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EXHIBIT 2.11
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into and is effective this
27th day of December, 1996, by and between Balanced Care Corporation, a
Delaware corporation ("Purchaser"), and ▇▇▇▇▇▇▇-▇▇▇▇ Health Care Center, Inc.,
a Pennsylvania corporation ("Seller").
RECITALS:
Seller owns a skilled nursing facility located at ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Facility"). Purchaser desires to purchase
substantially all of the assets of Seller and the Business (as hereinafter
defined) related thereto and Seller desires to sell such assets to Purchaser.
This Agreement sets forth the terms and conditions upon which
Purchaser is purchasing the assets (other than Excluded Assets, as hereinafter
defined) owned by Seller and used in the conduct of its Business, and Seller is
selling to Purchaser such assets (other than Excluded Assets).
In consideration of the mutual agreements, covenants, representations
and warranties contained herein, and in reliance thereon, Purchaser and Seller
hereby agree as follows:
ARTICLE I. CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 "Accounts Receivable" shall mean as of any date any trade accounts
receivable (including, without limitation, any third party receivables arising
in connection with any Third Party Payor Programs) notes receivable, bid or
performance deposits, employee advances and other miscellaneous receivables
associated with the Business through and as of such date.
1.2 "Accreditation Body" shall mean CARF, JCAHO, the Department of
Health, the Department of Welfare and all other Persons having jurisdiction
over the accreditation, certification, evaluation or operation of the Business.
1.3 "Accrued Expenses" shall mean as of any date accrued rents,
insurance premiums, payroll and benefits (including, without limitation,
vacation, sick pay, disability pay) and other accrued expenses as would appear
on a balance sheet of the Business as of such date prepared in accordance with
GAAP consistently applied, including those described in Schedule 1.3.
1.4 "Affiliate" shall mean any company or other entity which controls,
is controlled by or is under common control with the designated Party. For the
purpose of the foregoing, ownership, directly or indirectly, of 20% or more of
the voting stock or other equity interest shall be deemed to constitute
control.
1.5 "Agreement" shall mean this Asset Purchase Agreement.
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1.6 "Ancillary Agreements" shall mean the real property conveyances
described in Section 5.2.1, the ▇▇▇▇ of sale, assignment and assumption
described in Section 5.2.2, the Escrow Agreement described in Section 14.2 and
the Employment Agreements described in Section 10.9 .
1.7 "Assumed Liabilities" shall have the meaning given to it in
Section 4.2.
1.8 "▇▇▇▇▇▇" shall mean ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
1.9 "Books and Records" shall have the meaning given to it in
Section 6.15.
1.10 "Business" shall mean the operation of a skilled nursing facility
and any other ancillary health care services owned, operated, delivered,
managed, developed, constructed, maintained, used, occupied or possessed by
Seller in connection therewith (including, without limitation, any outpatient
and contract rehab therapy services or any Alzheimer's units).
1.11 "CARF" shall mean the Commission on Accreditation of
Rehabilitation Facilities.
1.12 "Champus" shall mean the Civilian Health and Medical Program of
the Uniform Service, a program of medical benefits covering retirees and
dependents of members or former members of a uniformed service provided,
financed and supervised by the United States Department of Defense and
established by 10 U.S.C Sections 1071 et seq.
1.13 "Closing" shall have the meaning given to it in Section 5.1.
1.14 "Closing Date" shall have the meaning given to it in Section 5.1.
1.15 "Closing Inventory" shall mean all Inventory relating to the
Business on the Closing Date.
1.16 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time, and any successor thereto. Any reference herein to a
specific section or sections of the Code shall be deemed to include a reference
to any corresponding provision of future law.
1.17 "Contract" shall mean all alliance agreements, transfer
agreements, other agreements (including, without limitation, Resident/Patient's
Agreements, Management Agreements and Provider Agreements), contracts, contract
rights, commitments, customer accounts, orders, leases, guaranties, warranties
and representations, franchises and books and records of account benefiting,
relating to the Purchased Assets or the operation of the Business or the
ownership, construction, development, maintenance, repair, management, use,
occupancy, possession or operation thereof, or the operation of any of the
programs or services in conjunction with the Business and all renewals,
replacements and substitutions therefor, issued by any Governmental Authority,
Accreditation Body or Third Party Payor or maintained or used
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by Seller with any third Person.
1.18 "Current Liabilities" shall mean all liabilities classified
as current liabilities in accordance with GAAP.
1.19 "Damages" shall have the meaning given to such term in
Section 14.4.
1.20 "Department of Health" shall mean the Commonwealth of
Pennsylvania, Department of Health.
1.21 "Department of Welfare" shall mean the Commonwealth of
Pennsylvania, Department of Public Welfare.
1.21a "Deposit Fund" shall mean $30,000 to be paid by Purchaser and
held by the Escrow Agent pursuant to the terms and conditions of the Escrow
Agreement.
1.22 "Due Diligence Date" shall mean January 15, 1997
1.23 "Employee" shall mean any individual employed by Seller in the
conduct of the Business as listed on Schedule 1.23 (such Schedule being subject
to change between the date hereof and the Closing Date as a result of employee
changes in the ordinary course of Seller's business consistent with past
practices).
1.24 "Employment Agreements" shall mean the contracts entered into
between Purchaser and each of ▇▇▇▇▇ and ▇▇▇▇▇▇ in substantially the form of
Exhibit 1.24.
1.25 "Encumbrance" shall mean any right to, or interest in, property,
which subsists in a third-party and which constitutes a claim, lien, charge or
liability attached to and binding upon the property, including, but not limited
to, a mortgage, judgment lien, mechanic's lien, lease, security interest,
easement and right-of-way.
1.26 "Environmental Law" shall mean any federal [including but not
limited to the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et
seq.), the Toxic Substances Control Act (15 U.S.C. Sections 2601 et seq.), the
Clean Air Act (42 U.S.C. Sections 7401 et seq.), the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Sections 9601
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901
et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Sections 1801
et seq.), and the Federal Insecticide Fungicide and Rodenticide Act (7 U.S.C.
Sections 136 et seq.)], other Legal Requirements, any common law doctrine and
any provision or condition of any permit, license or other operating
authorization relating to (i) the protection of the environment or the public
welfare from actual or potential exposure (or the effects of exposure) to any
actual or potential release, discharge, disposal or emission (whether past or
present) of any Regulated Substance or (ii) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Regulated Substance.
1.27 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as
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amended.
1.28 "ERISA Plans" shall mean defined benefit pension plans and
defined contribution pension plans qualified under Section 401(a) of the Code.
1.29 "Escrow Agent" shall mean Mellon Bank.
1.30 "Escrow Agreement" shall mean the escrow agreement entered into
between Escrow Agent, Seller and Purchaser in substantially the form of Exhibit
1.30.
1.31 "Escrow Fund" shall mean $125,000 to be held by the Escrow Agent
pursuant to the terms and conditions of the Escrow Agreement.
1.32 "Excluded Assets" shall mean those assets that are not included
in the sale contemplated hereby and as are further defined in Section 2.2.
1.32a "Facility" shall have the meaning given to such term in the
Recitals of this Agreement.
1.33 "GAAP" shall mean generally accepted accounting principles in the
United States of America.
1.34 "Governmental Authorities" shall mean all agencies, authorities,
bodies, boards, commissions, courts, instrumentalities, legislatures and
offices of any nature whatsoever of any government, quasi-governmental unit or
political subdivision, whether with a federal, state, county, district,
municipal, city or otherwise.
1.35 "Indemnifying Party" shall have the meaning given to such term in
Section 14.4.
1.36 "Indemnified Party" shall have the meaning given to such term in
Section 14.4.
1.37 "Inventory" shall mean the inventory of Seller, including,
without limitation, dry storage goods, janitorial supplies, food and beverage
supplies, office supplies, medical supplies and pharmaceutical supplies.
1.38 "JCAHO" shall mean the Joint Commission on Accreditation of
Healthcare Organizations.
1.39 "▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
1.39a "Keystone Management Services" shall mean Keystone Management
Services, a Pennsylvania general partnership, consisting of its general
partners, ▇▇▇▇▇ and ▇▇▇▇▇▇.
1.40 "Knowledge" and words of similar import shall mean, with respect
to Purchaser, actual knowledge of a particular fact or other matter being
possessed by an officer or other individual now or formerly having principal
responsibility for a business or administrative
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function of such Party, including individuals serving in such a capacity in or
for the Business, and the knowledge that reasonably could be expected to be
obtained in the course of conducting a reasonably comprehensive investigation
concerning the subject matter.
1.41 "Legal Requirements" shall mean all statutes, ordinances,
by-laws, codes, rules, regulations, restrictions, orders, judgments, decrees
and injunctions (including, without limitation, all applicable building, health
code, zoning, subdivision and other land use and health care licensing
statutes, ordinances, by-laws, codes, rules and regulations), promulgated or
issued by any Governmental Authority, Accreditation Body or Third Party Payor.
Without limiting the foregoing, the term Legal Requirements includes all
Environmental Laws and all Permits and Contracts issued or entered into by any
Governmental Authority, any Accreditation Body and/or any Third Party Payor and
all Permitted Encumbrances.
1.42 "Managed Care Plans" shall mean all health maintenance
organizations, preferred provider organizations, individual practice
associations, competitive medical plans and similar arrangements.
1.43 "Management Agreement" shall mean any agreement, whether written
or oral, between Seller and any other Person pursuant to which Seller provides
any payment, fee or other consideration to any other Person to operate or
manage the Business (except any employment agreements).
1.44 "Medicaid" shall mean the medical assistance program established
by Title XIX of the Social Security Act (42 U.S.C. Sections 1396 et seq.) and
any statute succeeding thereto.
1.45 "Medicare" shall mean the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act (42 U.S.C.
Sections 1395 et seq.) and any statute succeeding thereto.
1.46 "Other Agreements shall mean the agreements set forth on Schedule
1.46, including any other agreements executed and delivered under or in
connection therewith.
1.47 "Other Companies" shall mean the companies identified on Schedule
1.47
1.48 "Party" shall mean either Seller or Purchaser, individually, as
the context so requires, and the term "Parties" shall mean Seller and Purchaser
together.
1.49 "Payables" as of any date shall mean any of the trade accounts
payable associated with the Business as of such date in accordance with GAAP
consistently applied.
1.50 "Payroll Practice / Employee Arrangement" shall have the meaning
given to such term in Section 6.18.
1.51 "Permits" shall mean all permits, licenses, approvals,
qualifications, rights, variances, permissive uses, accreditations,
certificates, certifications, consents, contracts, interim
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licences, permits and other authorizations of every nature whatsoever required
by, or issued to or on behalf of Seller under, any Legal Requirements
benefiting, relating or effecting the Business or the construction, development,
maintenance, management, use or operation thereof, or the operation of any
programs or services in conjunction with the Business and all renewals,
replacements and substitutions therefor, now or hereafter required or issued by
any Governmental Authority, Accreditation Body or Third Party Payor.
1.52 "Permitted Encumbrances" shall mean those Encumbrances as
specifically set forth on Schedule 1.52 hereto.
1.53 "Person" shall mean any individual, corporation, company, limited
or general partnership, trust or estate, joint venture, association or other
entity.
1.54 "Prepaid Expenses" as of any date shall mean payments made by
Seller with respect to the Business which constitute prepaid expenses of the
Business in accordance with GAAP consistently applied.
1.55 [RESERVED].
1.56 "Proprietary Rights" shall have the meaning given to such term in
Section 6.9.1.
1.57 "Provider Agreements" shall mean all participation, provider and
reimbursement agreements or arrangements for the benefit of Seller in
connection with the operation of the Business relating to any right to payment
or other claim arising out of or in connection with Seller's participation in
any Third Party Payor Program.
1.58 "Purchase Price" shall have the meaning given to such term in
Section 3.1.1.
1.59 "Purchased Assets" shall have the meaning given to such term in
Section 2.1.
1.60 "Purchaser" shall have the meaning given to such term in the
preamble of this Agreement.
