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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
Dated as of July 26, 1996, by and between Xxxxx Xxx Xxxxxx, Xx., both
individually and as Trustee of the Revocable Inter Vivos Trust Agreement of
Xxxxx Xxx Xxxxxx dated February 4, 1988, Xxxx Xxxxxxx Xxxxxx, Xxxxx Xxx Xxxxxx,
Xx., J. Xxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx Xxxxxx, and Xxxx Xxxxxxx Xxxxxx, all
individual residents of Missouri ("Seller"), and Hawthorn Health Properties,
Inc., a California corporation ("Buyer").
Seller owns and desires to sell all of the capital stock of each of
the following corporations (each, a "Company," collectively, the "Companies")
that will be issued and outstanding following the closing of the transactions
contemplated in the Redemption Agreements.
1. National Care Centers, Inc., a Missouri corporation, d/b/a Lebanon
Care Center.
2. National Care Centers of Hermitage, Inc., a Missouri corporation,
d/b/a Hermitage Park Regional Care Centers.
3. National Care Centers of Lebanon, Inc., a Missouri corporation,
d/b/a Lebanon Park Manor, d/b/a Fremont Terrace Apts., and d/b/a Elder Care
Home Health Agency.
4. National Care Centers of NIXA, Inc., a Missouri corporation, d/b/a
Nixa Park Care Center, d/b/a Nixa Park Terrace Apts.
5. National Care Centers of Springfield, Inc., a Missouri corporation,
d/b/a Springfield Park Care Center, d/b/a Bedford Park Terrace Apts. (excluding
d/b/a Cherokee Residential Care Center).
6. Xxxxx Management Inc., a Missouri corporation, d/b/a Xxxxx Oaks
Care Center.
7. Long Term Pharmaceutical Care, Inc., formerly known as Xxxx
Construction Company, a Missouri corporation, d/b/a Mt. Xxxxxx Xxxx Pharmacy
and d/b/a Long Term Pharmaceutical Care.
8. Springfield Retirement Village, Inc., d/b/a Mt. Xxxxxx Xxxx Care
Center.
9. Mt. Xxxxxx Xxxx Care Center West, Inc.
to Buyer, and Buyer desires to purchase such capital stock on the terms and
subject to the conditions set forth below. In consideration of the
representations, warranties, covenants, and agreements contained herein, Seller
and Buyer, each intending to be legally bound hereby, agree as set forth below.
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ARTICLE I
DEFINITIONS: CONSTRUCTION
1.01 DEFINITIONS. As used in this Agreement, the following terms have
the meanings specified in this Section 1.01. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
"Accounting Principles" means GAAP.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person or any Family Member
of such Person.
"Agreement" means this Stock Purchase Agreement, as it may be amended
from time to time.
"Auditors" means Ernst & Young LLP.
"BCC" means Balanced Care Corporation, a Delaware corporation.
"Benefit Plan" has the meaning given that term in Section 3.23(a).
"Business" means the business conducted by each Company, which
generally includes the ownership and operation of an elderly living center
including a skilled nursing facility, operation of a pharmacy, and operation of
a home health agency, including all activities related to the foregoing.
"Buyer" means Hawthorn Health Properties, Inc., a California
corporation.
"Buyer Damages" has the meaning given that term in Section 7.02.
"Buyer Indemnitees" has the meaning given that term in Section 7.02.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System Database pursuant to Superfund.
"Closing" has the meaning given that term in Section 2.03.
"Closing Date" has the meaning given that term in Section 2.03.
"Code" means the Internal Revenue Code of 1986, as amended, and the
applicable rulings and regulations thereunder.
"Combined Companies" means each of the Companies plus the Other
Companies.
"Company" and "Companies" have the meanings set forth in the Preamble
to this Agreement.
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"Company Group" has the meaning given that term in Section 3.23(b).
"Company Plan" has the meaning given that term in Section 3.23(a).
"Contract" and "Contracts" have the respective meanings given those
terms in Section 3.15.
"Covenant Not to Compete" means an agreement in the form attached
hereto as Exhibit 1.01(1).
"Damages" has the meaning given that term in Section 7.05.
"Defined Benefit Plan" has the meaning given that term in Section
3.23(e).
"Employment Agreements" means the contracts between Xxxxxx Health Care
Group, Inc., Buyer and each of Xxxx Xxxxxx, Xxxxx Xxxxxx, and Xxxx Xxxxx in
substantially the form of Exhibits 1.01(2) through 1.01(4), respectively.
"Encumbrance" means any liability, debt, mortgage, deed of trust,
pledge, security interest, encumbrance, option, right of first refusal,
agreement of sale, adverse claim, easement, lien, assessment, restrictive
covenant, encroachment, burden or charge of any kind or nature whatsoever or
any item similar or related to the foregoing.
"Environment" means soil, land, surface or subsurface waters, ground
waters, and ambient air.
"Environmental Condition" means any condition with respect to the
Environment relating to or arising out of the use, handling, storage,
transportation, treatment, recycling, release, or threatened release by the
Company.
"Environmental Law" means any applicable Law relating to public health
and safety or protection of the environment, including common law nuisance,
property damage and similar common law theories.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the applicable rulings and regulations thereunder.
"Escrow Agent" means Commerce Bank.
"Escrow Agreement" means an agreement substantially in the form of
Exhibit 1.01(5) hereto among Buyer, Seller, and Escrow Agent.
"Escrow Amount" means $1,200,000 to be held by the Escrow Agent
pursuant to the terms and conditions of the Escrow Agreement.
"Exchange Agreement" means, collectively, the Merger Agreement of even
date herewith between BCC, BCC at Nevada Park Care Center, Inc., and National
Care Centers of Nevada, Inc.
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(the "Nevada Merger Agreement") and that certain Merger Agreement of even date
herewith between BCC, BCC at Republic Park Center, Inc., and National Care
Centers of Republic (the "Republic Merger Agreement"). Under the Nevada Merger
Agreement and the Republic Merger Agreement, the capital stock of those
corporations shall be exchanged for shares of BCC's common stock as a result of
the merger of National Care Centers of Republic, Inc., into BCC at Republic
Park Care Center, Inc., and of National Care Centers of Nevada, Inc., into BCC
at Nevada Park Care Center, Inc.
"Family Member" means any spouse, sibling, parent, offspring; personal
representatives or heirs of a Person or any spouse of such Family Member.
"FASB" means the Financial Accounting Standards Board or its
successor.
"Fiscal Year Financial Statements" has the meaning given that term in
Section 3.07(b).
"Xxxxxx Health Care Group Purchase Agreement" means the Asset Purchase
Agreement of even date herewith between Hawthorn Health Properties, Inc., and
Xxxxxx Health Care Group, Inc.
"Funded Debt" means the aggregate amount of all indebtedness of the
Combined Companies for borrowed money or the deferred purchase price of any
property or the redemption of any stock plus the amount required to satisfy all
obligations of any of the Combined Companies with respect to any capital lease
in order to obtain title to the underlying property, provided, however, that
the Funded Debt shall not include (i) obligations undertaken by National Care
Centers of Springfield, Inc., d/b/a Springfield Park Care Center, for the
purchase of a van and (ii) obligations undertaken by each of the Companies
payable to Xxxxxx Health Care Group, Inc., for the purchase of computers and
related equipment.
"GAAP" means United States generally accepted accounting principles.
"Governing Documents" means, with respect to any Person who is not a
natural Person, the certificate or articles of incorporation, bylaws, deed of
trust, formation or governing agreement and other charter documents or
organization or governing documents or instruments of such Person.
"Governmental Body" means any court, government (federal, state,
local, or foreign department, commission, board, bureau, agency, official or
other regulatory, administrative or governmental authority or instrumentality,
including, without limitation, any Medicare fiscal intermediary.
"Hazardous Activity" means the distribution, generation, handling,
storage, treatment, use, transportation, recycling, release or threatened
release of Hazardous Materials.
"Hazardous Materials" means any substance listed, defined, classified,
or determined to be hazardous, radioactive, or toxic contaminant pursuant to
any Environmental Law.
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"Indemnified Party" has the meaning given that term in Section 7.05.
"Indemnifying Party" has the meaning given that term in Section 7.05.
"Intellectual Property" has the meaning given that term in Section
3.22.
"IRS" means the Internal Revenue Service.
"Law" means any applicable federal, state, municipal, local or foreign
statute, law, ordinance, rule, regulation, policy or order of any kind or
nature whatsoever including any public policy, order of any Governmental Body
or principle of common law.
"Litigation" has the meaning given that term in Section 3.14.
"Management Agreement" means, collectively, each of the agreements in
the form attached hereto as Exhibit 1.01(6) between the affiliates of BCC and
Xxxxxx Health Care Group, Inc., a Missouri corporation owned by Seller.
"Material" means all items which, in the aggregate and disregarding
materiality, shall equal or exceed $100,000.
"Multiemployer Plan" has the meaning given that term in Section
3.23(f).
"Other Agreement" means each other agreement or document contemplated
hereby to be executed and delivered in connection with the transactions
contemplated by this Agreement on or before Closing, including the Management
Agreement, the Exchange Agreement, the Right of First Refusal Agreement, the
Escrow Agreement, the Covenants Not to Compete, and the Employment Agreements.
"Other Companies" means National Care Centers of Republic, Inc., a
Missouri corporation, d/b/a Republic Park Center, and National Care Centers of
Nevada, Inc., a Missouri corporation, d/b/a Nevada Park Care Center (excluding
d/b/a Nevada Park Terrace Apartments).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PCBs" means polychlorinated biphenyls.
"Permit" and "Permits" have the respective meanings given those terms
in Section 3.16.
"Person" means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization, a business, any other legal entity,
and a Governmental Body.
"Purchase Price" has the meaning given that term in Section 2.02.
"Qualified Plan" has the meaning given that term in Section 3.23(d).
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"Real Property" has the meaning given that term in Section 3.17.
"Receivables" has the meaning given that term in Section 3.12.
"Redemption Agreement" means collectively each of the Stock Redemption
Agreements in the form of Exhibit 1.01(8) among Seller and each Company
identified in Schedule 3.03 as a Company which is redeeming certain of its
Stock.
"Related Party" means (i) Seller, (ii) any Affiliate of Seller, (iii)
any officer, director or shareholder or former officer, director or shareholder
of any Person identified in clauses (i) or (ii) preceding, and (iv) any spouse,
sibling, parent, offspring; personal representative, or heir of any natural
Person identified in any one of the preceding clauses.
"Release" means any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing, or
dumping into the environment.
"Right of First Refusal Agreement" means the agreement in the form of
Exhibit 1.01(9) hereto between BCC and Seller pursuant to which Seller grants
to BCC the right of first refusal to purchase the Nevada Park Apartments and
Cherokee Residential Care on the terms set forth therein.
"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.
"Seller" means collectively Xxxxx Xxx Xxxxxx, Xx., both individually
and as Trustee of the Revocable Inter Vivos Trust Agreement of Xxxxx Xxx Xxxxxx
dated February 4, 1988, Xxxx Xxxxxxx Xxxxxx, Xxxxx Xxx Xxxxxx, Xx., J. Xxxx
Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx Xxxxxx, and Xxxx Xxxxxxx Xxxxxx, all individual
residents of Missouri.
"Seller Damages" has the meaning given that term in Section 7.03.
"Seller Indemnitees" has the meaning given that term in Section 7.03.
"Shares" has the meaning given that term in Section 3.03.
"Subsidiary" means any corporation, partnership, joint venture or
other entity in which the Company owns, directly or indirectly, more than 20%
of the outstanding voting securities or equity interests.
"Superfund" means the Comprehensive Environmental Response
Compensation and Liability Act of 1980, 42 U.S.C. Sections 6901, et seq., as
amended.
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"Tax" means any domestic or foreign federal, state, county or local
tax, levy, impost or other similar charge of any kind whatsoever, including any
interest or penalty thereon or addition thereto, whether disputed or not.
