exv10w12



 





EXHIBIT 10.12


[FORM OF]

PURCHASE AND SALE AGREEMENT

(Divided Facility)




          This PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of
              
      , 2006, by and between                                         , a                                         corporation
(“Transferor”), ALC REAL ESTATE, LLC, a Wisconsin limited liability company
(“Transferee”), ASSISTED LIVING CONCEPTS, INC., a Nevada corporation (“Assisted
Living”), and EXTENDICARE HEALTH SERVICES, INC., a Delaware corporation
(“Extendicare”).




          WHEREAS, Transferor is the owner of certain real property located at                                                             and legally described on
Exhibit A (the “Property”); and





          WHEREAS, the Facility (as defined in Section 1.01) is located on a portion of the Property;
and




          WHEREAS, Transferor is in the process of dividing the Property so that the portion of the
Property on which the Facility is located will be a separate legal parcel (the “Property
Division”); and




          WHEREAS, upon the completion of the Property Division, Transferor desires to transfer to
Transferee, and Transferee desires to accept and assume from Transferor, the Assets and the Assumed
Liabilities (each as defined below); and




          WHEREAS, Extendicare is the ultimate parent of Transferor and Assisted Living is the sole
member of Transferee.




          NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:




ARTICLE ONE

Transfer of Assets; Assumption of Liabilities




          1.01 Transfer of Assets. On the terms and subject to the conditions set forth in this
Agreement, effective upon the completion of the Property Division and receipt of all required
approvals, Transferor hereby sells, assigns, conveys, transfers, and delivers to Transferee, and
Transferee hereby accepts and acquires from Transferor, all of Transferor’s right, title and
interest in and to that portion of the Property shown on Exhibit A-1 (the “Facility”),
together with all buildings, improvements, structures and fixtures located thereon, all furniture,
equipment and other personal property located therein (except as excluded below), and all
rights-of-way, easements and privileges appurtenant thereto (collectively, the “Assets”).




          1.02 Excluded Assets. Notwithstanding the terms of Section 1.01, Transferor is not
selling, assigning, conveying, transferring or delivering to Transferee any operating assets of




 









 




the Facility which have been transferred to ALC Operating, LLC by the operator of the Facility
pursuant to a separate agreement dated the date hereof.




          1.03 Assumed Liabilities. Except as set forth on Exhibit B and subject to Sections
4.02 and 4.03 hereof, on the terms and subject to the conditions set forth in this Agreement,
Transferor hereby assigns, conveys, transfers and delivers to Transferee, and Transferee hereby
accepts and assumes from Transferor, all of the liabilities of Transferor that primarily relate to
the Assets (the “Assumed Liabilities”); provided, however, that the Assumed Liabilities do
not include any liability to the extent such liability arises out of or results from the operations
of the Facility or the Property prior to the date of the Closing (as that term is defined in
Section 3.03 below).




ARTICLE TWO

Consideration




          2.01 Purchase Price. The purchase price for the Assets shall be                                   
                           Dollars
($                                        ) (the “Purchase Price”). The Purchase Price shall be paid in accordance
with the provisions of Article Three.




          2.02 Allocation. The Purchase Price shall be allocated as shown on Exhibit D to this
Agreement.




ARTICLE THREE

Loan of Purchase Price




          3.01 Execution of Note. Immediately prior to the distribution by Extendicare, Inc. of
the Assisted Living stock to holders of Extendicare, Inc. stock, Assisted Living shall lend an
amount equal to the amount of the Purchase Price to Extendicare in exchange for a note in the form
attached hereto as Exhibit C (the “Note”) and Extendicare shall immediately deliver the
Note to Assisted Living.




          3.02 Transfer of Note by Assisted Living. Promptly upon receipt of the Note from
Extendicare, Assisted Living shall endorse and deliver the Note to Transferee as a contribution to
capital and not in exchange for additional membership interests in Transferee.




          3.03 Payment of Purchase Price. Upon the closing of the sale of the Assets to
Transferee (the “Closing”), Transferee shall pay the
Purchase Price to Transferor.




ARTICLE FOUR

Closing




          4.01 Conveyance. At Closing, in exchange for payment of the Purchase Price,
Transferor shall convey title to the Assets to Transferee by special warranty deed and bill of sale
free and clear of all liens and encumbrances created by or through Transferor other than those
matters shown as permitted encumbrances on the deed.




