THE LIMITED PARTNERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND MAY BE OFFERED
OR SOLD ONLY (1) UPON REGISTRATION OF THE LIMITED PARTNERSHIP INTERESTS UNDER
THE SECURITIES ACT AND THE STATE ACTS OR PURSUANT TO AN EXEMPTION THEREFROM, AND
(2) AFTER COMPLIANCE WITH ALL RESTRICTIONS ON TRANSFER OF SUCH LIMITED
PARTNERSHIP INTERESTS IMPOSED BY THIS AGREEMENT.
* * *
PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT
-------------------------------------------------
THIS PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT (this
"Agreement") is made and entered into as of September 25, 1997, by and between
ELDERTRUST OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership
("Transferee"), GHV ASSOCIATES, a Pennsylvania general partnership (the
"Partnership") and each of the parties listed on Schedule 1.1 attached hereto
who executes a Partner Consent (hereinafter defined) agreeing to become a party
to this Agreement (each a "Contributor" and collectively, "Contributors").
WHEREAS, Contributors each are partners in the Partnership;
WHEREAS, the Partnership owns and operates a clinic and
training facility known as Windsor Clinic/Windsor Training Facility consisting
of a leasehold estate in the real property described in Exhibit A hereto (the
"Clinic Real Property"), the improvements thereon and all other real and
personal property associated therewith all of which other real and personal
property is described in Exhibit A-1 hereto (the Clinic Real Property together
with all such other real and personal property shall be known as the "Clinic
Property");
WHEREAS, the Partnership owns and operates an office building
known as Windsor Office Building consisting of the real property described in
Exhibit B hereto (the "Office Real Property"), the improvements thereon and all
other real and personal property associated therewith all of which other real
and personal property is described in Exhibit B-1 hereto (the Office Real
Property together with all such other real and personal property shall be known
as the "Office Property") (the Clinic Real Property and the Office Real Property
hereinafter collectively shall be known as the "Real Property"; the Clinic
Property and the Office Property hereinafter collectively shall be known as the
"Property"); and
WHEREAS, the Partnership desires to contribute the Property to
Transferee on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises and covenants set forth herein, Transferee, the Partnership and
Contributors hereby agree as follows:
ARTICLE I
THE CONTRIBUTION
1.1 Contribution and Acquisition of Contributed Property.
Subject to the terms and conditions set forth herein, the Partnership agrees to
contribute to Transferee and Transferee agrees to acquire and accept from the
Partnership, the Property, in exchange for units of limited partnership interest
in Transferee (the "Units"), as set forth in Article II hereof, in a transaction
intended to qualify for nonrecognition of gain to Contributors pursuant to
Section 721 of the Internal Revenue Code of 1986, as amended (the "Code") (the
"Contribution").
1.2. Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall occur simultaneously with the closing of
the initial public offering (the "IPO") of shares of beneficial interest in
ElderTrust, a Maryland real estate investment trust (the "REIT"); provided, that
if the IPO has not occurred on or before March 31, 1998, this Agreement shall
terminate and none of the parties hereto shall have any further liability to any
other party hereto. The Closing shall occur simultaneously with the delivery of
the following documents:
(a) the Registration Rights Agreement, substantially in the
form attached hereto as Exhibit C, executed by Transferee and Contributors;
(b) the Second Amended and Restated Agreement of Limited
Partnership of Transferee, substantially in the form attached hereto as Exhibit
D (the "Operating Partnership Agreement");
(c) the documents specified in Section 8.1 and Section 8.2
hereof; and
(d) such other documents as the parties may mutually agree.
-2-
ARTICLE II
EXCHANGE AMOUNT
2.1. Exchange Amount.
(a) Units Delivered at Closing. In exchange for the
contribution of the Property and upon execution and delivery of the Letter of
Direction (as defined below) by the Partnership and of the Operating Partnership
Agreement by Contributors, the Partnership shall receive on behalf of
Contributors, at the Closing, an aggregate number of Units equal to (i) $666,400
(the "Aggregate Amount") divided by (ii) the midpoint of the price range for
shares of beneficial interest in the REIT as set forth in the REIT's final
preliminary prospectus (the "Final Preliminary Prospectus") related to the IPO,
rounded up to the nearest whole Unit. The rights of holders of the Units as of
the Closing will be as set forth in the Operating Partnership Agreement.
(b) Distribution of Units. At the Closing, Transferee shall
issue the Units (as determined pursuant to Section 2.1(a) above) to Contributors
in the denominations set forth in the Letter of Direction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TRANSFEREE
Transferee hereby represents and warrants to the Partnership
and Contributors as follows:
3.1 Organization, Power and Authority, and Qualification.
Transferee is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware. Transferee has the requisite
power and authority to carry on its respective business as it is now being
conducted and to engage in the Contribution. Transferee has made available to
the Partnership and Contributors complete and correct copies of the governing
documents of Transferee with all amendments as in effect on the date of this
Agreement. Transferee is qualified to do business and is in good standing in
each jurisdiction where the character of its property owned or leased or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified and in good standing would not have a material
adverse effect on the business or financial condition of Transferee.
3.2 Authority Relative to this Agreement. All action of
Transferee necessary to authorize the execution, delivery and performance of
this Agreement by Transferee has been taken, and no other proceedings on the
part of Transferee are necessary to authorize the execution and delivery of this
Agreement by Transferee and the consummation by Transferee of the Contribution.
-3-
Neither the execution and delivery of this Agreement by
Transferee nor the consummation by Transferee of the Contribution nor compliance
by Transferee with any of the provisions hereof will (i) conflict with or result
in any breach of any provisions of the partnership agreement of Transferee, (ii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Transferee is a party or by which it or
any of its properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Transferee or any
of the properties or assets of Transferee.