"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.
"Threatened Release" means a substantial likelihood of a release that
requires action to prevent or mitigate damage to the environment that may
result from such release.
1.02. CONSTRUCTION. As used herein, unless the context otherwise
requires: (i) references to "Article" or "Section" are to an article or section
hereof; (ii) all "Exhibits" and "Schedules" referred to herein are to Exhibits
and Schedules attached hereto and are incorporated herein by reference and made
a part hereof; (iii) "include", "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; and (iv) the headings of the various
articles, sections and other subdivisions hereof are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions hereof.
ARTICLE II
THE TRANSACTION
2.01. SALE AND PURCHASE OF SHARES. Upon the terms and subject to the
conditions of this Agreement and in consideration of the Purchase Price, Seller
shall sell, assign, transfer and deliver the Shares to Buyer, and Buyer shall
purchase from Seller and take delivery of the Shares, at the Closing, free of
all Encumbrances.
2.02. PURCHASE PRICE. The aggregate purchase price for the Shares (the
"Purchase Price") shall be $38,500,000 less the amount of the Funded Debt. The
parties agree that the Purchase Price is allocated among the Companies as shown
on Schedule 2.02. Seller and Buyer agree to report the transactions effected in
accordance with this Agreement for federal income tax and governmental
reimbursement purposes in accordance with such allocation. In addition, Buyer
agrees to pay or cause to be paid the Funded Debt at the Closing pursuant to
Section 2.05 below.
2.03. CLOSING. The consummation of the purchase and sale of the Shares
and the other transactions contemplated hereby (the "Closing") shall take place
at 10:00 a.m., local time, on or before August 19, 1996, at the offices of
Mercantile Bank of Springfield, 000 Xx. Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxx, or
at such other time, date or place as the parties agree (the "Closing Date"),
provided, however, that the Closing shall be effective as of August 31, 1996
(the "Effective Closing Date").
2.04. CLOSING DATE PROMISSORY NOTE. At Buyer's option, Buyer may pay
the Purchase Price by delivery to Seller's agent of a Promissory Note in the
form of Exhibit 2.04(1) hereto (the
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"Promissory Note"). Such note shall be payable on the Closing Date by payment
in the manner set forth in Section 2.05. The Promissory Note shall be secured
by a pledge of all of the issued and outstanding stock of the Companies issued
to Buyer pursuant to the Stock Pledge Agreement in the form of Exhibit 2.04(2).
2.05. PAYMENT. Upon the terms and subject to the conditions of this
Agreement,
(a) at Closing, Buyer shall deliver
(i) to Seller by cashier's check or wire transfer of
federal funds $38,500,000 less (A) the Escrow Amount, and (B) the amount of the
Funded Debt,
(ii) to Seller by cashier's check or wire transfer of
federal funds the aggregate sum of $2,000,000, such amount being the
consideration for the Covenant Not to Compete, and such amount shall be payable
among Seller as shown on Schedule 2.05,
(iii) to the Escrow Agent by wire transfer of federal
funds the Escrow Amount, and
(iv) to each creditor of Seller to which the Funded Debt
is owed, Buyer shall pay the full amount of the Funded Debt by cashier's check
or wire transfer of federal funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement and consummate
the transactions contemplated hereby, Seller represents and warrants to Buyer,
as to each of the Companies, and, where applicable as to himself, that each of
the following representations and warranties is true as of the date hereof:
3.01. ORGANIZATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of Missouri, and has the
corporate power and authority to own or lease its properties, carry on its
business as now conducted, enter into this Agreement and the Other Agreements
to which it is or is to become a party and perform its obligations hereunder
and thereunder.
3.02. AUTHORIZATION: ENFORCEABILITY. This Agreement and each Other
Agreement to which Seller or the Company, or both, is a party have been duly
executed and delivered by and constitute the legal, valid and binding
obligations of such party, enforceable against it in accordance with their
respective terms, except for (i) the effect of bankruptcy, insolvency,
reorganization, moratorium, equity of redemption or other similar laws now or
hereafter in effect relating to or affecting creditors generally and (ii) the
effect of general principles of equity and the discretion of the court before
which any proceeding therefor may be brought. Each Other Agreement to which
either Seller or the Company, or both, is to become a party pursuant to the
provisions hereof, when executed and delivered by such party, will constitute
the legal, valid and
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binding obligation of such party, enforceable against such party in accordance
with the terms of such Other Agreement, except for (i) the effect of
bankruptcy, insolvency, reorganization, moratorium, equity of redemption or
other similar laws now or hereafter in effect relating to or affecting
creditors generally and (ii) the effect of general principles of equity and the
discretion of the court before which any proceeding therefor may be brought.
All actions contemplated by this Agreement and the Other Agreements have been
duly and validly authorized by all necessary proceedings by Seller and the
Company.
3.03. SHARES; CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of the Company consists solely of the number of shares
of common stock at the par value per share of such common stock identified on
Schedule 3.03 (the "Stock"). Schedule 3.03 identifies the number of shares of
Stock issued and outstanding and the number of shares of Stock held in the
treasury of the Company. Schedule 3.03 also sets forth truthful and accurate
information concerning the shares of capital stock of the Company that will be
issued and outstanding as of the Closing Date after consummation of the
transactions contemplated in the Redemption Agreements (the "Shares"). All of
the Stock is owned of record, legally and beneficially by Seller, except for
the Stock identified on Schedule 3.03 as treasury stock. Except as may be
disclosed on Schedule 3.03, the Stock is free and clear of any and all
Encumbrances, including without limitation any Encumbrance resulting from the
acquisition by Seller of the Stock, and upon delivery of the Shares hereunder,
Buyer will acquire title thereto, free and clear of any and all Encumbrances.
There are no Security Rights relating to any of the Stock except as disclosed
on Schedule 3.03. All rights and powers to vote the Stock are held exclusively
by Seller. All of the Stock is validly issued, fully paid and nonassessable,
was not issued in violation of the terms of any agreement or other
understanding, and was issued and acquired by Seller in substantial compliance
with all applicable Laws. Any shares of Stock that were previously outstanding
but that are now owned by the Company were acquired by the Company in
substantial compliance with all applicable Laws.
3.04. SUBSIDIARIES AND FICTITIOUS NAMES. Except as disclosed in
Schedule 3.04, the Company does not own, nor has it ever owned, any shares of
capital stock of or other equity interest in any corporation, partnership,
joint venture or other entity. Schedule 3.04 discloses with respect to each
Company (i) its name, (ii) the jurisdiction of its organization, and (iii) all
fictitious or other names under which the Company does business or ever
conducted business.
3.05 QUALIFICATION. The Company is duly qualified and in good
standing as a foreign corporation and is duly authorized to transact business
in each jurisdiction wherein the character of the properties owned or leased by
it or the nature of the activities conducted by it makes such qualification and
good standing necessary.
3.06 NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS.
(a) Neither the execution and delivery of this Agreement or any
Other Agreement to which Seller or the Company, or both, is or is to become a
party, the consummation of the transactions contemplated hereby or thereby nor
the compliance with or fulfillment of the terms, conditions or provisions
hereof or thereof by Seller or the Company, or
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both, will, except as disclosed in Schedule 3.06: (i) contravene any provision
of the Governing Documents of the Company, (ii) conflict with, result in a
breach of, constitute a default or an event of default (or an event that might,
with the passage of time or the giving of notice or both, constitute a default
or event of default) under any of the terms of, result in the termination of,
result in the loss of any right under, or give to any other Person the right to
cause such a termination of or loss under, any asset of Seller or the Company,
including any Permit, Intellectual Property, license, franchise, indenture,
mortgage or any other contract, agreement or instrument to which either Seller
or the Company is a party or by which any of their assets may be bound or
affected, (iii) result in the creation, maturation or acceleration of any
liability or obligation of Seller or the Company (or give to any other Person
the right to cause such a creation, maturation or acceleration), (iv) violate
any Law or violate any judgment or order of any Governmental Body to which
Seller or the Company is subject or by which any of their respective assets may
be bound or affected, or (v) result in the creation or imposition of any
Encumbrance upon the Stock or any asset of Seller or the Company or give to any
other Person any interest or right therein.
(b) Except as set forth on Schedule 3.06 and in Section 5.05, no
consent, approval or authorization of, or registration or filing with, any
Person is required in connection with the execution or delivery by Seller or
the Company, or both, of this Agreement or any of the Other Agreements to which
either, or both, is or is to become a party pursuant to the provisions hereof
or the consummation by Seller or the Company, or both, of the transactions
contemplated hereby or thereby.
3.07. FINANCIAL INFORMATION.
(a) RECORDS. The books of account and related records of the
Company reflect accurately and in detail its assets, liabilities, revenues,
expenses and other transactions.
(b) FINANCIAL STATEMENTS. Attached as Exhibit 3.07(b)(1) are the
audited or reviewed balance sheets, income statements and statements of cash
flows for each Company's two most recent fiscal years (except that the
statements for Xxxxx Management, Inc., and Long Term Pharmaceutical Care, Inc.,
are not audited or reviewed) (collectively, the "Fiscal Year Financial
Statements"). The most recent Fiscal Year Financial Statement for National Care
Centers of Lebanon, Inc., as of the Closing shall be as of April 30, 1995, and
for Xxxxx Management, Inc., as of the Closing shall be June 30, 1995, for the
reason that the most recent fiscal year end statements of National Care Centers
of Lebanon, Inc., and Xxxxx Management, Inc., shall not be prepared on or
before the Closing. Also attached hereto as Exhibit 3.07(b)(2) are the
unaudited interim balance sheets and income statements for the Companies as of
April 30, 1996 and for the interim periods ended April 30, 1996, except that
the Estimated Interim Financial Statement for Long Term Pharmaceutical Care,
Inc., shall be as of March 31, 1996 (collectively, the "Estimated Interim
Financial Statements"). The Fiscal Year Financial Statements in all material
respects (i) are accurate, correct, and complete in accordance with the books
of account and records of the Companies, (ii) have been prepared in accordance
with Accounting Principles on a consistent basis throughout the indicated
periods, and (iii) present fairly the financial condition, assets and
liabilities and results of operation of the Companies at
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the dates and for the relevant periods indicated in accordance with the
Accounting Principles. The Estimated Interim Financial Statements in all
material respects (i) are accurate, correct, and complete in accordance with
the books of account and records of the Companies, (ii) have been prepared in
accordance with Accounting Principles on a consistent basis, except that they
contain no footnotes, no year-end adjustments, including, but not limited to,
adjustments for amounts which may be receivable or payable as a result of any
Medicare cost report, adjustments for uncollectable accounts receivable and
adjustments for income tax accruals, and (iii) present fairly the financial
condition, assets and liabilities and results of operations of the Companies at
the dates and for the relevant periods indicated in accordance with the
Accounting Principles.
(c) STATE SURVEYS AND COST REPORTS. Attached as Exhibit 3.07(c)
are copies of the state surveys completed and cost reports filed by or on
behalf of each Company for the years 1994 and 1995 and filed for 1996 on or
before April 30, 1996. Each such report was prepared in substantial compliance
with all Laws and is complete and accurate in all material respects.
(d) FUNDED DEBT. Schedule 3.07 indicates the amount of Funded
Debt for each of the Combined Companies as of July 31, 1996, and describes each
component thereof by indicating the identity of the creditor and the type of
indebtedness.
