EXECUTION COPY
FIRST AMENDMENT TO PURCHASE AGREEMENT
FIRST AMENDMENT dated August 31, 1998 to the PURCHASE AGREEMENT
("Agreement") dated as of July 13, 1998, among ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Sellers"), CareMatrix of
Massachusetts, Inc., a Delaware corporation ("Purchaser") and CareMatrix
Corporation, a Delaware corporation ("CareMatrix"), as Guarantor:
WHEREAS, the parties hereto desire that certain provisions of the Agreement
be amended as herein set forth;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. Section 1.01. (a) Section 1.01 is hereby amended by adding the following
definitions in proper alphabetical order:
"`Alandco Purchase Price' means the amount of the Purchase Price allocated
to Alandco as set forth on Schedule 2.02(A) to this Agreement."
"`Alandco Shares' means the issued and outstanding shares of common stock
of Alandco."
"`Closing' means, with respect to all the Companies other than Alandco, the
Initial Closing, and with respect to Alandco, the Alandco Closing."
"`Closing Date' means, with respect to all the Companies other than
Alandco, the Initial Closing Date, and with respect to Alandco, the Alandco
Closing Date."
"`North Fork Loan' means that certain loan from North Fork Bank to South
Shore Associates, LLC entered into pursuant to a Building Loan Agreement,
dated November 4, 1997 between South Shore Associates, LLC and North Fork
Bank, and the agreements and instruments related thereto."
"`SeniorCare Shares' means the issued and outstanding shares of common
stock of SeniorCare Group, Ltd. a New York corporation."
"`Trust Interests' means the membership interests in Seniorland Company,
LLC owned by the Trusts as set forth on Schedule I hereto."
(b) The definition of "Projects under Development" is hereby amended by
deleting therein the name "South Shore Associates, LLC" and substituting
therefor the name "Seniorland, LLC".
(c) The definition of "Total Working Capital" is hereby amended by (i)
adding the parenthetical "(other than Alandco)" after the word "Companies"
wherever it appears and (ii) replacing the term "Closing Balance Sheet"
contained therein with the term "Initial Closing Balance Sheet".
2. Section 1.02. The references in Section 1.02 to "Closing", "Closing
Balance Sheet" and "Closing Date" are hereby deleted, along with their
corresponding section references, and the following terms are hereby added to
such Section, in proper alphabetical order, with their corresponding section
references:
"Alandco Closing" "2.04"
"Alandco Closing Balance Sheet" "2.06"
"Alandco Closing Date" "2.04"
"Alandco Debt Consents" "8.02"
"Consulting Agreement" "5.10"
"Initial Closing" "2.03"
"Initial Closing Balance Sheet" "2.07"
"Initial Closing Date" "2.03"
"South Shore Note" "8.01"
"Trusts" "3.24"
3. Section 2.02. Section 2.02 is hereby amended as follows:
(a) The first sentence of Section 2.02 is amended by (i) deleting the
figure "104,000,000" contained therein and replacing such figure with the figure
"105,714,763".
(b) The second sentence of Section 2.02 is hereby deleted in its entirety
and replaced with the following:
"The Purchase Price shall be subject to adjustment in accordance with
Sections 2.05, 2.06, and 8.02."
4. Section 2.03. Section 2.03 is hereby deleted in its entirety and
replaced with the following:
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"SECTION 2.03. Initial Closing. (a) Subject to the terms and conditions of
this Agreement, the sale and purchase of the Senior Care Shares and the
Membership Interests, contemplated hereby shall take place at a closing (the
"Initial Closing") to be held at 10:00 a.m., local time, on the last Business
Day of the month during which the later of the following occurs: (i) the
expiration or termination of the applicable waiting periods under the HSR Act,
if any, and (ii) the satisfaction or waiver of all other conditions to the
obligations of the parties set forth in Sections 8.01(a) and 8.02(a) of this
Agreement, at the offices of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other time or on such other date or at such
other place as each Seller and the Purchaser may mutually agree upon in writing
(the day on which the Initial Closing takes place being the "Initial Closing
Date").
