.
6.1.1 BCC. BCC is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation, and has all requisite corporate power and authority and
has been duly authorized by each Subsidiary to execute and deliver this
Agreement, the Other Agreements and the Ancillary Agreements to which
it is a Party, to consummate the transactions contemplated hereby and
thereby and to perform all the terms and conditions hereof and thereof
to be performed by it on its behalf or the behalf of the Subsidiaries.
6.1.2 Subsidiaries. The Subsidiaries are corporations duly
organized, validly existing and in good standing under the laws of
their states of incorporation, and have all requisite corporate power
and authority to execute and deliver this Agreement, the Other
Agreements, and the Ancillary Agreements to which they are a party, to
consummate the transactions contemplated hereby and thereby and to
perform all the terms and conditions hereof and thereof to be performed
by them and to duly authorize BCC to do the same on their behalf.
6.2. Authorization of Agreement and Enforceability. Seller has taken
all necessary corporate action to authorize the execution and delivery of this
Agreement, the Other Agreements, and the Ancillary Agreements to which it is a
Party, the performance by it of all terms and conditions hereof and thereof to
be performed by it and the consummation of the transactions contemplated hereby
and thereby. This Agreement, the Other Agreements and the Ancillary Agreements,
upon Seller's execution and delivery thereof, will constitute the legal, valid
and binding obligations of Seller, enforceable in accordance with their terms
except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws presently or hereafter in effect
relating to or affecting the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
20
6.3. No Violation; Consents. The execution, delivery and performance by
Seller of this Agreement, the Other Agreements and the Ancillary Agreements to
which it is a Party, and the consummation of the transactions contemplated
hereby and thereby will not (with or without the giving of notice or the lapse
of time, or both) (i) violate any provision of the charter or bylaws of Seller,
(ii) except with respect to notices and consents required to be given by Seller
and which Seller shall give on or prior to the Closing Date to any Accreditation
Body or Governmental Authority in connection with the sale and change of
ownership or operation of the Purchased Assets, Facilities and the Business,
violate or require any consent, authorization or approval of, or exemption by,
or filing under any Contract or Legal Requirements, (iii) violate any judgment,
order, writ or decree of any court applicable to Seller, the Business or the
Purchased Assets, (iv) except as identified on Schedule 6.3.1, conflict with,
result in a breach of, constitute a default under, or accelerate or permit the
acceleration of the performance required by, or require any consent,
authorization or approval under any agreement, Contract, commitment, lease or
other instrument, document or undertaking to which Seller is a party or to which
any of the Purchased Assets is bound or (v) result in the creation or impression
of any Encumbrances upon the Purchased Assets.
6.4. Financial Statements. Seller has delivered to Purchaser true and
complete copies of the (i) balance sheets of the Subsidiaries at August 31,
1999, June 30, 1999, June 30, 1998 and June 30, 1997, together with the related
income statements for the years or periods then ended and (ii) a statement of
profit and loss for each Subsidiary as of August 31, 1999 and June 30, 1999 and
a corresponding income statement for the fiscal year or period then ended.
Seller shall provide Purchaser, as promptly as the same become available through
the Closing Date, monthly balance sheets and statements of profit and loss of
Seller and each of the Subsidiaries. The foregoing financial statements
(including any provided after the date hereof) have been prepared from the Books
and Records of Seller in accordance with GAAP consistently applied throughout
the periods involved except as may be noted therein and except that not all of
the notes required by GAAP are included nor do the interim statements reflect
customary year end adjustments. Such financial statements are materially true,
correct and complete and fairly present the financial position of the Business
at the dates indicated and the results of operations and cash flows of Business
for the periods then ended in accordance with GAAP.
6.5. Inventory. The level of Inventory maintained by Seller and
included in the Purchased Assets is sufficient to carry on the Business as
historically conducted. Seller will maintain inventory levels consistent with
inventory levels that have been maintained by Seller over the past twelve
months, subject to changes resulting from the ordinary course of business.
6.6. Absence of Certain Changes or Events. Except as set forth in
Schedule 6.6 hereto, since September 30, 1999 in connection with the Business,
Seller has not:
(i) amended in any material respect or terminated any
Contract other than in the ordinary course of
Seller's business consistent with past practice;
21
(ii) suffered the occurrence of any events that,
individually or in the aggregate, have had, or could
reasonably be expected to have, a material adverse
effect on the Purchased Assets or the results of
operations of the Business;
(iii) incurred any damage or destruction having a material
adverse effect on the Purchased Assets or the results
of operations of the Business by fire, storm or
similar casualty, whether or not covered by
insurance;
(iv) sold, transferred, replaced or leased any of the
Purchased Assets or sold any Inventory at a discount,
except for transactions in the ordinary course of
Seller's business consistent with past practice;
(v) entered into any transaction or made any commitments
(for capital expenditures or otherwise) other than in
the ordinary course of Seller's business consistent
with past practice;
(vi) changed its methods of accounting, excluding changes
in response to new legal or accounting requirements
beyond Seller's control;
(vii) increased the compensation of Employees, except
following normal review procedures or as reasonably
deemed necessary in the ordinary course of Seller's
business consistent with past practice;
(viii) suffered any major or key personnel changes or any
strike, work stoppage or other labor dispute;
(ix) materially altered its conduct in its relations with
suppliers, residents and patients;
(x) materially altered its marketing efforts with respect
to the Business; or
(xi) received any notice nor gained any Knowledge that any
of its licenses or Permits to operate the Facilities
have been or will be suspended, revoked, or
restricted in any manner.
6.7. Real Property. Except as set forth on Schedule 6.7:
6.7.1. Title to Property; Absence of Liens and Encumbrances.
Seller has good and marketable title to the Real Property, free and
clear of all Encumbrances, other than Permitted Encumbrances.
6.7.2. Boundaries; Location. To the best of Seller's
Knowledge, each Real Property and Facility parcel is considered a
separate parcel of land for taxing and conveyancing purposes and each
Real Property or Facility parcel (i) is not
22
located in a flood plain, flood hazard area or designated wetlands
area, (ii) has no subsidence problems due to natural or manmade
sub-surface conditions, and (iii) the boundaries of each Real Property
and Facility Parcel are consistent with their legal descriptions in
Schedule 6.7 and no Person disputes such boundaries except as may be
otherwise disclosed herein.
6.7.3. Use and Operations. Except as otherwise may be
disclosed in any Schedules, the use and operation of each Facility
conforms in all material respects to all applicable building, zoning,
safety and subdivision laws, Environmental Laws and other Legal
Requirements, and all restrictive covenants and restrictions and
conditions affecting title, including but not limited to:
a. Easements; Rights of Way. To the best of Seller's
Knowledge, there are no easements or rights of way except (i)
those shown by the public records of the counties in which the
Facilities are located and (ii) those identified on the
surveys provided to Purchaser by Seller.
b. Water. To the best of Seller's Knowledge, there are no
public or private rights to any water source located on, by,
or under any of the Facilities.
c. Mechanic/Materialman Liens. To the best of Seller's
Knowledge, all bills for services performed or materials
furnished to the Facilities have been paid in full or will be
paid in full as of the Closing Date. To the best of Seller's
Knowledge, there are no mechanic or materialman liens against
the Facilities.
d. Mortgages. There are no unrecorded mortgages affecting the
Facilities. All recorded mortgages on the Owned Facilities, if
any, shall be satisfied in full and releases thereof shall be
delivered on the Closing Date.
e. Adverse Possession. To the best of Seller's Knowledge, no
person has acquired any rights to any of the Facilities by
adverse possession or prescription.
f. Restrictive Covenants. To the best of Seller's Knowledge,
there are no public or private restrictive covenants,
servitudes, or agreements prohibiting, limiting, or impairing
any use of the Facilities.
6.7.4. Utilities. To the best of Seller's Knowledge, all
utilities (including water, electric, storm and sanitary sewage and
telephone utilities) required to operate the Facilities are available
to the Facilities and such utilities enter the boundaries of the
Facilities through adjoining public streets, permanent easements or
rights-of-way of record in favor of Seller. Such utilities are all
connected pursuant to valid permits, are all in functional working
order and are adequate to service the operations of the Facilities as
currently conducted and intended to be
23
conducted and are in full compliance with all Legal Requirements.
Seller has not received any written notice of any proposed, planned or
actual curtailment of service of any utility supplied to the
Facilities.