1.61 "Purchaser Damages" shall have the meaning given to such term in
Section 14.2.
1.61a "Purchaser's Due Diligence" shall have the meaning given to such
term in Section 9.2.
1.62 "Purchaser Indemnitees" shall have the meaning given to such term
in Section 14.2.
1.63 "Real Property" shall mean the Real Property Leased and the Real
Property Owned, collectively.
1.64 "Real Property Leased" shall mean the real property leased by
Seller in connection
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with the Business as more fully described in Schedule 1.64 hereto.
1.65 "Real Property Owned" shall mean the real property owned by
Seller, and used in connection with the Business as more fully described in
Schedule 1.65 hereto.
1.66 "Regulated Substance" shall mean petroleum, petroleum
hydrocarbons or petroleum products and any other chemical, material, substance
or waste that is identified (by listing or characteristic) and regulated (or
the clean-up of which can be required) by any Legal Requirement intended to
protect the environment or the public health or welfare, including but not
limited to Legal Requirements relating to clean air, clean water, hazardous and
solid waste disposal, safe drinking water, endangered species, occupational
safety and health, oil spill prevention, groundwater protection, and toxic
substances control.
1.67 "Related Party" means (i) Seller, (ii) any Affiliate of Seller,
(iii) any officer, director, shareholder or partner of any Person identified in
clauses (i) or (ii) preceding, and (iv) any spouse, sibling, ancestor or lineal
descendant of any natural Person identified in any one of the preceding
clauses.
1.68 "Resident/Patient's Agreements" shall mean all contracts,
agreements and consents executed by or on behalf of any resident, patient or
other Person seeking services at the Facility as more fully described in
Schedule 1.68 hereto, including, without limitation, assignments of benefits
and guarantees, and such resident/patient's related medical and/or other
records.
1.69 "Retained Liabilities" has the meaning given that term in
Section 4.2.
1.70 "Security Right" means, with respect to any security, any option,
warrant, subscription right, preemptive right, other right, proxy, put, call,
demand, plan, commitment, agreement, understanding or arrangement of any kind
relating to such security, whether issued or unissued, or any other security
convertible into or exchangeable for any such security. "Security Right"
includes any right relating to issuance, sale, assignment, transfer, purchase,
redemption, conversion, exchange, registration or voting and includes rights
conferred by statute, by the issuer's governing documents or by agreement.
1.71 "Seller" shall have the meaning given to such term in the
preamble of this Agreement, individually and collectively, as the context may
require.
1.72 "Seller Damages" shall have the meaning given to such term in
Section 14.3.
1.73 "Seller Indemnitees" shall have the meaning given to such term in
Section 14.3.
1.74 "Seller's Accountants" shall have the meaning given to it in
Section 6.4.
1.74a "Seller's Knowledge" and words of similar import shall mean,
with respect to Seller, actual knowledge of a particular fact or other matter
being possessed by ▇▇▇▇▇ and/or
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▇▇▇▇▇▇ and the knowledge that reasonably could be expected to be obtained
concerning the subject matter by ▇▇▇▇▇ and ▇▇▇▇▇▇ in the ordinary course of
their ownership and operation of the Business.
1.74b "Survival Date" shall have the meaning given to such term in
Section 14.1.
1.75 "Taxes" shall mean all taxes, duties, charges, fees, levies or
other assessments imposed by any Governmental Authority, including, without
limitation, income, gross receipts, value-added, excise, withholding, personal
property, real estate, sales, use, ad valorem, license, lease, service,
severance, stamp, transfer, payroll, employment, customs, duties, alternative,
add-on minimum, estimated and franchise taxes (including any interest,
penalties or additions attributable to or imposed on or with respect to day
such assessment).
1.76 "Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to any Tax, including any
schedule or attachment thereto, and including any amendment thereof.
1.77 "Third Party Payor Programs" shall mean all third party payor
programs which Seller participates, including, without limitation, Medicare,
Medicaid, Champus, Blue Cross and/or Blue Shield, Managed Care Plans, other
private insurance plans and employee assistance programs.
1.78 "Third Party Payors" shall mean Medicare, Medicaid, Blue Cross
and/or Blue Shield, private insurers and any other Person which maintains Third
Party Payor Programs.
ARTICLE II. TRANSFER OF ASSETS AND PROPERTIES
2.1 Purchased Assets. Subject to the terms and conditions of this
Agreement, Seller shall sell and convey to Purchaser, free and clear of all
Encumbrances whatsoever (other than Permitted Encumbrances and except as
expressly provided herein), and Purchaser shall purchase from Seller, the
Business as a going concern and all Seller's rights, title and interest in and
to the assets, properties and rights of every kind and description, real,
personal and mixed, tangible and intangible, wherever situated owned by Seller
and used in the Business (the "Purchased Assets") as the same shall exist on
the Closing Date (other than the Excluded Assets), including, without
limitation, the following:
2.1.1 Real Property. Owned The Real Property Owned, together
with the buildings, structures, improvements and fixtures located
thereon, and all rights, privileges, easements, licenses,
hereditaments and other appurtenances relating thereto;
2.1.2 Real Property Leased. Seller's interest, as lessee, in
the Real Property Leased;
2.1.3 Equipment, Machinery and Other Tangible Personal
Property. All
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machinery, equipment, leasehold improvements, automobiles, supplies,
office furniture and office equipment, computing and telecommunications
equipment and other items of personal property that are owned by Seller
and used in connection with the Business, including those described in
Schedule 2.1.3 hereto;
2.1.4 Contracts Relating to the Business. All of the interest
of Seller in all Contracts relating to the acquisition or ownership by
Seller of any of the Purchased Assets or the operation of the
Business, the Resident/Patient's Agreements listed on Schedule 1.68
hereto and those Contracts not required to be listed on 2.1.4 by
reason of the provisions of Section 6.10.
2.1.5 Sales, Rental and Marketing Materials, Manuals. All
sales data, rental data, catalogs, brochures, reference sources,
suppliers' names, mailing lists, art work, photographs, public
relations material and advertising material used in the Business,
whether in electronic form or otherwise;
2.1.6 Permits, Licenses. All of Seller's interest in Permits
relating to the Business, including those listed in Schedule 2.1.6
hereto, to the extent such Permits are transferable to Purchaser;
2.1.7 Trade Secrets. All policies and procedures, methods
of delivery of services, trade secrets, designs, drawings and
specifications, market studies, consultants' reports, prototypes, and
all similar property of any nature, tangible or intangible, of Seller
used in the Business;
2.1.8 Intellectual Property. All right, title and interest of
Seller in the patents, trademarks, trademark registrations, trade
names, service marks, copyrights and copyright registrations described
in Schedule 2.1.8;
2.1.9 [RESERVED];
2.1.10 Goodwill. All of the interest of Seller in and to the
goodwill incident to the Business, including but not limited to the
value of the Facility name associated with the Business and the value
of good customer relations;
2.1.11 Inventory. All Closing Inventory;
2.1.12 Resident/Patient Funds. All deposits and escrow
accounts of, or for the benefit of, any of Seller's resident/patients
at the Closing Date;
2.1.13 Prepaid Expenses. All Seller's Prepaid Expenses of, or
for the benefit of, the Business at the Closing Date including those
described in Schedule 2.1.13, to the extent the benefits thereof are
transferable to Purchaser;
2.1.14 Computer Software. All computer applications software,
owned or
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licensed, whether for general business usage (e.g., accounting, word
processing, graphics, spreadsheet analysis, etc.), or specific,
unique-to-the-business usage, and all computer operating, security or
programming software, owned or licensed by Seller and used in the
operation of the Business; and
2.1.15 Other Intangible Assets. All other intangible assets
(including all causes of action, rights of action, contract rights and
warranty and product liability claims against third parties) relating
to the Purchased Assets or the Business.
2.2 Excluded Assets. Notwithstanding Section 2.1, the following assets
(collectively, the "Excluded Assets") shall be excluded from this Agreement, and
shall not be assigned or transferred to Purchaser:
2.2.1 Accounts Receivable. All Accounts Receivable of
Seller existing on the Closing Date;
2.2.2 Cash. All other cash, cash equivalents on hand or in
bank accounts, short-term notes receivable and unbilled costs and fees
up through and including the Closing Date;
2.2.3 Consideration. The consideration paid to Seller
pursuant to this Agreement;
2.2.4 Pensions. Assets constituting any pension or other
funds for the benefit of Employees existing on the Closing Date;
2.2.5 Corporate Books. Corporate minute books and stock books
of Seller;
2.2.6 Third Party Claims. Any claims and rights against third
parties (including, without limitation, insurance carriers) to the
extent they relate to liabilities or obligations that are not assumed
by Purchaser hereunder (except the amount of costs and expenses
Purchaser shall have incurred with respect to such claims and rights);
2.2.7 Taxes. Claims for refunds of Taxes and other charges
imposed by any Governmental Authority; and
2.2.8 Other Assets. Assets listed on Schedule 2.2.8.
2.3 License to Use Certain Assets To the extent that there are any
tangible or intangible assets used by Seller in connection with the Business
that are not specifically designated as Excluded Assets by Section 2.2 (without
reference to this Section), the Purchased Assets shall include an irrevocable,
nonexclusive, perpetual, paid-up, royalty-free, transferable license to
utilize such assets in connection with the operation of the Business after the
Closing Date. To the extent that any such assets may not be licensed, Seller
shall take all steps required to assure that Purchaser obtains the benefit of
such assets.
ARTICLE III. CONSIDERATION AND TERMS
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3.1 Consideration for Purchased Assets
3.1.1 Purchase Price. The aggregate consideration to be paid
by Purchaser to Seller for the Purchased Assets and the Business (the
"Purchase Price") shall be in the amount of $2,286,000, to be paid by
certified or cashier's check drawn on a national bank or by wire
transfer as follows:
(i) the Purchase Price less the sum of the Deposit Fund
and the Escrow Fund to Seller at the time of
Closing;
(ii) the Escrow Fund to Escrow Agent at the time of
Closing to be held in escrow pursuant to the Escrow
Agreement; and
(iii) upon execution and delivery hereof, the Deposit Fund
to Escrow Agent to be held in escrow pursuant to the
Escrow Agreement.
3.1.2 Other Consideration. As additional consideration, Purchaser shall
also assume the Assumed Liabilities at the time of Closing.
3.3 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Purchased Assets and the Business in accordance with the allocation
set forth in Schedule 3.3. Purchaser and Seller shall report the federal, state
and local income and other tax consequences of the purchase and sale
contemplated hereby in a manner consistent with such allocation.
ARTICLE IV. ASSUMPTION OF LIABILITIES; EMPLOYEE MATTERS
4.1 General Limitation on Assumption of Liabilities. Except for
Permitted Encumbrances and as otherwise provided in Sections 4.2, 4.3 and 4.4
below, Seller shall transfer the Purchased Assets to Purchaser free and clear
of all Encumbrances, and without any assumption of liabilities and obligations,
and Purchaser shall not, by virtue of its purchase of the Purchased Assets,
assume or become responsible for any liabilities or obligations of Seller or
any other Person. For purposes of this Section 4.1 the phrase "liabilities and
obligations" shall include, without limitation, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated, secured
or unsecured.
4.2 Assumed Liabilities and Obligations. On the Closing Date, Purchaser
shall acquire the Purchased Assets subject only to, and shall undertake, assume,
perform and otherwise pay, satisfy and discharge, and hold Seller harmless from
the following liabilities and obligations, excluding any liabilities and
obligations to Affiliates of Seller (collectively, the "Assumed Liabilities"):
(i) all obligations of Seller accruing subsequent to the Closing
Date under the
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Contracts contemplated by Section 2.1.4, including, without
limitation, those set forth in Schedule 1.68 and Schedule
2.1.4, provided that the rights thereunder have been duly and
effectively assigned to Purchaser; and
(ii) all obligations of Seller accruing after the Closing Date
under the Permits described in Section 2.1.6, provided that
the rights thereunder have been duly and effectively assigned
to Purchaser.
