SUPREME COURT OF THE STATE OF NEW YORK
`
`COUNTY OF NEW YORK
`............................................................... x
`
`BATAVIA OPERATING, LLC,
`
`-against-
`
`Plaintiff,
`
`‘
`
`:
`
`Index No.: 655291/2017
`
`BATAVIA HEALTH CARE CENTER, LLC and
`TENZER AND LUNIN LLP, in its capacity as
`Escrow Agent and Stakeholder,
`
`Defendants.
`--------------------------------------------------------------- x
`
`MOHAWK OPERATING, LLC,
`
`Plaintiff,
`
`-against-
`
`Index No.: 655290/2017
`
`MVNH ASSOCIATES, LLC and
`TENZER AND LUNIN LLP, in its capacity as
`Escrow Agent and Stakeholder,
`
`Defendants.
`............................................................... x
`
`STIPULATION AND JOINT MOTION FOR
`CONSOLIDATION
`
`WHEREAS, on August 10, 2017,
`
`the above-captioned Actions (the “Main
`
`Actions”) were commenced in this Court seeking declaratory and other relief arising from the
`
`termination by the respective Plaintiffs of Asset Purchase Agreements and seeking return of the
`
`respective down payments paid into escrow and the interest earned thereon (the “Escrow
`
`Deposits”) from Tenzer and Lunin LLP, named as a Defendant solely in its capacity as Escrow
`
`Agent under each Agreement (the “Escrow Agent”); and
`
`

`

`WHEREAS, the Complaints in the Main Actions are annexed hereto as Exhibits
`
`AandB; and
`
`WHEREAS,
`
`the non-Escrow Agent Defendant
`
`in each case rejected the
`
`respective Plaintiff's termination of its Asset Purchase Agreement, objected to the Escrow
`
`Agent’s returning the Escrow Deposits to Plaintiffs,
`
`itself laminated the respective Asset
`
`Purchase Agreement and demanded that the Escrow Agent turn over the Esarow Deposits to it;
`
`and
`
`WHEREAS, the Plaintifl' in each case rejected the respective non-Escrow Agent
`
`Defendant’s termination of its Asset Purchase Agreement and demand that the Escrow Agent
`
`turn over the Escrow Deposits to it; and
`
`WHEREAS, the Asset Purchase Agreements underlying the Main Actions are
`
`identical or substantially similar in the provisions relevant in the Main Actions; and
`
`WHEREAS, many of the factual and legal issues underlying the Main Actions are
`
`identical or substantially similar; and
`
`WHEREAS, on August 15, 2017, the Escrow Agent commenced an inlerpleader
`
`action in this Court captioned Tenzer and Lunin LLP v. Batavr'a Operating, LLC, et at, Index
`
`No. 655351/2017, seeking, inter alia, to have the parties to the captioned actions interplead their
`
`respective claims to the Escrow Deposits in the interpleacler action and seeking to deposit the
`
`respective Escrow Deposits with the court, or to distribute the Escrow Deposits to the parties as
`
`directed by the Court or the stipulation of all of the parties to the Main Actions; and
`
`WHEREAS,
`
`in view of the Main Actions,
`
`the Escrow Agent has agreed to
`
`discontinue the Interpleader Action pursuant to the Notice of Discontinuance annexed hereto as
`
`Exhibit C; and
`
`

`

`WHEREAS, Plaintiffs and the Escrow Agent have agreed to discontinue the
`
`Main Actions against the Escrow Agent upon the Escrow Agent’s agreement to continue to hold
`
`the Escrow Deposits in escrow, to be bound by the final orders and instructions of this Court in
`
`the Main Actions with respect to the disposition of the Escrow Deposits that are not subject to
`
`appeal or under appeal (“Final Orders”), to release the Escrow Deposits only in accordance with
`
`such Final Orders or the stipulation of all of the parties to the Main Actions and to remain subject
`
`to the jurisdiction of this Court to effectuate this Stipulation and Order, the Final Orders, and
`
