Common use of Hired Employees Clause in Contracts

Hired Employees. (i) Upon terms and conditions set by the NEW OPERATORS, as described herein, the NEW OPERATORS shall offer employment to, substantially all employees of the Facilities who, as of the Closing Date, are actively working at the Facilities. NEW OPERATORS shall also offer employment upon the terms and conditions set forth herein, to all employees of OWNERS (expressly excluding the administrators of the Facilities who are employed by Current Manager, unless said administrators should elect to accept employment with NEW OPERATORS upon terms and conditions negotiated outside this Agreement and not addressed herein) who, as of the Closing Date are on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to work-related injury or illness, when and only when they return from such leave. NEW OPERATORS shall defend, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating to the failure of NEW OPERATORS to hire or offer employment to any OWNERS employees, on the terms set forth in this Section 4.01(a), who are as of the Closing Date (i) actively working, or (ii) on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy, or (iii) on a leave of absence due to a work-related injury or illness. All such employees electing to accept employment with NEW OPERATORS, are hereinafter referred to as the (“Hired Employees”). It is understood that NEW OPERATORS shall not be responsible for any disability or workers’ compensation benefits for any 10370946.3 13 employees on leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to a work-related injury or illness that are receiving such benefits as of the Closing Date until such time as they become Hired Employees. As to each of the Hired Employees, NEW OPERATORS shall recognize each such Hired Employee’s original hire date and shall continue to employ each such Hired Employee for a period of no less than ninety (90) days following the Closing Date, unless the employment of such Hired Employee is terminated in accordance with NEW OPERATORS’ personnel policies, or as a result of such Hired Employee’s resignation. Any such employment of a Hired Employee by NEW OPERATORS shall be on terms which require said Hired Employee to perform comparable services, in a comparable position and at the same base salary as such Hired Employee enjoyed with the Facilities prior to the Closing Date. OWNERS, or any of its Affiliates, shall have the right to employ or offer to employ any former employee of the Facilities who declines to accept employment with NEW OPERATORS. (j) Between the Effective Date and the Closing Date, neither OWNERS, nor its parent company, nor any of its subsidiaries and/or affiliates, through any principal and/or agent, shall have directly or indirectly solicited any employees of the Facilities for the purpose of transferring such employee to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; (k) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely to ensure that OWNERS are not required to give notice to the employees of the Facilities of the “closure” thereof under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”) or under any comparable state law. Accordingly, NEW OPERATORS shall indemnify, defend and hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act or under comparable state law in the event of a violation by NEW OPERATORS of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS constructively terminated employees of the Facilities as a result of the terms and conditions of employment offered by NEW OPERATORS; provided, however, that nothing herein shall be construed as imposing any obligation on NEW OPERATORS to indemnify, defend or hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act as a result of the acts or omissions of OWNERS prior to the Closing Date, it being understood and agreed that NEW OPERATORS shall only be liable for its own acts or omissions on or after the Closing Date. Nothing in this Article IV shall, however, create any rights in favor of any person not a party hereto, including the employees of the Facilities, or constitute an employment agreement or condition of employment for any employee of OWNERS or any Affiliate thereof who is a Hired Employee. (l) OWNERS shall offer and provide, as appropriate, group health plan continuation coverage pursuant to the requirements of Section 601, et seq. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities to whom it is required to offer the same under applicable law. OWNERS acknowledges and agrees that NEW OPERATORS is not assuming any of OWNERS’ or its Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As of the Closing Date, all active employees of OWNERS employed at the Facilities: (i) who are eligible to participate as of the Closing Date in group health insurance coverage sponsored by OWNERS and (ii) who become

Hired Employees. (ia) Upon terms and conditions set by the NEW OPERATORS, as described herein, the NEW OPERATORS New Operator shall offer employment to, to substantially all of the employees of Kindred employed at the Facilities who, Facility as of the Closing Date, are actively . A list of all such employees of Kindred working at or in connection with the Facilities. NEW OPERATORS shall also offer employment upon the terms and conditions set forth herein, to all employees of OWNERS (expressly excluding the administrators of the Facilities who are employed by Current Manager, unless said administrators should elect to accept employment with NEW OPERATORS upon terms and conditions negotiated outside this Agreement and not addressed herein) who, Facility as of , 20 (including each employee’s name, title, hours worked during the preceding twelve months, hire date and hourly rate or periodic salary) is attached as Exhibit 10.1(a) hereto. Kindred shall provide New Operator with an updated version of Exhibit 10.1(a) at least five (5) Business Days, but no more than fifteen (15) Business Days, prior to the Closing Date are on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to work-related injury or illness, when and only when they return from such leave. NEW OPERATORS shall defend, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating to the failure of NEW OPERATORS to hire or offer employment to any OWNERS employees, on the terms set forth in this Section 4.01(a), who are as of the Closing Date (i) actively working, or (ii) on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy, or (iii) on a leave of absence due to a work-related injury or illnessDate. All such employees electing to accept employment with NEW OPERATORS, New Operator are hereinafter referred to as the (“Hired Employees”). It is understood that NEW OPERATORS To the extent permissible under the applicable Employee Plans, New Operator shall credit Hired Employees service date with Kindred for purposes of eligibility to participate and to vest (but not be responsible for any disability or workers’ compensation benefits for any 10370946.3 13 employees on leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to a work-related injury or illness that are receiving such benefits as of benefit accrual purposes) under the Closing Date until such time as they become Hired Employees. As to each of Employee Plans in which the Hired Employees, NEW OPERATORS shall recognize Employees participate after the Effective Time to the extent such service was taken into account for each such Hired Employee’s original hire date purpose by Kindred under each corresponding Employee Plan and New Operator shall continue to employ each such Hired Employee for a period of no less than ninety (90) days following the Closing DateEffective Time, unless the employment of such Hired Employee is terminated in accordance with NEW OPERATORS’ New Operator’s personnel policies, or as a result of such Hired Employee’s resignation. Any such employment of a Hired Employee by NEW OPERATORS New Operator shall be on terms which require said Hired Employee to perform comparable services, in a comparable position (to the extent that New Operator has the need for the same or equivalent position) and at the same a comparable base salary and similar fringe benefits as such Hired Employee enjoyed with the Facilities Kindred prior to the Closing DateEffective Time. OWNERSKindred, or any of its Affiliates, shall have the right to employ or offer to employ any former employee of the Facilities Kindred who declines to accept employment with NEW OPERATORS. New Operator. On or after thirty (j30) Between the Effective Date and days prior to the Closing Date, neither OWNERSNew Operator, nor its parent company, nor any of its subsidiaries and/or affiliates, through any principal and/or agentupon prior notice to and coordination with Kindred, shall have directly or indirectly solicited any be entitled to meet with the Facility employees of the Facilities for the and distribute employment and Employee Plan applications and materials. (b) New Operator acknowledges that one purpose of transferring such employee to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; (kSection 10.1(a) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely