EXHIBIT 99.1
OPTION AGREEMENT
NEITHER THIS OPTION AGREEMENT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR HAVE BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES
LAWS OF ANY STATE; THEREFORE, THIS OPTION AGREEMENT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF, IF ANY, MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR QUALIFICATION OR UPON DELIVERY TO THE COMPANY, OF AN OPINION OF
COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY THAT
REGISTRATION OR QUALIFICATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
This OPTION AGREEMENT (this "Agreement") is entered into as of
October 18, 1998, by and among Sunrise Assisted Living, Inc., a Delaware
corporation ("Acquiror"), and Karrington Health, Inc., an Ohio corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, Acquiror, Buckeye Merger Corporation, an Ohio corporation ("Merger
Sub"), and the Company are entering into an Agreement of Merger of even date
herewith (the "Merger Agreement"; capitalized terms used but not defined herein
shall have the same meaning assigned to such terms in the Merger Agreement),
pursuant to which Merger Sub will be merged with and into the Company (the
"Merger"), the separate corporate existence of Merger Sub shall cease and the
Company shall continue as the surviving corporation in the Merger; and
WHEREAS, as a condition to the willingness of the parties to enter
into the Merger Agreement and incur expenses and expend time and effort in
connection with the Merger Agreement and transactions contemplated thereby,
Acquiror has required that the Company agree, and the Company has agreed, among
other things, to grant to Acquiror the Company Stock Option (as hereinafter
defined), in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and in the Merger Agreement and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE I
THE COMPANY STOCK OPTION
1.1 Grant of Company Stock Option. The Company hereby grants to
Acquiror an irrevocable option (the "Company Stock Option") to purchase, subject
to the terms hereof 676,903 1/ fully paid and nonassessable shares (the "Company
Option Shares") of Company Common Stock at a purchase price of $9.00 per Company
Option Share (the "Company Stock Purchase Price") in the manner set forth in
Sections 1.2, 1.3 and 1.4 hereof; provided, however, that in no event shall the
number of shares of Company Common Stock for which the Company Stock Option is
exercisable exceed 9.9% of the number of shares of Company Common Stock
outstanding before the exercise of the Company Stock Option. The number of
shares of Company Common Stock that may be received upon the exercise of the
Company Stock Option is subject to adjustment as set forth herein.
1.2 Exercise of Company Stock Option.
(a) The Company Stock Option may be exercised by Acquiror, in
whole or in part, at any time or from time to time prior to
termination of this Company Stock Option in accordance with Section
6.7, if during the term of this Company Stock Option a proposal for a
Third Party Transaction is announced or received by the Company (the
"Acquiror Triggering Event").
(b) In the event Acquiror wishes to exercise all or any part of
the Company Stock Option, Acquiror shall deliver to the Company a
written notice (an "Acquiror Exercise Notice," with the date of the
Acquiror Exercise Notice being hereafter called the "Notice Date")
notifying Company of its exercise of the Company Stock Option and
specifying the number of the Company Option Shares to be purchased.
The closing of such exercise of the Company Stock Option (a "Company
Option Closing") shall occur at a place, and on a date (not earlier
than three nor later than 30 business days from the Notice Date) and
at a time designated by Acquiror in the Acquiror Exercise Notice.
(c) Upon receipt of an Acquiror Exercise Notice, the Company
shall be obligated to deliver to Acquiror a certificate or
certificates evidencing the Company Option Shares, in accordance with
the terms of this Agreement, on the later of (i) the date specified in
the Acquiror Exercise Notice or (ii) the first business day on which
the conditions specified in Section 1.3 shall be satisfied.
(d) Notwithstanding the foregoing, the Company Stock Option may
not be exercised in whole or in part with respect to that number of
shares of Company Common Stock that would result in the Acquiror
realizing upon exercise 1/ A number equal to 9.9% of the outstanding
Company Common Stock on the date hereof.
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thereof, taking into account all prior exercises of the Company Stock
Option, an Aggregate Spread Value in excess of $5.0 million. For
purposes of this Section 1.2(d), the term "Aggregate Spread Value"
shall mean sum of (i) the number of Company Option Shares purchased
upon exercise of the Company Stock Option multiplied by (ii) the
excess, if any, of the average of the last reported sales prices on
the Nasdaq Stock Market ("NASDAQ") of the Company Common Stock during
the five trading days immediately preceding the Notice Date (or each
applicable Notice Date, if the Company Stock Option is exercised on
more than one occasion) over the Company Stock Purchase Price.
