Common use of Operations Transfer Agreement Clause in Contracts

Operations Transfer Agreement. Simultaneous with the execution of this Agreement, Sellers and New Operators shall enter into the Operations Transfer Agreement which includes, among other things, the following: (i) the hiring by New Operators of a sufficient number of employees at each Facility to avoid WARN reporting requirements along with a full credit to New Operators for all accrued employee sick, vacation and holiday pay (including associated payroll taxes); (ii) New Operators’ right to reject all service contracts at each Facility; (iii) indemnification and post-closing protection to New Operators from Sellers for pre-closing liabilities and claims under the Operations Transfer Agreement, including but not limited to Medicare and Medicaid overpayments, MDS adjustments, civil monetary penalties, bed taxes, claims relating to the patient trust funds, unpaid taxes, and any and all claims or demands which occurred or accrued prior to the Closing Date (collectively, “OTA Claims”), and providing for Sellers and New Operators to enter into the Escrow Holdback Agreement; (iv) procedures for post-closing adjustments for accounts receivable and accounts payable, including prorations for all applicable bed taxes (collectively, “OTA Post-Closing Adjustments”); and (v) transfer of patient trust funds, Personal Property, and to the extent allowable by federal law and state law, the existing Medicare and Medicaid provider agreements. All of the conditions to the obligations of New Operators set forth in the Operations Transfer Agreement shall have been fulfilled or waived and Sellers shall have fulfilled, in accordance with the terms of the Operations Transfer Agreement, all of their obligations thereunder such that there is no event of default under the Operations Transfer Agreement on behalf of Sellers. Notwithstanding the foregoing, Sellers and Purchasers acknowledge and agree that (a) Sellers cannot submit this Agreement for approval to the Chancery Court for Davidson County, Tennessee or the Attorney General for the State of Tennessee as required by Section 15(o) herein, until the parties have executed and agreed on the terms of the Operations Transfer Agreement; and (b) the Operations Transfer Agreement shall include a provision similar the provisions of Sections 17(a)-(c) herein, wherein Purchasers and New Operators acknowledge and agree that the indemnity and reimbursement liabilities of Sellers under the Operations Transfer Agreement, the Escrow Holdback Agreement and this Agreement (including, without limitation, OTA Claims and OTA Post-Closing Adjustments) shall not under any circumstances exceed cumulatively, the Maximum Indemnity Amount (as defined herein). The term “Maximum Indemnity Amount”) shall mean: (i) TWO MILLION DOLLARS ($2,000,000.00) during the first year immediately following the Closing Date, (ii) ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00) during the calendar year immediately following the first anniversary of the Closing Date, (iii) ONE MILLION DOLLARS ($1,000,000.00) during the calendar year immediately following the second anniversary of the Closing Date, and (iv) FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) during the six month period immediately following the third anniversary of the Closing Date (provided, however, during such six month period under clause (iv), Sellers’ Surviving Liabilities (as defined in Section 17(a) herein) shall be limited to indemnity obligations of Sellers relating to any settlement, adjustment, disallowance, overpayment, set off against future payments or reimbursement, or recoupment arising from any cost report filed with any government healthcare program for any period ending on or before the Closing Date, including any such cost report filed after the Closing Date for prior periods, and any demand for return of any payments made in any period before the Closing Date by any government healthcare program, whether by the government healthcare program or a contractor acting on behalf of a government healthcare program). 10370945.3 20

