EXHIBIT 10.1
LEASE TERMINATION AND
OPERATIONS TRANSFER AGREEMENT
THIS LEASE TERMINATION AND OPERATIONS TRANSFER AGREEMENT (the
"Agreement") is made and entered into as of the 31st day of March, 2002 by and
between (i) DIVERSICARE ASSISTED LIVING SERVICES, INC., a Tennessee corporation
("Lessee"), and (ii) XXX X. XXXXXX, an individual, and any person or entity to
whom this Agreement is assigned in accordance with Section 17 hereof
("Assignee").
RECITALS
A. Pursuant to each Lease And Option to Purchase identified on Exhibit
A attached hereto by and between Lessee and, as applicable, Pleasant Care
Associates, L.P. and Xxxxx Investment Company, L.P., as Lessors (each a "Lease"
and collectively, the "Leases"), Lessee is currently the lessee of the two (2)
adult care home facilities identified on Exhibit A attached hereto (each a
"Facility" and together the "Facilities"), located in the State of North
Carolina and the State of Virginia as more particularly set forth in Exhibit A
attached hereto.
B. Lessee and Assignee wish to assign all of Lessee's right, title and
interest in, and under, the Leases to Assignee, with possession and operation of
the premises and property that are the subject of the Leases (the "Leased
Property") being turned over to Assignee. In connection with such assignment,
Assignee is willing to assume certain obligations with respect to each Facility,
subject to the terms and conditions set forth in this Agreement.
C. In order to facilitate an orderly transfer of the operations of each
Facility from Lessee to Assignee, Lessee and Assignee desire to document certain
terms and conditions relevant to the transfer of operational control and
responsibility for each Facility.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements of the parties set forth herein, the parties
hereto agree as follows:
AGREEMENT
1. Termination; Surrender of Leased Property; Releases.
1.1 Transfer Date. If all of the conditions to the completion
of the transactions contemplated herein are satisfied, the closing of the
transactions contemplated herein (the "Transfer Date") shall occur and be
effective as of 12:01 a.m. on the date that the applicable governmental agencies
of the State of North Carolina and the State of Virginia having jurisdiction
over each Facility has approved the transfer of operations of the Facilities to
Assignee in accordance with applicable state laws relating to the change of
ownership/transfer of license of each Facility.
1.2 Assignment of Lease. On the Transfer Date, Lessee will
assign to Assignee all of its right, title and interest in, to and under each
Lease and Assignee will assume all of the rights
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and obligations of the Lessee under each Lease pursuant to an Assignment and
Assumption of Lease in the form attached hereto as Exhibit B to be executed by
Lessee and Assignee. On or before the Transfer Date, Assignee shall obtain the
acknowledgment and consent, in writing, of each Lessor under each Lease, to the
assignment of the Leases to Assignee and the release of Lessee from its duties
and obligations under each Lease. A short form memorandum of each Lease having
been previously recorded, on the Transfer Date the parties shall execute for
each Lease a Notice of Assignment of Lease in form sufficient for recording in
order to provide record notice of the assignment of each Lease by Lessee to
Assignee.
1.3 Delivery of Leased Property; Transfer of Lessee's Personal
Property. On the Transfer Date, Lessee will vacate and surrender to Assignee,
and will deliver possession and control to Assignee, all of the Leased Property
that is the subject of each Lease. On the Transfer Date, Lessee will also
transfer, assign and deliver to Assignee all of Lessee's right, title and
interest in and to, and the possession and control of, all equipment, motor
vehicles, machinery, furniture, fixtures, trade fixtures, inventory of goods and
supplies and all other tangible and intangible personal property owned or leased
by Lessee and located at or used in connection with and necessary for the
operation of each Facility ("Lessee's Personal Property"), including the right
to the use of the name under which each Facility is doing business or has done
business during Lessee's use and occupancy and the operations, policies and
procedures manuals specific to each Facility, if any, as were in place at the
Facility at the time the Facility was leased to Lessee by the owner thereof, but
excluding (i) any leased property that is the subject of a Declined Contract (as
defined in Paragraph 8), (ii) Lessee's wide area network and associated software
provided on the Diversicare wide area network, (iii) Lessee's continuous quality
improvement program, manuals and materials, management information systems,
policy, procedure and educational manuals and materials, and similar proprietary
property of Lessee, and (iv) any rights in or to the use of the name "Advocat"
or "Diversicare", or any derivative thereof, and subject to the rights of any
lessors of any of Lessee's Personal Property. On the Transfer Date, Lessee will
make, execute and deliver a Xxxx of Sale and Assignment in the form attached
hereto as Exhibit C sufficient to transfer Lessee's interest in Lessee's
Personal Property to Assignee. The presence of the Lessee's Personal Property at
each Facility on the Transfer Date shall constitute delivery thereof. Any items
of Lessee's Personal Property containing the name or logo of "Diversicare" or
"Advocat", or any derivative thereof, at any Facility as of the Transfer Date
shall be replaced and either destroyed by Assignee or returned to Lessee. As of
the Transfer Date, Assignee will discontinue the use of any stationary or other
supplies at any Facility which contain reference to such names.
1.4 Transfer As To Both Facilities. It is understood and
agreed that this Agreement is intended to and does provide for the assignment of
the Lease and transfer of operations for both Facilities, irrespective of the
fact that they are located in separate states requiring the approval of separate
governmental agencies and are owned by different third party lessors, and that
the closing of assignment of the Lease and transfer of operations of each
Facility, and the obligation of the Lessee to consummate the transactions
contemplated by this Agreement, is conditioned upon the closing of the
assignment of the Lease and transfer of operations of the other Facility as
provided for herein.
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2. As Is/Where Is.
All of the Leased Property and Lessee's Personal Property will be
transferred and delivered to Assignee by Lessee on the Transfer Date, and will
be accepted by Assignee, "as is," "where is,", with no warranty of habitability,
use or fitness for habitation with respect to any real estate and improvements
and with no warranties, including the warranty of merchantability or fitness for
a particular purpose, with respect to all of the other property, and all of
which warranties (both express and implied) Lessee hereby disclaims. Assignee
has, or will have on or before the Transfer Date, examined and inspected the
Leased Property and Lessee's Personal Property and knows and is satisfied with,
or will know and be satisfied with, its condition and Assignee are not now
relying, and will not later rely, upon any representations or warranties made
(or asserted to have been made) by Lessee, Advocat or anyone claiming to act by,
through or under or on their behalf concerning the Leased Property and Lessee's
Personal Property. Prior to the Transfer Date, Assignee shall have the right,
upon reasonable advance notice and during normal business hours, to enter the
Facilities for the purpose of inspecting the Real and Personal Property and
determining Lessee's compliance with the terms of this Agreement, subject to any
security, health, safety or privacy requirements or rights of the residents and
employees of each Facility. Lessee shall have the right to have a representative
present at all times during any such inspection by Assignee.