Except for the Assumed Liabilities, Purchaser does not and shall not
assume or in any way undertake to pay, perform, satisfy or discharge any other
liability of Seller existing on the Closing Date or arising out of any
transactions entered into, or any state of facts existing, prior to the Closing
Date (the "Retained Liabilities"), and Seller agrees to pay and satisfy when
due all Retained Liabilities. Except for the obligations and liabilities
included in the Assumed Liabilities, the term "Retained Liabilities" shall
include, without limitation, liabilities:
(i) for or in connection with any dividends, distributions,
redemptions, or Security Rights with respect to any security
of Seller;
(ii) arising out of any transaction affecting Seller or
obligations incurred by Seller after Closing;
(iii) for expenses or fees incident to or arising out of the
negotiation, preparation, approval or authorization of this
Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, all legal
and accounting fees and all brokers or finders fees or
commissions payable by Seller;
(iv) under or arising out of this Agreement;
(v) against which Seller is insured or otherwise indemnified or
which would have been covered by insurance (or
indemnification) but for a claim by the insurer (or the
indemnitor) that the insured (or the indemnities) had
breached its obligations under the policy of insurance (or
the contract of indemnity) or had committed fraud in the
insurance application;
(vi) to any Related Party;
(viii) to indemnify Seller's officers, directors, shareholders,
Employees or agents;
(ix) Federal, state or local tax liabilities or obligations of
Seller in respect to periods prior to Closing, and the
transactions contemplated hereunder, including, without
limitation, income taxes payable under the Code, any income
tax, any franchise tax, any tax recapture, any FICA, workers'
compensation, vacation liability and other employee benefits,
any insurance premiums, rents, or other accruals and any and
all other taxes or amounts due or payable for a period prior
to Closing; notwithstanding the foregoing, all sales and use
taxes, transfer taxes, and all other
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impositions of tax arising solely by reason of the transfers
contemplated by this Agreement (excluding all federal, state
and local income and gross receipt taxes on the earnings or
gross receipts of Seller prior to the Closing Date, which
shall remain the sole responsibility of Seller) shall be the
responsibility of and shall be borne equally by Seller and
Purchaser (any real estate and personal property taxes for the
year in which Closing occurs shall be pro-rated to the Closing
Date (based on a calendar year or fiscal year for which such
taxes are levied basis), if the tax rates for the year in
which Closing occurs shall not be fixed prior to the Closing
Date for a particular item of the Purchased Assets, the
pro-ration of taxes thereon shall be based upon the tax rate
for the year prior to Closing applied to the latest assessment
valuation; however, in the event that any such taxes are
increased or decreased for the year in which Closing occurs,
Seller or Purchaser shall then reimburse the other party for
amounts in excess of or less than the proration as determined
as of the Closing Date);
(x) for long term indebtedness and other obligations or
guarantees of Seller;
(xi) for Current Liabilities reflected on the books of Seller at
the Closing Date; and
(xii) for Accrued Expenses and Payables reflected on the books of
Seller at the Closing Date.
4.3 Offer of Employment. Purchaser shall offer employment on and as of
Closing, on an at-will basis, to all Employees (except as indicated on Schedule
1.23) in substantially similar jobs, at the same base salaries or wages and
substantially the same benefits as were paid or provided by Seller immediately
prior to the Closing Date.
4.4 Vacation, Workers' Compensation and Disability Claims.
4.4.1 Seller's Liability. Seller shall remain liable for all
liability for all accrued vacation entitlements, workers' compensation,
disability and occupational diseases of or with respect to all of
Seller's Employees attributable to entitlements, injuries, claims,
conditions, events and occurrences occurring on or before the Closing
Date.
4.4.2 Purchaser's Liability. Purchaser shall be liable for all
liability for all vacation entitlements, workers' compensation,
disability and occupational diseases of or with respect to all of
Employees of Seller hired by Purchaser attributable to entitlements,
injuries, claims, conditions, events and occurrences first occurring
after the Closing Date.
ARTICLE V. CLOSING
5.1 Time; Location. The consummation of the purchase and sale of the
Purchased Assets shall take place on or after January 2, 1997, but in any event
not later than March 15, 1997 (the "Closing"). The date of the Closing shall be
referred to as the "Closing Date." The Closing shall take place at such time,
date and place as may be mutually agreed upon by the Parties.
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5.2 Documents. At Closing, Seller shall execute and deliver the
following instruments of transfer and assignment:
5.2.1 Deeds. Duly executed special warranty deeds, in
recordable form, transferring good and marketable fee simple title to
the Real Property Owned, subject only to Permitted Encumbrances, and
such affidavits or other instruments as Purchaser's title insurance
company may reasonably request, including but not limited to (i)
exceptions for (A) judgments, bankruptcies, taxes and municipal
claims, (B) parties in possession other than current occupants pursuant
to agreements with Seller and (C) mechanics' or materialmens' liens and
(ii) payoff letters, lien releases and satisfaction pieces and (iii)
gap indemnities;
5.2.2 ▇▇▇▇ of Sale. A general ▇▇▇▇ of sale, assignment and
assumption substantially in the form of Exhibit 5.2.2 hereto,
transferring to Purchaser good and indefeasible title to all of the
tangible personal property included in the Purchased Assets, subject
only to Permitted Encumbrances and the Assumed Liabilities and
assigning to Purchaser, to the extent assignable, Seller's right,
title and interest in each of the Contracts, Permits and other
agreements included in the Purchased Assets, together with all
consents of third parties that Seller has been able to obtain that are
required to make each such assignment effective to such third parties;
5.2.3 Title Certificates. Certificates of title to all
vehicles included in the Purchased Assets with assignments to
Purchaser;
5.2.4 Property Tax Statements. All real estate and personal
property tax statements or bills for or relating to the Real Property
or any of the other Purchased Assets for the applicable current tax
year or years, and all tax assessments or notices thereof upon which
such taxes are based;
5.2.5 Plans and Specifications. To the extent not delivered
prior to Closing, all plans, specifications and other drawings in
Seller's possession or reasonably obtainable by Seller and used in the
construction of the Facility or any renovations thereof (including,
without limitation, any as-built plans and architectural
specifications) and all guarantees and warranties made by third
parties with respect to the improvements, buildings, personalty, the
property under the Contracts or any of the other Purchased Assets;
5.2.6 Building Permits. To the extent not delivered prior to
Closing, all building permits, zoning permits, occupancy permits and
subdivision plans and, to the extent the following are in Seller's
possession or reasonably obtainable by Seller, surveys and hazardous
waste studies prepared within 36 months before the date hereof, for or
relating to the Purchased Assets;
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5.2.7 Contracts and Other Permits. To the extent not
delivered prior to Closing, all Contracts, Permits, or other
instruments or agreements relating to the ownership, operation, use,
occupancy, licensure, accreditation or maintenance of the Business;
and
5.2.8 Census. The census of Seller current as of two days
prior to the Closing Date.
5.2.9 Other Documents. The Ancillary Agreements, and such
additional instruments of conveyance and transfer as Purchaser may
reasonably require in order to more effectively vest in it, and put it
in possession of, the Purchased Assets.
5.3 Reasonable Steps Seller shall make such reasonable efforts as may
be appropriate so that on the Closing Date, Purchaser shall be placed in actual
possession and control of all of the Purchased Assets.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller represents and warrants
to Purchaser, that each of the following representations and warranties is true
and correct as of the date hereof:
6.1 Organization, Good Standing and Power. Seller is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation, and has all requisite corporate power and authority to execute
and deliver this Agreement and the Ancillary Agreements to which it is a party,
to consummate the transactions contemplated hereby and thereby and to perform
all the terms and conditions hereof and thereof and to be performed by it.
6.2 Authorization of Agreement and Enforceability. Seller has taken all
necessary corporate action to authorize the execution and delivery of this
Agreement and the Ancillary Agreements to which it is a party, the performance
by it of all terms and conditions hereof and thereof to be performed by it and
the consummation of the transactions contemplated hereby and thereby,
including, without limitation, obtaining such shareholder's consents as is
required under the Pennsylvania Business Corporation Law. This Agreement
constitutes, and the Ancillary Agreements to which Seller is party, upon
Seller's execution and delivery thereof, will constitute the legal, valid and
binding obligations of Seller, enforceable in accordance with their terms
except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws presently or hereafter in effect
relating to or affecting the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law).
6.3 No Violation; Consents. The execution, delivery and performance by
Seller of this Agreement and the Ancillary Agreements to which it is a party,
and the consummation of the transactions contemplated hereby and thereby will
not (with or without the giving of notice or the lapse of time, or both) (i)
violate any provision of the charter or bylaws of Seller, (ii) except with
respect to notices and consents required to be given by Seller to any
Accreditation Body or
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Governmental Authority in connection with the sale and change of ownership of
the Purchased Assets and the Business, violate or require any consent,
authorization or approval of, or exemption by, or filing under any provision of
any law, statute, rule or regulation to which Seller, the Business or the
Purchased Assets are subject, (iii) violate any judgment, order, writ or decree
of any court applicable to Seller, the Business or the Purchased Assets, (iv)
except with respect to agreements with Seller's lender and except as identified
on Schedule 2.1.4, conflict with, result in a breach of, constitute a default
under, or accelerate or permit the acceleration of the performance required by,
or require any consent, authorization or approval under any agreement, Contract,
commitment, lease or other instrument, document or undertaking to which Seller
is a party or any of the Purchased Assets is bound or (v) result in the creation
or imposition of any Encumbrances upon the Purchased Assets.
6.4 Financial Statements. Seller has delivered to Purchaser true and
complete copies of the (i) audited balance sheets of Seller at December 31,
1995, 1994 and 1993 and the related statements of income and cash flows for the
years then ended, certified by ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, independent public
accountants ("Seller's Accountants") and (ii) monthly statements of profit and
loss for the first 10 months of 1996 with respect to the operation of the
Facility. True and correct copies of such financial statements are attached
hereto as Schedule 6.4. The foregoing financial statements have been prepared
from the Books and Records of Seller in accordance with GAAP consistently
applied throughout the periods involved except as may be noted therein. Such
financial statements, including the related notes, are materially true and
correct and fairly present the financial position of the Business at the dates
indicated and the results of operations and cash flows of the Business for the
periods then ended in accordance with GAAP. The most recent interim financial
statements provided to Purchaser dated October 31, 1996 reflect all material
liabilities of Seller and there has been no material adverse change with
respect to the matters contained therein since the date thereof.
6.5 [RESERVED].
6.6 Inventory. The level of Inventory maintained by Seller and included
in the Purchased Assets is sufficient to carry on the Business as historically
conducted.
6.7 Absence of Certain Changes or Events. Except as set forth in
Schedule 6.7 hereto, since October 31, 1996, in connection with the Business,
Seller has not:
(i) amended in any material respect or terminated any
Contract other than in the ordinary course of
Seller's business consistent with past practice;
(ii) suffered the occurrence of any events that,
individually or in the aggregate, have had, or could
reasonably be expected to have, a material adverse
effect on the Purchased Assets or the results of
operations of the Business;
(iii) incurred any damage or destruction having a material
adverse effect on the Purchased Assets or the
results of operations of the Business by fire, storm
or similar casualty, whether or not covered by
insurance;
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(iv) sold, transferred, replaced or leased any of the
Purchased Assets or sold any Inventory at a
discount, except for transactions in the ordinary
course of Seller's business consistent with past
practice;
(v) waived or released any material rights with respect
to the Purchased Assets or the Business;
(vi) transferred or granted any rights to any Proprietary
Rights;
(vii) entered into any transaction or made any commitments
(for capital expenditures or otherwise) other than
in the ordinary course of Seller's business
consistent with past practice;
viii) changed its methods of accounting;
(ix) increased the compensation of Employees, except
following normal review procedures or as reasonably
deemed necessary in the ordinary course of Seller's
business consistent with past practice;
(x) suffered any major or key personnel changes; or
(xi) materially altered its conduct in its relations with
suppliers, residents and patients.
