Exhibit 10.10
FORM OF ASSET TRANSFER AGREEMENT
THIS ASSET TRANSFER 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"), and __________
("Transferor").
WHEREAS, Transferor is a limited partner in Senior LifeChoice of Paoli,
L.P., a Pennsylvania limited partnership (the "Partnership") and owns the
limited partnership interests in the Partnership set forth on Schedule 1.1
hereof (the "Interest");
WHEREAS, Transferor desires to transfer the Interest to Transferee on
the terms and conditions set forth;
WHEREAS, the Partnership owns and operates an assisted living facility
known as ___________ (the "Facility"), which Facility consists of the real
property described in Exhibit A hereto (the "Real Property"), the improvements
thereon and all other real and personal property associated therewith
(collectively, the "Property"), all of which other real and personal property is
described in Exhibit B hereto; and
WHEREAS, all capitalized terms not otherwise defined herein shall have
the meanings set forth in Article XIII hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants set forth herein, Transferee and Transferor hereby agree
as follows:
ARTICLE I
THE TRANSFER
Subject to the terms and conditions set forth herein, Transferor agrees
to transfer to Transferee, and Transferee agrees to acquire from Transferor, the
Interest. The transfer of the Interest shall be effected pursuant to the
provisions of this Article I and other applicable provisions of this Agreement
(the "Transaction").
1.1 Transfer of Interest. On the Closing Date (as hereinafter defined),
in accordance with the terms and conditions set forth herein, Transferor shall
transfer to Transferee, and Transferee shall acquire from Transferor, the
Interest and all of Transferor's right, title and interest in and to the
Interest (including rights to distributions under the Partnership's agreement of
limited partnership that have accrued as of the Closing Date).
1.2 Purchase Price. The total consideration (the "Purchase Price") to
be paid by Transferee to Transferor for the Interest shall be immediately
available funds to be paid to Transferor at the Closing in the amount of
_____________ ($___________).
1.3 Closing. The closing of the Transaction (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 neither party hereto shall have any
further liability to any other party hereto.
ARTICLE II
[INTENTIONALLY DELETED]
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TRANSFEREE
Transferee hereby represents and warrants to Transferor 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.
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 Transaction.
Neither the execution and delivery of this Agreement by Transferee nor
the consummation by Transferee of the Transaction 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
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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 Transferor 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 Transaction contemplated
by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR
Transferor hereby represents and warrants to Transferee as follows:
4.1 [INTENTIONALLY DELETED]
4.2 Authority Relative to this Agreement. All action necessary to
authorize the execution, delivery and performance of this Agreement by
Transferor has been taken, and no other proceedings are necessary to authorize
the execution and delivery by Transferor of this Agreement and the consummation
by Transferor of the Transaction.
Neither the execution and delivery of this Agreement by Transferor, nor
the consummation by Transferor of the Transaction nor compliance by Transferor
with any of the provisions hereof as of the date of the Closing 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 Transferor or the Partnership is a party or by
which Transferor or the Partnership or the Property may be bound, or (iii)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Transferor, 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 Transferor, the Partnership, the Transaction 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 Transferor to Transferee and constitutes a valid and
binding agreement of Transferor, enforceable against Transferor in accordance
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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 corporations and to
general principles of equity.
4.4 Brokers. Transferor has not employed any broker or finder, or
incurred any liability therefor, in connection with the Transaction contemplated
by this Agreement.
4.5 Options to Acquire. Transferor has not granted to any person any
option, warrant or other right to acquire the Interest, and to Transferor's
knowledge, no other person or entity has granted to any person (other than
Transferee) any option, warrant or other right to acquire any interest in the
Partnership.