3. Transfer of Resident Trust Funds.
3.1 On or before the Transfer Date, Lessee shall deliver to
Assignee a true, correct and complete accounting (properly audited and
reconciled) of all security deposits, resident accounts and resident trust funds
(collectively, the "Resident Trust Funds") and an inventory of all other
residents' property, if any, held by Lessee on the Transfer Date for residents
at each Facility. On the Transfer Date, Lessee shall transfer the Resident Trust
Funds and any other residents' property at each Facility to Assignee and
Assignee hereby agrees that it will accept such Resident Trust Funds and any
other residents' property in trust for the residents, in accordance with
applicable statutory and regulatory requirements.
3.2 Lessee will indemnify, defend and hold Assignee harmless
from all liabilities, claims and demands, including reasonable attorneys' fees,
in the event the amount of the Resident Trust Funds, or other residents'
property, if any, transferred to Assignee do not represent the full amount of
the Resident Trust Funds or other property shown to have been delivered to
Lessee as custodian for the residents at the Facility or for claims which arise
from actions or omissions of Lessee with respect to the Resident Trust Funds or
other property prior to the Transfer Date. Assignee will indemnify, defend and
hold Lessee harmless from all liabilities, claims and demands, including
reasonable attorneys' fees, in the event a claim is made against Lessee by a
resident for his/her Resident Trust Funds or property where such funds or
property were properly calculated and transferred to Assignee pursuant to the
terms hereof.
4. Employees.
4.1 Employment of Existing Employees. On the Transfer Date,
Assignee shall, subject to the provisions of Section 4.2 below, have the right
and option of offering to employ any or
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all of Lessee's employees that work at each Facility. Lessee shall terminate the
employment of any employees at each Facility that Assignee does not elect to
employ. In order to determine compliance with Section 4.2, below, Assignee shall
advise Lessee in writing on or before ten (10) days prior to the Transfer Date
of those employees of Lessee that Assignee has elected not to employ. Lessee
shall remain liable for all Employee Liabilities (as herein defined) relating to
all employees of Lessee at each Facility that accrue up to the Transfer Date.
Assignee shall assume and be responsible for all Employee Liabilities with
respect to all employees of Lessee at each Facility hired by Assignee that
accrue on or after the Transfer Date. Without limiting the generality of the
foregoing, Lessee shall remain liable from and after the Transfer Date for all
obligations of Lessee, if any, to provide continuation of health insurance
coverage in accordance with COBRA to those employees of Lessee not hired by
Assignee and eligible to utilize COBRA as a result of the termination of their
employment by Lessee as herein provided. As used herein, "Employee Liabilities"
means wages, salaries, earned and accrued vacation, holiday and sick pay, all
accrued paid days off and sick days, and earned or accrued bonuses, if any, due
to employees at each Facility and health insurance, payroll and payroll taxes,
unemployment and FICA expenses.
4.2 WARN Act. Anything in this Agreement to the contrary
notwithstanding, Assignee shall employ such number of Lessee's employees at each
Facility and shall retain for a period of ninety (90) days following the Closing
Date such number of Lessee's employees at each Facility as shall be necessary to
avoid any potential liability by Lessee for a violation of the Workers
Adjustment Retraining and Notification Act (the "WARN Act") (or any similar law
of the State of North Carolina or the State of Virginia) attendant to Lessee's
failure to notify such employees of a "mass layoff" or "plant closing" as
defined in the WARN Act (or any similar law of the State of North Carolina or
the State of Virginia). For purposes of determining compliance by Assignee with
the foregoing provisions, employees at each Facility terminated by Lessee during
the period of ninety (90) days immediately prior to the Transfer Date for other
than cause, retirement or voluntary departure, all of whom are listed in Exhibit
D, shall be taken into consideration. Assignee shall indemnify Lessee from and
against any liability for any WARN Act violations resulting from the aggregation
of the terminations of employment by Lessee during the ninety (90) days
immediately preceding the Transfer Date listed on Exhibit D with the
terminations of employment of Lessee's employees at each Facility on or after
the Transfer Date in violation of this Section 4.2. Nothing herein contained
shall be deemed either to affect or to limit in any way the management
prerogatives of Assignee with respect to employees, or to create or to grant to
such employees any third party beneficiary rights or claims or causes of action
of any kind or nature. In the event at the time of the execution of this
Agreement, Exhibit D is not attached hereto, Lessee and Assignee agree that the
provisions of this Section 4.2 shall nonetheless be effective and binding upon
Lessee and Assignee provided that Exhibit D is delivered by Lessee to Assignee
and is attached hereto on or before the Transfer Date.
5. Accounts Receivable.
5.1 Lessee shall retain its right, title and interest in and
to all unpaid accounts receivable with respect to each Facility which relate to
the period prior to the Transfer Date. On or before the Transfer Date, Lessee
shall provide Assignee with a schedule setting forth by resident its outstanding
accounts receivable as of the Transfer Date.
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5.2 Payments received by Assignee after the Transfer Date from
third party payors and private pay residents which relate to periods prior to
the Transfer Date, Assignee shall collect as Lessee's agent for the limited
purpose of such collection. Assignor shall remit to Lessee the gross proceeds of
such collection with thirty (30) days following the end of each month thereafter
for a maximum of six (6) months. Lessee shall be responsible for collecting all
receivables thereafter. Lessee and Assignor each agree to provide the other
party with any information in its possession reasonably requested by such party
with respect to accounts receivable and amounts received.
5.3 Lessee shall timely file or cause to be filed all cost
reports required to be filed with respect to the purchase of services by
Medicaid or Medicare prior to the Transfer Date and pay all amounts required
thereunder for any periods prior to the Transfer Date. Lessee shall be entitled
to receive any refund or other benefit which may result from the filing of said
reports. Lessee shall remain liable for the refund of any overpayments made to
Lessee prior to the Transfer Date for which payment is due to Medicaid or any
other third party payor after the Transfer Date arising from services provided
by Lessee at each Facility prior to the Transfer Date. After the Transfer Date,
Assignee shall assist Lessee in any way reasonably necessary to complete such
cost reports in a timely manner.