Operations Transfer Agreement. Simultaneous with the execution of this Agreement, Sellers and New Operators shall enter into the Operations Transfer Agreement which includes, among other things, the following: (i) the hiring by New Operators of a sufficient number of employees at each Facility to avoid WARN reporting requirements along with a full credit to New Operators for all accrued employee sick, vacation and holiday pay (including associated payroll taxes); (ii) New Operators’ right to reject all service contracts at each Facility; (iii) indemnification and post-closing protection to New Operators from Sellers for pre-closing liabilities and claims under the Operations Transfer Agreement, including but not limited to Medicare and Medicaid overpayments, MDS adjustments, civil monetary penalties, bed taxes, claims relating to the patient trust funds, unpaid taxes, and any and all claims or demands which occurred or accrued prior to the Closing Date (collectively, “OTA Claims”), and providing for Sellers and New Operators to enter into the Escrow Holdback Agreement; (iv) procedures for post-closing adjustments for accounts receivable and accounts payable, including prorations for all applicable bed taxes (collectively, “OTA Post-Closing Adjustments”); and (v) transfer of patient trust funds, Personal Property, and to the extent allowable by federal law and state law, the existing Medicare and Medicaid provider agreements. All of the conditions to the obligations of New Operators set forth in the Operations Transfer Agreement shall have been fulfilled or waived and Sellers shall have fulfilled, in accordance with the terms of the Operations Transfer Agreement, all of their obligations thereunder such that there is no event of default under the Operations Transfer Agreement on behalf of Sellers. Notwithstanding the foregoing, Sellers and Purchasers acknowledge and agree that (a) Sellers cannot submit this Agreement for approval to the Chancery Court for Davidson County, Tennessee or the Attorney General for the State of Tennessee as required by Section 15(o) herein, until the parties have executed and agreed on the terms of the Operations Transfer Agreement; and (b) the Operations Transfer Agreement shall include a provision similar the provisions of Sections 17(a)-(c) herein, wherein Purchasers and New Operators acknowledge and agree that the indemnity and reimbursement liabilities of Sellers under the Operations Transfer Agreement, the Escrow Holdback Agreement and this Agreement (including, without limitation, OTA Claims and OTA Post-Closing Adjustments) shall not under any circumstances exceed cumulatively, the Maximum Indemnity Amount (as defined herein). The term “Maximum Indemnity Amount”) shall mean: (i) TWO MILLION DOLLARS ($2,000,000.00) during the first year immediately following the Closing Date, (ii) ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00) during the calendar year immediately following the first anniversary of the Closing Date, (iii) ONE MILLION DOLLARS ($1,000,000.00) during the calendar year immediately following the second anniversary of the Closing Date, and (iv) FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) during the six month period immediately following the third anniversary of the Closing Date (provided, however, during such six month period under clause (iv), Sellers’ Surviving Liabilities (as defined in Section 17(a) herein) shall be limited to indemnity obligations of Sellers relating to any settlement, adjustment, disallowance, overpayment, set off against future payments or reimbursement, or recoupment arising from any cost report filed with any government healthcare program for any period ending on or before the Closing Date, including any such cost report filed after the Closing Date for prior periods, and any demand for return of any payments made in any period before the Closing Date by any government healthcare program, whether by the government healthcare program or a contractor acting on behalf of a government healthcare program). 10370945.3 2020 (m.) FF&E. Substantially all of the FF&E and Personal Property shall be located at the Facilities on the Closing Date. (n.)