3.08. UNDISCLOSED LIABILITIES. The Company has no debt, obligation or
liability, absolute, fixed, contingent or otherwise, of any nature whatsoever,
whether due or to become due, including any unasserted claim, whether incurred
directly or by any predecessor thereto, and whether arising out of any act,
omission, transaction, circumstance, sale of goods or services, state of facts
or other condition, except: (i) those reflected or reserved against its Fiscal
Year Financial Statements and/or its Estimated Interim Financial Statements in
the amounts shown therein; (ii) those not required under GAAP to be reflected
or reserved against in its Fiscal Year Financial Statements and/or its
Estimated Interim Financial Statements; (iii) those disclosed on Schedule 3.08;
(iv) those of the same nature as those set forth on its Fiscal Year Financial
Statements and/or its Estimated Interim Financial Statements that have arisen
in the ordinary course of business of the Company after the effective dates of
each of its Fiscal Year Financial Statements and each of its Estimated Interim
Financial Statements through the date hereof, all of which obligations
described in this clause (iv) have been consistent in amount and character with
past practice and experience, and none of which, individually or in the
aggregate, has had or will have an adverse effect on the business, financial
condition or prospects of any Company and none of which is a liability for
breach of contract or warranty or has arisen out of tort, infringement of any
intellectual property rights, or violation of Law or is claimed in any pending
or threatened legal proceeding; (v) those claims which are (1) first asserted
in writing after the date hereof, (2) which an insurance carrier identified on
Schedule 3.21 is obligated to defend, (3) the amount of the claim is not in
excess of the coverage available under such insurance, and (4) which shall be
disclosed by Seller to Buyer in the Closing Certificate pursuant to Section
6.01(d); (vi) those claims which are asserted by employees of Companies under
the Workers' Compensation Law and which would not have a materially adverse
effect on the Companies, and (vii) those which are not material in the
aggregate.
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3.09. NO CHANGES. Since April 30, 1996, each Company has conducted its
business only in the ordinary course, except for actions taken in compliance
with the terms of this Agreement. Without limiting the generality of the
foregoing sentence, since April 30, 1996, except as otherwise disclosed or
provided for in this Agreement, in Schedule 3.09, in any other Schedule or
Exhibit hereto, or in any other document which Seller shall deliver to Buyer on
or after the date hereof pursuant to the terms of this Agreement, there has not
been any of the following which are material in the aggregate: (i) damage or
destruction to any asset of the Company, whether or not covered by insurance;
(ii) strike, work stoppage, slowdown, or similar concerted activity by
employees at the Company; (iii) creation of any Encumbrance on any asset of the
Company; (iv) declaration or payment of any dividend or other distribution on
or with respect to or redemption or purchase by the Company of any shares of
capital stock of the Company; (v) increase in the salary, wage or bonus of any
employee of the Company which is not customary in amount; (vi) asset
acquisition or expenditure, including capital expenditure, in excess of
$100,000 in the aggregate, other than the purchase of inventory in the ordinary
course of business; (vii) change in any Company Plan; (viii) change in any
method of accounting; (ix) payment to or transaction with any Related Party,
which payment or transaction is not specifically disclosed on Schedule 3.18;
(x) disposition of any asset (other than inventory in the ordinary course of
business) for more than $100,000 in the aggregate or for less than fair market
value; (xi) payment, prepayment or discharge of any liability other than in the
ordinary course of business; (xii) write-offs or write-downs of any assets of
the Company in excess of $100,000 in the aggregate; (xiii) creation,
termination or amendment of, or waiver of any right under, any material
agreement of the Company not in the ordinary course of business; or (xiv)
agreement or commitment to do any of the foregoing.
3.10. TAXES.
(a) TAX RETURNS; PAYMENT. The Company has filed or caused to be
filed on a timely basis, or will file or cause to be filed on a timely basis,
all Tax Returns that are required to be filed by it prior to or on the
Effective Closing Date, without regard to any extensions, pursuant to the Law
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. The Company has paid all Taxes that have 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 disclosed on Schedule 3.10, (ii) such Taxes that are fully reserved against
on the Fiscal Year Financial Statements or the Estimated Interim Financial
Statements, (iii) Taxes accruing after the end of the last fiscal year of each
Company and Other Company that are not yet due, and (iv) payroll taxes which
have accrued but were not required to have been paid on or before the Closing
and for which Seller shall cause the Company to have cash for such payments on
the Closing date. The Company is not currently the beneficiary of any extension
of time within which to file any Tax Return, except as disclosed on Schedule
3.10. No claim has been made by a taxing authority of a jurisdiction where the
Company does not file Tax Returns that it is or may be subject to taxation in
that jurisdiction. Without limiting the foregoing, the Company has no liability
for any Tax except Taxes disclosed on Schedule 3.10. Schedule 3.10 contains a
complete and accurate list of each type of Tax paid by the Company and each
Governmental Body to which such Tax is paid. Seller has no actual knowledge of
any
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13
proposed change in Law (other than the Code) that would result in a material
increase in Tax payable by any Company.
(b) WITHHOLDING. The Company has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party.
(c) ASSESSMENTS. There is no pending, or, to the knowledge of
Seller or the Company, threatened or anticipated, assessment of any additional
Tax against the Company. The Company has not waived any statute of limitations
in respect of any Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency for any taxable period for which the period of
limitations on assessment has not expired, except as disclosed on Schedule
3.10. No Tax audit or examination is now pending or currently in progress with
respect to the Company.
(d) OTHER MATTERS. Except as disclosed on Schedule 3.10, the
Company is not a party to any income Tax allocation or sharing agreement. The
Company has not filed a consent under Code Section 341 (f) concerning
collapsible corporations. The Company has not made any payment, nor is it
obligated to make any payment, nor is it a party to any agreement that under
certain circumstances could obligate it to make any payment, that will not be
deductible under Code Sections 280G or 162 (m). The Company is not (nor does it
have any liability for unpaid Taxes because it once was) a member of an
affiliated group as defined in Section 1504 of the Code. The Company is not and
has not been during the applicable period specified in Code Section
897(c)(1)(A)(ii) a United States real property holding corporation as defined
in Code Section 897(c)(2).
(e) CONTROLLED GROUP. The Combined Companies constitute one
controlled group of corporations within the meaning of Sections 52 and 1563 of
the Code. Schedule 3.10 contains a list of all other entities that are also
members of such controlled group. There have been no transactions between any
Company and any other Person for which a loss has been disallowed or deferred
or which has otherwise been subject to Section 267 (a) of the Code.
3.11. INVENTORY. All of the material inventory owned by the Company is
valued on the books and records of the Company and in the Fiscal Year Financial
Statements at lower of cost or market, the cost thereof being determined on a
first-in, first-out basis in accordance with GAAP. Except to the extent of the
reserve in the Fiscal Year Financial Statements, none of the Company's
inventory is obsolete, has been consigned to others, or is on consignment from
others.
3.12. RECEIVABLES. Schedule 3.12 discloses all trade and other
accounts receivable of the Company (Receivables) outstanding as of July 31,
1996, presented on an aged basis and separately identifies the name of each
account debtor and the total amount of each related Receivable. The term
"Receivable is further defined to include billing in advance for services to be
rendered to "Private Pay Patients" (as defined in Section 5.07 below) of the
Companies and the Medicaid resource portion of billing for services to be
rendered to patients of the Companies for whom the Companies are entitled to
Medicaid reimbursement. All Receivables, whether
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reflected on the Fiscal Year Financial Statements, disclosed on Schedule 3.12,
or created after the end of the last fiscal year of each Company and each Other
Company, arose from bona fide sale or service transactions of the Company, and
no portion of any Receivable is subject to counterclaim, defense or set-off or
is otherwise in dispute. Except to the extent of the recorded reserve for
doubtful accounts specified on the Fiscal Year Financial Statements, all of the
Receivables are collectible in the ordinary course of business and will be
fully collected within 90 days after having been created using commercially
reasonable efforts.
3.13. CONDITION OF ASSETS; BUSINESS. The Company is engaged in the
Business and no other business, except as disclosed in Schedule 3.13. The
buildings, fixtures, improvements, machinery, equipment, tools, furniture,
improvements and tangible personal property of the Company, including those
reflected on the Fiscal Year Financial Statements, are in good operating
condition and repair and are suitable for the purposes for which they are used
in the Business, except (i) minor or routine maintenance, (ii) matters
disclosed on Schedule 3.13, and (iii) conditions which in the aggregate would
cost less than $25,000 to repair or replace. Except for Encumbrances listed on
Schedule 3.13 and those Encumbrances included in the title insurance
commitments received by Buyer, the Company has good and marketable title to all
of its assets; all of such assets are reflected on the Fiscal Year Financial
Statements, or, under GAAP, are not required to be reflected thereon; such
assets include all assets that are necessary for use in and operation of the
Business; and none of such assets is subject to any Encumbrance or impairment,
whether due to its condition, utility, collectability or otherwise.
3.14. NO PENDING LITIGATION OR PROCEEDINGS. Except for those matters
described on Schedule 3.14, no action, suit, investigation, claim or proceeding
of any nature or kind whatsoever, whether civil, criminal or administrative, by
or before any Governmental Body or arbitrator ("Litigation") is pending or, to
the knowledge of Seller, threatened against or affecting the Company, the
Business, any of the Company's assets, any of the Shares, or any of the
transactions contemplated by this Agreement or any Other Agreement. In
addition, none of the Combined Companies has been a party to any action in a
court of general jurisdiction during the time period January 1, 1993 through
the present, except as disclosed on Schedule 3.14. There is presently no
outstanding judgment, decree or order of any Governmental Body against or
affecting the Company, the Business, any of the Company's assets, any of the
Shares, or any of the transactions contemplated by this Agreement or any Other
Agreement. The Company does not have pending any Litigation against any third
party, except for those matters described on Schedule 3.14.
3.15. CONTRACTS; COMPLIANCE. Disclosed on Schedule 3.15, 3.21, 3.22,
or 3.23 is a brief description of each contract, lease, indenture, mortgage,
instrument, commitment or other agreement, arrangement or understanding, oral
or written, formal or informal, to which the Company is a party or by which it
or its assets may be affected and that (i) is material to the Business or the
Company's assets or operations, individually or in the aggregate, (ii) involves
the purchase, sale or lease of any asset, materials, supplies, inventory or
services in excess of $10,000 per year, (iii) has an unexpired term of more
than six months from the date hereof, taking into account the effect of any
renewal options, (iv) relates to the borrowing or lending of any money or
guarantee of any obligation (other than the guarantee represented by the
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endorsement of negotiable instruments presented for collection), (v) limits the
right of the Company to compete in any line of business or otherwise restricts
any right the Company may have, (vi) is an employment or consulting contract
(vii) is with a Governmental Body or (viii) was not entered into in the
ordinary course (each, a "Contract" and collectively, the "Contracts"). Each
Contract is a legal, valid and binding obligation of the Company and is in full
force and effect. The Company and, to the best knowledge of Seller, each other
party to each Contract has performed substantially all obligations required to
be performed by it thereunder and is not in breach or default, and is not
alleged to be in breach or default, in any respect thereunder, and no event has
occurred and no condition or state of facts exists (or would exist upon the
giving of notice or the lapse of time or both) that would become or cause a
breach, default or event of default thereunder, would give to any Person the
right to cause such a termination or would cause an acceleration of any
obligation thereunder. The Company is not currently renegotiating any Contract
nor has the Company received any notice of non-renewal or price increase or
sales or production allocation with respect to any Contract.
3.16. PERMITS; COMPLIANCE WITH LAW. The Company holds all permits,
certificates, licenses, franchises, privileges, approvals, registrations and
authorizations required under any applicable Law in connection with the
operation of its assets and Business (each, a "Permit" and, collectively,
"Permits"). Each Permit is valid, subsisting and in full force and effect. The
Company is in substantial compliance with and has fulfilled and performed its
obligations under each Permit, and no event or condition or state of facts
exists (or would exist upon the giving of notice or lapse of time or both) that
could constitute a material breach or default under any Permit. The Company has
not been since January 1, 1994, nor is it currently in violation of any Law and
has received no notice of any violation of Law, and no event has occurred or
condition or state of facts exists that could give rise to any such violation,
except for notices of deficiencies received from the Missouri Department of
Social Services, Division of Aging, as set out in Schedule 3.16, and the
matters disclosed in Schedule 3.14. The Company has not received any notice of
non-renewal of any Permit nor will the transactions contemplated hereby result
in the cancellation or increase the likelihood of non-renewal of any Permit.