4.6 [INTENTIONALLY DELETED]
4.7 Title to Property. Transferor has good and marketable title to the
Interest, free and clear of any Liens (as hereinafter defined). To Transferor's
knowledge, the Partnership has fee simple title to the Real Property and good
and valid title to all the Personal Property (as defined on Exhibit B). To
Transferor's knowledge, 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"):
(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 Bond Debt (as hereinafter defined); and
(iv) Liens shown on Schedule 4.7 hereto.
4.8 Debt. The Property is subject to mortgage indebtedness described on
Schedule 4.8 hereto (the "Bond Debt"). Schedule 4.8 correctly sets forth the
interest rate, maturity date and outstanding amount of the Bond Debt as of the
date hereof. Except for the Bond Debt, the Partnership has no material
indebtedness other than indebtedness incurred by it in its ordinary course of
business. There exists no default, or event which with the passage of time or
notice or both would constitute a default with respect to the Bond 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 Transaction or the Property. In connection with the Bond Debt,
the Trustee thereunder is holding not less than the sum of $912,000 as a debt
service reserve (the "Debt Service Reserve Fund") and not less than the sum of
$203,000 as an operating reserve (the "Operating Reserve Fund").
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4.9 Financial Statements. The financial statements of the Partnership
attached as Schedule 4.9 hereto (the "Financial Statements") have been prepared
from the books and records of the Partnership 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.
4.10 Financial Condition. Since June 30, 1997, there has been no
material adverse change in the business or financial condition of the
Partnership.
4.11 Leases. Except as set forth on Schedule 4.11 hereto, there are no
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 4.11 (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 in
full force and effect without material default.
4.12 Contracts. Except for a management agreement for the Facility and
service contracts entered into in the ordinary course of business of the
operation of the Facility, the Partnership is not a party to and neither
Transferor nor the Partnership is bound by any contracts or other
understandings, written or oral, that relate to the Interest or the Property,
except for contracts or understandings that are not material to the business and
operations of the Property (collectively, the "Contracts"). Neither Transferor
nor the Partnership nor, to Transferor's knowledge, 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.
4.13 Permits. To the knowledge of Transferor, 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 Transferor's knowledge, the Partnership is not in violation of
any Permit in any material respect. No notice to, declaration, filing or
registration with, or Permit or consent from any governmental or regulatory body
or authority, or any other person or entity, is required to be made or obtained
by Transferor or the Partnership in connection with the execution, delivery or
performance of this Agreement and the consummation of the transactions
contemplated hereby, and no Permits will in any way be affected by, or terminate
or lapse by reason of, the Transaction or any of the other agreements
contemplated hereunder or executed herewith.
4.14. Litigation. There are no claims, actions, suits, proceedings or
investigations pending or, to Transferor's knowledge, threatened against
Transferor or the Partnership, or any properties or rights of Transferor or the
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Partnership, that would have a material adverse effect on the business or
financial condition of Transferor or the Partnership, the Transaction or the
Property before any court or administrative, governmental or regulatory
authority or body, domestic or foreign. None of Transferor, the Partnership, the
Interest 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
Transaction or the Property.
4.15 Compliance with Laws. To Transferor's knowledge, the Partnership
has not received any written or other actual notice of any 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 Transferor's knowledge, 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.
4.16 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.
4.17 Insurance. To the knowledge of Transferor, 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 Transferor, 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.
4.18 [INTENTIONALLY DELETED]
4.19 Utilities. 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. The
Partnership has not been notified of any increase or proposed increase in the
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.
4.20 Environmental. Except as may be revealed in the Phase I
Environmental Report prepared for the Property by ▇▇▇ ▇. ▇▇▇▇▇▇, Inc., dated
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June, 1997, (i) no Hazardous Substances are present at, on or under, and there
has been no Release of Hazardous Substances from, the Property that require
investigation, notification, remediation or response under applicable law, (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, (iii)
the Property contains no underground improvements, including but not limited to
treatment or storage tanks, or underground piping associated with such tanks,
used currently or in the past for the management of Hazardous Materials, and no
portion of the Property is or has been used as a dump or landfill or consists of
or contains filled in land or wetlands; (iv) Transferor has furnished to
Transferee accurate and complete information pertaining to the environmental
history of the Property and the operations of the Partnership thereon, (v)
neither PCBs nor asbestos-containing materials are present on or in the
Property, and (vi) no Lien in favor of any person relating to or in connection
with any Claim under any Environmental Law has been filed or attached to the
Property. The Partnership has not received any notice from any governmental
agency or instrumentality having jurisdiction thereof or from any other person
of any actual or alleged violation of or liability under any Environmental Laws.
