Common use of Operator Matters Clause in Contracts

Operator Matters. (a) Without duplication of the representations and warranties contained in Section 4.12, to the Knowledge of Sellers, each Facility Operator has been issued and is, or as of immediately prior to the Core Portfolio Closing, will have been issued and will be, in good standing with respect to any and all Provider Agreements and Permits (including, without limitation, any of the same issued by a Health Department) that are necessary for the current conduct of its business and/or the current use and operation (the “Primary Use”) of each of the Acquired Properties as a nursing facility, assisted living facility and/or rehabilitation hospital (collectively, the “Operator Licenses”). To the Knowledge of the Sellers, neither any Seller, any Acquired Company, any Facility Operator or any Acquired Property is the subject of any Proceeding, examination or investigation by any Health Department or other Governmental Entity concerning an actual or alleged material violation of any Laws, including, but not limited to, any billing regulations or governmental guidance or any Operator Licenses other than in the ordinary course and for which plans of correction that are acceptable to the Health Department or such other Governmental Entity, as the case may be, have been submitted thereto. To the Knowledge of Sellers, the Operator Licenses apply to the Acquired Properties and will not be transferred to any location other than the applicable Acquired Property. As used herein, “Health Departments” shall mean departments of health and/or any Governmental Entities of the state where any applicable Acquired Property is located which have jurisdiction over the licensing, ownership and/or operations of such Acquired Property as an assisted living and/or nursing facility and/or rehabilitation facility being operated or proposed to be operated on the property leased pursuant to the Property Leases.

Operator Matters. (ai) Without duplication of the representations and warranties contained in Section 4.12, to the Knowledge of Sellers, each Facility Operator Seller has been issued and is, or as of immediately prior to the Core Portfolio Closing, will have been issued and will be, is in good standing with respect to any and all Provider Agreements and Permits from all applicable Governmental Authorities (including, without limitation, any of the same issued by a Health Department) that are necessary for the current conduct of its business and/or the current use and operation (the “Primary Use”) of each of the Acquired Properties as a nursing facility, assisted living facility and/or rehabilitation hospital (collectively, the “Operator Licenses”). To the Knowledge of the Sellers, neither any Seller, any Acquired Company, any Facility Operator or any Acquired Property is the subject of any Proceeding, examination or investigation by any Health Department or other Governmental Entity concerning an actual or alleged material violation of any Laws, including, but not limited to, any billing regulations Health Department) necessary for the use, operation and maintenance of each Facility and the conduct of such Seller’s business therein. To Seller’s knowledge, Seller is not the subject of any investigation, proceeding or governmental guidance or examination by any Operator Licenses other than in the ordinary course and for which plans of correction that are acceptable to the Health Department or such other Governmental EntityAuthority, as commission, board or agency concerning an actual or alleged violation of any laws, ordinances, rules, regulations or Permits. Seller agrees that prior to the case Closing Date or earlier termination of this Agreement, the Permits (i) may not be, and have not been submitted thereto. To the Knowledge of Sellers, the Operator Licenses apply to the Acquired Properties and will not be be, transferred to any location other than the applicable Acquired Property. As used hereinFacilities; (ii) except for obligations under the NHP Lease, “Health Departments” shall mean departments of health and/or are not and will not be pledged as collateral security for any Governmental Entities loan or indebtedness that will not be released at Closing; (iii) are held and will remain free from restrictions or known conflicts which would materially impair the use or operation of the state where Facilities; and (iv) are not provisional, probationary or restricted in any applicable Acquired Property way. (ii) Except as set forth on Schedule 5.2(t)(ii), neither Seller nor Manager is located which involved in any litigation, proceeding, or to Seller’s knowledge investigation (by or with any person, resident, Health Department or Governmental Authority), nor does Seller have jurisdiction over the licensingany knowledge of any claim or threatened litigation, ownership and/or operations of such Acquired Property as an assisted living