`such other orders and instructions as the Court may direct respecting the Escrow Deposits; and
`
`WHEREAS, consolidation of the Main Actions would result
`
`in substantial
`
`efficiencies and savings of time and resources ofthc parties and the Court;
`
`NOW THEREFORE, upon the joint motion of the Parties to the Main Actions,
`
`and it appearing that consolidation of the Main Actions would result in substantial savings and
`
`efficiencies of time and resources of the Parties and the Court, it is
`
`ORDERED, that the Main Actions be consolidated for all purposes before this
`
`Court; and it is
`
`ORDERED, that the Main Actions be and hereby are dismissed against
`
`the
`
`Escrow Agent, and it is
`
`ORDERED, that the Escrow Agent discontinue the Interpleader Action and file
`
`the Notice of Discontinuance annexed hereto as Exhibit C; and it is
`
`ORDERED, that the Escrow Agent continue to hold the Escrow Deposits in
`
`escrow, that it be bound by the Final Orders and such other orders and instructions as this Court
`
`may direct respecting the Escrow Deposits, and that it release the Escrow Deposits only in
`
`

`

`accordance with such Final Orders or the stipulation of all of the Parties to the Main Actions and
`
`it is
`
`ORDERED, that the Escrow Agent shall remain subject to the jurisdiction of this
`
`Court to effectuate this Stipulation and Order, the Final Orders and such orders and instructions
`
`as this Court may direct respecting the Escrow Deposits.
`
`ENTER,
`
`J.S.C.
`
`Consented to:
`
`ALLEGAERT BERGER & VOGEL LLP
`
`TENZER AND LUNIN LLP
`
`By:
`
`By:
`
`I
`
`chaffe
`
`oseph . Kaplan
`
`111 Broadway, 20th Floor
`New York, New York 10006
`(212) 571-0550
`
`32 East 57th Street, 10th Fl.
`New York, New York 10022
`(212) 262-6699
`
`Attorneysfor Plainnfi‘r
`
`Attorneysfor Defendants
`
`

`

`TENZER AND LUNIN LLP
`
`By:
`
`Jo eph C.
`
`aplan
`
`32 East 57‘" Street, 10'h Floor
`New York, New York 10022
`(212) 262-6699
`
`Attorneysjbr Tenzer and Lunin as Escrow Agent
`
`

`

`
`
`
`
`
`
`EXHIBIT A
`
`EXHIBIT A
`
`

`

`FILED: NEW YORK COUNTY CLERK 08/10/2017 01:20 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 655291/2017
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`RECEIVED NYSCEF: 08/10/2017
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`FILED: NEW YORK COUNTY CLERK 08.112017 01:20 PM
`NYSCEF DOC. NO.
`1
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`INDEX NO- 655291/2017
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`
`
`
`
`RnCnIVnD NYSCEF: 08/10/2017
`
`
`
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEw YORK
`--------------------------------------------------------------- X
`
`BATAVIA OPERATING, LLC,
`
`Plaintiff,
`
`Index No.: 655291/17
`
`.
`-aga1nst—
`
`SUMMONS
`——
`
`BATAVIA HEALTH CARE CENTER, LLC and
`TENZER AND LUNIN LLP, in its capacity as
`Escrow A cut and Stakeholder
`g
`’
`
`Elggtt‘ffagetilegnfii:gfgiiofihe
`.
`y
`p
`'
`bas1s of venue IS contractual
`designation (CPLR § 501).
`
`Defendants.
`--------------------------------------------------------------- X
`
`TO THE ABOVE NAMED DEFENDANTS:
`
`YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve
`a copy of your answer, or, if the complaint is not served with the summons, to serve a notice of
`
`appearance, on the undersigned within 20 days after service of this summons, exclusive of the
`day of service (or within 30 days after the service is complete if this summons is not personally
`delivered to you within the State of New York); and in case of your failure to appear or answer,
`judgment will be taken against you by default for the relief demanded in the verified complaint.