(b) At the Initial Closing, each Seller shall deliver or cause to be
delivered to the Purchaser: (i) stock certificates evidencing such Seller's
SeniorCare Shares duly endorsed in blank or accompanied by stock powers duly
executed in blank; (ii) membership certificates evidencing such Seller's
Membership Interests duly endorsed in blank or accompanied by transfer powers
duly executed in blank, and (iii) the certificate required to be delivered
pursuant to Section 8.02(a)(i).
(c) At the Initial Closing, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ will cause the Trusts to
deliver membership certificates evidencing the Trust Interests, duly endorsed in
blank or accompanied by transfer powers duly executed in blank.
(d) At the Initial Closing, the Purchaser shall deliver to each Seller: (i)
its Pro Rata Share of the Purchase Price, less the Alandco Purchase Price, by
wire transfer in immediately available funds, to an account or accounts
designated at least two Business Days prior to the Initial Closing Date by such
Seller in a written notice to the Purchaser; provided, however, that the amount
of the Purchase Price delivered to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ shall be reduced by the
amount of the Purchase Price which ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ directs the Purchaser
to pay to the Trusts for the Trust Interests; and (ii) the certificate required
to be delivered pursuant to Section 8.01(a)(i).
(e) At the Initial Closing, the Purchaser shall deliver to the Trusts the
amount of the Purchase Price which ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ directs the Purchaser
to pay to the Trusts for the Trust Interests, by wire transfer in immediately
available funds, to an account or accounts designated at least two Business Days
prior to the Initial Closing Date by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ in a written notice
to the Purchaser.
(f) All action to be taken at the Initial Closing shall be effective as of
11:59 p.m. on the Initial Closing Date."
5. Section 2.04. Previous Section 2.04 is hereby renumbered Section 2.05,
and a new Section 2.04 is hereby added as follows:
"Section 2.04. Alandco Closing. (a) Subject to the terms and conditions of
this Agreement, the sale and purchase of the Alandco Shares contemplated hereby
shall take place at a closing (the "Alandco Closing") to be held at 10:00 a.m.,
local time, on the last Business
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Day of the month during which the later of the following occurs: (i) written
approval of the New Jersey Department of Health and Senior Service Division of
Long Term Care Systems Development and Quality to the acquisition by the
Purchaser of Alandco from the Sellers pursuant to this Agreement, and (ii) the
satisfaction or waiver of all other conditions to the obligations of the parties
set forth in Sections 8.01(b) and 8.02(b) of this Agreement, at the offices of
Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such
other time or on such other date or at such other place as each Seller and the
Purchaser may mutually agree upon in writing (the day on which the Alandco
Closing takes place being the "Alandco Closing Date").
(b) At the Alandco Closing, each Seller shall deliver or cause to be
delivered to the Purchaser (i) the certificate required to be delivered pursuant
to Section 8.02(b)(i), and (ii) the stock certificates evidencing such Seller's
Alandco Shares duly endorsed in blank or accompanied by stock powers duly
endorsed in blank.
(c) At the Alandco Closing, the Purchaser shall deliver to each Seller: (i)
its Pro Rata Share of the Alandco Purchase Price, by wire transfer in
immediately available funds, to an account or accounts designated at least two
Business Days prior to the Alandco Closing Date by such Seller in a written
notice to the Purchaser; and (ii) the certificate required to be delivered
pursuant to Section 8.01(b)(i).
(d) All action to be taken at the Alandco Closing shall be effective as of
11:59 p.m. on the Alandco Closing Date."
6. Section 2.05. Renumbered Section 2.05 is hereby amended as follows:
(a) Renumbered Section 2.05 is hereby renamed "Initial Closing Purchase
Price Adjustment," all references to "Section 2.04" shall be changed to "Section
2.05", and all references to "Closing Balance Sheet" are hereby deleted and
replaced with "Initial Closing Balance Sheet".