5.4 Each party hereto covenants and agrees to remit or
forward, with reasonable promptness, to the other (i) any payments received,
which payments are on or in respect of accounts or notes receivable owned by (or
are otherwise payable to) the other or (ii) any notifications, mailings or other
written communications (including such communications from Medicaid or Medicaid
or other government payor) received by such party which pertain to the other
party or such other party's operation of any Facility. It is understood and
agreed that, in connection with the operation of the Facilities from and after
the Transfer Date, Assignee will apply for and obtain its own provider account
numbers for each Facility prior to the Transfer Date and shall not be entitled
to use the Lessee's provider account number(s) for the Facilities, which shall
remain the sole and exclusive property of Lessee.
6. Prorations; Liabilities.
6.1. Revenues and expenses pertaining to Assumed Contracts (as
defined in Section 8), and real and personal property taxes attributable to each
Facility shall be prorated between Lessee and Assignee as of the Transfer Date.
In general, such prorations shall be made so as to reimburse Lessee for prepaid
expense items and to charge Lessee for prepaid revenue items that are
attributable to the period after the Transfer Date and to charge Lessee for
expenses payable after the Transfer Date that are attributable to the period
prior to the Transfer Date.
6.2. There shall be no proration of utility charges or any
other payables or expenses attributable to each Facility as of the Transfer
Date, it being the intent of the parties that the Lessee shall pay the bills
therefore for the period prior to the Transfer Date and Lessors shall pay the
bills therefore for the period on and after the Transfer Date. Utilities for
each Facility will be cut off in Lessee's name on the last day prior to the
Transfer Date and Lessee shall be entitled to the return of any deposit in
respect thereof. Assignee shall be responsible for obtaining utility services in
its name
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for the Facilities, ensuring that the same are available on the Transfer Date,
and making any deposits necessary therefore prior to the Transfer Date. Lessee
will notify its suppliers, other than the Assumed Contracts, that the cut off
date for their provision of supplies or services to the Facilities will be the
last day prior to the Transfer Date.
6.3. All prorations required hereunder shall be made on the
basis of actual days elapsed in the relevant accounting or revenue period and
shall be based on the most recent information available to Lessee. All amounts
owing from one party hereto to the other party hereto that require adjustment
after the Transfer Date shall be settled within thirty (30) days after the
Transfer Date, or, in the event the information necessary for such adjustment is
not available within said 30-day period, then as soon thereafter as practicable.
6.4. Notwithstanding the fact that the Transfer Date is the
first day of a calendar month, there shall be no proration of and Lessee shall
not be required to pay all or any portion of the monthly installment of rent
which, by the terms of each Lease, is due on the first day of each calendar
month. Assignee will be responsible for the monthly installment of rent, if any,
due and payable on and as of the Transfer Date under the Leases.
7. Access to Records.
7.1 On the Transfer Date, Lessee shall deliver to Assignee all
of the books and records for each Facility, including, but not limited to,
resident medical and financial records and employee records for those employees
of Lessee at each Facility hired by Assignee in accordance with Section 4.1
hereof. The turnover of records and information with respect to residents of
each Facility which are in the possession of Lessee shall be subject to
applicable legal requirements and rights governing the confidentiality of
resident records, but Lessee shall cooperate with Assignee in facilitating
requests to residents of each Facility to consent to the transfer to Assignee of
such records and information.
7.2 After the Transfer Date, Assignee shall allow Lessee and
its agents and representatives to have reasonable access to (upon reasonable
prior notice and during normal business hours), and to make copies of, the books
and records (including, subject to obtaining residents' or resident's authorized
representative consent, medical records for pre-Transfer Date residents) and
supporting material of each Facility relating to the period prior to the
Transfer Date, to the extent reasonably necessary to enable Lessee (i) to
investigate and defend malpractice, employee or other claims, (ii) to prepare
work papers for financial reports, tax returns and cost reports, (iii) to answer
any questions raised relating to patient billing with respect to the
pre-Transfer Date period, (iv) to investigate any claims for overpayment made to
Lessee, and (v) to verify accounts receivable collections due Lessee. Lessee
shall be entitled to remove the originals of any records delivered to Assignee
for purposes of litigation involving a resident or employee to whom such record
relates, but only if an officer of or counsel for Lessee certifies that such
original must be produced in order to comply with applicable law or the order of
a court of competent jurisdiction in connection with such litigation, and if
such is consistent with applicable law governing resident records. Any record so
removed shall promptly be returned to Assignee following its use. For a period
of six (6) months after the Transfer Date, Assignor shall allow Lessee and its
agents and representatives shall have
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access to (upon reasonable prior notice and during normal business hours but not
more than one (1) time in each calendar month) the cash receipts journals of
each Facility and other records relating to cash receipts or other forms of
payment received or collected in respect of each Facility from and after the
Transfer Date for the purpose of verifying the allocation of cash receipts or
other forms of payment in accordance with Section 5 hereof. Following its
receipt of the final remittance of receivables from Assignor at the end of the
six (6) month period as provided for in Section 5.2, above, Lessee shall have
the one-time right, if it so elects, to have access to such cash receipts
journals and other records of each Facility for the purpose of performing an
audit, at Lessee's sole cost and expense, in order to verify Assignor's
compliance with Section 5; provided that Lessee gives Assignor written notice of
its election to perform such audit within fifteen (15) days after its receipt of
such final remittance and thereafter promptly commences and diligently
prosecutes such audit to completion. Assignor shall reasonably cooperate with
Lessee in the performance of such audit.
7.3 Assignee agrees to maintain such books, records and other
material comprising records of the operations of each Facility prior to the
Transfer Date that have been received by Assignee from Lessee or otherwise,
including, but not limited to, resident records and records of resident funds,
to the extent required by law, but in no event less than three (3) years, and
shall allow Lessee a reasonable opportunity not to exceed thirty (30) days to
remove such documents, at Lessee's expense, at such time after such record
retention period as may be required by law if Assignee shall decide to destroy
or dispose of such documents. Assignee shall provide Lessee not less than
forty-five (45) days, nor more than ninety (90) days, prior written notice of
such destruction or disposal. If Lessee desires to obtain any such documents, it
may do so by notifying Assignee in writing at any time prior to the scheduled
date of destruction or disposal, in which event Assignee shall not destroy such
documents and the parties shall promptly arrange for the delivery of such
documents to Lessee, at Lessee's expense.
