Document:

Exhibit 10.33

 

Exhibit 10.33

EXECUTED VERSION

ASSET AND REAL ESTATE PURCHASE AGREEMENT

BY AND AMONG

BALDWIN/GREEN ACRES LIMITED PARTNERSHIP

(AS “SELLER”)

AND

RE2 KENTON, INC.

(AS “BUYER”)

Dated as of March 31, 2004

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	1.	 	SALE OF ASSETS AND ASSUMPTION OF LIABILITIES	 	 	2	 
	 

	 	 	1.1	 	 	Assets
	 	 	2	 
	 

	 	 	1.2	 	 	Excluded Liabilities
	 	 	3	 
	 
	 	 	 	 	 	 	 	 	 	 
	2.	 	FINANCIAL ARRANGEMENTS	 	 	3	 
	 

	 	 	2.1	 	 	Purchase Price
	 	 	3	 
	 

	 	 	2.2	 	 	Allocation of Purchase Price
	 	 	3	 
	 

	 	 	2.3	 	 	Purchase Price Adjustments
	 	 	3	 
	 
	 	 	 	 	 	 	 	 	 	 
	3.	 	CLOSING	 	 	3	 
	 

	 	 	3.1	 	 	Closing
	 	 	3	 
	 

	 	 	3.2	 	 	Actions of Seller at Closing
	 	 	4	 
	 

	 	 	3.3	 	 	Actions of Buyer at Closing
	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	4.	 	REPRESENTATIONS AND WARRANTIES OF SELLER	 	 	6	 
	 

	 	 	4.1	 	 	Capacity
	 	 	6	 
	 

	 	 	4.2	 	 	Powers; Consents; Absence of Conflicts With Other Agreements
	 	 	6	 
	 

	 	 	4.3	 	 	No Affiliates and FIRPTA
	 	 	7	 
	 

	 	 	4.4	 	 	Binding Agreement
	 	 	7	 
	 

	 	 	4.5	 	 	Licenses and Permits
	 	 	7	 
	 

	 	 	4.6	 	 	Legal and Regulatory Compliance
	 	 	7	 
	 

	 	 	4.7	 	 	The Contracts
	 	 	8	 
	 

	 	 	4.8	 	 	Equipment
	 	 	8	 
	 

	 	 	4.9	 	 	Real Property
	 	 	8	 
	 

	 	 	4.10	 	 	Condition of Assets
	 	 	10	 
	 

	 	 	4.11	 	 	Brokers and Finders
	 	 	10	 
	 

	 	 	4.12	 	 	Insurance
	 	 	10	 
	 

	 	 	4.13	 	 	Reserved
	 	 	10	 
	 

	 	 	4.14	 	 	No Employees
	 	 	10	 
	 

	 	 	4.15	 	 	Litigation or Proceeding
	 	 	10	 
	 

	 	 	4.16	 	 	Taxes
	 	 	11	 
	 

	 	 	4.17	 	 	No Material Change
	 	 	11	 
	 

	 	 	4.18	 	 	Certain Affiliate Transactions
	 	 	11	 
	 

	 	 	4.19	 	 	Environmental Matters
	 	 	12	 
	 

	 	 	4.20	 	 	Construction in Progress
	 	 	13	 
	 

	 	 	4.21	 	 	Reports, Statements and Copies
	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 
	5.	 	REPRESENTATIONS AND WARRANTIES OF BUYER	 	 	14	 
	 

	 	 	5.1	 	 	Corporate Capacity
	 	 	14	 
	 

	 	 	5.2	 	 	Corporate Powers; Consents; Absence of Conflicts With Other
Agreements, Etc
	 	 	14	 
	 

	 	 	5.3	 	 	Binding Effect
	 	 	15	 
	 

	 	 	5.4	 	 	Brokers and Finders
	 	 	15	 

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	6.	 	COVENANTS OF SELLER	 	 	15	 
	 

	 	 	6.1	 	 	Access and Information
	 	 	15	 
	 

	 	 	6.2	 	 	Operations
	 	 	15	 
	 

	 	 	6.3	 	 	Negative Covenants
	 	 	16	 
	 

	 	 	6.4	 	 	Governmental Approvals
	 	 	16	 
	 

	 	 	6.5	 	 	Exclusive Agreement
	 	 	16	 
	 

	 	 	6.6	 	 	Closing Conditions
	 	 	16	 
	 

	 	 	6.7	 	 	Title and Survey Matters
	 	 	16	 
	 

	 	 	6.8	 	 	Cooperation
	 	 	17	 
	 
	 	 	 	 	 	 	 	 	 	 
	7.	 	COVENANTS OF BUYER	 	 	18	 
	 

	 	 	7.1	 	 	Governmental Approval
	 	 	18	 
	 

	 	 	7.2	 	 	Survey
	 	 	18	 
	 

	 	 	7.3	 	 	Closing Conditions
	 	 	18	 
	 

	 	 	7.4	 	 	Cooperation
	 	 	18	 
	 
	 	 	 	 	 	 	 	 	 	 
	8.	 	CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER	 	 	18	 
	 

	 	 	8.1	 	 	Representations/Warranties
	 	 	19	 
	 

	 	 	8.2	 	 	Opinion of Seller’s Counsel
	 	 	19	 
	 

	 	 	8.3	 	 	Action/Proceeding
	 	 	19	 
	 

	 	 	8.4	 	 	No Adverse Change
	 	 	20	 
	 

	 	 	8.5	 	 	Vesting/Recordation
	 	 	20	 
	 

	 	 	8.6	 	 	Title to Real Estate
	 	 	20	 
	 

	 	 	8.7	 	 	No Agreements and Commitments
	 	 	20	 
	 

	 	 	8.8	 	 	Closing Documents
	 	 	20	 
	 

	 	 	8.9	 	 	Casualty
	 	 	20	 
	 

	 	 	8.10	 	 	Consents to Assignments
	 	 	21	 
	 

	 	 	8.11	 	 	Appraisal
	 	 	21	 
	 

	 	 	8.12	 	 	Environmental Survey and Physical Inspections
	 	 	21	 
	 

	 	 	8.13	 	 	Due Diligence
	 	 	21	 
	 

	 	 	8.14	 	 	Allocation of Purchase Price
	 	 	21	 
	 

	 	 	8.15	 	 	Financing
	 	 	21	 
	 

	 	 	8.16	 	 	Condemnation
	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	9.	 	CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER	 	 	22	 
	 

	 	 	9.1	 	 	Representations/Warranties
	 	 	22	 
	 

	 	 	9.2	 	 	Opinion of Buyer’s Counsel
	 	 	22	 
	 

	 	 	9.3	 	 	Action/Proceeding
	 	 	23	 
	 

	 	 	9.4	 	 	Pre-Closing Confirmations
	 	 	23	 
	 

	 	 	9.5	 	 	Extraordinary Liabilities/Obligation
	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 
	10.	 	ADDITIONAL AGREEMENTS	 	 	23	 
	 

	 	 	10.1	 	 	Termination Prior to Closing
	 	 	23	 
	 

	 	 	10.2	 	 	Post-Closing Access to Information
	 	 	24	 
	 

	 	 	10.3	 	 	Press Releases

	 	 	24	 

 ii

 

	 	 	 	 	 	 	 	 	 	 	 
	11.	 	INDEMNIFICATION	 	 	24	 
	 

	 	 	11.1	 	 	Indemnification by Seller
	 	 	24	 
	 

	 	 	11.2	 	 	Limitations/Seller
	 	 	25	 
	 

	 	 	11.3	 	 	Indemnification by Buyer
	 	 	25	 
	 

	 	 	11.4	 	 	Limitations/Buyer
	 	 	26	 
	 

	 	 	11.5	 	 	Indemnification Set Off and Procedure
	 	 	26	 
	 

	 	 	11.6	 	 	Survival of Representations
	 	 	27	 
	 

	 	 	11.7	 	 	Indemnity Notice
	 	 	28	 
	 
	 	 	 	 	 	 	 	 	 	 
	12.	 	GENERAL	 	 	28	 
	 

	 	 	12.1	 	 	Interpretation
	 	 	28	 
	 

	 	 	12.2	 	 	Schedules
	 	 	29	 
	 

	 	 	12.3	 	 	Consented Assignment
	 	 	29	 
	 

	 	 	12.4	 	 	Consents, Approvals and Discretion
	 	 	29	 
	 

	 	 	12.5	 	 	Expenses; Legal Fees and Costs
	 	 	30	 
	 

	 	 	12.6	 	 	Choice of Law; Arbitration
	 	 	30	 
	 

	 	 	12.7	 	 	Benefit Assignment
	 	 	31	 
	 

	 	 	12.8	 	 	Accounting Date
	 	 	31	 
	 

	 	 	12.9	 	 	No Third-Party Beneficiaries
	 	 	31	 
	 

	 	 	12.10	 	 	Waiver of Breach
	 	 	31	 
	 

	 	 	12.11	 	 	Notices
	 	 	31	 
	 

	 	 	12.12	 	 	Severability
	 	 	32	 
	 

	 	 	12.13	 	 	Gender and Number
	 	 	33	 
	 

	 	 	12.14	 	 	Divisions and Headings
	 	 	33	 
	 

	 	 	12.15	 	 	Time of Essence
	 	 	33	 
	 

	 	 	12.16	 	 	Confidentiality
	 	 	33	 
	 

	 	 	12.17	 	 	Entire Agreement/Amendment
	 	 	33	 
	 

	 	 	12.18	 	 	Drafting
	 	 	34	 
	 

	 	 	12.19	 	 	Incorporated Reference
	 	 	34	 

 iii

 

ASSET AND REAL ESTATE PURCHASE AGREEMENT

     THIS ASSET PURCHASE AND REAL ESTATE AGREEMENT (“Agreement”) is made and entered into as of
March 31, 2004, by and among BALDWIN/GREEN ACRES, Limited Partnership, an Ohio limited partnership
(as “Seller”) and RE2 KENTON, INC., an Ohio corporation (as “Buyer”).