and/or nursing facility and/or rehabilitation facility being operated proceeding or proposed to be operated investigation, that would have a material adverse impact on the property leased value or use of the Facilities, Seller’s leasehold estate pursuant to the Property LeasesNHP Lease or the Transferred Personal Property. To Seller’s knowledge, other than regularly scheduled audits and reviews, no validation review, peer review or program integrity review related to any Facility or Seller has been conducted by any entity, commission, board or agency in connection with the Medicare, Medicaid, Medicaid waiver or any other federal or state health program, and to Seller’s knowledge, no such reviews are scheduled, pending or threatened against or affecting any Facility or Seller. (iii) To Seller’s knowledge, with respect to each Facility, the Permits and Provider Agreements represent all of the licenses, Permits, approvals and Provider Agreements necessary to operate the Facilities as assisted living or dementia care facilities. (iv) Seller has delivered to Purchaser accurate and complete copies of all Operator Reports for the last three (3) years. The Operator Reports are accurate in all material respects. All material reports, documents and notices required to be filed, maintained or furnished by Seller to any governmental agency with respect to all of the Facilities have been so filed, maintained or furnished. Except as disclosed on Schedule 5.2(t)(iv), there are no defects or deficiencies to or with respect to any Facility or Provider Agreement cited in any survey or cost report provided, submitted or made by or to any Governmental Authority under Medicaid, any Third Party Payor Program or any law, ordinance, rule or regulation that remain uncured. (v) No notice of any violation issued by a Governmental Authority has been received by Seller that would, directly or indirectly, or with the passage of time: (A) impact Seller’s ability to accept and/or retain patients and/or residents at a Facility for assisted living or dementia care; (B) have a material adverse effect on Seller’s ability to operate the Facilities for assisted living or dementia care or result in the imposition of a fine or sanction; or (C) modify, limit or annul or result in the transfer, suspension, or revocation or imposition of probationary use of any of the Permits. (vi) Except as disclosed on Schedule 5.2(t)(vi), no Facility has received a “Level A” (or equivalent) violation under Medicaid, as applicable, and no statement of charges or deficiencies has been made or penalty enforcement action has been undertaken against any Facility or Seller, or against any officer or director of Seller by any Governmental Authority during the last three calendar years, and there have been no violations over the past three years which would threaten any Facility or Seller’s certification for participation in Medicaid or any other Third Party Payor Programs, including Medicaid waiver program contracts. (vii) There are no current, pending or outstanding or to Seller’s knowledge, threatened Medicaid, Medicaid waiver or Third Party Payor Programs reimbursement audits or appeals pending at any Facility. (viii) To Seller’s knowledge, there are no current or pending Medicaid, Medicaid waiver or Third Party Payor Programs’ recoupment efforts with respect to any Facility. Seller is not a participant in any federal program whereby any governmental agency may have the right to recover funds by reason of the advance of federal funds; provided that this sentence is not intended to apply to Medicaid. (ix) There are no Provider Agreements held by or issued to Seller or the Facilities under which the Facilities are eligible to receive payment under Medicare. (x) Except as set forth in Schedule 5.2(t)(x), since January 1, 2007, no state or federal regulatory agency with jurisdiction over any Facility has: (i) made a substandard quality of care determination regarding such Facility; (ii) made a determination that such Facility is not in substantial compliance with any applicable regulatory requirements; (iii) designated any portion of such Facility or the entirety of such Facility as part of a “poor performing chain”; or (iv) taken adverse regulatory action with respect to such Facility including, without limitation, the imposing of civil money penalties and no such action set forth in (i)-(iv) above are pending. (xi) If and to the extent required, Seller has assessed residents of the Facilities in accordance with all Governmental Requirements related to assisted living home care providers, dementia care, home and community-based waivered services (if applicable), as well as other Governmental Requirements and has determined that all residents of the Facilities have been appropriately assessed to live at the Facilities as of the Effective Date; provided that Purchaser acknowledges that even though a resident has been assessed, such