ASSIGNMENT AND ASSUMPTION OF MANAGEMENT AGREEMENT
(Park Ridge, New Jersey)
THIS AGREEMENT made this 3rd day of July, 1996, by and between CCC of New
Jersey, Inc., a Delaware corporation ("Assignor"), and CareMatrix of
Massachusetts, Inc., a Delaware corporation ("Assignee"').
WITNESSETH
WHEREAS, Assignor is the Manager under that certain Management Agreement
(the "Management Agreement"), dated June 23, 1995, between SVT Corporation and
Assignor relating to the management of the two hundred ten (210) licensed bed
nursing home facility, comprised of one hundred eighty (180) long term care beds
and thirty (30) residential care beds, to be located in Park Ridge, New Jersey
(the "Facility"), a copy of which is attached hereto as Exhibit A; and
WHEREAS, upon the completion of the construction of the Facility, Assignor
desires for Assignee to manage the Facility.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Assignor hereby assigns, sets over and transfers unto Assignee to have
and to hold from and after the date hereof, all of the right, title
and interest of Assignor in, to and under the Management Agreement,
and Assignee hereby accepts the within assignment and assumes and
agrees with Assignor, to perform and comply with and to be bound by
all of the terms, covenants, agreements, provisions and conditions of
the Management Agreement on the part of the manager thereunder to be
performed on and after the date hereof in the same manner and with the
same force and effect as if Assignee had originally executed the
Management Agreement as manager.
2. Assignor agrees to indemnify and hold harmless Assignee from and
against any and all Claims (as defined in paragraph 4 hereof) accruing
or arising under the Management Agreement on or before the date
hereof.
3. Assignee agrees to indemnify and hold harmless Assignor from and
against any and all Claims accruing or arising under the Management
Agreement after the date hereof
4. For the purposes of this Agreement, the term "Claims" means all costs,
claims, obligations, damages, penalties, causes of action, losses,
injuries, liabilities and expenses (including, without limitation,
reasonable legal fees and expenses).
5. This Agreement (i) shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, (ii)
shall be governed by the laws of the Commonwealth of Massachusetts and
(iii) may not be modified orally, but only by a writing signed by both
parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date and year first above written.
ASSIGNOR:
CCC OF NEW JERSEY, INC
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title:
ASSIGNEE:
CAREMATRIX OF MASSACHUSETTS By.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title:
MANAGEMENT AGREEMENT
Between
SVT CORPORATION
And
CCC OF NEW JERSEY, INC.
TABLE OF CONTENTS
Section 1 - Definitions
Section 2 - Agreement to Manage and Operate the Facility
Section 3 - Management and Operation Services; Duties of Manager
Section 4 - Non-Discrimination
Section 5 - Warranties and Representations of Operator
Section 6 - Warranties and Representations of Manager
Section 7 - Covenants by Operator
Section 8 - Covenants by Manager
Section 9 - Compensation
Section 10- Subordination
Section 11- Term of Agreement
Section 12- Arbitration
Section 13- Agreements Entered Into By Manager
Section 14- Miscellaneous
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MANAGEMENT AGREEMENT
THIS AGREEMENT ("Agreement") is by and between SVT CORPORATION, a [New
Jersey corporation] with an office at 000 Xxxxxxxx Xxxx, Xxxxx X0, Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000, ("Operator") and CCC OF NEW JERSEY, INC., a New
Jersey corporation with an office at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx
00000 ("Manager") .
STATEMENT OF FACTS
1. The Operator desires to arrange for the licensure, management and
operation of a nursing home facility ("Facility") to be constructed in the
Township of Montvale, Bergen County, New Jersey ("Premises").
2. Manager or its affiliates furnishes or has furnished management services
to other health care facilities similar to the Facility.
3. The Operator desires to employ Manager to manage and operate the
Facility for the Operator in accordance with the terms and conditions of this
Agreement.
IT IS AGREED:
Section 1 - Definitions. As used in this Agreement:
(a) "Facility Expenses" means all costs, expenses and cash disbursements
of any type relating to or arising out of the ownership or operation
of the Facility and the Premises, including, without limitation,
taxes, capital improvements, debt service (interest and principal) and
expenses of operating, maintaining and repairing the Facility and
funding necessary reserves.