1.3 Conditions to Delivery of the Company Option Shares. The right of
Acquiror to exercise the Company Stock Option and the obligation of the Company
to deliver the Company Option Shares upon any exercise of the Company Stock
Option is subject to the following conditions:
(a) Such delivery would not in any material respect violate, or
otherwise cause the material violation of, any material law,
including, without limitation, the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act") applicable to such exercise of the Company
Stock Option and the delivery of the Company Option Shares; and
(b) There shall be no preliminary or permanent injunction or
other order by any court of competent jurisdiction preventing or
prohibiting such exercise of the Company Stock Option or the delivery
of the Company Option Shares in respect of such exercise (and no
action or proceeding shall have been commenced or threatened for
purposes of obtaining the same).
1.4 Closings. At any Company Option Closing, (i) the Company will
deliver to Acquiror a certificate or certificates evidencing the number of the
Company Option Shares being purchased in the denominations specified in the
Acquiror Exercise Notice, and, if the Company Stock Option has been exercised in
part, a new Company Stock Option evidencing the right of Acquiror to purchase
the balance of the Company Option Shares; and (ii) Acquiror will pay to the
Company the aggregate Company Stock Purchase Price for the Company Option Shares
to be purchased by Acquiror. Such aggregate purchase price is payable in
Acquiror Common Stock, cash or a combination of Acquiror Common Stock and cash,
in each case at Acquiror's option, as specified in the Acquiror Exercise Notice.
All cash payments made by Acquiror to the Company pursuant to this Section 1.4
shall be made, at the option of Acquiror, either by wire transfer of immediately
available funds or by delivery to the Company of a certified or bank cashier's
check or checks payable to or on the order of the Company, in either case in the
amount of the Company Stock Purchase Price multiplied by the number of shares to
be purchased. If Acquiror elects to pay the Company Stock Purchase Price or a
portion thereof in Acquiror Common Stock, the Acquiror Common Stock shall be
valued at the
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average of the last reported sales prices of the Acquiror Common Stock on the
NASDAQ for the five trading days immediately prior to the date of the Company
Exercise Notice. After payment of the Company Stock Purchase Price for the
Company Option Shares covered by the Acquiror Exercise Notice, the Company Stock
Option shall be deemed exercised to the extent of the Company Option Shares
specified in the Acquiror Exercise Notice as of the date such Company Exercise
Notice is given to the Company.
1.5 Adjustments Upon Share Issuances, Changes in Capitalization, etc.
In the event of any change in the Company Common Stock or in the number of
outstanding shares of the Company Common Stock by reason of a stock dividend,
split-up, recapitalization, combination, exchange of shares or similar
transaction or any other change in the corporate or capital structure of the
Company (including, without limitation, the declaration or payment of an
extraordinary dividend or cash, securities or other property), the type and
number of shares or securities to be issued by the Company upon exercise of the
Company Stock Option shall be adjusted appropriately, and proper provision shall
be made in the agreements governing such transaction, so that Acquiror shall
receive upon exercise of the Company Stock Option the number and class of shares
and voting power represented thereby, or other securities or property that
Acquiror would have received in respect of the Company Common Stock, if the
Company Stock Option had been exercised immediately prior to such event, or the
record date therefor, as applicable, and elected to the fullest extent it would
have been permitted to elect, to receive such securities, cash or other
property.
1.6 Legends. The certificate or certificates evidencing the Company
Option Shares acquired upon exercise of the Company Option Shares shall bear a
legend in substantially the following form:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), NOR HAVE
THEY BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
STATE; THEREFORE, THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED
EXCEPT UPON SUCH REGISTRATION OR QUALIFICATION OR UPON DELIVERY TO
THE COMPANY, OF AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO THE COMPANY THAT REGISTRATION OR QUALIFICATION IS NOT
REQUIRED FOR SUCH SALE OR TRANSFER.
It is understood and agreed that the above legend will be removed by
delivery of substitute certificate(s) without such legend if the holder shall
have delivered to the Company a copy of a letter from the staff of the
Securities and
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Exchange Commission, or an opinion of counsel in form and substance reasonably
satisfactory to the Company and its counsel, to the effect that such legend is
not required for purposes of the Securities Act.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Acquiror as
follows:
2.1 Authority Relative to this Agreement. The Company has all
requisite corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby to be consummated by the Company. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Company, and no other corporate proceedings on the part of the
Company are necessary to authorize the execution and delivery of this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Acquiror, constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its terms.