3.17. REAL PROPERTY. Schedule 3.17 contains a list of all real
properties currently owned, used or leased by the Company or in which the
Company has an interest, excluding those properties identified in Schedule 5.05
which Seller shall have a right to convey to other parties prior to the Closing
(collectively, the "Real Property"), and identifies the record title holder of
all of the Real Property. The Company has good and marketable fee simple title
to all Real Property shown as owned by it on Schedule 3.17, free and clear of
all Encumbrances, other than (i) as indicated on Schedule 3.17, (ii) zoning
restrictions, (iii) liens for current taxes not yet due, and (iv) those
Encumbrances set out in the title insurance commitments received by Buyer with
respect to the Real Estate and which are set out in Schedule 3.17. The Company
has the right to quiet enjoyment of all Real Property in which it holds a
leasehold interest for the full term, including all renewal rights, of the
lease or similar agreement relating thereto. Schedule 3.17 contains a list of
all title insurance policies held by the Company. Seller has delivered an ALTA
as-built survey for all Real Property owned by the Company to Buyer. The
Company has not received any written notice of assessments for public
improvements or condemnation against any Real Property.
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3.18. TRANSACTIONS WITH RELATED PARTIES. No Related Party is or has
been since January 1, 1992 a party to any transaction, agreement or
understanding with the Company except pursuant to arrangements disclosed on
Schedule 3.18 and except for dividends properly reflected as such in the Fiscal
Year Financial Statements or the Estimated Interim Financial Statements, except
as set forth in Schedule 3.18. No Related Party uses any assets of the Company
except directly in connection with the Business, and no Related Party owns any
asset used in the Business. Except as set forth on Schedule 3.18, no Related
Party has any claim of any nature, including any inchoate claim, against the
Company, and the Company has no claim of any nature, including any inchoate
claim, against any Related Party. Except as disclosed on Schedule 3.18, as
otherwise expressly provided hereby or by any Other Agreement or as otherwise
may be mutually agreed after Closing, (i) no Related Party will at any time
after Closing for any reason, directly or indirectly, be or become entitled to
receive any payment or transfer of money or other property of any kind from the
Company, and (ii) the Company will not at any time after Closing for any
reason, directly or indirectly, be or become subject to any obligation to any
Related Party.
3.19. LABOR RELATIONS. The relations of the Company with its employees
are good to the best of Seller's knowledge. No employee of the Company is
represented by any union or other labor organization. No representation
election, arbitration proceeding, grievance, labor strike, dispute, slowdown,
stoppage or other concerted activity on the part of Company's employees is
pending or, to the knowledge of Seller or the Company, threatened against,
involving, affecting or potentially affecting the Company. No complaint against
the Company is pending or, to the knowledge of Seller or the Company,
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 the Company. The Company has no contingent liability for sick
leave, vacation time, severance pay or any similar item not fully reserved on
the Fiscal Year Financial Statements and/or the Estimated Interim Financial
Statements. The Company has no contingent liability for any occupational
disease of any of its employees, former employees or others. Neither the
execution and delivery of this Agreement, the performance of the provisions
hereof nor the consummation of the transactions contemplated hereby will
trigger any severance pay obligation under any contract or under any Law.
3.20. PRODUCTS LIABILITY; WARRANTIES. The Company shall have no
liability after the Effective Closing Date not fully covered by insurance
relating to any services rendered, or any product manufactured, distributed, or
sold by the Company prior to the Effective Closing Date, whether or not such
liability relates to products or services that are defective or improperly
designed, manufactured, or rendered in breach of any express or implied
warranty. Schedule 3.20 discloses and describes the terms of all express
product warranties under which the Company may have liability after the
Effective Closing Date.
3.21. INSURANCE. Schedule 3.21 discloses all insurance policies with
respect to which the Company is the owner, insured or beneficiary. The Company
will not have any liability after the Effective Closing Date for retrospective
or retroactive premium adjustments. Since incorporation, all insurance policies
covering professional liability and general liability maintained by or for the
benefit of the Company have been "occurrence" policies and not "claims
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made" policies. All such liability policies are listed on Schedule 3.21.
Schedule 3.21 discloses the manner in which the Company provides coverage for
workers' compensation claims.
3.22. INTELLECTUAL PROPERTY RIGHTS. Schedule 3.22 discloses all of the
trademark and service xxxx rights, applications and registrations, trade names,
fictitious names, service marks, logos and brand names, copyrights, copyright
applications, letters patent, patent applications and licenses of any of the
foregoing owned or used by the Company in or applicable to the Business. The
Company has the entire right, title and interest in and to, or has the
exclusive perpetual royalty-free right to use, the intellectual property rights
disclosed on Schedule 3.22 and all other processes, know-how, show-how,
formulae, trade secrets, inventions, discoveries, improvements, blueprints,
specifications, drawings, designs, and other proprietary rights necessary or
applicable to or advisable for use in the Business ("Intellectual Property"),
free and clear of all Encumbrances, except as disclosed in Schedule 3.22.
Schedule 3.22 separately discloses all intellectual property rights to which
the Company holds rights under any license. The Intellectual Property is valid
and not the subject of any interference, opposition, reexamination or
cancellation. To the knowledge of Seller or the Company, no Person is
infringing upon nor has any Person misappropriated any Intellectual Property.
The Company is not infringing upon the intellectual property rights of any
other Person.
3.23. EMPLOYEE BENEFITS.
(a) BENEFIT PLANS; COMPANY PLANS. Schedule 3.23(a) discloses all
existing written and unwritten "employee benefit plans" within the meaning of
Section 3(3) of ERISA, and any other written and unwritten profit sharing,
pension, savings, deferred compensation, fringe benefit, insurance, medical,
medical reimbursement, life, disability, accident, post-retirement health or
welfare benefit, stock option, stock purchase, sick pay, vacation, employment,
severance, termination or other plan, agreement, contract, policy, trust fund
or arrangement (each, a "Benefit Plan"), whether or not funded and whether or
not terminated, (i) maintained or sponsored by the Company, or (ii) with
respect to which the Company (or Seller with respect to the Company) is
obligated to contribute, or (iii) that otherwise covers any of the current or
former employees of the Company or their beneficiaries, or (iv) as to which any
such current or former employees or their beneficiaries participated or were
entitled to participate or accrue or have accrued any rights thereunder (each,
a "Company Plan").
(b) COMPANY GROUP MATTERS; FUNDING. Neither the Company nor any
corporation that may be aggregated with the Company under Sections 414(b), (c),
(m) or (o) of the Code (the "Company Group") has any obligation to contribute
to or any direct or indirect liability under or with respect to any Benefit
Plan of the type described in Sections 4063 and 4064 of ERISA or Section 413(c)
of the Code. The Company does not have any liability as a result of delinquent
contributions, distress terminations, fraudulent transfers, failure to pay
premiums to the PBGC, or withdrawal liability (as defined in Section 4201 of
ERISA). Following the Closing, the Company will not have any liability, with
respect to any Benefit Plan of any member of the Company Group (other than one
of the Combined Companies) as a result of delinquent contributions, distress
terminations, fraudulent transfers, failure to pay premiums to the PBGC, or
withdrawal liability (as defined in Section 4201 of ERISA). No accumulated
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funding deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code) exists nor has any funding waiver from the IRS been received or requested
with respect to any Company Plan or any Benefit Plan sponsored or maintained by
any member of the Company Group and no excise or other Tax is due or owing
because of any failure to comply with the minimum funding standards of the Code
or ERISA with respect to any of such plans.
(c) COMPLIANCE. Except as otherwise provided on Schedule
3.23(c), each of the Company Plans and all related trusts, insurance contracts
and funds have been created, maintained, funded and administered in all
respects in substantial compliance with all applicable Laws and in substantial
compliance with the plan document, trust agreement, insurance policy or other
writing creating the same or applicable thereto. No Company Plan is or is
proposed to be under audit or investigation by the IRS or Department of Labor,
and no completed audit of any Company Plan has resulted in the imposition of
any Tax, fine or penalty.
(d) QUALIFIED PLANS. Schedule 3.23(d) discloses each Company
Plan that purports to be a qualified plan under Section 401(a) of the Code and
exempt from United States federal income tax under Section 501(a) of the Code
(a "Qualified Plan"). With respect to each Qualified Plan, a determination
letter (or opinion or notification letter, if applicable) has been received
from the IRS that such plan is qualified under Section 401(a) of the Code and
exempt from federal income tax under Section 501(a) of the Code. No Qualified
Plan has been amended since the date of the most recent such letter.
No member of the Company Group, nor (to the best of Seller's
knowledge) any fiduciary of any Qualified Plan, nor (to the best of Seller's
knowledge) any agent of any of the foregoing, has done anything that would
adversely affect the qualified status of a Qualified Plan or the qualified
status of any related trust.
(e) NO DEFINED BENEFIT PLANS. No Company Plan is a defined
benefit plan within the meaning of Section 3(35) of ERISA (a "Defined Benefit
Plan"). No Defined Benefit Plan sponsored or maintained by any member of the
Company Group has been terminated or partially terminated after September 1,
1974, except as set forth on Schedule 3.23(e). Each Defined Benefit Plan
identified as terminated on Schedule 3.23(e) has met the requirement for
standard termination of single-employer plans contained in Section 4041(b) of
ERISA. During the five-year period ending on the Effective Closing Date, no
member of the Company Group has transferred a Defined Benefit Plan to a
corporation that was not, at the time of transfer, related to the transferor in
any manner described in Sections 414(b), (c), (m) or (o) of the Code.
(f) MULTIEMPLOYER PLANS. No Company Plan is a multiemployer plan
within the meaning of Section 3(37) or Section 4001(a)(3) of ERISA (a
"Multiemployer Plan"). No member of the Company Group has withdrawn from any
Multiemployer Plan or incurred any withdrawal liability to or under any
Multiemployer Plan. No Company Plan covers any employees of any member of the
Company Group in any foreign country or territory.
(g) PROHIBITED TRANSACTIONS; FIDUCIARY DUTIES; POSTRETIREMENT
BENEFITS. Except as otherwise provided on Schedule 3.23(g), no prohibited
transaction (within the meaning of Section 406 of ERISA and Section 4975 of the
Code) with respect to any Company Plan exists
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or has occurred that could subject the Company to any liability or Tax under
Part 5 of Title I of ERISA or Section 4975 of the Code. To Seller's knowledge,
no member of the Company Group, nor any administrator or fiduciary of any
Company Plan, nor any agent of any of the foregoing, has engaged in any
transaction or acted or failed to act in a manner that will subject the Company
to any liability for a breach of fiduciary or other duty under ERISA. With the
exception of the requirements of Section 4980B of the Code, no post-retirement
benefits are provided under any Company Plan that is a welfare benefit plan as
described in ERISA Section 3(1).
3.24. ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 3.24:
(a) COMPLIANCE; NO LIABILITY. The Company has operated the
Business and each parcel of Real Property in substantial compliance with all
applicable Environmental Laws. The Company is not subject to any liability,
penalty or expense (including legal fees) that would have a material adverse
effect on the financial condition of the Seller or the Companies and will not
hereafter suffer or incur any loss, liability, penalty or expense (including
legal fees) by virtue of any material violation of any applicable Environmental
Law occurring prior to the Effective Closing Date, any Hazardous Activity
conducted on or with respect to any property at or prior to the Effective
Closing Date or any Environmental Condition existing on or with respect to any
property at or prior to the Effective Closing Date, in each case whether or not
the Company permitted or participated in such act or omission.