3.3 Binding Obligation. This Agreement has been duly and
validly executed and delivered by Transferee to the Partnership and Contributors
and constitutes a valid and binding agreement of Transferee, enforceable against
Transferee in accordance with its terms, except that such enforcement may be
subject to bankruptcy, conservatorship, receivership, insolvency, moratorium or
similar laws affecting creditors' rights generally or the rights of creditors of
limited partnerships and to general principles of equity.
3.4 Brokers. Transferee has not employed any broker or
finder, or incurred any liability therefor, in connection with the Contribution
contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP AND EACH CONTRIBUTOR
The Partnership and Contributors hereby represent and warrant
to Transferee as follows:
4.1 Organization and Qualification. The Partnership is a
general partnership duly organized and validly existing under the laws of the
Commonwealth of Pennsylvania. The Partnership has the requisite power and
authority to carry on its business as it is now being conducted. The Partnership
has made available to Transferee complete and correct copies of the
organizational documents of the Partnership, with all amendments as in effect on
the date of this Agreement. The Partnership is qualified to do business in each
jurisdiction where the character of its property owned or leased or the nature
of its activities makes such qualification necessary, except where the failure
to be so qualified and in good standing would not have a material adverse effect
on the business or financial condition of the Partnership or on the
Contribution. None of the Contributors nor the Partnership is a "foreign person"
under Section 1445 of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
-4-
4.2 Authority Relative to this Agreement. All action
necessary to authorize the execution, delivery and performance of this Agreement
by the Partnership and Contributors has been taken, and no other proceedings are
necessary to authorize the execution and delivery by the Partnership and
Contributors of this Agreement and the consummation by the Partnership of the
Contribution.
Neither the execution and delivery of this Agreement by the
Partnership and Contributors, nor the consummation by the Partnership of the
Contribution nor compliance by the Partnership and Contributors with any of the
provisions hereof will (i) conflict with or result in any breach of any
provisions of the partnership agreement of the Partnership, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, permit, contract, agreement,
easement, restriction or other instrument or obligation to which Contributors or
the Partnership is a party or by which Contributors or the Partnership or the
Property may be bound, or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Contributors, the Partnership or the
Property, except in the case of (ii) or (iii) for violations, breaches, or
defaults (A) which would not in the aggregate have a material adverse effect on
the business or financial condition of Contributors, the Partnership, the
Contribution or the Property or (B) for which waivers or consents have been
obtained or, as listed on Schedule 4.2, will be obtained prior to the date of
the Closing.
4.3 Binding Obligation. This Agreement has been duly and
validly executed and delivered by the Partnership and Contributors to Transferee
and constitutes a valid and binding agreement of the Partnership and each
Contributor, enforceable against the Partnership and each Contributor in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, conservatorship, receivership, insolvency, moratorium or similar
laws affecting creditors' rights generally and to general principles of equity.
4.4 Brokers. None of the Partnership or any of the
Contributors has employed any broker or finder, or incurred any liability
therefor, in connection with the Contribution contemplated by this Agreement.
4.5 Title to Assets. The Partnership has good and valid title
to the Clinic Personal Property (as defined on Exhibit A-1) and to the Office
Personal Property (as defined on Exhibit B-1). To the knowledge of the
Partnership and Contributors, the Property is not subject to any imperfections
in title, easements, liens, mortgages, encumbrances, pledges, claims, charges,
options, defects, preferential purchase rights or other encumbrances
(collectively referred to herein as "Liens") except for the following
("Permitted Liens"):
-5-
(i) Liens for real property taxes and assessments or for fire
dues, library dues or similar assessments not yet
delinquent;
(ii) Liens that are not material in character, amount, or
extent and do not materially detract from the value, or
interfere with the use of, the Partnership's assets
subject thereto or affected thereby or otherwise
materially impair the business operations being conducted
or proposed to be conducted thereon;
(iii) the Mortgage Debt (as hereinafter defined); and
(iv) Liens shown on Schedule 4.5 hereto.
4.6 Debt. The Property is encumbered by the mortgage
indebtedness described on Schedule 4.6 hereto (the "Mortgage Debt"). Except for
the Mortgage Debt, the Partnership has no material indebtedness other than
indebtedness incurred by it in its ordinary course of business. To the knowledge
of the Partnership and Contributors, there exists no default, or event which
with the passage of time or notice or both would constitute a default with
respect to the Mortgage Debt or any other debt of the Partnership that has not
been cured or that would have a material adverse effect on the business or
financial condition of the Partnership, the Contribution or the Property.
4.7 Financial Statements. The financial statements of the
Partnership attached as Schedule 4.7 hereto (the "Financial Statements") have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods specified. The balance
sheets in the Financial Statements fairly present the financial condition of the
Partnership as of the dates shown, and the income statements in the Financial
Statements fairly present the results of operations for the periods indicated.
4.8 Financial Condition. Since June 30, 1997, there has been
no material adverse change in the business or financial condition of the
Partnership.
4.9 Leases. Except as set forth on Schedule 4.9 hereto, the
Partnership has not entered into any leases, tenancies or other rights of
occupancy in effect on the date hereof with respect to the Property. Each of the
leases referenced in Schedule 4.9 (the "Leases") has been delivered to or made
available to Transferee and is presently unamended (or with respect to each such
lease that has been amended, all amendments thereto have been delivered or made
available to Transferee) and, to the knowledge of the Partnership and
Contributors, are in full force and effect without material default.