6.7.5. Assessment Notices. Seller has no Knowledge of and has
not received any written or oral notice of assessments for public
improvements against any Facility or any written or oral notice or
order by any Governmental Authority, any insurance company that has
issued a policy with respect to any of the Facilities or any board of
fire underwriters or other body exercising similar functions that
relates to violations of building, safety or fire ordinances or
regulations, that claims any defect or deficiency with respect to any
of the Facilities or requests the performance of any repairs,
alterations or other work to or in any of such properties or in the
streets bounding the same.
6.7.6. Condemnation. To the best of Seller's Knowledge, there
is no pending or threatened condemnation, expropriation, eminent domain
or similar proceeding affecting all or any portion of any Facility and
Seller has no Knowledge of the likelihood thereof.
6.8. Contracts and Commitments. Except as listed on Schedule 2.1.3,
Seller is not a party to any written or oral (related to or in connection with
the Purchased Assets or Business and for which Purchaser shall be bound
following the Closing Date):
(i) Contract for the future purchase of, or payment for,
supplies or products, or for the performance of
services by another party, involving in any one case
$10,000 or more (and not terminable by Seller or
Purchaser without penalty or liability on no more
than 90 days notice);
(ii) Contract to sell or supply products or to perform
services, involving in any one case $10,000 or more
(except for any Resident/Patient's Agreement or any
other agreement terminable by Seller or Purchaser
without penalty or liability on no more than 90 days
notice);
(iii) Contract continuing over a period of more than six
months from the date hereof or exceeding $10,000 in
value (except for any Resident/Patient's Agreement or
any other agreement terminable by Seller or Purchaser
without penalty or liability on no more than 90 days
notice);
(iv) representative, sales agency, dealer or distributor
Contract;
(v) lease (other than the Facility Leases) under which
Seller is either lessor or lessee involving an annual
payment of more than $10,000;
24
(vi) note, debenture, bond, conditional sale agreement,
equipment trust agreement, letter of credit
agreement, loan agreement or other Contract or for
the borrowing or lending of money (including without
limitation loans to or from Employees) or guarantee,
pledge or undertaking of the indebtedness of any
other Person;
(vii) Contract for any charitable or political
contribution;
(viii) Contract limiting or restraining Seller or any
successor or assign (including Purchaser) from
engaging or competing in any kind of business with
any Person (except as disclosed on Schedule 6.8); or
(ix) license, franchise, distributorship or other
agreement, including those that relate in whole or in
part to any patent, trademark, trade name, service
xxxx or copyright or to any ideas, technical
assistance or other know-how of or used by the
Business.
Each of the Contracts and other instruments, documents and undertakings
listed on Schedule 2.1.3 is valid and enforceable in accordance with its terms
in all material respects, Seller is in compliance with the provisions thereof in
all material respects, Seller is not in default in the performance, observance
or fulfillment of any material obligation, covenant or condition contained
therein, and no event has occurred that with or without the giving of notice or
lapse of time, or both, would constitute such a default by Seller thereunder or,
to Seller's Knowledge, a material default by any other party thereto. Except as
otherwise listed on Schedule 2.1.3, no consent or approval of any party to any
Contract, commitment, lease or other instrument, document or undertaking listed
on Schedule 2.1.3 is required for the execution of this Agreement or the
consummation of the transactions contemplated hereby.
6.9. Permits, Licenses. Seller has all Permits that are required to
operate the Business and Seller is in material compliance with the terms and
conditions of the Permits. Schedule 2.1.4 hereto sets forth a correct and
complete list of all material Permits, each one of which is in full force and
effect. To Seller's Knowledge, no suspension or cancellation of any of the
Permits is pending or threatened and no cause exists for such suspension or
cancellation. Any Permits that cannot be transferred or require consent or
approval for the transfer are specifically identified on Schedule 2.1.4 hereto
as nontransferable or requiring such consent or approval.
6.10. Compliance with Laws. Except as described in Schedule 6.10
hereto, Seller has conducted, and is presently conducting, the Business so as to
comply in all material respects with all Legal Requirements applicable to the
conduct of operation of the Business or the ownership or use of the Purchased
Assets.
6.11. Legal Proceedings. Except as described in Schedule 6.11 hereto,
there is no claim, action, suit, proceeding, investigation or inquiry pending
before any Governmental Authority or, to Seller's Knowledge, threatened against
Seller with respect to the Business or any of the Purchased Assets, or relating
to the transactions
25
contemplated by this Agreement, nor to Seller's Knowledge is there any basis for
any such claim, action, suit, proceeding, investigation, or inquiry. Except as
set forth on Schedule 6.11 hereto, Seller is not a party to or subject to the
provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental, regulatory or administrative official, body
or authority or other Governmental Authority that relates to the Purchased
Assets or the Business or that might affect the transactions contemplated by
this Agreement.
6.12. Absence of Undisclosed Liabilities. Except as set forth in
Schedule 6.12, Seller has no material liabilities or obligations in excess of
$15,000 relating to the Business except (i) those liabilities and obligations
set forth on the financial statements of Seller referenced in Section 6.4 and
not heretofore paid or discharged; (ii) those liabilities and obligations
arising in the ordinary course of Seller's business consistent with past
practice under any Contract or commitment specifically disclosed on Schedule
2.1.3 hereto or not required to be disclosed because of the term or amount
involved; and (iii) those liabilities and obligations incurred in the ordinary
course of Seller's business with past practice since September 30, 1999.
6.13. Books and Records. All books of account and other financial
records of Seller directly relating to the Business (the "Books and Records")
are materially complete and correct and have been made available to Purchaser.
6.14. Employees. Schedule 1.22 sets forth a true, correct and complete
list of all individuals currently employed by Seller in the conduct of the
Business and their rate of compensation and date of hire. Except as set forth on
Schedule 1.22, none of the individuals employed by Seller have been given any
credit for service under any Payroll Practice/Employee Arrangement prior to
their respective date of hire.
6.15. Labor Relations. No Employee of Seller is represented by any
union or other labor organization. No representation election, arbitration
proceeding, grievance, labor strike, dispute, slowdown, or stoppage is pending,
to Seller's Knowledge, or threatened against, involving, affecting or
potentially affecting Seller. No complaint against Seller is pending or, to
Seller's Knowledge, threatened before the National Labor Relations Board, the
Equal Employment Opportunity Commission or any similar state or local agency, by
or on behalf of any Employee of Seller.
6.16. Payroll Practice/Employee Arrangement.
6.16.1. Benefit Plans. Schedule 6.16 contains a complete list
of each employee benefit plan subject to ERISA, and/or holiday,
vacation or other bonus practice or any other employee pay practice,
arrangement, agreement or commitment ("Payroll Practice/Employee
Arrangement") and maintained by or with respect to which Seller has any
liability or obligation, whether actual or contingent, with respect to
the Employees or their respective beneficiaries.
6.16.2. Plan Liability. Seller has not taken and will not take
any action that may result in Purchaser being a party to, or bound by,
an ERISA Plan, and
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Purchaser shall have no liability under or be subject to any liability
on account of any ERISA Plan following the consummation of the
transaction hereby.
6.16.3. Retirement Benefits. No Payroll Practice/Employee
Arrangement will require the payment of retiree medical benefits by
Purchaser.
6.17. Finder's Fee. Except as set forth on Schedule 6.17, Seller has
not taken any action that would give to any Person a right to a finder's fee or
any type of brokerage commission in relation to, or in connection with, the
transactions contemplated by this Agreement. Seller is solely responsible for
payment of the fee described on Schedule 6.17.
6.18. Interest in Business. Except as set forth on Schedule 6.18, as of
the date of this Agreement, Seller has not granted, and there is not
outstanding, any option, right, agreement or other obligation pursuant to which
any Person could claim a right to acquire in any way all or any part of, or
interest in, the Business, Facilities, or Purchased Assets.
6.19. Condition of Assets. Except as set forth on Schedule 6.19, all
taken as a whole, the buildings, structures and equipment that are part of the
Purchased Assets are in adequate physical condition for their present and
intended use in the conduct of the Business consistent with past practice and
are otherwise in good working order except for reasonable and ordinary wear and
tear.