8. Assumed/Declined Contracts. Effective as of the Transfer Date,
Lessee shall transfer and assign to Assignee all of Lessee's interest in, and
Assignee shall assume the obligations of Lessee under and agree to perform and
be bound by all of the terms and conditions of, the following (collectively, the
"Assumed Contracts"): (i) all admission policy agreements, patient's rights
agreements and/or any other patient or resident tenancy or occupancy agreements
(collectively the "Occupancy Agreements") with existing residents of each
Facility (provided, however, that nothing herein shall prevent Assignee from
asking existing residents or requiring newly admitted residents to sign new
Occupancy Agreements with the Assignee) and (ii) all of the operating contracts
and agreements with third parties for the sale, lease or provision of goods,
services or equipment in connection with the operation of each Facility
(collectively, the "Service Contracts") other than the Declined Contracts, if
any (as hereinafter defined). Such assignment and assumption shall be made
pursuant to an Assignment and Assumption Agreement in the form attached hereto
as Exhibit E, to be executed on the Transfer Date by Lessee and Assignee. Lessee
will cooperate with Assignee in obtaining any required consent, waiver or
approval in connection with the assignment to and assumption by Assignee of
Lessee's interests and obligations under the Assumed Contracts, but Lessee shall
have no liability to Assignee for any damages incurred by Assignee as a result
of its failure or inability to obtain any consent or waiver necessary to assume
any Assumed Contract. Nothing herein shall be construed as imposing any
liability on Assignee with respect to any
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obligations under (a) the Assumed Contracts which relate to the period prior to
the Transfer Date even if the same are not payable until after the Transfer
Date, it being specifically understood and agreed that Assignee's liability
shall be limited to its acts and omissions thereunder from and after the
Transfer Date or (b) the contracts and agreements specifically listed and
described in Exhibit F hereto which Assignee has advised Lessee in writing prior
to the Transfer Date it is not prepared to assume as of the Transfer Date (the
"Declined Contracts"). Lessee will provide Assignee with copies of all Service
Contracts for Assignee's inspection and approval prior to the Transfer Date. In
the event that at the time of the execution of this Agreement Exhibit F is not
attached hereto, Lessee and Assignee agree that the provisions of this Section 8
shall be effective and binding upon Lessee and Assignee provided that Exhibit F
is delivered and accepted by Assignee and Lessee and attached hereto on or
before the Transfer Date.
9. Mutual Releases.
9.1 Release by Lessee. Effective as of the Transfer Date,
Lessee shall and does hereby release and forever discharge Assignee, its
employees, agents and representatives from any and all liabilities or
obligations, of whatever kind or nature, known or unknown, that Assignee, its
agents, employees or representatives, has, had or may have to Lessee arising out
of or based upon each Lease, or the use and occupancy of each Facility by
Lessee, or its agents, employees and representatives, except with respect to (i)
any breach of this Agreement by Assignee or (ii) any future performance of
Assignee required by this Agreement or (iii) any claim for indemnification
pursuant to Section 9.3., below.
9.2 Release by Assignee. Effective as of the Transfer Date,
Assignee shall and does hereby release and forever discharge Lessee, its
employees, agents and representatives, from any and all liabilities or
obligations, of whatever kind or nature, known or unknown, that Lessee, or its
agents, employees and representatives, has, had or may have to Assignee arising
out of or based upon each Lease, or the use and occupancy of each Facility by
Lessee, or its agents, employees and representatives, except with respect to (i)
any breach of this Agreement by Lessee or (ii) any future performance of Lessee
required by this Agreement or (iii) any claim for indemnification pursuant to
Section 9.3., below.
9.3 Claims by a Straddle Patient. Any claim by a resident
relating to professional negligence or similar matters involving a resident of a
Facility served prior to the Transfer Date and/or subsequent to the Transfer
Date or any claims made by or for any third parties for personal injury or death
occurring at a Facility will be the responsibility of either Assignee or Lessee
in accordance with the following guidelines: (i) if it is a claim in which
clearly the incident giving rise to liability arose during Lessee's use and
occupancy of the Facility but prior to the Transfer Date, Lessee shall respond
to, and will hold harmless and indemnify Assignee from and against, the claim
and defense expenses; (ii) if it is a claim in which clearly the incident giving
rise to liability arose subsequent to the Transfer Date, Assignee shall respond
to, and will hold harmless and indemnify Assignee from and against, the claim
and defense expenses; and (iii) in the event that the incident giving rise to
liability as to time is not clear, Lessee and Assignee will jointly defend the
claim and each will fully cooperate with the other in such defense. Once the
claim is settled, closed or otherwise disposed of, if Assignee and Lessee cannot
agree to the allocation of both indemnity and
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expenses, then the matter shall be submitted to binding arbitration in
accordance with the rules and procedures of the American Arbitration
Association.
10. Representations, Warranties and Covenants.
10.1 Assignee hereby represents and warrants that it has all
necessary power and authority to enter into this Agreement and to execute all
documents and instruments referred to herein or contemplated hereby and all
necessary action has been taken to authorize the individual executing this
Agreement to do so, and this Agreement has been duly and validly executed and
delivered by Assignee and is enforceable against Assignee in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy
laws and general principles of equity.
10.2 Lessee hereby represents and warrants that it has all
necessary power and authority to enter into this Agreement and to execute all
documents and instruments referred to herein or contemplated hereby and to
consummate the transaction provided for herein, and all necessary action has
been taken to authorize the individual executing this Agreement to do so, and
this Agreement has been duly and validly executed and delivered by Lessee and is
enforceable against Lessee in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy laws and general
principles of equity.
10.3 Assignee covenants and agrees that, as of the Transfer
Date, (i) Assignee will have all licenses, permits and approvals required of
Assignee by the State of North Carolina and the State of Virginia to operate
each Facility as a fully licensed, adult care home facility, except to the
extent that there has been a waiver of such compliance from the applicable
governmental authorities having jurisdiction thereof and (ii) each Facility will
be duly certified to participate, and does participate, in the Medicaid and/or
Medicare programs, if any, available in each such state under valid Medicaid
and/or Medicare contracts.
10.4 Lessee covenants and agrees that between the date hereof
and the Transfer Date: (i) Lessee will provide all necessary information
requested by Assignee for the preparation and filing of any and all necessary
applications or notifications to any federal or state governmental authority
having jurisdiction over a change in the operational control of each Facility,
and any other information reasonably required to effect an orderly transfer of
each Facility, (ii) Lessee shall use its reasonable best efforts to keep the
business and organization of each Facility intact and to preserve for Assignee
the goodwill of the suppliers, distributors, residents and others having
business relations with Lessee with respect to each Facility; and (iii) except
in the case of an emergency or if required by law, Lessee shall not move or
solicit the move of any residents presently situated at either Facility.