4.21 Condition of Property. Except as set forth in the structural
report prepared for the Property by Burkavage Design, dated June 15, 1997, and
from which, to Transferor's knowledge, there has been no material change, there
is no material defect in the condition of the Property, the improvements
thereon, the structural elements thereof and the mechanical systems therein, nor
any material damage from casualty or other cause, nor any soil condition of the
Property that will not support all of the improvements thereon without the need
for unusual or new subsurface excavations, fill, footings, caissons or other
installations, except for any such defect, damage or condition that has been
corrected or will be corrected in the ordinary course of the business of the
Property as part of its scheduled annual maintenance and improvement program.
4.22 Pending Assessments and Eminent Domain. Transferor have no
knowledge and neither Transferor 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 affect in any manner any portion of the Property.
4.23 [INTENTIONALLY DELETED]
4.24 Compliance with Law; Approvals.
(a) The operations of the Partnership have been and, to the date of
Closing, will continue to be conducted in compliance with all applicable Laws
and regulations, including, without limitation, all laws, regulations, orders
and requirements promulgated by any Governmental Authority or relating to
consumer protection, equal opportunity, health, health care industry regulation,
third-party reimbursement (including Medicare, Medicaid, and workers
compensation), environmental protection, fire, zoning and building and
occupational safety matters, except for noncompliance that individually or in
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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 Property or either Partnership.
(b) Neither the Partnership nor Transferor has received notice of any
violation (or of any investigation, inspection, audit, or other proceeding by
any Governmental Authority involving allegations of any violation) of any
applicable Law, or is in material default with respect to any applicable Law
and, to the best knowledge of Transferor, no investigation, inspection, audit,
or other proceeding by any Governmental Authority involving allegations of
violation of any applicable Law is threatened or contemplated.
(c) There are no physician shareholders of Transferor.
4.25 Fraud and Abuse Matters
Neither the Partnership nor the officers, directors, employees or
agents of the Partnership or its general partner, have engaged in any activities
which are prohibited, or are cause for civil penalties or mandatory or
permissive exclusion from Medicare or Medicaid, under ▇▇.▇▇. 1320a-7, 1320a-7a,
1320a-7b, or 1395nn of Title 42 of the United States Code, the federal Civilian
Health and Medical Plan of the Uniformed Services statute ("CHAMPUS"), or the
regulations promulgated pursuant to such statutes or regulation, or related
state or local statutes or which are prohibited by any private accrediting
organization from which the Partnership seeks accreditation or by generally
recognized professional standards of care or conduct, including but not limited
to the following activities:
(a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment;
(b) knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in determining rights to
any benefit or payment;
(c) presenting or causing to be presented a claim for reimbursement
under CHAMPUS, Medicare, Medicaid or other State Health Care Program as defined
in Section 1128(h) of the federal Social Security Act (together with all
regulations promulgated pursuant thereto, the "SSA") or any Federal Health Care
Program (as defined in Section 1128B(f) of the SSA) that is (i) for an item or
service that the person presenting or causing to be presented knows or should
know was not provided as claimed, or (ii) for an item or service and the person
presenting knows or should know that the claim is false or fraudulent;
(d) knowingly and willfully offering, paying, soliciting or receiving
any remuneration (including any kickback, bribe, or rebate), directly or
indirectly, overtly or covertly, in cash or in kind (i) in return for referring,
or to induce the referral of, an individual to a person for the furnishing or
arranging for the furnishing of any item or service for which payment may be
made in whole or in part by CHAMPUS, Medicare or Medicaid, or other State Health
Care Program or any Federal Health Care Program, or (iii) in return for, or to
induce, the purchase, lease, or order, or the arranging for or recommending of
the purchase, lease, or order, of any good, facility, service, or item for which
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payment may be made in whole or in part by CHAMPUS, Medicare or Medicaid or
other State Health Care Program or any Federal Health Care program; or
(e) knowingly and willfully making or causing to be made or inducing or
seeking to induce the making of any false statement or representation (or
omitting to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading) or a material fact with
respect to (i) the conditions or operations of a facility in order that the
facility may qualify for CHAMPUS, Medicare, Medicaid or other State Health Care
Program or Federal Health Care Program certification, or (ii) information
required to be provided under SSA ss. 1124A.