4.10 Contracts. The Partnership is not a party to and none of
Contributors nor the Partnership is bound by any contracts or other
understandings, written or oral, that relate to the Property, except for
contracts or understandings that are not material to the business and operations
of the Property (collectively, the "Contracts," which term shall not be
construed to include any leases). Neither Contributors nor the Partnership, as
applicable, nor, to the knowledge of the Partnership and Contributors, any other
party thereto has breached or defaulted under the terms of any Contract, except
for such breaches or defaults that would not have a material adverse effect on
the business or operations of the Partnership or the Property.
-6-
4.11 Permits. To the knowledge of the Partnership and
Contributors, the Partnership has all such franchises, certificates, licenses,
permits and other authorizations from government political subdivisions,
regulatory authorities or any other person or entity (collectively "Permits") as
are necessary for the ownership, use, operation and licensing of the Property as
it is currently being used, except where the failure to possess such Permits
would not have a material adverse effect on the business or financial condition
of the Partnership or the Property, and to the knowledge of the Partnership and
Contributors, the Partnership is not in violation of any Permit in any material
respect and all Permits of the Partnership are valid and in full force and
effect.
4.12 Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Partnership
and Contributors, threatened against Contributors or the Partnership, or any
properties or rights of Contributors or the Partnership, that would have a
material adverse effect on the business or financial condition of the
Partnership, the Contribution or the Property before any court or
administrative, governmental or regulatory authority or body, domestic or
foreign. None of the Partnership or the Property is subject to any order,
judgment, injunction or decree of any court, tribunal or other governmental
authority (other than generally applicable laws, rules and regulations) that
would have a material adverse effect on the business or financial condition of
the Partnership, the Contribution or the Property.
4.13 Compliance with Laws. To the knowledge of the Partnership
and Contributors, the Partnership has not received any written or other actual
notice of any material violation of any applicable zoning regulation or
ordinance, or of any employment, environmental, or other regulatory law, order,
regulation or requirement, including applicable subdivision laws, relating to
the Property or the business or operations thereon, which remains uncured, and,
to the knowledge of the Partnership and Contributors, there are no such
violations which, individually or in the aggregate, would have a material
adverse effect on the business or financial condition of the Partnership or the
Property.
4.14 Taxes. Except for such matters as in the aggregate shall
not result in a material adverse effect on the business or financial condition
of the Partnership, (i) all tax or information returns required to be filed on
or before the date hereof by or on behalf of the Partnership have been filed
through the date hereof or will be filed on or before the date of the Closing in
accordance with all applicable laws, (ii) there is no action, suit or proceeding
pending against, or with respect to, the Partnership or the Property in respect
of any tax nor is any claim for additional tax asserted by any such authority,
and (iii) all taxes (including related penalties, interest and additional
amounts) imposed upon the Partnership and required to be reported on a return
required to be filed (without regard to any applicable extensions) on or before
the date hereof have been paid or will be paid prior to the delinquency thereof.
-7-
4.15 Insurance. To the knowledge of the Partnership and
Contributors, each of the insurance policies with respect to the Property is in
full force and effect and all premiums due and payable thereunder have been
fully paid when due. To the knowledge of the Partnership and Contributors, the
Partnership has not received from any insurance company notice of any material
defects or deficiencies affecting the insurability of the Property or notices of
cancellation or intent to cancel any such insurance.
4.16 Employees. The Partnership has no employees.
4.17 Utilities. To the knowledge of the Partnership and
Contributors, usable public sanitary and storm sewers, public water, and gas and
electrical utilities (collectively, the "Public Utilities"), of adequate
capacity for the operation of the Property, are installed in, and are duly
connected to, the Property and can be used without any charge except the normal
and usual metered charges imposed for such Public Utilities. No amounts due and
owing with respect to the Property in connection with utilities, insurance,
assessments or other charges customarily prorated in real estate transactions
have been outstanding more than 30 days.
4.18 Environmental. For the purpose of this Section 4.18, the
term "Hazardous Substances" shall mean substances defined as a "hazardous
waste," "hazardous substance," or "toxic substance" under any Environmental
Laws, including, without limitation, oil, petroleum, or any petroleum-derived
substance or waste, asbestos or asbestos-containing materials, PCBs, pesticides,
explosives, radioactive materials, dioxins, urea formaldehyde insulation or any
constituent of any such substance, pollutant or waste. As used herein,
"Environmental Laws" shall include, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
ss. 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901, et seq., the Clean Air Act, 42 U.S.C. ss. 7401, et seq., the Clean Water
Act, 33 U.S.C. ss. 1251, et seq., the Toxic Substance Control Act, 15 U.S.C. ss.
2601, et seq. and the Occupational Safety and Health Act, 29 U.S.C. ss. 651, et
seq., as any of the preceding have been amended prior to the date of the
Closing, and any other federal, state or local law, ordinance, regulation, rule,
order, decision or permit relating to the protection of human health from
environmental effects of Hazardous Substances and which are applicable to the
Property.
-8-
To the knowledge of the Partnership and Contributors, and
except as may be revealed in the Phase I Environmental Report prepared for the
Property by ▇▇▇ ▇. ▇▇▇▇▇▇, Inc., dated July, 1997, (i) no Hazardous Substances
are present in, on or under the Property that require remediation under
applicable law or would have a material adverse affect on the condition
(financial or otherwise), earnings, assets, business affairs or business
prospects of the Property, the Partnership or the Contribution, (ii) no
liability under or violation of any Environmental Laws or condition that could
give rise to such liability or violation exists with respect to the Property,
except for liabilities that would not have a material adverse effect on the
business or financial condition of the Partnership or the Property, and (iii)
the Partnership has not caused or allowed any discharge or disposal of any
Hazardous Substances at the Property except in compliance with Environmental
Laws. The Partnership has not received any written notice from any governmental
agency or instrumentality having jurisdiction thereof of any violation of any
Environmental Laws which remains uncured or unremediated.