(b) TREATMENT; CERCLIS. The Company has not treated, stored,
recycled or disposed of any Hazardous Material on any Real Property, and to the
best of Seller's knowledge no other Person has treated, stored, recycled or
disposed of any Hazardous Material on any part of the Real Property except in
accordance with Environmental Laws. The Company has not caused release of any
Hazardous Material at, on, or under any Real Property. The Company has not
transported any Hazardous Material or arranged for the transportation of any
Hazardous Material to any location that is listed on the National Priorities
List pursuant to Superfund. None of the Real Property is listed or, to the
knowledge of Seller or the Company, proposed for listing on the National
Priorities List or CERCLIS pursuant to Superfund or any state or local list of
sites requiring investigation or cleanup.
(c) NOTICES; EXISTING CLAIMS; HAZARDOUS MATERIALS; STORAGE
TANKS. The Company has not received any request for information, notice of
claim, demand or other notification that it is or may be potentially
responsible with respect to any investigation, abatement or cleanup of any
Threatened Release or Release of any Hazardous Material. The Company is not
required to place any notice or restriction relating to the presence of any
Hazardous Material at any Real Property or, if it sold the Real Property, in
any deed to any Real Property. The Company has provided to Buyer a list of
locations to which the Company has transported any Hazardous Material for
recycling, treatment, disposal, or other handling. There has been no past, and
there is no pending or contemplated, claim by the Company under any
Environmental Law or Laws based on actions of others that may have impacted on
the Real Property, and the Company has not entered into any agreement with any
Person regarding any Environmental Law, remedial action or other environmental
liability or expense. No PCBs or asbestos is present on or in any structure or
equipment located on any Real Property. All storage
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20
tanks located on the Real Property, whether underground or aboveground, are
disclosed on Schedule 3.24. Seller has no knowledge of any past or present leak
from any such storage tank. Notwithstanding any provision in this Agreement to
the contrary, Seller makes no representation or warranty with respect to any
occurrence, condition, or state of facts which is set out in the Site Reports,
as defined in Section 4.06 below or in Schedule 4.06. To the extent the
foregoing representations in any of the subsections of this Section 3.24 relate
to matters involving the Real Property prior to its ownership by any Company or
Seller or to matters resulting from actions of Persons other than any Company
or Seller, such representations are made solely to the best of Seller's
knowledge.
3.25. FINDERS' FEES. Neither Seller nor the Company nor any of their
respective officers, directors or employees has employed any broker or finder
or incurred any liability for any brokerage fee, commission or finders' fee in
connection with any of the transactions contemplated hereby or by any Other
Agreement.
3.26. DISCLOSURE. None of the representations or warranties of Seller
and the Company contained herein and none of the information contained in the
Schedules referred to in Article III is false or misleading in any material
respect or omits to state a fact herein or therein necessary to make the
statements herein or therein not misleading in any material respect.
3.27. XXXX-XXXXX-XXXXXX. The Seller, together with all corporations,
partnerships, or other business entities controlled by the Seller, as of their
last regularly prepared financial statements, have less than $100,000,000 of
total assets and, for the last fiscal year of each such entity, less than
$100,000,000 of net revenues. The terms used in this Section, including without
limitation, controlled, person, hold, voting stock, entities, total assets and
net revenues, shall be defined and interpreted in accordance with the Premerger
Notification Regulations promulgated by the Federal Trade Commission under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1974.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and consummate
the transactions contemplated hereby, Buyer represents and warrants to Seller
as follows:
4.01. ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and has the corporate power and authority to own or lease its
properties, carry on its business, enter into this Agreement and the Other
Agreements to which it is or is to become a party and perform its obligations
hereunder and thereunder. Buyer is qualified as a foreign corporation in each
jurisdiction where such qualification is required by law.
4.02. AUTHORIZATION; ENFORCEABILITY. This Agreement and each Other
Agreement to which Buyer is a party have been duly executed and delivered by
and constitute the legal, valid and binding obligations of Buyer, enforceable
against it in accordance with their respective
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21
terms, except for (i) the effect of bankruptcy, insolvency, reorganization,
moratorium, equity of redemption or other similar laws now or hereafter in
effect relating to or affecting creditors generally and (ii) the effect of
general principles of equity and the discretion of the court before which any
proceeding therefor may be brought. Each Other Agreement to which Buyer is to
become a party pursuant to the provisions hereof, when executed and delivered
by Buyer, will constitute the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with the terms of such Other Agreement,
except for (i) the effect of bankruptcy, insolvency, reorganization,
moratorium, equity of redemption or other similar laws now or hereafter in
effect relating to or affecting creditors generally and (ii) the effect of
general principles of equity and the discretion of the court before which any
proceeding therefor may be brought. All actions contemplated by this Section
have been duly and validly authorized by all necessary proceedings by Buyer.
4.03. NO VIOLATION OF LAWS; CONSENTS. Neither the execution and
delivery of this Agreement or any Other Agreement to which Buyer is or is to
become a party, the consummation of the transactions contemplated hereby or
thereby nor the compliance with or fulfillment of the terms, conditions or
provisions hereof or thereof by Buyer will: (i) contravene any provision of the
Governing Documents of Buyer, or (ii) violate any Law or any judgment or order
of any Governmental Body to which Buyer is subject or by which any of its
assets may be bound or affected. No consent, approval or authorization of, or
registration or filing with, any Person is required in connection with the
execution or delivery by Buyer of this Agreement or any of the Other Agreements
to which Buyer is or is to become a party pursuant to the provisions hereof or
the consummation by Buyer of the transactions contemplated hereby or thereby.
4.04. NO PENDING LITIGATION OR PROCEEDINGS. No Litigation is pending
or, to the knowledge of Buyer, threatened against or affecting Buyer in
connection with any of the transactions contemplated by this Agreement or any
Other Agreement to which Buyer is or is to become a party. There is presently
no outstanding judgment, decree or order of any Governmental Body against or
affecting Buyer in connection with the transactions contemplated by this
Agreement or any Other Agreement to which Buyer is or is to become a party.
4.05. FINDERS' FEES. Neither Buyer nor any of its officers, directors
or employees has employed any broker or finder or incurred any liability for
any brokerage fee, commission or finders' fee in connection with any of the
transactions contemplated hereby.
4.06. INSPECTIONS BY BUYER. Buyer has inspected the Real Property to
its satisfaction and has independently investigated the Real Property and
analyzed the results of such investigations and is satisfied with same, but
such inspections shall not serve to limit Seller's representations set forth
herein relating to the Real Property. Attached hereto as Schedule 4.06 is a
copy of each environmental site report which Buyer caused to be prepared for
the Real Property (the "Site Reports").
4.07. XXXX-XXXXX-XXXXXX. The Buyer, together with (a) all
corporations, partnerships, or other business entities controlled by the Buyer,
(b) all persons who hold, directly or indirectly, 50% or more of the voting
stock of the Buyer, and (c) all corporations, partnerships or other
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business entities controlled by such persons in (b) as of the date of its last
regularly prepared financial statements, have less than $10,000,000 of total
assets and, for its fiscal year ended December 31, 1995 had less than
$10,000,000 of net revenues. The terms used in this Section, including without
limitation, controlled, person, hold, voting stock, entities, total assets and
net revenues, shall be defined and interpreted in accordance with the Premerger
Notification Regulations promulgated by the Federal Trade Commission under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1974.
4.08. BUYER'S LENDER. Buyer agrees to deliver to Seller not later than
one business day before the Closing Date Schedule 4.08 which shall set forth
(i) the name and address of Buyer's and BCC's lender for the acquisition (the
"Lender") for the purpose of this Agreement; (ii) a statement of the full
principal amount of the loan from the Lender to Buyer and to BCC; and (iii) a
statement which shows the distribution of all of the principal of said
financing to be made upon the Closing.
ARTICLE V
CERTAIN COVENANTS
5.01. CONDUCT OF BUSINESS PENDING CLOSING. From and after the date
hereof and until the Closing Date, unless Buyer shall otherwise consent in
writing and except for actions taken in compliance with the terms of this
Agreement or any Exhibit or Schedule hereto, each Company shall, and Seller
shall cause each Company to, conduct its affairs as follows:
(a) ORDINARY COURSE; COMPLIANCE. The Business shall be conducted
only in the ordinary course and consistent with past practice. Each Company
shall maintain its property, equipment and other assets consistent with their
present condition, ordinary wear and tear excepted, and shall comply in a
timely fashion with the provisions of all Contracts, Permits and Laws and its
other agreements and commitments. Each Company shall use its best efforts to
keep its business organization intact, keep available the services of its
present employees and preserve the goodwill of its referring physicians,
suppliers, customers and others having business relations with it. Each Company
shall maintain in full force and effect the policies of insurance disclosed on
Schedule 3.21, subject only to variations required by the ordinary operations
of the Business, or else shall obtain, prior to the lapse of any such policy,
substantially similar coverage with insurers of recognized standing.
(b) TRANSACTIONS. No Company shall: (i) amend its Governing
Documents; (ii) change its authorized or issued capital stock or issue any
Security Rights with respect to shares of its capital stock; (iii) enter into
any contract or commitment the performance of which may extend beyond the
Closing, except those made in the ordinary course of business, the terms of
which are consistent with past practice; (iv) enter into any employment or
consulting contract or arrangement that is not terminable at will and without
penalty or continuing obligation; (v) fail to pay any Tax or any other
liability or charge when due, other than charges contested in good faith by
appropriate proceedings; (vi) make, change or revoke any Tax election or make
any agreement or settlement with any taxing authority; (vii) take any action
that is reasonably likely to result in the occurrence of any event set forth in
Section 3.09; (viii) take any action or omit to
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take any action that will cause a breach or termination of any Contract, other
than termination by fulfillment of the terms thereunder; or (ix) declare any
dividend or make any distribution with respect to its Stock other than a
distribution of the assets set forth on Schedule 5.01 and pursuant to the
Redemption Agreements.
(c) ACCESS, INFORMATION AND DOCUMENTS. Seller and each Company
shall give to Buyer and BCC and to Buyer's and BCC's employees and
representatives and financial sources (including, without limitation,
accountants, actuaries, attorneys, environmental consultants and engineers)
access during normal business hours to all of the properties, books, Tax
Returns, contracts, commitments, records, officers, personnel and accountants
(including independent public accountants and their audit workpapers concerning
the Company) of the Company and shall furnish to Buyer all such documents and
copies of documents and all information with respect to the properties,
liabilities and affairs of the Company as Buyer may reasonably request.
5.02 CERTAIN TAX MATTERS.
(a) ALLOCATION OF TAXES FOR PERIODS THROUGH THE EFFECTIVE
CLOSING DATE. The income of each Company shall be apportioned for the period up
to and including the Effective Closing Date and the period after the Effective
Closing Date by closing the books of Company as of the close of business on the
day before the Effective Closing Date. All Tax liability for taxes due and
payable for the period prior to the Effective Closing Date shall be either paid
by Company before the Closing or shall be paid by Seller pursuant to the terms
of the Escrow Agreement. Buyer shall cause any refund which may be received by
the Company or any Other Company after the Closing as a result of any short
period tax return to be paid to Seller.
(b) TAX RETURNS DUE AFTER THE CLOSING DATE. Buyer will file, or
cause Company to file, all Tax Returns that are required to be filed by Company
after the Closing Date, without regard to any extensions, pursuant to the law
of each governmental authority with taxing power over it. In addition, Buyer
shall file, or cause Company to file, the tax return of National Care Centers
of Lebanon, Inc., for its fiscal year ended April 30, 1996, and the tax return
of Xxxxx Management, Inc., for its fiscal year ended June 30, 1996.
(c) CARRYBACKS. If a Company is required to carry back any item
of loss, deduction or credit that arises in any taxable period ending after the
Effective Closing Date to a Tax Return of the Company for any taxable period
ending on or before the Effective Closing Date, Buyer or the Company, as the
case may be, will be entitled to an amount equal to the refund or credit of
Taxes realized as a result thereof.
(d) MUTUAL COOPERATION. Buyer and Seller shall each provide the
other, and Buyer shall cause each Company to provide Seller, with such
assistance as may reasonably be requested by any of them in connection with the
preparation of any Tax Return, any Tax audit, or any judicial or administrative
proceedings relating to any Tax, and each will retain and provide the other
with any records or information that may be relevant to such Tax Return, Tax
audit,
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proceeding or determination. The party requesting assistance hereunder shall
reimburse the other for direct expenses incurred in providing such assistance.