`
`Dated: August 8, 2017
`
`ALLEGAERT BERGER & VOGEL LLP
`
`By:
`
`sZHyman L. Schaffer
`
`Hyman L. Schaffer
`
`111 Broadway, 20th Floor
`
`New York, New York 10006
`
`Tel: (212) 571-0550
`
`Fax: (212) 571-0555
`
`Attorneys for Plaintifi‘Batavia Operating, LLC
`
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
`·-------------------------------------------------------------- )(
`BATAVIA OPERATING, LLC,
`
`Plaintiff,
`
`IndeJC No.:
`
`-against-
`
`BATAVIA HEALTH CARE CENTER, LLC and
`TENZER AND LUNIN LLP, in its capacity as
`Escrow Agent and Stakeholder,
`
`Defendants.
`·-------------------------------------------------------------- )(
`
`COMPLAINT FOR
`DECLARATORY JUDGMENT
`AND OTHER RELIEF
`
`Plaintiff Batavia Operating, LLC ("Plaintiff' or "Buyer"), by its attorneys,
`
`Allegaert Berger & Vogel LLP, for its complaint against Defendants, alleges the following:
`
`THE PARTIES
`
`1.
`
`Plaintiff is a New York limited liability company, with a place of business
`
`office at 257 State Street, Batavia, New York.
`
`2.
`
`Upon information and belief, Defendant Batavia Health Care Center, LLC
`
`("MVNH" or "Seller") is a New York limited liability company, with its principal place of
`
`business at 257 State Street, Batavia, New York.
`
`3.
`
`Upon information and belief, Defendant Tenzer and Lunin (the "Escrow
`
`Agent") is a professional limited liability partnership organized under the laws of the State of
`
`New York, with its offices at 32 East 57th Street, lOth Floor, New York, New York 10022. and is
`
`named as a Defendant in this action solely in its capacity as Escrow Agent and as the stakeholder
`
`of the Down Payment, as described below.
`
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`VENUE
`
`4.
`
`Venue is proper in this Court pursuant to CPLR 501, in that the parties to
`
`this action have agreed contractually to submit to the jurisdiction of the Supreme Court, New
`
`York County as one of the exclusive jurisdictions for resolution any disputes arising thereunder,
`
`and to waive any objections to the laying of venue in this county and Court.
`
`FACTS
`
`5.
`
`Defendant is the owner and licensed operator of Batavia Health Care
`
`Center (the "Facility"), a skilled nursing facility located at 257 State Street, Batavia, New York
`
`13357 (the "Premises"). On or about June 24, 2016, Plaintiff, as Buyer, and Defendant, as Seller,
`
`each executed and delivered an Asset Purchase Agreement (the "AP A") and associated
`
`documents for the purchase of certain of Seller's assets relating to the Facility (the "Basic
`
`Assets"). A copy of the AP A is annexed hereto as Exhibit A.
`
`6.
`
`The Seller leases the Premises and furniture, fixtures and equipment
`
`thereat from Batavia Realty, LLC, as lessor (the "Landlord"). The Landlord has an existing
`
`mortgage with an entity known as Capital Funding LLC (the "Mortgagee"), which mortgage is
`
`insured by the United States Department of Housing and Urban Development ("HUD"). In
`
`connection with the transaction contemplated in the AP A, Buyer entered into a lease with the
`
`Landlord. Pursuant to Section 11.7 of the APA, Buyer was obligated to submit an application to
`
`the Mortgagee and to HUD for transfer of physical assets (the "TPA Application"), seeking
`
`approval to become the licensed operator of the Facility (the "TPA Approval"). Section 11.7
`
`provides:
`
`11.7 Application for Transfer of Physical Assets. Within ninety (90)
`days after the Contract Date, Buyer shall, at its own cost and expense,
`submit to the Mortgagee and HUD and application (the "TPA
`Application") for transfer of physical assets seeking approval (the "TPA
`
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`Approval") to become the license operator of the Facility. Buyer shall
`timely submit all information and materials required by HUD in
`connection with its review of the TPA Application and shall diligently
`pursue obtaining HUD approval. Buyer shall deliver to Seller, within five
`(5) business days of its· submission or receipt, a complete copy of the TPA
`Application and all correspondence and submissions to or from HUD
`relating thereto.
`
`(The transactions contemplated under the AP A are collectively referred to as the "Transaction").
`
`7.