6.20. Environmental Matters. Except as disclosed in Schedule 6.20 and
except to the extent that noncompliance would not have a material adverse effect
on the Business, to the best of Seller's Knowledge, Seller is in compliance in
all material respects with all Environmental Laws applicable to Seller, the
Business, the Facilities, the Purchased Assets and the Facility Leases. The
foregoing representation and warranty applies to the operation of the Business
and the use of the Purchased Assets including, but not limited to, the use,
handling, treatment, storage, transportation and disposal of any hazardous,
toxic or infectious waste, material or substance (including medical waste). To
the best of Seller's Knowledge, no investigation or review is pending or
threatened by any Governmental Authority or other Person with respect to any
alleged violation by Seller or the Business of any Environmental Law, the need
for any work, repairs or demolition by Seller, on or in connection with the Real
Property or the Facility Leases in order to comply with any Environmental Law,
or any actual or threatened release (including, but not limited to, any spill,
discharge, leak, emission, ejection, escape or dumping) or inadequate storage
of, or contamination caused by, any hazardous, toxic or infectious waste,
material or substance (including medical waste) or petroleum product, material
or waste or radioactive substance or waste, or any such constituent which would
have a material adverse effect.
6.21. Surveys. Seller has provided Purchaser with copies of Seller's
federal and/or state surveys or inspections and any plans of correction for the
current year and the immediately preceding year for the Facilities. Each such
survey or inspection was prepared in material compliance with all applicable
Legal Requirements.
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6.22. Tax Returns. Seller has filed or caused to be filed, or will file
or cause to be filed, all Tax Returns that are required to be filed by it prior
to or on the Closing Date, pursuant to all Legal Requirements of each
Governmental Authority with taxing power over it. All such Tax Returns were or
will be, as the case may be, correct and complete in all material respects.
Seller has paid or will pay all Taxes that have or will become due as shown on
such Tax Returns or pursuant to any assessment received as an adjustment to such
Tax Returns, except (i) such Taxes, if any, as are being contested in good
faith, and (ii) such Taxes that are fully reserved against on the financial
statements of Seller previously provided to Purchaser, and Taxes accruing that
are not yet due. All such Taxes are Retained Liabilities and subject to the
indemnification provisions set forth in Section 14.2.
6.23. Compliance with Medicare and Medicaid. To the best of Seller's
Knowledge, no claims have been made by Medicare or Medicaid or by any Third
Party Payor which would prevent Purchaser from operating the Facilities as
contemplated herein and contracting with and receiving payments from such
sources or which would otherwise materially affect Purchaser's reimbursement
from such sources.
6.24. FIRPTA. Seller is not a "foreign person" as such term is defined
under Section 1445(f)(3) of the Code.
6.25. Computer Software. Seller makes no representations or warranties
regarding year 2000 compliance of any computer software or hardware included in
the Purchased Assets.
6.26. Medicare, Medicaid and Other Third-Party Payors.
(1) Seller participates in the Medicare and Medicaid Programs.
A list of Seller's Medicare and Medicaid contracts and provider numbers
(or if such contracts do not exist other documentation evidencing such
participation) (collectively, the "Provider Agreements") are listed in
Schedule 6.26 attached hereto. Seller is, and intends to be at the time
of Closing, in full compliance with the terms, conditions and
provisions of the Provider Agreements.
(2) To the extent not provided before Closing, Seller shall
provide to Purchaser a copy of the most recent Statement of
Deficiencies and Plan of Correction, if any.
(3) To the best of Seller's Knowledge, no notice of any offset
against future reimbursements under or pursuant to the Provider
Agreements has been received by Seller nor is there any basis therefor.
There are no pending appeals, adjustments, challenges, audits,
litigation, or notices of intent to recoup past or present
reimbursements with respect to the Provider Agreements. Seller has not
been subject to or threatened with loss of waiver or liability for
utilization review denials with respect to the Provider Agreements
during the past twelve (12)
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months nor has Seller received notice of any pending, threatened or
possible decertification or other loss of participation in any of the
Provider Agreements.
(4) All liabilities and contractual adjustments of Seller
under any Third Party Payor or reimbursement programs have been
properly reflected and adequately reserved for in its financial
statements. In the event that Purchaser suffers any offsets against any
reimbursement due to Purchaser under any Third Party Payor or
reimbursement programs, including but not limited to the Provider
Agreements, relating to the periods on or prior to Closing, then Seller
shall within 30 days of discovery thereof pay to Purchaser the amounts
so offset. If Seller fails to pay Purchaser any such amounts within 30
days, Seller agrees to pay Purchaser the amounts so offset with
interest at a rate equal to ten percent (10%) per annum accruing
thereafter until the date paid by Seller to Purchaser.
6.26. Facility Leases. With respect to the Facility Leases:
(1) Schedule 2.1.1 sets forth each agreement which relates to Seller's
right to occupy, use and enjoy the Leased Facilities;
(2) Neither Seller, any landlord or sublessor, nor any other Person is
or will be as of the Closing Date in breach or default of any provision
of the Facility Leases nor is Seller aware of anything that with the
passage of time that would constitute an event of default;
(3) All rent and other amounts due under the Facility Leases are
current and no amount is outstanding other than as may be permitted
under the Facility Leases; and
(4) No tangible personal property is leased pursuant to the Facility
Leases except as set forth in Schedule 2.1.3.
6.27. Future Financial Performance. Seller has and will have following
the Closing Date the financial ability to perform its obligations under this
Agreement and to indemnify Purchaser as provided in Section 14.2.
6.28. Knowledge of Purchaser. None of the foregoing representations and
warranties of the Seller shall be deemed materially false, inaccurate or
incomplete as a result of any change in any applicable Legal Requirements over
which Seller has no control or authority and to which Purchaser has knowledge,
including without limitation, changes in private and public payor reimbursement
rules and regulations.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Purchaser represents and
warrants to Seller that each of the following representations and warranties is
true and correct as of the date hereof:
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7.1. Organization, Good Standing, Power. Purchaser is a nonprofit
corporation duly organized, validly existing and in good standing under the laws
of its state of organization and has all requisite power and authority to
execute and deliver this Agreement, the Other Agreements, and the Ancillary
Agreements to which Purchaser is a Party, to consummate the transactions
contemplated hereby and thereby and to perform all the terms and conditions
hereof and thereof to be performed by it.
7.2. Authorization of Agreement and Enforceability. Purchaser has taken
all necessary corporate action to authorize the execution and delivery of this
Agreement and the Ancillary Agreements to which Purchaser is a Party, the
performance by it of all terms and conditions hereof and thereof to be performed
by it and the consummation of the transactions contemplated hereby and thereby.
This Agreement, the Other Agreements, and the Ancillary Agreements, upon
Purchaser's execution and delivery thereof, will constitute, the legal, valid
and binding obligations of Purchaser, enforceable in accordance with their terms
except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws presently or hereafter in effect
relating to or affecting the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
7.3. No Violations; Consents. Except as set forth on Schedule 7.3, the
execution, delivery and performance by Purchaser of this Agreement, the Other
Agreements and the Ancillary Agreements to which Purchaser is a Party and the
consummation of the transactions contemplated hereby and thereby will not (with
or without the giving of notice or the lapse of time, or both) (i) violate any
provision of the charter, bylaws or operating agreement of Purchaser, (ii)
except with respect to notices and consents required to be given by Purchaser to
any Accreditation Body or Governmental Authority in connection with the sale and
change of ownership of the Purchased Assets and the Business, violate, or
require any consent, authorization or approval of or exemption by, or filing
under any Legal Requirements (iii) violate any judgment, order, writ or decree
of any court applicable to Purchaser, or (iv) conflict with, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval under
any agreement, contract, commitment, lease or other instrument, document or
undertaking to which Purchaser is a Party.
7.4. Legal Proceedings. There is no claim, action, suit, proceeding,
investigation or inquiry pending before any Governmental Authority or, to
Purchaser's Knowledge, threatened against Purchaser or any of Purchaser's
properties, assets, operations or businesses that might prevent or delay the
consummation of the transactions contemplated hereby.
7.5. No Finder. Purchaser has not taken any action which would give to
any Person a right to a finder's fee or any type of brokerage commission in
relation to, or in connection with, the transactions contemplated by this
Agreement.
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7.6. Purchaser's Assets. Neither Purchaser nor Purchaser's "ultimate
parent entity" (as such term is defined in 16 CFR, Chapter 1, Subchapter H,
Section 801.1 et seq.) had: (i) annual net sales of $100,000,000 or more as
stated on its last regularly prepared statement of income and expenses; or (ii)
total assets of $100,000,000 or more as stated on its last regularly prepared
balance sheet.