4.26 Medicare/Medicaid Participation
Neither the Partnership nor any officer, director, agent (as defined in
42 C.F.R. ss. 1001.1001(a)(2)), or managing employee (as defined in SSA ss.
1126(b)) of the Partnership or its general partner (1) has had a civil monetary
penalty assessed against it under SSA ss. 1128A; (2) has been excluded from
participation under the Medicare program or a State Health Care Program; (3) has
been convicted (as that term is defined in 42 C.F.R. ss. 1001.2) of any of the
following categories of offenses as described in SSA ss. 1128(a) and (b)(1),
(2), (3):
(a) criminal offenses relating to the delivery of an item or service
under Medicare, Medicaid or any other State Health Care Program or any Federal
Health Care Program;
(b) criminal offenses under federal or state law relating to patient
neglect or abuse in connection with the delivery of a health care item or
service;
(c) criminal offenses under federal or state law relating to fraud,
theft, embezzlement, breach of fiduciary responsibility, or other financial
misconduct in connection with the delivery of a health care item or service or
with respect to any act or omission in a program operated by or financed in
whole or in part by any federal, state or local government agency;
(d) federal or state laws relating to the interference with or
obstruction of any investigation into any criminal offense described in (a)
through (c) above; or
(e) criminal offenses under federal or state law relating to the
unlawful manufacture, distribution, prescription or dispensing of a controlled
substance.
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ARTICLE V
[INTENTIONALLY DELETED]
ARTICLE VI
[INTENTIONALLY DELETED]
ARTICLE VII
CONDITIONS TO CONSUMMATION OF TRANSACTION
The obligation of Transferee to consummate the Transaction 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 Transferor in this Agreement or in any document
delivered by Transferor pursuant to this Agreement shall be true and correct
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 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 Transaction, the
Partnership or the Property.
7.3 Title Insurance; Survey. Commonwealth Land Title Insurance Company
shall have issued an ALTA owners title insurance policy effective as of the date
of the Closing or an unconditional commitment therefor insuring the
Partnership's interest in the Property in an amount not less than $2,300,000, in
each case with only those exceptions and containing such endorsements as are
acceptable to Transferee in its sole and absolute discretion and otherwise
acceptable to Transferee in Transferee's sole discretion; in addition thereto,
Transferee shall have received a survey for the Real Property that is acceptable
to Transferee in Transferee's sole discretion.
7.4 No Order or Injunction. The consummation of the Transaction shall
not have been restrained, enjoined or prohibited by any order or injunction of
any court or governmental authority of competent jurisdiction.
7.5 Consents. All consents listed on Schedule 4.2 and all other
consents necessary for the execution and delivery of this Agreement by
Transferor and the consummation of the Transaction by Transferor have been
obtained.
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7.6 Instruments of Conveyance. Transferor shall have executed and
delivered the instruments evidencing conveyance of the Interest referred to in
Section 9.1.