resident’s condition may change over time, which will require another assessment. Seller agrees that it will comply with all Governmental Requirements in re-assessing such residents. (xii) Seller has not provided residential nursing care or skilled living facility care or administered medications within the meaning of Governmental Requirements regulating the operation of nursing home or skilled nursing facilities so as to cause a Material Adverse Effect. (xiii) To Seller’s knowledge, there are no waivers, exemptions, or exceptions of Governmental Requirements relating to the operation of the Facilities that will cease to apply as a result of the transfer to Purchaser which are material. (xiv) To Seller’s knowledge, Seller, Manager, Hearthstone, their officers, directors and employees, and Persons who provide services under agreements with Seller or the Facilities have been and are in material compliance with the federal Medicaid statutes, state laws and regulations relating to licensure of the Facilities and contracting to participate in the Medicaid program and applicable Medicaid waiver programs, 42 U.S.C. §§ 1320a-7(a), 1320a-7b and 1395nn, as amended, and the regulations promulgated thereunder or any applicable state and local statutes and regulations and rules of professional conduct, and have not within the six (6) year period ending on the Closing Date, such that such actions or inactions, individually or in the aggregate, would have a Material Adverse Effect: (A) knowingly and willfully made or caused to be made a false statement or representation of a material fact in any application for any benefit or payment; (B) knowingly and willfully made or caused to be made any false statement or representation of a material fact for use in determining rights to any benefit or payment; (C) presented or caused to be presented a claim for reimbursement for services under Medicaid, a Medicaid waiver program, or other state or federal healthcare programs that is for an item or service that is known to be (a) not provided as claimed, or (b) false or fraudulent; (D) failed to disclose knowledge by a claimant of the occurrence of any event affecting the initial or continued right to any benefit or payment on its own behalf or on behalf of another, with intent fraudulently to secure such benefit or payment; (E) knowingly and willfully illegally offered, paid, solicited or received any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind (i) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by Medicaid or any other state or federal healthcare programs, or (ii) in return for purchasing, leasing or ordering or arranging for or recommending purchasing, leasing or ordering any good, facility, service, or item for which payment may be made in whole or in part by Medicaid or any other state or federal healthcare programs; (F) knowingly made a payment, directly or indirectly, to a physician as an inducement to reduce or limit services to individuals who are under the direct care of the physician and who are entitled to benefits under Medicaid or any other state or federal healthcare programs; (G) provided to any person information that is known or should be known to be false or misleading that could reasonably be expected to influence the decision when to discharge a hospital in-patient from the hospital; (H) knowingly and willfully made or caused to be made or induced or sought to induce the making of any false statement or representation (or omitted to state a fact required to be stated therein or necessary to make the statements contained therein not misleading) of a material fact with respect to (i) the conditions or operations of a Facility in order that such Facility may qualify for Medicaid or other state or federal healthcare program certification, or (ii) information required to be provided under § 1124A of the Social Security Act (42 U.S.C. § 1320a-3); (I) knowingly and willfully charged (i) for any Medicaid, or Medicaid waiver program service, money or other consideration at a rate in excess of the rates established by the state or federal government, as applicable, or (ii) for services covered (in whole or in part) by Medicaid, or any Medicaid waiver program, charged, solicited, accepted or received, in addition to amounts paid by Medicaid, or such waiver program, any gift, money, donation or other consideration (other than a charitable, religious or philanthropic contribution from an organization or from a person unrelated to the patient) (a) as a precondition of treating the patient, or (b) as a requirement for the patient’s continued treatment; (J) had or has any “financial relationship” with any “referring physician” or an immediate family member of such physician, within the meaning of those terms under 42 U.S.C. § 1395nn; or (K) contracted with or employed any person or entity excluded from participation in Medicaid or any other state or federal healthcare programs.