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          4.02 Prorations. Real estate and personal property taxes shall be prorated as of the
date of Closing based on 105% of the most current tax bills if taxes are paid in arrears and
otherwise in accordance with the current tax bill and adjusted accordingly between the parties.
All other items of income and expense relating to the Assets shall be prorated between Transferor
and Transferee as of Closing, and the Purchase Price shall be adjusted accordingly.




          4.03 Closing Costs. Transferor shall pay all transfer taxes, survey and title costs
and all other closing costs.




          4.04 Contracts Relating to the Assets. At Closing, Transferor shall assign to
Transferee and Transferee shall assume Transferor’s right, title and interest in all third-party
contracts relating to the Assets other than any such contracts assigned to ALC Operating, LLC by
the operator of the Facility pursuant to a separate agreement dated the date hereof.




          4.05 Cooperation. The parties shall cooperate with each other in all reasonable
respects to ensure that the Closing occurs upon completion of the Property Division, including
using their commercially reasonable efforts to obtain all permits and remove all legal impediments
as required in connection with the Property Division. To the extent that the assignment of any
contract requires the consent of a third party, Transferor and Transferee shall use their
commercially reasonable efforts to obtain such consent. If such consent cannot be obtained,
Transferor and Transferee shall take such other actions in order to place Transferee, insofar as
reasonably practicable and subject to applicable law and to the fullest extent permitted under the
applicable third party contract, in the same position as if such contract had been assigned to
Transferee as contemplated hereby and so that all the benefits and burdens relating to such
contract are to inure to Transferee.




ARTICLE FIVE

Miscellaneous




          5.01 NO REPRESENTATIONS OR WARRANTIES REGARDING THE ASSETS. TRANSFEREE ACKNOWLEDGES
AND AGREES THAT NONE OF TRANSFEROR, ASSISTED LIVING OR EXTENDICARE MAKE ANY REPRESENTATION OR
WARRANTY REGARDING ANY OF THE ASSETS OR ASSUMED LIABILITIES OR REGARDING ANY OTHER MATTERS IN
CONNECTION WITH ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF TRANSFEROR,
ASSISTED LIVING AND EXTENDICARE HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR
REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING ANY OF THE
ASSETS OR ASSUMED LIABILITIES OR ANY MATTER RELATED THERETO.




          5.02 “AS IS” TRANSFER. THE TRANSFER OF THE ASSETS AS PROVIDED FOR HEREIN IS MADE ON
AN “AS IS,” “WHERE IS” BASIS AND “WITH ALL FAULTS.” TRANSFEREE ACCEPTS THE ASSETS AND THE ASSUMED
LIABILITIES IN THEIR “AS IS” “WHERE IS” “WITH ALL FAULTS” CONDITION WITHOUT RELYING ON ANY
REPRESENTATIONS OR WARRANTIES FROM ANY OF THE OTHER PARTIES TO THIS AGREEMENT. TRANSFEREE
ACKNOWLEDGES AND AGREES THAT NONE OF TRANSFEROR, ASSISTED LIVING OR EXTENDICARE




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SHALL BE RESPONSIBLE OR LIABLE TO TRANSFEREE FOR ANY DEFECTS, ERRORS OR OMISSIONS OR ON
ACCOUNT OF ANY OTHER CONDITIONS AFFECTING THE ASSETS OR THE ASSUMED LIABILITIES.




          5.03 Authority. Each party to this Agreement represents and warrants that (i) it is
an entity organized and existing and in good standing under the laws of the state in which it is
organized, and (ii) it has the right and authority to enter into this Agreement and consummate the
transactions contemplated by this Agreement.




          5.04 Further Assurances. At and after closing, each party hereto shall execute,
deliver, file and record, or cause to be executed, delivered, filed and recorded, such further
agreements, instruments and other documents, and take, or cause to be taken, such further actions,
as any other party hereto may reasonably request as being necessary or advisable to effect or
evidence the transactions contemplated by this Agreement or otherwise carryout the intent and
purposes of this Agreement. Without limiting the foregoing, in the event that the Property
Division is not able to be legally completed due to applicable laws or decisions of governmental
agencies having jurisdiction , the parties hereby covenant and agree to cooperate in good faith to
take such other action(s)as such parties shall deem appropriate to accomplish the Property Division
including, without limitation, the (a) creation of a tenancy in common; or (b) the creation of a
condominium form of ownership; or (c) the sale-leaseback of the entire Property; or (e) such other
form upon which the parties shall agree.




