00-099 NovaCare & Donald Chu (Sports Center)JUN-19-99 SAT 10 10 Rt1 MT CONSULTING FAX N0. 16109416282 P. 03
Nfay-19-99 01 :39P P/. 0/3 ,y~
C~ ~ f y
ASSIGNMENT AND ASS'UMPT)<ON AGREEMENT
THIS ACR>/EMENT is between A~:celeration of Cupertino, lnc. & Donald Chu,
(Assignor) and No~•aCarc (3utpaticnt Rehabilitation West, Inc., a Delaware corporation
(Assignee).
WHIrl2EAS, City of Cupertino, as Lessor, and Acceleration of
Cupertino and Donald Chu as Lessees, entered into a Lease on or about
November 4, 1996, a true and correct ce.py of which is attached hereto and made
a part hereof (the Lease}:
WHERF,AS, the above "Lease' is for the demised premises located at
21111 Stevens Creek Hlvd., being app:roxirnatdy 2,40Q square feet, located in
the Ciry of Cupertino, CA, to be used and occupied as a facility for, including
but not limitzd to, occupational thcr,xpy, speech therapy, physical therapy,
psychological therapy, orlhoties, pa~sthetics, and genera! office use by
Assignee:
WHEREAS, Assignor desires to assign, and Assigner desires to assume
the rights, duties, and liabilities of the lessee pursuant to the Lease.
1~IOW, THERF.FORF~, in consideration of the mutual covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
Rcknowledged, the parties AGREE as follows:
1. Assignor assigns and transfers to Assignee all of flee Assignor's rights, title, and
interest in the Lease as of the date hereof.
2. Assi~ee hereby assumes .ill rights, duties, and liabilities of the Lease to be
perforrncd by Assignor, including the duty to Iray all rental and other charges regrured pursuant
to the provisions of the I ease, from this date forward.
3. Article 8.05(c) ofthe Lease shall be amended as follows:
a. Donald Chu shall be released from the responsibility of authorized
represcntativc oCthc corporate tenant.
b. For matters pertaining to daily operations, the authorized representative
for Assignee shall be the Site Manager. The site manager shalt communicate directly with the
Assignor's representative, Recreation Supervisor.
c. For matters pertaining to contractual issues, the authorized representrttivc
for Assignee shall be the Clinical t~perations llirector.
JUN-19-99 SAT 10:10 All MT CONSULTING
Ntay-19-99 O1x39P
Lessor:
Lesx:c (Assignor):
Assignee:
Prenuscs:
Date of Lease:
FAX N0. 16109416282
City of Cupertino
Accelcr:~tion of Cupertino, inc. & Donald Chu
NovaCan: Outpatient Rehabilitation West, lnc.
21 I l ] St~:vens Creek Blvd., Cupertino, CA
on or about November 4, 1996
P. 04
P_04
THE undenigncd, City of Cupertino, being the Lessor under the Lease referenced in the
foregoing and attached Assignment and Assumption Agreement, hereby consents and agrees for
the bencft of both the Lessee and the Assignee to the following:
A. Lessor consents to the assigiunent of the Lessee's interest in the Lease by
Acceleration of Cupertino, Inc. & Donald Chu, to NovaCare Outpatient Rehabilitatiai West,
Inc., pursuant to the attached Assignment and Assumption Agreement_
II, Lessor certifies to Assignor au~i the Assignee that all paymertts required to bt
made by the Lessee uncG~r the Lease, as of the date hemof, have been made and the Lessee under
the Lease is not in default with respect to any term, envenom[, or condition of the Lease.
Dated the )4~`' dayofls a~ , 1995
~E~
Gcssor -City of upertino
Print Name: wA~.~.`f OEA ~ M~•ro~2._
IN T ~ STIMONY WHEREOF, the: panics have executed this Agreement as of
'1'hr ~ day of
inn
~ ~
~A signor)
By: `~1ova a Outpatient a bil
/~
L
t.~ortata ~ nu
( ~ ee)
:~ ephett P. ountain, President
Business Development Services
itation West, Inc.
s
s
r
~Jctober 5, 1999
NovaCare, Inc.
1016 West Ninth Avenue
King of Prussia, PA 19406
Re: Office lease (as amended throl~gh the date hereof, the "Lease"), dated as of
November 4, 1996, by and between City of Cupertino, as landlord (the
"Landlord"), and Acceleration of Cupertino and Donald Chu, as tenant
(the "Tenant") for the premise: known as 21111 Stevens Creek Boulevard,
Cupertino, CA 95014.
Ladies and Gentlemen:
We hereby confirm and certify as follows:
1. The Lease is in full force and effect and to the best of our knowledge there
are no breaches or uncured defaults by any party thereunder.
2. Landlord hereby consents to the assignment (the "Assignment") of the
Lease from Tenant to RehabClinics, Inc., ~i Delaware corporation and wholly-owned
subsidiary of NovaCare, Inc., and hereby waives any rights that Landlord may have to (i)
declare such Assignment a default or event of default under the Lease, or (ii) terminate
the Lease or exercise any other remedy that Landlord may have because of, or as a result
of, the Assignment. The Assignment, as of the effective date thereof, shall have the force
and effect of creating a direct lease between Landlord and Assignee.