7.7 Lease. Transferee (or the Partnership) and Genesis Health Ventures,
Inc. or an affiliate or subsidiary thereof shall have entered into a lease with
respect to the Facility.
7.8 Occupancy. At least 85% of the units in the Facility shall be
occupied as of the Closing Date.
7.9 Zoning Change. There shall be no pending or threatened zoning
change without may affect the Property or any part thereof.
7.10 Simultaneous Closing. The Transaction shall close simultaneously
with the closing under the agreements listed on Schedule 7.10 hereof.
7.11. Trustee/Bondholder Consent. ▇▇▇▇▇ ▇▇▇▇▇, as holder of certain of
the bonds issued in connection with the Bond Debt, and, if required, the Trustee
under the Bond Debt and ▇.▇. ▇▇▇▇▇▇▇▇ as holder of certain of the bonds (i)
shall have consented to the Transaction and to the acquisition of all of the
partnership interests in the Partnership by Transferee or its designee, (ii)
shall agree and consent to such matters, including, without limitation, any
appropriate modifications to the documents and instruments evidencing or
securing the Bond Debt (the "Bond Documents") and the prepayment of that portion
of the Bond Debt evidenced by the ▇▇▇▇▇▇▇ County Industrial Development
Authority $250,000 Assisted Living Facility Revenue Bonds (Senior LifeChoice of
Paoli, L.P.) Taxable Series 1994B as shall have been requested by Transferee,
which agreements and consents shall be on terms and conditions acceptable to
Transferee in its sole discretion, (iii) shall have granted such waivers to
provisions of the Bond Documents as shall have been requested by Transferee,
which waivers shall be on terms and conditions acceptable to Transferee in its
sole discretion, (iv) ▇▇▇▇▇ ▇▇▇▇▇, as holder of the bonds issued in connection
with the Bond Debt, and, if required, the Trustee under the Bond Debt shall have
agreed to accept a letter of credit in lieu of the Debt Service Reserve Fund and
the Operating Reserve Fund, and (v) shall have agreed to release to the general
partner of the Partnership for distribution to the partners of the Partnership
all amounts held in all funds and reserves created and existing under the Bond
Documents in excess of $1,115,000.
ARTICLE VIII
CONDITIONS TO CONSUMMATION
OF TRANSACTION BY TRANSFEROR
The obligation of Transferor to consummate the Transaction shall be
subject to fulfillment (or waiver) at or prior to the date of the Closing of the
following conditions:
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8.1 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.
8.2 Consents. All consents necessary for the consummation of the
Transaction by Transferee shall have been obtained.
8.3 IPO Closing. The IPO shall close simultaneously with the
Transaction.
8.4 Simultaneous Closing. The Transaction shall close simultaneously
with the closing under the agreements listed on Schedule 7.10 hereof.
8.5 Payment to General Partner. The general partner of the Partnership
shall have received, for distribution to all of the partners of the Partnership,
an amount at least equal to all amounts held in all funds and reserves created
under the Bond Documents in excess of $1,115,000.
ARTICLE IX
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 Article VII hereof.
9.1 Closing Deliveries by Transferor. At Closing, Transferor shall
deliver the following:
(a) one or more written documents of conveyance contributing to
Transferee title to the Interest, free and clear of any adverse claim
or interest;
(b) such documents and certificates as Transferee may require to
establish the authority of the parties executing any documents in
connection with the Transaction including, in the case of any
Transferor 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;
(c) such consents as are contemplated by Section 7.5 hereof and
Section 7.11 hereof;
(d) a certificate duly executed by Transferor under penalty of
perjury setting forth Transferor's address and federal tax
identification number and certifying that Transferor is not a "foreign
person" in accordance with the provisions of Section 1445 (as may be
amended prior to the date hereof) of the Internal Revenue Code of 1986,
as amended, and any regulations promulgated thereunder;
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(e) such other documents and instruments as Transferee and
Transferor agree are necessary or appropriate.