is to ensure that OWNERS are Kindred is not required to give notice to the employees of the Facilities Kindred of the “closure” thereof of the Facility under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”) or under any comparable state lawlaw applicable to such employees. Accordingly, NEW OPERATORS New Operator shall indemnify, defend and hold harmless OWNERS Kindred for, from and against any liability which it Kindred may incur under the WARN Act or under any applicable comparable state law in the event of a violation by NEW OPERATORS New Operator of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS New Operator constructively terminated employees of the Facilities Kindred as a result of the terms and conditions of employment offered by NEW OPERATORS; providedNew Operator. Further, however, that nothing herein New Operator shall be construed as imposing any obligation on NEW OPERATORS to solely liable for its own acts and omissions in connection with this transfer of operations and shall indemnify, defend or and hold harmless OWNERS harmless, Kindred for, from and against any liability which it may incur under the WARN Act as a result of the for such acts or omissions omissions, including, but not limited to New Operator’s failure to hire an employee or former employee as contemplated in paragraph 10.1 (a) or termination of OWNERS prior to the Closing Date, it being understood and agreed that NEW OPERATORS shall only be liable for its own acts or omissions on or after the Closing Dateemployment of any former Kindred employee. Nothing in this Article IV X shall, however, create any rights in favor of any person not a party hereto, including the employees of the FacilitiesKindred, or constitute an employment agreement or condition of employment for any employee of OWNERS Kindred or any Affiliate thereof who is a Hired Employee. (lc) OWNERS Except as otherwise required by Law, Kindred shall offer and provide, as appropriate, group health plan continuation coverage pursuant to the requirements of Section 601, et seq. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities Kindred to whom it is required to offer the same under applicable lawLaw. OWNERS Kindred acknowledges and agrees that NEW OPERATORS New Operator is not assuming any of OWNERS’ Kindred’s or its it’s Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As of It is understood that New Operator shall not be responsible to pay any disability or workers’ compensation benefits to or for any Kindred employee who is receiving such benefits with respect to a disability or injury covered by Kindred’s benefit plans or workers compensation policies with respect to an injury or disability attributable to the period ending on the Closing Date, all active employees of OWNERS employed at the Facilities: (i) who are eligible to participate as of the Closing Date in group health insurance coverage sponsored by OWNERS and (ii) who become.

Hired Employees. (ia) Upon terms and conditions set by No later than four (4) Business Days following the NEW OPERATORSdate hereof (and, as described hereinin any event, no later than the NEW OPERATORS shall offer employment to, substantially all employees date on which Gaiam provides written notice of the Facilities whotransaction to each individual listed on Schedule 1.1(a) attached hereto in accordance with Section 7.08 of the MIPA), Assignee shall make offers of employment to each individual listed on Schedule 1.1(a) attached hereto (with such employment commencing immediately following the Closing Date such that there will be no gap in employment and contingent on each such individual first resigning from Gaiam or the applicable Brand Company effective as of the Closing Date), are actively working at such offers to be consistent with the Facilities. NEW OPERATORS requirements of this Section 5.2 and Section 5.3. (b) Assignee shall also offer employment upon the terms be solely liable for all benefits payments and conditions set forth herein, to all employees of OWNERS (expressly excluding the administrators of the Facilities who are employed by Current Manager, unless said administrators should elect to accept employment with NEW OPERATORS upon terms other liabilities and conditions negotiated outside this Agreement and not addressed herein) who, as of the Closing Date are on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to work-related injury or illness, when and only when they return obligations arising from such leave. NEW OPERATORS shall defend, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating to the failure termination of NEW OPERATORS employment of any Hired Employee by Assignee following the Closing Date. Assignee hereby agrees to hire or offer employment provide to any OWNERS employees, on the terms set forth in this Section 4.01(a), who are as of the Closing Date (i) actively working, or (ii) on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy, or (iii) on a leave of absence due to a work-related injury or illness. All such employees electing to accept employment with NEW OPERATORS, are hereinafter referred to as the (“Hired Employees”). It is understood that NEW OPERATORS shall not be responsible for any disability or workers’ compensation benefits for any 10370946.3 13 employees on leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to a work-related injury or illness that are receiving such benefits as of the Closing Date until such time as they become Hired Employees. As to each of the Hired Employees, NEW OPERATORS shall recognize each such Hired Employee’s original hire date and shall continue to employ each such Hired Employee for a period of no less than ninety who is terminated (90without cause) days by Assignee during the twelve (12) months following the Closing Date, unless severance in accordance with the severance policy maintained by the Brand Companies as of the date the MIPA is signed, which requires, in order for severance to payable, (i) the execution of a valid release and waiver of claims by employees in favor or their employer and (ii) that an employee has not been offered substantially similar employment (same salary and location) in connection with the sale of the business in which they work (regardless of whether the applicable employee actually accepts such employment). For the avoidance of doubt, neither Assignor nor the Brand Companies shall have any liability with respect to severance, benefits, or any other amounts payable to any Hired Employee arising from or relating to the employment or termination of employment of any Hired Employee by Assignee following the Closing Date. (c) For a period of at least twelve (12) months following the Closing, Assignee shall use commercially reasonable efforts to provide to all Hired Employees (i) no less than the same wage rate or cash salary level in effect for such Hired Employee is terminated in accordance with NEW OPERATORS’ personnel policiesimmediately prior to the Closing and (ii) employee benefit plans, or cash incentive compensation opportunities, and fringe benefits that, when taken as a result of such Hired Employee’s resignation. Any such employment of a Hired Employee by NEW OPERATORS shall be on terms which require said Hired Employee to perform comparable serviceswhole, in a comparable position and at are substantially the same base salary or similar in value, as those in effect immediately prior to the Closing (other than with respect to the value of any matching contribution under Gaiam’s 401(k) Plan or the value of any additional vacation, sick time or personal time off entitlement such Hired Employee enjoyed with the Facilities employees may have had prior to the Closing Date). (d) Following the Closing, Assignee shall use commercially reasonable efforts, in respect of any plan providing health benefits in which Hired Employees, as applicable, will participate after the Closing Date, to (A) waive any preexisting condition limitations otherwise applicable to such Hired Employees and their eligible dependents, as applicable, and (B) subject to Gaiam providing Assignor with the applicable information with respect to each Hired Employee in a form that Assignee determines is administratively feasible to take into account under its plans or the plans of its Affiliates or licensees, provide credit to each Hired Employee, as applicable, for any co-payments, deductibles and out-of-pocket expenses paid by the Hired Employee during the portion of the relevant plan year including the Closing Date. OWNERSFor eligibility and vesting purposes under any tax-qualified retirement plan sponsored or maintained by Assignee, Assignee shall provide Hired Employees with past service credit for such Hired Employees’ service to Gaiam, HoldCo or any of their respective Affiliates, as applicable; provided that (A) such service would have been credited under a comparable Company Benefit Plan, (B) such service need not be credited to the extent it would result in a duplication of benefits, (C) such service credit shall not be given with respect to benefit accruals under any defined benefit plan or retiree medical savings account