7.7. Future Financial Performance. Purchaser has and will have
following the Closing the financial ability to perform its obligations under the
Facility Leases and the Lease Guaranty Fee Agreement(s) (if necessary and
required due to the guaranty obligations of BCC required by Seller's landlords
and lenders). The Parties agree to finalize the form and content of the Lease
Guaranty Fee Agreement on terms mutually acceptable to both Parties within 7
days after the date of execution of this Agreement.
ARTICLE VIII. COVENANTS OF SELLER PRIOR TO CLOSING DATE
8.1. Required Actions. Between the date of this Agreement and the
Closing Date, Seller covenants that it will, in its conduct of the Business,
except as otherwise agreed by Purchaser in writing:
8.1.1. Access to Information. Give to Purchaser and its
counsel, accountants, consultants and other representatives, for the
purpose of audit, review and copying, reasonable access to such of the
books, accounts, Contracts and records of Seller as are relevant to the
Purchased Assets and the Business, and furnish or otherwise make
available to Purchaser all such information concerning the Purchased
Assets and the Business as Purchaser may reasonably request.
Accordingly, Seller shall provide Purchaser with the following:
(i) Seller's occupancy reports for the Facilities, as
soon as the same become available through the Closing
Date, but no later than 20 days after the last day of
any given month (which reports shall be prepared
based on the number of operational beds):
(ii) Seller's federal and/or state surveys or inspections
and any plans of correction for the Facilities, as
soon as the same become available through the Closing
Date, but no later than 10 days after received by
Seller;
(iii) Seller's cost reports for the current year if
applicable and the immediately preceding year for the
Facilities, together with the current rate schedule
for such Facilities;
(iv) monthly statements of profit and loss of Seller for
the Facilities, as soon as the same become available
through the Closing Date, but no later than 30 days
after the last day of each month;
(v) Seller's most recent Aging Reports for the Facilities
on the Closing Date.
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8.1.2. Conduct of Business. Operate the Business in the usual,
regular and ordinary manner as such Business was conducted prior to the
date hereof and, to the extent consistent with such operation, use
reasonable commercial efforts until the Closing Date to (i) preserve
and keep intact the Business, (ii) maintain current accounting policies
applied on a consistent basis, (iii) keep available the services of the
Employees; (iv) preserve its relationships with landlords, residents,
patients, suppliers and others having business dealings with Seller in
connection with the Business; (v) satisfy all Encumbrances to the
extent required by the instruments and documents relating thereto; and
(vi) maintain current marketing activities, subject, in each case, to
customary changes in the ordinary course of business;
8.1.3. Maintenance of Properties. Maintain the Purchased
Assets, whether owned or leased, in their present order and condition,
in accordance with Seller's past practices, reasonable wear and tear
excepted but in any event in compliance with the Facility Leases;
8.1.4. Maintenance of Books and Records. Maintain the Books
and Records in the usual, regular and ordinary manner, on a basis
consistent with past practice.
8.1.5. Compliance with Applicable Law. Comply in all material
respects with all Legal Requirements applicable to Seller and the
Purchased Assets and to the conduct of the Business;
8.1.6. Performance of Obligations. Perform all obligations of
Seller relating to the Purchased Assets and the Business in accordance
with the past practices of Seller including all obligations under the
Facility Leases;
8.1.7. Approvals, Consents. Use its commercially reasonable
best efforts to obtain in writing as promptly as possible but no later
than the Closing Date (except for the consent conditions for the Home
Health and Hospice Assets as set forth in Section 3.1.3 above) any
approvals and consents as required to be obtained by Seller in order to
effectuate the transactions contemplated hereby including, without
limitation, consents to the assignment of the leases of the Facility
Leases of the Leased Facilities and deliver to Purchaser copies of such
approvals and consents. Accordingly, Seller shall cooperate with
Purchaser's efforts to obtain the necessary licenses to operate the
Facilities from the appropriate Governmental Authorities and
Accreditation Bodies, including, without limitation, the Department of
Health and Department of Social Services. Upon execution and delivery
of this Agreement, Seller shall promptly:
(i) provide Purchaser with copies of all Permits;
(ii) notify each Accreditation Body, Governmental
Authority, and Third Party Payor as required by any
Legal Requirement of the pending change of ownership
of the Facilities; and
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(iii) provide such other notices as required by all Legal
Requirements including, if required, notices to
Seller's residents/patients of the Facilities. Prior
to sending the notices, Seller shall provide copies
to Purchaser for review and approval, which approval
shall not be unreasonably withheld, delayed, or
conditioned.
8.1.8. Compliance with Agreement. Not undertake any course of
action materially inconsistent with satisfaction of the conditions
applicable to it set forth in this Agreement, and use its commercially
reasonable best efforts to do all such acts and take all such measures
as may be reasonably necessary to comply with the representations,
agreements, conditions and other provisions of this Agreement;
8.1.9. Insurance. Keep the Facilities insured against the same
risks and in at least the same amounts of coverage as of the date of
this Agreement or as required by the Facility Leases; and
8.1.10. Other Agreements and Ancillary Agreements. Execute and
deliver each of the Other Agreements and Ancillary Agreements and to
consummate the transactions contemplated thereby;
8.2. Other Deliveries. At its own cost and expense, Seller shall
deliver with respect to the Real Property at or before Closing:
8.2.1. FIRPTA Certificates. A certificate, duly executed and
acknowledged by an officer of Seller, in the form prescribed by
Treasury Regulation Section 1.1445-2(b)(2)(iii), stating Seller's name,
address and Federal tax identification number, and that it is not a
"foreign person" within the meaning of Section 1445 of the Code.
8.2.2 Other. All other documents and items required to be
delivered by Seller pursuant to Section 5.2.
8.3. Prohibited Actions. Between the date of this Agreement and the
Closing Date, in its conduct of the Business, Seller shall not, except as
otherwise agreed by Purchaser in writing:
8.3.1. Sale of Purchased Assets. Sell, transfer, assign,
lease, encumber or otherwise dispose of any of the Purchased Assets
other than in the ordinary course of Seller's business consistent with
past practices;
8.3.2. Business Changes. Change in any material respect the
character of the Business;
8.3.3. Incurrence of Material Obligations. Incur any material
obligation or enter into any material agreement, commitment or other
transaction or arrangement, commitment or other transaction or
arrangement that is not in the
33
ordinary course of Seller's business and with respect to which
Purchaser will be bound subsequent to Closing;
8.3.4. Incurrence of Liens. Subject to lien, security interest
or any other Encumbrance, other than Permitted Encumbrances, any of the
Purchased Assets;
8.3.5. Change in Employee Compensation and Benefits. Increase
the rate of compensation paid, or pay any bonus, to anyone connected
with the Business, except for those increases or bonuses planned, in
the ordinary course of Seller's business consistent with past practices
and disclosed to Purchaser in writing prior to the Closing Date, or
establish or adopt any new pension or profit-sharing plan, deferred
compensation agreement or employee benefit arrangement of any kind
whatsoever covering or affecting Employees;
8.3.6. Publicity; Advertisement. Except as required by law or
pursuant to the rules and regulations of the Securities and Exchange
Commission or the American Stock Exchange, publicize, advertise or
announce to any third-party, except as required pursuant to this
Agreement to obtain the consent of such third-party, the entering into
of this Agreement, the terms of this Agreement or the transactions
contemplated hereby; and
8.3.7. No Termination or Modification. Terminate or materially
modify any Contract listed on Schedule 2.1.3, any Facility Lease, or
other authorization or agreement affecting the Business or the
Purchased Assets or the operation thereof except in the ordinary course
of business.
8.4. Extended Due Diligence. For the 30 days immediately following the
execution and delivery of this Agreement, Seller shall assist and provide
Purchaser all information and access, with respect to Seller, that Purchaser may
reasonably request for the purpose of conducting due diligence concerning
Seller's ability to perform its obligations under this Agreement; provided,
however, Purchaser shall conduct all reviews, inspections, and visits at the
Facilities during normal business hours and shall obtain the prior approval of
Seller before undertaking any such action.
8.5. Occupancy Rate. Seller shall use its commercially reasonable best
efforts to maintain occupancy rates at the same levels through Closing. For each
of the periods of: (i) one month before Closing; and (ii) five (5) days before
Closing, the average total occupancy of residents shall not have decreased by
more than seven and one-half percent (7.5%).