(b) The first two sentences of Section 2.05(b) are hereby deleted in their
entirety and replaced with the following:
"(b) As soon as practicable, but in no event later than 90 calendar days
following the Initial Closing Date, the Sellers shall jointly prepare a
combined balance sheet (the "Initial Closing Balance Sheet") reflecting the
financial position of the Companies other than Alandco as of the Initial
Closing Date. The Initial Closing Balance Sheet shall be accompanied by the
report thereon of KPMG Peat Marwick LLP, independent accountants of the
Sellers (the "Sellers' Accountants"), stating that the Initial Closing
Balance Sheet fairly presents in all material respects the combined
financial position of the Companies reflected on the Initial Closing
Balance Sheet in accordance with GAAP applied on a basis consistent with
the preparation of the 1997 Combined Balance Sheet."
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7. Section 2.06. A new Section 2.06 is hereby added to the Agreement as
follows:
"SECTION 2.06. Alandco Purchase Price Adjustment. As soon as practicable,
but in no event later than 90 calendar days following the Alandco Closing Date,
the Sellers shall jointly prepare a balance sheet (the "Alandco Closing Balance
Sheet") reflecting the financial position of Alandco as of the Alandco Closing
Date. All other provisions of Section 2.05 shall apply mutatis mutandis as if
all references to the Closing Balance Sheet therein were references to the
Alandco Closing Balance Sheet."
8. Section 3.03. Section 3.03 is hereby amended by deleting the penultimate
sentence therein and substituting therefor the following:
"Each Seller and, in the case of the Trust Interests, the Trusts, own the
Shares and Membership Interests set forth opposite such Person's name on Parts I
and II, respectively of Schedule I hereto, free and clear of all Encumbrances,
except for any Encumbrances arising out of, under or in connection with this
Agreement."
9. Section 3.24. Article III is hereby amended by adding at the end thereof
a new Section 3.24 to read as follows:
"SECTION 3.24. Trusts. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ represents and warrants that
(a) the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust f/b/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Trust f/b/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, and the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust f/b/o
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (collectively, the "Trusts") have the legal right, power and
authority to (i) own the Trust Interests, and (ii) transfer the Trust Interests
to the Purchaser, free and clear of all Encumbrances, except for any
Encumbrances arising out of, under or in connection with this Agreement, and (b)
the Trust Interests shall be transferred by the Trusts to the Purchaser at the
Initial Closing. For the purposes of Article III only, all references to
"Membership Interests" shall be deemed to include the Trust Interests."
10. Section 5.08. Section 5.08 is hereby deleted in its entirety and
replaced with the following:
"SECTION 5.08. Intellectual Property. (a) The Sellers acknowledge that from
and after the Initial Closing, the Intellectual Property Rights of the Companies
other than Alandco shall be owned by the Purchaser, that from and after the
Alandco Closing, the Intellectual Property Rights of Alandco shall be owned by
the Purchaser, that the Sellers shall have no rights thereto and that the
Sellers will not contest the ownership or validity of any rights of the
Purchaser thereto, in each case from and after the applicable closings.
(b) Except as expressly agreed in writing by the Purchaser or pursuant to
any agreements and licenses between the Purchaser and the Sellers, (i) from and
after the Initial Closing, the Sellers shall not use any of the Intellectual
Property Rights of the Companies other than Alandco, and (ii) from and after the
Alandco Closing, the Sellers shall not use any of the Intellectual Property
Rights of Alandco."
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11. Section 5.10. The first sentence of Section 5.10 is hereby deleted in
its entirety and replaced with the following:
"The Purchaser shall enter into an operating agreement with the Sellers at
the Initial Closing in substantially the form attached hereto as Exhibit A (the
"Operating Agreement") pursuant to which the Sellers shall operate the
facilities owned by the Companies other than Alandco. The Purchaser shall enter
into a consulting agreement with the Sellers at the Alandco Closing in
substantially the form attached hereto as Exhibit B (the "Consulting Agreement")
pursuant to which the Sellers shall make themselves available for consultations
with the Purchaser with respect to the operation of the facility owned by
Alandco during the term set forth therein."
12. Section 5.12. Sections 5.12(a) and 5.12(e) are hereby amended by
replacing the references to "Closing Date" therein with "Initial Closing Date".