plan, (D) such service credit shall not be given with respect to any newly established plan for which prior service is not taken into account for employees of Assignee, and (E) such service credit would not violate the qualified status of any tax-qualified retirement plan nor violate any provision of any Applicable Law. (e) Nothing in this Agreement, whether express or implied, shall: (i) confer upon any Hired Employee any rights or remedies, including any right to employment or continued employment for any period or terms of employment, (ii) be interpreted to prevent or restrict Assignee from modifying or terminating the employment or terms of employment of any Hired Employee, including the amendment or termination of any employee benefit or compensation plan, program or arrangement, after the Closing, subject to the provisions of this Section 5.2; (iii) be treated as a termination, amendment or other modification of any employee benefit plan or arrangement, (iv) require Assignee to pay or provide any compensation or benefit to any Hired Employee to the extent that paying such compensation or providing such benefit would result in a duplication of the compensation or benefits to which such Hired Employee is otherwise entitled, or (v) require Assignee to provide any benefit that would violate any provision of any Applicable Law. (f) If at any time during the thirty (30) days following the Closing, Assignee or any of its Affiliates, shall have affiliates hires any Brand Employee (as defined in the right to employ MIPA) (other than any Hired Employees whose employment or offer to employ any former employee of the Facilities who declines to accept employment consulting arrangements with NEW OPERATORS. (j) Between the Effective Date and Assignee commenced on or immediately after the Closing Date, neither OWNERS, nor its parent company, nor any of its subsidiaries and/or affiliates, through any principal and/or agent, shall have directly or indirectly solicited any employees of ) whose employment was terminated during the Facilities for the purpose of transferring such employee to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; period beginning three (k3) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely to ensure that OWNERS are not required to give notice to the employees of the Facilities of the “closure” thereof under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”) or under any comparable state law. Accordingly, NEW OPERATORS shall indemnify, defend and hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act or under comparable state law in the event of a violation by NEW OPERATORS of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS constructively terminated employees of the Facilities as a result of the terms and conditions of employment offered by NEW OPERATORS; provided, however, that nothing herein shall be construed as imposing any obligation on NEW OPERATORS to indemnify, defend or hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act as a result of the acts or omissions of OWNERS Business Days prior to the Closing DateDate and ending on the date that is thirty (30) days following the Closing, it being understood and agreed that NEW OPERATORS then Assignee shall only be liable for its own acts or omissions on or after the Closing Date. Nothing in this Article IV shall, however, create any rights in favor of any person not a party hereto, including the employees of the Facilities, or constitute an employment agreement or condition of employment for any employee of OWNERS or any Affiliate thereof who is a Hired Employee. (l) OWNERS shall offer and provide, as appropriate, group health plan continuation coverage pursuant to the requirements of Section 601, et seq. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities to whom it is required to offer the same under applicable law. OWNERS acknowledges and agrees that NEW OPERATORS is not assuming any of OWNERS’ or its Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As of the Closing Date, all active employees of OWNERS employed at the Facilities: promptly (i) who are eligible to participate as inform Assignor of the Closing Date in group health insurance coverage sponsored by OWNERS such hiring and (ii) who becomepay to Assignor an amount in cash equal to any severance, change of control or other similar payments paid to such Brand Employee by Assignor or any Brand Company in connection with such termination of employment. Notwithstanding anything to the contrary contained in this Agreement, Assignee shall have the right, without liability under this Section 5.2(f), to hire any of the following persons as consultants: (1) Axxxx Xxxxxx; (2) Gxxx Xxxxxxxxxxxx; (3) Bxxxxxxx Xxxxxxx; (4) Bxxx Xxxxxx; (5) Jxxxxxxx Xxxxxxxxx.

Hired Employees. (a) Seller agrees that, (i) Upon from the Effective Date and continuing until the earlier of fourteen days later (the "SELECTION DATE") or the termination of this Agreement according to its terms, Seller will provide Purchaser with reasonable access to and the opportunity to meet and interview each Employee for the purposes of negotiating offers of employment contingent upon the Closing, and (ii) from the Effective Date and continuing until the earlier of seven days later or the termination of this Agreement according to its terms, Seller shall use its commercially reasonable efforts to assist Purchaser in recruiting Employees to accept offers of employment with Purchaser. By the Selection Date, Purchaser shall identify all Employees it wants to retain as Hired Employees and shall have made written offers of employment to such Employees that are contingent upon the Closing. (b) An Employee hired by Purchaser no later than twenty (20) days after the Closing Date shall be referred to herein as a "HIRED EMPLOYEE." Purchaser agrees that, to the extent not inconsistent with the terms and conditions set by of Purchaser's benefit plans or applicable law, each Hired Employee shall be given full credit for such Hired Employee's period of employment with Seller for purposes of determining eligibility for employee benefits. (c) For the NEW OPERATORS, as described herein, period beginning on the NEW OPERATORS shall offer employment to, substantially all employees of the Facilities who, as of Effective Date and ending sixty (60) days after the Closing Date, are actively working at the Facilities. NEW OPERATORS Seller shall also not offer employment upon the terms and conditions set forth herein, to all employees of OWNERS (expressly excluding the administrators of the Facilities who are employed by Current Manager, unless said administrators should elect to accept employment with NEW OPERATORS upon terms and conditions negotiated outside this Agreement and not addressed herein) who, as of the Closing Date are on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to work-related injury or illness, when and only when they return from such leave. NEW OPERATORS shall defend, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating to the failure of NEW OPERATORS to hire or offer employment provide to any OWNERS employeesEmployee any severance or other termination benefits except in accordance with the severance policy of Seller attached as SCHEDULE 15 or as required by law, and, for the period beginning on the terms set forth in this Section 4.01(a), who are as of the Closing Effective Date (i) actively working, or (ii) on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy, or (iii) on a leave of absence due to a work-related injury or illness. All such employees electing to accept employment with NEW OPERATORS, are hereinafter referred to as the (“Hired Employees”). It is understood that NEW OPERATORS shall not be responsible for any disability or workers’ compensation benefits for any 10370946.3 13 employees on leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to a work-related injury or illness that are receiving such benefits as of the Closing Date until such time as they become Hired Employees. As to each of the Hired Employees, NEW OPERATORS shall recognize each such Hired Employee’s original hire date and shall continue to employ each such Hired Employee for a period of no less than ending ninety (90) days following after the Closing Date, unless the employment of such Hired Seller shall not promise, offer or provide to any Employee is terminated any increase in accordance with NEW OPERATORS’ personnel policiessalary, bonus (or as a result of such Hired Employee’s resignation. Any such employment of a Hired Employee by NEW OPERATORS shall be on terms which require said Hired Employee to perform comparable servicesbonus potential) or benefits, including equity incentives, in a comparable position and at connection with such Employee's continued employment with Seller, regardless of whether in the same base salary as such Hired Employee enjoyed or different position with the Facilities prior to the Closing Date. OWNERS, or any of its Affiliates, shall have the right to employ or offer to employ any former employee of the Facilities who declines to accept employment with NEW OPERATORSSeller. (j) Between the Effective