(b) "Gross Xxxxxxxx" shall mean and include:
(i) the gross dollar amount of all xxxxxxxx by the Facility to or on
behalf of patients and visitors directly or indirectly connected
with the Facility for the provision of all goods and services,
and will include, without limitation, xxxxxxxx to all
governmental payors, including Medicare and Medicaid, xxxxxxxx to
self-paying patients, and xxxxxxxx to all other third-party
insurance carriers; and
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(ii) the gross dollar amount received from non-patient care activity
but nevertheless arising from the operation of the Facility
including, but not limited to, gift shop, coffee shop, vending
machines, laundry machines, xxxxxx shop, beauty shop, and all
other concessions; provided, however, that the proceeds for all
borrowings shall be excluded from Gross Xxxxxxxx.
(c) "Positive Cash Flow" means the excess, if any, of the amount of Gross
Xxxxxxxx over the total amount of Facility Expenses, but excluding
depreciation and management fees to Manager under this Agreement.
(d) "Negative Cash Flow" means the excess, if any, of the total amount of
Facility Expenses over the amount of Gross Xxxxxxxx.
Section 2 - Agreement to Manage and Operate the Facility.
(a) For and during the term of the Agreement, the Operator hereby engages
Manager, and Manager accepts such engagement, to supervise,
administer, manage and operate the Facility and all phases of its
operation in the name of the Operator and on the Operator's behalf and
for the Operator's account, on the terms and subject to the conditions
set forth herein.
(b) Manager agrees that it will:
(i) perform its duties and responsibilities hereunder, in compliance
with all applicable laws and take those actions necessary so that
Operator satisfies its responsibilities as the licensee of the
Facility;
(ii) supervise and direct the management and operation of the
Facility, given the financial resources available to the
Facility, the location of the Facility, the restrictions of
applicable laws and other existing circumstances;
(iii) consult with the Operator on matters relating to the Facility;
and
(iv) pay, and be solely responsible for all Facility Expenses
regardless of whether the proceeds of Gross Xxxxxxxx are
sufficient for the payment of such Facility Expenses.
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Manager shall act in good faith to perform its obligations hereunder,
but shall have no liability to the Operator for any decisions made
with respect to or any actions taken or the omission of any actions in
connection with the Facility's operations which are not willful or
negligent actions or omissions, so long as such decisions, actions, or
omissions were made or taken in good faith. It is understood that
Manager makes no warranties, express or implied, except as otherwise
specifically provided for in this Agreement.
(c) Manager shall not be deemed to be in violation of this Agreement if it
is prevented from performing any of its obligations hereunder for any
reason beyond its control, including, but not limited to, strikes,
interference or noncooperation by Operator, lockouts, acts of God,
unavailability of supplies, statute, regulation or rule of the federal
or any state or any local government, or any agency thereof.
(d) Subject to the foregoing and to the other provisions of this
Agreement, Manager shall have the sole and exclusive authority and
responsibility, control and discretion with regard to the operation,
administration and management of the business, policies, and assets of
the Facility (including, without limitation, the exercise of its
rights and performance of its duties provided for in Section 3 hereof)
and the right to determine all operating policies affecting the
appearance, maintenance, standards of operation, quality of service,
and any other matter affecting the Facility or the operation thereof.
Section 3 - Management and Operation Services; Duties of Manager. In
addition to the general duties set forth above, Manager covenants that it shall
perform the following specific responsibilities. All such responsibilities shall
be carried out with the Operator's full cooperation. Manager shall:
(a) Start-Up Requirements.
(i) Prepare and recommend an estimated budget for licensure and
start-up purposes;
(ii) Be responsible for the licensing of the Facility, including the
performance of such duties as should be performed prior to such
commencement of operations, as dictated by the State of New
Jersey and applicable regulatory agencies. The Operator shall
cooperate with the Manager in such process;
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(iii) Participate in the on-site inspections of the Facility required
by the Department of Health of the State of New Jersey
("Department") and other applicable regulatory agencies prior to
permitting operation of the Facility;
(iv) Select and hire a licensed administrator, program director and a
nursing director as well as other personnel required by the
Department and various departmental heads deemed appropriate by
Manager;
(v) Establish nursing staff procedures (including the establishment
of records and manuals to the extent required by the Department;
(vi) Provide nursing staff direction (including the establishment of
records and manuals to the extent required by the Department;
(vii) Establish operational procedures (including the establishment of
records and manuals to the extent required by the Department; and
(viii) Establish a uniform personnel policy for the Facility's staff
(including the establishment of records and manuals to the extent
required by the Department.
(b) Accounting and Money Management.