4.19 [INTENTIONALLY DELETED]
4.20 Pending Assessments and Eminent Domain. None of the
Partnership or any of the Contributors has knowledge of, and neither
Contributors nor the Partnership has received notice of, any pending proceeding
for the imposition of any special assessment, or the formation of a special
assessment district, or for a condemnation proceeding which would materially
affect in any manner any portion of the Property.
4.21 Securities Matters.
(a) The Partnership and each Contributor acknowledge that
Transferee intends the offer and issuance of the Units to be exempt from
registration under the Securities Act and applicable state securities laws by
virtue of (i) the status of the Partnership and each Contributor as an
accredited investor and (ii) Regulation D promulgated under Section 4(2) of the
Securities Act ("Regulation D"). Transferee will rely in part upon the
representations and warranties made by the Partnership and Contributors in
making a determination that the offer and issuance of the Units qualify for
exemption under Rule 506 of Regulation D as an offer and sale only to accredited
investors.
(b) The Partnership and each Contributor is an Accredited
Investor.
(c) Each Contributor will acquire the Units solely for his,
her or its own account, and not with a view to or for sale in connection with
any "distribution" thereof within the meaning of the Securities Act.
-9-
(d) The Partnership and each Contributor have sufficient
knowledge and experience in financial, tax and business matters to enable it or
him to evaluate the merits and risks of investment in the Units. The Partnership
and each Contributor have the ability to bear the economic risk of acquiring the
Units. The Partnership and each Contributor acknowledge that (i) the
transactions contemplated by this Agreement involve complex tax consequences for
the Partnership and each Contributor, and the Partnership and each Contributor
is relying solely on the advice of his, her or its own tax advisors in
evaluating such consequences, (ii) Transferee has not made (or shall be deemed
to have made) any representations or warranties as to the tax consequences of
such transaction to the Partnership and to Contributors, and (iii) any
references in this Agreement to the intended tax effect of the Contribution and
the other matters described herein shall not be deemed to imply any
representation by Transferee as to a particular tax effect that may be obtained
by the Partnership and Contributors. The Partnership and Contributors remain
solely responsible for all tax matters relating to the Partnership and
Contributors.
(e) The Partnership and each Contributor have received and
reviewed materials containing certain information regarding Transferee, the REIT
and the IPO prior to executing this Agreement. The Partnership and each
Contributor have been supplied with, or had access to, information to which a
reasonable investor would attach significance in making an investment decision
to acquire the Units and any other information the Partnership or any
Contributor has requested. The Partnership and each Contributor have had an
opportunity to ask questions of and receive information and answers from
Transferee concerning Transferee, the REIT and the Units and to assess and
evaluate any information supplied to the Partnership and Contributors by
Transferee.
(f) The Partnership and each Contributor acknowledge that the
Units are not registered under the Securities Act or any state securities laws
and cannot be resold without registration thereunder or exemption therefrom.
Each Contributor agrees that he, she or it will not transfer all or any portion
of the Units for at least one (1) year after the date of the Closing, and
thereafter only if such transfer has been registered or is exempt from
registration under the Securities Act and any applicable state securities laws.
4.22 [INTENTIONALLY DELETED]
4.23 Governmental Proceedings. There is no governmental action
or governmental proceeding (zoning or otherwise) or governmental investigation
pending or, to the knowledge of the Partnership and Contributors, threatened
against or relating to the Property or the transactions contemplated by this
Agreement.
-10-
4.24 No Agreements. Except as set forth on Schedule 4.24,
other than the Leases, the Property is not subject to any outstanding agreement
of sale or lease, option to purchase or other right of any third party to
acquire any interest therein.
4.25 Ground Lease. (i) The ground lease which creates a
leasehold interest in the Clinic Real Property (the "Ground Lease") is in full
force and effect, (ii) Transferor is not in material default under any of the
terms, conditions, covenants or provisions of the Ground Lease, (iii) neither
Transferor nor the landlord under the Ground Lease has commenced any action or
given or received any notice asserting a default thereunder or for the purpose
of terminating the Ground Lease and (iv) all rents, additional rents and other
sums due and payable under the Ground Lease by Transferor have been paid in
full.
ARTICLE V
COVENANTS AND AGREEMENTS OF THE PARTNERSHIP AND CONTRIBUTORS
The Partnership and Contributors hereby covenant and agree
with Transferee that prior to the date of the Closing:
5.1 Actions Affecting Assets. Except in the ordinary course
of business, the Partnership shall not sell, assign, pledge, transfer or
encumber, or enter into any other material consent, commitment, understanding or
other agreement, or incur any material obligation or liability (contingent or
absolute) with respect to the Property or merge or consolidate with or into any
other entity or enter into any agreements relating thereto without Transferee's
prior consent.
5.2 Access to Property and Records. Upon reasonable notice
and during regular business hours, the Partnership shall give Transferee and
Transferee's authorized representatives full access to the Partnership's
personnel and all properties, documents, contracts, facilities, books, equipment
and records of the Partnership, relating to the Property to conduct its
investigations, including, without limitation, surveys, site analyses, soil
tests, engineering studies, and other investigations.
5.3 Permits. The Partnership shall maintain all Permits in
full force and effect, and will file timely all reports, statements, renewal
applications and other filings, and will pay timely all fees and charges in
connection therewith that are required to keep the Permits in full force and
effect.
