AMENDMENT ONE
TO
ASSET PURCHASE AGREEMENT
This Amendment Number One to Asset Purchase Agreement (the
"Amendment"), is dated as of April 14, 1999, and entered into by and among
XXXXXXXXXX CONVALESCENT HOSPITALS, INC., a California corporation ("PCHI"),
XXXXXXXXXX REAL ESTATE CORPORATION, a California corporation ("PREC") (PCHI and
PREC are also sometimes referred to herein individually as, a "Seller" and,
collectively as, the "Sellers"), and SUNLAND ASSOCIATES, INC., a Tennessee
corporation (the "Buyer") or its assigns as herein permitted.
WITNESSETH:
WHEREAS, PCHI, PREC and Buyer entered into that one certain Asset
Purchase Agreement dated as of March 15, 1999 (the "Purchase
Agreement") providing for among other things the sale by PCHI and PREC and the
purchase by Buyer of three skilled nursing facilities in California; and
WHEREAS, PCHI, PREC and Buyer desire to amend certain of the terms of
the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, and covenants stated in this Agreement, and the
other good and valuable consideration exchanged between the parties, the receipt
and sufficiency of which is hereby acknowledged, the parties intending to be
legally bound agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms used herein as
defined terms shall have the meaning given them in the Purchase Agreement.
2. SECTION 1.1. "DEFINITIONS." Section 1.1. is amended to provide that the
definition of Transaction Documents shall mean:
"TRANSACTION DOCUMENTS means this Agreement, the Xxxx of Sale, the
Assignment and Assumption Agreement; the Warranty Deed, the Consents,
the Second Lien Deed of Trust and Security Agreement, Note, and the
exhibits, schedules, certificates, and lists related to each of the
foregoing, as applicable to each of Seller and Buyer."
3. SECTION 4.1.a. "XXXXXXX MONEY DEPOSIT-REQUIRED DEPOSITS." Section 4.1.a. is
hereby amended to read as follows:
"REQUIRED DEPOSITS. Buyer shall on or before March 16, 1999 deposit
with Michener, Larimore, Swindle, Whitaker, Flowers, Sawyer, Xxxxxxxx
& Chalk, L.L.P., counsel to Sellers, the sum of $100,000.00 (the
"Initial Xxxxxxx Money Deposit") pursuant to and to be governed by the
Xxxxxxx Money Deposit Agreement and Amendment One to Xxxxxxx Money
Deposit Agreement substantially in the form of APPENDIX 4.1 hereto
(the "Xxxxxxx Money Deposit Agreement"). Subject to the terms of the
Xxxxxxx Money Deposit Agreement and this Agreement Buyer may extend
the closing of the purchase of the Acquired Assets for up to an
additional 15 days past the Scheduled Closing Date upon the
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payment of $50,000 as an additional xxxxxxx money deposit, and
thereafter extend the closing of the purchase of the Acquired Assets
for up to a further 30 day period upon the payment of $125,000 as an
additional xxxxxxx money deposit (each, a "Supplemental Xxxxxxx Money
Deposit") (the Initial Xxxxxxx Money Deposit and Supplemental Xxxxxxx
Money Deposit, whether one or more, are referred to herein
collectively as, the "Xxxxxxx Money Deposit"). Each Supplemental
Xxxxxxx Money Deposit shall be governed by the Xxxxxxx Money Deposit
Agreement."
4. SECTION 4.2. "PURCHASE PRICE." Section 4.2. is hereby amended to read as
follows:
"PURCHASE PRICE. The aggregate purchase price to be paid by Buyer to
Sellers for the Acquired Assets (the "Purchase Price") shall be SIX
MILLION FOUR HUNDRED THOUSAND DOLLARS ($6,400,000.00)."
5. SECTION 4.3. "METHOD OF PAYMENT." Section 4.3. is hereby amended to read as
follows:
"METHOD OF PAYMENT. The Purchase Price, less the amount of the Note,
and any credits against such sum required by the provisions hereof,
shall be paid by Buyer to Sellers, at the Closing, by wire transfer or
delivery of other immediately available funds to the account or
accounts designated by Sellers prior to Closing and by the delivery of
a promissory note in the original principal amount of $3,900,000 and
substantially in the form of APPENDIX 4.3 (the "Note"), which, if the
maker is not Buyer, shall be secured by the guarantee of Buyer and
which shall be secured by a second lien on the Real Property and
equipment, working capital and the stock of Buyer and shall be second
to no more than a $3,750,000 first lien. The Note shall be a five year
balloon note, amortized based upon 240 months beginning on the
thirteenth month, accrue interest at 9% per annum, with interest only
payable monthly for the first year, and shall receive a prepayment
discount of $650,000 if paid in full within the first twelve months, a
$600,000 discount if paid in full after twelve months and before
eighteen months, a $400,000 discount if paid in full after eighteen
months and before twenty-four months, and a $300,000 discount if paid
in full after twenty-four months and before thirty months. The
provisions of the Note as executed shall govern and control over any
inconsistent provision hereof."
6. SECTION 5.1. "CLOSING DATE." Section 5.1. is hereby amended to provide that
the "Scheduled Closing Date" shall be June 15, 1999, or such other date
mutually agreed upon in writing by the parties.