2.2 Authority to Issue Shares. The Company has taken all necessary
corporate action to authorize and reserve and permit it to issue, and at all
times from the date hereof until the Company Stock Option shall no longer be
exercisable, shall have reserved, all the Company Option Shares issuable
pursuant to this Agreement, and the Company will take all necessary corporate
action to authorize and reserve and permit it to issue all additional shares of
the Company Common Stock or other securities which may be issued pursuant to
Section 1.5, all of which, upon their issuance and delivery in accordance with
the terms of this Agreement, shall be duly authorized, validly issued, fully
paid and nonassessable, shall be delivered free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on Acquiror's voting rights, charges and other encumbrances of any
nature whatsoever (other than this Agreement) and shall not be subject to any
preemptive rights.
2.3 No Violation. The execution and delivery of this Agreement by the
Company do not, the performance of its obligations hereunder by the Company will
not, and the consummation by the Company of the transactions contemplated to be
performed by it hereunder will not, (i) violate or conflict with any provision
of any Law in effect on the date of this Agreement and applicable to the Company
or any Company Subsidiary or by which any of their respective properties or
assets is bound or subject; (ii) require the Company or any Company Subsidiary
to obtain
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any consent, waiver, approval, license or authorization or permit of, or make
any filing with, or notification to, any Governmental Entities, based on laws,
rules, regulations and other requirements of Governmental Entities in effect as
of the date of this Agreement (other than (a) the filing of a pre-merger
notification report under the HSR Act and the expiration of the applicable
waiting period, (b) filings or authorizations required in connection or in
compliance with the provisions of the Securities Act, NASDAQ rules for
notification of the listing of additional securities (or the rules of any other
applicable national exchange) or the "blue sky" laws of various states, or (c)
any other filings and approvals expressly contemplated by this Agreement); (iii)
require the consent, waiver, approval, license or authorization of any person
(other than Governmental Entities); (iv) violate, conflict with or result in a
breach of or the acceleration of any obligation under, or constitute a default
(or an event which with notice or the lapse of time or both would become a
default) under, or give to others any rights of, or result in any, termination,
amendment, acceleration or cancellation of, or loss of any benefit or creation
of a right of first refusal, or require any payment under, or result in the
creation of a lien or other encumbrance on any of the properties or assets of
the Company or any Company Subsidiary pursuant to or under any provision of any
indenture, mortgage, note, bond, lien, lease, license, agreement, contract,
order, judgment, ordinance, Company Permit (as defined below) or other
instrument or obligation to which the Company or any Company Subsidiary is a
party or by which the Company or any Company Subsidiary or any of their
respective properties is bound or subject to; or (v) conflict with or violate
the Articles of Incorporation or Bylaws, or the equivalent organizational
documents, in each case as amended or restated, of the Company or any Company
Subsidiary, except for any breaches, defaults, events, rights of termination,
amendment, acceleration or cancellation, payment obligations or liens or
encumbrances described in clause (iv) that would not have a Material Adverse
Effect on the Company and except where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications
would not, either individually or in the aggregate, prevent the Company from
performing any of its obligations under this Agreement and would not have a
Material Adverse Effect on the Company. Neither the Company nor any of its
affiliates or associates (as each such term is defined in Section 203 of the
DGCL) is, prior to the date hereof, an "interested stockholder" (as such term is
defined in Section 203 of the DGCL) of Acquiror. For purposes hereof, "Company
Permit" means any all license, CON, franchise, grant, permit, easement,
variance, accreditation, exemption, consent, certificate, identification number,
approval, order, and other authorization necessary for the Company or any
Company Subsidiary to own, lease and operate properties and to carry on its
business as it is now being conducted.
ARTICLE III
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
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3.1 Listing; Other Action. (a) If the Company Common Stock or any
other securities to be acquired upon exercise of the Company Stock Option are
then traded on the NASDAQ or any other national exchange, the Company, upon the
request of Acquiror, shall, at the Company's expense, promptly file a
notification to list such shares or other securities on such exchange and will
use reasonable best efforts to obtain approval of such listing on such exchange,
subject to notice of issuance, as promptly as practicable.
(b) The Company shall use its reasonable best efforts to take, or
cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable Laws
and regulations to consummate and make effective the transactions
contemplated hereunder, including, without limitation, using its
reasonable best efforts to obtain all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental
Entities. Without limiting the generality of the foregoing, the
Company shall, when required in order to effect the transactions
contemplated hereunder, make all filings and submissions under the HSR
Act as promptly as practicable.