13. Section 5.13. Section 5.13 is hereby amended by replacing the reference
to "Closing Date" therein with "Initial Closing Date".
14. Section 5.14. A new Section 5.14 is hereby added to read as follows:
"SECTION 5.14. South Shore Note. The Purchaser shall punctually make all
payments due under the South Shore Note."
15. Section 7.01. Section 7.01(a) is hereby amended by replacing the
reference to "Closing Balance Sheet" therein with "Initial Closing Balance Sheet
with respect to each Company other than Alandco and the Alandco Closing Balance
Sheet with respect to Alandco".
16. Section 7.06. Section 7.06 is hereby amended by deleting all references
to "Companies" and replacing them with "Companies other than Alandco after the
Initial Closing Date and all Companies after the Alandco Closing Date".
17. Section 8.01. Section 8.01 is hereby amended as follows:
(a) The first paragraph of Section 8.01 is hereby deleted in its entirety
and replaced with the following:
"(a) The obligations of each Seller to consummate the Initial Closing,
shall be subject to the fulfillment or waiver, at or prior to the Initial
Closing, of each of the following conditions:"
(b) Sections 8.01(a) through (e) are hereby renumbered Sections 8.01(a)(i)
through (v), Section 8.01(f) is hereby deleted in its entirety, and Section
8.01(g) is hereby renumbered Section 8.01(a)(vi).
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(c) Former Section 8.01(a) is hereby amended by deleting all references to
"Closing" therein and replacing them with "Initial Closing" and by relettering
(i), (ii), and (iii) as (A), (B), and (C).
(d) Former Section 8.01(c) is hereby amended by deleting the reference to
"Section 8.01(c)" therein and replacing it with "Section 8.01(a)(iii)."
(e) Former Section 8.01(d) is hereby deleted in its entirety and replaced
with the following:
"(iv) Assumption of Guarantees. The Purchaser shall have assumed or
replaced the Guarantees applicable to the Companies other than
Alandco;"
(f) A new Section 8.01(a)(vii) shall be added as follows:
"(vii) Assignment. (A) The Building Loan Mortgage Note dated November
4, 1997, from South Shore Associates, LLC, to North Fork Bank, and the
Subordinated Soft Cost Loan Note dated November 4, 1997, from South
Shore Associates, LLC, to North Fork Bank shall have been assigned in
full by North Fork Bank to R.K. Associates; (B) all mortgages in South
Shore Associates, LLC's properties held by North Fork Bank shall have
been assigned in full to R.K. Associates; (C) all guarantees entered
into in connection therewith shall have been terminated; (D) South
Shore Associates, LLC, shall have entered into amendments to such
notes and mortgages, pursuant to which it agrees to pay on a secured
basis the principal amount of $6,500,000 to R.K. Associates on
September 30, 1998 (such agreement, the "South Shore Note"); provided,
however, that such date shall be extended to not later than October
31, 1998, upon Purchaser's written assurances satisfactory to the
Sellers that it is diligently working to obtain mortgage financing for
South Shore Associates LLC's properties; and (E) CareMatrix shall have
entered into guarantees and indemnities for the benefit of R.K.
Associates substantially similar to those entered into by South Shore
Associates, LLC, in connection with the notes referred to in clause
(A) above."