7. SECTION 5.3. "EXTENSION DATE." Section 5.3. is hereby amended to read as
follows:
"EXTENSION DATE. As provided by Section 4.1, Buyer may, in its sole
discretion, extend the date for the Closing past the Scheduled Closing
Date to a date not later than June 30, 1999 (the "First Extension
Date") by giving notice to Seller of such extension specifying the new
Closing Date and delivering an additional $50,000 Supplemental Xxxxxxx
Money Deposit pursuant to the Xxxxxxx Money Deposit Agreement at least
one (1) Business Days prior to the Scheduled Closing Date. Thereafter,
Buyer may, in its sole discretion, extend the date for the Closing
past such First Extension Date to a date not later than July 30, 1999
(the
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"Second Extension Date") by giving notice of such extension specifying
the new Closing Date and delivering an additional $125,000
Supplemental Xxxxxxx Money Deposit pursuant to the Xxxxxxx Money
Deposit Agreement at least five (5) Business Days prior to the First
Extension Date. Each new Closing Date set by Buyer pursuant to this
section based on its giving of an extension notice and delivering a
Supplemental Xxxxxxx Money Deposit may also be referred to herein as
an "Extension Date"."
8. SECTION 6.1. "CONSTRUCTION-IN-PROGRESS AT LAFAYETTE." Section 6.1. is
hereby deleted.
9. SECTION 9.16. "CONSENTS TO ASSUMPTION OF LEASES." Section 9.16 is hereby
amended to read as follows:
"a. Buyer shall assist and cooperate with Seller and its
representatives in obtaining, by the Closing Date the termination of
all rights of lessor under a lease of University (the "University
Lease") and the release by the lessor of the University Lease of any
right lessor may have to purchase the leased property.
b. If Seller is unable after using all commercially reasonable means,
to obtain the termination and release required in Section 9.16.a. by
the Closing Date, then Buyer shall be deemed to have terminated this
Agreement under Section 13.1.a."
10. SECTION 11.8.b. "NECESSARY CONSENTS." Section 11.8.b is hereby deleted.
11. SECTION 11.14. "TERMINATION OF UNIVERSITY LEASE." There shall be added a
new Section 11.14. "Termination of University Lease" as follows:
"SECTION 11.14. TERMINATION OF UNIVERSITY LEASE. Seller shall have
delivered to Buyer a termination of the University Lease by lessor and
a release of any and all rights lessor may have to purchase the leased
property."
12. SECTION 12.1.l. "DELIVERIES BY SELLERS-CONSTRUCTION CONTRACT ESCROW
AGREEMENT." Section 12.1.l. is hereby deleted and there shall be added a
new Section 12.1.l. as follows:
"SECTION 12.1.l. UNIVERSITY TERMINATION. A termination of the
University Lease by lessor and a release of any and all rights lessor
may have to purchase the leased property."
13. SECTION 12.3.h. "DELIVERIES BY BUYER-CONSTRUCTION CONTRACT ESCROW
AGREEMENT." Section 12.3.h. is hereby deleted.
14. SECTION 13.1.b. "TERMINATION EVENTS." Section 13.1.b. is hereby deleted.
15. SECTION 13.3.b. "CONSEQUENCES OF TERMINATION-XXXXXXX MONEY DEPOSIT."
Section 13.3.b is hereby amended to read as follows:
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"XXXXXXX MONEY DEPOSIT. With respect to the Xxxxxxx Money Deposit:
i. If Buyer terminates this Agreement pursuant to Section 13.1.a.
hereof prior to or on the Closing Date and the basis for such
termination is the right to terminate provided by Section 9.16.b., the
Xxxxxxx Money Deposit shall be paid and delivered to Buyer within five
(5) Business Days after the effective date of such termination;
ii. If Buyer terminates this Agreement for any reason provided
for herein or otherwise, other than as provided in sub-section
13.3.b.i above the Xxxxxxx Money Deposit shall be paid and delivered
to Seller within five (5) Business Days after the effective date of
such termination; and
iii. If not earlier required to be paid and delivered to Buyer or
retained by Sellers, as the case may be, the Xxxxxxx Money Deposit
shall be paid to and retained by Sellers at the Closing and credited
against the Purchase Price.
Once the Xxxxxxx Money Deposit is released, whether to Buyer or
Sellers, all obligations of Sellers with respect thereto will
immediately terminate."
16. MISCELLANEOUS.
a. ENTIRE AGREEMENT. This Amendment, constitutes the entire agreement
between the parties relating to the subject matter hereof, and supersedes
all previous agreements, written or oral. If there shall be any conflict
between the terms or interpretation of this Amendment and the terms of the
Purchase Agreement, the terms of this Amendment shall govern. Headings are
for convenience of reference only and shall not affect the interpretation
or construction of this Amendment. All exhibits, schedules, documents, and
instruments referred to in this Amendment are incorporated by reference for
all purposes.
b. GOVERNING LAW; VENUE; ATTORNEY'S FEES.
i. Any dispute between the parties relating to this Amendment shall be
construed under and in accordance with the laws of the State of California
applicable to contracts between residents of California that are to be
wholly performed within such state.
ii. The parties agree that the courts within Contra Costa County,
California shall have exclusive venue and jurisdiction of same.
iii. The prevailing party in any litigation shall be entitled to
recover from the other party reasonable attorney's fees and court costs
incurred in the same, in addition to any other relief that may be awarded.
c. MULTIPLE COUNTERPARTS. This Amendment may be executed in multiple
counterparts, each of which shall constitute an original and all of which
shall constitute one document; and furthermore, a facsimile signature shall
be deemed an original.
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IN WITNESS WHEREOF, the parties have executed this Agreement and caused
same to be duly delivered on their behalf as of the day and year first written
above.
Buyer:
SUNLAND ASSOCIATES, INC.
By:
--------------------------------
Name:
------------------------------
Title:
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Sellers:
XXXXXXXXXX CONVALESCENT
HOSPITALS, INC.
By:
--------------------------------
Name: X. X. Xxxxxxxxx
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Title: Vice President
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XXXXXXXXXX REAL ESTATE
CORPORATION
By:
--------------------------------
Name: X. X. Xxxxxxxxx
------------------------------
Title: Vice President
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