8.6. Environmental Permit. Seller shall use its commercially reasonable
best efforts to cause Purchaser to receive the permit required to operate the
waste water treatment facility at the Leased Facility known as "Terraces at
Balanced Care, Xxxxx" no later than the Closing Date.
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ARTICLE IX. COVENANTS OF PURCHASER PRIOR TO CLOSING DATE
9.1. Required Actions. Between the date of this Agreement and the
Closing Date, Purchaser shall, except as otherwise agreed by Seller in writing,
use its commercially reasonable best efforts to do all such acts and take all
such measures as may be reasonably necessary to comply with the representations,
agreements, conditions and other provisions of this Agreement.
9.1.1. Other Agreements. Purchaser shall execute and deliver
each of the Other Agreements and shall consummate the transactions
contemplated thereby.
9.2. Prohibited Actions. Between the date of this Agreement
and the Closing Date, Purchaser shall:
9.2.1. Investigation. Use reasonable efforts to conduct an
investigation of the Business of Seller in such a manner as to prevent
disruption of relations with the Employees, residents, patients and
suppliers of Seller, which investigation may include such due diligence
as is customary for transactions of the type contemplated herein.
Purchaser shall have no contact with Employees of any of the Facilities
without the prior consent of Seller.
9.2.2. Approvals, Consents. Use its commercially reasonable
best efforts to obtain in writing as promptly as possible any approvals
and consents as required to be obtained by Purchaser in order to
effectuate the transactions contemplated hereby and deliver to Seller
copies of such approvals and consents. Accordingly, Purchaser shall
take all reasonable action to obtain the necessary licenses to operate
the Facilities from the Department of Health and Department of Social
Services including:
(i) notify each Accreditation Body and Third Party Payor
as required by any Legal Requirement of the pending
change of ownership of the Facilities;
(ii) provide such other notices as required by all Legal
Requirements including notices to Seller's
residents/patients of the Facilities. Prior to
sending the notices, Purchaser shall provide copies
to Seller for review and approval, which approval
shall not be unreasonably withheld, delayed, or
conditioned; and
(iii) obtain its own provider numbers for the Facilities.
9.2.3. Confidentiality. Treat in confidence all books,
records, documents and information obtained regarding Seller, the
Facilities or Business pursuant to Section 8.1.1 of this Agreement or
otherwise during the course of negotiations leading to the consummation
of this Agreement and the transactions contemplated herein
("Confidential Information"), except that Confidential Information for
these purposes shall not include documents and information that is in
the public domain. Purchaser shall not disclose, use, or otherwise
disseminate Confidential
35
Information except for purposes of evaluating the Business and the
operations of the Facilities, to the extent required to respond to the
reasonable requests of Purchaser's lender to obtain financing necessary
to consummate the transactions contemplated hereunder and as otherwise
permitted under this Agreement and the transactions contemplated
herein.
9.2.4. Publicity; Advertisement. Except as required by law,
publicize, advertise or announce to any third-party, except as required
pursuant to this Agreement to obtain the consent of such third-party,
the entering into of this Agreement, the terms of this Agreement or the
transactions contemplated hereby; provided, however, the foregoing
shall not be applicable to disclosures made by Purchaser to Purchaser's
lender in response to such lender's reasonable requests.
9.3. Extended Due Diligence. For the 30 days immediately following the
execution of this Agreement, Purchaser shall assist and provide Seller all
reasonable information and access, with respect to Purchaser and Purchaser's
owners and lenders, that Seller may reasonably request for the purpose of
conducting due diligence concerning Purchaser's ability to perform its
obligations under the Facility Leases and the Lease Guaranty Fee Agreement(s)
(if necessary and required due to the guaranty obligations of BCC required by
Seller's landlords and lenders).
ARTICLE X. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to proceed with any Closing under this
Agreement is subject to the fulfillment prior to or at the time of Closing of
the following conditions with respect to Seller, any one or more of which may be
waived in writing in whole or in part by Purchaser:
10.1. Accuracy of Representations and Warranties. The representations
and warranties of Seller contained in this Agreement, the Other Agreements and
the Ancillary Agreements to which Seller is a party shall be true in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date.
10.2. Performance of Agreement. Seller shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement and the
Ancillary Agreements to which Seller is a party to be performed or complied with
by it at or prior to the Closing Date.
10.3. Seller's Certificate. Purchaser shall have received a certificate
from Seller, dated as of the Closing Date, reasonably satisfactory in form and
substance to Purchaser, certifying as to the matters specified in Section 10.1
and Section 10.2 hereof.
10.4. Secretary's Certificate. Purchaser shall have received a
certificate, dated as of the Closing Date, of the Secretary or any Assistant
Secretary of Seller with respect to the incumbency and specimen signature of
each officer or representative of Seller
36
executing this Agreement and stating the resolution of the board of directors of
Seller authorizing the transactions contemplated hereby, the certificate
referred to in Section 10.3 and the Ancillary Agreements to which Seller is a
party.
10.5. Injunction. On the Closing Date, there shall be no injunction,
writ, preliminary restraining order or any order of any nature in effect issued
by a court of competent jurisdiction directing that the transactions provided
herein, or any of them, not be consummated as herein provided and no suit,
action, investigation, inquiry, or other legal or administrative proceeding by
any Governmental Authority or other Person shall have been instituted or
threatened which questions the validity or legality of the transactions
contemplated hereby or which if successfully asserted might otherwise have a
material adverse effect on the conduct of the Business or impose any additional
material financial obligation on or require the surrender of any material right
by, Purchaser.
10.6. Actions and Proceedings. All corporate actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental hereto and all other related legal matters shall be
reasonably satisfactory to Purchaser, and Purchaser shall have been furnished
with such certified copies of such corporate actions and proceedings and such
other instruments and documents as it shall have reasonably requested,
including, without limitation:
(i) certificates of the appropriate public officials to
the effect that BCC and each Subsidiary is a validly
existing corporation in good standing in its state of
incorporation as of a date not more than 30 days
prior to the Closing Date;
(ii) incumbency and specimen signature certificates dated
the Closing Date, signed by the officers of each
Seller and certified by its Secretary; and
(iii) true and correct copies of (A) the charter documents
of BCC and each Subsidiary as of a date not more than
30 days prior to the Closing Date, certified by the
Secretary of State of its state of incorporation and
(B) the bylaws of BCC and each Subsidiary as of the
Closing Date, certified by the Secretary of Seller.
10.7. Other Agreements. Each of the Other Agreements shall have been
executed and delivered by the parties thereto, and the transactions contemplated
thereby shall have been consummated.
10.8. Consents. Any third-party consents, approvals, authorizations or
Permits including, without limitation, those required by any Governmental
Authorities and those required to assign the Facility Leases (except for the
consent conditions for the Home Health and Hospice Assets as set forth in
Section 3.1.3 above) and as otherwise necessary for the conveyance of Purchased
Assets or valid consummation of the transactions contemplated hereby shall have
been obtained. For purposes of this Section, the consents
37
of all landlords of the Leased Facilities, and the consent of all Governmental
Authorities to the transfer of any Permits (to the extent transferable) shall be
deemed material.
10.9. Material Adverse Change. There shall have been no material
adverse change in the Business or prospects of the Facilities from those
existing on the date hereof.
10.10. Financing Available. Purchaser shall have obtained the necessary
financing for the payment of the Purchase Price.
ARTICLE XI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligation of Seller to proceed with any Closing under this
Agreement is subject to the fulfillment prior to or at the time of Closing of
the following conditions with respect to Purchaser, any one or more of which may
be waived in whole or in part by Seller.
11.1. Accuracy of Representations and Warranties. The representations
and warranties of Purchaser contained in this Agreement shall have been true in
all material respects on the date hereof and shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date.
11.2. Performance of Agreement. Purchaser shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement to be
performed or complied with by it at or prior to the Closing Date.
11.3. Purchaser's Certificate. Seller shall have received a certificate
from Purchaser, dated as of the Closing Date, reasonably satisfactory in form
and substance to Seller and its counsel, certifying as to the fulfillment of all
matters specified in Section 11.1 and Section 11.2 hereof.