          5.05 Amendment and Waiver. Any amendment, supplement or modification of this
Agreement, and any consent to any departure by any party hereto from the terms of this Agreement,
shall be effective only if it is made or given in writing and signed by each party hereto.




          5.06 Binding Effect. This Agreement and all of the provisions hereof will be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns.




          5.07 Complete Agreement. Other than the Separation Agreement dated as of ___,
2006 between Assisted Living and Extendicare Real Estate Investment Trust, this Agreement and the
exhibits hereto contain the complete agreement between the parties and supercede any prior
understandings, agreements or representations by or between the parties, written or oral, which may
have related to the subject matter hereof in any way.




          5.08 Counterparts. This Agreement may be executed in one or more counterparts, each
of which will be deemed an original, but all of which together will constitute one and the same
instrument.




          5.09 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law; but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.




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          5.10 GOVERNING LAW. EXCEPT FOR THE NOTE, WHICH SHALL BE GOVERNED BY WISCONSIN LAW,
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN
WHICH THE FACILITY IS LOCATED, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
CONFLICT OF LAWS PRINCIPLES.




[the remainder of this page has been left intentionally blank]




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          IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by a duly authorized
officer of each party hereto as of the date first above written.




	 	 	 	 	 	 	 
	 	 	[TRANSFEROR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 		 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ALC REAL ESTATE, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	ASSISTED LIVING CONCEPTS, INC.,	 	 
	 

	 	 	 	Its Sole Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EXTENDICARE HEALTH SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSISTED LIVING CONCEPTS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 






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EXHIBIT A




Legal Description of the Property




 









 






EXHIBIT A-1




Facility















 





EXHIBIT B




Exceptions to Assumed Liabilities





	1.	 	Payment of any indebtedness owed by Transferor and secured by any mortgage affecting the
Assets.






	2.	 	Payment of any judgment against Transferor.






	3.	 	Payment of any other amounts owed by Transferor and secured by a lien on the Assets, such as
a security interest or mechanic’s lien.
















 





EXHIBIT
C



PROMISSORY NOTE




$                                                            
             
                                                 , 2006




     FOR VALUE RECEIVED, the undersigned, (“Extendicare”), promises to pay to the order of
Assisted Living Concepts, Inc., a Nevada corporation (“Assisted Living”), at 111 West
Michigan Street, Milwaukee, Wisconsin 53203, or such other place as may be designated from time to
time by the holder of this Note, the principal sum of                                         Dollars ($                    ), together with interest
at the annual rate of six percent (6%), on the following terms:



     (a) Promptly upon receipt of this Note from Extendicare, Assisted Living shall endorse and
deliver this Note to ALC Real Estate, LLC (“ALC”) as a contribution to capital and not in
exchange for additional membership interests in ALC; and



     (b) Upon the earliest of (i) closing (the “Closing”) of the sale of that certain
assisted living facility located at                                         (the “Facility”) by                     (“Transferor”) to ALC, (ii)
the date on which the lease for the Facility between Transferor and ALC dated                     ,
2006 (the “Lease”) matures, or (iii) the date that ALC elects not to extend the term of the
Lease, the outstanding principal balance of this Note, together with all accrued and unpaid
interest thereon, shall be paid by Extendicare to ALC.



     This Note is to be governed by and construed according to the domestic laws of the State of
Wisconsin without giving effect to the conflict of law provisions (whether of the State of
Wisconsin or any other jurisdiction) that would cause the application of the law of any other
jurisdiction. This Note is given for an actual loan of money for business purposes and not for
personal, residential or agricultural purposes. The records of holder shall be prima facie
evidence of the amount owing on this Note.



     IN WITNESS WHEREOF, the undersigned has duly executed this Note as of this ___day of                     , 2006.



	 	 	 	 	 
	 	 	EXTENDICARE HEALTH SERVICES, INC.,

a Delaware corporation
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
 




Pay to the order of ALC Real Estate, LLC as a contribution to capital this ___day of                     , 2006.




	 	 	 	 	 
	ASSISTED LIVING CONCEPTS, INC.
	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 







 









 








EXHIBIT D




Allocation of Purchase Price




	 	 	 
	Real Property:

	 	$
	 
	 	 
	Personal Property:

	 	$