`
`The purchase price for Seller's sale, conveyance, transfer and delivery of
`
`the Basic Assets, as defined in Section 2.2 of the APA, to Buyer was $1,800,000.00 in cash (the
`
`"Cash Payment"), plus Buyer's assumption of certain liabilities relating to the ownership or
`
`operation of the Facility and/or the Basic Assets.
`
`8.
`
`Pursuant to Section 3.2.1 of the AP A, Plaintiff was required to make a
`
`down payment in the amount of $300,000.00 to Defendant upon execution of the AP A (the
`
`"Down Payment"), which Down Payment was to be credited against the Cash Payment due to
`
`Seller at the closing of the Transaction.
`
`9.
`
`Notwithstanding the terms of Section 3.2.1 of the APA, the parties to the
`
`AP A agreed that the Down Payment would be held in escrow pursuant to an Escrow Agreement
`
`dated June 24, 2016. Tenzer and Lunin agreed to act as the Escrow Agent under that Agreement.
`
`A copy of the Escrow Agreement is annexed as Exhibit B.
`
`10.
`
`Because the Facility is a skilled nursing facility that is licensed by the
`
`State of New York, the Transaction required approval of the New York State Department of
`
`Health (the "DOH Approval"). Such Approval is sought through the filing of an application for
`
`a Certificate of Need ("CON") with the Department of Health, responding to any requests for
`
`further information by DOH, and a hearing on the application. Accordingly, Section 11.1 of the
`
`AP A provided:
`
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`11.1 Certificate of Need Approval. Within forty five (45) days after the
`Contract Date, as its own cost and expense, Buyer shall submit to the
`Department of Health a certificate of need application (the "Application")
`seeking DOH Approval for its purchase of the Basic Assets and its
`operation of the Facility. Buyer shall timely submit all information and
`materials required by DOH in connection with its review of the
`Application and shall diligently pursue obtaining the DOH Approval.
`Buyer shall deliver to Seller, within five (5) business days of its
`submission or receipt, a complete copy of the Application and all
`correspondence and submissions to or from the Department of Health
`relating thereto. Buyer shall not intentionally take any action prior to the
`Closing Date which would or might disqualify Buyer as the established
`and licensed operator of the Facility or delay the DOH Approval. Once
`the Application has been submitted to DOH, there shall be no change in
`the proposed members of Buyers unless necessary to resolve character,
`competence or financial issues raised by DOH in its review of the
`Application and provided such change shall not violate any other
`provision of this Agreement.
`
`11.
`
`Under Section 12.3 of the AP A, one of the conditions precedent to the
`
`Buyer's obligation to close the Transaction was that the Buyer shall have received the DOH
`
`Approval and the TP A Approval. Section 12 states:
`
`12.
`
`CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER TO
`
`CLOSE
`
`The obligations of Buyer to close on the Transaction are subject to the
`fulfillment at or prior to the Closing Date of all of the following conditions
`precedent unless such fulfillment is waived in writing by the Buyer:
`
`12.3 Regulatory Approval. Buyer shall have received the DOH
`Approval and the TP A Approval.
`
`13.
`
`Pursuant to Section 6 of the APA, and subject to the Section 12 (above),
`
`Section 13 (Conditions Precedent To The Obligations Of Seller To Close) and Section 14
`
`(Termination; Remedies), the Closing Date of the Transaction was to take place within 15 days
`
`after receipt by Buyer, or its representative, of the DOH Approval. However, Section 14.1.4 of
`
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`the AP A, to which Section 6 was subject, provided that the Seller or the Buyer could terminate
`
`the AP A upon written notice to the other party if the Transaction did not occur within 12 months
`
`of the date of the AP A, that is, by June 24, 2017 (the "Outside Closing Date").
`
`14.
`
`Plaintiff submitted its application for a CON seeking the DOH Approval
`
`on or about August 26, 2016 and diligently pursued obtaining the DOH Approval.
`
`15.
`
`Plaintiff submitted its TP A Application on or about May 26, 2017 and
`
`diligently pursued obtaining the TPA Approval.
`
`16.
`
`Plaintiff was notified by HUD that it had obtained conditional TPA
`
`Approval by letter dated June 23, 2017. A copy of this letter is annexed as Exhibit C. However,
`
`DOH Approval had not been obtained by June 24, 2017, the Outside Closing Date.