WITNESSETH:

     WHEREAS, Seller owns a building that is a nursing home and the related real estate located at
117 Jacob-Parrot Boulevard, Kenton, Ohio, (the “Premises”);

     WHEREAS, Seller leased the Premises to Baldwin Manor, Inc. (“Baldwin Manor”), pursuant to that
certain Lease Agreement (the “Lease”) dated January 25, 1996 by and between Seller and Baldwin
Manor, Inc., as amended by that certain Amendment to Lease dated April 26, 1996 (the “Lease”);

     WHEREAS, Seller and Baldwin Manor also entered into an Option to Purchase Agreement on January
25, 1996 (the “Option to Purchase Agreement”) giving Baldwin Manor the option to purchase the
Premises in accordance with the terms set forth therein:

     WHEREAS, an affiliate of Seller, Green Acres Nursing Homes, Inc. (“Green Acres”), entered into
a Purchase Agreement (the “Green Acres/Baldwin Purchase Agreement”) with Baldwin Manor on January
25, 1996 whereby Baldwin Manor purchased Green Acres’ assets;

     WHEREAS, Baldwin Manor subsequently assigned the Lease to Tandem Health Care of Ohio, Inc., an
Ohio corporation (“Tandem Ohio”), pursuant to that certain Assignment and Assumption of Lease and
Opinion, dated January 31, 2000 (the “Baldwin Assignment”);

     WHEREAS, as a proper assignees of the Lease, Tandem Ohio has a right to purchase the Premises
in accordance with Option to Purchase Agreement;

     WHEREAS, Tandem Ohio currently subleases the Premises to Tandem Health Care of Kenton Inc.
(“Sublessee”);

     WHEREAS, all of Tandem Ohio’s right, title and interest in and to the Premises is encumbered
by an Open-End Leasehold Mortgage, Assignment of Leases and Rents and Security Agreement in favor
of FirstMerit N.A., as mortgagee (the “FirstMerit Mortgage”);

     WHEREAS, Tandem Ohio wishes to exercise its option to purchase the Premises through its
nominee, Buyer, pursuant to the terms set forth herein;

     WHEREAS, the partners of Seller have determined that it is in the best interest of Seller to
sell the Premises to Buyer pursuant to the terms set forth herein;

     NOW, THEREFORE, for and in consideration of the premises, and the agreements, covenants,
representations and warranties hereinafter set forth, and other good and valuable

 

 

consideration, the receipt and adequacy of all of which are forever acknowledged and
confessed, the parties hereto, intending to be legally bound hereby, agree as follows:

1. SALE OF ASSETS AND ASSUMPTION OF LIABILITIES

1.1 Assets.

          Subject to the terms and conditions of this Agreement, Seller agrees to sell, convey, transfer
and deliver to Buyer and Buyer agrees to purchase as of Closing (as hereinafter defined) all the
real property, including without limitation the building and fixtures, owned by Seller and
associated with or employed in the operation of the Premises, which assets shall include the
following (collectively, the “Assets”): (i) fee simple absolute title to the real property
described in Schedule 4.12 hereto, together with all tenements, hereditaments,
appurtenances, rights-of-way, strips, gores, easements, licenses, development rights, entitlements,
improvements, buildings and fixtures located thereon or therein, and any other rights and
privileges in any way pertaining or beneficial to such real property and all damages, awards,
claims and causes of action now or hereafter payable or assertable with respect to any of the
foregoing by reason of any exercise of the power of eminent domain (collectively, the “Real
Property”); (ii) any machinery, equipment, furniture, furnishings, appliances, signs and other
personal property located in, attached to or used in connection with the Real Property and owned by
Seller (“Personal Property”); (iii) all written warranties and guaranties given to Seller made by
or received from any person with respect to any building, building component, structure, fixture,
machinery, equipment or material constituting part of the Real Property (collectively the
“Warranties”); (iv) (a) any preliminary, final or proposed building plans or specifications
(including “as-built” plans and drawings) and plans and specifications for improvements, structures
and fixtures, (b) existing surveys, architectural and structural drawings, and engineering, soils,
seismic, environmental, geologic and architectural reports, studies and tests relating to the Real
Property and (c) lock combinations, keys, operating manuals and technical data relating to the Real
Property or any Personal Property ((a), (b) and (c) collectively, the “Reports and Plans”), and (v)
all (a) licenses, permits, building inspection approvals and certificates of use or occupancy,
granted to Seller by Governmental Authorities (as defined herein) in connection with the Real
Property, (b) development rights, covenants, conditions and restrictions and other rights
benefiting the Real Property and (c) other licenses, consents and approvals Seller has relating to
the Real Property or any Personal Property ((a), (b) and (c) collectively, the “Licenses and
Permits”), and (vi) any books and records pertaining to the Warranties, Licenses and Permits, any
Real Property or the operation of the Real Property (collectively, the “Books and Records”).
Seller shall convey good title to the Assets and all parts thereof to Buyer free and clear of all
liens, judgments, mortgages, tenancies, leases, easements, reservations, encroachments, pledges,
rights of first refusal, options, restrictions, encumbrances, liabilities, claims, assessments,
security interests and defects in title, except as permitted or provided herein to the contrary.

2

 

1.2 Excluded Liabilities.

          Buyer shall not assume or be obligated to pay nor shall the Assets be subject to or bound by
any liability of Seller, whether fixed or contingent, recorded or unrecorded (all such liabilities,
“Excluded Liabilities”).

2. FINANCIAL ARRANGEMENTS

2.1 Purchase Price.

          Subject to the terms and conditions hereof, Buyer agrees to tender to Seller approximately
Three Million Eight Hundred and Seventy-five Thousand ($3,875,000) (the “Purchase Price”) minus the
Three Hundred Seventy-five Thousand Dollars ($375,000) attributable to Sublessee’s Lease deposit as
the assignee of the Lease.

2.2 Allocation of Purchase Price.

          Seller and Buyer shall agree prior to Closing to an allocation (the “Allocation”) of the
Purchase Price among the various classes of Assets as provided by Section 1060 of the Internal
Revenue Code of 1986, as amended and rules and regulations promulgated thereunder (collectively,
the “Code”) and to be set forth in Schedule 2.2 hereto. In this regard, the parties agree
that, if required, they will each properly prepare and timely file Form 8594 in accordance with
Section 1060 of the Code consistent with the Allocation. The parties agree that any tax returns or
other tax information they may file or cause to be filed with any governmental agency shall be
prepared and filed consistently with the Allocation.

2.3 Purchase Price Adjustments.

          In accordance with the terms of this Agreement, the Purchase Price shall be adjusted on the
Closing Date for any amounts which are due and payable by either party to the other on the Closing
Date or which are to become due and payable after the Closing Date which are attributable to
services or goods received or taxes associated with the period prior to Closing, and any amounts
which are paid prior to the Closing Date which are attributable to services or goods to be received
or taxes associated with the period subsequent to Closing, with respect to any taxes or utilities
relating to the Assets which Sublessee, as assignee of the Lease, is not obligated to pay (the
“Prorations”). Seller shall cancel all existing utility accounts, if any, on the Closing Date.

3. CLOSING

3.1 Closing.

          Subject to the satisfaction or waiver by the appropriate party of all the conditions precedent
to Closing specified in Articles 8 and 9 hereof, the consummation of the transactions (the
“Closing”) shall take place at the offices of Buchanan Ingersoll Professional Corporation, One
Oxford Centre, 301 Grant Street, 20th Floor, Pittsburgh, Pennsylvania, 15219, at 8:30 a.m. on or
before April 30, 2004 or at such later or earlier date and/or such other location as the

3

 

parties hereto may mutually agree in writing or as otherwise provided in this Agreement (the
“Closing Date”). The Closing shall be effective as of 12:01 a.m. then prevailing Eastern time on
May 1, 2004 (the “Effective Time”).

3.2 Actions of Seller at Closing.

          At the Closing and unless otherwise waived in writing by Buyer, Seller shall deliver to Buyer
the following:

          3.2.1 Deeds, duly executed, containing special or limited warranty of title, sufficient in the
opinion of Buyer’s counsel to vest in Buyer (or its nominee or assignee) full legal and equitable
fee simple absolute title to the Real Property, subject only to the liens and encumbrances
permitted herein;

          3.2.2 General Bill of Sale and Assignment of Contracts, in substantially the form attached as
Exhibit A (the “Bill of Sale”), duly executed by Seller, conveying to Buyer good and valid title to
the Warranties, the Reports and Plans, the Books and Records, the Licenses and Permits and the
Personal Property owned by Seller, including any unpaid casualty claims and losses (if any) and
unpaid condemnation awards or damages (if any), which title shall be free and clear of all liens,
security interests, pledges, options, restrictions, encumbrances, and defects in title, except for
current taxes not yet due and payable and except as provided or permitted herein;

          3.2.3 A FIRPTA Affidavit, substantially in the form attached hereto as Exhibit B;

          3.2.4 All documents required by this Agreement or the Title Company (as defined herein), which
are necessary in order for the Title Company to issue the Title Policy to Buyer in accordance with
this Agreement, including without limitation the Seller’s affidavit prepared by the Title Company;

          3.2.5 A payoff letter with wire instructions setting forth the amount required to be paid in
order to satisfy in full as of the Closing Date any and all mortgages, including the FirstMerit
Mortgage, that encumber the Real Property;

          3.2.6 All Warranties;

          3.2.7 All Books and Records;

          3.2.8 All Licenses and Permits;

          3.2.9 All Reports and Plans;

          3.2.10 All keys to the Real Property and Personal Property in possession of Seller;

4

 

          3.2.11 A duly executed counterpart of any certificates, affidavits, disclosures and reports
required by applicable state and local law in connection with the conveyance of the Assets to
Buyer;

          3.2.12 Certificate of Limited Partnership of Seller from the Ohio Secretary of State, dated no
earlier than ten (10) business days prior to Closing;

          3.2.13 Certificate of the general partner of Seller, certifying that (a) each covenant and
agreement of Seller to be performed prior to or as of Closing pursuant to this Agreement has been
performed in all material respects, and (b) as of Closing all of the respective representations and
warranties by or on behalf of Seller contained in this Agreement are true and correct;

          3.2.14 Certificate of Full Force and Effect of Seller from the Ohio Secretary of State, dated
no earlier than ten (10) business days prior to Closing;

          3.2.15 The opinion of Seller’s counsel as described in and provided by Section 8.2 hereof;

          3.2.16 Closing Statement that has been agreed to by each party;

          3.2.17 The cancellation and termination of any existing lease of the Real Property; and

          3.2.18 Such other instruments and documents as Buyer reasonably deems necessary to effect the
transactions contemplated hereby.

3.3 Actions of Buyer at Closing.

          At the Closing and unless otherwise waived in writing by Seller, Buyer shall deliver to Seller
the following:

          3.3.1 The Purchase Price in same-day funds;

          3.3.2 Copies of resolutions duly adopted by the board of directors of Buyer authorizing and
approving Buyer’s performance of the transactions set forth herein and the execution and delivery
of this Agreement and the documents described herein, certified as true and of full force as of
Closing by an appropriate officer of Buyer;

          3.3.3 Certificate of the Chairman of Buyer, in his official capacity, certifying that (a) each
covenant and agreement of Buyer to be performed prior to or as of Closing pursuant to this
Agreement has been performed in all material respects, and (b) as of Closing all of the respective
representations and warranties by or on behalf of Buyer contained in this Agreement are true and
correct in all material respects;

          3.3.4 Certificates of incumbency for the respective officers of Buyer executing this Agreement
or making certifications for Closing dated as of Closing;

5

 

          3.3.5 Certificate of Good Standing of Buyer from the Ohio Secretary of State, dated no earlier
than ten (10) days prior to Closing;

          3.3.6 Closing Statement that has been agreed to by each party;

          3.3.7 Buyer’s opinion letter as referenced in Section 9.2 herein.

          3.3.8 Such other instruments and documents as are ordinarily required to effect the
transactions that are necessary and appropriate to consummate the transactions contemplated by this
Agreement.

          4. REPRESENTATIONS AND WARRANTIES OF SELLER

          As of the date hereof, Seller represents and warrants to Buyer that the following facts and
circumstances are and, at the Closing Date, will be true and correct:

4.1 Capacity.

          Seller is a limited partnership duly organized, validly existing and of full force and effect
under the laws of the State of Ohio. Seller has the requisite power and authority to execute,
deliver, and perform its obligations under this Agreement and all transactions contemplated hereby.
Seller has taken all requisite action to authorize the execution, delivery, and performance of
Seller’s obligations hereunder. Seller has the requisite power and authority to conduct its
business as now being conducted. Seller is duly authorized, qualified and licensed under all
applicable laws, regulations, ordinances and orders of governmental authorities having jurisdiction
over the Assets to own its properties and conduct its business in the place and manner now
conducted.