6.8 Title to Properties; Absence of Liens and Encumbrances. Seller
owns and will transfer to Purchaser at Closing good, marketable and
indefeasible title to all of the Purchased Assets subject to Closing, including
without limitation the Real Property (except as disclosed in Schedule 6.8 or
except as sold or otherwise disposed of by Seller in the ordinary course of
Seller's business consistent with past practice), free and clear of all
Encumbrances, other than Permitted Encumbrances. Seller has the right to quiet
enjoyment of all Real Property Leased in which it holds a leasehold interest
for the full term, including all renewal rights, of the lease or similar
agreement relating thereto. Copies of all existing title insurance policies
written in favor of Seller and all surveys relating to the Real Property in
Seller's possession or reasonably obtainable by Seller have been delivered to
Purchaser. Except as set forth on Schedule 6.8, all structures and other
improvements on the Real Property are in good order and repair and free from
any structural defects and are within the lot lines and do not encroach on the
properties of any other Person, and the use and operation of the Real Property
conforms to all applicable building, zoning, safety and subdivision laws,
Environmental Laws and other Legal Requirements, and all restrictive covenants
and restrictions and conditions affecting title. Except as disclosed on
Schedule 6.8, no portion of the Real Property is located in a flood plain,
flood hazard area or designated wetlands area. Seller has not received any
written or oral notice of assessments for public improvements against the Real
Property or any written or oral notice or order by any Governmental Authority,
any insurance company that has issued a policy with respect to any of such
properties or any board of fire underwriters or other body exercising similar
functions that relates to violations of building, safety or fire ordinances or
regulations,
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claims any defect or deficiency with respect to any of such properties or
requests the performance of any repairs, alterations or other work to or in any
of such properties or in the streets bounding the same. Except as disclosed on
Schedule 6.8, each parcel of Real Property is considered a separate parcel of
land for taxing and conveyancing purposes. There is no pending condemnation,
expropriation, eminent domain or similar proceeding affecting all or any portion
of the Real Property. All public utilities (including water, gas, electric,
storm and sanitary sewage, and telephone utilities) required to operate the
Facility of Seller are available to such Facility and such utilities enter the
boundaries of such Facility through adjoining public streets, permanent
easements or rights-of-way of record in favor of Seller. Such public utilities
are all connected pursuant to valid permits, are all in good working order and
are adequate to service the operations of such Facility as currently conducted
and to the best of Seller's Knowledge permit full compliance with all Legal
Requirements. Seller has not received any written notice of any proposed,
planned or actual curtailment of service of any utility supplied to any Facility
of Seller. Except as disclosed on Schedule 6.8 all present driveways and other
access routes to the Real Property are from public streets and no other Person
has any right to use any such driveways or other access routes.
6.9 Proprietary Rights.
6.9.1 Logos and Tradenames. Schedule 2.1.8 hereto sets forth a
correct and complete list of all patents, logos, trademarks, trade
names, service marks, copyrights and applications or registrations
therefor used in and material to the Business (collectively, the
"Proprietary Rights").
6.9.2 Licenses. Except as disclosed in Schedule ▇.▇.▇.: (i) Seller
owns or possesses adequate licenses or other valid rights to use
(without the making of any payment to others or the obligation or grant
rights to others in exchange) all the Proprietary Rights material to
the Business; (ii) the Proprietary Rights included in the Purchased
Assets constitute all the material rights necessary to conduct the
Business in accordance with past practice and are being conveyed to
Purchaser together with the other Purchased Assets; (iii) the validity
of the Proprietary Rights and the rights therein of Seller have not
been questioned in any litigation to which Seller is a party, nor, to
Seller's Knowledge, is any such litigation threatened; and (iv) to the
best of Seller's Knowledge, the conduct of the Business does not
conflict with patent rights, licenses, trademark rights, trade name
rights, copyrights or other intellectual property rights of others.
6.9.3 Infringement. Except as disclosed in Schedule 2.1.8 hereto,
to Seller's Knowledge, no material use of any Proprietary Rights owned
by Seller has heretofore been, or is now being, made by any Person
other than Seller, and to Seller's Knowledge, there is no infringement
of any Proprietary Rights owned or licensed by Seller. No present or
former director, officer, Employee or consultant of Seller has any
interest in any of the Proprietary Rights.
6.10 Contracts and Commitments. Except as listed and described on
Schedule 1.68 and Schedule 2.1.4, neither Seller nor any party acting on behalf
of Seller with Seller's
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Knowledge and consent is a party to any written or oral (for which Purchaser
shall be bound following the Closing Date):
(i) Contract for the future purchase of, or payment for,
supplies or products, or for the performance of
services by another party, involving in any one case
$10,000 or more;
(ii) Contract to sell or supply products or to perform
services, involving in any one case $10,000 or more
(except for any Resident/Patient's Agreement);
(iii) Contract continuing over a period of more than six
months from the date hereof or exceeding $10,000 in
value (except for any Resident/Patient's Agreement);
(iv) representative, sales agency, dealer or distributor
Contract;
(v) lease under which Seller is either lessor or lessee
other than with respect to the Real Property Leased;
(vi) note, debenture, bond, conditional sale agreement,
equipment trust agreement, letter of credit
agreement, loan agreement or other Contract or for
the borrowing or lending of money (including without
limitation loans to or from Employees) or guarantee,
pledge or undertaking of the indebtedness of any
other Person;
(vii) Contract for any charitable or political
contribution;
(viii) Contract limiting or restraining Seller or any
successor or assign from engaging or competing in
any likeness of business with any Person;
(ix) license, franchise, distributorship or other
agreement, including those that relate in whole or
in part to any patent, trademark, trade name,
service ▇▇▇▇ or copyright or to any ideas, technical
assistance or other know-how of or used by the
Business; or
(x) any other material Contract not made in the ordinary
course of Seller's business consistent with past
practice.
Each of the Contracts and other instruments, documents and
undertakings listed on Schedule 1.68 and Schedule 2.1.4 is valid and
enforceable in accordance with its terms, Seller and, to Seller's Knowledge any
other party thereto, are in compliance with the provisions thereof, Seller and,
to Seller's Knowledge any other party thereto, are not in default in the
performance, observance or fulfillment of any material obligation, covenant or
condition contained therein, and no event has occurred that with or without the
giving of notice or lapse of time, or both, would constitute a default by
Seller thereunder and, to Seller's Knowledge, a default by any other party
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thereto; (ii) except as set forth on Schedule 1.68 and Schedule 2.1.4 no
advance payments have been received by Seller by or on behalf of any party to
any of the Contracts, commitments, leases and other instruments listed on
Schedule 1.68 and Schedule 2.1.4 for services to be rendered or products to be
delivered to such party after the Closing Date; and (iii) no consent or
approval of any party to any Contract, commitment, lease or other instrument,
document or undertaking listed on Schedule 1.68 and Schedule 2.1.4 is required
for the execution of this Agreement or the consummation of the transactions
contemplated hereby.
6.11 Permits, Licenses. Seller has all Permits that are required to
operate the Business (including without limitation those required under any
Environmental Law) and, Seller is in material compliance with the terms and
conditions of the Permits. Schedule 2.1.6 hereto sets forth a correct and
complete list of all Permits, each one of which is in full force and effect. To
Seller's Knowledge, no suspension or cancellation of any of the Permits is
threatened and no cause exists for such suspension or cancellation. Any Permits
that cannot be transferred or require consent or approval for the transfer
thereof are specifically identified on Schedule 2.1.6 hereto as nontransferable
or requiring such consent or approval.
6.12 Compliance with Laws. Except as described in Schedule 6.12
hereto, Seller has at all times conducted, and is presently conducting, the
Business so as to comply in all material respects with all Legal Requirements
applicable to the conduct of operation of the Business or the ownership or use
of the Purchased Assets.
6.13 Legal Proceedings. Except as described in Schedule 6.13 hereto,
there is no claim, action, suit, proceeding, investigation or inquiry pending
before any Governmental Authority or, to Seller's Knowledge, threatened against
Seller with respect to the Business or any of the Purchased Assets, or relating
to the transactions contemplated by this Agreement, nor to Seller's Knowledge
is there any basis for any such claim, action, suit, proceeding, investigation,
or inquiry. Except as set forth on Schedule 6.13 hereto, Seller is not a party
to or subject to the provisions of any judgment, order, writ, injunction,
decree or award of any court, arbitrator or governmental, regulatory or
administrative official, body or authority that relates to the Purchased Assets
or the Business or that might affect the transactions contemplated by this
Agreement.
6.14 Absence of Undisclosed Liabilities. Except as set forth in
Schedule 6.14, Seller has no material liabilities or obligations (as defined in
Section 4.1) relating to the Business except (i) those liabilities and
obligations set forth on the financial statements of Seller previously provided
to Purchaser and not heretofore paid or discharged; (ii) those liabilities and
obligations arising in the ordinary course of Seller's business consistent with
past practice under any Contract or commitment specifically disclosed on
Schedule 2.1.4 hereto or not required to be disclosed because of the term or
amount involved; and (iii) those liabilities and obligations incurred in the
ordinary course of Seller's business consistent with past practice since the
financial statements dated October 31, 1996 provided to Purchaser.
6.15 Books and Records. All books of account and other financial
records of Seller directly relating to the Business (the "Books and Records")
are materially complete and correct
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and have been made available to Purchaser.
6.16 Employees. Schedule 1.23 sets forth a true and correct list of
all individuals currently employed by Seller in the conduct of the Business and
their present position and rate of compensation and date of hire. Except as set
forth on Schedule 1.23, none of the individuals employed by Seller have been
given any credit for service under any Payroll Practice/Employee Arrangement
prior to their respective dates of hire.
6.17 Labor Relations. No Employee of Seller is represented by any
union or other labor organization. No representation election, arbitration
proceeding, grievance, labor strike, dispute, slowdown, stoppage or other labor
trouble is pending or, to Seller's Knowledge, threatened against, involving,
affecting or potentially affecting Seller. No complaint against Seller is
pending or, to Seller's Knowledge, threatened before the National Labor
Relations Board, the Equal Employment Opportunity Commission or any similar
state or local agency, by or on behalf of any Employee of Seller. Two days
prior to the Closing Date, Seller shall provide Purchaser with a compilation of
any existing liability for Employee sick leave, vacation time, severance pay or
any similar item. To Seller's Knowledge, except as set forth on Schedule 1.23
Seller has no 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.
6.18 Payroll Practice/Employee Arrangement.
6.18.1 Benefit Plans. Schedule 6.18 contains a complete list of
each employee benefit plan subject to ERISA, and/or holiday, vacation
or other bonus practice or any other employee pay practice,
arrangement, agreement or commitment (the "Payroll Practice/Employee
Arrangement") and maintained by or with respect to which Seller has any
liability or obligation, whether actual or contingent, with respect to
the Employees or their respective beneficiaries.
6.18.2 Plan Liability. Seller has not taken any action that may
result in Purchaser being a party to, or bound by, an ERISA Plan, and
Purchaser shall have no liability under, or be subject to any liability
on account of, any ERISA Plan or Payroll Practice/Employee Arrangement
following the consummation of the transaction contemplated hereby.
6.18.3 Retirement Benefits. No ERISA Plan or other employee
arrangement has provided for the payment of retiree benefits by
Purchaser.
6.19 No Finder. Seller has not taken any action that would give to any
Person a right to a finder's fee or any type of brokerage commission in relation
to, or in connection with, the transactions contemplated by this Agreement.
6.20 Interest in Business. Seller has not granted, and there is not
outstanding, any option, right, agreement or other obligation pursuant to which
any Person could claim a right to
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acquire in any way all or any part of, or interest in, the Business.
6.21 Condition of Assets. Except as set forth on Schedule 6.21, all
buildings, structures and equipment that are part of the Purchased Assets are
structurally sound, are in generally good operating condition and repair
(subject only to routine maintenance and repair) and are usable in the conduct
of the Business consistent with past practice and conform to all applicable
Legal Requirements.