Landlord name:
Signatory name:
Title:
f01T1'IS~ \LEAS-ASS.doc\10/04/99 4:42 PM
News Release
FOR IMMEDIATE RELEASE
(As of October 4, 1999)
Analyst Contact: Susan J. Campbell
610-992-7425
Media Contact: Raymond J. Pennacchia
610-992-7184
NOVACARE ANNOUNCES SALE OF PHYSICAL REHABILITATION AND
OCCUPATIONAL HEALTH BUSINESS
KING OF PRUSSIA, Pa., -- NovaCare, Inc:. (NYSE: NOV) announced today that it
has reached a definitive agreement to sell its outpatient physical rehabilitation and
occupational health (PROH) business to Sele~~t Medical Corporation, aprivately-held
health care company with its headquarters in Mechanicsburg, Pa. Under the terms of the
agreement, Select Medical will pay NovaCarf; total consideration of $200 million,
including the assumption of debt (expected to be approximately $45 million at closing)
and approximately $155 million in cash, of which $25 million will be placed in escrow in
conjunction with certain representations to Select Medical.
Select Medical is a private company that primarily operates long-term acute care
hospitals and outpatient medical rehabilitation clinics. After completion of the
transaction, Select Medical will have annuali: ed net revenues exceeding $800 million
with more than 40 long-term acute care hospitals and more than 700 outpatient medical
rehabilitation clinics within the U.S. and Can~ida. Select Medical was founded in 1997 by
Rocco and Robert Ortenzio, who have extensive experience as leading executives within
the medical rehabilitation services industry, including Continental Medical Systems,
which they founded in 1985. Select Medical :has financial backing from several of the
nation's leading private equity investment firnzs, including Welsh, Carson, Anderson &
Stowe; GTCR Golder Rauner LLC; and Thoma Cressey Equity Partners.
NovaCare's PROH business will oper<<te as NovaCare, a division of Select
Medical. Division headquarters for this business will remain in King of Prussia, Pa.
- more -
NovaCare, Inc.
Add One
"With this transaction, our employees will be joining a company with a successful
track record and a strong commitment to the rehabilitation industry," said Timothy E.
Foster, chief executive officer. "In addition, Select has the resources to take advantage of
the growth opportunities in the attractive outpatient services sector. The new owners will
retain the nationally-recognized NovaCare br~~nd and community relationships."
NovaCare shareholders previously approved the sale of PROH in a Special
Meeting of Stockholders on September 21, 1999. The transaction is expected to close
within 30 days following review under the Hart-Scott-Rodino Act. The transaction is not
subject to financing contingencies.
"The purchase price is at the minimum. of our expected range as estimated in our
August proxy statement to shareholders and re:fleets current weakness in the debt markets
for health care transactions and declining values in the rehabilitation sector," said Foster.
Warburg Dillon Read and Wasserstein Perella & Company acted as NovaCare's
advisors on the transaction.
Cautionary ,Statement
Except for historical information, matters discussed are forward-looking statements that
are based on management's estimates, assumptions and projections. Important factors that
could cause results to dyer materially from those expected by management include
reimbursement system changes, the productivity of clinicians, pricing of payer contracts,
management retention and development, management's success in developing and
introducing new products and lines of business, the ability of the company, its customers and
suppliers to complete assessment, testing and remediation of Year 2000 issues, the ability of
the company to improve its cash flow from operations, the ability to complete the sale of the
physical rehabilitation and occupational heab'h business and adverse Internal Revenue
Service rulings with respect to the employer status of employee services businesses.
###
~' NovaCare
Nelpixg Make Life a Little Better.
October 5, 1999
Dear Sir or Madam:
NovaCare, Inc. has announced that it has Entered into a definitive agreement to sell
its Physical Rehabilitation and Occupational Health Division to Select Medical
Corporation. I have enclosed the press release that was sent out yesterday to the
media, which describes more about the transaction and Select Medical. As a
technical matter, our current lease agreement requires that a lease assignment be
completed in this situation. Enclosed is our lease assignment form, which assigns the
lease from our existing Tenant name to ReflabClinics, Inc, which is the wholly-owned
subsidiary of NovaCare, Inc. that is being sc-Id to Select Medical.
We would appreciate you returning the enclosed assignment form to us as soon as
possible since time is of the essence with his matter. If you have any questions
please contact me at (610) 941 -5612.
Sinc rely,
St ve Mackell
Vice President of Corporate Services
NovaCare, Inc. Outpatient Rehabilitation
1016 VG'est Ninth avenue King of Pnusia, PA 19406 610 992 8962 Fax 610 992 9316
8/11/98
Mr. Steve Dowling
Parks and Recreation
City of Cupertino
10300 Torrey Ave.
Cupertino, CA 95014-3255
Re: Lease for space at the Cupertino Sports Center
Dear Mr. Dowling,
As regards the lease for the space currently occupied by the Acceleration
Program at the Cupertino Sports Center, 21111 Stevens Creek Blvd, Suite A,
Cupertino, CA 95014. I hereby grant the City of Cupertino permission to
talk to outside entities, without my being present, as regards the potential
takeover of the lease at the above address.
However, this permission in no way relinquishes my rights as a lessee of the
above space, and my lease will continue in existence throughout any
discussions with or without my being present. I intend to retain first right of
refusal for any potential early termination of the lease. This will continue
until such time as all parties agree to ~~ mutually acceptable resolution of the
issues~t hand.
Si cerely,
A. Chu Ph.D.
Cc: Dani Slavin, NovaCare
Gayle Tonon, Esq.