(g) A new Section 8.01(b) shall be added as follows:
"(b) The obligations of each Seller to consummate the Alandco Closing
shall be subject to the fulfillment or waiver, at or prior to the
Alandco Closing, of each of the following conditions:
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(i) Representations and Warranties; Covenants. (A) The representations
and warranties of the Purchaser to the extent made with respect to
Alandco contained in this Agreement shall be true and correct as of
the Alandco Closing, with the same force and effect as if made as of
the Alandco Closing (or, in the case of such representations and
warranties of the Purchaser which address matters only as of a
particular date, as of such date), except where the failure to be so
true and correct would not have a material adverse effect on the
ability of the Purchaser to consummate the Alandco Closing; (B) the
covenants and agreements contained in this Agreement to be complied
with by the Purchaser with respect to Alandco at or prior to the
Alandco Closing shall have been complied with in all material
respects; and (C) the Sellers shall have received a certificate of the
Purchaser as to the matters set forth in clauses (A) and (B) above
signed by a duly authorized officer of the Purchaser;
(ii) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any Governmental Order which is in
effect and has the effect of making the Alandco Closing illegal or
otherwise prohibiting consummation thereof; provided, however, that
the provisions of this Section 8.01(b)(ii) shall not apply if any
Seller has directly or indirectly solicited or encouraged any such
action;
(iii) Assumption of Guarantees. The Purchaser shall have assumed or
replaced the Guarantees applicable to Alandco in their entirety;
(iv) Other Governmental Approvals. The Sellers shall have obtained the
approval of the New Jersey Department of Health and Senior Services
Division of Long Term Care Systems Development and Quality to the sale
of Alandco by the Sellers to the Purchaser pursuant to this Agreement
and such approval shall be in form and substance reasonably
satisfactory to the Sellers and shall not be subject to the
satisfaction of any condition that has not been satisfied or waived;
and
(v) Consulting Agreement. The Purchaser shall have delivered to each
Seller duly executed counterparts of the Consulting Agreement."
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18. Section 8.02. Section 8.02 is hereby amended as follows:
(a) The first paragraph of Section 8.02 is hereby deleted in its entirety
and replaced with the following:
"(a) The obligations of the Purchaser to consummate the Initial
Closing shall be subject to the fulfillment or waiver, at or prior to
the Initial Closing, of each of the following conditions:"
(b) Sections 8.02(a) and (b) are hereby renumbered Sections 8.02(a)(i) and
(ii), Section 8.02(c) is hereby deleted in its entirety, and Sections 8.02(d)
through (h) are hereby renumbered Sections 8.02(a)(iii) through (vii).
(c) Former Section 8.02(a) is hereby amended by deleting all references to
"Closing" therein and replacing them with "Initial Closing" and by relettering
(i), (ii), and (iii) as (A), (B), and (C).
(d) Former Section 8.02(d) is hereby amended by deleting the reference to
"Section 8.02(c)" therein and replacing it with "Section 8.02(b)(iii)."
(e) Former Section 8.02(f) is hereby deleted in its entirety and replaced
with the following:
"(v) Third Party Consents. All consents (or in lieu thereof waivers)
to the performance by the Sellers of their obligations with respect to
the Companies other than Alandco, under this Agreement and the
Operating Agreement or to the consummation by the Sellers of the
transactions contemplated hereby and thereby at or prior to the
Initial Closing as are required under any contract to which any of the
Sellers or the Companies is a party or by which any of their
respective assets and properties are bound and where the failure to
obtain any such consent (or in lieu thereof waiver) could reasonably
be expected, individually or in the aggregate with other such
failures, to have a Material Adverse Effect, (A) shall been obtained,
(B) shall be in form and substance reasonably satisfactory to the
Purchaser, (C) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (D) shall be in
full force and effect; provided, however, that in the event the
consent of any party to any of the loan agreements or mortgages set
forth in Section 3.05 of the Disclosure Schedule is not obtained to
such performance or consummation (the "Debt Consents"), the Sellers
shall have the right to elect to reduce the amount of the Purchase
Price payable at the Initial Closing by an amount equal to the amount
of any prepayment penalty incurred as a result of the prepayment of
any amounts owing under such loan agreement or mortgage and, if
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such election is made, the condition set forth in this Section
8.02(a)(v) will be deemed satisfied with respect to any such loan
agreement or mortgage."
(f) Former Section 8.02(g) is hereby amended by deleting all references to
"Companies" therein and replacing them with "Companies other than Alandco," and
renumbering (a) and (b) as (A) and (B).
(g) Former Section 8.02(h) is hereby amended by deleting the reference to
"the Companies" therein and replacing it with "the Companies other than Alandco"
by deleting the reference to "Closing Date" therein and replacing it with
"Initial Closing Date" and by deleting the reference to "Closing" therein and
replacing it with "Initial Closing."