4.2 Powers; Consents; Absence of Conflicts With Other Agreements.

          The execution, delivery and performance of this Agreement by Seller and all other agreements
referenced in or ancillary hereto to which Seller is a party or is to become a party at the Closing
and the consummation of the transactions set forth herein by Seller:

          4.2.1 are within Seller’s powers, are not in contravention of law and have been duly
authorized by all necessary action of Seller;

          4.2.2 do not and will not conflict with any provision of Seller’s certificate of limited
partnership, partnership agreements or operating agreements;

          4.2.3 except as otherwise expressly herein provided, do not require any approval or consent
of, or filing with, any governmental agency or authority which is required by law or the
regulations of any such agency or authority;

          4.2.4 except as otherwise expressly provided herein, will not result in the creation of any
lien, charge or encumbrance affecting any of the Assets;

6

 

          4.2.5 will not violate any statute, law, rule or regulation of any governmental authority to
which Seller or the Assets may be subject if such violation would have a material adverse affect on
the Assets; and

          4.2.6 will not violate any order, writ, injunction, decree, or judgment of any court or
governmental authority to which Seller or the Assets may be subject.

4.3 No Affiliates and FIRPTA.

          Except as set forth on Schedule 4.3, Seller does not own or control, is not owned or
controlled by and is not under common ownership or control with any other Person and does not have
any investments in any other entity. Seller is not a foreign person within the meaning of Section
1445 of the Internal Revenue Code of 1986, as amended (the “Code”).

4.4 Binding Agreement.

          This Agreement and all agreements to which Seller is or will become a party hereunder or
pursuant hereto are and will constitute the valid and legally binding obligation of Seller and are
and will be enforceable against Seller, in accordance with the respective terms hereof or thereof,
except as enforceability may be restricted, limited or delayed by applicable bankruptcy or other
laws affecting creditors’ rights generally and except as enforceability may be subject to general
principles of equity (the “Enforceability Exceptions”). All persons who have any legal or
equitable interest in the Assets, or whose joinder would be necessary to convey title to the Assets
as required by this Agreement, are named herein as “Seller.”

4.5 Licenses and Permits.

          All certificates of use or occupancy, zoning permits building permits and other governmental
permits, licenses, authorizations and approvals necessary or useful for the lawful construction,
ownership, operation, management use and occupancy of the Property have been obtained and are in
full force and effect, unconditional, not currently under appeal, and not subject to appeal and are
included in the Licenses and Permits to be assigned to Buyer hereunder, except to the extent the
Sublessee already has any such Licenses and Permits as a result of its sublease of the Premises.
Seller has previously delivered to Buyer true, correct and complete copies of all the Licenses and
Permits. Seller holds all the Licenses and Permits, as qualified above, in its own name, has not
assigned them and has not received any notice nor knows of any reason why any such notice should be
given, that any of the Licenses and Permits may be suspended or not renewed or may not be assigned
to Buyer.

4.6 Legal and Regulatory Compliance.

          Seller is in compliance with all applicable laws of federal, state and local authorities and
all applicable rules, regulations and requirements of all federal, state and local commissions,
boards, bureaus and agencies having jurisdiction over the Assets; and Seller has timely filed all
reports, data and other information required to be filed with such commissions, boards, bureaus and
agencies except where a failure to file timely would not have a material adverse effect on the
Assets.

7

 

4.7 The Contracts.

          Other than the Lease, the Option to Purchase Agreement and the FirstMerit Mortgage, which
shall be paid in full at the time of the Closing, Seller is not a party to any contracts,
commitments or agreements that affect the Assets.

4.8 Equipment.

          Seller owns no equipment located on the Premises or elsewhere that is used in the operations
of the Premises.

4.9 Real Property.

          Seller is vested with full legal and equitable fee simple absolute title to the Real Property.
The legal description of the Premises is described in Schedule 4.9 hereto. The Real
Property will be conveyed to Buyer at Closing by special or limited warranty deed subject only to
the following (collectively, the “Permitted Encumbrances”): (i) current taxes, that are a lien not
yet due and payable on the Closing Date; (iii) easements, conditions, or restrictions of record
provided that none of the foregoing are violated by any existing improvements or the present use
thereof; (iv) dedicated streets, roads, and rights-of-way; (v) all applicable zoning and other laws
which do not interfere with existing use; (vi) matters disclosed on the Survey (as defined in
Section 7.2) and (vii) other matters on the Title Commitment (as hereinafter defined) to which
Buyer does not object. The Real Property comprises all of the real property necessary to operate
the nursing home on the Premises.

          4.9.1 Seller has good, indefeasible and insurable fee simple absolute title to each parcel of
Real Property, free and clear of any and all mortgages, liabilities, liens, charges, claims,
collateral assignments, tenancies, leases, attachments, levies, judgments, easements, reservations,
encroachments, pledges, rights-of-way, equities, restrictions, encumbrances, rights of first
refusal, options to acquire, assessments, security interests, defects in title and all other title
matters whatsoever, except those to be paid at the Closing and the Permitted Encumbrances, and will
defend the same against the claims of all persons wrongfully claiming by, through or under Seller;

          4.9.2 Seller has not received notice of a violation of any applicable ordinance or other law,
order, regulation or requirement (which violation has not been cured) relating to any part of the
Real Property, including building, zoning, environmental laws and the Americans With Disabilities
Act of 1990, as amended;

          4.9.3 There is not existing, and to the best knowledge of Seller, there is not presently
contemplated or proposed, any eminent domain, condemnation or similar action, or zoning action or
proceeding, with respect to any portion of the Real Property or any utilities, sewers, roadways or
other public improvements;

          4.9.4 Seller has no knowledge nor has received a notice of any contemplated or proposed
moratorium or similar impediment to land development, building construction, or

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hook-up to usage of water or sewer or other utility services that could materially adversely
affect the use of the Real Property as it is currently being utilized;

          4.9.5 The Real Property and its operation are in compliance with all applicable zoning
ordinances, local building codes and ordinances or are operating under a valid zoning variance; the
use and operation of the nursing home on the Premises as a nursing home is a permitted use under
the applicable zoning code(s); Seller has received no notice that such nursing home is in
violation, which violation has not been cured, of local building codes, ordinances or zoning laws;
and the consummation of the transactions set forth herein will not result in a violation of any
applicable zoning ordinance or the termination of any applicable zoning variance now existing;

          4.9.6 Seller has not received any notice which currently remains uncured that indicates that
Seller has failed to obtain any license, permit, approval, certificate or other authorizations
required by applicable statutes, laws, ordinances or regulations for the use and occupancy of the
Real Property;

          4.9.7 No part of the Real Property contains or is located within any tideland, wetland, or
marshland or any similar areas;

          4.9.8 To Seller’s best knowledge, there are no parties other than Tandem Ohio or Sublessee in
possession of the Real Property or any portion thereof as managers, lessees, tenants, or
trespassers. The Real Property is not subject to any lease, license, form of use or occupancy
agreement other than the lease to Tandem Ohio and the sublease to Sublessee;

          4.9.9 There is access to the Real Property from a dedicated public right-of-way. No fact or
condition exists which would result in the termination or reduction of the current access to or
from the Real Property to such right-of-way;

          4.9.10 There is available to the Real Property propane gas, water, sanitary sewer lines, storm
sewers, electrical, and telephone services in operating condition which are adequate for use of the
Real Property for the operation of the nursing home located on the Premises. The Real Property has
access to utility lines located in a dedicated public right-of-way. There is no, and on the
Closing Date, there will be no, pending or threatened governmental or third party proceeding which
would impair or result in the termination of such utility availability;

          4.9.11 Seller has not received and has no actual knowledge of any notice or request, formal or
informal, from any insurance company or board of fire underwriters (i) identifying any defects in
the buildings or improvements on the Premises that would adversely affect the insurability of the
nursing home located on the Premises, or (ii) requesting the performance of any demolition,
repairs, alteration or other work with respect to the nursing home located on the Premises;

          4.9.12 Seller has no knowledge and Seller has not received a notice of any public improvements
which have been ordered to be made and/or which have not heretofore been

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assessed, and there are no special, general or other assessments pending, threatened against,
affecting or to affect the buildings or improvements on the Premises; and

          4.9.13 No public or private nuisance condition concurrently exists or has existed prior to the
date hereof on, or with respect to, the Real Property.

4.10 Condition of Assets.

          To Seller’s knowledge, all of the mechanical and electrical systems, heating and air
conditioning systems, plumbing, water and sewer systems, and all other items of mechanical
equipment or appliances and tangible personal property are in good working order, condition, and
repair, normal wear and tear excepted, of sufficient size and capacity to service the buildings and
improvements on the Premises and to comply with all applicable ordinances and regulations, and with
all building, zoning, fire, safety, and other codes, laws and orders. To Seller’s knowledge, all
buildings and improvements, including the roof and the foundation, are structurally sound and free
from leaks and other defects, normal wear and tear excepted.

4.11 Brokers and Finders.

          Seller has not and will not engage any broker or finder in connection with this Agreement and
the transactions contemplated hereunder unless Seller notifies Buyer of such engagement, in which
event Seller agrees to be solely responsible for all fees, charges, costs and expenses of any such
broker or finder.

4.12 Insurance.

          Schedule 4.12 sets forth a true and complete list of all insurance policies or
self-insurance funds of any nature whatsoever maintained by Seller, if any, as of the date hereof
covering the ownership and operation of the Assets, which Schedule reflects the policies’ numbers,
terms, identity of insurers, amounts and coverages. Seller has not as of the date hereof (i)
received any written notice from any such insurance company canceling or materially amending any of
said insurance policies, or (ii) failed to give any required notice or present any claim which is
still outstanding under any of said policies.

4.13 Reserved.

4.14 No Employees.

          Seller does not currently have, and has not at anytime in the past hired or employed, any
employees.

4.15 Litigation or Proceeding.

          With the exception of the litigation listed on Schedule 4.15 hereto (the
“Litigation”), there are no claims, judgments, orders, suits, actions, garnishments,
attachments or proceedings of any nature by or before any court, commission, board or other
governmental body pending, or to the knowledge of Seller threatened, which involve or affect, or
could involve or

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affect: (a) the Assets, (b) the legal use of the Assets, (c) Seller’s title to the Assets,
(d) the validity or enforceability of this Agreement, (e) any risk of any judgment or liability
being imposed upon Seller which could materially adversely affect the financial condition of Seller
or Seller’s ability, power or right to observe or perform fully its agreements and obligations
hereunder, including without limitation the conveyance of the Assets to Buyer. Seller has filed a
claim under a valid and adequate insurance policy for each and every matter contained in the
Litigation (which insurance policy shall not require any deductible or other payment in connection
with the filing, performance or payment of each such claim), if any, and each such claim has been
accepted by the applicable insurance company and the proper defense of such claim has been tendered
at the sole cost and expense of such insurance company (including the cost of all attorneys’ fees).

4.16 Taxes.

          Seller has, within the time and in the manner prescribed by law, filed or properly requested
extensions for all federal, state and local tax and other information return and reports (“Tax
Returns”) required to be filed by it and has collected and remitted all payroll taxes required by
federal and state law, and, if required, has paid in full or made adequate provisions for the
payment of all known taxes (including income, franchise, sales and use, excise, severance,
property, gross receipts and payroll taxes, together with any interest, penalties, assessments or
deficiencies, hereinafter referred to collectively as “Taxes” or singularly as a “Tax”), for all
periods ending on or before the date hereof and on or before the Closing Date. All such Tax
Returns are and will be true, correct and complete in all material respects and in compliance in
all material respects with the laws, rules and regulations applicable to such Tax Returns. Seller
is not a party to any action or proceeding by a government authority for the assessment or
collection of Taxes which may adversely affect Seller, the Business, or the Assets or affect future
rights in or use of the Assets, and no such claim against Seller for additional Taxes, penalties or
interest is pending or, to the best of Seller’s knowledge, threatened.

4.17 No Material Change.

          Except as disclosed herein (including the Schedules hereto) or as disclosed on Schedule
4.17 hereto, since December 31, 2003 to the date of this Agreement (i) there has not been any
material damage, destruction or loss (whether or not covered by insurance) affecting the Assets and
(ii) Seller has not incurred any material liability or obligation of any nature (whether absolute,
accrued, contingent or otherwise).