11.4. Secretary's Certificate. Seller shall have received a
certificate, dated the Closing Date, of the Secretary or any Assistant Secretary
of Purchaser with respect to the incumbency and specimen signature of each
officer or representative of Purchaser executing this Agreement and stating the
resolution of the board of directors of Purchaser authorizing the transactions
contemplated hereby, the certificate referred to in Section 11.3 and the
Ancillary Agreements to which Purchaser is a party.
11.5. Injunction. On the Closing Date, there shall be no injunction,
writ, preliminary restraining order or any order of any nature in effect issued
by a court of competent jurisdiction directing that the transactions provided
for herein, or any of them, not be consummated as herein provided and no suit,
action, investigation, inquiry or other legal or administrative proceeding by
any Governmental Authority or other Person shall
38
have been instituted, threatened or anticipated which questions the validity or
legality of the transactions contemplated hereby.
11.6. Other Agreements. Each of the Other Agreements shall have been
executed and delivered by the parties thereto, and the transactions contemplated
thereby shall have been consummated.
11.7. Consents. Any third-party consents, approvals, authorizations or
Permits including, without limitation, those required by any Governmental
Authorities and those required to assign the Facility Leases (except for the
consent conditions for the Home Health and Hospice Assets as set forth in
Section 3.1.3 above) and as otherwise necessary for the conveyance of Purchased
Assets or valid consummation of the transactions contemplated hereby shall have
been obtained. For purposes of this Section, the consents of all landlords of
the Leased Facilities, and the consent of all Governmental Authorities to the
transfer of any Permits (to the extent transferable) shall be deemed material.
11.8. Financing Available. Purchaser shall have obtained the necessary
financing for the payment of the Purchase Price.
11.9. Opinion of Counsel. Seller shall have received a favorable
opinion of counsel for Purchaser if required by any of Seller's Landlords
(including, without limitation, Meditrust Corporation and Healthcare Realty
Trust), in a form reasonably satisfactory to Seller's Landlords and its counsel.
ARTICLE XII. OBLIGATIONS AFTER THE CLOSING DATE
12.1. Transition of Employees. From and after the Closing Date,
Purchaser and Seller shall cooperate to ensure an orderly transition of the
Employees who accept employment with Purchaser.
12.2. Certain Transitional Matters.
12.2.1. Transfer of Assets. After the Closing, each Party
shall promptly transfer and deliver to the other Party any property
belonging to the other Party that comes into the possession of the
first Party.
12.2.2. Accounts Receivable. Seller and Purchaser shall use
reasonable commercial efforts to collect and shall deliver to each
other, as the case may be, all Accounts Receivable as of the Closing
Date for services rendered to residents of the Facilities prior to the
Closing Date as follows:
(i) Residents of Facilities. For all private pay
residents of the Facilities who have an account as of
the Closing Date that has a balance owed beyond 30
days on the most recent accounts receivable aging
reports (the "Aging Reports") to be provided at
Closing by Seller to Purchaser, any payments that are
received from any source (the "Resident Payments")
other than Medicare
39
and Medicaid recipients shall be applied to any
outstanding balance owed to Purchaser, with the
remainder, if any, to be applied to the oldest
outstanding balance of Seller. For all residents who
have an account as of the Closing Date that have a
balance owed of 30 days or less on the Aging Reports,
any Resident Payments that are received from any
source other than a Medicare and Medicaid recipient
shall be applied 50% to Purchaser and 50% to Seller.
If any Resident Payments are received directly from
any Third Party Payor and are accompanied by
remittance advice, such Resident Payments shall be
applied to the outstanding balance corresponding to
such remittance advice. Purchaser agrees to cooperate
with Seller and to allow Seller, at its own cost and
expense, to take such actions as are reasonably
necessary for Seller to collect any outstanding
balances owed to Seller on and after the Closing
Date, including, without limitation, engaging one or
more third parties to provide collection services as
long as such actions shall not materially interfere
with the operation of the Business.
(ii) Non-Residents of Facilities. All payments received by
Purchaser with respect to Accounts Receivable as of
the Closing Date relating to Persons who are not
residents of any of the Facilities as of the Closing
Date shall be delivered to Seller.
(iii) Adequate Assurances Agreement. In order to avoid any
interruption in the payment of the Accounts
Receivable from the Missouri Medicaid Program due and
to become due to Purchaser and/or Seller, Purchaser
and Seller agree to enter into an agreement as
contemplated by 13 CSR 70-10.015(10)(E) to provide
the Department of Social Services with adequate
assurances that the final cost reports will be timely
filed; provided, however, Seller agrees that
Purchaser's payments on the Accounts Receivable shall
not be delayed or withheld as a result of the
untimely filing thereof and to the extent that any
payments are withheld by Seller shall be obligated to
indemnify Purchaser as more fully set forth in the
Adequate Assurances Agreement.
(iv) Procedure. Each of Purchaser and Seller shall
promptly remit to the other Party all payments
received by Purchaser or Seller which belong to the
other Party as determined by the provisions of this
Section 12.2.2. Purchaser may terminate its
obligation to collect the Accounts Receivable at
anytime after the first anniversary of the Closing by
providing 30 days' notice to Seller. Upon providing
such notice, Purchaser shall provide to or as
directed by Seller such information regarding the
Accounts Receivable as Seller may reasonably request
and shall otherwise cooperate with Seller to insure a
smooth transition of collection efforts.
40
12.2.3. Deferred Transfer. To the extent that either Party
receives funds or other property belonging to the other Party and fails
to deliver it to the Party entitled thereto within 30 days, the Party
failing to deliver shall be obligated to pay the Party entitled to
receive the property a handling fee of $50 per occurrence.
12.2.4. Collection During Transition Period. Purchaser shall
continue to xxxx all third party and government payors on behalf of and
in the name of Seller as its billing agent for services provided prior
to the Closing Date and until Seller's Accounts Receivable are closed
out or properly transferred and shall remit all collections as provided
herein.
12.3. Further Assurances of Seller. From and after the Closing Date,
Seller shall, at the request of Purchaser, execute, acknowledge and deliver to
Purchaser, without further consideration, all such further assignments,
conveyances, endorsements, deeds, special powers of attorney, consents and other
documents, and take such other action, as Purchaser may reasonably request (i)
to transfer to and vest in Purchaser, and protect its rights, title and interest
in, all the Purchased Assets and (ii) otherwise to consummate the transactions
contemplated by this Agreement. In addition, from and after the Closing Date,
Seller shall afford Purchaser and its attorneys, accountants and other
representatives access, during normal business hours, to any Books and Records
relating to the Business that Seller may retain as may reasonably be required in
connection with the preparation of financial information or tax returns of
Purchaser.
12.4. Further Assurances of Purchaser. From and after the Closing Date
until the Survival Date, Purchaser shall afford to Seller and its attorneys,
accountants and other representatives access, during normal business hours, to
such Books and Records relating to the Business that Purchaser may retain as may
reasonably be required in connection with the preparation of financial
information or Tax Returns relating to the period on or prior to the Closing
Date; provided, however, Purchaser shall retain items in accordance with
applicable laws. From and after the Closing date, Purchaser shall cooperate in
all reasonable respects with Seller with respect to its former interest in the
Business and in connection with financial account closing and reporting and
claims and litigation asserted by or against third parties, including, but not
limited to, making employees then employed by Purchaser available at reasonable
times to assist with, or provide information in connection with financial
account closing and reporting and claims and litigation, provided that Seller
reimburses Purchaser for its reasonable out-of-pocket expenses in connection
therewith.
12.5 Noncompetition. For a period of five (5) years following the
Closing Date, Seller agrees that neither it nor any of its affiliates will
directly or indirectly own, manage, operate, join, control or participate in the
ownership, management, operation or control of any independent living,
residential care, or skilled nursing facilities (as the case may be) within a
10-mile radius of any of the Facilities (as the case may be). Seller
acknowledges that the provisions of this Section are reasonable and necessary to
protect the interests of Purchaser, that any violation of this Section will
result in an irreparable injury to Purchaser and that damages at law would not
be reasonable or adequate compensation to Purchaser for violation of this
Section and that, in addition to any other
41
available remedies, Purchaser shall be entitled to have the provisions of this
Section specifically enforced by preliminary and permanent injunctive relief
without the necessity of proving actual damages or posting a bond or other
security to an equitable accounting of all earnings, profits and other benefits
arising out of any violation of this Section. In the event that the provision of
this Section shall ever be deemed to exceed the time, geographic scope or other
limitations permitted by applicable law, then the provisions shall be deemed
reformed to the maximum extent permitted by applicable law. The Parties agree to
memorialize the above basic terms, along with other mutually agreeable terms and
conditions, as more fully set forth in a Noncompetition Agreement to be executed
and delivered at Closing.