(e) AUDITS AND REFUND CLAIMS. Upon Seller's written request,
Buyer shall cause Company to claim any and all Tax credits and file any and all
applications for refunds of Taxes to which Company may from time to time be
entitled to claim or recover, and which are in respect of Taxes paid by Company
for any taxable period (or partial period) ending on or prior to the Effective
Closing Date, at the earliest date that such credits and/or refunds become
available. In the event that Company receives a Tax refund for any taxable
period (or partial period) ending on or prior to the Effective Closing Date,
except to the extent that the refund is attributable to a carryback described
in Section 5.02(c), Company shall pay such refund to Seller within ten days of
receipt of such refund.
Seller shall have the right, at its own expense, to control
any audit or determination by any authority, or the resolution of any claim for
refund or amended return, and contest, resolve, and defend against any
assessment, notice of deficiency, or other adjustment or proposed adjustment of
Taxes for any taxable period (or partial period) ending on or prior to the
Effective Closing Date, provided, however, that Seller shall consult with Buyer
with respect to the resolution of any issue that would materially affect Buyer
for any taxable period (or partial period) ending after the Effective Closing
Date and shall not settle any such issue or file any amended return relating to
such issue without the consent of Buyer, which consent shall not be
unreasonably withheld. Where consent to a settlement is withheld by Buyer
pursuant to the preceding sentence, Buyer may continue or initiate any further
proceedings at its own expense, provided that the liability of Seller, after
giving effect to this Agreement, shall not exceed the liability that would have
resulted from the settlement or amended return. In the event any such audit
shall occur after the termination of the Escrow Agreement, or in the event the
reasonably anticipated potential liability of the Company in connection with
any such audit shall exceed the balance of the Escrow Account after taking into
account pending claims against the Escrow Account from time to time, Seller
agrees to post a bond or other security reasonably acceptable to Buyer to serve
as security for the reasonably anticipated potential liability related to such
audit. Any such bond or other security shall be released upon resolution of any
such audit and Seller's fulfillment of its obligations with regard to same.
For purposes of this subsection (e), any taxable period
beginning before and ending after the Effective Closing Date shall be treated
as two partial periods, one ending on the Effective Closing Date and the other
beginning on the day after the Effective Closing Date, except that Taxes (such
as property taxes) imposed on a periodic basis shall be allocated on a per diem
basis.
(f) CONSOLIDATED RETURN BY BUYER. Buyer agrees to file (or cause
to be filed) timely consents by Buyer and each of the Companies with the
appropriate federal and state tax authorities to qualify for filing
consolidated federal and state income tax returns. Following the Closing, Buyer
shall file consolidated federal and state income tax returns for itself and the
Companies for the first taxable year ending after the Closing.
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5.03. PUBLICITY. Seller and Buyer shall not issue any press release or
otherwise make any announcements to the public with respect to this Agreement
without the prior written consent of the other, except as required by Law. This
Section shall expire on the Closing Date.
5.04. FULFILLMENT OF AGREEMENTS. Each party hereto shall use its best
efforts to cause all of those conditions to the obligations of the other under
Article VI that are not beyond its reasonable control to be satisfied on or
prior to the Closing and shall use its best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement.
5.05. ASSETS TO BE TRANSFERRED BEFORE CLOSING. Pursuant to the
Redemption Agreements, Seller shall cause each of the Companies to transfer
each of the following described assets (the "Excluded Assets") to Seller
pursuant to the Redemption Agreements in exchange for the number of shares of
Stock specified in the Redemption Agreements: (i) all cash except for advance
payments for services to be rendered to private-pay patients after the Closing,
resident trust funds, deposits for Worker's Compensation contributions and;
(ii) any assets owned by one or more of the Companies which are not related to
the operation of the skilled nursing facilities, residential care facilities,
independent living apartments for the elderly, home health agency, and pharmacy
businesses which are described in the list of Companies set out in the first
declaration paragraph beginning on page 1 of this Agreement; (iii) Xxxxx Xxx
Xxxxxx'x personal assets and furniture, including artwork, office equipment
which is currently used by him; and (iv) certain items of furniture in the
independent living apartments with a value not to exceed $5,000. The assets to
be so transferred pursuant to the Redemption Agreements shall be identified on
Schedule 5.05. Seller shall be obligated to pay to Buyer any tax which may be
incurred by the Companies as a result of the foregoing transfer of the Excluded
Assets. Such payment shall be made pursuant to the terms of the Escrow
Agreement.
5.06. LETTER OF INTENT. Execution of this Agreement shall terminate
any and all obligations of the parties which might otherwise arise under the
letter of intent dated April 19, 1996, between Balanced Care Corporation,
Xxxxxx Health Care Group, Inc., and Xxxxx Xxx Xxxxxx, Xx.
5.07. RECEIVABLES. All payments upon Receivables received by the
Company or any Other Company on or before the Effective Closing Date shall be a
part of the cash of the Companies and Other Companies which shall be removed by
Seller before the Closing pursuant to Section 5.05 above, except for payments
of Receivables of "Private-Pay Patients" (as defined below) for services to be
rendered on or after the Closing. "Private-Pay Patients" are defined to be
those patients of a Company or Other Company for whom no reimbursement is
received from Medicare or Medicaid reimbursement programs or from any insurance
company, except the private resource portion of Medicaid reimbursement for
Medicaid-approved patients. Seller represents and warrants that the aggregate
total of all Receivables of the Combined Companies as of the Effective Closing
Date shall not be less than $4,400,000.
5.08. ACCOUNTS PAYABLE. "Accounts Payable" is defined as amounts which
any Company or Other Company is required to pay for goods received or services
rendered in the
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ordinary course of business. Seller agrees to pay or cause each Company or
Other Company to pay on or before the Closing all Accounts Payable for all
goods received and for all services rendered on or before July 31, 1996. The
parties agree that Seller shall have no obligation with respect to Accounts
Payable for goods received or services rendered to the Company or any Other
Company from and after August 1, 1996, except that Seller shall pay or cause to
be paid each payroll and the related payroll taxes for salary payments to
employees of the Companies which are paid on or before the Effective Closing
Date.
5.09. COST REPORTS. Buyer will file, or cause Company to file all
Medicare and Medicaid cost reports that are required to be filed by Company
after the Closing Date, without regard to any extensions, pursuant to
applicable law. Any liability of Company required to be paid as a result of any
such cost report for any period prior to the Closing Date shall either be paid
by Company before the Closing Date or shall be paid by Seller pursuant to the
terms of the Escrow Agreement. Buyer shall cause any refund which may be
received by the Company or any Other Company after the Closing as a result of
any such cost report to be paid to Seller.
5.10. APPOINTMENT OF SELLERS' AGENT. Each Seller hereby irrevocably
appoints Xxxxx Xxx Xxxxxx, Xx. (herein called the "Seller's Agent"), as such
Seller's Agent and attorney-in-fact to take any action required or permitted to
be taken by such Seller under the terms of this Agreement, including, without
limiting the generality of the foregoing, the giving and receipt of any notices
to be delivered or received by or on behalf of any or all of the Seller, the
payment of expenses relating to the transactions contemplated by this
Agreement, the representation of the Seller in indemnification proceedings
hereunder, and the right to waive any of the terms of this Agreement in any
respect, whether or not material, and agrees to be bound by any and all actions
taken by the Seller's Agent on his or her behalf. Each Seller agrees jointly
and severally to indemnify the Seller's Agent from and against and in respect
of any and all liabilities, damages, claims, costs and expenses, including, but
not limited to, attorneys' fees arising out of or due to any action as the
Seller's Agent and any and all actions, proceedings, demands, assessments or
judgments, costs and expenses incidental thereto, except to the extent that the
same result from bad faith or gross negligence on the part of the Seller's
Agent. Buyer shall be entitled to rely exclusively upon any communications
given by the Seller's Agent on behalf of any Seller, and shall not be liable
for any action taken or not taken in reliance upon the Seller's Agent. Except
for any notice with regard to a replacement for Seller's Agent pursuant to this
Section 5.12, Buyer shall be entitled to disregard any notices or
communications given or made by Seller unless given or made through the
Seller's Agent. In the event that Seller's Agent dies, resigns, refuses to act
or becomes disabled or unavailable, the Seller shall promptly by majority vote
in accordance with their prior ownership of the Shares appoint another Seller
as the substitute Seller's Agent to act under this Agreement; such substitute
Seller's Agent shall have all the powers of the initial Seller's Agent
hereunder; and, the Seller shall promptly deliver a copy of such appointment to
the Buyer.
5.11. DELIVERIES TO BUYER'S LENDER. Buyer shall have the right to
assign its rights arising under this Agreement, including but not limited to,
its rights arising under Article III (Representations and Warranties of Seller)
to Buyer's Lender. Seller shall cause to be delivered and addressed to Buyer's
Lender the opinion of Seller's counsel described in 6.03(a)(viii).
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5.12. RELATED PARTY BALANCES. Not later than the Closing, Seller shall
cause all amounts due among Seller, any Related Party, any present or former
shareholder of the Company, and the Company to be paid in full.
5.13. EXHIBITS, SCHEDULES, AND OTHER AGREEMENTS. The parties
acknowledge that certain of the Exhibits, Schedules, and Other Agreements
contemplated hereunder have not yet been prepared upon the date this Agreement
was executed. Each party agrees to use its best efforts to prepare and to
deliver to the other party each such remaining Exhibit, Schedule, and Other
Agreement which is required under the terms of this Agreement not later than
August 16, 1996. The parties agree to negotiate in good faith to arrive at the
definitive terms and conditions of any such Schedule, Exhibit, and Other
Agreement not later than August 16, 1996.
ARTICLE VI
CONDITIONS TO CLOSING; TERMINATION
6.01. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER. The obligation of
Buyer to proceed with the Closing under this Agreement with respect to any
Company is subject to the fulfillment prior to or at Closing of the following
conditions with respect to Seller and each and every Company, any one or more
of which may be waived in whole or in part by Buyer at Buyer's sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each
of the representations and warranties of Seller contained in this Agreement
shall be true and correct in all material respects on and as of the Effective
Closing Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Effective Closing
Date. Seller shall have performed in all respects all of the covenants and
complied with all of the provisions required by this Agreement to be performed
or complied with by it at or before the Closing.
(b) LITIGATION. No Law shall be in effect that restrains or
prohibits the transactions contemplated hereby or that would limit or adversely
affect Buyer's ownership of all of the capital stock of the Company or control
of the Company, and there shall not have been threatened, nor shall there be
pending, any action or proceeding by or before any Governmental Body
challenging the lawfulness of or seeking to prevent or delay any of the
transactions contemplated by this Agreement or any of the Other Agreements or
seeking monetary or other relief by reason of the consummation of any of such
transactions.
(c) NO MATERIAL ADVERSE CHANGE. Between the date hereof and the
Effective Closing Date, there shall have been no material adverse change,
regardless of insurance coverage therefor, in the Business or any of the
assets, results of operations, liabilities, or condition, financial or
otherwise, of the Company.
(d) CLOSING CERTIFICATE. Seller shall have delivered a
certificate, dated the Effective Closing Date, in such detail as Buyer shall
reasonably request, certifying to the fulfillment of the conditions set forth
in subparagraphs (a), (b) and (c) of this Section 6.01. Such
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certificate shall constitute a representation and warranty of Seller with
regard to the matters therein for purposes of this Agreement.
(e) CLOSING DOCUMENTS. Buyer shall have received the other
documents referred to in Section 6.03(a). All agreements, certificates,
opinions and other documents delivered by Seller or the Company to Buyer
hereunder shall be in form and substance satisfactory to Buyer.
(f) CONSENTS. The Company shall have received the consents,
approvals and actions of the Persons listed on Schedule 6.01.