`
`17.
`
`On June 27,2017, Plaintiff, by its attorney, Stacy J. Flanigan ofGutnicki
`
`LLP, sent a notice to Seller pursuant to Section 14.1.4 of the APA terminating the APA. A copy
`
`of Buyer's June 27, 2017, notice to Defendant is annexed as Exhibit D.
`
`18.
`
`On July 3, 2017, Plaintiff, by its attorney, Stacy J. Flanigan of Gutnicki
`
`LLP, made demand on the Escrow Agent for return of the Down Payment, less $50,000.00,
`
`pursuant to Section 14.2.1 of the APA. That Section provides:
`
`14.2.1 Down Payment to Buyer. In the event this Agreement is
`terminated pursuant to Section 14.1.1 hereof, Buyer shall be entitled to the
`return of the Down Payment. In the event this Agreement is terminated
`pursuant to Section 14.1.4 hereof, Buyer shall be entitled to receive all but
`$50,000.00 of the Down Payment and $50,000.00 of the Down Payment
`shall be retained by Seller to reimburse Seller for costs and expenses
`incurred by Seller in connection with the Transaction.
`
`(A copy of the July 3 letter to the Escrow Agent (the "Escrow Delivery Demand") is annexed as
`
`Exhibit E.)
`
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`19.
`
`On July 18, 2017, Defendant, by its attorney, Joseph C. Kaplan of Tenzer
`
`and Lunin LLP, sent a letter to the Escrow Agent, ostensibly pursuant to Section 4 of the Escrow
`
`Agreement, objecting to Plaintiff's Escrow Delivery Demand (the "Delivery Objection Letter,"
`
`a copy of which is annexed as Exhibit F.)
`
`20.
`
`In the Delivery Objection Letter, Defendant's attorney made two
`
`assertions. First, Defendant claimed that, notwithstanding Buyer's termination of the APA
`
`pursuant to Section 14.1.4, in fact it was Defendant that was entitled to the full Down Payment
`
`because (notwithstanding Section 14.2.1's directive), Plaintiff had terminated the APA for a
`
`reason other than a Seller Default under 14.1.1, and APA Section 14.2.2 thus required that the
`
`full Down Payment go to Defendant as Seller. Second, Defendant had separately purported to
`
`"reject" Plaintiff's June 27,2017 termination of the APA under Section 14.1.4 and, instead, itself
`
`purported to terminate the AP A (that Buyer had already terminated) because of putative uncured
`
`Buyer Defaults, thereby likewise entitling Defendant to the entire Down Payment pursuant to
`
`APA Section 14.2.2. Defendant posited its supposed ability to reject Buyer's termination and to
`
`itself terminate the APA in a July 18, 2017letter (the "July 18 Termination Rejection Letter")
`
`which it enclosed with the Delivery Objection Letter. (A copy of the July 18 Termination
`
`Rejection Letter is annexed as Exhibit G.)
`
`21.
`
`The right by either party to terminate the APA under Section 14.1.4 was
`
`by its terms unconditional, subject only to Buyer's right to extend the Outside Closing Date for
`
`an additional 90 days upon fulfillment of certain conditions set forth therein.
`
`22.
`
`Defendant's effort in the July 18 Rejection Letter to terminate the AP A,
`
`which Buyer had already properly terminated on June 27, 2017, and to improperly retain the
`
`Down Payment on that basis, was premised on putative Buyer Defaults that Defendant had
`
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`previously suggested in a letter dated May 25, 2017, and which Plaintiff had debunked as
`
`unfounded in a letter dated June 19, 2017. (A copy of Defendant's attorney's May 25, 2017
`
`Buyer Default Letter is annexed as Exhibit H; the response by Plaintiff's attorney is annexed as
`
`Exhibit 1.)
`
`23.
`
`By letter dated July 28, 2017, Buyer's attorney responded to and rejected
`
`Defendant's putative termination of the AP A set forth in its July 18 Rejection Letter. (A copy of
`
`this letter is annexed as Exhibit J.) By letter dated the same date, Buyer's attorney responded to
`
`Defendant's Delivery Objection Letter, rejected Defendant's own stated bases for its demand for
`
`delivery to it of the Down Payment, and objected to delivery of the Down Payment to Defendant.