10.5 Lessee represents and warrants that, except as otherwise
provided in this Agreement, between the date hereof and the Transfer Date (i)
Lessee will continue to carry on its business and activities relating to the
Facilities in the substantially same manner as it did prior to the date hereof,
(ii) Lessee will continue to perform its obligations as Lessee under the Leases,
(iii) Lessee will not enter into any new contract or other agreement that will
be an obligation affecting any Facility subsequent to the Transfer Date without
the prior written consent of the Assignee, which
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consent shall not be unreasonably withheld, and (iv) Lessee will not dispose of
any equipment, machinery, furnishings, fixtures or inventory, except in the
ordinary course of business.
10.6 Lessee represents and warrants that, to the best of
Lessee's knowledge, Lessee has permitted no liens or encumbrances (except for
the current year's taxes to be prorated as of the Transfer Date) to be placed
upon any of the Leased Property and that if any such lien or encumbrance is
placed or permitted to be placed on any of the Leased Property between the date
hereof and the Transfer Date, Lessee will cause the same to be removed prior to
the Transfer Date. For purposes of this Section 10.6, the term "Lessee's
Knowledge" shall be deemed to mean and be limited to the personal knowledge of
the following officers or representatives of Lessee: Xxx Raupauch, Xxxxx
Xxxxxxx, Xxxxxxx Xxxxx, Xx. Xxxxxxx Xxxxxxx, and Will Council, but shall in no
event be deemed to include the personal knowledge of Xxx X. Xxxxxx, who was
formerly employed by Lessee.
11. Conditions to Close. In addition to the condition expressed in
Section 1.4 hereof, the obligations of Lessee and Assignee to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions on or prior to the Transfer Date or the dates
designated elsewhere in this Agreement for the satisfaction of such conditions:
(a) All of the representations and warranties of the parties contained
herein shall be true and correct in all material respects as of the date of this
Agreement and as of the Transfer Date;
(b) As of the Transfer Date, each party shall have performed its
obligations hereunder and all documents to be made executed and/or delivered on
the Transfer Date shall have been tendered;
(c) There shall exist no actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, pending or threatened against
any party hereto that would materially and adversely affect the ability of any
party hereto to perform its obligations under this Agreement;
(d) There shall exist no pending or threatened action, suit or
proceeding with respect to any party hereto before or by any court or
administrative agency (i) which seeks to restrain, suspend or prohibit resident
admission(s) to a Facility, (ii) which seeks to impose a provisional license or
the failure to comply with which could result in the imposition of a provisional
license as to any Facility, or (iii) which seeks to restrain or prohibit, or to
obtain damages or a discovery order with respect to, this Agreement or the
consummation of the transactions contemplated hereby;
(e) Assignee and Lessee shall have obtained all consents, releases and
approvals from all third parties from whom such consents, releases or approvals
are necessary to consummate the transactions contemplated hereby, including
without limitation, the case of Lessee, the consent of AmSouth Bank, and in the
case of the Assignee, the consent of the lessors under the Leases and release of
Lessee described in Section 1.2, above, and, if applicable or necessary, the
holders of any mortgages on the Facilities;
(f) Assignee shall have obtained all of the licenses, permits,
approvals and certifications described in Section 10.3, above, necessary for the
continued operation as an adult care home of each Facility to be turned over to
it by Lessee pursuant to this Agreement; and
10
(g) The termination of the Xxxxxx Leases described in that certain
Lease Termination Agreement and Operations Transfer Agreement of even date
herewith by and among Assignee and certain of its affiliates, Diversicare
Assisted Living Services NC, LLC and Advocat Inc. and the consummation of the
transfer of operations, assignments, releases and other transactions described
therein shall have been completed as contemplated and described in said
Agreement.
12. Termination. Notwithstanding anything in this Agreement to the
contrary, this Agreement and the obligations of the parties hereunder may be
terminated on or prior to the Transfer Date as follows:
(a) By Lessee (i) in the event the transactions contemplated by this
Agreement have been prohibited or enjoined by reason of any final judgment,
decree or order entered or issued by a court of competent jurisdiction in
litigation or proceedings involving either Assignee or Lessee; or (ii) in the
event Assignee breach or violate any material provision of this Agreement or
fail to perform any material covenant or agreement to be performed by Assignee
under the terms of this Agreement, and Lessee has provided written notice
thereof to Assignee giving reasonable specificity and Assignee have not cured
same within a reasonable period of time and such breach is not waived by Lessee
in writing.
(b) By Assignee (i) in the event the transactions contemplated by this
Agreement have been prohibited or enjoined by reason of any final judgment,
decree or order entered or issued by a court of competent jurisdiction in
litigation or proceedings involving either Assignee or Lessee; or (ii) in the
event Lessee breaches or violates any material provision of this Agreement or
fails to perform any material covenant or agreement to be performed by Lessee
under the terms of this Agreement and Assignee have provided written notice
thereof to Lessee giving reasonable specificity and Lessee has not cured same
within a reasonable period of time and such breach is not waived by Assignee in
writing.
(c) By Assignee or by Lessee if the Transfer Date hereunder shall not
have taken place by September 1, 2002, or by such later date as shall be agreed
upon by an appropriate amendment to this Agreement if the parties agree in
writing to an extension, provided that a party shall not have the right to
terminate under this Section 11 if the conditions precedent to such party's
obligation to close have been fully satisfied and such party has failed or
refused to close within a reasonable time after being requested in writing to
close by the other party.
13. Further Assurances. Each of the parties hereto agrees to execute
and deliver any and all further agreements, documents or instruments necessary
to effectuate this Agreement and the transactions referred to herein or
contemplated hereby or reasonably requested by the other party to perfect or
evidence their rights hereunder.
14. Notices. All notices to be given by any party to this Agreement to
the other party hereto shall be in writing, and shall be (a) given in person,
(b) deposited in the United States mail, certified or registered, postage
prepaid, return receipt requested or (c)sent by national overnight courier
service, each addressed as follows:
11
(a) If to Assignee: 0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxx X. Xxxxxx
(b) If to Lessee or Advocat: 000 Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Any such notice personally delivered shall be deemed delivered when actually
received, any such notice deposited in the United States mail, registered or
certified, return receipt requested, with all postage prepaid, shall be deemed
to have been given on the earlier of the date received or the date when delivery
is first refused, and any notice deposited with an overnight courier service for
deliver shall be deemed delivered on the business day following such deposit.