(i) Develop and implement payroll systems, cash management systems,
claims fillings, patient xxxxxxxx, admissions policies concerning
credit, deposits, and uncompensated care agreements;
(ii) Prepare cost reports for the Facility as required by the
Department or any other authority having jurisdiction and prepare
any rate requests deemed desirable by the Manager, in its sole
discretion;
(iii) Pay all Facility Expenses on a timely basis.
(c) Administrative.
(i) Provide on-going review and monitoring of all obligations of the
Facility to regulatory agencies with respect to inspections and
compliance requirements for licensing of the
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Facility, assure compliance with licensing requirements for the
Facility and apply for modification of the license to the extent
deemed appropriate by Manager;
(ii) Comply with all requirements of the Department and all other
federal, state and local governmental entities or agencies having
jurisdiction over the Facility;
(iii) Advertise, as a Facility Expense, for employee positions with
the Facility and for attracting patients to the Facility and
otherwise arrange for the provision of marketing services,
including the discretion to change the name of the Facility in
connection with such efforts; and
(iv) Develop and implement admissions policies and procedures.
(d) Dietary Management.
(i) Establish and review menus, dietary practices and procedures and
supervise the dietary personnel; and
(ii) Develop and implement practices and procedures with respect to
purchasing and dietary control.
(e) Clinical Programs.
(i) Establish and implement clinical and special programs, services,
practices and procedures deemed appropriate by Manager, and
establish and maintain internal policies and procedures and plans
of organization for each program;
(ii) Establish and maintain standards and quality control of programs;
and
(iii) Prepare written evaluations of each program in relation to its
operation, goals and objectives and implement any required
changes in policies or programs of the Facility.
(f) Plant and Maintenance. Manager shall cause the Facility to be
maintained and repaired in accordance with federal, state, and local
codes, and in a condition consistent with the highest professional
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standards of nursing home maintenance, reasonable wear and tear
excepted, including but not limited to cleaning, painting, plumbing,
carpentry, grounds care, and such other maintenance and repair work as
may be deemed by Manager to be reasonably necessary. Manager shall
make or install or cause to be installed, as a Facility Expense, all
needed and proper repairs, replacements, additions, and improvements
in and to the Facility and the furnishings and equipment in order to
keep and maintain the same in good repair, working order, and
condition, reasonable wear and tear excepted.
(g) purchasing.
(i) Review the purchasing standards, procedures and policies, and
develop, implement, and maintain a purchasing system for medical
and food supplies, equipment, appliances, furnishings, other
materials and uniforms, and ordering and coordination of service
calls necessary to the proper conduct of the Facility;
(ii) Negotiate contracts for the purchase of items listed in
subsection (g) (i) above and service contracts;
(iii) Develop and implement methods of replacing obsolete equipment;
and
(iv) Control inventory levels and develop specifications for supplies.
(h) Data Processing.
(i) Provide data processing and payroll processing systems and
procedures or cause such systems and procedures to be provided in
order to process bills, accounts, general ledgers, monthly
financial, and statistical data and to record the receipt and
disbursement of all funds; and
(ii) Provide a system to itemize all accounts payable and accounts
receivable or cause such a system to be provided.
(i) Records and Reports. In addition to any other requirements specified
in this Agreement, Manager shall
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have the following responsibilities with respect to records and
reports:
(i) Manager shall cause to be established and maintained for the
Facility a comprehensive system of records, books, and accounts
in a manner conforming to the directives of all applicable
third-party payors. All records, books and accounts will be
subject to examination after prior notice and at reasonable hours
by an authorized representative of the Operator. Patient account
records shall be maintained at the Facility;
(ii) Manager shall furnish such information (including bed census
reports and a daily census log) as may be requested by the
Operator from time to time with respect to the financial,
physical or operational condition of the Facility;
(iii) Manager shall furnish to the Operator monthly operating
statements within thirty (30) days after the end of each month
and shall annex thereto a computation of the management fee for
the preceding month;
(iv) Manager shall supervise the preparation for the Operator of
budgets and internal financial reports;
(v) On or before forty-five (45) days after the close of each fiscal
year during the term of this Agreement (unless delayed by
circumstances beyond the control of Manager), Manager will also
cause to be delivered to the Operator a balance sheet and related
statement of profit and loss in a form sufficient to enable
Operator's parent company to prepare financial statements
certified by an independent certified public accounting firm
reflecting the assets employed in the operation of the Facility
and the liabilities incurred in connection therewith at the end
of the fiscal year, and the results of the operation of the
Facility during the preceding twelve (12) months and having
annexed thereto a computation of the management fee for such
preceding fiscal year; and
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(vi) All costs and expenses incurred in connection with the
preparation of any statements, reports, schedules, computations,
and other reports required under this Section or any other
provision of the Agreement shall be a Facility Expense.