Operations Transfer Agreement. Simultaneous with As of the execution of this Agreement, Sellers and New Operators shall enter into the Operations Transfer Agreement which includes, among other thingsEffective Date, the following: Property is leased by Seller to SH CCRC, LLC (i“Operator”) the hiring by New Operators of a sufficient number of employees at each Facility to avoid WARN reporting requirements along with a full credit to New Operators for all accrued employee sick, vacation and holiday pay (including associated payroll taxes); (ii) New Operators’ right to reject all service contracts at each Facility; (iii) indemnification and post-closing protection to New Operators from Sellers for pre-closing liabilities and claims under the Operations Transfer Agreement, including but not limited to Medicare and Medicaid overpayments, MDS adjustments, civil monetary penalties, bed taxes, claims relating pursuant to the patient trust fundsterms of that certain Lease dated as of November 1, unpaid taxes2007 (as amended to date, and any and all claims the “Facility Lease”). On or demands which occurred or accrued prior to before forty-five (45) days from the Closing Effective Date (collectively, the “Outside OTA ClaimsDate”), Purchaser shall negotiate, execute and providing for Sellers enter into an operations transfer agreement (the “OTA”) with Operator, pursuant to which, inter alia, Purchaser and New Operators Operator shall make certain agreements and arrangements concerning the orderly transfer and transition of the business operations at the Property. Purchaser hereby agrees to diligently pursue the mutual execution of the OTA, and to exercise best efforts to enter into the Escrow Holdback Agreement; (iv) procedures for post-closing adjustments for accounts receivable OTA on or before the Outside OTA Date. Purchaser hereby acknowledges and accounts payable, including prorations for all applicable bed taxes (collectively, “OTA Post-Closing Adjustments”); agrees that Seller is only selling to it the Property and (v) transfer of patient trust funds, Personal Property, and to the extent allowable by federal law and state law, the existing Medicare and Medicaid provider agreements. All of the conditions to the obligations of New Operators set forth in the Operations Transfer Agreement Purchaser shall have been fulfilled or waived and Sellers shall have fulfilled, in accordance with the terms of the Operations Transfer Agreement, all of their obligations thereunder such that there is no event of default under the Operations Transfer Agreement solely rely on behalf of Sellers. Notwithstanding the foregoing, Sellers and Purchasers acknowledge and agree that (a) Sellers cannot submit this Agreement for approval to the Chancery Court for Davidson County, Tennessee or the Attorney General for the State of Tennessee as required by Section 15(o) herein, until the parties have executed and agreed on the terms of the Operations Transfer Agreement; and (b) the Operations Transfer Agreement shall include a provision similar the provisions of Sections 17(a)-(c) hereinthe OTA with respect to the transfer of any operational assets and liabilities in connection with the operation of the business conducted at the Property. Upon execution, wherein Purchasers Purchaser shall provide Seller with a copy of the OTA executed by Purchaser and New Operators acknowledge and agree that Operator. Notwithstanding anything herein which may be construed to the indemnity and reimbursement liabilities of Sellers under the Operations Transfer Agreementcontrary, the Escrow Holdback Agreement and this Agreement (including, without limitation, OTA Claims and OTA Post-Closing Adjustments) shall not under any circumstances exceed cumulatively, the Maximum Indemnity Amount (as defined herein). The term “Maximum Indemnity Amount”) shall mean: (i) TWO MILLION DOLLARS ($2,000,000.00) during the first year immediately following the Closing Date, (ii) ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00) during the calendar year immediately following the first anniversary termination of the Closing Date, (iii) ONE MILLION DOLLARS ($1,000,000.00) during the calendar year immediately following the second anniversary of the Closing Date, and (iv) FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) during the six month period immediately following the third anniversary of the Closing Date (Facility Lease shall be a condition precedent to Seller’s obligation to proceed to Closing; provided, however, during such six month period under clause (iv), Sellers’ Surviving Liabilities (as defined in Section 17(a) herein) shall Seller covenants and agrees to use commercially reasonable efforts to cause the Facility Lease to be limited to indemnity obligations of Sellers relating to any settlement, adjustment, disallowance, overpayment, set off against future payments or reimbursement, or recoupment arising from any cost report filed terminated concurrently with any government healthcare program for any period ending the Closing. If Purchaser has not entered into the OTA on or before the Closing Outside OTA Date and provided Purchaser has otherwise complied with its obligations under this Section 5, Purchaser shall have the right to terminate this Agreement by written notice to Seller, delivered on or before the OTA Outside Date, including in which case, the Deposit (and all interest thereon) shall be returned to Purchaser and neither party shall have any such cost report filed after further rights or obligations hereunder, except those specifically survive the Closing Date for prior periods, and any demand for return of any payments made in any period before the Closing Date by any government healthcare program, whether by the government healthcare program or a contractor acting on behalf of a government healthcare program). 10370945.3 20termination hereof.