9.2 Closing Deliveries by Transferee. At Closing, Transferee shall
deliver or cause to be delivered the following:
(a) the Purchase Price;
(b) such other documents and instruments as
Transferor and Transferee agree are necessary or appropriate.
9.3 Closing Costs. Transferee agrees to pay all costs associated with
the closing of the acquisition of the Interest by Transferee, including (i)
survey costs, (ii) costs of obtaining title insurance policies for the benefit
of Transferee, and (iii) except as provided below, all other fees imposed on or
in connection with the Transaction. Each party shall pay its own legal fees.
ARTICLE X
REMEDIES ON DEFAULT
10.1 Transferor's Remedies. Except for any breaches waived in writing
by Transferor, if Transferee fails to consummate the Transaction when required
to do so pursuant to the provisions hereof, then Transferor shall be entitled to
terminate this Agreement as the exclusive and sole right and remedy of
Transferor (except as provided in this sentence), whereupon this Agreement shall
terminate and none of the parties hereto shall have any further obligations to
any other party hereto, provided, however that in such event, Transferee shall
reimburse Transferor for all reasonable costs incurred by Transferor in
connection with the Transaction, provided that the amount to be reimbursed by
Transferee shall not exceed Twenty-Five Thousand Dollars ($25,000).
10.2 Transferee's Remedies. Except for any breaches waived in writing
by Transferee, if Transferor has breached any of its covenants or obligations
under this Agreement or shall have failed, refused or are unable to consummate
the Transaction 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 Transferor
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, except in the case of a willful failure or refusal of
Transferor to consummate the Transaction by the date of Closing or the inability
of Transferor to consummate the Transaction by the date of Closing by virtue of
an intentional act of Transferor, the amount of money damages that Transferee
may recover from Transferor shall not exceed Twenty-Five Thousand Dollars
($25,000).
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ARTICLE XI
INDEMNIFICATION
11.1 Indemnification by Transferor. Transferor hereby indemnifies and
agrees to defend and hold harmless Transferee, and its officers, directors,
employees, agents and successors and assigns and its general partner and any
officers, 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) subject to
Section 10.2 above, the failure of Transferor to perform any of his, her or its
obligations hereunder or, to the extent provided in Section 13.1, the breach by
Transferor of any of his, her or its representations and warranties hereunder,
(b) events, contractual obligations, acts or omissions of Transferor 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
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
Transferor under this Section 11.1 shall survive the Closing.
11.2 Indemnification by Transferee. Transferee hereby indemnifies and
agrees to defend and hold harmless Transferor, and its successors and assigns
("Transferor 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 Transferor 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) subject to Section 10.1 above, the failure
of Transferee to perform any of its obligations hereunder or, to the extent
provided in Section 13.1, 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 or (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. The obligations of Transferee under this Section 11.2 shall survive
the Closing.
ARTICLE XII
[INTENTIONALLY DELETED]
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ARTICLE XIII
GENERAL PROVISIONS
13.1 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 Transferor set forth in Article IV of this
Agreement and the representations and warranties of Transferee set forth in
Article III of this Agreement shall survive the consummation of the Transaction
for a period of one (1) year from the date of the Closing except that the
representations and warranties of Transferor set forth in Section 4.20 of this
Agreement shall survive the consummation of the Transaction for a period of
three (3) years from the date of the Closing. Such representations and
warranties shall expire and be terminated and extinguished forever at the
expiration of the applicable 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 Transferor to Transferee pursuant to this Section
13.1 shall not exceed twenty percent (20%) of the value of the Purchase Price
pursuant to this Agreement.
13.2 Notices. All notices, demands, requests or other communications
which may be or are required to be given or made by either Transferor 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:
If to Transferor: ___________________
___________________
___________________
___________________
If to Transferee: Eldertrust Operating Limited Partnership
c/o ElderTrust Realty Group, Inc., General Partner
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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
15
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.