`
`(A copy of this letter is annexed as Exhibit K.)
`
`FIRST CAUSE OF ACTION
`DECLARATORY .JUDGMENT
`
`24.
`
`Plaintiff repeats and realleges the preceding paragraphs of this Complaint.
`
`25.
`
`Plaintiff has demanded and is entitled to the return of the Down Payment,
`
`less $50,000.00, pursuant to Section 14.2.1 of the APA, which demand Defendant has rejected in
`
`the Delivery Objection Letter.
`
`26.
`
`Defendant has sent a Delivery Objection Letter to the Escrow Agent
`
`objecting to the return of the Down Payment, less $50,000.00, to Plaintiff.
`
`27.
`
`AP A Section 14.2.1 provides that, if the AP A is terminated pursuant to
`
`Section 14.1.4, then the Down Payment, less $50,000.00 which shall be retained by Seller to
`
`reimburse it for costs and expenses it incurred in connection with the Transaction, shall be
`
`delivered to Buyer.
`
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`28.
`
`Plaintiff, as Buyer, validly terminated the APA pursuant to Section 14.1.4
`
`thereof and made proper demand on the Escrow Agent for delivery of the Down Payment to it,
`
`less $50,000.00, pursuant to APA Section 14.2.1.
`
`29.
`
`In the Delivery Objection Letter, Defendant objected to delivery of the
`
`Down Payment, less $50,000.00, to Plaintiff. Pursuant to the Escrow Agreement, the Escrow
`
`Agent may not return the Down Payment to Plaintiff absent, as relevant here, a final judgment of
`
`this Court that is no longer subject to appeal or under appeal.
`
`30.
`
`As a result thereof, a justiciable controversy exists as to the rights of the
`
`parties under the AP A and the Escrow Agreement.
`
`SECOND CAUSE OF ACTION
`DECLARATORY JUDGMENT
`
`31.
`
`Plaintiff repeats and realleges paragraphs 1 through 23 of this Complaint.
`
`32.
`
`In the Delivery Objection Letter, Defendant objected to delivery of the
`
`Down Payment, less $50,000.00, to Plaintiff and asserted that, notwithstanding the explicit terms
`
`of AP A Section 14.2.1, Defendant itself was entitled to delivery of the full Down Payment
`
`pursuant to AP A Section 14.2.2, because Plaintiff had terminated the AP A for a reason other
`
`than a Seller Default pursuant to APA Section 14.1.1.
`
`33.
`
`Defendant's interpretation of its right to the Down Payment pursuant to
`
`Section 14.2.2 when either party terminates the APA pursuant to Section 14.1.4 would read a
`
`broad, general provision as overriding a provision specifically applicable to a termination
`
`pursuant to APA Section 14.1.4, namely Section 14.2.1, and. renders the provision regarding
`
`Buyer's entitlement to the Down Payment under these circumstances, as explicitly set forth in
`
`Section 14.2.1, meaningless.
`
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`34.
`
`As a result thereof, a justiciable controversy exists as to the rights of the
`
`parties under the AP A and the Escrow Agreement.
`
`THIRD CAUSE OF ACTION
`DECLARATORY .JUDGMENT
`
`35.
`
`Plaintiff repeats and realleges paragraphs 1 through 23 of this Complaint.
`
`36.
`
`Section 14.1.2 of the AP A provides:
`
`14.1.2 In the event of a Buyer material breach, default or failure to fulfill
`any representation, warrant or covenant of this Agreement prior to the
`Closing (in each instance, "Buyer Default') and the continuance of such
`Buyer Default for twenty (20) days following the receipt by Buyer of
`written notice from Seller specifying the Buyer Default, Seller shall have
`the right, upon written notice to Buyer, to terminate this Agreement. The
`waiver by Seller of a breach hereunder shall not operate or be construed as
`a waiver of any subsequent breach.
`
`37.