(g) COVENANT NOT TO COMPETE. Each of Seller and Buyer shall have
executed a Covenant Not to Compete.
(h) MANAGEMENT AGREEMENT. Xxxxxx Health Care Group, Inc., shall
have entered into the Management Agreement.
(i) XXXXXX PURCHASE AGREEMENT. Seller shall have entered into
the Xxxxxx Health Care Group Purchase Agreement.
(j) EXCHANGE AGREEMENT. Seller and the Other Companies shall
have entered into the Exchange Agreement and the transactions contemplated
thereby shall have been consummated.
(k) PAYOFF LETTERS ETC. Seller shall have delivered to Buyer at
least five days prior to the Closing Date a payoff letter from the holder of
each Funded Debt and each such holder shall have delivered to Buyer's title
insurance company appropriate releases in recordable form of all Encumbrances
relating to such Funded Debt with instructions to record such releases upon
payment of the Funded Debt as of the Closing Date.
(1) ESCROW AGREEMENT. Buyer, Seller, and Escrow Agent shall have
entered into the Escrow
(m) RIGHT OF FIRST REFUSAL AGREEMENT. Seller shall have executed
the Right of First Refusal Agreement.
(n) FINANCING AVAILABLE. Buyer shall have obtained the necessary
financing for payment of the Purchase Price.
(o) EMPLOYMENT AGREEMENTS. Xxxxxx Health Care Group, Inc., and
each of Xxxxx Xxx Xxxxxx, Xx., Xxxx Xxxxxx, Xxxxx Xxxxxx and Xxxx Xxxxx, shall
have executed the Employment Agreements.
(p) SHAREHOLDERS' AGREEMENTS. Each of the Companies and each
party included in Seller shall execute all documents which are necessary and
appropriate in order to either terminate all agreements entered into between
the Company and Seller or whereby the Seller shall waive all of his or her
rights arising under any such Shareholders' Agreements.
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6.02. CONDITIONS PRECEDENT TO OBLIGATION OF SELLER. The obligation of
Seller to proceed with the Closing under this Agreement is subject to the
fulfillment prior to or at Closing of the following conditions, any one or more
of which may be waived in whole or in part by Seller at Seller's sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each
of the representations and warranties of Buyer contained in this Agreement
shall be true and correct in all material respects on and as of the Effective
Closing Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Effective Closing
Date. Buyer shall have performed all of the covenants and complied in all
respects with all of the provisions required by this Agreement to be performed
or complied with by it at or before the Closing.
(b) LITIGATION. No Law shall be in effect that restrains or
prohibits the transactions contemplated hereby, and there shall not have been
threatened, nor shall there be pending, any action or proceeding by or before
any Governmental Body challenging the lawfulness of or seeking to prevent or
delay any of the transactions contemplated by this Agreement or the Other
Agreements or seeking monetary or other relief by reason of the consummation of
such transactions.
(c) NO MATERIAL ADVERSE CHANGE. Between the date hereof and the
Effective Closing Date, there shall have been no material adverse change,
regardless of insurance coverage therefor, in the business or any of the
assets, results of operations, liabilities, or condition, financial or
otherwise, of Buyer.
(d) CLOSING CERTIFICATE. Buyer shall have delivered a
certificate, dated the Effective Closing Date, in such detail as Seller shall
request, certifying to the fulfillment of the conditions set forth in
subparagraphs (a) and (b) of this Section 6.02. Such certificate shall
constitute a representation and warranty of Buyer with regard to the matters
therein for purposes of this Agreement.
(e) CLOSING DOCUMENTS. Seller shall also have received the other
documents referred to in Section 6.03(b). All agreements, certificates,
opinions and other documents delivered by Buyer to Seller hereunder shall be in
form and substance reasonably satisfactory to Seller.
(f) MANAGEMENT AGREEMENT. BCC's affiliates shall have entered
into the Management Agreement.
(g) XXXXXX PURCHASE AGREEMENT. BCC or its affiliates shall have
entered into the Xxxxxx Health Care Group Purchase Agreement.
(h) EXCHANGE AGREEMENT. BCC shall have entered into the Exchange
Agreement and shall have performed all actions necessary on Buyer's part to
consummate the transactions contemplated thereby.
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(i) ESCROW AGREEMENT. Buyer, Seller, and Escrow Agent shall have
entered into the Escrow Agreement.
(j) RIGHT OF FIRST REFUSAL AGREEMENT. BCC shall have executed
the Right of First Refusal Agreement.
(k) COVENANT NOT TO COMPETE. Each of Buyer and Seller shall have
executed a Covenant Not to Compete and Buyer shall have made the payment
required thereby.
(1) XXXXX LEASE. BCC shall have executed an Indemnification
Agreement in the form of Exhibit 6.02(1) whereby BCC shall agree to indemnify,
defend, and hold harmless Xxxx X. Xxxxxx, Xxxx X. Xxxxxx, and Xxxxx X. Xxxxxx
from any liabilities which may arise after the Closing Date as a result of the
Guaranty Agreement of payment and performance by Xxxxx Management, Inc., under
the Lease (as amended) between Noble House of Xxxxx, Inc., as landlord, and
Xxxxx Management, Inc., assignee of Xxxxx Oaks Health Care Centre, Inc., as
tenant. Buyer hereby waives any obligation which Seller might otherwise have to
deliver to Buyer evidence of consent by Noble House of Xxxxx, Inc., to any
transaction contemplated in this Stock Purchase Agreement or any Other
Agreement.
(m) EMPLOYMENT AGREEMENTS. Buyer shall have executed the
Employment Agreements and such Employment Agreements shall each include the
following:
(i) Buyer shall guaranty all obligations of Xxxxxx Health
Care Group, Inc. ("FHCG") arising from and after the earlier of eighteen months
after the Closing or the date when the assets of FHCG shall be transferred to
BCC pursuant to the Xxxxxx Purchase Agreement.
(ii) FHCG shall agree to assign such Employment Agreement to
BCC and BCC shall agree to accept such assignment and shall agree to take over
and perform all obligations of FHCG from and after the date defined in (i)
above.
(n) SHAREHOLDERS' AGREEMENTS. Each of the Companies and each
party included in Seller shall execute all documents which are necessary and
appropriate in order to either terminate all agreements entered into between
the Company and Seller or whereby the Seller shall waive all of his or her
rights arising under any such Shareholders' Agreements.
(o) PROMISSORY NOTE AND STOCK PLEDGE AGREEMENT. If Buyer shall
elect to pay the Purchase Price by delivery of a Promissory Note, Buyer shall
execute and deliver the Promissory Note in the form of Exhibit 2.04(1), and
Buyer and the Escrow Agent shall execute the Stock Pledge Agreement.
6.03. DELIVERIES AND PROCEEDINGS AT CLOSING.
(a) DELIVERIES BY SELLER. Seller shall deliver or cause to be
delivered to Buyer at the Closing:
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(i) Certificates representing the Shares duly endorsed in
negotiable form or accompanied by stock powers duly executed in blank, in
either case with signatures guaranteed by a commercial bank or brokerage firm
and with all transfer taxes, if any, paid in full.
(ii) Certificates of the appropriate public officials to the
effect that each Company was a validly existing corporation in good standing in
its state of incorporation as of a date not more than 10 days prior to the
Effective Closing Date.
(iii) Incumbency and specimen signature certificates dated
the Closing Date, signed by the officers of each Company and certified by their
respective Secretaries.
(iv) True and correct copies of (A) the Governing Documents
(other than the bylaws) of each Company as of a date not more than 10 days
prior to the Closing Date, certified by the Secretaries of State of their
respective states of incorporation and (B) the bylaws of each Company as of the
Closing Date, certified by their respective Secretaries.
(v) Certificates of the respective Secretaries of each
Company (A) setting forth all resolutions of the Board of Directors of the
Company authorizing the execution and delivery of this Agreement and the
performance by the Company of the transactions contemplated hereby, and (B) to
the effect that the Governing Documents of the Company delivered pursuant to
Section 6.03 (a)(iv) were in effect at the date of adoption of such
resolutions, the date of execution of this Agreement and the Closing Date.
(vi) General releases by all officers and directors of each
Company and by Seller and all Related Parties of all liability of the Company
to them and of any claim that they or any of them may have against the Company
(exclusive of pension obligations) in the form of Exhibit 6.03(a)(vi).
(vii) The minute books, stock ledgers and corporate seal of
each Company.
(viii) The opinion of Husch & Eppenberger, legal counsel to
Seller and the Company, in substantially the form of Exhibit 6.03(a)(viii).
(ix) Resignations of the officers and directors of the
Company effective at the Closing.
(x) The other named agreements and documents listed on
Schedule 6.03.
(xi) Such other agreements and documents as Buyer may
reasonably request.
(b) DELIVERIES BY BUYER. Buyer shall deliver or cause to be
delivered to Seller at the Closing:
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(i) A wire transfer of federal funds in accordance with
Section 2.05 pursuant to complete wire transfer instructions delivered by
Seller to Buyer in writing at least five days prior to Closing.
(ii) A certificate of the appropriate public official to the
effect that Buyer is a validly existing corporation in its state of
incorporation as of a date not more than 10 days prior to the Closing Date.
(iii) Incumbency and specimen signature certificates signed
by the officers of Buyer and certified by the Secretary of Buyer.
(iv) True and correct copies of (A) the Governing Documents
(other than the bylaws) of Buyer as of a date not more than 10 days prior to
the Closing Date, certified by the Secretary of State of the state of Buyer's
incorporation and (B) the bylaws of Buyer as of the Closing Date, certified by
the Secretary of Buyer.
(v) A certificate of the Secretary of Buyer (A) setting
forth all resolutions of the Board of Directors of Buyer authorizing the
execution and delivery of this Agreement and the performance by Buyer of the
transactions contemplated hereby, certified by the Secretary of Buyer and (B)
to the effect that the Governing Documents of Buyer delivered pursuant to
Section 6.03(b)(iv) were in effect at the date of adoption of such resolutions,
the date of execution of this Agreement and the Closing Date.
(vi) The opinion of Xxxxxxxxxxx & Xxxxxxxx LLP, Buyer's
legal counsel, in substantially the form of Exhibit 6.03(b)(vi).
(vii) The other named agreements and documents listed on
Schedule 6.03.
(viii) Such other agreements and documents as Seller may
reasonably request.
6.04. TERMINATION. This Agreement may be terminated at any time prior
to Closing by: (i) mutual consent of Buyer and Seller; (ii) Buyer, if any of
the conditions specified in Section 6.01 hereof shall not have been fulfilled
by August 29, 1996, and shall not have been waived by Buyer; or (iii) Seller,
if any of the conditions specified in Section 6.02 hereof shall not have been
fulfilled by August 29, 1996, and shall not have been waived by Seller. In the
event of termination of this Agreement by either Buyer or Seller pursuant to
clause (ii) or (iii) of the immediately preceding sentence, Buyer, on the one
hand, and Seller and the Company, on the other hand, shall be liable to the
other for any breach hereof by such party, which breach led to such
termination, and the rights and obligations of the parties set forth in
Sections 7.02, 7.03, and 8.01 shall survive such termination. Buyer, on the one
hand, and Seller and the Company, on the other hand, shall also be entitled to
seek any other remedy to which it may be entitled at law or in equity in the
event of such termination, which remedies shall include injunctive relief and
specific performance.
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ARTICLE VII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.01. SURVIVAL OF REPRESENTATIONS. All representations, warranties and
agreements made by any party in this Agreement or pursuant hereto shall survive
the Closing, but all claims for damages made by virtue of such representations,
warranties and agreements shall be made under, and subject to the limitations
set forth in, this Article VII. The representations and warranties set forth in
Articles III and IV are cumulative, and any limitation or qualification set
forth in any one representation and warranty therein shall not limit or qualify
any other representation and warranty therein. After Closing, no Company shall
have any liability to Seller for any breach of any representation or warranty
made by Seller or the Company to Buyer in this Agreement, in any certificate or
document furnished pursuant hereto by Seller or the Company or any Other
Agreement to which Seller or the Company, or both, is or is to become a party.