Date and the Closing Date, neither OWNERS, nor its parent company, nor any of its subsidiaries and/or affiliates, through any principal and/or agent, shall have directly or indirectly solicited any employees of the Facilities for the purpose of transferring such employee to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; (k) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely to ensure that OWNERS are not required to give notice to the employees of the Facilities of the “closure” thereof under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”) or under any comparable state law. Accordingly, NEW OPERATORS shall indemnify, defend and hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act or under comparable state law in the event of a violation by NEW OPERATORS of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS constructively terminated employees of the Facilities as a result of the terms and conditions of employment offered by NEW OPERATORS; provided, however, that nothing herein shall be construed as imposing any obligation on NEW OPERATORS to indemnify, defend or hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act as a result of the acts or omissions of OWNERS prior to the Closing Date, it being understood and agreed that NEW OPERATORS shall only be liable for its own acts or omissions on or after the Closing Date. Nothing in this Article IV shall, however, create any rights in favor of any person not a party hereto, including the employees of the Facilities, or constitute an employment agreement or condition of employment for any employee of OWNERS or any Affiliate thereof who is a Hired Employee. (l) OWNERS shall offer and provide, as appropriate, group health plan continuation coverage pursuant to the requirements of Section 601, et seq. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities to whom it is required to offer the same under applicable law. OWNERS acknowledges and agrees that NEW OPERATORS is not assuming any of OWNERS’ or its Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As of the Closing Date, all active employees of OWNERS employed at the Facilities: (i) who are eligible to participate as of the Closing Date in group health insurance coverage sponsored by OWNERS and (ii) who become

Hired Employees. (ia) Upon terms and conditions set by At the NEW OPERATORSClosing, as described herein, the NEW OPERATORS Buyer shall offer employment to, substantially to all employees of the Facilities whoemployees identified on Schedule 1.10, as of the Closing Date, are actively working at the Facilities. NEW OPERATORS shall also offer employment upon the terms including those on vacation and conditions set forth herein, to all employees of OWNERS (expressly excluding the administrators of the Facilities who are employed by Current Manager, unless said administrators should elect to accept employment with NEW OPERATORS upon terms and conditions negotiated outside this Agreement and not addressed herein) who, as of the Closing Date are on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to work-related injury or illness, when and only when they return from such leave. NEW OPERATORS shall defend, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating to the failure of NEW OPERATORS to hire or offer employment to any OWNERS employees, on the terms set forth in this Section 4.01(a), who are as of the Closing Date (i) actively working, or (ii) on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy, or (iii) on a leave of absence due to a work-related injury or illness. All such employees electing to accept employment with NEW OPERATORS, are hereinafter referred to as the (“Hired Employees”). It is understood that NEW OPERATORS shall not be responsible for any disability or workers’ compensation benefits for any 10370946.3 13 employees those on leave of absence pursuant who are entitled by law to OWNERS’ Family return to their employment following such leave of absence, who were actively employed by Seller immediately prior to the date hereof and Medical Leave any replacement employees hired with the consent of Absence Policy or due to a work-related injury or illness that are receiving such benefits as of the Closing Date until such time as they become Hired Employees. As to each of the Hired Employees, NEW OPERATORS shall recognize each such Hired Employee’s original hire date and shall continue to employ each such Hired Employee for a period of no less than ninety (90) days Buyer following the Closing Date, unless the employment of such Hired Employee is terminated in accordance with NEW OPERATORS’ personnel policies, or as a result of such Hired Employee’s resignationdate hereof. Any such employment of a Hired Employee by NEW OPERATORS Those employees identified on Schedule 1.10 shall be on terms which require said Hired Employee offered employment with Buyer in positions at least comparable to perform comparable services, in a comparable position and at the same base salary as such Hired Employee enjoyed their positions with the Facilities Seller prior to the Closing Dateand with compensation and benefits [. OWNERS. . *** . . .]to those applicable to such employees prior to the Closing. With respect to Buyer’s welfare or benefits plans, Buyer shall use commercially reasonable efforts to ensure that the service of Hired Employees with Seller shall apply for eligibility, vesting, contributions, sharing and entitlement to benefits under Buyer’s welfare or any of its Affiliates, shall have the right to employ or offer to employ any former employee of the Facilities who declines to accept employment with NEW OPERATORSbenefits plans. (jb) Between With respect to each welfare plan of Buyer in which the Effective Date Hired Employees become participants, Buyer shall use commercially reasonable efforts to (i) cause there to be waived any pre-existing condition, domestic partner or eligibility limitations and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations for the Closing Datecurrent year, neither OWNERSto claims incurred and amounts paid by, nor its parent companyand amounts reimbursed to, nor the Hired Employees under similar plans maintained by Seller immediately prior to the Closing. (c) Buyer shall not assume any liabilities or obligations for the provision of its subsidiaries and/or affiliates, through notice or payment in lieu of notice or any principal and/or agent, shall have directly applicable penalties with respect to Hired Employees or indirectly solicited any other employees of the Facilities for the purpose Seller of transferring such employee to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; (k) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely to ensure that OWNERS are not required to give notice to the employees of the Facilities of the “closure” thereof Affiliates under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”) or under any comparable similar state law. Accordingly, NEW OPERATORS shall indemnify, defend and hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act or under comparable state local law in the event of a violation by NEW OPERATORS of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS constructively terminated employees of the Facilities arising as a result of the terms and conditions transactions contemplated by this Agreement. Notwithstanding the foregoing, for a period of 60 days following the Closing, Buyer shall not cause any of the Hired Employees to suffer “employment offered by NEW OPERATORS; provided, however, that nothing herein shall be construed as imposing any obligation on NEW OPERATORS to indemnify, defend or hold harmless OWNERS for, from and against any liability which it may incur under loss” for purposes of the WARN Act as a result of the acts or omissions of OWNERS prior to the Closing Dateextent such employment loss could reasonably be expected to create a WARN Act-related liability for Seller, it being understood and agreed that NEW OPERATORS shall only be liable unless Buyer has a good reason for its own acts or omissions on or after the Closing Date. Nothing in this Article IV shall, however, create terminating any rights in favor of any person not a party heretosuch employee, including the employees but not limited to, violation of the FacilitiesBuyer’s employee policies, theft or constitute an employment agreement or condition violation of employment for any employee of OWNERS or any Affiliate thereof who is a Hired Employeelaw. (ld) OWNERS Buyer shall offer assume and provide, as appropriate, group health plan continuation coverage pursuant provide to the requirements of Section 601, et seqHired Employees the [. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities to whom it is required to offer the same under applicable law. OWNERS acknowledges and agrees that NEW OPERATORS is not assuming any of OWNERS’ or its Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As of the Closing Date, all active employees of OWNERS employed at the Facilities: (i) who are eligible to participate as of the Closing Date in group health insurance coverage sponsored by OWNERS and (ii) who become*** . . .].