Operator Matters. (ai) Without duplication of the representations and warranties contained in Section 4.12, to the Knowledge of Sellers, each Facility Operator has been issued and is, or as of immediately prior to the Core Portfolio Closing, will have been issued and will be, in good standing with respect to any and all Provider Agreements and Permits (including, without limitation, any of the same issued by a Health Department) that are necessary for the current conduct of its business and/or the current use and operation (the “Primary Use”) of each of the Acquired Properties as a nursing facility, assisted living facility and/or rehabilitation hospital (collectively, the “Operator Licenses”). To the Knowledge best of the SellersSeller’s knowledge, neither any Seller, any Acquired Company, any Facility Operator or any Acquired Property Seller is not the subject of any Proceedinginvestigation, proceeding or examination or investigation by any Health Department or other Governmental Entity governmental or quasi-governmental authority commission, board or agency concerning an actual or alleged material violation of any Lawslaws, includingordinances, but not limited torules, any billing regulations or governmental guidance regulations, or any Operator Licenses other than in the ordinary course and for which plans of correction that are acceptable to the Health Department or such other Governmental EntityPermits, except as the case set forth on Schedule 5.2(r)(i). The Permits (i) may not be, and have not been submitted thereto. To the Knowledge of Sellers, the Operator Licenses apply to the Acquired Properties and will not be be, transferred to any location other than the applicable Acquired PropertyFacilities; (ii) are not and will not be pledged as collateral security for any loan or indebtedness that will not be released at Closing; and (iii) are held and will remain free from restrictions or known conflicts which would materially impair the use or operation of the Facilities and shall not be provisional, probationary or restricted in any way. (ii) Except as set forth on Schedule 5.2(r)(ii), Seller is not involved in any litigation, proceeding, or investigation (by or with any person, employee, resident, Health Department or Governmental Authority), nor does Seller have any knowledge of any claim or threatened litigation, proceeding or investigation. As used hereinOther than regularly scheduled audits, “Health Departments” shall mean departments surveys and reviews, no validation review, peer review or program integrity review related to any Facility or the Seller has been conducted by any entity, commission, board or agency in connection with any Permit or federal or state health program, and no such reviews are scheduled, pending or threatened against or affecting any Facility or Seller. (iii) With respect to each Facility, the Permits and Provider Agreements represent all of health and/or the licenses, Permits, approvals, and Provider Agreements necessary in order to operate the Facilities as assisted living and memory care facilities. (iv) Seller has delivered to Purchaser accurate and complete copies of all Operator Reports for the last three (3) years. The Operator Reports are accurate in all material respects. All material reports, documents and notices required to be filed, maintained or furnished by Seller to any governmental agency with respect to all of the Facilities have been so filed, maintained or furnished. Except as disclosed on Schedule 5.2(r)(iv), there are no defects or deficiencies to or with respect to any Facility or Provider Agreement cited in any survey provided, submitted or made by or to any Governmental Entities Authority under any Third Party Payor Program or any law, ordinance, rule or regulation that remain uncured. (v) Neither Seller nor any of the Facilities is the subject of any proceeding by any Governmental Authority, nor to the best of Seller’s knowledge, threatened with any such proceedings, and no notice of any violation has been issued by a Governmental Authority that would, directly or indirectly, or with the passage of time: (A) impact Seller’s ability to accept and/or retain residents at a Facility; (B) have a Material Adverse Effect on Seller’s ability to accept and/or retain residents or operate the Facilities or result in the imposition of a fine or sanction; or (C) modify, limit or annul or result in the transfer, suspension, or revocation or imposition of probationary use of any of the Permits. (vi) No Facility has now, nor at any time in the past has, entered into any Provider Agreements with or otherwise been a provider, vendor or contractor under Medicaid, Medicare, any Medicaid waiver program, or any other state where or federal health care program. Seller is not a participant in any federal program whereby any governmental agency may have the right to recover funds by reason of the advance of