(h) A new Section 8.02(a)(viii) shall be added as follows:
"North Fork Loan. The Purchaser shall have evidence in form and
substance reasonably satisfactory to the Purchaser that South Shore
Associates, LLC has no further obligations to North Fork Bank under
the North Fork Loan."
(i) A new Section 8.02(b) shall be added as follows:
"(b) The obligations of each Purchaser to consummate the Alandco
Closing shall be subject to the fulfillment or waiver, at or prior to
the Alandco Closing, of each of the following conditions:
(i) Representations and Warranties; Covenants. (A) The
representations and warranties of each Seller contained in this
Agreement to the extent made with respect to Alandco shall be
true and correct as of the Alandco Closing, with the same force
and effect as if made as of the Alandco Closing (or, in the case
of such representations and warranties of such Seller which
address matters only as of a particular date, as of such date),
except where the failure to be so true and correct would not have
a Material Adverse Effect; (B) the covenants and agreements
contained in this Agreement to be complied with by each Seller
with respect to Alandco at or prior to the Alandco Closing shall
have been complied with in all material respects; and (C) the
Purchaser shall have received a certificate of each Seller as to
matters set forth in clauses (A) and (B) above signed by such
Seller;
(ii) Other Governmental Approvals. The Purchaser shall have
obtained the approval of the New Jersey
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Department of Health and Senior Service Division of Long Term
Care Systems Development and Quality to the acquisition by the
Purchaser of Alandco from the Sellers pursuant to this Agreement
and such approval shall be in form and substance reasonably
satisfactory to the Purchaser and shall not be subject to the
satisfaction of any condition that has not been satisfied or
waived;
(iii) No Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any statute, rule,
regulation, injunction or other Governmental Order which is in
effect and has the effect of making the Alandco Closing illegal
or otherwise prohibiting consummation thereof; provided, however,
that the provisions of this Section 8.02(b)(iii) shall not apply
if the Purchaser has directly or indirectly solicited or
encouraged any such action;
(iv) Consulting Agreement. The Sellers shall have delivered duly
executed counterparts of the Consulting Agreement;
(v) Third Party Consents. All consents (or in lieu thereof
waivers) to the performance by the Sellers of their obligations
with respect to Alandco under this Agreement and the Consulting
Agreement or to the consummation by the Sellers of the
transactions contemplated hereby and thereby at or prior to the
Alandco Closing as are required under any contract to which any
of the Sellers or Alandco is a party or by which any of their
respective assets and properties are bound and where the failure
to obtain any such consent (or in lieu thereof waiver) could
reasonably be expected, individually or in the aggregate with
other such failures, to have a Material Adverse Effect, (A) shall
have been obtained, (B) shall be in form and substance reasonably
satisfactory to the Purchaser, (C) shall not be subject to the
satisfaction of any condition that has not been satisfied or
waived, and (D) shall be in full force and effect; provided,
however, that in the event the consent of any party to any of the
loan agreements or mortgages set forth in Section 3.05 of the
Disclosure Schedule to which Alandco is a party is not obtained
to such performance or consummation (the "Alandco Debt
Consents"), the Sellers shall have the right to elect to reduce
the Alandco Purchase Price by an amount equal to the amount of
any prepayment penalty incurred as a result of the prepayment
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of any amounts owing under such loan agreement or mortgage and,
if such election is made, the condition set forth in this Section
8.02(b)(v) will be deemed satisfied with respect to any such loan
agreement or mortgage;
(vi) Good Standing Certificates. The Sellers shall have delivered
to the Purchaser (a) copies of the articles of incorporation
including all amendments thereto, of Alandco certified by the
Secretary of State or other appropriate official of the
jurisdiction of incorporation, and (b) certificates from the
Secretary of State or other appropriate official of the
respective jurisdiction of incorporation to the effect that
Alandco is in good standing or subsisting in such jurisdiction,
listing all charter documents of Alandco on file and attesting to
its payment of all franchise or similar Taxes; and
(vii) Resignations of Directors and Officers. Such members of the
board of directors and such officers of Alandco as are designated
in a written notice delivered at least two (2) Business Days
prior to the Alandco Closing Date by the Sellers to the Purchaser
shall have tendered, effective at the Alandco Closing, their
resignations as such directors and officers."
