EXHIBIT 10.8
ASSET ACQUISITION AGREEMENT
This Agreement is made this 9th day of October, 1997, by and among
Genesis Health Ventures, Inc., a Pennsylvania corporation, or its designee
pursuant to Section 4.2 hereof (the "Buyer"), The Multicare Companies, Inc., a
Delaware corporation (the "Seller"), and Health Care Rehab Systems, Inc., a
Pennsylvania corporation, Horizon Rehabilitation, Inc., a West Virginia
corporation, Progressive Rehabilitation Centers, Inc., a Delaware corporation,
and Total Rehabilitation Center, L.L.C., a New Jersey limited liability company
(each a "Company" and collectively, the "Companies").
BACKGROUND
WHEREAS, the Seller and the Companies have agreed to sell and Buyer has
agreed to purchase, all of the Assets of each of the Companies on the terms and
conditions provided for in this Agreement;
WHEREAS, all filings required pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("HSR Filings"), have been made
in connection with the purchase and sale of the Assets, and early termination of
the applicable waiting period was granted by the Federal Trade Commission and
the Department of Justice on July 7, 1997 with respect to the HSR Filings; and
WHEREAS, any and all permits, approvals and consents of any
governmental body or agency have been obtained which the Buyer, Seller and the
Companies reasonably deem necessary to consummate the transactions contemplated
by this Agreement so as to be in compliance in all material respects with the
applicable laws.
AGREEMENT
NOW, THEREFORE, in order to consummate such transactions and in
consideration of the mutual agreements set forth herein, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE 1. DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, unless otherwise
defined herein or unless the context otherwise requires, the following terms
shall have the following meanings:
"Agreement" means this Asset Acquisition Agreement, all schedules
hereto and all amendments, modifications, and supplements hereto.
"Assets" means all of the Companies' real, personal, mixed, tangible or
intangible property of any nature, including, without limitation, cash,
prepayments, deposits, escrows, accounts receivable, bank accounts, securities,
permits, vehicles, fixed assets, furniture, patents, trademarks, copyrights,
designs, formulae, real property, software, computers, equipment, contract
rights, intangibles, names, goodwill, claims, causes of action and other legal
rights and remedies.
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"Buyer" is defined in the preamble hereto.
"Closing" has the meaning specified in Section 2.2 hereof.
"Closing Date" has the meaning specified in Section 2.2 hereof.
"Company" or "Companies" is defined in the preamble hereto.
"Encumbrance" means any mortgage, claim, lien, pledge, option, charge,
security interest or other similar interest, easement, judgment or imperfection
of title of any nature whatsoever.
"Material Adverse Effect" means any change or effect that would or
would reasonably be expected to materially and adversely affect the financial
condition, results of operations, assets or business of each of the Companies,
the Seller, or the Buyer and its subsidiaries taken as a whole, as the case may
be.
"Merger Agreement" means the Merger Agreement, dated as of June 16,
1997, by and among Genesis ElderCare Corp. (formerly known as Waltz Corp.), a
Delaware corporation, Genesis ElderCare Acquisition Corp. (formerly known as
Waltz Acquisition Corp.), a Delaware corporation, and the Seller pursuant to
which Genesis ElderCare Acquisition Corp. shall merge with and into the Seller.
"Purchase Price" means Twenty-Four Million Dollars ($24,000,000) to be
paid by Buyer for the Assets.
"Seller" is defined in the preamble hereto.
ARTICLE 2. SALE OF ASSETS AND PURCHASE PRICE
Section 2.1 Sale of Assets. On the terms and subject to the conditions
set forth in this Agreement, the Companies shall cause the sale, transfer and
delivery to Buyer, and Buyer shall purchase, on the Closing Date, all right,
title and interest in and to all of the Assets, and Buyer shall assume all of
the liabilities of each of the Companies.
Section 2.2 Closing.
(a) The closing of the purchase and sale of the Assets (the
"Closing") shall take place simultaneous with the execution of this Agreement at
the offices of Blank Rome Comisky & McCauley, One Logan Square, Philadelphia,
Pennsylvania 19103, or at such other place as shall be mutually agreeable to the
parties hereto (which time and place are designated as the "Closing Date");
provided, however, that if acceptable to the parties, the Closing may be
effected by facsimile transmission of executed copies of the documents
(including without limitation, this Agreement) delivered at the Closing and
payment of the purchase price specified in Section 2.3 and by sending original
copies of the documents (including without limitation, this Agreement) delivered
at the Closing by reputable overnight delivery service, postage or delivery
charges prepaid, for delivery to the parties at their respective addresses set
forth in Section 7.1 herein by the third business day following the Closing.