Any party to whom notices are to be sent pursuant to this Agreement may from
time to time change its address for further communications thereunder by giving
notice in the manner prescribed herein to all other parties hereto.
15. Payment of Expenses. Each party hereto shall bear its own legal,
accounting and other expenses incurred in connection with the preparation and
negotiation of this Agreement and the consummation of the transaction
contemplated hereby, whether or not the transaction is consummated.
16. Entire Agreement; Amendment; Waiver. This Agreement, together with
the other agreements referred to herein, constitutes the entire understanding
among the parties with respect to the subject matter hereof, superseding all
negotiations, prior discussions and preliminary agreements. This Agreement may
not be modified or amended except in writing signed by the parties hereto. No
waiver of any term, provision or condition of this Agreement in any one or more
instances, shall be deemed to be or be construed as a further or continuing
waiver of any such term, provision or condition of this Agreement. No failure to
act shall be construed as a waiver of any term, provision, condition or rights
granted hereunder.
17. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the respective legal representatives, heirs, successors
and assigns of the parties hereto; provided that no assignment of the rights and
interests of the Assignee hereunder shall be effective unless and until the
intended assignee executes and delivers to Lessee on or before the Transfer Date
a written assignment and assumption agreement, in form satisfactory to Lessee,
whereby such intended assignee agrees to assume and be bound by all of the terms
and provisions of this Agreement and the duties and obligations of the Assignee
hereunder.
18. No Joint Venture; Third Party Beneficiaries. Nothing contained
herein shall be construed as forming a joint venture or partnership among
Assignee and Advocat or Lessee with respect to the subject matter hereof. The
parties hereto do not intend that any third party shall have any rights under
this Agreement.
12
19. Captions. The section headings contained herein are for convenience
only and shall not be considered or referred to in resolving questions of
interpretation.
20. Counterparts. This Agreement may be executed and delivered via
facsimile and in one or more counterparts and all such counterparts taken
together shall constitute a single original Agreement.
21. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of North Carolina.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]
13
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the
day and year first set forth above.
DIVERSICARE ASSISTED LIVING
SERVICES, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
------------------------------
Title: President
-----------------------------
/s/ Xxx X. Xxxxxx
------------------------------------
Xxx X. Xxxxxx
14
EXHIBIT A
LEASES
1. OAKREST MANOR
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx
Lease And Option to Purchase dated April 28, 1999 by and between
Pleasant Care Associates, LP, a Virginia Limited Partnership, as
Lessor, and Diversicare Assisted Living Services, Inc., a Tennessee
corporation, as Lessee, for the adult care facility known as Oakcrest
Manor.
2. VINTAGE INN
Highway 17 N.
Williamston, North Carolina
Lease And Option to Purchase dated April 28, 1999 by and between Xxxxx
Investment Company, LP, a North Carolina Limited Partnership, as
Lessor, and Diversicare Assisted Living Services, Inc., a Tennessee
corporation, as Lessee, for the adult care facility known as Vintage
Inn.
15
EXHIBIT B
ASSIGNMENT AND ASSUMPTION OF LEASE
ASSIGNOR: DIVERSICARE ASSISTED LIVING SERVICES, INC., a Tennessee corporation
ASSIGNEE: XXX X. XXXXXX
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (the "Assignment") is made and
entered into as of _______________, 2002 by and between XXX X. XXXXXX, an
individual ("Assignee") and DIVERSICARE ASSISTED LIVING SERVICES, INC., a
Tennessee corporation ("Assignor").
For good and valuable consideration, the receipt of which is hereby
acknowledged, and pursuant to that certain Lease Assignment and Operations
Transfer Agreement dated as of March _____, 2002 by and among Assignor and
Assignee and certain affiliates described herein (the "Agreement"), Assignor and
Assignee hereby agree as follows:
1. Assignment of Lease. Assignor hereby transfers, grants, conveys,
assigns and sets over to Assignee, its successors and assigns, all of Assignor's
right, title, and interest as Lessee in, to and that certain Lease With Option
to Purchase described on Exhibit A attached hereto, and any and all amendments,
modifications, restatements, renewals or replacements thereof or thereto,
together with any and all rights to extend or renew and all other options or
rights provided for therein (the "Lease"), for the benefit and use of the
Assignee as and from the effective date hereof and during the term and interest
of the Lessee therein. Reference is here made to the Lease for a full statement
of their terms and conditions.
2. Assumption by Assignee. Assignee hereby assumes, and does hereby
covenant and agree with Assignor to fully and faithfully pay, perform, keep,
observe, meet and discharge, from and after the effective date hereof, all of
the duties, responsibilities, undertakings and obligations of the Lessee that
accrue under the Lease from and after the effective date hereof, including,
without limitation, the payment of rent, and Assignee agrees to be bound from
the and after the effective date hereof by all of the terms, conditions,
covenants and agreements of each Lease. Assignee hereby covenants and agrees
that it will indemnify and hold and save harmless the Assignor from and against
all liabilities, obligations, claims, demands, costs or expenses incurred or
suffered by, or asserted against, Assignor as a result of or on account of the
failure of Assignee to observe and perform any of the duties, responsibilities
and obligations of the Lessee which shall accrue or arise under the Lease on and
after the effective date hereof.
3. No Change. It is understood and agreed by the parties hereto that
this Assignment does not extend the terms of the Lease or change the
consideration given therefor in any form. This instrument shall not have the
effect of in any way modifying, amending, supplementing or abridging the Lease
or any of its provisions as the same are now or may hereafter be in force and
effect.
16
4. Effective Date. This Assignment shall be effective as of 12:01 a.m.,
EST, on _____________________, 2002.
6. Governing Law. This Assignment shall be interpreted, construed and
governed according to the laws of the State of _____________________________.
7. Binding Effect. This Assignment shall be binding upon and shall
inure to the benefit of the respective legal representatives, successors and
assigns of the Assignor, and Assignee.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed to be effective as of the effective date stated herein.
ASSIGNEE:
---------------------------------------
XXX X. XXXXXX
ASSIGNOR:
DIVERSICARE ASSISTED LIVING
SERVICES, INC.
By:
----------------------------------
Its:
----------------------------------
17
EXHIBIT C
XXXX OF SALE AND ASSIGNMENT
ASSIGNOR: DIVERSICARE ASSISTED LIVING SERVICES, INC., a Tennessee corporation
liability company
ASSIGNEE: XXX X. XXXXXX
THIS XXXX OF SALE AND ASSIGNMENT ("Assignment") is made and entered
into effective as of the ______ day of _________, 2002 by and between Xxx X.