Hired Employees. Each offer made and accepted pursuant to Section 12.1 shall (ia) Upon terms entitle each Hired Employee to participate in all employee benefit, compensation and conditions set severance plans or programs maintained by the NEW OPERATORSEmployer for its similarly situated employees and with respect to eligibility, as described hereinparticipation and vesting requirements (but not benefit accrual) of such employee benefit plans, Hired Employees shall be given credit for past service with the NEW OPERATORS shall offer employment toSellers and their Affiliates, substantially all employees to the extent such past service is recognized and credited to such Hired Employee, under Sellers' employee benefits plans; and (b) for a period of the Facilities who, as of one (1) year from the Closing Date, are actively working entitle the Hired Employees to severance benefits at least as favorable as those available from CES in similar circumstances, as described on Schedule 12.2 in an amount equivalent to or greater than the Facilities. NEW OPERATORS shall also offer employment upon amount such Hired Employees would be eligible to receive from the terms and conditions set forth herein, to all employees of OWNERS (expressly excluding the administrators of the Facilities who are employed by Current Manager, unless said administrators should elect to accept employment with NEW OPERATORS upon terms and conditions negotiated outside this Agreement and not addressed herein) who, Sellers as of the Closing Effective Date are on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to work-related injury or illness, when and only when they return from such leave. NEW OPERATORS shall defend, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating to the failure of NEW OPERATORS to hire or offer employment to any OWNERS employees, on the terms as set forth in this Section 4.01(a)Schedule 12.2. The Hired Employees shall also be given credit for any deductible or co-payment amounts or out-of-pocket maximum paid, who are as and be subject to any annual maximum benefits, in respect of the plan year in which the Closing Date (i) actively workingoccurs, or (ii) on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policythe extent that, or (iii) on a leave of absence due to a work-related injury or illness. All such employees electing to accept employment with NEW OPERATORS, are hereinafter referred to as the (“Hired Employees”). It is understood that NEW OPERATORS shall not be responsible for any disability or workers’ compensation benefits for any 10370946.3 13 employees on leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to a work-related injury or illness that are receiving such benefits as of the Closing Date until such time as they become Hired Employees. As to each of the Hired Employees, NEW OPERATORS shall recognize each such Hired Employee’s original hire date and shall continue to employ each such Hired Employee for a period of no less than ninety (90) days following the Closing Date, unless the employment of such Hired Employee is terminated they participate in accordance with NEW OPERATORS’ personnel policies, or as a result of such Hired Employee’s resignation. Any such employment of a Hired Employee by NEW OPERATORS shall be on terms which require said Hired Employee to perform comparable services, in a comparable position and at the same base salary as such Hired Employee enjoyed with the Facilities prior to the Closing Date. OWNERS, or any of its Affiliates, the Buyer's employee benefits plans for which deductibles or co-payments are required or maximum benefits apply The Buyer shall have the right to employ or offer to employ any former employee of the Facilities who declines to accept employment with NEW OPERATORS. (j) Between the Effective Date and the Closing Date, neither OWNERS, nor its parent company, nor any also cause each of its subsidiaries and/or affiliates, through any principal and/or agent, shall have directly or indirectly solicited any employees of the Facilities for the purpose of transferring such employee plans to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; (k) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely to ensure that OWNERS are not required to give notice to the employees of the Facilities of the “closure” thereof under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”) or under any comparable state law. Accordingly, NEW OPERATORS shall indemnify, defend and hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act or under comparable state law in the event of a violation by NEW OPERATORS of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS constructively terminated employees of the Facilities as a result of the terms and conditions of employment offered by NEW OPERATORS; provided, however, that nothing herein shall be construed as imposing any obligation on NEW OPERATORS to indemnify, defend or hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act as a result of the acts or omissions of OWNERS prior to the Closing Date, it being understood and agreed that NEW OPERATORS shall only be liable for its own acts or omissions on or after the Closing Date. Nothing in this Article IV shall, however, create any rights in favor of any person not a party hereto, including the employees of the Facilities, or constitute an employment agreement or condition of employment for any employee of OWNERS or any Affiliate thereof who is a Hired Employee. (l) OWNERS shall offer and provide, as appropriate, group health plan continuation coverage pursuant to the requirements of Section 601, et seq. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities to whom it is required to offer the same under applicable law. OWNERS acknowledges and agrees that NEW OPERATORS is not assuming any of OWNERS’ or its Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As of the Closing Date, all active employees of OWNERS employed at the Facilities: waive (i) who are eligible to participate as of the Closing Date in group health insurance coverage sponsored by OWNERS and any preexisting condition restriction or (ii) who becomewaiting period limitations, each of which would otherwise be applicable to the Hired Employees and their dependants, to the same extent such restrictions and limitations were satisfied under the Sellers' respective plans.