13.3 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 Commonwealth of Pennsylvania (but not
including the choice of law rules thereof).
13.4 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 Transferor (if the assignor is Transferee)
or Transferee (if the assignor is Transferor), 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 (i) Transferee may
assign 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 Transferor; no
such assignment shall relieve Transferee of its obligations hereunder and (ii)
Transferee may designate one or more entities to acquire a portion of the
Interest.
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.
13.5 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.
13.6 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 Transaction and are intended to be an integration of
all prior negotiations and understandings. Transferor 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.
13.7 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
16
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.
13.8 Power of Attorney. By executing this Agreement pursuant to a
Letter of Acceptance, Transferor is constituting and appointing each of ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇. and D. ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., individually, with full power of
substitution, the true and lawful attorney-in-fact (the "Attorney") of
Transferor, with full power and authority in the name of and for and on behalf
of Transferor, to execute an instrument of conveyance contributing his, her or
its Interest to Transferee pursuant to the terms set forth in this Agreement,
and to execute any other instruments that Transferee reasonably deems necessary
or appropriate in connection with the contribution of the Interest pursuant to
this Agreement.
13.9 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.
13.10 [INTENTIONALLY DELETED]
13.11 Confidentiality. Transferee and Transferor agree not to make any
public announcement about the Transaction without the prior written consent of
the other party. Notwithstanding the foregoing, the Transaction, the terms and
conditions of this Agreement may be described in any registration statement or
other document filed by the REIT with the United States Securities and Exchange
Commission (the "SEC") and a copy of this Agreement may be filed with the SEC.
ARTICLE XIV
CERTAIN DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
following meanings:
"Claims" means all demands, claims, actions or causes of action,
assessments, losses, damages (including, without limitation, diminution in
value), liabilities, costs and expenses, including, without limitation,
interest, penalties and attorneys' fees and disbursements.
"Environmental Laws" means any Laws (including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act),
including any plans, other criteria, or guidelines promulgated pursuant to such
Laws, now or hereafter in effect relating to the generation, production,
installation, use, storage, treatment, transportation, release, threatened
release or disposal of Hazardous Materials. noise control, or the protection of
human health or safety, natural resources or the environment.
17
"Governmental Authority" means any nation, government, state,
municipality or any political subdivision of any nation, government, state or
municipality, including any court of other entity exercising executive,
legislative, regulatory, judicial or administrative functions of, or pertaining
to, government.
"Hazardous Materials" means any wastes, substances, radiation or
materials (whether solids, liquids or gases) (i) which are hazardous, toxic,
infectious, explosive, radioactive, carcinogenic, or mutagenic; (ii) which are
or become defined as "pollutants," "contaminants," "hazardous materials,"
"hazardous wastes," "hazardous substances," "toxic substances," "radioactive
materials," "solid wastes," or other similar designations in, or otherwise
subject to regulation under, any Environmental Laws; (iii) the presence of which
on the Real Property cause or threaten to cause a nuisance pursuant to
applicable statutory or common law upon the Real Property or to adjacent
properties; (iv) without limitation, which contain polychlorinated biphenyls
(PCBs), asbestos and asbestos-containing materials, lead-based pains,
urea-formaldehyde foam insulation and petroleum or petroleum products
(including, without limitation, crude oil or any fraction thereof) or (v) which
pose a hazard to human health, safety, natural resources, industrial hygiene, or
the environment, or an impediment to working conditions.
"Laws" means all foreign, federal, state and local statutes, laws
ordinances, regulations, rules, resolutions, orders, determinations, writs,
injunctions, common law rulings, awards, (including, without limitation, awards
of any arbitrator), judgments and decrees applicable to the specified persons or
entities and to the businesses and Assets thereof (including, without
limitation, Laws relating to securities registration and regulation; the sale,
leasing, ownership or management of real property; employment practices, terms
and conditions, and wages and hours; building standards, land use and zoning;
safety, health and fire prevention; and environmental protection, including
Environmental Laws).