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(b) At the Closing, the Seller and the Companies shall
deliver:
(1) Assets. Possession and control of all of the
Assets including, but not limited to, all
applicable keys, access cards and other
entry devices.
(2) Documents of Transfer. Such bills of sale, deeds,
assignments, releases, endorsements, affidavits, and other instruments and
documents of sale, transfer, assignment and conveyance as may be reasonably
required, in order to lawfully and effectively sell, transfer, assign and convey
to Buyer all right, title and interest in and to all of the Assets, in each case
in form acceptable to Buyer, dated as of the Closing Date, and duly executed
and, if necessary, acknowledged by the Seller and each of the Companies.
Section 2.3 Purchase Price. On the Closing Date, Buyer shall pay the
Purchase Price, against delivery of the Assets, by wire transfer of immediately
available funds to such accounts as the Seller shall designate.
ARTICLE 3. CERTAIN UNDERSTANDINGS AND AGREEMENTS
Section 3.1 Deliveries. The Seller and the Companies shall promptly
deliver to Buyer copies of all documents, instruments, notices, records,
certificates and other items relating to the Assets.
Section 3.2 Bulk Sales Notices. The Seller and the Companies shall (i)
execute and file all bulk sales filings and notices required by law and (ii)
cooperate with Buyer in its compliance with bulk sales laws applicable to it, as
reasonably requested by Buyer.
Section 3.3 Purchase Price Adjustment. To the extent that run rate
revenues or the EBITDA generated by the Assets sold hereunder as of August 31,
1997 vary materially from $19.5 million and $2.7 million, respectively, the
parties agree to make an appropriate adjustment in the purchase price.
Section 3.4 Tax Adjustment. To the extent that taxes in excess of $4.0
million are imposed upon Seller as a result of the sale of the Assets hereunder,
Buyer will pay to Seller the amount by which such taxes exceed $4.0 million when
Seller is required to pay such taxes. To the extent that the sale of Assets
hereunder generates taxes of less than $4.0 million to Seller, Seller will pay
to Buyer the tax savings realized from such taxes being less than $4.0 million
when Seller receives the benefit from such taxes being less than $4.0 million.
ARTICLE 4. MISCELLANEOUS
Section 4.1 Notices. All notices, requests, demands and other
communications hereunder shall be in writing (including telecopy or similar
writing) and shall be given:
If to Buyer:
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Genesis Health Ventures, Inc.
148 West State Street
Kennett Square, Pennsylvania 19348
Attention: Michael R. Walker
Telephone: (610) 444-6350
Facsimile: (610) 444-7438
with a copy to:
Blank Rome Comisky & McCauley
One Logan Square
Philadelphia, Pennsylvania 19103
Attention: Stephen E. Luongo, Esq.
Telephone: (215) 569-5500
Facsimile: (215) 569-5555
If to Seller or the Companies:
Genesis ElderCare Corp.
148 West State Street
Kennett Square, Pennsylvania 19348
Attention: Michael R. Walker
Telephone: (610) 444-6350
Facsimile: (610) 444-7438
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attention: William E. Curbow, Esquire
Telephone: (212) 455-2000
Facsimile: (212) 455-2502
or to such other address or telecopy number and with such other copies as such
party may hereafter specify for the purpose of notice to the other party. Each
such notice, request, demand or other communication shall be effective (a) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section and evidence of receipt is received or (b) if given by
any other means, upon delivery or refusal of delivery at the address specified
in this Section.
Section 4.2 Assignability; Parties in Interest. This Agreement shall
not be assignable by any of the parties hereto, except that this Agreement shall
be assignable in whole or in part by Buyer to any subsidiary or subsidiaries of
Buyer, provided that no such assignment shall relieve the assignor of its
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obligations hereunder. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. Except as specifically referred to herein, this Agreement is for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns and nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any legal or equitable rights, remedies or
claims under or by reason of this Agreement.