Hired Employees. Purchaser shall have the right (i) Upon in its sole and absolute discretion), but not the obligation, to offer employment, on an at will basis, effective on the Closing Date, to any or all Current Business Employees pursuant to terms and conditions set by to be determined in the NEW OPERATORSsole discretion of Purchaser (the “Employment Offers”). In no event shall Purchaser be obligated to hire or retain any Person for any period following the Closing. At least two (2) Business Days prior to the Closing Date, as described herein, Purchaser shall provide the NEW OPERATORS shall offer employment to, substantially Motion Companies with a list of all employees of any Motion Company to which Purchaser intends to make an Employment Offer, and the Facilities who, Motion Companies shall make commercially reasonable efforts to cooperate with Purchaser to effectuate such offers. The Current Business Employees who accept Purchaser’s Employment Offers and who commence employment with Purchaser pursuant to such offer terms are referred to herein as the “Hired Employees.” Under no circumstances shall any Business Employee become an employee of Purchaser unless such individual becomes a Hired Employee or is otherwise hired by Purchaser. Effective as of the Closing Date, are actively working at the Facilities. NEW OPERATORS Motion Companies shall also offer employment upon terminate all Hired Employees and shall pay, no later than the terms and conditions set forth hereinend of the first pay period after the Closing (or as otherwise required under applicable Law), to all employees of OWNERS such Hired Employees all amounts earned or accrued (expressly excluding the administrators of the Facilities who are employed by Current Managerbut not paid) for wages, unless said administrators should elect commissions, salaries and bonuses (but not including paid time off) relating to accept employment with NEW OPERATORS upon terms and conditions negotiated outside this Agreement and periods up to, but not addressed herein) whoincluding, as of the Closing Date are on a leave of absence pursuant to OWNERS’ Family Date, and Medical Leave of Absence Policy or due to work-related injury or illnessshall make and account for all periods up to, when and only when they return from such leave. NEW OPERATORS shall defendbut not including, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating to the failure of NEW OPERATORS to hire or offer employment to any OWNERS employees, on the terms set forth in this Section 4.01(a), who are as of the Closing Date Date, all proper deductions, remittances and contributions for employee wages, commissions and salaries required under all Contracts and Laws (i) actively workingincluding for health, or (ii) on a leave of absence pursuant to OWNERS’ Family hospital and Medical Leave of Absence Policymedical insurance, or (iii) on a leave of absence due to a work-related injury or illness. All such employees electing to accept employment with NEW OPERATORSincome Tax, are hereinafter referred to as FICA Taxes and the (“Hired Employees”like). It is understood that NEW OPERATORS For avoidance of doubt, the Motion Companies shall not be responsible for any disability all Liabilities arising out of or workers’ compensation benefits for any 10370946.3 13 employees on leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to a work-related injury or illness that are receiving based upon such benefits as of the Closing Date until such time as they become Hired Employees. As to each termination of the Hired Employees, NEW OPERATORS shall recognize each such Hired Employee’s original hire date and shall continue to employ each such Hired Employee for a period including any severance pay obligations of no less than ninety (90) days following the Closing Date, unless the employment of such Hired Employee is terminated in accordance with NEW OPERATORS’ personnel policies, or as a result of such Hired Employee’s resignation. Any such employment of a Hired Employee by NEW OPERATORS shall be on terms which require said Hired Employee to perform comparable services, in a comparable position and at the same base salary as such Hired Employee enjoyed with the Facilities prior to the Closing Date. OWNERS, or any of its Affiliates, shall have the right to employ or offer to employ any former employee of the Facilities who declines to accept employment with NEW OPERATORSMotion Companies. (j) Between the Effective Date and the Closing Date, neither OWNERS, nor its parent company, nor any of its subsidiaries and/or affiliates, through any principal and/or agent, shall have directly or indirectly solicited any employees of the Facilities for the purpose of transferring such employee to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; (k) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely to ensure that OWNERS are not required to give notice to the employees of the Facilities of the “closure” thereof under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”) or under any comparable state law. Accordingly, NEW OPERATORS shall indemnify, defend and hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act or under comparable state law in the event of a violation by NEW OPERATORS of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS constructively terminated employees of the Facilities as a result of the terms and conditions of employment offered by NEW OPERATORS; provided, however, that nothing herein shall be construed as imposing any obligation on NEW OPERATORS to indemnify, defend or hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act as a result of the acts or omissions of OWNERS prior to the Closing Date, it being understood and agreed that NEW OPERATORS shall only be liable for its own acts or omissions on or after the Closing Date. Nothing in this Article IV shall, however, create any rights in favor of any person not a party hereto, including the employees of the Facilities, or constitute an employment agreement or condition of employment for any employee of OWNERS or any Affiliate thereof who is a Hired Employee. (l) OWNERS shall offer and provide, as appropriate, group health plan continuation coverage pursuant to the requirements of Section 601, et seq. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities to whom it is required to offer the same under applicable law. OWNERS acknowledges and agrees that NEW OPERATORS is not assuming any of OWNERS’ or its Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As of the Closing Date, all active employees of OWNERS employed at the Facilities: (i) who are eligible to participate as of the Closing Date in group health insurance coverage sponsored by OWNERS and (ii) who become

Hired Employees. (i) Upon terms and conditions set by 19.2.1 M-I agrees that the NEW OPERATORS, as described herein, the NEW OPERATORS shall offer employment to, substantially all employees of the Facilities who, as of the Closing Date, are actively working at the Facilities. NEW OPERATORS shall also offer employment upon the terms and conditions set forth herein, to all employees of OWNERS (expressly excluding the administrators of the Facilities who are employed by Current Manager, unless said administrators should elect to accept employment with NEW OPERATORS upon terms and conditions negotiated outside this Agreement and not addressed herein) who, as of the Closing Date are on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to work-related injury or illness, when and only when they return from such leave. NEW OPERATORS shall defend, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating to the failure of NEW OPERATORS to hire or offer employment to any OWNERS employees, on the terms set forth in this Section 4.01(a), who are as of the Closing Date (i) actively working, or (ii) on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy, or (iii) on a leave of absence due to a work-related injury or illness. All such employees electing to accept employment with NEW OPERATORS, are hereinafter referred to as the (“Hired Employees”). It is understood that NEW OPERATORS shall Company will not be responsible for any disability or workers’ compensation benefits for any 10370946.3 13 employees on leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to a work-related injury or illness that are receiving such benefits as of the Closing Date until such time as they become Hired Employees. As to each of the Hired Employees, NEW OPERATORS shall recognize each such Hired Employee’s original hire date and shall continue to employ each such Hired Employee for a period of no less than ninety (90) days following the Closing Date, unless the employment of such Hired Employee is terminated in accordance with NEW OPERATORS’ personnel policies, or as a result of such Hired Employee’s resignation. Any such employment of a Hired Employee by NEW OPERATORS shall be on terms which require said Hired Employee to perform comparable services, in a comparable position and at the same base salary as such Hired Employee enjoyed with the Facilities prior to the Closing Date. OWNERS, or any of its Affiliates, shall have the right to employ or offer obligated to employ any of M-I's former employee of the Facilities who declines to accept employment with NEW OPERATORS. (j) Between the Effective Date and the Closing Date, neither OWNERS, nor its parent company, nor any of its subsidiaries and/or affiliates, through any principal and/or agent, shall have directly or indirectly solicited any employees of the Facilities for the purpose of transferring such employee