Xxxxxx, an individual ("Assignee) and Diversicare Assisted Living Services NC,
LLC, a Tennessee corporation ("Assignor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Assignor and Assignee have entered into a certain Lease
Assignment and Operations Transfer Agreement dated as of March __, 2002 (the
"Agreement") pursuant to which Assignor has agreed to transfer and deliver to
Assignee certain personal property used by Assignor in the operation of certain
adult care home facilities and related properties (the "Facilities") described
therein;
NOW THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and sufficient of which is hereby
acknowledged, and pursuant to the Agreement, the parties hereto agree as
follows:
1. Sale and Assignment. Assignor hereby bargains, sells, conveys,
assigns, transfers, and delivers to Assignee, its successors and assigns,
forever, all right, title and interest of Assignor in and to the following
property owned, leased, used or held by Assignor and located at or used in
connection with, and necessary to the operation of, the Facility described on
Exhibit A attached hereto (collectively the "Assets"):
(a) All furniture, furnishings, trade fixtures, fittings,
computers, appliances, apparatus, equipment, machinery, tools, leasehold
improvements and fixtures, and all other tangible personal property of every
kind and description, together with all accessions, additions, attachments,
accessories, appurtenances and replacements parts thereto and thereof
(collectively, "Personal Property");
(b) All assignable warranties, surety agreements or guaranties
(express or implied) issued in connection with or arising out of the purchase,
construction, repair or replacement of any of
18
the foregoing Personal Property, and all rights of Assignor which have accrued
or may accrue thereunder;
(c) All inventories of consumable and disposable goods and
supplies of every kind and description, including without limitation, raw
materials, work in progress, stock in trade, finished goods, supplies, paper,
food, cleaning materials, disposables, linens, office supplies, drugs and
medical supplies (collectively, "Inventory");
(d) All resident, medical, clinical, personnel files and other
records related to the Facility (including both hard and microfiche copies) and
all books and records used in operating the Facility;
(e) All motor vehicles including, but not limited to, those
vehicles listed on Exhibit A, attached hereto (collectively, the "Vehicles");
(f) All contract and leasehold rights and interests pursuant
to contracts for purchase or lease of personal property, construction contracts,
contracts for purchase, sale or lease of equipment, goods or services currently
furnished or to be furnished in connection with the Facility and that are
expressly assumed by Assignee pursuant to the Agreement;
(g) All trade names under or by which the Facility may be
operated or known and all trademarks, trade names and goodwill related to the
Facility or the operation of the business of the Facilities; and
(h) All books and records pertaining to the above described
Assets, including the operations, policies and procedures manuals specific to
the Facility, if any, as were in place at the Facility at the time the Facility
was leased to Assignor by the owner thereof.
2. Excluded Assets. The following items of property are expressly
excluded from the transfer of the Assets provided for herein and for purposes of
this Assignment are not, and shall not be deemed to be, a part of the "Assets"
described herein: (i) any leased property that is the subject of a Declined
Contract (as defined in Paragraph 8 of the Agreement, (ii) Assignor's wide area
network and associated software provided on the Diversicare wide area network,
(iii) Assignor's continuous quality improvement program, manuals and materials,
management information systems, policy, procedure and educational manuals and
materials, and similar proprietary property of Assignor, and (iv) any rights in
or to the use of the name "Advocat" or "Diversicare", or any derivative thereof.
Anything herein to the contrary notwithstanding, Assignee shall be entitled to
receive all operations, policies and procedures manuals specific to the
Facility, if any, as were in place at the Facility at the time the Facility was
leased to Assignor by the owner thereof.
3. Rights Assigned. It is acknowledged that as to any Assets, or any
part thereof, located at and used, held or maintained in connection with the
operation of the Facility that are leased and not owned by Assignor, Assignor is
not selling or conveying such Assets but is only assigning its rights, if any,
in and to those Assets to Assignee and the term "Assets" includes, as to those
items, the leasehold interest only of Assignor, together with any options to
purchase any of said
19
items and any additional or greater rights with respect to such items which
Assignor may have the right to hereafter acquire.
4. As Is/Where Is. The Assets hereby conveyed and assigned are being
transferred to and accepted by Assignee "as-is" "where-is", without any
warranty, express or implied, statutory or otherwise, and including without
limitation any warranty as to condition, merchantability or fitness for a
particular purpose, all of which warranties (both express and implied) Assignor
hereby disclaims.
5. Delivery of Documents; Further Assurances. Simultaneously with the
execution of this Assignment, Assignor has caused to be delivered to Assignee
all agreements, books, instruments, documents, records, invoices, manuals,
warranties and other materials, records and documents evidencing or relating to
the Assets transferred hereby. If additional records or documents evidencing or
relating to the Assets are subsequently found or received by Assignor, Assignor
will immediately forward them to Assignee. Assignor further agrees to cooperate
with Assignee and to execute and deliver, or cause to be executed and delivered,
any and all such further documents, instruments, materials or records, including
motor vehicle certificates of title, as may be necessary or required or
reasonably requested by Assignee in order to further perfect Assignee's right,
title and interest in and to the Assets and to otherwise carry out the intent
and purpose of this Assignment.
6. Attorney-In-Fact. To assure the full effectiveness of this
Assignment with respect to the Vehicles transferred hereby, Assignor hereby
constitutes and appoints Assignee its true and lawful attorney, with full power
of substitution, for Assignor and in its name and stead or otherwise, to demand
or receive from time to time any and all of the Vehicles, to give receipts and
releases for or in respect of the same or any part thereof, and from time to
time to institute and prosecute in the name of Assignor or otherwise any and all
proceedings at law, in equity or otherwise, which Assignee reasonably may deem
proper, in order to collect, assert or enforce any claim, right or title of any
kind of Assignee in or to the Vehicles and to defend or compromise any or all
actions, suits or proceedings with respect to any of the Vehicles and in
general, to do all acts and things in relation to the Vehicles as Assignee
reasonably may deem desirable; Assignor declaring that the appointment made and
the powers granted by this Assignment are coupled with an interest and are not
and shall not be revocable by Assignor.
7. Effective Date. This Assignment shall be effective as of 12:01 a.m.,
EST, on the ____ day of ________, 2002.
8. Binding Effect. This Assignment shall be binding upon and shall
inure to the benefit of the respective legal representatives, successors and
assigns of the Assignor and Assignee.
20
IN WITNESS WHEREOF, Assignor and Assignee have caused this Instrument
to be executed as of effective date stated herein.