5.4 Contracts. The Partnership shall not enter into any new
Contracts with respect to the Property except in the ordinary course of the
business of the operation of the Property.
-11-
5.5 Insurance. The Partnership shall maintain in full force
and effect substantially the same public liability and casualty insurance
coverage now in effect with respect to the Property.
5.6 Taxes and Assessments. The Partnership shall pay or
discharge before delinquent all tax liabilities and obligations, including
without limitation those for federal, state or local income, property,
unemployment, withholding, sales, transfer, stamp, documentary, use and other
taxes.
5.7 Binding Commitments. The Partnership shall not make any
commitments or representations to any applicable government authorities, any
adjoining or surrounding property owners, any civic association, any utility or
any other similar person or entity that would in any manner be binding upon
Transferee or the Property without Transferee's prior consent, except such
agreements that would not have a material adverse effect on the Property.
5.8 Compliance with Law. The operations of the Partnership
and the Property will be conducted in compliance with all applicable laws,
including, without limitation, all such laws regulations, orders and
requirements promulgated by any governmental authority or relating to
environmental protection, fire, zoning and building and occupational safety
matters, except for noncompliance that individually or in the aggregate would
not and, insofar as may reasonably be foreseen, in the future will not, have a
material adverse effect on the business or operations of the Partnership or the
Property.
5.9 Operation of Property. The Partnership shall operate and
maintain the Property in the same manner as the Partnership has heretofore
operated the Property.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF
CONTRIBUTION BY TRANSFEREE
The obligation of Transferee to consummate the Contribution
shall be subject to fulfillment (or waiver) at or prior to the date of the
Closing of the following conditions:
6.1 Representations, Warranties and Covenants. The
representations, warranties and covenants made by the Partnership and
Contributors in this Agreement or in any document delivered by the Partnership
or any Contributor pursuant to this Agreement shall be true and correct in all
material respects when made and on and as of the date of the Closing as though
such representations, warranties and covenants were made on and as of such date.
-12-
6.2 No Material Adverse Change. There shall have been no
material adverse change in the value or condition of the Property or the
Partnership since the date hereof, except for changes contemplated by this
Agreement and changes in the ordinary course of business which do not have a
material adverse effect on the business or financial condition of the
Contribution, the Partnership or the Property.
6.3 Title Insurance. Commonwealth Land Title Insurance
Company (the "Title Company") shall have issued to Transferee an ALTA owners
title insurance policy effective as of the date of the Closing or an
unconditional commitment therefor insuring leasehold title to the Property to be
vested in Transferee in the aggregate amount of not less than $666,400, subject
to no exceptions other than Permitted Liens (other than the Mortgage Debt), with
such endorsements and otherwise in form acceptable to Transferee in its sole and
absolute discretion.
6.4 No Order or Injunction. The consummation of the
Contribution shall not have been restrained, enjoined or prohibited by any order
or injunction of any court or governmental authority of competent jurisdiction
nor shall there be any pending or threatened condemnation proceeding with
respect to the Property or any portion thereof.
6.5 Consents. All consents listed on Schedule 4.2 or
otherwise necessary for the execution and delivery of this Agreement by the
Partnership and each Contributor and the consummation of the Contribution by the
Partnership have been obtained, including, without limitation, the execution by
the Partnership and each Contributor on or before the date hereof of a consent
form pursuant to which each such Contributor has executed this Agreement and
consented to each matter set forth herein (each, a "Partner Consent").
6.6 Instruments of Conveyance. The Partnership shall have
delivered the instruments evidencing conveyance of the Property referred to in
Section 8.1.
6.7 IPO Closing. The IPO shall close simultaneously with the
Contribution.
6.8 Simultaneous Closing. The Contribution shall close
simultaneously with the closing under the agreements listed on Schedule 6.8
hereof.
-13-
ARTICLE VII
CONDITIONS TO CONSUMMATION
OF TRANSACTION BY THE PARTNERSHIP AND CONTRIBUTORS
The obligation of the Partnership and Contributors to
consummate the Contribution shall be subject to fulfillment (or waiver) at or
prior to the date of the Closing of the following conditions:
7.1 Representations, Warranties and Covenants. The
representations, warranties and covenants made by Transferee in this Agreement
or in any document delivered by Transferee pursuant to this Agreement shall be
true and correct in all material respects when made and on and as of the date of
the Closing as though such representations, warranties and covenants were made
on and as of such date.
7.2 Consents. All consents necessary for the consummation of
the Contribution by Transferee shall have been obtained.
7.3 IPO Closing. The IPO shall close simultaneously with the
Contribution.
7.4 Simultaneous Closing. The Contribution shall close
simultaneously with the closings under the agreements listed on Schedule 6.8
hereof.
ARTICLE VIII
THE CLOSING
Subject to the terms and conditions of this Agreement, the
Closing shall take place promptly after satisfaction or waiver of the conditions
set forth in Articles VI and VII hereof.