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`On May 25, 2017, Defendant's attorney sent a notice of Buyer Default to
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`Buyer positing putative Buyer Defaults. (A copy of the May 25, 2017 Buyer Default Notice is
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`annexed as Exhibit H.) On June 19, 2017, Buyer's attorney responded to and rejected the
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`putative Buyer Defaults as being unfounded. (A copy of the June 19 response is annexed as
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`Exhibit I).
`
`38.
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`On June 27, 2017, Plaintiff, as Buyer, terminated the APA pursuant to
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`Section 14.1.4 thereof. Plaintiff's right to terminate the APA pursuant to that Section was
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`unconditional.
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`39.
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`Thereafter, Defendant sent the July 18 Termination Rejection Letter
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`purporting to reject Plaintiff's June 27 termination of the APA and claiming Seller's right to
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`terminate the AP A for putative uncured defaults supposedly set forth in the May 25 Default
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`Letter.
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`40.
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`Defendant's assertion of an ability to reject Plaintiff's June 27, 2017
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`termination of the AP A pursuant to Section 14.1.4 thereof is contractually unfounded.
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`41.
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`Defendant's assertion of a right to terminate the APA on July 18, 2017 on
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`the basis of putative uncured Buyer Defaults is contractually unfounded and factually baseless.
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`42.
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`As a result thereof, there is a justiciable controversy concerning the rights
`
`of the Parties under the AP A.
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`FOURTH CAUSE OF ACTION
`BREACH OF CONTRACT
`
`43.
`
`44.
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`Plaintiff repeats and realleges paragraphs 1 through 23 of this Complaint.
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`As a result of its baseless Delivery Objection Letter, its attempt to
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`terminate the already terminated AP A, its attempt to prevent delivery of the Down Payment, less
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`$50,000.00, to Plaintiff and its attempt to obtain delivery of the Down Payment for itself,
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`Defendant has breached the AP A.
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`45.
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`46.
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`As a result of said breaches, the Plaintiff has been damaged.
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`The Plaintiff's damages include, but are not limited to its Deposit in the
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`amount of$ 450.000.00, counsel fees and court costs.
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`WHEREFORE, Plaintiff prays that this Court enter judgment in favor of Plaintiff and
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`against Defendants:
`
`1.
`
`On the First Cause of Action:
`
`(a)
`
`pursuant to CPLR § 3001, declaring that Plaintiff properly
`
`terminated the APA pursuant to APA Section 14.1.4 and directing the Escrow Agent
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`and/or Defendant to release the Down Payment, less $50,000.00 to Plaintiff pursuant to
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`Section 14.2.1 of the APA; and pursuant to CPLR § 3001 directing the return of the
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`Down Payment, less $50,000.00, to Plaintiff.
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`(b)
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`pursuant to CPLR § 3001 directing the Escrow Agent and/or
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`Defendant to release the Down Payment, less $50,000.00, to Plaintiff and directing the
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`Escrow Agent to release $50,000.00 of the Down Payment to Defendant.
`
`(c)
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`for such other and further relied as may be appropriate.
`
`2.
`
`On the Second Cause of Action:
`
`(a)
`
`pursuant to CPLR § 3001, declaring that Plaintiff properly
`
`terminated the AP A pursuant to Section 14.1.4, that Plaintiff is entitled to return of the
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`Down Payment, less $50,000.00, pursuant to Section 14.2.1 of the APA, that Defendant
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`is entitled only to $50,000.00 of the Down Payment as provided in Section 14.2.1 of the
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`AP A, that Defendant has no right to any portion of the Down Payment under Section
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`14.2.2 of the AP A, and directing the Escrow Agent and/or Defendant to release the Down
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`Payment, less $50,000.00 to Plaintiff pursuant to Section 14.2.1 of the APA and
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`directing the Escrow Agent to release $50,000.00 of the Down Payment to Defendant;
`
`and
`
`(b)
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`for such other and further relief as may be appropriate
`
`3.