ASSIGNOR:
DIVERSICARE ASSISTED LIVING
SERVICES, INC.
By:
----------------------------------
Its:
----------------------------------
ASSIGNEE:
---------------------------------------
Xxx X. Xxxxxx
21
EXHIBIT A
MOTOR VEHICLES
22
EXHIBIT D
TERMINATED EMPLOYEES
NONE
23
EXHIBIT E
ASSIGNMENT OF OCCUPANCY AGREEMENTS,
SECURITY AND OTHER DEPOSITS, SERVICE AGREEMENTS
AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT OF OCCUPANCY AGREEMENTS, SECURITY AND OTHER DEPOSITS,
SERVICE AGREEMENTS AND ASSUMPTION AGREEMENT (the "Assignment") is made effective
as of the ______ day of ________, 2002 by and between XXX X. XXXXXX, an
individual ("Assignee") and DIVERSICARE ASSISTED LIVING SERVICES, INC., a
corporation ("Assignor").
W I T N E S S E T H:
- - - - - - - - - -
Assignor and Assignee, and certain of their affiliates, have entered
into a Lease Assignment and Operations Transfer Agreement dated as of March ___,
2002 (the "Agreement") pursuant to which Assignor will surrender, transfer and
deliver to Assignee possession and control of certain real and personal property
located in North Carolina for use and operation as adult care home facilities.
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and pursuant to the Agreement, the parties hereto agree as
follows:
1. Assignment. Assignor hereby assigns, transfers, sells, conveys and
delivers to Assignee, its successors and assigns, forever, all right, title and
interest of Assignor in and to the following assets (the "Assets"):
(i) All admissions policy agreements, patient's rights
agreements and/or any other patient or resident tenancy or occupancy agreements
(collectively, "Occupancy Agreements") with residents or patients covering rooms
or units in the adult care home facility described on Exhibit A attached hereto
(the "Facility"), and any and all security or other deposits and/or trust
accounts related to the Occupancy Agreements (the "Accounts"); and
(ii) All operating contracts or agreements with third parties
for the sale, lease or provisions of goods, services or equipment in connection
with the use, enjoyment, occupancy or operation by Assignor of the Facility
("Service Agreements").
2. Delivery and Receipt of Documents. Simultaneously with the execution
of this Assignment, Assignor have delivered or caused to be delivered the
originals or true, correct and complete copies of the Occupancy Agreements and
the Service Agreements, and any modifications, renewals or extensions thereof,
to the extent the same are available and in written form, together with
24
appropriate documentation, evidencing the Accounts, the name of each resident
and the amount held on his or her behalf hereby transferred, and all other
agreements, instruments, ledgers, books of account or other records or documents
relating to the Assets hereby assigned and transferred. If additional records or
documents are found or received, Assignor will immediately forward them to
Assignee.
3. Assumption of Occupancy Agreements. Assignee hereby assumes and
agrees to perform all of the terms, covenants and conditions of the Occupancy
Agreements required to be performed on the part of Assignor which shall arise or
accrue on or after the effective date hereof, including, but not limited to, the
obligation to repay to residents, in accordance with the terms of such Occupancy
Agreements, all Accounts, trust account deposits and any security deposits
actually delivered by Assignor to and received by Assignee in accordance with
the Agreement and required to be repaid by the terms of such Occupancy
Agreements. In connection herewith, Assignee agrees to indemnify and save and
hold harmless Assignor from any and all liabilities, obligations, claims, costs,
expenses (including, without limitation, reasonable attorneys' fees) or causes
of action existing in favor of or asserted by other parties to the Occupancy
Agreement, or hereafter incurred or suffered by Assignor, arising out of or
relating to Assignee's failure to perform any of the obligations of Assignor
under the Occupancy Agreements on and after the effective date hereof or to
repay any trust account or security deposits actually received by Assignee where
required to do so. Nothing herein shall be construed so as to limit Assignee's
rights under the Occupancy Agreements or at law or in equity to terminate such
Occupancy Agreements, and Assignee shall not be liable to Assignors or any other
party for such proper termination, nor shall anything herein prevent Assignee
from asking residents to sign new Occupancy Agreements with Assignee.
4. Assumption of Service Agreements. Assignee hereby assumes and agrees
to perform all of the terms, covenants and conditions of the Service Agreements
required to be performed on the part of Assignor which shall arise or accrue on
and after the effective date hereof, and hereby agrees to indemnify, save and
hold harmless Assignor from any and all liabilities, obligations, claims, costs,
expenses (including, without limitation, reasonable attorneys' fees) or causes
of action existing in favor of or asserted by other parties to the Service
Agreements, or hereafter incurred or suffered by Assignor, arising out of or
relating to Assignee's failure to perform any of the obligations of Assignor
under the Service Agreements on and after the effective date hereof. Nothing
herein shall be construed so as to limit Assignee's rights under the Service
Agreements or at law or in equity to terminate such Service Agreements after the
effective date hereof, and Assignee shall not be liable to Assignor or any other
party for such proper termination.
5. Indemnification by Assignor. Assignor hereby agrees to indemnify,
save and hold harmless Assignee from and against all liabilities, obligations,
claims, costs, expenses (including, without limitation, reasonable attorneys'
fees) or causes of action existing in favor of or asserted by other parties to
the Occupancy Agreements or the Services Agreements, or hereafter incurred or
suffered by Assignee, arising out of or resulting from Assignor's failure to
perform any of the obligations of Assignor under the Occupancy Agreements or the
Service Agreements prior to the effective date hereof.
6. Binding Effect. This Assignment shall be binding upon and shall
inure to the benefit of the respective legal representatives, successors and
assigns of Assignors and Assignee.
25
7. Effective Date. This Assignment shall be effective as of 12:01 a.m.,
EST, on the _____ day of _________, 2002.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment to
be effective as of the effective date stated herein.
ASSIGNOR:
DIVERSICARE ASSISTED LIVING SERVICES, INC.
By:
------------------------------------
Its:
------------------------------------
ASSIGNEE:
-----------------------------------------
Xxx X. Xxxxxx
26
EXHIBIT A
TO ASSIGNMENT OF OCCUPANCY AGREEMENTS, SECURITY AND OTHER
DEPOSITS, SERVICE AGREEMENTS AND ASSUMPTION AGREEMENT
Adult Care Home Facility
27
EXHIBIT F
DECLINED CONTRACTS
Assignee has advised Assignor that Lessor does not intend to assume any
of the Service Contracts applicable to the Facility.
28