4.18 Certain Affiliate Transactions.

          No officer, partner or member of the board of directors of Seller (“Interested Person”) and no
member of the immediate family of an Interested Person of Seller (“Family Member”), directly or
indirectly, has any cause of action or claim whatsoever against Seller or the Assets.

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4.19 Environmental Matters.

     4.19.1 (1) For purposes of this Agreement, the term “Environmental Laws” shall mean any and
all bylaws, statutes, ordinances, rules, regulations, orders or determinations of any Government
Authority pertaining to health or the environment, whether now in existence or hereafter enacted
and in effect at the time of closing, in any and all jurisdictions in which the Real Property is
located.

               (2) For purposes of this Agreement, the terms “Hazardous Substances” and “release” (or
“threatened release”) have the meanings specified in the federal Comprehensive Environmental
Response, Compensation, and Liability Act (“CERCLA”); and the terms “solid waste” and “disposal”
(or “disposed”) have the meanings specified in the federal Resource Conservation Recovery Act
(“RCRA”); provided, however, that to the extent the applicable laws, ordinances, rules, regulations
or common law of the state in which the Real Property is located establish a meaning for “hazardous
substance,” “release,” “solid waste,” or “disposal” that is broader than that specified in either
CERCLA or RCRA, such broader meaning shall apply.

               (3) For purposes of this Agreement, the term “Governmental Authority” includes the United
States, the state, county, city, and political subdivisions in which the Real Property is located
or that exercise jurisdiction over the Real Property, and any agency, court, department,
commission, board, bureau or instrumentality or any of them that exercises jurisdiction over the
Real Property.

               (4) For purposes of this Agreement, the term “Environmental Condition” shall mean (a) any
release or threatened release of a hazardous substance from, in, on, under, or onto the Real
Property in violation of any Environmental Law; (b) any releases or threatened release of a
hazardous substance from the Real Property in, on, under, or onto any other property that results
in damages, loss, cost, expenses, or other liability; (c) any violation of any Environmental Law
relating to the manufacture, processing, distribution, transportation, storage, use, discharge,
handling, emission, or disposal of hazardous substances by or in connection with the Business; (d)
any release or threatened release of a hazardous substance from, in, on, under, or onto the Real
Property resulting in liability to non-governmental third parties in tort; or (e) any underground
storage tank, waste treatment, disposal or storage areas, asbestos or polychlorinated biphenyls
(“PCBs”).

          4.19.2 During Seller’s ownership of the Real Property:

               (1) The Real Property is in compliance with all applicable Environmental Laws. There are not
any Environmental Conditions existing on or resulting from Seller’s operation of the Real Property
that may give rise to any on-site or off-site remedial obligations.

               (2) The Real Property is not subject to any existing, pending or, to the best knowledge of
Seller, threatened action, suit, investigation, inquiry or proceeding by or before any Governmental
Authority under any Environmental Law.

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               (3) All notices, permits, licenses or similar authorizations, if any, required to be obtained
or filed by Seller under any Environmental Law in connection with the Real Property, including
those relating to the treatment, storage, disposal or release of a hazardous substance or solid
waste into the environment, have been duly obtained or filed and Seller is in compliance with the
terms and conditions of all such notices, permits, licenses and similar authorizations.

               (4) There is no pending claim of any nongovernmental third-party in tort in connection with
any release or threatened release of any hazardous substances, solid waste, petroleum, petroleum
products, asbestos, or PCBs into the environment as a result of or with respect to the Real
Property.

               (5) Seller has not: (a) entered into or been subject to any consent decree, compliance order,
or administrative order with respect to the Real Property or any facilities or operations thereon;
(b) received notice under the citizen suit provision of any Environmental Law in connection with
the Real Property or any facilities or operations thereon; (c) received any request for
information, notice, demand letter, administrative inquiry, or formal or informal complaint or
claim or suit with respect to any Environmental Condition relating to the Real Property or any
facilities or operations thereon; or (d) been subject to or threatened with any governmental or
citizen action with respect to the Real Property or any facilities or operations thereon; and
Seller has no reason to believe that any of the above will be asserted.

               (6) Seller has provided Buyer with true and correct copies of any environmental study,
assessment, report, permit or other written material relating to the environmental condition of the
Premises and the presence of Hazardous Substances that are in Seller’s possession.

4.20 Construction in Progress.

          There is no construction in progress on the Real Property.

4.21 Reports, Statements and Copies.

          All representations and warranties made herein or in any certificate or other document
delivered in connection herein, are true and correct in all material respects and do not omit to
state any material fact or circumstance necessary to make the statements contained therein, in
light of the circumstances, under which they are made, not misleading. All other reports,
statements, certificates and other data furnished by or on behalf of Seller to Buyer in connection
with this Agreement or the transactions contemplated hereunder are true and correct in all material
respects, and the copies of all agreements, instruments, and other documents provided to Buyer are
true, correct, and complete copies and include all amendments and modifications thereof.

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5. REPRESENTATIONS AND WARRANTIES OF BUYER

     As of the date hereof and as of the Closing Date, Buyer represents and warrants to Seller that
the following facts and circumstances are and, except as contemplated hereby, at the Closing Date
will be true and correct:

5.1 Corporate Capacity.

          Buyer is a corporation duly organized and validly existing, of active status under the laws of
the State of Ohio. Buyer has the requisite power and authority to enter into this Agreement,
perform its obligations hereunder and to conduct its businesses as now being conducted. Buyer has
taken all requisite action to authorize the execution, delivery, and performance of Buyer’s
obligations hereunder. Buyer has all requisite power and authority to conduct its business as now
being conducted and as to be conducted after the Closing.

5.2 Corporate Powers; Consents; Absence of Conflicts With Other Agreements, Etc.

          The execution, delivery and performance of this Agreement by Buyer and all other agreements
referenced herein to which Buyer is to become a party at the Closing and the consummation of the
transactions set forth herein by Buyer:

          5.2.1 are within Buyer’s powers, are not in contravention of the law, and have been duly
authorized by all necessary action of Buyer;

          5.2.2 do not and will not conflict with any provision of Buyer’s articles of incorporation or
bylaws;

          5.2.3 to the best knowledge of Buyer and except as otherwise expressly herein provided, do not
require any approval or consent of, or filing with, any governmental agency or authority bearing on
the validity of this Agreement which is required by law or the regulations of any such agency or
authority;

          5.2.4 will neither conflict with nor result in any breach of, or constitute a default under
(or an event which, with or without notice of lapse of time, or both would constitute a default) or
contravention of, nor cause the creation of any lien under, any indenture, agreement, lease,
instrument or understanding to which Buyer is a party or by which Buyer is bound;

          5.2.5 will not violate any statute, law, rule, regulation, order or judgment of any
governmental authority to which Buyer may be subject; or

          5.2.6 will not violate any order, writ, injunction, decree or judgment of any court or
governmental authority to which Buyer may be subject.

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5.3 Binding Effect.

          This Agreement and all other agreements to which Buyer is or will become a party hereunder or
pursuant hereto are and will constitute the valid and legally binding obligation of Buyer and are
and will be enforceable against Buyer in accordance with the respective terms hereof and thereof,
subject to the Enforceability Exceptions.

5.4 Brokers and Finders.

          Buyer has not engaged any broker or finder with respect to the transaction proposed in this
Agreement.

6. COVENANTS OF SELLER

6.1 Access and Information.

          Between the date of this Agreement and the Closing Date, Seller shall afford to the officers
and authorized representatives and agents of Buyer reasonable access to Seller’s partners,
directors, officers, employees (in the case of employees, with the approval of Seller, which will
not be unreasonably withheld), and the right to inspect the books, records, and documents of Seller
relating to the Assets (and to make copies thereof), and will furnish for inspection and copying by
Buyer such additional financial and operating data and other information in Seller’s possession
regarding the Assets as Buyer may from time to time request. In the exercise of its rights under
this section, Buyer shall not unreasonably interfere with the operations of Seller, the conduct of
the Business, or the relationships with Seller’s residents or suppliers.

6.2 Operations.

          From the date hereof until the Closing Date, Seller will:

          6.2.1 maintain the Assets, and keep all Real Property and equipment in as good working order
and condition as at present, ordinary wear and tear excepted;

          6.2.2 perform all of Seller’s obligations under the FirstMerit Mortgage;

          6.2.3 take all actions necessary and appropriate to render title to the Assets free and clear
of all liens, security agreements, claims, charges and encumbrances (except for the Permitted
Encumbrances);

          6.2.4 keep in full force and effect present insurance policies or other comparable insurance;
and

          6.2.5 consistent with past practices, Seller will make all normal and customary repairs to the
Assets.

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6.3 Negative Covenants.

          From the date hereof to the Closing Date, with respect to the Assets Seller will not, without
the prior written consent of Buyer:

          6.3.1 create or assume any new mortgage, security interest or other lien or encumbrance upon
any of the Assets, whether now owned or hereafter acquired; or

          6.3.2 sell, assign or otherwise transfer or dispose of any of the Assets.

6.4 Governmental Approvals.

          Between the date of this Agreement and the Closing Date, Seller (a) will use its best efforts
to obtain, as promptly as reasonably practicable, all approvals, authorizations and clearances of
governmental and regulatory authorities required of Seller to consummate the transactions set forth
herein, (b) will provide information and communications in Seller’s possession to governmental and
regulatory authorities as Buyer or such authorities may reasonably request, and (c) will cooperate
with Buyer in obtaining, as soon as practicable, all approvals, authorizations and clearances of
governmental and regulatory authorities required of Seller or Buyer to consummate the transactions
set forth herein.

6.5 Exclusive Agreement.

          Except for the Lease and the Option to Purchase Agreement, Seller is not party to any
agreement to sell any or all of the Assets to any party other than Buyer. In the event any such
agreement is entered into after the date hereof, Seller shall ensure that such agreement is
expressly subject to Buyer’s rights under this Agreement.

6.6 Closing Conditions.

          Between the date of this Agreement and the Closing Date, Seller will use its best efforts to
cause the conditions specified in Articles 8 and 9 hereof over which Seller has control to be
satisfied as soon as reasonably practicable, but in all events before the Closing Date.

6.7 Title and Survey Matters.

          6.7.1 Title Commitment. Seller, at its cost and expense, shall obtain and cause a
copy to be furnished to Buyer of a current title commitment with a non-imputation endorsement and
without standard exceptions (the “Title Commitment”) issued by a title insurance company selected
by Seller and reasonably acceptable to Buyer (the “Title Company”), together with legible copies of
all exceptions to title referenced therein (the “Exception Documents”). The Title Commitment shall
set forth the state of title to the Real Property, together with all exceptions or conditions to
such title, including all easements, restrictions, rights-of-way, covenants, reservations, and all
other encumbrances affecting the Real Property which would appear in an owner’s or leasehold title
policy, if issued. The Title Commitment shall contain the express commitment of the Title Company
to issue one or more owners’ or leasehold title policies (collectively, the “Title Policy”) to
Buyer in an amount equal to the

16

 

amount of purchase price as allocated per Section 2.3 of the Real Property insuring such title
to the Real Property as is specified in the Title Commitment. Buyer will have twenty (20) days
from the date Buyer receives the Title Commitment, the Exception Documents and Survey (as defined
below) within which to cause the Title Commitment and the Survey to be examined and to notify
Seller in writing of any material objections to Seller’s title reflected by the Title Commitment
and the Survey (“Buyer’s Objection”). Seller shall have twenty (20) days from receipt of Buyer’s
Objection to cure the material defects set forth therein, and to provide Buyer with written notice
of Seller’s action to remedy such objection (“Seller’s Response”). If Seller does not timely cure
and provide Seller’s Response, Buyer may, within three days thereafter either (a) accept title to
the Real Property as provided, or (b) terminate the Agreement in written notice to Seller. If
Buyer does not deliver to Seller written notice of termination within such day three day period,
Buyer will be deemed to have accepted title to the Real Property as shown in the Title Commitment
without reduction of Purchase Price. At Closing, an authorized agent of the Title Company shall
down-date and initial the Title Commitment to reflect the condition of title of the Real Property
must be consistent with the Title Commitment as modified to delete Buyer’s objections therefrom.