"Release" means any emission, spill, seepage, leak, escape, leaching,
discharge, injection, pumping, pouring, emptying, dumping, disposal, or release
of Hazardous Materials from any source (including, without limitation, the Real
Property and property adjacent to the Real Property) into or upon the
environment, including the air, soil, improvements, surface water, groundwater,
the sewer, septic system, storm drain, publicly owned treatment works, or waste
treatment, storage, or disposal systems at, on, from, above or under the Real
Property.
18
IN WITNESS WHEREOF, Transferee has caused this Agreement to be
duly executed and delivered on its behalf and Transferor has executed a separate
Letter of Acceptance 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.
By: ____________________
Name: ____________________
Title:____________________
19
[PARTNER COUNTERPART SIGNATURE PAGE
Please sign exactly as your name appears on the previous page. Trustees
and others acting in a representative capacity should indicate the capacity in
which they sign.
If by an individual on behalf of himself or herself:
____________________________________________________________
Signature of Partner Date
____________________________________________________________
Signature of Co-Owner, if any Date
If on behalf of an entity, or as Trustee, Custodian or
Partner:
____________________________________________________________
Print Name of Entity or capacity in which executed
____________________________________________________________
Signature of Officer, Trustee, Custodian or Partner
Individual Acknowledgment
-------------------------
STATE OF )
: SS.
COUNTY OF )
On the _______ day of _________________ 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.
________________________________
Notary Public
Trustee Acknowledgment
----------------------
STATE OF )
: SS.
COUNTY OF )
On the _______ day of _________________ 1997, before me personally came
_____________________________, to me known, who being by me duly sworn, did
depose and say that he resides at ______________________________, that he is
Trustee for ____________________________________________________________________
_______________________________________________________________, the trust
described in and which executed the foregoing instrument, and that he signed his
name thereto on behalf of said trust.
20
___________________________
Notary Public
Corporate Acknowledgment
------------------------
STATE OF )
: SS.
COUNTY OF )
On the ____ day of ______ 19__, before me personally came
______________________, to me known, who being by me duly sworn, did depose and
say that he resides at _________________________________________________________
____________________________________________, that he is _______________________
__________________________________, of ____________________________, a _________
___________________ corporation, which executed the foregoing instrument, and
that he signed his name thereto on behalf of said corporation by order of the
board of directors of said corporation, and as the act and deed of said of
corporation for the uses and purposes of therein mentioned.
___________________________
Notary Public
Partnership Acknowledgment
--------------------------
STATE OF )
: SS.
COUNTY OF )
On the ____ day of ________________ 1997, before me personally came
_________ ______________________, to me known, who being by me duly sworn, did
depose and say that he resides at ______________________________, that he is
________________________ of ___________ ____________________________, a
partnership, which executed the foregoing instrument, and that he signed his
name thereto on behalf of said partnership, and as the act and deed of said
partnership for the uses and purposes of therein mentioned.
___________________________
Notary Public
21
EXHIBIT SCHEDULE
Cash
Partner Amount Interest
------- ------ --------
Senior LifeChoice of Paoli, LP:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $42,000 1.5% ▇▇
▇▇▇▇▇▇ Partnership 84,000 3.0% LP
▇▇▇▇ ▇▇▇▇▇▇ 42,000 1.5% LP
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 42,000 1.5% LP
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as 21,000 .75% LP
custodian for
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as 21,000 .75% LP
custodian for
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tigh Investments 42,000 1.5% LP
Tigh Investments 42,000 1.5% LP
Senior LifeChoice of Kimberton, LP:
▇▇▇▇▇▇ Partnership 78,000 2.5% LP
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 39,000 1.25% ▇▇
▇▇▇▇▇▇▇▇▇ Family Limited 39,000 1.25% LP
Partnership
22