19. Section 9.01. Section 9.01 is hereby amended by deleting the term "the
Closing Date" and substituting therefor the following: "(a) with respect to any
such representations, warranties, covenants or agreements made relating to any
Company other than Alandco, the Initial Closing Date and (b) with respect to any
such representations, warranties, covenants or agreements made relating to
Alandco, the Alandco Closing Date".
20. Section 9.04. Section 9.04(b) is hereby deleted in its entirety and
replaced with the following:
"(b) Each party hereto hereby acknowledges and agrees that, from and after
the Initial Closing, with respect to matters relating to the Companies other
than Alandco, and from and after the Alandco Closing, with respect to matters
relating to Alandco, its sole and exclusive remedy with respect to any and all
claims relating to the subject matter of this Agreement shall be pursuant to the
indemnification provisions set forth in this Article IX and in Article VII. In
furtherance of the foregoing, each party hereto hereby waives, to the fullest
extent permitted under applicable law, any and all other rights, claims and
causes of action it may have, from and after the applicable closing, against the
other parties hereto its officers, directors, employees, agents, representatives
and Affiliates relating to the subject matter of this Agreement."
21. Section 10.01. Section 10.01 is hereby amended as follows:
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(a) The introductory sentence of Section 10.01 is hereby deleted in its
entirety and replaced with the following:
"This Agreement may be terminated at any time prior to the Initial Closing
and the Alandco Closing, with respect to Interests not yet transferred to
Purchaser pursuant to this Agreement:"
(b) Subsection 10.01(c) is hereby amended by replacing the references to
"Closing" therein with "Initial Closing."
(c) A new Subsection 10.01(d) is hereby added before the last sentence of
Section 10.01 to read as follows:
"(d) by Sellers if the Alandco Closing shall not have occurred by
December 31, 1998, unless such closing shall not have taken place
due to the failure by Sellers to fulfill any obligation under
this Agreement; provided, however, that in the event that
Purchaser is making good faith efforts to obtain the approvals
required by Sections 8.01(b)(iv) and 8.02(b)(ii), such date shall
be extended for an additional sixty days."
22. Section 10.02. Section 10.02 is hereby amended by adding the following
sentence at the end of the Section:
"Notwithstanding the foregoing, in the event of termination as
provided in Section 10.01, this Agreement shall only become void, and
liability shall only be limited as set forth in this Section 10.02,
with respect to Interests not yet transferred to Purchaser pursuant to
this Agreement."
23. Section 10.03. Section 10.03 is hereby amended by deleting the
reference to "Closing" therein and replacing it with "Initial Closing or the
Alandco Closing".
24. Section 11.01. Section 11.01 is hereby amended as follows:
(a) Section 11.01(a) is hereby amended by deleting the reference to
"Closing" therein and replacing it with "Initial Closing or the Alandco
Closing".
(b) Section 11.01(b) is hereby deleted in its entirety and replaced with
the following:
"Notwithstanding the foregoing, (i) if the Initial Closing does not
occur because of a breach by a party hereto, such party will reimburse
the other parties (as their sole and exclusive remedy hereunder) for
their out-of-pocket costs and expenses, including, without limitation,
fees and expenses of counsel, financing sources and accountants and
disbursements of financial advisors, incurred in connection with the
preparation,
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negotiation and performance of this Agreement and the transactions
contemplated hereby, and (ii) if the Initial Closing occurs, but the
Alandco Closing does not occur because of a breach by a party hereto,
such party will reimburse the other parties (as their sole and
exclusive remedy hereunder) for six percent of their aggregate out-of
pocket costs and expenses, as described in clause (i) above.
25. Section 11.11. Section 11.11 is hereby amended by deleting the first
reference to "Closing" therein and replacing it with "Initial Closing or Alandco
Closing" and by deleting the second reference to "Closing" therein and replacing
it with "applicable closing."