          6.7.2 Title Policy. Within thirty (30) days after Closing, Seller shall cause the
Title Policy to be furnished to Buyer. The costs relating to such Title Policy shall be paid as
set forth in Section 12.5 hereof. The Title Policy shall be issued in the amount of amount of
purchase price as allocated per Section 2.3 of the Real Property and shall insure good and
marketable fee simple title to the fee simple Real Property. The Title Policy may contain the
Permitted Encumbrances, but shall contain no additional exceptions to title to the Real Property
other than the standard exceptions contained in ALTA owners policy prescribed for use in the State
of Ohio, with: (a) the standard exception as to taxes limited to taxes for the current and
subsequent years “not yet due and payable,” (b) the standard exception as to unrecorded easements,
visible and apparent easements, or other matters which would be disclosed by an inspection of the
Real Property deleted; (c) the standard exception as to mechanics’, materialmen’s, or similar liens
or other matters relating to the completion of construction and payment of bills with respect
thereto deleted; (d) the standard exception as to areas, boundaries, discrepancies, encroachments,
and other matters which would be disclosed by a survey of the Real Property deleted (subject to
Buyer timely obtaining a survey); (e) zoning endorsement; (f) comprehensive endorsement (ALTA); (g)
contiguity endorsements; (h) access endorsement; and (i) Environmental Protection Agency
endorsements.

6.8 Cooperation.

          Prior to the Closing Date, Seller will not take any action that would cause the conditions
upon the obligation of the parties to effect the transactions contemplated hereby not to be
fulfilled, including taking or causing to be taken any action that would cause the representations
and warranties made by Seller herein not to be true, correct, and complete as of the Closing Date.

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7. COVENANTS OF BUYER

7.1 Governmental Approval.

          Between the date of this Agreement and the Closing Date, Buyer will (a) use its reasonable
best efforts to obtain, as promptly as practicable, all approvals, authorizations and clearances of
governmental and regulatory authorities required of Buyer to consummate the transactions
contemplated hereby, (b) use its commercially reasonable efforts to provide such other information
and communications to governmental and regulatory authorities as Seller or such authorities may
reasonably request, and (c) cooperate with Seller in obtaining, as soon as practicable, all
approvals, authorizations and clearances of governmental and regulatory authorities required of
Seller to consummate the transactions contemplated hereby.

7.2 Survey.

          Buyer, at the sole cost and expense of Buyer, shall obtain an as-built survey (the “Survey”)
of the Real Property acceptable to the Title Company for purposes of deleting standard survey
exceptions as provided above and reflecting all improvements visible on the grounds and all
easements, rights of way, means of ingress or egress, encroachments and drainage ditches, whether
abutting or interior, of record or on the grounds. The Survey shall reflect whether and to the
extent any portion of the Real Property lies within the 100-year flood hazardous area as defined by
applicable state or federal guidelines and shall be approved by Buyer, which approval shall not be
unreasonably withheld. The Survey shall be certified to the Title Company, Buyer’s lender and
Buyer in a form reasonably satisfactory to each.

7.3 Closing Conditions.

          Between the date of this Agreement and the Closing Date, Buyer will use its reasonable best
efforts to cause the conditions specified in Articles 8 and 9 hereof over which Buyer has control
to be satisfied as soon as reasonably practicable, but in all events before the Closing Date.

7.4 Cooperation.

          Prior to the Closing Date, Buyer will not take any action that would cause the conditions upon
the obligation of the parties to effect the transactions contemplated hereby not to be fulfilled,
including taking or causing to be taken any action that would cause the representations and
warranties made by Buyer herein not to be true, correct, and complete as of the Closing Date.

8. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

          The obligations of Buyer hereunder are subject to the satisfaction, on or prior to the Closing
Date, of the following conditions unless waived in writing by Buyer. The failure of any of the
following conditions to be met (through no fault of the Buyer) shall cause this Agreement to be
terminated with no further obligation of the parties one to the other except for Section 12.5, 12.6
and 12.16 herein:

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8.1 Representations/Warranties.

          The representations and warranties of Seller contained in this Agreement shall be true when
made and on and as of the Closing Date as though such representations and warranties had been made
on and as of such Closing Date; each and all of the terms, covenants and conditions of this
Agreement to be complied with or performed by Seller on or before the Closing Date pursuant to the
terms hereof shall have been duly complied with and performed; and Buyer shall have received a
certificate to the foregoing effect from both the general partner of Seller, in his or her official
capacity.

8.2 Opinion of Seller’s Counsel.

          Buyer shall have received an opinion from counsel to Seller dated as of the Closing Date and
addressed to Buyer, in form and substance reasonably satisfactory to Buyer to the effect that: (i)
Seller is a limited partnership, duly organized, validly existing and of full force and effect
under the laws of the State of Ohio; (ii) Seller has full power and authority to make, execute,
deliver and perform this Agreement and each of the agreements contemplated hereby, and all
corporate or other proceedings required to be taken by Seller to authorize the execution, delivery
and performance of this Agreement and each of the agreements contemplated hereby by Seller and to
sell, convey, assign, transfer and deliver the Assets to Buyer as herein contemplated have all been
duly and properly taken; (iii) this Agreement and all other agreements, deeds, assignments, other
instruments and other agreements of conveyance and transfer to be executed and delivered hereunder
by Seller constitute the valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms, except for the Enforceability Exceptions; and (iv) no
ungiven notice to, or unobtained consent, authorization, approval or order of any court or
governmental agency or body required to be obtained by Seller is required for the consummation of
the transactions set forth herein. Such opinion shall include any other matters incident to the
matters herein contemplated as Buyer or Buyer’s counsel may reasonably request. In rendering such
opinion, such counsel may rely upon certificates of governmental officials, may place reasonable
reliance upon certificates of officers of Seller, and may rely on the opinions or advice of other
professionals and advisors employed by Seller.

8.3 Action/Proceeding.

          No action or proceeding before a court or any other governmental agency or body shall have
been instituted or threatened to restrain or prohibit or obtain damages or other relief with
respect to this Agreement or the consummation of the transactions set forth herein, and no
governmental agency or body shall have taken any other action or made any request of Seller or
Buyer as a result of which Buyer reasonably and in good faith deems it inadvisable to proceed with
the transactions hereunder, and there shall not be in effect any order restraining, enjoining, or
otherwise preventing consummation of the transactions set forth herein.

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8.4 No Adverse Change.

          Seller shall not have suffered any material change, loss or damage to the Assets, whether or
not covered by insurance.

8.5 Vesting/Recordation.

          Seller shall have furnished to Buyer, in form and substance reasonably acceptable to Buyer and
approved by Buyer’s counsel, deeds, bills of sale, assignments or other instruments of transfer and
consents and waivers by others, necessary or appropriate to transfer to and effectively vest in
Buyer all of Seller’s right, title and interest in and to the Assets, in proper statutory form for
recording if such recording is necessary or appropriate.

8.6 Title to Real Estate.

          Buyer shall have received the Title Commitment and any objections by Buyer to exceptions
contained therein (other than Permitted Encumbrances) shall have been cured or waived as provided
herein.

8.7 No Agreements and Commitments.

          Seller shall not have entered into any new agreements or commitments relating to the Assets
prior to the Closing without the written consent of Buyer.

8.8 Closing Documents.

          Seller shall have executed and delivered to Buyer all of the Closing Documents required to be
executed by Seller pursuant to any term or provision of this Agreement, each of which shall be in
form and substance reasonably acceptable to Buyer.

8.9 Casualty.

          If before the Closing any material part of the Assets is damaged, lost, or destroyed (whether
by fire, theft, vandalism, or other cause or casualty other than the act or omission of Buyer, its
agents, or representatives) and the same can be replaced, repaired or restored within 90 days,
Seller must promptly replace, repair, and/or restore the same to substantially the same condition
as before the damage; provided, however, that for the purposes of this Section, the Premises may
not be replaced with other real property. If in Seller’s determination, the same cannot be
replaced, repaired, or restored within 90 days, Seller must so notify Buyer within 30 days of the
occurrence of the damage or destruction. Buyer will thereupon have 10 days to notify Seller in
writing of its election either to (a) terminate this Agreement in its entirety; or (b) proceed to
Closing and either (i) receive an assignment of insurance proceeds payable to Seller as a result of
the damage or destruction, but the Purchase Price will not be reduced, or (ii) reduce the Purchase
Price by the amount of insurance proceeds payable to Seller as a result of the damage or
destruction, but Seller will retain all such proceeds.

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8.10 Consents to Assignments.

          All consents, waivers and estoppels of third parties, including governmental agencies,
required to be obtained by Seller in connection with the transactions contemplated hereby are set
forth on Schedule 8.10 hereof. All such consents shall have been obtained by Seller in
form and substance reasonably acceptable to Buyer. Seller shall use its best efforts to obtain all
other consents of third parties which are necessary or desirable to consummate the transactions
contemplated herein.

8.11 Appraisal.

          Buyer shall have received an appraisal of the Assets reasonably satisfactory to Buyer and
Buyer’s Lender (as defined herein) indicating that the allocation of the Purchase Price
contemplated by Section 2.2 is appropriate.

8.12 Environmental Survey and Physical Inspections.

          Buyer, at its sole cost and expense, shall have received a Phase I Environmental Site
Assessment from an environmental engineering firm (and, if recommended by such firm, additional
surveys and reports) and such structural engineering inspections and reports, mechanical systems
inspections and reports, and life safety code inspections and report, all as Buyer or Buyer’s
Lender (as defined below) may deem advisable or desirable with respect to the Real Property, the
scope, findings and conclusions of which shall be in accordance with the representations and
warranties set forth in Sections 4.9 and 4.19 hereof.

8.13 Due Diligence.

          Seller shall have granted Buyer complete access to conduct its due diligence related to the
Assets, and Buyer shall have completed its due diligence reviews, the results of which shall be
reasonably satisfactory to Buyer and Buyer’s Lender.

8.14 Allocation of Purchase Price.

          Seller and Buyer shall have agreed to an allocation of the Purchase Price, as contemplated by
Section 2.2 hereof.

8.15 Financing.

          Buyer shall have obtained one or more debt and/or equity financing commitments from a
lender(s) of its choice (“Lender”), on terms and conditions reasonably acceptable to Buyer, and
Buyer shall have received the proceeds of said financing in an amount sufficient to enable Buyer to
pay the Purchase Price as of the Closing Date.

8.16 Condemnation.

          If, prior to the Effective Time, all or any portion of the Real Property is taken by eminent
domain or a notice of any eminent domain proceedings with respect to the Real Property

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or any part thereof is received by the Seller then Seller shall within ten (1) days thereafter
deliver written notice thereof to Buyer and Buyer shall have the option to (a) compete the purchase
hereunder or (b) if such taking, Buyer’s sole and absolute discretion, adversely affect the Real
Property or its current viability for Buyer’s intended purposes, terminate this Agreement, in which
event the parties shall have no further obligations to the other pursuant to this Agreement, and
this Agreement shall be null and void. Buyer shall deliver written notice of its election to
terminate this Agreement pursuant to this Section to the Seller within ten (10) days after the date
upon which the Buyer received written notice of such eminent domain proceedings. If this Agreement
is not so terminated, Buyer shall be entitled to all awards or damages by reason of any exercise of
the power of eminent domain or condemnation with respect to, or for the taking of, the Real
Property or any portion thereof, and all proceeds of such awards or damages shall be a credit for
Buyer’s benefit toward the Purchase Price, and any unpaid awards or damages shall be assigned to
Buyer at Closing. Any negotiation for, or agreement to, and all contests of any offers and awards
relating to eminent domain proceedings shall be conducted with the joint approval and consent of
the Seller and the Buyer.

9. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER

     The obligations of Seller hereunder are subject to the satisfaction, on or prior to the
Closing Date, of the following conditions unless waived in writing by Seller. The failure of any
of the following conditions to be met (through no fault of the Seller) shall cause this Agreement
to be terminated with no further obligation of the parties one to the other except for Sections
12.5, 12.6 and 12.16 herein:

9.1 Representations/Warranties.

          The representations and warranties of Buyer contained in this Agreement shall be true when
made and as of the Closing Date as though such representations and warranties had been made on and
as of such Closing Date; each and all of the terms, covenants and conditions of this Agreement to
be complied with or performed by Buyer on or before the Closing Date pursuant to the terms hereof
shall have been duly complied with and performed; and Seller have received a certificate to the
foregoing effect from the Chairman of Buyer.

9.2 Opinion of Buyer’s Counsel.

          Seller shall have received from counsel to Buyer an opinion dated as of the Closing Date and
addressed to Seller, in form and substance reasonably satisfactory to Seller, to the effect that:
(i) Buyer is a corporation, duly organized, validly existing and of active status under the laws of
the State of Ohio; (ii) Buyer has full power and authority to make, execute, deliver and perform
this Agreement and each of the agreements contemplated hereby, and all corporate or other
proceedings required to be taken by Buyer to authorize the execution, delivery, and performance of
this Agreement and each of the agreements contemplated hereby by Buyer, and to purchase and receive
the Assets as herein contemplated, have all been duly and properly taken; (iii) this Agreement and
the other agreements and instruments delivered hereunder by Buyer constitute the valid and binding
obligation of Buyer enforceable against Buyer in accordance with their respective terms, except for
the Enforceability Exceptions; and (iv) no

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ungiven notice to or obtained consent, authorization, approval or order of any court or
governmental agency or body required to be obtained by Buyer is required for the consummation of
the transactions set forth herein. Such opinion shall include any other matters incident to the
matters herein contemplated as Seller or Seller’s counsel may reasonably request. In rendering
such opinion, such counsel may rely upon certificates of governmental officials and may place
reasonable reliance upon certificates of officers of Buyer.

9.3 Action/Proceeding.

          No action or proceeding before a court or any other governmental agency or body shall have
been instituted or threatened to restrain or prohibit or obtain damages or other relief with
respect to this Agreement or the consummation of the transactions set forth herein, and no
governmental agency or body shall have taken any other action or made any request of Seller or
Buyer as a result of which Seller reasonably and in good faith deems it inadvisable to proceed with
the transactions hereunder; and there shall not be in effect any order restraining, enjoining, or
otherwise preventing consummation of the transactions set forth herein.

9.4 Pre-Closing Confirmations.

          Seller shall have obtained documentation or other evidence reasonably satisfactory to Seller
confirming the consents and approvals from third parties as may be legally or contractually
required for Seller’s consummation of the transactions described herein without breach or default
of any material agreement to which Seller is a party.

9.5 Extraordinary Liabilities/Obligation.

          Buyer shall not (a) be in receivership or dissolution, (b) have made any assignment for the
benefit of creditors, (c) admitted in writing its inability to pay its debts as they mature, (d)
have been adjudicated a bankrupt, or (e) have filed a petition in voluntary bankruptcy, a petition
or answer seeking reorganization, or an arrangement with creditors under the federal bankruptcy law
or any other similar law or statute of the United States or any state, nor shall any such petition
have been filed against Buyer.

10. ADDITIONAL AGREEMENTS

10.1 Termination Prior to Closing.

          Notwithstanding anything herein to the contrary, this Agreement may be terminated at any time:
(i) on or prior to the Closing Date by mutual consent of Buyer and Seller; (ii) on or prior to the
Closing Date by Buyer if there has been a material adverse change in the financial condition or
results of operations of the Assets since the date hereof; (iii) on or prior to closing by Buyer if
any of the conditions specified in Article 8 of this Agreement have not been substantially
satisfied and satisfaction of such condition shall not have been waived; (iv) on or prior to
Closing by Seller if any of the conditions specified in Article 9 of this Agreement have not been
satisfied and satisfaction of such condition shall not have been waived; (v) by Buyer in accordance
with the provisions of Section 6.7, 8.9 or 8.16; (vi) by Buyer or Seller if Closing shall

23

 

not have taken place on or before 11:59 p.m. (Eastern time) on April 30, 2004 (which date may
be extended by mutual agreement of Buyer and Seller).

          Notwithstanding the foregoing, a party shall not be allowed to exercise any right of
termination if the event giving rise to the termination right shall be due to the willful breach of
this Agreement by such party seeking to terminate this Agreement to perform or observe in any
material respect any of the covenants or agreements set forth herein to be performed or observed by
such party.

10.2 Post-Closing Access to Information.

          Seller and Buyer Seller and Buyer acknowledge that subsequent to Closing each party may need
access to information or documents in the control or possession of the other party (or their
affiliates) for the purposes of concluding the transactions set forth herein, audits, compliance
with governmental requirements and regulations, and the prosecution or defense of third-party
claims. Accordingly, Seller and Buyer agree that for a period of seven (7) years after Closing
each will, at the expense of the requesting party and upon written request, make available to the
other’s agents, independent auditors and/or governmental agencies such documents and information as
may be available relating to the Assets for periods prior and subsequent to Closing to the extent
necessary to facilitate concluding the transactions set forth herein, audits, compliance with
governmental requirements and regulations and the prosecution or defense of claims.

10.3 Press Releases.

          At all times at or before the Closing, Seller, on the one hand, and Buyer, on the other hand,
will consult with the other before issuing or making any reports, statements or releases to the
public with respect to this Agreement or the transactions contemplated hereby and will use good
faith efforts to obtain the other party’s approval of the text of any public report, statement or
release to be made on behalf of such party. If either party is unable to obtain the approval of
its public report, statement, or release from the other party and such report, statement, or
release is, in the opinion of legal counsel to such party, required by law in order to discharge
such party’s disclosure obligations, then the party may make or issue the legally required report,
statement, or release and promptly furnish the other party with a copy thereof.

11. INDEMNIFICATION

11.1 Indemnification by Seller.

          Subject to and to the extent provided in this Article 11, Seller shall defend, indemnify and
hold harmless Buyer, its successors and permitted assigns (Buyer, its successors and permitted
assigns are collectively referred to as “Buyer’s Indemnified Persons”) from and after the Closing
from and against any claims, actions, losses, payments (whether made in settlement or otherwise),
damages, costs, or expenses (including interest, penalties, costs of preparation and investigation,
reasonable attorneys’, accountants’, and other professional advisors’ fees directly accruing from
such damages) (“Losses”), which arise from or relate to Sellers

24

 

ownership of the Assets prior to the Closing, or which are incurred or suffered by Buyer’s
Indemnified Persons, from:

          11.1.1 any material inaccuracy in any representation or warranty of Seller or the
nonfulfillment of any covenant, agreement or other obligation of Seller set forth in this
Agreement;

          11.1.2 any income or other tax assessed against Buyer from the operations of Seller prior to
the Closing Date, or any transaction or activity of Seller prior to the Closing Date, or any income
derived by Seller prior to the Closing Date;

          11.1.3 the Excluded Liabilities;

          11.1.4 any lawsuit, claim, or proceeding against Buyer or the Assets based upon any act or
omission by Seller which occurred prior to the Closing Date; or

          11.1.5 any wages, salaries, bonuses, commissions, rebates, expenses, benefits, and other
compensation or fees of any nature payable prior to the Closing Date to any director, officer,
employee, contractor, agent or representative of Seller;

provided, however, that Seller shall not indemnify Buyer’s Indemnified Persons to the extent such
losses arise from Tandem Ohio’s operations or use of the Assets under the Lease.

11.2 Limitations/Seller.

          Seller shall have no liability under this Article 11 and no claim under Section 11.1 of this
Agreement shall be made if no notice thereof shall have been given by or on behalf of any of
Buyer’s Indemnified Persons to Seller in the manner provided in Section 11.5.

11.3 Indemnification by Buyer.

          Subject to and to the extent provided in this Article 11, Buyer shall indemnify, defend, and
hold harmless Seller, its successors and permitted assigns (Seller, its successors and permitted
assigns are hereinafter collectively referred to as “Seller’s Indemnified Persons”) from and after
the Closing from and against any Losses that in any way arise from or relate to Buyer’s ownership
of the Assets after the Closing, or which are incurred or suffered by Seller’s Indemnified Persons
from:

          11.3.1 any material inaccuracy in any representation or warranty of Buyer or the
nonfulfillment of any covenant, agreement or other obligation of Buyer set forth in this Agreement;
or

          11.3.2 Any cause, event, fact, or circumstance whatsoever arising on or in connection with the
Real Property after the Closing.

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11.4 Limitations/Buyer.

          Buyer shall have no liability under this Article 11 and no claim under Section 11.3 of this
Agreement shall be made if no notice thereof shall have been given by or on behalf of any of
Seller’s Indemnified Persons to Buyer in the manner provided in Section 11.5.

11.5 Indemnification Set Off and Procedure.

          All claims for indemnity herein shall be made in accordance with the following procedures:

          11.5.1 Notification. A claim for indemnification for any matter may be asserted by
the party seeking indemnification (the “Indemnified Party”) by notice to the party from whom
indemnification is sought (the “Indemnifying Party”). Such claimant shall notify the Indemnifying
Party, in writing as soon as practicable after it has knowledge of an indemnification claim and
specify in such notice, the amount of the claim, to the extent asserted (if a third party claim),
and such facts as reasonably necessary to give the Indemnifying Party an opportunity to evaluate
the claim.

          11.5.2 Third Party Claims. The Indemnifying Party shall be entitled at any time to
participate in the defense of any such claim, action, or proceeding with counsel reasonably
satisfactory to the Indemnified Party, and the parties agree to cooperate fully with one another in
connection with the defense and/or settlement thereof. Subject to the rights of or duties to any
insurer or other third person having liability therefor, the Indemnifying Party shall have the
right upon receipt of notice from the Indemnified Party of the existence of such claim or the
commencement of any such third-party action or proceeding, to undertake and direct the defense of
such claim or the commencement of any such third-party action or proceeding, to undertake and
direct the defense of such claim, action or proceeding at any time by delivering to the Indemnified
Party:

          (a) Written notice of such undertaking;

          (b) Written admission of complete liability for indemnification with respect to any
such claim, action or proceeding; and

          (c) Written consent to be joined as party to any such action or proceeding or in any
action or proceeding resulting from such claim.