3.2 Registration. Upon the request of Acquiror at any time and from
time to time within two (2) years after the first Company Option Closing, the
Company agrees (i) to effect, as promptly as practicable, up to two
registrations under the Securities Act covering any part or all (as may be
requested by Acquiror) of the securities that have been acquired by or are
issuable to Acquiror upon exercise of Company Stock Option, and to use its best
efforts to qualify such Company Option Shares and/or other securities acquired
upon exercise of the Company Stock Option under any applicable state securities
laws and (ii) to include any part or all of Company Option Shares and such other
securities acquired upon exercise of the Company Stock Option in any
registration statement for common stock filed by the Company under the
Securities Act in which such inclusion is permitted under applicable rules and
regulations and to use its reasonable best efforts to keep each such
registration described in clause (i) effective for a period not in excess of six
(6) months, unless, in the written opinion of counsel to the Company, addressed
to Acquiror and reasonably satisfactory in form and substance to Acquiror, such
registration is not required for the sale and distribution of such securities in
the manner contemplated by Acquiror. If the managing underwriter of a proposed
offering of securities by the Company shall advise the Company in writing that,
in the reasonable opinion of the managing underwriter, the distribution of
Company Option Shares or such other securities acquired upon exercise of the
Company Stock Option requested by Acquiror to be included in a registration
statement concurrently with securities being registered for sale by the Company
would adversely affect the distribution of such securities by the Company, then
the Company shall, at its option, either (i) include such of the Company Option
Shares and/or such other securities acquired upon exercise of the Company Stock
Option in the registration statement, but Acquiror shall agree to delay the
offering
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and sale for such period of time as the managing underwriter may reasonably
request (provided that Acquiror may at any time withdraw its request to include
securities in such offering) or (ii) include such portion of Company Option
Shares and/or such other securities acquired upon exercise of the Company Stock
Option in the registration statement as the managing underwriter advises may be
included for sale simultaneously with sales by the Company. The registrations
effected under this Section 3.2 shall be effected at the Company's expense,
except for underwriting commissions and discounts and the fees and disbursements
of Acquiror's counsel. With respect to a registration statement which has become
effective pursuant to this Agreement, if the Board of Directors of the Company
shall determine, in its good faith reasonable judgment, that it is necessary to
suspend the availability of such registration statement in light of the
existence of any undisclosed acquisition or financing activity or other
undisclosed material event, circumstance or condition involving the Company or
any Company Subsidiary, the disclosure of which in any such case could
reasonably be expected materially to disadvantage the Company, and the existence
of which would render such registration statement inadequate as failing to
include material information, then the Company may cause the right of Acquiror
to make dispositions of Company Option Shares and/or such other securities
acquired upon exercise of the Company Stock Option pursuant to such registration
statement to be suspended for one or more periods of time not exceeding 90 days
in the aggregate, as the Board of Directors of the Company determines in its
good faith reasonable judgment to be necessary. If the Company determines to
suspend the right of the holders pursuant to the immediately preceding sentence,
the Company shall deliver a notice to Acquiror which indicates that such
registration statement is no longer usable. Upon the receipt of any such notice,
Acquiror shall forthwith discontinue any sale of Company Option Shares and/or
other securities acquired upon exercise of the Company Stock Option pursuant to
such registration statement and any use of the prospectus contained therein. As
soon as the circumstances which resulted in the delivery of any such notice
cease to exist, the Company shall promptly notify Acquiror of such cessation,
whereupon Acquiror may resume making dispositions of Company Option Shares
and/or other securities acquired upon exercise of the Company Stock Option
pursuant to such registration statement. Acquiror shall provide all information
reasonably requested by the Company for inclusion in any registration statement
to be filed hereunder. In connection with any registration pursuant to this
Section 3.2, the Company and Acquiror shall provide each other and any
underwriter of the offering with customary representations, warranties,
covenants, indemnification and contribution.
3.3 Put Right. Prior to the termination of the Company Stock Option
in accordance with Section 6.7 hereof and if the other conditions set forth in
Section 1.3 are met and the Company Stock Option is otherwise exercisable,
Acquiror shall have the right in connection with the consummation of a Third
Party Transaction to require the Company to purchase the Company Stock Option
(the "Put Right") at a cash purchase price (the "Put Price") equal to the
product
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determined by multiplying (i) the number of Company Option Shares as to which
the Company Stock Option has not yet been exercised by (ii) the Spread (as
defined below). The Company hereby agrees to furnish notice to Acquiror at least
five business days prior to the anticipated consummation of a Third Party
Transaction. As used herein, the term "Spread" shall mean the excess, if any, of
(i) the greater of (x) the highest price (in cash or fair market value of
securities or other property) per share of the Company Common Stock paid within
12 months preceding the date of exercise of the Put Right (or to be paid
pursuant to any agreement or arrangement in effect as of the date of such
exercise) for any shares of Company Common Stock beneficially owned by any
person who shall have acquired or become the beneficial owner of 20% or more of
the outstanding shares of Company Common Stock after the date hereof or (y) the
average of the last reported sales prices on NASDAQ of the Company Common Stock
during the five trading days immediately preceding the written notice of
exercise of the Put Right over (ii) the Company Stock Purchase Price.