to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; (k) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely to ensure that OWNERS are not required to give notice to the employees of the Facilities of the “closure” thereof under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”) or under any comparable state law. Accordingly, NEW OPERATORS shall indemnify, defend and hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act or under comparable state law in the event of a violation by NEW OPERATORS of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS constructively terminated employees of the Facilities as a result of the terms and conditions of employment offered by NEW OPERATORSpresent employees; provided, however, that nothing herein the Company may determine, in its sole discretion, to offer employment to the employees listed on SCHEDULE 19.2.1 (the "M-I HIRED EMPLOYEES"), and M-I will use its reasonable efforts to cause such M-I Hired Employees to make available their employment services to the Company. Employment offered to the M-I Hired Employees shall be construed offered on similar terms (in the aggregate) to those under which M-I employed such M-I Hired Employees as imposing any obligation on NEW OPERATORS of the Closing; PROVIDED that, the Company is making no assurances as to indemnifythe length of such employment or that the terms of employment are substantially similar. The Company will credit the M-I Hired Employees with service, defend or hold harmless OWNERS forfor eligibility and vesting purposes, from and against any liability which it may incur under the WARN Act Company's employee benefits plans substantially equal to the M-I Hired Employee's service with M-I as a result of the acts Closing Date. Any severance obligations due to M-I Hired Employees for previous employment with M-I shall be the sole obligation and responsibility of M-I. 19.2.2 MCA agrees that the Company will not be obligated to employ any of MCA's former or omissions present employees; provided, however, that the Company may determine, in its sole discretion, to offer employment to the employees listed on SCHEDULE 19.2.2 (the "MCA HIRED EMPLOYEES"), and MCA will use its reasonable efforts to cause such MCA Hired Employees to make available their employment services to the Company. Employment offered to the MCA Hired Employees shall be offered on similar terms (in the aggregate) to those under which MCA employed such MCA Hired Employees as of OWNERS prior the Closing; PROVIDED that, the Company is making no assurances as to the length of such employment or that the terms of employment are substantially similar. The Company will credit the MCA Hired Employees with service, for eligibility and vesting purposes, under the Company's employee benefits plans substantially equal to the MCA Hired Employee's service with MCA as of the Closing Date. Any severance obligations due to MCA Hired Employees for previous employment with MCA shall be the sole obligation and responsibility of MCA. 19.2.3 The Company agrees to provide comprehensive medical insurance benefits to the MCA Hired Employees and M-I Hired Employees (collectively "Hired Employees" and individually "Hired Employee") and their dependents, if applicable, which shall be determined without reference to waiting periods and "pre-existing condition" exceptions, except for those waiting periods and pre-existing conditions that were excluded under the applicable Party's health insurance plan. The Company agrees to credit any deductibles, co-pays and out of pocket expense maximums to the Company's medical insurance policies that provide coverage to Hired Employees and their dependents, if applicable. 19.2.4 For purposes of determining each Hired Employee's unused calendar year 2003 vacation entitlement, the Hired Employee shall be deemed transferred as of close of business on June 30, 2003. The Company shall not be obligated to carry-over any unused calendar year 2003 or pre-calendar year 2003 vacation entitlement nor be obligated to make any payment in lieu of such unused vacation entitlement. If any Hired Employee, who was allowed to carry-over unused vacation entitlement from year-to-year while in the employment of M-I or MCA or its Affiliate, as applicable,, has unused vacation entitlement at the Closing Date, it being understood and agreed that NEW OPERATORS M-I or MCA, as applicable, shall only be liable for its own acts or omissions on or obligated to pay to such Hired Employee wages in lieu of such unused carry-over vacation entitlement within ten (10) days after the Closing Date. Nothing in this Article IV shall, however, create any rights in favor of any person not a party hereto, including the employees of the Facilities, or constitute an employment agreement or condition of employment for any employee of OWNERS or any Affiliate thereof who is a Hired Employee. (l) OWNERS shall offer and provide, as appropriate, group health plan continuation coverage pursuant to the requirements of Section 601, et seq. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities to whom it is required to offer the same under applicable law. OWNERS acknowledges and agrees that NEW OPERATORS is not assuming any of OWNERS’ or its Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As of the Closing Date, all active employees of OWNERS employed at the Facilities: (i) who are eligible to participate as of the Closing Date in group health insurance coverage sponsored by OWNERS and (ii) who become

Hired Employees. Buyer Exhibit 4 sets forth a list of all Employees who are designated to receive an offer from Buyer on the Closing Date (i) Upon terms and conditions set by each a “Closing Date Offered Employee”). Seller shall terminate the NEW OPERATORSemployment of each Closing Date Offered Employee, as described herein, the NEW OPERATORS shall offer employment to, substantially all employees of the Facilities who, effective as of the Closing Date, are actively working whether or not such individual accepts Buyer’s offer of employment, and any Closing Date Offered Employee who accepts Buyer’s offer of employment (each a “Closing Date Hired Employee”) shall become an employee of Buyer on the day following the Closing Date. Any Employee who is not a Closing Date Offered Employee and who is not an Oxygen Employee shall be hereinafter referred to as a “Leased Employee,” and shall be so designated on Schedule 4.8(a)(ii). Buyer shall have no obligation at the Facilities. NEW OPERATORS shall also any time to offer employment to, or to hire, any Leased Employees or Oxygen Employees; however, Buyer may interview, offer employment to, and, upon the terms five (5) business days written notice to Seller, hire any such Leased Employees and conditions set forth herein, to all employees of OWNERS (expressly excluding the administrators of the Facilities who are employed by Current Manager, unless said administrators should elect to accept employment with NEW OPERATORS Oxygen Employees in its sole discretion upon terms and conditions negotiated outside this Agreement and not addressed herein) whoacceptable to Buyer, either during the Lease Term (as of the Closing Date are on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to work-related injury or illness, when and only when they return from such leave. NEW OPERATORS shall defend, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating to the failure of NEW OPERATORS to hire or offer employment to any OWNERS employees, on the terms set forth in this Section 4.01(a), who are as of the Closing Date (i) actively working, or (ii) on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy, or (iii) on a leave of absence due to a work-related injury or illness. All such employees electing to accept employment with NEW OPERATORS, are hereinafter referred to as the (“Hired Employees”). It is understood that NEW OPERATORS shall not be responsible for any disability or workers’ compensation benefits for any 10370946.3 13 employees on leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to a work-related injury or illness that are receiving such benefits as of the Closing Date until such time as they become Hired Employees. As to each of the Hired Employees, NEW OPERATORS shall recognize each such Hired Employee’s original hire date and shall continue to employ each such Hired Employee for a period of no less than ninety (90) days following the Closing Date, unless the employment of such Hired Employee is terminated in accordance with NEW OPERATORS’ personnel policies, or as a result of such Hired Employee’s resignation. Any such employment of a Hired Employee by NEW OPERATORS shall be on terms which require said Hired Employee to perform comparable services, in a comparable position and at the same base salary as such Hired Employee enjoyed with the Facilities prior to the Closing Date. OWNERS, or any of its Affiliates, shall have the right to employ or offer to employ any former employee of the Facilities who declines to accept employment with NEW OPERATORS. (j) Between the Effective Date and the Closing Date, neither OWNERS, nor its parent company, nor any of its subsidiaries and/or affiliates, through any principal and/or agent, shall have directly or indirectly solicited any employees of the Facilities for the purpose of transferring such employee to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; (k) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely to ensure that OWNERS are not required to give notice to the employees of the Facilities of the “closure” thereof under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”defined) or