          From and after delivery of items referred to in (a), (b) and (c), the Indemnifying Party shall
be relieved of the obligation to reimburse the Indemnified Party for any other legal, accounting,
or other out-of-pocket costs and expenses thereafter incurred by the Indemnified Party with respect
to the defense of such claim, action, or proceeding notwithstanding any participation by the
Indemnified Party. In the event the Indemnifying Party declines to undertake the defense of any
such claim, action, or proceeding when first notified thereof, the Indemnifying Party shall be
advised as to current status and progress thereof on a regular basis, and the Indemnifying Party
shall retain said right pursuant to the terms above to undertake the defense thereof until such
matter is fully resolved. Unless and until the Indemnifying Party so undertakes

26

 

the defense thereof, the Indemnified Party agrees not to make any offer of settlement without
first having provided five days’ advance written notice thereof to the Indemnifying Party and
obtained the written approval of the Indemnifying Party. In the event the Indemnifying Party so
undertakes the defense of any such claim, action, or proceeding, the Indemnified Party shall
nevertheless be entitled to participate in (but not direct) the defense thereof with counsel of its
own choice and the parties agree to cooperate fully with one another in connection with the defense
and/or settlement thereof; provided, however, that any decision to settle any such claim, action or
proceeding shall be at the sole discretion of the Indemnifying Party.

          11.5.3 Direct Claims Not Involving Third Parties. In the event that the Indemnifying
Party disputes a claim for indemnification not involving a third party, the Indemnifying Party must
object to the indemnification claim in writing to the Indemnified Party within fifteen (15) days of
its receipt of the written claim. If the parties are unable to resolve the dispute in an amicable
manner within thirty (30) days of the purported dispute, the parties agree to submit the issue to
mediation under the Commercial Mediation Rules of the American Arbitration Association. The
mediator shall not have authority to impose a settlement upon the parties, but will attempt to help
them reach a satisfactory resolution of the disagreement. The mediator shall end the mediation
whenever, in his judgment, further efforts at mediation would not contribute to a resolution of the
submitted disagreement. If the issue is not resolved pursuant to the mediation process set forth
above, the parties agree to submit the issue to binding arbitration administered in Wadsworth, Ohio
by the American Arbitration Association under its Commercial Arbitration Rules (or by such other
commercial arbitration service and its rules as may be agreed to by the parties at that time) in
effect at the time the controversial claim is submitted to binding arbitration, and judgment on the
award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The
arbitration shall be conducted by a panel of three arbitrators. Each party shall select one
arbitrator and agree upon a third within fifteen (15) days of the date of the demand for
arbitration. In the event that the parties are unable to timely agree on the third arbitrator, the
two selected arbitrators shall select a third arbitrator within fifteen (15) days of the parties’
impasse. The arbitrator shall be neutral and have no past or present governance or financial
relationship with any of the parties to this Agreement. Reasonable discovery shall be allowed in
arbitration. The arbitration shall commence within five (5) days after the selection of the
arbitration panel. Each party shall attend the arbitration through at least two individuals having
the authority to negotiate on behalf of that party. The arbitration shall be completed within
forty-five (45) days of commencement. Unless otherwise agreed to by the parties, it shall be
conducted pursuant to the rules of the American Arbitration Association. The arbitration panel
shall issue a binding written decision within ten (10) working days of final adjournment of the
arbitration.

11.6 Survival of Representations.

          Notwithstanding any right of Buyer (whether or not exercised) to investigate the affairs of
Seller or any right of any party (whether or not exercised) to investigate the accuracy of the
representations and warranties of the other party contained in this Agreement, Seller has, on the
one hand, and Buyer has, on the other hand, the right to rely fully upon the representations and
warranties of the other contained in this Agreement. The representations, warranties, covenants
and agreements respectively made by Seller, on the one hand, and Buyer, on the other

27

 

hand, in this Agreement or in any certificate respectively delivered by any of Seller or Buyer
pursuant to this Agreement will survive the Closing for a period of two years. As to claims
arising out of Sections 4.16 and 4.19, said representations and warranties shall survive the
Closing for the applicable statute of limitations periods. Provided, however, any claim, cause of
action, or other Loss, as defined herein, that would otherwise be time barred or otherwise
precluded from being asserted for any reason, shall not, by virtue of the provisions contained in
this Agreement, be deemed to be contractually extended in any fashion by virtue of the specific
time limitations set forth in this section.

11.7 Indemnity Notice.

          Buyer and Seller each agree to give the other party prompt notice of any circumstance under
which such other party would have a claim for indemnity pursuant to this Article 11.

12. GENERAL

12.1 Interpretation.

          In this Agreement, unless the context otherwise requires:

          12.1.1 references to this Agreement are references to this Agreement and to the Schedules and
Exhibits hereto;

          12.1.2 references to Articles and Sections are references to articles and sections of this
Agreement;

          12.1.3 references to any party to this Agreement shall include references to its respective
successors and permitted assigns;

          12.1.4 references to a judgment shall include references to any order, writ, injunction,
decree, determination or award of any court or tribunal;

          12.1.5 references to a “Person” shall mean any individual, company, body corporate or politic,
association, partnership, limited liability company, firm, joint venture, trust and governmental
agency or authority;

          12.1.6 the terms “hereof,” “herein,” “hereby,” “hereunder” and derivative or similar words
will refer to this entire Agreement;

          12.1.7 references to the “Code” shall mean the Internal Revenue Code of 1986, as amended, and
regulations thereunder and any future corresponding laws and regulations;

          12.1.8 references to any document (including this Agreement) are references to that document
as amended, consolidated, supplemented, novated or replaced by the parties from time to time;

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          12.1.9 references to any law are references to that law as amended, consolidated, supplemented
or replaced from time to time and shall also refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise;

          12.1.10 the word “including” shall mean including without limitation;

          12.1.11 references to the “best knowledge” of a party means the actual or constructive
knowledge of any director, or officer, of such party after due inquiry;

          12.1.12 references to “reasonable best efforts” exclude the payment of monies to third parties
who are not employees or agents of such party required to make reasonable best efforts, other than
for incidental costs and expenses;

          12.1.13 references to time are references to Eastern Standard or Daylight time (as in effect
on the applicable day) unless otherwise specified herein.

12.2 Schedules.

          The Schedules and all Exhibits and documents referred to in or attached to this Agreement are
integral parts of this Agreement as if fully set forth herein. Seller shall, at least ten (10)
days prior to the Closing Date, supplement or amend the Schedules prepared pursuant to this
Agreement with respect to any matter hereafter arising which, if existing or occurring at the date
of this Agreement, would have been required to be set forth or described in the Schedules or which
is necessary to correct or complete (with respect to any Schedule that is incomplete as of the date
of this Agreement) any information in the Schedules and deliver the same to Buyer. Notwithstanding
the foregoing, Buyer’s obligations or liabilities shall not be increased by means of a Schedule or
Exhibit revision or update.

12.3 Consented Assignment.

          Anything contained herein to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any claim, right, contract, license, lease, commitment, sales order or
purchase order if an attempted assignment thereof without the consent of another party thereto
would constitute a breach thereof or in any material way affect the rights of Seller thereunder, an
attempted assignment would be ineffective or would materially affect Seller’s rights thereunder so
that Buyer would not in fact receive all such rights. Seller shall cooperate in any reasonable
arrangement designed to provide for Buyer the benefits under any such claim, right, contract,
license, lease, commitment, sales order or purchase order, including enforcement of any and all
rights of Seller against the other party or parties thereto arising out of the breach or
cancellation by such other party or otherwise.

12.4 Consents, Approvals and Discretion.

          Except as herein expressly provided to the contrary, whenever this Agreement requires any
consent or approval to be given by either party or either party must or may exercise discretion,
the parties agree that such consent or approval shall not be unreasonably withheld or delayed and
such discretion shall be reasonably exercised.

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12.5 Expenses; Legal Fees and Costs.

          12.5.1 Except as otherwise expressly set forth in this Agreement, all expenses of the
preparation of this Agreement and of the consummation of the transactions set forth herein,
including counsel fees, accounting fees, investment advisor’s fees and disbursements, shall be
borne by the respective parties incurring such expense, whether or not such transactions are
consummated.

          12.5.2 Seller shall pay the following costs:

	 	1.	 	proration of real estate taxes and
assessments chargeable to Seller;
	 
	 	2.	 	transfer fee and conveyance tax;
	 
	 	3.	 	title exam fee;
	 
	 	4.	 	title commitment fee; and
	 
	 	5.	 	50% the owner’s title insurance policy in
the amount of the Purchase Price (“Title Insurance Cost”).

          12.5.3 Buyer shall pay the following costs:

	 	1.	 	fees relating to recording any deeds;
	 
	 	2.	 	Buyer’s financing costs and lender fees and
lender policy fees;
	 
	 	3.	 	costs of Buyer’s inspections and surveys;
and
	 
	 	4.	 	50% of the Title Insurance Cost.

          12.5.4 In the event either party elects to incur legal expenses to enforce or interpret any
provision of this Agreement by judicial means, the prevailing party will be entitled to recover
such legal expenses, including, attorney’s fees, costs and necessary disbursements, through appeal
or in bankruptcy proceedings in addition to any other relief to which such party shall be entitled.

12.6 Choice of Law; Arbitration.

          12.6.1 The parties agree that this Agreement shall be governed by and construed in accordance
with the internal laws of the State of Ohio without regard to such state’s conflicts of laws or
choice of law rules.

          12.6.2 In the event that any dispute arises concerning this Agreement, the parties expressly
agree to enter into binding arbitration. Any dispute, controversy or claim arising out of this
letter shall be settled by arbitration in accordance with this section. Any arbitration under this
section shall be conducted in accordance with the Rules for Non-Administered Arbitration of the CPR
Institute for Dispute Resolution, and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. The place of arbitration shall be Wadsworth,
Ohio. The arbitrators shall decide legal issues pertaining to the dispute, controversy or claim
pursuant to the laws of the State of Ohio. The

30

 

parties shall have the right to conduct reasonable discovery pursuant to the Federal Rules of
Civil Procedure. The arbitrators shall not have the authority to award punitive damages, but shall
have the authority to enter equitable relief. THE PARTIES UNDERSTAND THAT THEY ARE KNOWINGLY AND
WILLINGLY EXPRESSLY WAIVING A RIGHT TO JURY TRIAL CONCERNING ANY MATTERS RELATING TO THIS
AGREEMENT.

12.7 Benefit Assignment.

          Subject to provisions herein to the contrary, this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective legal representatives, successors and
permitted assigns; provided, however, that no party may assign this Agreement without the prior
written consent of the other party. No assignment shall relieve the assignor of its liabilities
and obligations hereunder, and the assignor will remain jointly and severally liable with the
assignee for all of its liabilities and obligations hereunder, except that Buyer may, without the
prior written consent of Seller, assign its rights and delegate its duties hereunder to one or more
entities which controls, is controlled by, or is under common control with Buyer, which shall have
the effect of thereby releasing Buyer hereunder.

12.8 Accounting Date.

          The transactions contemplated hereby shall be effective for accounting purposes as of 12:01
a.m. (Eastern time) on May 1, 2004, unless otherwise agreed in writing by Seller and Buyer.

12.9 No Third-Party Beneficiaries.

          The terms and provisions of this Agreement are intended solely for the benefit of Buyer and
Seller and their respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person.

12.10 Waiver of Breach.

          The waiver by either party of a breach or violation of any provision of this Agreement shall
not operate as, or be construed to constitute, a waiver of any subsequent breach of the same or
other provision hereof. All remedies, either under this Agreement, or by law or otherwise
afforded, will be cumulative and not alternative.

12.11 Notices.

          Any notice, demand or communication required, permitted, or desired to be given hereunder
shall be deemed effectively given when personally delivered, or when delivered by overnight
courier, or five (5) days after being deposited in the United States mail, with postage prepaid
thereon, certified or registered mail, return receipt requested, addressed as follows:

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	 	Buyer:
	 	RE2 Kenton, Inc.
	 

	 	 	 	c/o Tandem Health Care, Inc.
	 