7.02. INDEMNIFICATION BY SELLER.
(a) BASIC INDEMNIFICATION. Seller shall indemnify, defend, save
and hold Buyer, BCC, and their respective officers, directors, employees,
agents and Affiliates (including, after the Closing, the Companies,
collectively, "Buyer 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, whether or not
the underlying demands, claims, allegations, etc., of third parties are
meritorious; collectively, "Buyer Damages") asserted against, imposed upon,
resulting to, required to be paid by or incurred by any Buyer Indemnitees,
directly or indirectly, in connection with, arising out of, which could result
in, or which would not have occurred but for, (i) a breach of any
representation or warranty made by Seller or the Company in this Agreement, in
any certificate or document furnished pursuant hereto by Seller or the Company
or any Other Agreement to which Seller or the Company, or both, is or is to
become a party, (ii) a breach or nonfulfillment of any covenant or agreement
made by Seller or the Company in or pursuant to this Agreement or in any Other
Agreement to which Seller or the Company, or both, is or is to become a party,
and (iii) any and all liabilities of the Company of any nature whatsoever,
whether due or to become due, whether accrued, absolute, contingent or
otherwise, existing on the Effective Closing Date or arising out of any
transaction entered into, or any state of facts existing, prior to the
Effective Closing Date, except for (i) liabilities fully reserved on the Fiscal
Year Financial Statements and/or the Estimated Interim Financial Statements,
but only to the extent reserved therein, (ii) those liabilities not required
under GAAP to be reserved in the Fiscal Year Financial Statements and/or the
Estimated Interim Financial Statements that are expressly quantified and set
forth in the Contracts, and (iii) obligations disclosed in this Agreement or in
any Other Agreement, Schedule, or Exhibit and (iv) obligations for Accounts
Payable which are not the responsibility of Seller pursuant to Section 5.10
above.
(b) PAYMENT OF BUYER DAMAGES. To the extent any Buyer Indemnitee
is entitled to collect Buyer Damages, Buyer shall, at its option, be entitled
to withdraw sufficient funds pursuant to the Escrow Agreement in lieu of
payment directly from Seller, and to the
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extent the amount due to any Buyer Indemnitee exceeds the balance of the funds
held under the Escrow Agreement, Buyer shall be entitled to collect such
balance owed to Buyer Indemnitee directly from Seller.
7.03. INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend, save
and hold Seller and Seller's heirs, personal representatives and assigns
(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, whether or not the underlying 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 Indemnitees, directly or indirectly, in
connection with, arising out of, which could result in, or which would not have
occurred but for, (i) a breach of any representation or warranty made by Buyer
in this Agreement or in any certificate or document furnished pursuant hereto
by Buyer or any Other Agreement to which Buyer is a party, (ii) a breach or
nonfulfillment of any covenant or agreement made by Buyer in or pursuant to
this Agreement and in any Other Agreement to which Buyer is a party, and (iii)
any and all liabilities of the Company of any nature whatsoever arising after
the Effective Closing Date or arising out of any transaction entered into, or
any state of facts which come into existence after the Effective Closing Date,
except for any liability which Seller has agreed hereunder to assume.
7.04. LIMITATION OF LIABILITY. Notwithstanding the foregoing, Seller's
obligations to indemnify Buyer Indemnitees against any Buyer Damages shall be
subject to all of the following limitations:
(a) THRESHOLD. No indemnification shall be made under clause (i)
of Section 7.02 until the aggregate amount of Buyer Damages thereunder exceeds
$100,000, but if the aggregate amount of Buyer Damages thereunder exceeds such
amount, indemnification shall be made by Seller thereunder to the full extent
of Buyer Damages.
(b) TIME PERIOD. Seller shall be obligated to indemnify Buyer
Indemnitees by virtue of clause (i) of Section 7.02 only for those Buyer
Damages as to which Buyer has given Seller written notice thereof within two
years after the Closing Date; provided, however, that with respect to any claim
for Buyer Damages sustained by reason of a breach of any representation or
warranty relating to those matters governed by Sections 3.10 and 3.24 Seller's
liability shall be limited to Buyer Damages as to which such written notice
shall have been given within the periods of the applicable federal and state
statutes of limitations related to such matters. Notwithstanding the foregoing,
Seller shall be obligated to indemnify Buyer Indemnitees for claims of alleged
breach of any representation or warranty of Seller with regard to the condition
of assets of the Company contained in Section 3.13 only if Buyer shall have
given Seller written notice of facts upon which the claim is based not later
than ninety days after the Closing.
(c) MAXIMUM LIABILITY. Notwithstanding any provision of this
Agreement to the contrary, the aggregate liability of Seller under (1) Section
7.03 above and (2) Section 7.03 of
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Exchange Agreements shall not in any event exceed $2,400,000, except for the
following: (i) claims as otherwise provided in Section 7.04(d) below; (ii)
claims arising under Sections 3.10 or 5.02 (taxes); and (iii) claims against
the Company for a refund of any amount previously received by the Company for
any Medicare reimbursement.
(d) FRAUD; INTENTIONAL MISREPRESENTATION. The limitations set
forth in Sections 7.04(a), (b), and (c) shall not apply to Buyer Damages
arising out of (i) fraud or (ii) the breach of any representation or warranty
contained herein or pursuant hereto if such representation or warranty was made
with actual knowledge that it contained an untrue statement of a fact or
omitted to state a fact necessary to make the statements of facts contained
therein not misleading.
7.05. NOTICE OF CLAIMS. If any Buyer Indemnitee or Seller Indemnitee
(an "Indemnified Party") believes that it has suffered or incurred or will
suffer or incur any Buyer Damages or Seller Damages, as the case may be
("Damages"), for which it is entitled to indemnification under this Article
VII, such Indemnified Party shall so notify the party or parties 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 VII or otherwise except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.
7.06. THIRD PARTY CLAIMS. The Indemnifying Party shall have the right
at its sole cost and expense to conduct and control, through counsel of its
choosing, the defense of any third party claim, action or suit, and the
Indemnifying Party may compromise or settle the same, provided that the
Indemnifying Party shall give the Indemnified Party advance notice of any
proposed compromise or settlement. The Indemnifying Party shall permit the
Indemnified Party to participate in the defense of any such action or suit
through counsel chosen by the Indemnified Party, provided that the fees and
expenses of such counsel shall be borne by the Indemnified Party. If the
Indemnifying Party shall control the conduct and settlement of such action or
suit, (i) the Indemnifying Party shall not thereby permit to exist any
Encumbrance upon any asset of the Indemnified Party; (ii) 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; (iii) the Indemnifying
Party shall permit the Indemnified Party to participate in such conduct or
settlement through counsel chosen by the Indemnified Party; and (iv) 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.
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ARTICLE VIII
MISCELLANEOUS
8.01. COSTS AND EXPENSES. Subject to Section 6.04., Buyer and Seller
shall each pay its respective expenses, brokers' fees and commissions, and
Seller shall pay all of the pre-Closing expenses of the Company incurred in
connection with this Agreement and the transactions contemplated hereby,
including all accounting, legal and appraisal fees and settlement charges.
8.02. FURTHER ASSURANCES. Seller shall, at any time and from time to
time on and after the Closing Date, upon request by Buyer and without further
consideration, take or cause to be taken such actions and execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
instruments, documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring, assigning,
delivering, assuring and confirming the Shares to Buyer or any of the assets
used in the Business to the Company.
8.03. NOTICES. All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given or made (i) the second business day after the date of mailing, if
delivered by registered or certified mail, postage prepaid, (ii) upon delivery,
if sent by hand delivery, (iii) upon delivery, if sent by prepaid courier, with
a record of receipt, or (iv) the next day after the date of dispatch, if sent
by cable, telegram, facsimile or telecopy (with a copy simultaneously sent by
registered or certified mail, postage prepaid, return receipt requested), to
the parties at the following addresses:
(i) if to Buyer, to:
F. Xxxxx Xxxx, President
Hawthorn Health Properties, Inc.
0000 Xxxxxxxx Xxxxxxx,
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
with a required copy to:
Xxxxxxx X. Xxxxxxx
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
Old Federal Reserve Bank Building
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
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with a required copy to:
Xxxx X. Xxxxxxxxx
Chairman and CEO
Balanced Care Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
with a required copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
Attn: Xxxx X. Xxxxxx, Esquire
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
(ii) if to Seller, to:
Xx. Xxxxx Xxx Xxxxxx
President and CEO
Xxxxxx Health Care Group
000 X. Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
with a required copy to:
Xxxxxx Xxxxxxxxxx
Xxxxx & Eppenberger
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx Xxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Notices to each Company shall be addressed in care of Seller before Closing and
in care of Buyer after Closing. Any party hereto may change the address to
which notice to it, or copies thereof, shall be addressed, by giving notice
thereof to the other parties hereto in conformity with the foregoing.
8.04. CURRENCY. All currency references herein are to United States
dollars.
8.05. OFFSET; ASSIGNMENT; GOVERNING LAW. Buyer shall be entitled to
offset or recoup from any amounts due to Seller from Buyer hereunder or under
any Other Agreement against any obligation of Seller to Buyer hereunder or
under any Other Agreement. This Agreement and all
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the rights and powers granted hereby shall bind and inure to the benefit of the
parties hereto and their respective permitted successors and assigns. This
Agreement and the rights, interests and obligations hereunder may not be
assigned by any party hereto without the prior written consent of the other
parties hereto, except that Buyer may make such assignments to any Affiliate of
Buyer provided that Buyer remains liable hereunder. This Agreement shall be
governed by and construed in accordance with the laws of the Missouri without
regard to its conflict of law doctrines.
8.06. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. To be effective, any
amendment or waiver under this Agreement must be in writing and be signed by
the party against whom enforcement of the same is sought. Neither the failure
of any party hereto to exercise any right, power or remedy provided under this
Agreement or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any
such right, power or remedy or to demand such compliance. The rights and
remedies of the parties hereto are cumulative and not exclusive of the rights
and remedies that they otherwise might have now or hereafter, at law, in
equity, by statute or otherwise.
8.07. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement
and the Schedules and Exhibits set forth all of the promises, covenants,
agreements, conditions and undertakings between the parties hereto with respect
to the subject matter hereof, and supersede all prior or contemporaneous
agreements and understandings, negotiations, inducements or conditions, express
or implied, oral or written, including the letter of intent. This Agreement is
not intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder, except the provisions of Sections 7.02 and 7.03 relating
to Buyer Indemnitees and Seller Indemnitees, provided, however, that BCC shall
be a third party beneficiary of Buyer's rights hereunder.
8.08. SEVERABILITY. If any term or other provision of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced under any rule of Law in any particular respect or
under any particular circumstances, such term or provision shall nevertheless
remain in full force and effect in all other respects and under all other
circumstances, and all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the fullest extent possible.
8.09. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS
OF THE DAY AND YEAR FIRST ABOVE WRITTEN.
SELLER
/s/ Xxxxx Xxx Xxxxxx, Xx.
----------------------------------------
Xxxxx Xxx Xxxxxx, Xx., both individually
and as Trustee of the Revocable Inter
Vivos Trust Agreement of Xxxxx Xxx
Xxxxxx dated February 4, 1988
/s/ Xxxx Xxxxxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxxx Xxxxxx
/s/ Xxxxx Xxx Xxxxxx, Xx.
----------------------------------------
Xxxxx Xxx Xxxxxx, Xx.
/s/ J. Xxxx Xxxxxx Xxxxxx
----------------------------------------
J. Xxxx Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxxxx Xxxxxx
/s/ Xxxx Xxxxxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxxx Xxxxxx
BUYER
Hawthorn Health Properties, Inc.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------
Title: Vice President
---------------------------------
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