6.22 Affiliate Transactions. Except as set forth in Schedule 6.22
hereto, Seller and its Affiliates provide no services or products to the
Business.
6.23 Environmental Matters. Except as disclosed in Schedule 6.23:
6.23.1 Compliance; No Liability Seller has operated the Business
and each parcel of Real Property in material compliance with all
applicable Environmental Laws. Seller is not subject to any liability,
penalty or expense (including legal fees), and Purchaser will not
suffer or incur any loss, liability, penalty or expense (including
legal fees) by virtue of any violation of any Environmental Law
occurring prior to the Closing, any environmental activity conducted on
or with respect to any property at or prior to the Closing or any
environmental condition existing on or with respect to any property at
or prior to the Closing, in each case whether or not Seller permitted
or participated in such act or omission.
6.23.2 Treatment; CERCLIS Except in material compliance with all
applicable Environmental Laws, Seller has not treated, stored, recycled
or disposed of any hazardous material, and to Seller's Knowledge, no
other Person has treated, stored, recycled or disposed of any hazardous
material on any part of the Real Property. There has been no release of
any hazardous material at, on or under any Real Property. Seller has
not transported any hazardous material or arranged for the
transportation of any hazardous material to any location that is listed
or proposed for listing on the National Priorities List pursuant to
Superfund, on CERCLIS or any other location that is the subject of
federal, state or local enforcement action or other investigation that
may lead to claims against Seller for cleanup costs, remedial action,
damages to natural resources, to other property or for personal injury
including claims under Superfund. None of the Real Property is listed
or, to Seller's Knowledge, proposed for listing on the National
Priorities List pursuant to Superfund, CERCLIS or any state or local
list of sites requiring investigation or cleanup.
6.23.3 Notices; Existing Claims; Certain Hazardous Materials;
Storage Tanks Seller 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 or actual release of any hazardous material.
Seller is not required to place any notice or restriction relating to
the presence of any hazardous material at any Real Property or in any
deed to any Real Property. Seller has provided to Purchaser a list of
all sites to which, to Seller's Knowledge, Seller has transported any
hazardous material for recycling, treatment, disposal, other handling
or
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otherwise. There has been no past, and there is no pending or
contemplated, claim by Seller under any Environmental Law or Legal
Requirement based on actions of others that may have impacted on the
Real Property, and Seller has not entered into any agreement with any
Person regarding any Environmental Law, remedial action or other
environmental liability or expense. All storage tanks located on the
Real Property, whether underground or aboveground, are disclosed on
Schedule 6.23, and, to Seller's Knowledge, all such tanks and
associated piping are in sound condition and are not leaking and have
not leaked.
6.24 Insurance. Schedule 6.24 sets forth a complete list of all
insurance policies maintained with respect to the Business for the past three
years and all insurance policies known by Seller to have been maintained by any
other Person which may provide any coverage for liabilities relating in any
manner to any Environmental Law. Schedule 6.24 also sets forth a true and
correct summary of the loss experiences for the past three years under each
such policy. Except as set forth on Schedule 6.24, no insurance has ever been
canceled or denied. Following the Closing, Seller shall, to the extent that
coverage under its insurance policies extends to include the Business in
respect of claims or occurrences concerning Seller prior to the Closing, (i)
take no action to eliminate or reduce such coverage, other than normal
elimination or reduction of coverage as they occur by virtue of the filing of
claims in the ordinary course under such insurance policies, (ii) pay when due
any premiums under such policies for periods, including retrospective or
retroactive premium adjustments and (iii) provided Purchaser maintains Seller's
insurance policies or otherwise is entitled to make a claim against Seller's
insurance policies pursuant to the terms of this Agreement, use its best
efforts to assist in filing and processing claims under, and otherwise
cooperate with Purchaser to allow Purchaser, in its own name, or on behalf of
Seller, to obtain all coverage benefits applicable to the Business under such
insurance policies, including the execution of assignments or powers of
attorney for the benefit of Purchaser. Any proceeds of insurance paid by an
insurer to Seller for claims of Purchaser made in accordance with this Section
shall be promptly paid to Purchaser.
6.25 No Significant Items Excluded. Except for Excluded Assets, there
are no assets or properties of Seller or any Related Party that are of material
importance to the ongoing operation of the Business by Purchaser in
substantially the same manner in which the Business has been conducted by
Seller prior to the date of this Agreement.
6.26. Surveys. Seller has provided Purchaser with copies of Seller's
federal and/or state surveys or inspections and any plans of correction for the
current year and the two immediately preceding years for the Facility. Each
such survey or inspection was prepared in material compliance with all
applicable Legal Requirements.
6.27. Cost Reports Seller has provided Purchaser with copies of all
Seller's cost reports and rate schedules for the current year and the two
immediately preceding years for the Facility. Each such cost report was
prepared in material compliance with all applicable Legal Requirements.
6.28. Occupancy Reports Seller has provided Purchaser with copies of
Seller's
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occupancy reports for the Facility for the last year. Each such occupancy report
was prepared based on the number of operational beds (i.e., double occupancy
rooms were only counted as such when both beds were occupied).
6.29. Tax Returns Seller has filed or caused to be filed, or will file
or cause to be filed, all Tax Returns that are required to be filed by it prior
to or on the Closing Date, pursuant to all Legal Requirements of each
Governmental Authority with taxing power over it. All such Tax Returns were or
will be, as the case may be, correct and complete in all material respects.
Seller has paid or will pay all Taxes that have or will become due as shown on
such Tax Returns or pursuant to any assessment received as an adjustment to
such Tax Returns, except (i) such Taxes, if any, as are being contested in good
faith and disclosed on Schedule 6.29, (ii) such Taxes that are fully reserved
against on the financial statements of Seller previously provided to Purchaser,
and Taxes accruing that are not yet due. Except as set forth on Schedule 6.29,
Seller is not currently the beneficiary of any extension of time within which
to file any Tax Return. No claim has been made by a taxing authority of a
jurisdiction other than one in which the Facility is located. Seller has paid,
or will withhold and pay, all Taxes required to have been withheld in
connection with amounts paid or owing to any Employee, independent contractor,
creditor, stockholder or other third party.
6.30 Completeness and Accuracy All information set forth on any
Schedule hereto is true, correct and complete. No representation or warranty of
Seller contained in this Agreement contains or will contain any untrue
statement of material fact, or omits or will omit to state any material fact
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. All Contracts, Permits and other
documents and instruments furnished or made available to Purchaser by Seller
are or will be true, complete and accurate originals or copies of originals and
include all amendments, supplements, waivers and modifications thereto.
6.31 Seller's Assets Neither Seller nor Seller's "ultimate parent
entity" (as such term is defined in 16 CFR, Chapter 1, Subchapter H, ss. 801.1
et seq) had: (i) annual net sales of $100,000,000 or more as stated on its last
regularly prepared statement of income and expenses; or (ii) total assets of
$100,000,000 or more as stated on its last regularly prepared balance sheet.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Purchaser represents and
warrants to Seller, that each of the following representations and warranties is
true and correct as of the date hereof:
7.1 Organization, Good Standing, Power. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all requisite corporate power and authority to
own and lease the Purchased Assets, to carry on the Business and to execute and
deliver this Agreement and the Ancillary Agreements to which Purchaser is a
party, to consummate the transactions contemplated hereby and thereby and to
perform all the terms and conditions hereof and thereof to be performed by it.
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7.2 Authorization of Agreement and Enforceability. Purchaser has taken
all necessary corporate action to authorize the execution and delivery of this
Agreement and the Ancillary Agreements to which Purchaser is a party, the
performance by it of all terms and conditions hereof and thereof to be
performed by it and the consummation of the transactions contemplated hereby
and thereby. This Agreement constitutes, and the Ancillary Agreements, upon
Purchaser's execution and delivery thereof, will constitute, the legal, valid
and binding obligations of Purchaser, enforceable in accordance with their
terms except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws presently or hereafter in effect
relating to or affecting the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law).
7.3 No Violations; Consents. Except as set forth on Schedule 7.3, the
execution, delivery and performance by Purchaser of this Agreement and the
Ancillary Agreements to which Purchaser is a party and the consummation of the
transactions contemplated hereby and thereby will not (with or without the
giving of notice or the lapse of time, or both) (i) violate any provision of
the charter or bylaws of Purchaser, (ii) except with respect to notices and
consents required to be given by Purchaser to any Accreditation Body or
Governmental Authority in connection with the sale and change of ownership of
the Purchased Assets and the Business, violate, or require any consent,
authorization or approval of, or exemption by, or filing under any provision of
any contract, law, statute, rule or regulation to which Purchaser is subject,
(iii) violate any judgment, order, writ or decree of any court applicable to
Purchaser, (vi) conflict with, result in a breach of, constitute a default
under, or accelerate or permit the acceleration of the performance required by,
or require any consent, authorization or approval under any agreement,
contract, commitment, lease or other instrument, document or undertaking to
which Purchaser is a party or (v) result in the creation or imposition of any
Encumbrance upon its assets.
7.4. Legal Proceedings. There is no claim, action, suit, proceeding,
investigation or inquiry pending before any Governmental Authority or, to
Purchaser's Knowledge, threatened against Purchaser or any of Purchaser's
properties, assets, operations or businesses that might prevent or delay the
consummation of the transactions contemplated hereby.
7.5 No Finder. Purchaser has not taken any action which would give to
any Person a right to a finder's fee or any type of brokerage commission in
relation to, or in connection with, the transactions contemplated by this
Agreement.
7.6 Purchaser's Assets. Neither purchaser nor Purchaser's "ultimate
parent entity" (as such term is defined in 16 CFR, Chapter 1, Subchapter H, ss.
801.1 et seq) had: (i) annual net sale of $100,000,000 or more as stated on its
last regularly prepared statement of income and expenses; or (ii) total assets
of $100,000,000 or more as stated on its last regularly prepared balance sheet.
ARTICLE VIII. COVENANTS OF SELLER PRIOR TO CLOSING DATE
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8.1 Required Actions. Between the date of this Agreement and the
Closing Date, Seller covenants that it will, in its conduct of the Business,
except as otherwise agreed by Purchaser in writing:
8.1.1 Access to Information. Give to Purchaser and its counsel,
accountants, consultants and other representatives, for the purpose of
audit, review and copying, reasonable access, during normal business
hours, to such of the properties, books, accounts, Contracts and
records of Seller as are relevant to the Purchased Assets and the
Business, and furnish or otherwise make available to Purchaser all such
information concerning the Purchased Assets and the Business as
Purchaser may reasonably request. Accordingly, Seller shall provide
Purchaser with the following:
(i) Seller's occupancy reports for the Facility, as soon
as the same become available through the Closing
Date, but no later than ten days after the last day
of any given month (which reports shall be prepared
based on the number of operational beds);
(ii) Seller's federal and/or state surveys or inspections
and any plans of correction for the Facility, as
soon as the same become available through the
Closing Date, but no later than ten days after
received by Seller;
(iii) if applicable, Seller's cost reports for the current
year and the two immediately preceding years for the
Facility, together with the current rate schedule
for such Facility;
(iv) monthly statements of profit and loss of Seller for
the Facility, as soon as the same become available
through the Closing Date, but no later than 21 days
after the last day of each month.
8.1.2 Conduct of Business. Operate the Business in the usual,
regular and ordinary manner as such Business was conducted prior to the
date hereof and, to the extent consistent with such operation, use its
best efforts until the Closing Date to (i) preserve and keep intact the
Business, (ii) keep available the services of the Employees; (iii)
preserve its relationships with residents, patients, suppliers and
others having business dealings with Seller in connection with the
Business and (iv) maintain current marketing activities;
8.1.3 Maintenance of Properties. Maintain the Purchased Assets,
whether owned or leased, in their present order and condition, in
accordance with Seller's past practices, reasonable wear and tear
excepted;
8.1.4 Maintenance of Books and Records. Maintain the Books and
Records in the usual, regular and ordinary manner, on a basis
consistent with past practice;
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8.1.5 Compliance with Applicable Law. Comply in all material
respects with all Legal Requirements applicable to the Purchased Assets
and to the conduct of the Business;
8.1.6 Performance of Obligations. Perform all the material
obligations of Seller relating to the Purchased Assets and the Business
in accordance with the past practices of Seller;
8.1.7 Approvals, Consents. Use its reasonable commercial efforts
to obtain in writing as promptly as possible any approvals and consents
as required to be obtained by Seller in order to effectuate the
transactions contemplated hereby and deliver to Purchaser copies of
such approvals and consents. Accordingly, Seller shall cooperate with
Purchaser's efforts to obtain the necessary licenses to operate the
Facility from the appropriate Accreditation Bodies, including, without
limitation, the Department of Welfare and the Department of Health.