federal funds. (vii) There are no current, pending or outstanding Third Party Payor Programs reimbursement audits or appeals pending at any Facility, and there are no years that are subject to audit. There are no current or pending Third Party Payor Programs’ recoupment efforts at any Facility. (viii) No state or federal regulatory agency with jurisdiction over any Facility has: (i) made a substandard quality of care determination regarding any Facility; (ii) made a determination that any Facility is not in substantial compliance with any applicable Acquired Property is located which have jurisdiction over regulatory requirements; (iii) designated any portion of any Facility or the licensingentirety of any Facility as part of a “poor performing chain”; or (iv) taken adverse regulatory action with respect to any Facility including, ownership and/or operations without limitation, the imposing of such Acquired Property as an civil money penalties. (ix) If and to the extent required, Seller has assessed residents of the Facilities in accordance with all Governmental Requirements related to assisted living and/or home care providers, memory care, home and community-based waivered services (if applicable), as well as other Governmental Requirements and has determined that all residents of the Facilities have been appropriately assessed to live at the Facilities as of the Effective Date. (x) Other than delegated services acceptable under assisted living regulations in Texas, Seller has not provided residential nursing care or skilled living facility and/or rehabilitation facility being operated care or proposed to be operated on administered medications within the property leased pursuant meaning of Governmental Requirements regulating the operation of nursing home or skilled nursing facilities. (xi) To the best of Seller’s knowledge, there are no waivers, exemptions, or exceptions of Governmental Requirements relating to the Property Leasesoperation of the Facilities that will cease to apply as a result of the transfer to Purchaser which are material. (xii) Seller, its officers, directors and employees, and to the best of Seller’s knowledge Persons who provide services under agreements with Seller or the Facilities have been and are in material compliance with state laws and regulations relating to licensure and operation of the Facilities or any applicable federal, state and local statutes and regulations and rules of professional conduct. (xiii) Neither Seller nor any of the Facilities is a covered entity under HIPAA.

Operator Matters. (a) Without duplication of the representations and warranties contained in Section 4.12, to the Knowledge of Sellers, each Facility Operator has been issued and is, or as of immediately prior to the Core Portfolio Closing, will have been issued and will be, in good standing with respect to any and all Provider Agreements material governmental licenses, permits, registrations, filings, orders, qualifications, approvals and Permits authorizations (including, without limitation, any of the same issued by a Health Department) that are necessary for the current conduct of its business and/or the current use and operation (the “Primary Use”) of each of the Acquired Properties Real Property Assets as a nursing facility, assisted living facility and/or rehabilitation hospital (collectively, the “Operator Licenses”). To the Knowledge of the Sellers, neither any SellerNeither VSCRE, any Acquired Company, Subsidiary or any Facility Operator or nor any Acquired Real Property Asset is the subject of any Proceeding, examination or investigation by any Health Department or other Governmental Entity concerning an actual or alleged material violation of any Laws, including, but not limited to, any billing regulations or governmental guidance Laws or any Operator Licenses other than in the ordinary course and for which plans of correction that are acceptable to the Health Department or such other Governmental Entity, as the case may be, have been submitted thereto. To the Knowledge of Sellers, the The Operator Licenses (i) apply to the Acquired Properties Real Property Assets and will not be transferred to any location other than the applicable Acquired PropertyReal Property Assets; and (ii) are not and will not be pledged as collateral for any Indebtedness other than Indebtedness that will be repaid or defeased as contemplated by Section 6.6(a) or Assumed Property Debt. As used herein, “Health Departments” shall mean departments of health and/or any Governmental Entities of the state where any applicable Acquired Real Property Asset is located which have jurisdiction over the licensing, ownership and/or operations of such Acquired Real Property Asset as an independent, assisted living and/or nursing facility and/or rehabilitation facility being operated or proposed to be operated on the property leased pursuant to the Property Leases.