EXHIBIT 10.27
ASSIGNMENT, ASSUMPTION AND AMENDMENT OF THE
GRANCARE, INC. 401(k) SAVINGS PLAN
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") is made and
entered into as of January , 1997, by and between GRANCARE, INC., a California
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corporation (the "Assignor") and NEW GRANCARE, INC., a Delaware corporation (the
"Assignee").
W I T N E S S E T H:
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WHEREAS, the Assignor maintains the GranCare, Inc. 401(k) Savings Plan (the
"401(k) Plan") and its accompanying Trust Agreement;
WHEREAS, the Assignor and Assignee have entered into a distribution
agreement, dated as of September 3, 1996, whereby the Assignor will distribute
on a certain date (the "Distribution Date") to its shareholders all of the
outstanding shares of common stock of its wholly owned subsidiary, the Assignee
(the "Distribution");
WHEREAS, upon the Distribution Date, the Assignor wishes to assign all
duties and obligations as the Primary Sponsor under the 401(k) Plan and the
Assignee wishes to accept and assume such duties and obligations as Primary
Sponsor of the 401(k) Plan; and
WHEREAS, in connection with the Distribution, the Assignee wishes to
clarify certain provisions of the 401(k) Plan.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Assignment of 401(k) Plan. FOR VALUE RECEIVED, and in accordance with
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the terms of the 401(k) Plan, the Assignor assigns, grants, conveys, transfers
and sets over to the Assignee, effective upon the Distribution Date, all rights
and obligations of the Assignor under the 401(k) Plan, including any rights as
policyholder of any insurance policies funding benefits under the 401(k) and the
rights as Settlor of any trust established in connection with the Plan. The
Assignor covenants, warrants and represents to the Assignee that (i) all
representations and warranties made or deemed to be made on behalf of the
Assignor under the 401(k) Plan are true and correct on and as of the
Distribution Date, except as affected by the transactions contemplated in the
401(k) Plan, and (ii) the Assignor is not otherwise in default under the terms
of the 401(k) Plan. This assignment is given for good and valuable
consideration paid to the Assignor, the receipt and sufficiency of which
consideration is hereby acknowledged, and is coupled with an interest, and
therefore irrevocable.
2. Assumption of 401(k) Plan by Assignee. FOR VALUE RECEIVED, the
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Assignee hereby accepts the foregoing assignment of the Assignor's rights and
obligations under the 401(k) Plan. The Assignee agrees from and after the
Distribution Date to timely pay, perform and discharge all obligations,
covenants, stipulations and agreements of the Assignor under the
401(k) Plan and hereby agrees to indemnify and save harmless the Assignor from
any and all losses, damages, claims and expenses from liabilities arising out of
any breach or default under the 401(k) Plan from and after the Distribution Date
resulting from the failure of the Assignee to abide by and perform the same.
3. Amendment of Plan. On the Distribution Date, all references to the
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term "Employer" within the 401(k) Plan shall be references to the Assignee. For
the purposes of vesting and the payment of benefits solely, the Distribution
shall not constitute a termination of employment, as defined in Section 2.93 of
the 401(k) Plan, so long as the participant remains continuously in the employ
of the Assignee or its affiliates, and after the Distribution Date,
contributions shall not be made by or on behalf of those participants who do not
continue in the employ of the Assignee and its affiliates.
4. Governing Law. This Assignment shall be governed and construed in
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accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed and sealed this
Assignment as of the day and year first written above.
GRANCARE, INC., a California Company
By: /s/ Xxxxxx X. Xxxxxx
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Print Name: Xxxxxx X. Xxxxxx
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Title: Executive Vice President
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NEW GRANCARE, INC., a Delaware Company
By: /s/ Xxxxxx X. Xxxxxx
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Print Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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