Upon execution and delivery of this Agreement, Seller shall promptly:
(i) provide Purchaser with copies of all Permits;
(ii) notify each Accreditation Body and Third Party Payor
as required by any Legal Requirement of the pending
change of ownership of the Facility; and
(iii) provide such other notices as required by all Legal
Requirements including, if required, (i) notices to
Seller's residents/patients of the Facility and (ii)
notices to human service agencies (as that term is
defined by the Department of Welfare). Prior to
sending the notices, Seller shall provide copies to
Purchaser for review and approval, which approval
shall not be unreasonably withheld;
8.1.8 Notice of Material Damage. Give to Purchaser prompt notice
in writing of any fact that, if known on the date hereof, would have
been required to be set forth or disclosed in or pursuant to this
Agreement, or which would result in the breach in any material respect
by Seller of any of its representations, warranties, covenants or
agreements hereunder;
8.1.9 Surveys. Execute such affidavits or other instruments as are
commercially reasonable and necessary in order for Purchaser to remove
title exceptions for encroachments or survey discrepancies relating to
the Real Property;
8.1.10 Pay Employees to Closing Date. Pay all wages, salaries and
other sums due Employees through the close of business on the day prior
to the Closing Date;
8.1.11 Transfer of Employees. Take all reasonably necessary steps
to transfer to Purchaser the employment of all Employees electing to
continue their employ with Purchaser as of the Closing Date;
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8.1.12 Appointment of Seller's Agent. Irrevocably appoint ▇▇▇▇▇▇
or ▇▇▇▇▇ ("Seller's Agent"), as Seller's agent and attorney-in-fact to
take any action required or permitted to be taken hereunder by Seller,
including without limitation, the giving and receipt of notices to be
delivered or received by or on behalf of Seller, the payment of
expenses relating to the transactions contemplated under this
Agreement, the representation of Seller in indemnification proceedings
hereunder, and the right to waiver of any of the terms of this
Agreement in any respect, and agree to be bound by any and all actions
taken by Seller's Agent. Purchaser shall be entitled to rely
exclusively on any communications given by Seller's Agent on behalf of
Seller, and shall not be liable for any action taken or not taken in
reliance on Seller's Agent. In the event that Seller's Agent resigns or
refuses to act, Seller shall promptly appoint another Seller as the
substitute Sellers' Agent to act under this Agreement, and Seller shall
promptly deliver a copy of such appointment to Purchaser; and
8.1.13 Compliance with Agreement. Not undertake any course of
action materially inconsistent with satisfaction of the conditions
applicable to it set forth in this Agreement, and use all reasonable
efforts to do all such acts and take all such measures as may be
reasonably necessary to comply with the representations, agreements,
conditions and other provisions of this Agreement.
8.2 Other Deliveries. At its own cost and expense, Seller shall have
delivered with respect to the Real Property, as soon as possible but in any
event not later than three days before Closing:
8.2.1 Surveys. Existing surveys of such property currently in
Seller's possession or reasonably obtainable by Seller;
8.2.2 Affidavits. ALTA extended coverage statements/affidavits in
form and substance satisfactory to Purchaser's title insurer regarding
title, mechanic's liens and such other customary matters as may be
reasonably requested by Purchaser or Purchaser's title insurer; and
8.2.3 FIRPTA Certificates. A certificate, duly executed and
acknowledged by an officer of Seller under penalties of perjury, in the
form prescribed by Treasury Regulation Section 1.1445-2(b)(2)(iii),
stating Seller's name, address and Federal tax identification number,
and that it is not a "foreign person" within the meaning of Section
1445 of the Code.
8.3 Prohibited Actions. Between the date of this Agreement and the
Closing Date, in its conduct of the Business, Seller shall not, except as
otherwise agreed by Purchaser in writing:
8.3.1 Sale of Purchased Assets. Sell, transfer, assign, lease,
encumber or otherwise dispose of any of the Purchased Assets other than
in the ordinary course of Seller's business consistent with past
practices;
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8.3.2 Business Changes. Change in any material respect the
character of the Business;
8.3.3 Incurrence of Material Obligations. Incur any material fixed
or contingent obligation or enter into any material agreement,
commitment or other transaction or arrangement, commitment or other
transaction or arrangement that is not the ordinary course of Seller's
business consistent with past practices and with respect to which
Purchaser will be bound subsequent to Closing;
8.3.4 Incurrence of Liens. Subject to lien, security interest or
any other Encumbrance, other than Permitted Encumbrances, any of the
Purchased Assets;
8.3.5 Change in Employee Compensation and Benefits. Increase the
rate of compensation paid, or pay any bonus, to anyone connected with
the Business, except for those increases or bonuses planned, in the
ordinary course of Seller's business consistent with past practices, or
establish or adopt any new pension or profit-sharing plan, deferred
compensation agreement or employee benefit arrangement of any kind
whatsoever covering or affecting Employees;
8.3.6 Publicity; Advertisement. Except as required by law,
publicize, advertise or announce to any third-party, except as required
pursuant to this Agreement to obtain the consent of such third-party,
the entering into of this Agreement, the terms of this Agreement or the
transactions contemplated hereby;
8.3.7 No Release. Except in the ordinary course of Seller's
business consistent with past practices, cancel, release or relinquish
any material debts of or claims against others held by Seller with
respect to the Business or waive any material rights relating to the
Business; and
8.3.8 No Termination or Modification. Terminate or materially
modify any material, Contract or Permit listed on Schedule 1.68 or
Schedule 2.1.4 or other authorization or agreement affecting the
Business or the Purchased Assets or the operation thereof.
ARTICLE IX. COVENANTS OF PURCHASER PRIOR TO CLOSING DATE
9.1 Required Actions. Between the date of this Agreement and the
Closing Date, Purchaser shall, except as otherwise agreed by Seller in writing:
9.1.1 Advise of Changes. Advise Seller promptly in writing of any
fact that, if known at the Closing Date, would have been required to be
set forth or disclosed in or pursuant to this Agreement, or which would
result in the breach by Purchaser of any of its representations,
warranties, covenants or agreements hereunder;
9.1.2 Compliance with Agreement. Not undertake any course of
action
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inconsistent with satisfaction of the conditions applicable to it set
forth in this Agreement, and Purchaser shall use its best efforts to do
all such acts and take all such measures as may be reasonably necessary
to comply with the representations, agreements, conditions and other
provisions of this Agreement; and
9.1.3 Examinations. Promptly undertake all examinations,
inspections, surveys and audits, including, without limitation, title
searches and surveys of the Real Property, environmental assessments
and audits and engineering surveys, as Purchaser deems necessary in
connection with the acquisition of the Purchased Assets or the
Business.
9.1.4 Seller's Employees. Take all reasonable steps to ensure that
the transfer of employment of all of the Employees electing to continue
their employ with Purchaser as are able to be accomplished prior to or
on the Closing Date.
9.2 Investigation. Purchaser shall use reasonable efforts to conduct
an investigation of the Business of Seller in such a manner as to prevent
disruption of relations with the Employees, residents, patients and suppliers
of Seller, which investigation shall include such due diligence as is customary
for transactions of the type contemplated herein ("Purchaser's Due Diligence").
9.3 Approvals, Consents. Use its best efforts to obtain in writing as
promptly as possible any approvals and consents as required to be obtained by
Purchaser in order to effectuate the transactions contemplated hereby and
deliver to Purchaser copies of such approvals and consents. Accordingly,
Purchaser take all reasonable action to obtain the necessary licenses to
operate the Facility from the Department of Welfare and the Department of
Health, as applicable, including:
(i) notify each Accreditation Body and Third Party Payor
as required by any Legal Requirement of the pending
change of ownership of the Facility; and
(ii) provide such other notices as required by all Legal
Requirements including (i) notices to Seller's
residents/patients of the Facility and (ii) notices
to human service agencies (as that term is defined
by the Department of Welfare). Prior to sending the
notices, Purchaser shall provide copies to Seller
for review and approval, which approval shall not be
unreasonably withheld.
9.4 Publicity; Advertisement. Except as required by law, publicize,
advertise or announce to any third-party, except as required pursuant to this
Agreement to obtain the consent of such third-party, the entering into of this
Agreement, the terms of this Agreement or the transactions contemplated hereby;
provided, however, the foregoing shall not be applicable to disclosures made by
Purchaser to Purchaser's lender in response to such lender's reasonable
requests.
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ARTICLE X. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to proceed with any Closing under this
Agreement is subject to the fulfillment prior to or at the time of Closing of
the following conditions with respect to Seller, any one or more of which may
be waived in whole or in part by Purchaser:
10.1 Accuracy of Representations and Warranties. The representations
and warranties of Seller contained in this Agreement and the Ancillary
Agreements to which Seller is a party shall have been true in all material
respects on the date hereof and shall be true in all material respects on and
as of the Closing Date with the same force and effect as though made on and as
of the Closing Date.
10.2 Performance of Agreement. Seller shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement and the
Ancillary Agreements to which Seller is a party to be performed or complied
with by it at or prior to the Closing Date.
10.3 Seller's Certificate. Purchaser shall have received a certificate
from Seller, dated as of the Closing Date, reasonably satisfactory in form and
substance to Purchaser and its counsel, certifying as to the matters specified
in Section 10.1 and Section 10.2 hereof. The matters set forth in such
certificate shall constitute representations and warranties of Seller
hereunder.
10.4 Secretary's Certificate. Purchaser shall have received a
certificate, dated as of the Closing Date, of the Secretary or any Assistant
Secretary of Seller with respect to the incumbency and specimen signature of
each officer or representative of Seller executing this Agreement, the
certificate referred to in Section 10.3 and the Ancillary Agreements to which
Seller is a party.
10.5 Injunction. On the Closing Date, there shall be no injunction,
writ, preliminary restraining order or any order of any nature in effect issued
by a court of competent jurisdiction directing that the transactions provided
for herein, or any of them, not be consummated as herein provided and no suit,
action, investigation, inquiry or other legal or administrative proceeding by
any Governmental Authority or other Person shall have been instituted or
threatened which questions the validity or legality of the transactions
contemplated hereby or which if successfully asserted might otherwise have a
material adverse effect on the conduct of the Business or impose any additional
material financial obligation on, or require the surrender of any material
right by, Purchaser.
10.6 [RESERVED].
10.7 Other Agreements. Each of the Other Agreements shall have been
executed and delivered by the parties thereto, and the transactions contemplated
thereby shall have been consummated.
10.8 Consents. Any third-party consents, approvals, authorizations or
Permits
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(including, without limitation, those required by any Governmental Authorities)
necessary for the conveyance of the Purchased Assets or valid consummation of
the transactions contemplated hereby shall have been obtained.
10.9 Arrangements with Employees. Subject to the provisions of
Sections 4.3 and 9.1.4, substantially all of the Employees shall have accepted
employment with Purchaser effective on the Closing Date.
10.10 Employment Agreements. ▇▇▇▇▇ and ▇▇▇▇▇▇ shall have executed and
delivered the Employment Agreements with Purchaser.
10.11 Opinion of Counsel. Purchaser shall have received the favorable
opinion of ▇▇▇▇▇▇, Price & ▇▇▇▇▇▇, counsel for Seller, addressed to Purchaser
and Purchaser's lender, reasonably satisfactory to Purchaser and its counsel as
to the matters set forth in Sections 6.1, 6.2 and 6.3 hereof .