under any comparable state law. Accordingly, NEW OPERATORS shall indemnify, defend and hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act or under comparable state law in the event of a violation by NEW OPERATORS of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS constructively terminated employees of the Facilities as a result of the terms and conditions of employment offered by NEW OPERATORSthereafter; provided, however, that nothing herein shall be construed as imposing Buyer may not hire any obligation on NEW OPERATORS to indemnify, defend or hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act as a result of the acts or omissions of OWNERS Oxygen Employee prior to the Closing Dateend of the Interim Period described in Section 4.10. Seller shall terminate the employment of any Leased Employee or Oxygen Employee who receives such an offer from Buyer during the Lease Term, it being understood and agreed that NEW OPERATORS such termination shall only be liable for its own acts effective as of the day immediately prior to the effective date of Buyer’s offer of employment. A Leased Employee or omissions on or after Oxygen Employee who accepts Buyer’s offer of employment (each an “Additional Hired Employee,” and all such individuals collectively with the Closing Date. Nothing in this Article IV shallDate Hired Employees, however, create any rights in favor of any person not a party hereto, including the employees of the Facilities, or constitute “Hired Employees”) shall become an employment agreement or condition of employment for any employee of OWNERS or any Affiliate thereof who is Buyer on the date specified in Buyer’s offer effective the day after such date of termination (a Hired Employee’s effective date of employment with Buyer hereinafter the “Effective Hire Date”). Seller shall not make competing offers or proposals, or directly or indirectly seek to induce any Employees not to accept an offer of employment made by Buyer, or otherwise interfere with Buyer’s rights under the foregoing provisions of this Section 4.8(a). (l) OWNERS shall offer and provide, as appropriate, group health plan continuation coverage pursuant to the requirements of Section 601, et seq. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities to whom it is required to offer the same under applicable law. OWNERS acknowledges and agrees that NEW OPERATORS is not assuming any of OWNERS’ or its Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As of the Closing Date, all active employees of OWNERS employed at the Facilities: (i) who are eligible to participate as of the Closing Date in group health insurance coverage sponsored by OWNERS and (ii) who become

Hired Employees. (i) Upon terms and conditions set by the NEW OPERATORS, as described herein, the NEW OPERATORS shall offer employment to, substantially all employees of the Facilities who, as of Prior to the Closing Date, are actively working at the Facilities. NEW OPERATORS shall also Buyer will have extended or caused its Affiliates to extend an offer of employment upon the terms and conditions set forth herein, to all employees of OWNERS (expressly excluding the administrators of the Facilities who are employed by Current Manager, unless said administrators should elect to accept employment with NEW OPERATORS upon terms and conditions negotiated outside this Agreement and not addressed herein) who, as of the Closing Date are on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to work-related injury or illness, when and only when they return from such leave. NEW OPERATORS shall defend, hold harmless and indemnify OWNERS from and against any and all claims, causes of action and liability for or relating each Seller U.S. Employee that is substantially comparable to the failure of NEW OPERATORS to hire or offer employment to any OWNERS employees, on the terms set forth in this Section 4.01(a), who are as of the Closing Date (i) actively working, or (ii) on a leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy, or (iii) on a leave of absence due to a work-related injury or illness. All position held by such employees electing to accept employment with NEW OPERATORS, are hereinafter referred to as the (“Hired Employees”). It is understood that NEW OPERATORS shall not be responsible for any disability or workers’ compensation benefits for any 10370946.3 13 employees on leave of absence pursuant to OWNERS’ Family and Medical Leave of Absence Policy or due to a work-related injury or illness that are receiving such benefits as of the Closing Date until such time as they become Hired Employees. As to each of the Hired Employees, NEW OPERATORS shall recognize each such Hired Employee’s original hire date and shall continue to employ each such Hired Employee for a period of no less than ninety (90) days following the Closing Date, unless the employment of such Hired Employee is terminated in accordance with NEW OPERATORS’ personnel policies, or as a result of such Hired Employee’s resignation. Any such employment of a Hired Employee by NEW OPERATORS shall be on terms which require said Hired Employee to perform comparable services, in a comparable position and at the same base salary as such Hired Employee enjoyed with the Facilities Seller U.S. Employees immediately prior to the Closing Date. OWNERS, or any All offers of its Affiliates, shall have the right employment will be conditioned on Seller U.S. Employees executing confidentiality and non-competition agreements that are substantially similar to employ or those required by Seller. Such Seller U.S. Employees who accept Buyer's offer to employ any former employee of employment effective as of the Facilities who declines to accept employment with NEW OPERATORS. (j) Between the Effective Closing Date and the Closing Date, neither OWNERS, nor its parent company, nor any of its subsidiaries and/or affiliates, through any principal and/or agent, shall have directly or indirectly solicited any employees of the Facilities for the purpose of transferring such employee to and/or hiring such employee by/at any other nursing home owned by OWNERS, its parent, any subsidiary and/or affiliate of OWNERS; (k) Each of OWNERS and NEW OPERATORS acknowledge and agree that the provisions of Section 4.01(a) are designed solely to ensure that OWNERS are not required to give notice to the employees of the Facilities of the “closure” thereof under the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”) or under any comparable state law. Accordingly, NEW OPERATORS shall indemnify, defend and hold harmless OWNERS for, from and against any liability which it may incur under the WARN Act or under comparable state law in the event of a violation by NEW OPERATORS of its obligations thereunder, including a violation that results from allegations that NEW OPERATORS constructively terminated employees of the Facilities as a result of the terms and conditions of employment offered by NEW OPERATORS; provided, however, that nothing herein shall be construed known as imposing any obligation "U.S. Hired Employees". Each U.S. Hired Employee shall be listed on NEW OPERATORS to indemnify, defend or hold harmless OWNERS for, from and against any liability Schedule 2.1 which it may incur under the WARN Act as a result of the acts or omissions of OWNERS prior to the Closing Date, it being understood and agreed that NEW OPERATORS shall only be liable for its own acts or omissions completed by Seller on or after the Closing Date. Nothing in this Article IV shallNotwithstanding anything to the contrary, however, create if any rights in favor of any person not a party hereto, including the employees U.S. Hired Employee who is on short-term disability status as of the Facilities, or constitute an employment agreement or condition of employment for any employee of OWNERS or any Affiliate thereof who is a Hired Employee. (l) OWNERS shall offer and provide, as appropriate, group health plan continuation coverage pursuant to the requirements of Section 601, et seq. of ERISA and Section 4980B of the Code (“COBRA”) to all of the employees of the Facilities to whom it is required to offer the same under applicable law. OWNERS acknowledges and agrees that NEW OPERATORS is not assuming any of OWNERS’ or its Affiliates’ obligations to its employees under COBRA or otherwise, except as specifically provided in this Article IV. As Closing Date goes onto long-term disability status within one year of the Closing Date, all active employees of OWNERS employed at the Facilities: (i) who are eligible then such individuals shall cease to participate be treated as U.S. Hired Employees as of the commencement date of their long-term disability status and Seller shall retain full responsibility and liability for any such persons as of such commencement date. If any persons who are not Seller U.S. Employees by reason of being on inactive or long-term disability status as described in Section 1.12 return to active work status within one year of the Closing Date Date, Buyer shall extend offers of employment to such persons and such persons shall be treated as U.S. Hired Employees effective as of their date of hire for all purposes under this Agreement, including, without limitation, pension and retiree medical asset and liability transfers. Seller shall retain full responsibility and liability for any such persons on inactive or long-term disability status unless and until they are hired by Buyer in group health insurance coverage sponsored by OWNERS and (ii) who becomeaccordance with the immediately preceding sentence.