8.1 Closing Deliveries by the Partnership and Contributors. At
Closing, the Partnership or each Contributor, as applicable, shall deliver (or
cause to be delivered pursuant to the Power of Attorney referred to in Section
11.8) the following:
(a) a special warranty deed conveying good and marketable
title to the Office Real Property (subject only to Permitted
Liens);
(b) an assignment of leasehold estate conveying good and
marketable title to the leasehold estate created by the Ground
Lease relating to the Windsor Clinic (subject only to
Permitted Liens);
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(c) if requested by Transferee, a special warranty deed
conveying good and marketable title to the improvements
located on the Clinic Real Property (subject only to Permitted
Liens);
(d) a ▇▇▇▇ of sale pursuant to which the Partnership shall
convey to Transferee good title to that Property that consist
of personal property, free and clear of all liens and
encumbrances (other than Permitted Liens);
(e) such assignment and assumption agreements as may be
deemed necessary and appropriate by Transferee and the
Partnership pursuant to which the Partnership shall assign to
transferee all other assets of the Partnership that are used
or useful in connection with the operation of the Property,
including, without limitation, the Leases, the Contracts, the
Permits (to the extent assignable), and pursuant to which
Transferor shall assume liabilities associated therewith that
arise after the Closing;
(f) a certification by the Partnership and each
Contributor, duly executed by the Partnership or such
Contributor, as applicable, under penalty of perjury, setting
forth the Partnership's or Contributor's, as applicable,
address and federal tax identification number and certifying
that such Contributor is not a "foreign person" under Section
1445 (as may be amended) of the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder;
(g) such documents and certificates as Transferee may
require to establish the authority of the parties executing
any documents in connection with the Contribution including,
in the case of the Partnership or any Contributor that is a
corporation, partnership, limited liability company or other
similar entity (other than a trust or estate), an opinion of
counsel, reasonably satisfactory to Transferee, as to the due
execution and delivery of such documents;
(h) such consents as are contemplated by Section 6.5
hereof;
(i) a certificate of the Partnership and Contributors
certifying that the representations and warranties of the
Partnership and Contributors set forth herein are true and
correct in all material respects as of the Closing Date;
(j) a letter of direction (the "Letter of Direction") from
the Partnership to Transferee directing Transferee to issue
certificates representing the Units to Contributors in the
denominations set forth in such Letter of Direction; and
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(k) such other documents and instruments as Transferee,
the Partnership and Contributors agree are necessary or
appropriate.
8.2 Closing Deliveries by Transferee. At Closing, Transferee
shall deliver or cause to be delivered the following:
(a) the Units referred to in Article II hereof;
(b) copies of the executed Registration Rights Agreement
and Operating Partnership Agreement;
(c) the assignment and assumption agreements referenced
in Section 8.1(c) above;
(d) a certificate of Transferee certifying that the
representations and warranties of Transferee set forth herein
are true and correct in all material respects as of the
Closing Date;
(e) such other documents and instruments as the
Partnership, Contributors and Transferee agree are necessary
or appropriate.
8.3 Closing Costs. Transferee agrees to pay all costs
associated with the closing of the acquisition of the Property by Transferee,
including (i) survey costs, (ii) costs of obtaining a title insurance policy for
the benefit of Transferee, (iii) documentary and transfer fees, and (iv) all
taxes, recording charges and other fees imposed on or in connection with the
Contribution; provided, however, to the extent any instruments are required to
be recorded in connection with the Contribution, the Partnership and
Contributors, on one hand, and Transferee, on the other hand, shall each pay
one-half (1/2) of all costs, transfer and recordation taxes and fees associated
with the recordation. Each party shall pay its own legal fees. Transferee's
obligation to pay the closing costs hereunder shall be in addition to and apart
from its obligation to deliver the Units to Contributors.
8.4 Adjustments. The Partnership, Contributors and Transferee
agree that charges, credits and adjustments shall be made as of the Closing
Date, and a statement setting forth such adjustments shall be initialed by the
parties. The subject areas of such adjustments shall include:
(a) Real estate, personal property and similar taxes and
assessments (general and special, ordinary and extraordinary) that have become
or may become a lien on the Property;
(b) Rents and other amounts payable under the Leases;
(c) Charges for public utilities servicing the Property,
payments under the Contracts, charges under easements and similar agreements
affecting the Property;
(d) Insurance premiums, if any, to the extent policies
are assumed by Transferee; and
(e) All other charges and fees customarily prorated and
adjusted in similar transactions.
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The parties shall prorate on the best available information;
all adjustments that cannot be determined precisely as of the Closing Date shall
be readjusted as soon as practicable. The Partnership shall use its best efforts
to have all utility meters read as of the Closing Date. To the extent
practicable, as the Partnership, Contributors and Transferee agree as
appropriate, such prorations may occur outside the Closing by arrangement with
the vendor or supplier of services (e.g., utilities).
ARTICLE IX
REMEDIES ON DEFAULT
9.1 Remedies of the Partnership and Contributors. Except for
any breaches waived in writing by the Partnership and Contributors, if
Transferee fails to consummate the Contribution when required to do so pursuant
to the provisions hereof, then the Partnership or Contributors shall be entitled
to terminate this Agreement as the exclusive and sole right and remedy of the
Partnership and Contributors (except as provided in the next sentence),
whereupon this Agreement shall terminate and none of the parties shall have any
further obligations to any other party, provided, however, that in such event,
Transferee shall reimburse the Partnership and Contributors for all reasonable
costs incurred by the Partnership and Contributors in connection with the
Transaction, provided that the amount to be reimbursed by Transferee shall not
exceed Twenty-Five Thousand Dollars ($25,000).
9.2 Transferee's Remedies. Except for any breaches waived in
writing by Transferee, if the Partnership or any Contributor has breached any of
his, her or its covenants or obligations under this Agreement or has failed,
refused or is unable to consummate the Contribution by the date of the Closing
when and as required to do so hereunder, then Transferee shall have the right to
bring an action at law or in equity seeking the specific performance of the
obligations of the Partnership and Contributors hereunder and in addition
thereto or in lieu thereof, Transferee may avail itself of any other remedies
available at law or in equity on account of such breach, provided, however, the
amount of money damages that Transferee may recover from the Partnership and
Contributors shall not exceed Twenty-Five Thousand Dollars ($25,000).