ARTICLE XI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligation of Seller to proceed with any Closing under this
Agreement is subject to the fulfillment prior to or at the time of Closing of
the following conditions with respect to Purchaser, any one or more of which
may be waived in whole or in part by Seller:
11.1 Accuracy of Representations and Warranties. The representations
and warranties of Purchaser contained in this Agreement shall have been true in
all material respects on the date hereof and shall be true in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date.
11.2 Performance of Agreement. Purchaser shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants and conditions contained in this Agreement to be
performed or complied with by it at or prior to the Closing Date.
11.3 Purchaser's Certificate. Seller shall have received a certificate
from Purchaser, dated as of the Closing Date, reasonably satisfactory in form
and substance to Seller and its counsel, certifying as to the fulfillment of
all matters specified in Section 11.1 and Section 11.2 hereof. The matters set
forth in such certificate shall constitute representations and warranties of
Purchaser hereunder.
11.4 Secretary's Certificate. Seller shall have received a
certificate, dated the Closing Date, of the Secretary or any Assistant
Secretary of Purchaser with respect to the incumbency and specimen signature of
each officer or representative of Purchaser executing this Agreement, the
certificate referred to in Section 11.3 and the Ancillary Agreements to which
Purchaser is a party.
11.5 Injunction. On the Closing Date, there shall be no injunction,
writ, preliminary restraining order or any order of any nature in effect issued
by a court of competent jurisdiction
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directing that the transactions provided for herein, or any of them, not be
consummated as herein provided and no suit, action, investigation, inquiry or
other legal or administrative proceeding by any Governmental Authority or other
Person shall have been instituted, threatened or anticipated which questions the
validity or legality of the transactions contemplated hereby.
11.6 Other Agreements. Each of the Other Agreements shall have been
executed and delivered by the parties thereto, and the transactions contemplated
thereby shall have been consummated.
11.7 Employment Agreements. Purchaser shall have executed and delivered
the Employment Agreements with ▇▇▇▇▇ and ▇▇▇▇▇▇.
ARTICLE XII. OBLIGATIONS AFTER THE CLOSING DATE
12.1 Covenant Not to Interfere. Seller covenants and agrees that for a
period of five (5) years after the Closing Date, Seller will not solicit for
employment by Seller or any Affiliates any Person who is an Employee of the
Business as of the Closing Date.
12.2 Noncompetition. For a period of five years following the Closing
Date, Seller will not, directly or indirectly, unless acting in accordance with
Purchaser's written consent, own, manage, operate, finance or participate in
the ownership, management, operation or financing of or permit its name to be
used by or in connection with any business or enterprise engaged in the
Business acquired by Purchaser hereunder and located within a 25-mile radius of
the Facility. Seller acknowledges that the provisions of this Section are
reasonable and necessary to protect the interests of Purchaser, that any
violation of this Section will result in an irreparable injury to Purchaser and
that damages at law would not be reasonable or adequate compensation to
Purchaser for violation of this Section and that, in addition to any other
available remedies, Purchaser shall be entitled to have the provisions of this
Section specifically enforced by preliminary and permanent injunctive relief
without the necessity of proving actual damages or posting a bond or other
security to an equitable accounting of all earnings, profits and other benefits
arising out of any violation of this Section. In the event that the provision
of this Section shall ever be deemed to exceed the time, geographic scope or
other limitations permitted by applicable law, then the provisions shall be
deemed reformed to the maximum extent permitted by applicable law.
12.3 Transition of Employees. From and after the Closing Date,
Purchaser and Seller shall cooperate to ensure an orderly transition of the
Employees who accept employment with Purchaser.
12.4 [RESERVED].
12.5 Certain Transitional Matters.
12.5.1 Transfer of Assets. Seller agrees that Purchaser, from and
after the Closing, shall have the right and authority to collect for
Purchaser's own account all items
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which shall be transferred to Purchaser as provided herein.
12.5.2 Endorsement of Checks. From and after the Closing,
Purchaser shall have the right and authority to retain and endorse
without recourse the name of Seller on any check or any other evidences
of indebtedness received by Purchaser on account of any of the Business
and Purchased Assets transferred to Purchaser hereunder.
12.5.3 Seller's Remittance of Funds. After the Closing, Seller
shall promptly transfer and deliver to Purchaser any cash or other
property, if any, that Seller may receive related to the Business or
the Purchased Assets other than the Excluded Assets.
12.5.4 Purchaser's Remittance of Funds. After the Closing,
Purchaser shall promptly transfer and deliver to Seller any cash or
other property, if any, that Purchaser may receive related to the
Excluded Assets.
12.5.5 Assumed Liabilities Controlled by Purchaser. From and after
the Closing, Purchaser shall have complete control over the payment,
settlement or other disposition of, or any dispute involving, any
Assumed Liability, and Purchaser shall have the right to conduct and
control all negotiations and proceedings with respect thereto. Seller
shall notify Purchaser promptly of any claim made with respect to any
Assumed Liability and shall not, except with the prior written consent
of Purchaser, voluntarily make any payment of, or settle or offer to
settle, or consent to any compromise with respect to, any such Assumed
Liability. Seller shall cooperate with Purchaser in connection with any
negotiations or proceedings involving any Assumed Liability.
12.6 Audits. Following the Closing Date, Seller shall cooperate, and
request Seller's Accountants to cooperate at Purchaser's cost and expense, with
Purchaser and its auditors in the preparation of combined audited financial
statements of Seller and each of the Other Companies for the years ended
December 31, 1996, 1995 and 1994 to the extent required in connection with any
registration statement or other form filed by Purchaser with the Securities and
Exchange Commission under the Securities Act of 1933 for a public offering and
sale of securities of Purchaser. As used herein, the term "combined audited
financial statements" shall mean the audited financial statements of Seller and
each of the Other Companies, combined.
12.7 Further Assurances of Seller. From and after the Closing Date,
Seller shall, at the request of Purchaser, execute, acknowledge and deliver to
Purchaser, without further consideration, all such further assignments,
conveyances, endorsements, deeds, special powers of attorney, consents and
other documents, and take such other action, as Purchaser may reasonably
request (i) to transfer to and vest in Purchaser, and protect its rights, title
and interest in, all the Purchased Assets and (ii) otherwise to consummate the
transactions contemplated by this Agreement. In addition, from and after the
Closing Date, Seller shall afford Purchaser and its attorneys, accountants and
other representatives access, during normal business hours, to any Books and
Records relating to the Business that Seller may retain as may reasonably be
required in connection with the preparation of financial information or tax
returns of Purchaser.
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12.8 Further Assurances of Purchaser. From and after the Closing Date,
Purchaser shall afford to Seller and its attorneys, accountants and other
representatives access, during normal business hours, to such Books and Records
relating to the Business as may reasonably be required in connection with the
preparation of financial information or Tax Returns for periods concluding on
or prior to the Closing Date. Purchaser shall cooperate in all reasonable
respects with Seller with respect to its former interest in the Business and in
connection with financial account closing and reporting and claims and
litigation asserted by or against third parties, including, but not limited to,
making employees available at reasonable times to assist with, or provide
information in connection with financial account closing and reporting and
claims and litigation, provided that Seller reimburses Purchaser for its
reasonable out-of-pocket expenses (including costs of employees so assisting)
in connection therewith.
ARTICLE XIII. TERMINATION
13.1 Termination of Agreement. This Agreement may be terminated:
(i) by the mutual consent of Seller and
Purchaser;
(ii) by Seller or Purchaser if Closing has not
taken place on or before March 15, 1997;
provided however, that no Party then in
material breach of any of its obligations
hereunder shall have the right to
terminate;
(iii) by Purchaser upon notice to Seller if any
of the conditions set forth in Article X
hereof have not been satisfied or become
impossible to satisfy by the Closing Date
(other than by reason of the material
failure of Purchaser to fulfill its
obligations under this Agreement);
(iv) by Seller upon notice to Purchaser if any
of the conditions set forth in Article XI
hereof have not been satisfied or become
impossible to satisfy by the Closing Date
(other than by reason of the material
failure of Seller to fulfill its
obligations under this Agreement);
(v) by Seller if Purchaser materially breaches
or fails to fulfill its obligations under
this Agreement, which failure continues and
remains uncured for 30 consecutive calendar
days after Seller gives written notice of
such failure to Purchaser;
(vi) by Purchaser if Seller materially breaches
or fails to fulfill its obligations under
this Agreement, which failure continues and
remains uncured for 30 consecutive calendar
days after Purchaser gives written notice
of such failure to Seller; and
(vii) by Purchaser upon notice to Seller if any
of the conditions set forth below have not
been satisfied or become impossible to
satisfy by
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the Due Diligence Date (other
than by reason of the material failure of
Purchaser to fulfill its obligations under
this Agreement):
(a) the results of Purchaser's Due
Diligence shall not be satisfactory to
Purchaser in its sole discretion;
(b) Purchaser shall not have secured a
commitment for financing the
transaction contemplated by this
Agreement on terms and conditions
satisfactory to Purchaser in its sole
discretion;
(c) the results of an inspection of the
physical condition of the Real
Property, including the improvements
and the HVAC, electrical, plumbing and
other systems, by a qualified
engineering firm engaged by Purchaser,
at its cost and expense, are not
satisfactory to Purchaser in its sole
discretion; and
(d) the results of an environmental report
on the Purchased Assets and the
Business from a qualified geotechnical
or engineering firm engaged by
Purchaser, at its cost and expense,
are not satisfactory to Purchaser in
its sole discretion.
13.2 Return of Documents. If this Agreement is terminated for any
reason pursuant to this Article XIII, each Party shall return to the other
Party all documents and copies thereof which shall have been furnished to it by
such other Party or, with the agreement of the other Party, shall destroy all
such documents and copies thereof.
13.3 Deposit Fund. Upon termination of this Agreement, the Deposit Fund
shall be disbursed as follows and in accordance with the terms and conditions of
the Escrow Agreement:
(i) if this Agreement is terminated pursuant to Section
13.1(i), Section 13.1(iii) or Section 13.1(vi), the
Parties agree to instruct Escrow Agent to release
the entire amount of the Deposit Fund to Purchaser;
(ii) if this Agreement is terminated by Purchaser
pursuant to Section 13.1(vii) on or before the Due
Diligence Date, the Parties agree to instruct Escrow
Agent to release one-half of the amount of the
Deposit Fund to Purchaser and the balance of the
Deposit Fund to Seller; and
(iii) if this Agreement is terminated pursuant to Section
13.1(ii), Section 13.1(iv) or Section 13.1(v), the
Parties agree to instruct Escrow Agent to release
the entire amount of the Deposit Fund to Seller.
13.4 Remedies.
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13.4.1 Seller's Remedies. If this Agreement is terminated by
Seller as permitted under Section 13.1, the right to receive the Deposit Fund as
set forth in Section 13.3 shall be the sole and exclusive remedy of Seller as
liquidated damages, and shall be in lieu of all other rights and remedies which
may otherwise be available at law or in equity.
13.4.2 Purchaser's Remedies. If Purchaser has the right to
terminate this Agreement pursuant to Section 13.1(vi), in addition to
Purchaser's right to receive the Deposit Fund as permitted under Section 13.3,
Purchaser may seek any other remedies that may otherwise be available at law or
in equity, including, without limitation, an action for specific performance and
reimbursement from Seller for all expenses incurred by Purchaser in connection
with this Agreement and the transactions contemplated hereby.
ARTICLE XIV. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
14.1 Survival of Representations and Warranties. All representations
and warranties of the Parties shall survive until October 31, 1997 (the
"Survival Date"); provided, however, that all representations and warranties of
Seller with respect to any environmental matters set forth in Section 6.23 of
this Agreement shall survive for two years after the Closing Date.