`
`On the Third Cause of Action:
`
`(a)
`
`pursuant to CPLR § 3001, declaring that Plaintiff properly
`
`terminated the AP A pursuant to Section 14.1.4, that Plaintiff is entitled to return of the
`
`Down Payment, less $50,000.00, pursuant to Section 14.2.1 of the APA, that Defendant
`
`is entitled only to $50,000.00 of the Down Payment as provided in Section 14.2.1 of the
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`APA, that Defendant has no ability under the APA or otherwise to reject Plaintiff's July
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`7, 2017 termination of the AP A pursuant to Section 14.1.4, that Defendant's putative
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`termination of the APA on July 18, 2017 for putative uncured Buyer Defaults is
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`contractually ineffective as well as factually unfounded, and directing the Escrow Agent
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`and/or Defendant to release the Down Payment to Plaintiff pursuant to Section 14.2.1 of
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`theAPA;
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`(b)
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`For such other and further relief as may be appropriate
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`4.
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`On the Fourth Cause of Action, in the alternative,
`
`(a)
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`for compensatory damages in the amount of $250,000.00.
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`On all causes of Action, for interest as provided by contract and by law
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`For costs of this proceeding plus reasonable attorneys' fees.
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`For such other and further relief as this Court may deem appropriate.
`
`5.
`
`6.
`
`7.
`
`Dated: August 8, 2017
`
`ALLEGAERT BERGER & VOGEL LLP
`
`By:
`
`s/Hyman L. Schaffer
`Hyman L. Schaffer
`
`111 Broadway, 20th Floor
`New York, New York 10006
`Tel: (212) 571-0550
`Fax: (212) 571-0555
`
`Attorneys for Plaintiff
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`ASSET PURCHASE AGREEMENT
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`dated as of June 24, 2016
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`by and between
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`Batavia Health Care Center, LLC
`
`and
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`Batavia Operating, LLC
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`: 1171101<1100181885 2Jl
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`ASSET PURCHASE AGREEMENT
`
`AGREEMENT (the "Agreement") made as of June 24, 2016 (the "Contract Date") by
`and between Batavia Health Care Center, LLC, a New York limited liability company, having
`its principal place of business at 257 State Street, Batavia, New York 14020 ("Seller"), and
`Batavia Operating, LLC, a New York limited liability company with an address at 257 State
`St., Batavia, New York 14020 (''~r," and together with Seller, the "Parties" and each a
`··rarty").
`
`WHEREAS, Buyer, as Tenant, has entered into a certain Lease (the "Premises Lease")
`with Batavia Realty, LLC, as Landlord, providing for the leasing by Buyer of certain furniture,
`fixtures and equipment and the premises known as 257 State Street, Batavia, New York 14020
`(the "Premises"), as provided therein; and
`
`WHEREAS, Seller is the owner and licensed operator of Batavia Health Care Center, a
`skilled nursing facility (the "Facility") located at the Premises; and
`
`WHEREAS, Seller desires to sell, and Buyer desires to purchase, certain assets of Seller
`relating to the facility, upon the terms and subject to the conditions set forth in this Agreement.
`
`NOW, THEREFORE, in consideration of the premises, the mutual promises contained
`herein and for other good and valuable consideration, receipt of which is hereby acknowledged,
`the Parties agree as follows:
`
`I.
`
`CERTAIN DEFINED TERMS
`
`"Basic Assets" means all of Seller's right, title and interest in the following assets
`1.1.
`relating to the Facility as constituted as of 12:01 a.m. of the morning of the Closing Date (as
`hereinafter defined):
`
`1.1.1
`the business and operation of the Facility, except for the Excluded Assets
`(as hereinafter defined);
`
`1.1.2 all leasehold improvements, furniture, fixtures and equipment owned or
`leased by Seller (other than such items as are to be leased by Landlord to Tenant pursuant
`to the Premises Lease);
`
`1.1.3 all inventory, supplies, and other articles of personal property, except for
`the Excluded Assets (as hereinafter defined);
`
`: 1171/0141001818852:2
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`1.1.4 all contracts, agreements, leases, undertakings, commitments and other
`arrangements (collectively the "Assumed Contracts"), but excluding any Excluded Assets
`(as hereinafter defined);
`
`1.1.5 all trade names, logos, trademarks and service marks (or variations
`thereof) associated with the Facility, its programs and the Basic Assets;
`
`J .1.6 all security deposits and prepayments, if any, for future services held by
`
`Seller;
`
`1.1.7 all menus, policies and procedures manuals and computer softwar