ARTICLE XIII. TERMINATION
13.1. Termination of Agreement. This Agreement may be terminated:
(i) by the mutual consent of Seller and Purchaser in
writing and signed by both Parties;
(ii) by Seller if the Closing has not taken place (other
than by reason of a material failure of Seller to
fulfill its obligations under this Agreement or by
any other action or inaction by Seller that has a
material adverse effect on the Parties' ability to
consummate the transactions contemplated hereunder)
in accordance with Section 5.1;
(iii) by Purchaser if the Closing has not taken place
(other than by reason of a material failure of
Purchaser to fulfill its obligations under this
Agreement or by any other action or inaction by
Purchaser that has a material adverse effect on the
Parties' ability to consummate the transactions
contemplated hereunder) in accordance with Section
5.1;
(iv) by Purchaser upon notice to Seller if any of the
conditions set forth in Article X hereof have not
been satisfied or become impossible to satisfy by the
Closing Date and are not otherwise waived (other than
by reason of the material failure of Purchaser to
fulfill its obligations under this Agreement or by
any other action or inaction by Purchaser that has a
material adverse effect on the Parties' ability to
consummate the transactions contemplated hereunder);
(v) by Seller upon notice to Purchaser if any of the
conditions set forth in Article XI hereof have not
been satisfied or become impossible to satisfy by the
Closing Date and are not otherwise waived (other than
by reason of the material failure of Seller to
fulfill its obligations under this Agreement or by
any other action or inaction by Seller that has a
material adverse effect on the Parties' ability to
consummate the transactions contemplated hereunder);
42
(vi) by Seller if Purchaser materially breaches or fails
to fulfill its obligations under this Agreement,
which breach or failure continues and remains uncured
for 15 consecutive calendar days after Seller gives
written notice of such failure to Purchaser;
(vii) by Purchaser if Seller materially breaches or fails
to fulfill its obligations under this Agreement,
which breach or failure continues and remains uncured
for 15 consecutive calendar days after Purchaser
gives written notice of such failure to Seller;
(viii) by Seller if Purchaser fails to pay the Escrow Amount
on the date on which this Agreement is executed; or
(ix) by Seller if after using commercially reasonable best
efforts it is unable to terminate before the Closing
Date, on terms and conditions favorable to Seller in
its absolute discretion, that certain Management
Services Agreement by and between Seller and
Servicmaster Management Services, L.P., dated October
27, 1998, and which provides for the provision of
management services and certain other materials,
supplies and equipment, as defined therein; provided,
however, if Seller elects to exercise its termination
rights under this subsection, Purchaser at its option
may assume this Management Services Agreement under
Section 2.1.3 and Schedule 2.1.3 in which case
Seller's termination rights hereunder will be
automatically rescinded. Purchaser must exercise its
right to assume the Management Services Agreement
hereunder in writing upon 7 days written notice from
Seller.
(x) by either Party as otherwise specifically provided
for in this Agreement.
provided, however, that no Party then in material breach of any of its
obligations hereunder shall have the right to terminate pursuant to this Section
13.1.
13.2. Return of Documents. If this Agreement is terminated for any
reason permitted by this Agreement, each Party shall return to the other Party
all documents and copies thereof which shall have been furnished to it by such
other Party or, with the agreement of the other Party, shall destroy all such
documents and copies thereof.
13.3. Remedies. Except as otherwise provided in this Agreement, if this
Agreement is terminated by Purchaser or Seller as permitted under Section 13.1
and not as a result of a breach, such termination shall be without liability of
any Party. If a Party terminates this Agreement as a result of a breach by the
other Party, the nonbreaching Party, in addition to other available rights or
remedies now or hereafter existing at law or in equity, shall be entitled to
reimbursement from the breaching Party for all expenses (including reasonable
legal fees) incurred by the nonbreaching Party in connection with this Agreement
and the transactions contemplated hereby.
43
ARTICLE XIV. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
14.1. Survival of Representations and Warranties. All representations
and warranties of the Parties shall survive 24 months from the Closing Date (the
"Survival Date"). Notwithstanding the foregoing, there shall be no termination
of any such representation or warranty as to which a claim has been asserted
prior to the termination of such survival period, and the duration of the
survival of the representations and warranties shall not limit or shorten any
applicable statute of limitations for claims by the Parties.
14.2. Indemnification by Seller. Seller shall indemnify, defend, save
and hold Purchaser and its officers, directors, employees, agents and Affiliates
(collectively, "Purchaser Indemnitees") harmless from and against all demands,
claims, allegations, assertions, actions or causes of action, assessments,
losses, damages, deficiencies, liabilities, costs and expenses (including
reasonable legal fees, interest, penalties, and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing and whether or not
any such demands, claims, allegations, etc., of third parties are meritorious;
collectively, "Purchaser Damages") asserted against, imposed upon, resulting to,
required to be paid by, or incurred by any Purchaser Indemnitees, directly or
indirectly, in connection with, arising out of, or which would not have occurred
but for, (i) a breach of any representation or warranty made by such Seller in
this Agreement, in any certificate or document furnished pursuant hereto by such
Seller or any Other Agreements or Ancillary Agreement to which Seller is a party
and any Retained Liability, (ii) a breach or nonfulfillment of any covenant or
agreement made by Seller in this Agreement or in any Ancillary Agreement to
which Seller is a party, (iii) any and all Retained Liabilities, (iv) any
liability or expense relating to any matter set forth in Schedules 6.7, 6.11 and
6.20, (v) any material discrepancy in the balance of any trust funds of
residents/patients relating to periods prior to the Closing Date; (vi) any and
all liabilities of any nature whatsoever (other than Assumed Liabilities)
arising out of Seller's operation of the business prior to the Closing Date; and
(vii) liability resulting from any breach or default by Seller under any of the
Facility Leases. This indemnification by Seller in clause (i), relating to a
breach of any representation or warranty, shall not apply to any claim made more
than 24 months from the Closing Date.
14.3. Indemnification by Purchaser. Purchaser shall indemnify, defend,
save and hold Seller and its officers, directors, Employees, Affiliates and
agents (collectively, "Seller Indemnitees") harmless from and against any and
all demands, claims, actions or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses (including reasonable legal fees,
interest, penalties, and all reasonable amounts paid in investigation, defense
or settlement of any of the foregoing and whether or not any such demands,
claims, allegations, etc., of third parties are meritorious; collectively,
"Seller Damages") asserted against, imposed upon, resulting to, required to be
paid by, or incurred by any Seller Indemnitee, directly or indirectly, in
connection with, arising out of, or which would not have occurred but for, (i) a
breach of any representation or warranty made by Purchaser in this Agreement or
in any certificate or document furnished pursuant hereto by Purchaser or any
Other Agreements or Ancillary Agreement
44
to which Purchaser is a party, (ii) a breach or nonfulfillment of any covenant
or agreement made by Purchaser in this Agreement or in any Ancillary Agreement
to which Purchaser is a party, (iii) any and all Assumed Liabilities and (iv)
any and all liabilities of any nature whatsoever arising out of Purchaser's
operation of the business after the Closing Date. This indemnification by
Purchaser in clause (i), relating to a breach of any representation or warranty,
shall not apply to any claim made more than 24 months from the Closing Date.
14.4. Notice of Claims. If any Purchaser Indemnitee or Seller
Indemnitee (an "Indemnified Party") believes that it has suffered or incurred or
will suffer or incur any Purchaser Damages or Seller Damages, as the case may be
("Damages") for which it is entitled to indemnification under this Article XIV,
such Indemnified Party shall so notify the Party from whom indemnification is
being claimed (the "Indemnifying Party") with reasonable promptness and
reasonable particularity in light of the circumstances then existing. If any
action at law or suit in equity is instituted by or against a third party with
respect to which any Indemnified Party intends to claim any Damages, such
Indemnified Party shall promptly notify the Indemnifying Party of such action or
suit. The failure of an Indemnified Party to give any notice required by this
Section shall not affect any of such Party's rights under this Article XIV or
otherwise except and to the extent that such failure is actually prejudicial to
the rights or obligations of the Indemnified Party.