Notwithstanding the foregoing, there shall be no termination of any such
representation or warranty as to which a claim has been asserted prior to the
termination of such survival period. Except as otherwise expressly provided in
this Agreement, all covenants, agreements, undertakings and indemnities set
forth in this Agreement shall survive indefinitely. Any Party's right to the
indemnification or other remedies based upon the representations and
warranties, covenants, agreements and undertakings of the other Party will not
be affected by any investigation, knowledge or waiver of any condition by such
Party. Any investigation by such Party shall be for its own protection only and
shall not affect or impair any right or remedy hereunder.
14.2 Indemnification by Seller. Seller shall, indemnify, defend, save
and hold Purchaser, any assignee of Purchaser and their respective officers,
directors, employees, agents and Affiliates (collectively, "Purchaser
Indemnitees") harmless from and against all demands, claims, allegations,
assertions, actions or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses (including reasonable legal fees,
interest, penalties, and all reasonable amounts paid in investigation, defense
or settlement of any of the foregoing and whether or not any such demands,
claims, allegations, etc., of third parties are meritorious; collectively,
"Purchaser Damages") asserted against, imposed upon, resulting to, required to
be paid by, or incurred by any Purchaser Indemnitees, directly or indirectly,
in connection with, arising out of, which could result in, or which would not
have occurred but for, a breach of any representation or warranty made by
Seller in this Agreement, in any certificate or document furnished at Closing
pursuant hereto by Seller or any Ancillary Agreement to which Seller is or is
to become a party, a breach or nonfulfillment of any covenant or agreement made
by any Seller in this Agreement or in any Ancillary Agreement to which Seller
is or is to become a party, and
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any and all liabilities of Seller of any nature whatsoever, whether due or to
become due, whether accrued, absolute, contingent or otherwise, existing on the
Closing Date or arising out of any transaction entered into, or any state of
facts existing, prior to the Closing Date, except for any Assumed Liability. To
the extent any Purchaser Indemnitee is entitled to collect Purchaser Damages,
Purchaser shall, at its option and subject to the terms of the Escrow Agreement,
be entitled to withdraw sufficient funds from the Escrow Fund pursuant to the
Escrow Agreement in lieu of payment directly from Seller, and to the extent the
amount due any Purchaser Indemnitee exceeds the balance of the funds held under
the Escrow Agreement, Purchaser shall be entitled to collect such balance owned
to Purchaser Indemnitee directly from Seller.
14.3 Indemnification by Purchaser. Purchaser shall indemnify, defend,
save and hold Seller and its officers, directors, Employees, Affiliates and
agents (collectively, "Seller Indemnitees") harmless from and against any and
all demands, claims, actions or causes of action, assessments, losses, damages,
deficiencies, liabilities, costs and expenses (including reasonable legal fees,
interest, penalties, and all reasonable amounts paid in investigation, defense
or settlement of any of the foregoing and whether or not any such demands,
claims, allegations, etc., of third parties are meritorious; collectively,
"Seller Damages") asserted against, imposed upon, resulting to, required to be
paid by, or incurred by any Seller Indemnitees, directly or indirectly, in
connection with, arising out of, which could result in, or which would not have
occurred but for, a breach of any representation or warranty made by Purchaser
in this Agreement or in any certificate or document furnished pursuant hereto
by Purchaser or any Ancillary Agreement to which Purchaser is a party, a breach
or nonfulfillment of any covenant or agreement made by Purchaser in this
Agreement or in any Ancillary Agreement to which Purchaser is a party, any
Assumed Liability and any and all liabilities of any nature whatsoever arising
out of Purchaser's operation of the Business after the Closing Date.
14.4 Notice of Claims. If any Purchaser Indemnitee or Seller
Indemnitee (an "Indemnified Party") believes that it has suffered or incurred
or will suffer or incur any Purchaser Damages or Seller Damages, as the case
may be ("Damages") for which it is entitled to indemnification under this
Article XIV, such Indemnified Party shall so notify the Party from whom
indemnification is being claimed (the "Indemnifying Party") with reasonable
promptness and reasonable particularity in light of the circumstances then
existing. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any
Damages, such Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give any notice
required by this Section shall not affect any of such party's rights under this
Article XIV or otherwise except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.
Notwithstanding the foregoing, any Purchaser Indemnitee shall be required to
notify Seller's Agent of any claim for Purchaser Damages as required herein
even though the same may be included in the $25,000 threshold set forth in
Section 14.6, and Seller shall have the right to dispute any such claim.
14.5 Third Party Claims. The Indemnified Party shall have the right to
conduct and control, through counsel of its choosing, the defense of any third
party claim, action or suit, and the Indemnified Party may compromise or settle
the same, provided that the Indemnified Party
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39
shall give the Indemnifying Party advance notice of any proposed compromise or
settlement. The Indemnified Party shall permit the Indemnifying Party to
participate in the defense of any such action or suit through counsel chosen by
the Indemnifying Party, provided that the fees and expenses of such counsel
shall be borne by the Indemnifying Party. If the Indemnified Party permits the
Indemnifying Party to undertake, conduct and control the conduct and settlement
of such action or suit, the Indemnifying Party shall not thereby permit to exist
any Encumbrance upon any asset of the Indemnified Party; the Indemnifying Party
shall not consent to any settlement that does not include as an unconditional
term thereof the giving of a complete release from liability with respect to
such action or suit to the Indemnified Party; the Indemnifying Party shall
permit the Indemnified Party to participate in such conduct or settlement
through counsel chosen by the Indemnified Party; and the Indemnifying Party
shall agree promptly to reimburse the Indemnified Party for the full amount of
any Damages including fees and expenses of counsel for the Indemnified Party
incurred after giving the foregoing notice to the Indemnifying Party and prior
to the assumption of the conduct and control of such action or suit by the
Indemnifying Party.
14.6 Limitation of Liability. Notwithstanding the foregoing, Seller's
liabilities and obligations to indemnify Purchaser Indemnitees against any
Purchaser Damages shall be subject to all of the following limitations:
14.6.1 Threshold. No indemnification shall be made under Section
14.2 until the aggregate amount of Purchaser Damages thereunder exceeds $25,000,
but if the aggregate amount of Purchaser Damages thereunder exceeds $25,000 in
the aggregate, then indemnification shall be made by Seller thereunder to the
full extent of the Purchaser Damages.
14.6.2 Time Period. Seller shall be obligated to indemnify
Purchaser Indemnitees by virtue of Section 14.2 only for those Purchaser Damages
as to which Purchaser has given Seller's Agent written notice thereof on or
before the Survival Date; provided, however, that with respect to any claim for
Purchaser Damages sustained by reason of a breach of any representation or
warranty relating to those matters governed by Section 6.23, Seller's liability
shall be limited to Purchaser Damages as to which such written notice shall have
been given to Seller's Agent within two years of the Closing Date.
14.6.3 Fraud; Intentional Misrepresentation. The limitations set
forth in Sections 14.6.1 and 14.6.2 shall not apply to Purchaser Damages arising
out of fraud, 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
or misrepresented.
The foregoing limitations relate only to indemnification and do not diminish or
in any way relieve Seller of any of its obligations or liabilities with respect
to the Retained Liabilities.
ARTICLE XV. GENERAL
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15.1 Expenses. Except as otherwise provided in this Agreement, and
whether or not the transactions herein contemplated shall be consummated,
Purchaser and Seller shall pay their own fees, expenses and disbursements,
including the fees and expenses of their respective counsel, accountants and
other experts in connection with the subject matter of this Agreement and all
other costs and expenses incurred in performing and complying with all
conditions to be performed under this Agreement.
15.2 Publicity. All notices to third-parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and coordinated by and between Purchaser and Seller. Except as may be
required by law, no Party shall act unilaterally in this regard without prior
written approval of the other Party, such approval not be unreasonably
withheld.
15.3 Waivers. The waiver by either Party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.
15.4 Binding Effect; Benefits. This Agreement shall inure to the
benefit of the Parties hereto, and shall be binding upon the Parties hereto and
their respective successors and assigns. Nothing in this Agreement, express or
implied, is intended to confer on any Person other than the Parties hereto, or
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
15.5 Notices. All notices, requests, demands, elections and other
communications which either Party to this Agreement may be required to give
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, by a reputable courier service which requires a signature
upon delivery, by mailing the same by registered or certified first class mail,
postage prepaid, return receipt requested, or by telecopying with receipt
confirmation (followed by a first class mailing of the same) to the Party to
whom the same is so given or made. Such notice, request, demand, waiver,
election or other communication will be deemed to have been given as of the
date so delivered or electronically transmitted or two days after mailing
thereof.
15.5.1 Notice to Seller
If to Seller, to:
Sellers' Agent:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o Keystone Management Services, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a required copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇, Price & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
15.5.2 Notice to Purchaser.
If to Purchaser, to:
Balanced Care Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Director, Legal Services
With a required copy to:
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Or to such other addresses as such Party shall have specified by notice to the
other Party hereto.
15.6 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) and the Ancillary Agreements and documents delivered at
Closing pursuant hereto and thereto constitute the entire agreement and
understanding between the Parties hereto as to the matters set forth herein and
therein and supersede and revoke all prior agreements and understandings, oral
and written, between the Parties hereto or thereto or otherwise with respect to
the subject matter hereof or thereof. No change, amendment, termination or
attempted waiver of any of the provisions hereof shall thereof be binding upon
any Party unless set forth in an instrument in writing signed by the Party to
be bound or their respective successors in interest.
15.7 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
15.8 Headings. The article, section and other headings contained in
this Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to affect the meaning or interpretation of this
Agreement.
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15.9 Construction. Within this Agreement, the singular shall include
the plural and the plural shall include the singular, and any gender shall
include all other genders, all as the meaning and the context of this Agreement
shall require.
15.10 Governing Law and Choice of Forum. The validity and
interpretation of this Agreement shall be construed in accordance with, and
governed by the internal laws of the Commonwealth of Pennsylvania.
15.11 Cooperation. The Parties hereto shall cooperate fully at their
own expense, except as otherwise provided in this Agreement, with each other
and their respective counsel and accountants in connection with all steps to be
taken as part of their obligations under this Agreement.
15.12 Severability. If any term, covenant, condition or provision of
this Agreement or the application thereof to any circumstance shall be invalid
or unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Agreement shall not be affected thereby and each remaining
term, covenant, condition and provision of this Agreement shall be valid and
shall be enforceable to the fullest extent permitted by law. If any provision
of this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.
15.13 Attorneys' Fees. If a dispute arises among the Parties as a
result of which an action is commenced to interpret or enforce any of the terms
of this Agreement, the non-prevailing Party shall pay to the prevailing Party's
reasonable out-of-pocket attorneys' fees, costs and expenses incurred in
connection with the prosecution or defense of such action.
15.14 Successors and Assigns. The covenants, agreements, and
conditions contained herein or granted hereby shall be binding upon and shall
inure to the benefit of Purchaser and Seller, and each of their respective
successors and permitted assigns. Seller shall not assign, or otherwise
transfer any interest in this Agreement to any other Person without the prior
written consent of Purchaser, which consent shall not unreasonably be withheld.
Purchaser may assign and transfer its interest in this Agreement without
Seller's consent to any of Purchaser's Affiliates or to any lender providing
financing for the transactions contemplated hereby. In addition, Purchaser
anticipates financing the transactions contemplated hereby through a
sale-leaseback. Purchaser shall have the right to assign this Agreement, in
whole or in part, in such manner as Purchaser may desire in order to facilitate
such sale-leasebacks. Purchaser will promptly provide Seller with a copy of any
such assignment, and Seller agrees to execute and deliver any consents
reasonably required by Purchaser's lender in connection therewith, provided
such assignment does not expand any of Seller's obligations and liabilities
hereunder. Notwithstanding any permitted assignment of this Agreement by
Purchaser, Purchaser shall remain liable to Seller for all obligations and
liabilities to be performed by or on behalf of Purchaser hereunder.
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[NEXT FOLLOWING PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, intending to be legally bound hereby, the Parties
have caused this Agreement to be signed in their respective names by an officer
thereof duly authorized as of the date first above written.
BALANCED CARE CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇-▇▇▇▇ HEALTH CARE CENTER, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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