Section 4.3 Governing Law; Jurisdiction. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
Commonwealth of Pennsylvania, without regard to conflicts of laws. In any action
between or among any of the parties, whether arising out of this Agreement or
otherwise, (a) each of the parties irrevocably consents to the exclusive
jurisdiction and venue of the federal and state courts located in the
Commonwealth of Pennsylvania; (b) each of the parties irrevocably waives the
right to trial by jury; (c) each of the parties irrevocably consents to service
of process by first class certified mail, return receipt requested, postage
prepaid, to the address at which such party is to receive notice in accordance
with Section 7.1.
Section 4.4 Counterparts. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party shall have
received a counterpart signed by the other party.
Section 4.5 Publicity. Seller, the Companies and Buyer agree that press
releases and other announcements with respect to the transactions contemplated
hereby shall be subject to mutual agreement; provided, however, that Buyer may
make such announcements as in the opinion of its counsel, such party is required
to make pursuant to comply with law or the requirements of any stock exchange or
other applicable self-regulatory organization, but in such event Buyer shall, to
the extent practicable, give the Seller and the Companies reasonable prior
notice and an opportunity to comment on the proposed announcement.
Section 4.6 Complete Agreement. This Agreement, the exhibits hereto and
the schedules and documents delivered pursuant hereto or referred to herein
contain the entire agreement between the parties hereto with respect to the
transactions contemplated herein and supersede all previous negotiations,
commitments and writings.
Section 4.7 Amendments and Waivers. The parties hereto may (a) extend
the time for the performance of any of the obligations or other acts of the
parties hereto, (b) waive any inaccuracies in the representations and warranties
contained in this Agreement or in any or documents delivered pursuant hereto,
(c) waive compliance with any of the covenants or agreements contained in this
Agreement or (d) amend this Agreement, if and only, in the case of an extension
or amendment, if such action is set forth in a written agreement signed by both
parties, or, in the case of a waiver, if such waiver is signed by the party
against whom the waiver is to be effective.
Section 4.8 Expenses. Except as specifically provided in this
Agreement, each party shall bear the expenses incurred by it in connection with
the transactions contemplated by this Agreement.
Section 4.9 Consents. Notwithstanding anything herein to the contrary,
this Agreement shall not constitute an agreement to assign any contract,
license, lease, commitment or other arrangement if an attempted assignment would
constitute a breach thereof. Whenever such consent is required, the Seller will
use commercially reasonable efforts to cause such consents to be obtained and
Buyer agrees to cooperate with
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the Seller and to enter into any reasonable arrangement designed to provide for
Buyer the benefits under such contracts and agreements.
Section 4.10 Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 4.11 Severability. Any portion or provision of the Agreement
which is invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining portions or
provisions hereof in such jurisdiction or, to the extent permitted by law,
rendering that or any other portion or provision of the Agreement invalid,
illegal or unenforceable in any other jurisdiction.
Section 4.12 Further Assurances. Each party hereto agrees to execute
any and all documents and to perform such other acts as may be necessary or
expedient to further the purposes of this Agreement and the transactions
contemplated hereby.
Section 4.13. Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by their respective duly authorized officers as of the
date first above written.
THE MULTICARE COMPANIES, INC. GENESIS HEALTH VENTURES, INC.,
or its designee
By: /s/ George V. Hager, Jr. By: /s/ George V. Hager, Jr.
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Name: George V. Hager, Jr. Name: George V. Hager, Jr.
Title: Senior Vice President and Title: Senior Vice President and
Chief Financial Officer Chief Financial Officer
HEALTH CARE REHAB SYSTEMS, INC. HORIZON REHABILITATION, INC.
By: /s/ George V. Hager, Jr. By: /s/ George V. Hager, Jr.
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Name: George V. Hager, Jr. Name: George V. Hager, Jr.
Title: Senior Vice President and Title: Senior Vice President and
Chief Financial Officer Chief Financial Officer
PROGRESSIVE REHABILITATION TOTAL REHABILITATION CENTERS,
CENTER, INC. L.L.C.
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By: /s/ George V. Hager, Jr. By: /s/ George V. Hager, Jr.
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Name: George V. Hager, Jr. Name: George V. Hager, Jr.
Title: Senior Vice President and Title: Senior Vice President and
Chief Financial Officer Chief Financial Officer
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