	 	 	 	800 Concourse Parkway South, Suite 200
	 

	 	 	 	Maitland, Florida 32751
	 

	 	 	 	Attn: Chairman and CEO
	 

	 	 	 	Facsimile: (407) 571-0595
	 
	 	 	 	 
	 

	 	copy to:
	 	Tandem Health Care, Inc.
	 

	 	 	 	One Oxford Centre, 20th Floor
	 

	 	 	 	301 Grant Street
	 

	 	 	 	Pittsburgh, PA 15219
	 

	 	 	 	Attn: General Counsel
	 

	 	 	 	Facsimile: (412) 281-4435
	 
	 	 	 	 
	 

	 	Seller:
	 	Baldwin/Green Acres, Limited Partnership
	 

	 	 	 	Green Acres Nursing Home, Inc., General Partner
	 

	 	 	 	Deborah Wigle and Cleo Morris, Co-Presidents
	 

	 	 	 	c/o Deborah Wigle
	 

	 	 	 	12354 Lora Lane
	 

	 	 	 	Kenton, OH 43326
	 

	 	 	 	Telephone: (419) 673-5125 (no fax number)
	 
	 	 	 	 
	 

	 	copy to:
	 	Patrick J. Weschler, Esquire
	 

	 	 	 	Buckingham Doolittle & Burroughs, LLP
	 

	 	 	 	50 South Main Street, 10th Floor
	 

	 	 	 	Akron, OH 44309-1599
	 

	 	 	 	Facsimile: (330) 252-5410

or to such other address or number, and to the attention of such other person or officer, as any
party may designate, at any time, in writing in conformity with these notice provisions.

12.12 Severability.

          If any provision of this Agreement is held to be illegal, invalid or unenforceable under any
present or future law, and if the rights or obligations of Buyer or Seller under this Agreement
will not be materially and adversely affected thereby, (a) such provision will be fully severable;
(b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof; (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the legal, invalid or unenforceable
provision or by its severance herefrom; and (d) in lieu of such illegal, invalid or unenforceable
provision, a court of competent jurisdiction may reform such provision to make it lawful and in the
spirit of the intent of the parties, as evidenced by this Agreement and as so reformed shall be a
part of this Agreement.

32

 

12.13 Gender and Number.

          Whenever the context of this Agreement requires, the gender of all words herein shall include
the masculine, feminine and neuter, and the number of all words herein shall include the singular
and plural.

12.14 Divisions and Headings.

          The table of contents, the divisions of this Agreement into articles, sections, and
subsections and the use of captions and headings in connection therewith are solely for convenience
and shall have no legal effect in construing the provisions of this Agreement.

12.15 Time of Essence.

          Time is of the essence in the performance of this Agreement.

12.16 Confidentiality.

          It is understood by the parties hereto that the information, documents and instruments
delivered to Buyer by Seller or Seller’s agents and the information, documents and instruments
delivered to Seller by Buyer or Buyer’s agents are of a confidential and proprietary nature. Each
of the parties hereto agrees that prior to Closing they will maintain the confidentiality of all
such confidential information, documents or instruments delivered to them by each of the other
parties hereto or their agents in connection with the negotiation of this Agreement or in
compliance with the terms, conditions and covenants hereof and only disclose such information,
documents and instruments to their duly authorized officers, directors, representatives and agents.
Upon the Closing, Buyer’s confidentiality covenants shall be terminated but Seller’s
confidentiality covenants shall survive the Closing. Each of the parties hereto further agrees
that if the transactions contemplated hereby are not consummated, they will return all such
documents and instruments and all copies thereof in their possession to the other party to this
Agreement. Each of the parties hereto recognizes that any breach of this Section would result in
irreparable harm to the other party to this Agreement and their affiliates and that therefore
either Seller or Buyer shall be entitled to an injunction to prohibit any such breach or
anticipated breach, without the necessity of proving actual damages or posting a bond, cash or
otherwise, in addition to all of their other legal and equitable remedies. Nothing in this
Section, however, shall prohibit the use or disclosure of such confidential information, documents
or information as are required by law or governmental regulations or to defend itself in a legal
proceeding.

12.17 Entire Agreement/Amendment.

          This Agreement (and its exhibits, schedules and all other documents referenced and
incorporated herein) supersedes all previous contracts, and constitutes the entire agreement of
every kind or nature existing between or among the parties representing the within subject matter
and no party shall be entitled to benefits other than those specified herein. This Agreement may
be executed in two or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument. No terms,

33

 

conditions, warranties, or representations, other than those contained herein and no
amendments or modifications hereto shall be binding unless made in writing and signed by the party
to be charged.

12.18 Drafting.

          No provision of this Agreement shall be interpreted for or against either party hereto on the
basis that such party was the draftsman of such provision, each party having participated equally
in the drafting and negotiating hereof, and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

12.19 Incorporated Reference.

          All exhibits and schedules referenced herein are hereby incorporated herein by reference.

34

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in multiple
originals by their duly authorized officers, all as of the date and year first above written. This
Agreement may be executed and delivered in multiple counterparts and each such counterpart shall be
deemed an original, but all such counterparts shall together constitute one and the same Agreement.

	 	 	 	 	 	 	 
	BUYER:	 	BALDWIN/GREEN ACRES, Limited Partnership
	 	 	By: Green Acres Nursing Home, Inc.
	 

	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Deborah Wigle
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Deborah Wigle
	 	 	 	 	Title: Co-President
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Cleo Morris
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Cleo Morris
	 	 	 	 	Title: Co-President

	 	 	 	 	 
	SELLER:	 	TANDEM HEALTH CARE OF
	 	 	KENTON, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence R. Deering
	 

	 	 	 	 
	 	 	Name: Lawrence R. Deering
	 	 	Title: Chairman and CEO
	 
	 	 	 	 
	 	 	RE2 KENTON, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence R. Deering
	 

	 	 	 	 
	 	 	Name: Lawrence R. Deering
	 	 	Title: Chairman and CEO

35

 

ACKNOWLEDGEMENT

     For the sole purpose of acknowledging its assignment to Buyer of its option to purchase the
Assets as provided in the Baldwin Assignment, the undersigned hereby executes this Acknowledgement
and upon the closing of the transaction contemplated by this Agreement between Seller and Buyer,
will release Seller from any obligations arising after the Closing under the terms of the Lease.

	 	 	 	 	 
	 	 	TANDEM HEALTH CARE OF OHIO, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence R. Deering
	 

	 	 	 	 
	 	 	Name: Lawrence R. Deering
	 	 	Title: Chairman and CEO

36Exhibit 10.34

 

Exhibit 10.34

FIRST AMENDMENT TO

ASSET AND REAL ESTATE PURCHASE AGREEMENT

     THIS FIRST AMENDMENT TO ASSET AND REAL ESTATE PURCHASE AGREEMENT (this “Amendment”), dated as
of April 26, 2004, is entered into by and between Baldwin/Green Acres Limited Partnership, an Ohio
limited partnership (“Seller”), and RE2 Kenton, Inc., an Ohio corporation (“Buyer”);

     WHEREAS, Seller and Buyer have entered into that certain Asset and Real Estate Purchase
Agreement, dated March 31, 2004 (the “Agreement”), pursuant to which the Seller has agreed to sell,
and the Buyer has agreed to purchase the Premises (the “Transaction”);

     WHEREAS, pursuant to the Agreement, the closing for the Transaction is scheduled for April 30,
2004;

     WHEREAS, Seller and Buyer acknowledge that certain conditions to closing cannot be completed
by April 30, 2004;

     WHEREAS, Seller and Buyer still desire to affect the Transaction;

     NOW, THEREFORE, in consideration of the premises, agreements, covenants, representations and
warranties set forth herein and other good and valuable consideration, the receipt and adequacy of
all of which are forever acknowledged and confessed, the parties hereto, intending to be legally
bound hereby, agree as follows:

     1. Section 3.1 of the Agreement shall be amended and restated in its entirety as follows:

          3.1 Closing.

     Subject to the satisfaction or waiver by the appropriate party of all the conditions
precedent to Closing specified in Articles 8 and 9 hereof, the consummation of the
transactions (the “Closing”) shall take place at the offices of Buchanan Ingersoll
Professional Corporation, One Oxford Centre, 301 Grant Street, 20th Floor, Pittsburgh,
Pennsylvania, 15219, at 8:30 a.m. on or before May 21, 2004 or at such later or earlier date
and/or such other location as the parties hereto may mutually agree in writing or as
otherwise in this Agreement (the “Closing Date”). The Closing shall be effective as of
12:01 a.m. then prevailing Eastern time on May 22, 2004 (the “Effective Time”).

     2. Section 10.1 of the Agreement shall be amended and restated in its entirety as follows:

          10.1 Termination Prior to Closing.

     Notwithstanding anything herein to the contrary, this Agreement may be terminated at
any time: (i) on or prior to the Closing Date by mutual consent of Buyer

 

 

and Seller; (ii) on or prior to the Closing Date by Buyer if there has been a material
adverse change in the financial condition or results of operations of the Assets since the
date hereof; (iii) on or prior to closing by Buyer if any of the conditions specified in
Article 8 of this Agreement have not been substantially satisfied and satisfaction of such
condition shall not have been waived; (iv) on or prior to Closing by Seller if any of the
conditions specified in Article 9 of this Agreement have not been satisfied and satisfaction
of such condition shall not have been waived; (v) by Buyer in accordance with the provisions
of Sections 6.7, 8.9 or 8.16; (vi) by Buyer or Seller if Closing shall not have taken place
on or before 11:59 p.m. (Eastern time) on May 21, 2004 (which date may be extended by mutual
agreement of Buyer and Seller).

     Notwithstanding the foregoing, a party shall not be allowed to exercise any right of
termination if the event giving rise to the termination right shall be due to the willful
breach of this Agreement by such party seeking to terminate this Agreement to perform or
observe in any material respect of the covenants or agreement set forth herein to be
performed or observed by such party.

     3. Section 12.8 of the Agreement shall be amended and restated in its entirety as follows:

          12.8 Accounting Date.

     The transactions contemplated hereby shall be effective for accounting purposes as of
12:01 a.m. (Eastern time) on May 22, 2004, unless otherwise agreed in writing by Seller and
Buyer.

     4. The parties further acknowledge that the signature page of the Agreement inadvertently
referred to Seller as “Buyer” and Buyer as “Seller,” as well as including one of Buyer’s
affiliates. The parties hereto agree that the identities of the Seller and Buyer are as set forth
in the recitals to this Amendment and the Agreement.

     5. Except as expressly amended by this Amendment, the Agreement shall remain in effect as
originally agreed upon by the parties and is incorporated herein by reference.

     6. Capitalized terms used herein as defined terms shall have the meanings ascribed to them in
the Agreement.

     7. This Amendment shall be governed by and construed in accordance with the internal laws of
the State of Ohio without regard to such state’s conflicts of law or choice of law rules.

     8. This Amendment may be executed in two or more counterparts, each of which shall be deemed
an original, and all of which together shall constitute but one and the same instrument.

2

 

     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed in multiple
originals by their duly authorized officers, all as of the date and year first above written.

	 	 	 	 	 	 	 
	SELLER:	 	BALDWIN/GREEN ACRES, Limited Partnership
	 	 	By: Green Acres Nursing Home, Inc.
	 

	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Deborah Wigle
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Deborah Wigle
	 	 	 	 	Title: Co-President
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Cleo Morris
	 

	 	 	 	 	 	 
	 	 	 	 	Name: Cleo Morris
	 	 	 	 	Title: Co-President

	 	 	 	 	 
	BUYER:	 	RE2 KENTON, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence R. Deering
	 

	 	 	 	 
	 	 	Name: Lawrence R. Deering
	 	 	Title: Chairman and CEO

3

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