14.5. Third Party Claims. The Indemnified Party shall have the right to
conduct and control, through counsel of its choosing, the defense of any third
party claim, action or suit, and the Indemnified Party may compromise or settle
the same, provided that the Indemnified Party shall give the Indemnifying Party
advance notice of any proposed compromise or settlement. The Indemnified Party
shall permit the Indemnifying Party to participate in the defense of any such
action or suit through counsel chosen by the Indemnifying Party, provided that
the fees and expenses of such counsel shall be borne by the Indemnifying Party.
If the Indemnified Party permits the Indemnifying Party to undertake, conduct
and control the conduct and settlement of such action or suit, the Indemnifying
Party shall not thereby permit to exist any Encumbrance upon any asset of the
Indemnified Party; the Indemnifying Party shall not consent to any settlement
that does not include as an unconditional term thereof the giving of a complete
release from liability with respect to such action or suit to the Indemnified
Party; the Indemnifying Party shall permit the Indemnified Party to participate
in such conduct or settlement through counsel chosen by the Indemnified Party;
and the Indemnifying Party shall agree promptly to reimburse the Indemnified
Party for the full amount of any Damages including fees and expenses of counsel
for the Indemnified Party incurred after giving the foregoing notice to the
Indemnifying Party and prior to the assumption of the conduct and control of
such action or suit by the Indemnifying Party.
14.6. Threshold. No indemnification shall be made under Section 14.2 or
14.3 with respect to any breach of any representation or warranty until the
aggregate amount of respective Purchaser or Seller Damages thereunder exceeds
$15,000 and then only to
45
the extent of the excess above such amount. The limits imposed by this Section
shall not apply to breaches under Article 12 of this Agreement.
14.7. Cooperation. Upon request, the Parties agree to work in good
faith and provide needed information to resolve matters that may effect both
Parties.
ARTICLE XV. GENERAL
15.1. Expenses. Except as otherwise provided in this Agreement, and
whether or not the transactions herein contemplated shall be consummated,
Purchaser and Seller shall pay their own fees, expenses and disbursements,
including the fees and expenses of their respective counsel, accountants and
other experts in connection with the subject matter of this Agreement and all
other costs and expenses incurred in performing and complying with all
conditions to be performed under this Agreement.
15.2. Publicity. All notices to third parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and coordinated by and between Purchaser and Seller. Except as may be
required by law or the rules or regulations of the Securities and Exchange
Commission or the American Stock Exchange, no Party shall act unilaterally in
this regard without prior written approval of the other Party, such approval not
to be unreasonably withheld. Purchaser acknowledges that Seller is obligated to
make certain disclosures under the securities laws and the rules of the American
Stock Exchange and consents to such disclosures that Seller in good faith makes
with respect hereto.
15.3. Binding Effect; Benefits. This Agreement shall inure to the
benefit of the Parties hereto, and shall be binding upon the Parties hereto and
their respective successors and assigns. Nothing in this Agreement, express or
implied, is intended to confer on any Person other than the Parties hereto, or
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
15.4. Notices. All notices, requests, demands, elections and other
communications which either Party to this Agreement may be required to give
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, by a reputable courier service which requires a signature
upon delivery, or by mailing the same by registered or certified first class
mail, postage prepaid, return receipt requested, to the Party to whom the same
is so given or made. Such notice, request, demand, waiver, election or other
communication will be deemed to
46
have been given as of the date so delivered or electronically transmitted or two
days after mailing thereof.
15.4.1. Notice to Seller.
If to Seller, to:
Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx
Chairman and CEO
Fax: (000) 000-0000
With a required copy to:
Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esquire
Senior Vice President and Counsel
Fax: (000) 000-0000
15.4.2. Notice to Purchaser.
If to Purchaser, to:
Christian Health Care of Missouri, Inc.
000 X. 0xx Xxxxxx, Xxxxx X
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Fax: (000) 000-0000
With a required copy to:
Ball & Xxxxxxx, Ltd., PLLC
X.X. Xxxx Plaza - 000 X. Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esquire
Fax: (000) 000-0000
or to such other addresses as such Party shall have specified by notice to the
other Party hereto.
15.5. Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto), the Other Agreements, and the Ancillary Agreements and
documents delivered at Closing pursuant hereto and thereto constitute the entire
agreement and understanding between the Parties hereto as to the matters set
forth herein and therein and supersede and revoke all prior agreements and
understandings, oral and written, between the Parties
47
hereto or thereto or otherwise with respect to the subject matter hereof or
thereof. No change, amendment, termination or attempted waiver of any of the
provisions hereof shall thereof be binding upon any Party unless set forth in an
instrument in writing signed by the Party to be bound or their respective
successors in interest.
15.6. Confidentiality Agreement. Notwithstanding Section 15.5, the
Confidentiality Agreement dated July 2, 1999 between Purchaser and Seller shall
not be revoked or superseded by this Agreement and shall continue to be binding
upon the Parties in accordance with the terms and conditions of such
Confidentiality Agreement.
15.7. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument. A counterpart may
consist of a signature page of this Agreement.
15.8. Headings. The article, section and other headings contained in
this Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to affect the meaning or interpretation of this
Agreement.
15.9. Construction. Within this Agreement, the singular shall include
the plural and the plural shall include the singular, and any gender shall
include all other genders, all as the meaning and the context of this Agreement
shall require.
15.10. Governing Law. The validity and interpretation of this Agreement
shall be construed in accordance with, and governed by, the internal laws of the
State of Missouri, without regard to principles of conflicts of laws.
15.11. Cooperation. The Parties hereto shall cooperate fully at their
own expense, except as otherwise provided in this Agreement, with each other and
their respective counsel and accountants in connection with all steps to be
taken as part of their obligations under this Agreement.
15.12. Severability. If any term, covenant, condition or provision of
this Agreement or the application thereof to any circumstance shall be invalid
or unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Agreement shall not be affected thereby and each remaining
term, covenant, condition and provision of this Agreement shall be valid and
shall be enforceable to the fullest extent permitted by law. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.
15.13. Attorneys' Fees. If a dispute arises among the Parties as a
result of which an action is commenced to interpret or enforce any of the terms
of this Agreement, the nonprevailing Party shall pay the prevailing Party's
reasonable out-of-pocket attorneys' fees, costs and expenses incurred in
connection with the prosecution or defense of such action.
15.14. Successors and Assigns. The covenants, agreements, and
conditions contained herein or granted hereby shall be binding upon and shall
inure to the benefit of
48
Purchaser and Seller, and each of their respective successors and permitted
assigns. Seller shall not assign, or otherwise transfer, any interest in this
Agreement to any other Person (other than as collateral security) without the
prior written consent of Purchaser, which consent shall not unreasonably be
withheld. Purchaser may assign and transfer its interest in this Agreement only
with Seller's consent, which consent shall not be unreasonably withheld, to any
of Purchaser's Affiliates or to one or more special purpose financing vehicles;
provided, however, without the consent of Seller, Purchaser may direct Seller to
transfer the Purchased Assets and Real Property to another Person as Purchaser's
nominee and the receipt of the Real Property or Purchased Assets by any such
nominee shall be deemed an acceptance by such nominee to be bound to all of
Purchaser's obligations hereunder. In addition, each Party will promptly provide
to the Other Party a copy of any such assignment, and each Party agrees to
execute and deliver any consents reasonably required by the Other Party in
connection therewith, provided such assignment does not expand any of the
obligations and liabilities hereunder of any Party. Notwithstanding any
permitted assignment of this Agreement, each Party shall remain liable to the
other Party, as the case may be, for all obligations and liabilities to be
performed by or on behalf of the assigning Party hereunder.
[THE NEXT PAGE FOLLOWING IS THE SIGNATURE PAGE]
49
IN WITNESS WHEREOF, intending to be legally bound hereby, the Parties
have caused this Agreement to be signed in their respective names by an officer
thereof duly authorized as of the date first above written.
WITNESS: PURCHASER:
CHRISTIAN HEALTH CARE OF
MISSOURI, INC.
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxx
------------------------------ ---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
/s/ Xxx Xxxxx
------------------------------
WITNESS: SELLER:
BALANCED CARE CORPORATION, for
itself and for each of the Subsidiaries
/s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxxxx
------------------------------- ----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman and CEO
/s/ Xxxxx X. Xxxxx
-------------------------------