Notwithstanding the foregoing, in no event shall the aggregate Put Price,
together with the Aggregate Spread Value of any Company Option Shares previously
exercised, exceed $5.0 million. The procedures for the exercise of the Company
Stock Option set forth in Section 1.2(b) hereof shall be followed also with
regard to the exercise of this Put Right except that the closing of such
exercise of this Put Right shall occur simultaneously with the consummation of
the Third Party Transaction.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to the Company that it has
all requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby to be consummated by the Acquiror. The
execution and delivery of this Agreement by the Acquiror have been duly
authorized by the Board of Directors of the Acquiror.
ARTICLE V
COVENANTS OF ACQUIROR
Acquiror hereby covenants and agrees that, subject to Section 3.2
hereof, it shall acquire Company Option Shares and/or other securities acquired
upon exercise of the Company Stock Option for investment purposes only and not
with a view to any distribution thereof in violation of the Securities Act, and
shall not sell any such securities purchased pursuant to this Agreement except
in compliance with the Securities Act.
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ARTICLE VI
MISCELLANEOUS
6.1 Expenses. Except as expressly provided herein to the contrary,
each party hereto will pay all of its expenses in connection with the
transactions contemplated by this Agreement, including, without limitation, the
fees and expenses of its counsel and other advisors.
6.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be given (and shall be deemed to
have been duly given upon receipt) by delivery in person, by telecopy or
facsimile, by registered or certified mail (postage prepaid, return receipt
requested), or by a nationally recognized courier service to the parties at the
following addresses (or at such other address for a party as shall be specified
by like changes of address) or, if sent by telecopy or facsimile, to the parties
at the telecopier numbers specified below:
If to Acquiror: Sunrise Assisted Living, Inc.
0000 Xxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
With a copy Xxxxx & Xxxxxxx L.L.P.
(which shall not 000 00xx Xxxxxx, X.X.
constitute notice) to: Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telecopier: 000-000-0000
If to the Company: Karrington Health, Inc.
000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
Telecopier: (000) 000-0000
With copies Xxxxxxx & Xxxxxx LLP
(which shall not 000 Xxxxx Xxxxx Xxxxxx
constitute notice) to: Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. XxXxxxxx, III, Esq.
and
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
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6.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
6.4 Assignment. This Agreement shall not be assigned by operation of
law or otherwise, without the prior written consent of the other party hereto.
6.5 Governing Law. This Agreement, and all matters relating hereto,
shall be governed by, and construed in accordance with the laws of the State of
Ohio, regardless of the laws that might govern under applicable principles of
conflict of law theory.
6.6 Injunctive Relief. The parties agree that in the event of a
breach of any provision of this Agreement irreparable damage would occur, the
aggrieved party would be without an adequate remedy at law and damages would be
difficult to determine. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party may elect to
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach of such
provision. By seeking or obtaining such relief, the aggrieved party will not be
precluded from seeking or obtaining any other relief to which it may be entitled
at law or in equity.
6.7 Termination. The Company Stock Option shall terminate upon the
earlier of: (i) the Effective Time; or (ii) one year following the termination
or expiration of the Merger Agreement; provided, however, that if an Acquiror
Triggering Event occurs within such one-year period, then the Company Stock
Option shall terminate fifteen months after the termination or expiration of the
Merger Agreement.
6.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
6.9 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as to make it enforceable.
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6.10 Further Assurances. Each party hereto will execute and deliver
all such further documents and instruments and take all such further action as
may be necessary in order to consummate the transactions contemplated by this
Agreement.
6.11 Third Party Beneficiaries. Nothing in this Agreement, expressed
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
6.12 Amendment and Modification. This Agreement may be amended,
modified and supplemented only by a written document executed by Acquiror and
the Company.
IN WITNESS WHEREOF, Acquiror and the Company have caused this
Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
SUNRISE ASSISTED LIVING, INC.
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: President
KARRINGTON HEALTH, INC.
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
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