26. Schedule I. Schedule I is hereby amended as set forth in the attached
revised form of Schedule I to reflect the Trust Interests in Seniorland Company,
LLC.
27. Schedule 2.02(A). Schedule 2.02(A) is hereby amended by deleting the
figure "21,290,000" contained therein and substituting therefor the figure
"24,304,763", and by deleting the figure $9,600,000 and substituting therefor
the figure "8,300,000".
28. Exhibit A. The form of Operating Agreement attached to the Agreement as
Exhibit A is hereby amended by (a) deleting Alandco as a party thereto and (b)
amending Section 6.M by (i) inserting at the end of the first sentence thereof
the following:
", except that Operators shall pay all "back-office" expenses of the
Facilities for the period from and after the Initial Closing Date to
and until the earlier of (x) the second anniversary thereof and (y)
the termination of this Agreement, so long as the aggregate amount of
such expenses shall not have exceeded $1,386,763. To the extent that
the aggregate amount of such expenses upon the earlier of such second
anniversary and the date of such termination is less than $1,386,763,
the Operators shall pay the difference between $1,386,763 and such
aggregate amount to the Owners.";
(ii) inserting at the end of the third sentence thereof the following:
", and any taxes (and reasonable legal and accounting fees related
thereto) imposed on the Operators, or for which the Operators are held
liable, to the extent relating to the obligations of the Operators
under this Section 6.M to pay "back-office" expenses (such as taxes
that become payable by the Operators as a result of the disallowance
of a current tax deduction or similar tax benefit for back-office
expenses), net of any tax deduction or similar benefit to which the
Operators become entitled as a result of the facts that gave rise to
the increased tax liability."; and
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(iii) inserting at the end thereof the following:
"For the purposes of this Paragraph 6.M, "back-office" expenses shall
mean the salaries of the personnel employed by the Operators to
provide controller, payroll, accounts payable, accounts receivable,
secretarial, purchasing and maintenance services; employee benefits
expenses; telephone expenses; and expenses for supplies, postage and
computer maintenance incurred by the Operators in operating the
Facilities, and shall not include capital expenditures."
29. Disclosure Schedule. Section 3.13(a) of the Disclosure is hereby
amended by deleting the reference to the property located at 1515 Veterans
Memorial Highway from the section set forth across from South Shore Associates,
LLC.
30. References. (a) All references to Sections in the Agreement renumbered
hereby shall be deemed to be references to such Sections as renumbered.
(b) All references to "this Agreement" and terms of like import in the
Agreement shall be deemed to the references to the Agreement as amended hereby.
31. Construction. The parties hereto acknowledge and agree that unless
specifically stated otherwise in this Agreement as amended, (a) all obligations
of the parties relating to any Company other than Alandco referring to "Closing"
or the "Closing Date" therein shall mean and be a reference to the "Initial
Closing" and the "Initial Closing Date", respectively, and (b) all obligations
of the parties relating to Alandco referring to "Closing" or the "Closing Date"
therein shall mean and be a reference to the "Alandco Closing" and the "Alandco
Closing Date", respectively.
32. No Other Amendments. Except as expressly amended hereby, the provisions
of the Agreement are and shall remain in full force and effect.
33. Counterparts. This First Amendment may be executed by the parties
hereto in any number of separate counterparts, each of which shall be deemed to
be an original and all of which taken together shall be deemed to constitute one
and the same instrument.
34. Headings. The headings of this First Amendment are for reference only
and shall not limit or otherwise affect the meaning hereof.
35. Governing Law. The Amendment shall be governed by and construed in
accordance with the laws of the State of New York.
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EXECUTION COPY
IN WITNESS WHEREOF, this First Amendment to Purchase Agreement has been
executed and delivered as of the date first written above by each Seller and,
with respect to the Purchaser and the Guarantor, by its respective officers
thereunto duly authorized.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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CAREMATRIX OF MASSACHUSETTS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP
CAREMATRIX CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP