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9.3 Limitation on Liability of the Partnership and
Contributors. Any liability of the Partnership or Contributors to Transferee
pursuant to Section 9.2 shall be several and not joint and shall be limited to
the fair market value of the Units issued to Contributors at Closing (assuming
for this purpose that the fair market value of each Unit is equal to the price
per share of beneficial interest of the REIT at the time of determination).
ARTICLE X
INDEMNIFICATION
10.1 Indemnification by the Partnership and Contributors. The
Partnership and Contributors hereby jointly and severally indemnify and agree to
defend and hold harmless Transferee, and its officers, directors, employees,
agents and successors and assigns and its general partners and any officers,
trustees, directors, employees, agents and successors and assigns of such
general partners ("Transferee Indemnitees"), from and against any and all
demands, claims, actions or causes of action, assessments, expenses, costs,
damages, losses and liabilities (including attorneys' fees and other charges)
which may at any time be asserted against or suffered by any Transferee
Indemnitee, the Property, or any part thereof, whether before or after date of
the Closing, as a result of, on account of or arising from (a) the failure of
the Partnership or Contributors to perform any of their obligations hereunder
or, to the extent provided in Section 11.1, the breach by the Partnership or
Contributors of any of their representations and warranties hereunder, (b)
events, contractual obligations, acts or omissions of Contributors or the
Partnership that occurred in connection with the ownership or operation of the
Property prior to the Closing, (c) damage to property or injury to or death of
any person or any claims for any debts or obligations occurring on or about or
in connection with the Property or any portion thereof or with respect to the
operation of the Property at any time or times prior to the Closing, or (d) any
obligation, claim, suit, liability, contract, agreement, debt or encumbrance
(other than Permitted Liens) created, arising or accruing prior to the date of
the Closing, regardless of when asserted, relating to the Property or its
operation, including, without limitation, any and all liabilities for federal or
state income taxes or other taxes, which shall not have been set forth or
specifically described in this Agreement or the Schedules and the Exhibits
hereto. The obligations of the Partnership and Contributors under this Section
10.1 shall survive the Closing.
10.2 Indemnification by Transferee. Transferee hereby
indemnifies and agrees to defend and hold harmless the Partnership and
Contributors, and their respective successors and assigns ("Contributor
Indemnitees"), from and against any and all demands, claims, actions or causes
of action, assessments, expenses, costs, damages, losses and liabilities
(including attorneys' fees and other charges) which may at any time be asserted
against or suffered by any Contributor Indemnitee, the Property, or any part
thereof, whether before or after the date of the Closing, as a result of, on
account of or arising from (a) the failure of Transferee to perform any of its
obligations hereunder or, to the extent provided in Section 11.1, the breach by
Transferee of any of its representations and warranties made herein, (b) events,
contractual obligations, acts or omissions of Transferee that occurred in
connection with the ownership or operation of the Property prior to the Closing,
(c) damage to property or injury to or death of any person or any claims for any
debts or obligations occurring on or about or in connection with the Property or
any portion thereof or with respect to the operation of the Property at any time
or times prior to the Closing, or (d) any damage to the Property caused by
Transferee in connection with any studies, investigations or tests conducted by
Transferee pursuant to Section 5.2 hereof. The obligations of Transferee under
this Section 10.2 shall survive the Closing.
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ARTICLE XI
GENERAL PROVISIONS
11.1 Survival of Liability with Respect to Representations and
Warranties. (a) It is the express intention and agreement of the parties that
the representations and warranties of Transferee, the Partnership and
Contributors set forth in this Agreement shall survive the consummation of the
Contribution for a period of one (1) year from the date of the Closing except
that (i) the representation and warranty of the Partnership and Contributors set
forth in Section 4.18 hereof shall survive the consummation of the Contribution
for a period of two (2) years from the date of the Closing and (ii) the
representations and warranties of the Partnership and Contributors set forth in
Section 4.21 hereof shall survive Closing and shall not terminate. Except as
provided in the preceding sentence, such representations and warranties shall
expire and be terminated and extinguished forever at the expiration of such
period. Any written notice given within such period setting forth a claim must
set forth the nature and details of the claim with specificity.
(b) Any liability of the Partnership or Contributors to
Transferee pursuant to this Section 11.1 shall be joint and several and, except
for a breach of a representation and warranty set forth in Section 4.21 hereof,
shall be limited to twenty percent (20%) of the fair market value of the Units
issued to Contributors at Closing (assuming for this purpose that the fair
market value of each Unit is equal to the price per share of beneficial interest
of the REIT at the time of determination).
11.2 Notices. All notices, demands, requests or other
communications which may be or are required to be given or made by the
Partnership, Contributors or Transferee to the other pursuant to this Agreement
shall be in writing and shall be hand delivered or transmitted by certified
mail, express overnight mail or delivery service, telegram, telex or facsimile
transmission to the parties at the following addresses:
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If to a Contributor, at the address of Contributor set forth
on Schedule 1.1 hereto.
If to the Partnership: GHV Associates
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
Genesis Health Ventures, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Transferee: ElderTrust Operating Limited
Partnership
c/o ElderTrust
General Partner
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and
Chief Executive Officer
or such other address as the addressee may indicate by written notice to the
other party.
Each notice, demand, request or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the delivery receipt, the affidavit of messenger or (with respect to a telex)
the answerback being deemed conclusive but not exclusive evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.
11.3 Governing Law. This Agreement, the rights and obligations
of the parties hereto and any claims or disputes relating thereto shall be
governed by and construed under the laws of the State of Connecticut (but not
including the choice of law rules thereof).
11.4 Benefit and Assignment. No party hereto shall assign this
Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of the Partnership and Contributors (if the
assignor is Transferee) or Transferee (if the assignor is the Partnership or
Contributors), which consent shall not be unreasonably withheld, and any
purported assignment contrary to the terms hereof shall be null, void and of no
force and effect, except that Transferee may assign all or a portion of this
Agreement and its rights hereunder, to a corporation, partnership, limited
liability or other entity of which the entire ownership interest is owned
directly or indirectly by Transferee without the consent of the Partnership or
Contributors; no such assignment shall relieve Transferee of its obligations
hereunder.
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This Agreement shall be binding upon and shall inure to the
benefit to the parties hereto and their respective successors and assigns as
permitted hereunder. No person or entity other than the parties hereto is or
shall be entitled to bring any action to enforce any provision of this Agreement
against any of the parties hereto, and the covenants and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be enforceable only
by, the parties hereto or their respective successors and assigns as permitted
hereunder.
11.5 Severability. If any part of any provision of this
Agreement or any other agreement, document or writing given pursuant to or in
connection with this Agreement shall be invalid or unenforceable under
applicable law, such part shall be ineffective to the extent of such invalidity
or unenforceability only, without in any way affecting the remaining parts of
such provisions or the remaining provisions of said agreement so long as the
economic and legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.
11.6 Entire Agreement; Amendment. This Agreement and the
Exhibits and Schedules attached hereto (each of which shall be deemed
incorporated herein and made a part hereof) contain the final and entire
agreement between the parties hereto with respect to the Contribution and are
intended to be an integration of all prior negotiations and understandings. The
Partnership, Contributors and Transferee shall not be bound by any terms,
conditions, statements, warranties or representations, oral or written, not
contained or referred to herein or therein. No amendment, change or modification
of this Agreement shall be valid unless the same is in writing and signed by the
parties hereto.
11.7 No Waiver. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this Agreement or under
any other instrument or document given in connection with or pursuant to this
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial exercise
of any such right, power or privilege shall preclude the further exercise of
such right, power or privilege. No waiver shall be valid against any party
hereto unless made in writing and signed by the party against whom enforcement
of such waiver is sought and then only to the extent expressly specified
therein.
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11.8 Power of Attorney. By executing this Agreement pursuant
to a Consent Form, the Partnership and each Contributor is constituting and
appointing each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and D. ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.,
individually, with full power of substitution, the true and lawful
attorney-in-fact (the "Attorney"), with full power and authority in the name of
and for and on behalf of the Partnership or such Contributor, to execute the
Operating Partnership Agreement and the Registration Rights Agreement and to
execute any other instruments that Transferee reasonably deems necessary or
appropriate in connection with the contribution of the Property pursuant to this
Agreement.
11.9 Headings. Section and subsection headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.
11.10 Counterparts. To facilitate execution, this Agreement
may be executed in as many counterparts as may be required. It shall not be
necessary that the signature of or on behalf of each party appears on each
counterpart, but it shall be sufficient that the signature of or on behalf of
each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
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IN WITNESS WHEREOF, the Partnership and Transferee have caused
this Agreement to be duly executed and delivered on its behalf and each of the
Contributors has executed a separate Consent Form agreeing to be bound by the
terms of this Agreement as of the date first above written.
TRANSFEREE:
ELDERTRUST OPERATING LIMITED
PARTNERSHIP
By: ElderTrust Realty Group, Inc.,
general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: President and Chief
Executive Officer
PARTNERSHIP:
GHV ASSOCIATES
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing General Partner
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[COUNTERPART SIGNATURE PAGE TO PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT
DATED AS OF SEPTMBER 25, 1997 BY AND BETWEEN ELDERTRUST OPERATING LIMITED
PARTNERSHIP, GHV ASSOCIATES AND THE PARTIES LISTED ON SCHEDULE 1 THERETO]
Please sign exactly as your name appears on the previous page.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 9/28/97
--------------------- -------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Date
STATE OF PENNSYLVANIA)
: SS. October 1, 1997
COUNTY OF ▇▇▇▇▇▇▇ )
On the 1st day of October 1997, before me personally came
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, to me known and known to me to be the individual described in
the foregoing instrument, and acknowledged that he executed the same.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Notary Public
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[COUNTERPART SIGNATURE PAGE TO PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT
DATED AS OF SEPTMBER 25, 1997 BY AND BETWEEN ELDERTRUST OPERATING LIMITED
PARTNERSHIP, GHV ASSOCIATES AND THE PARTIES LISTED ON SCHEDULE 1 THERETO]
Please sign exactly as your name appears on the previous page.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 9/26/97
-------------------- -------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Date
STATE OF PENNSYLVANIA)
: SS.
COUNTY OF DELAWARE )
On the 26th day of September 1997, before me personally came
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, to me known and known to me to be the individual described in
the foregoing instrument, and acknowledged that he executed the same.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------
Notary Public
[COUNTERPART SIGNATURE PAGE TO PLAN OF ASSET TRANSFER AND CONTRIBUTION AGREEMENT
DATED AS OF SEPTMBER 25, 1997 BY AND BETWEEN ELDERTRUST OPERATING LIMITED
PARTNERSHIP, GHV ASSOCIATES AND THE PARTIES LISTED ON SCHEDULE 1 THERETO]
Please sign exactly as your name appears on the previous page.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 10/2/97
--------------------- -------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Date
STATE OF )
: SS.
COUNTY OF )
On the 2 day of Oct 1997, before me personally came ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, to me known and known to me to be the individual described in the
foregoing instrument, and acknowledged that he executed the same.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Notary Public
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