(j) Utilities and Services. Manager shall make arrangements for water,
electricity, heating, fuel and sewage, trash disposal, vermin
extermination, decorating, laundry facilities, and telephone service
and television service, all of which shall be included as Facility
Expenses.
(k) Employees. Manager shall establish the number, qualifications, and
duties of the personnel to be regularly employed in the management and
operation of the Facility including (without limitation) the
administrator, program directors, assistant administrator(s),
department heads, supervisory personnel, nursing and para-professional
staff, and maintenance, bookkeeping, clerical and other managerial,
operating or service employees who will work at and for the Facility.
All of such personnel shall be employees of the Operator (except as
is otherwise expressly provided), but shall be hired, promoted,
supervised and discharged exclusively by Manager on behalf of
Operator. Manager shall pay such employees and the costs associated
with such employees as a Facility Expense. Manager's obligations
hereunder shall be subject to the following conditions:
(i) Except as otherwise provided for in this Agreement, the Manager
shall pay, as a Facility Expense, the compensation (including
fringe benefits) of those persons identified in this Agreement as
being employees of or otherwise working for the Facility, and
shall pay for all local, state and federal taxes and assessments
(including but not limited to Social Security taxes, unemployment
insurance and worker's compensation insurance) incident to the,
employment of such personnel. The Facility's payroll, including
payment of wages and salary to employees at the Facility, tax
reporting, and withholding of taxes, shall be administered by
Manager, as a Facility Expense;
(ii) Compensation (including fringe benefits) payable (i) to any
person who is an officer
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and/or director of Manager or any of its affiliated companies and
(ii) to all off-site personnel of Manager, plus all local, state
and federal taxes and assessments incident to the employment of
any such persons, shall be borne by Manager, and shall not be
paid out of the Operator's funds or treated as a Facility Expense
except as set forth below;
(iii) All management overhead expenses of Manager reasonably allocated
to the services rendered under this Agreement (including, but not
limited to, salaries and fringe benefits of Manager's employees
working directly with the Facility, costs of office supplies and
equipment, data processing services, postage, transportation for
managerial personnel of Manager and telephone services) shall be
treated as a Facility Expense not less frequently than monthly;
(iv) The term "fringe benefits" as used herein shall include, but not
be limited to, the employer's contribution of F.I.C.A.,
unemployment compensation and other employment taxes, workmen's
compensation, group life, pension plans, accident and health
insurance premiums, vacation, sick pay and holidays to the extent
deemed appropriate by Manager;
(v) The administrator, who shall serve as the chief operating officer
of the Facility, the controller and the director of nurses, shall
be employees of Manager. All persons employed by Manager whose
services are furnished to the Facility under this section are
referred to as "Key Personnel." All Key Personnel shall be
employees of Manager throughout the Term of the Agreement.
Manager shall determine the amount and nature of and shall pay
compensation (as hereinafter described) to the Key Personnel for
all services rendered by them in connection with this Agreement.
In addition to Manager's fee hereunder, the Manager shall cause
the Facility to pay from the Facility's Gross Revenues to Manager
an amount equal to the Key Personnel's fair and reasonable
compensation plus fringe benefits which are or may become
standard for administrative or
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managerial personnel of Manager and its affiliates. Furthermore,
the Facility shall reimburse Manager as a Facility Expense for
employment, payroll or other taxes imposed because of employment
of the Key Personnel.
(1) Budgets. Annual Budgets, operating and capital, for each full
fiscal year of operation of the Facility shall be prepared by
Manager and delivered to the Operator at least thirty (30) days
before the beginning of the fiscal year to which such budget
relates. The Operator shall not unreasonably withhold or delay
its approval of such budget.
(m) Insurance.
(i) Manager shall specify the types of insurance, amount of
coverage thereunder, applicable deductibles and premiums
therefor and issuers thereof to be carried with respect to
the to Facility and its operations and Manager shall use its
best efforts to cause such insurance to be placed and kept
in effect at all times at the expense of Operator. All
insurance shall be placed with such companies, on such
conditions, in such amounts and with such interests
appearing thereon (except that Operator shall be named as an
insured under each such policy) as shall be deemed by the
Manager to be appropriate but not less than the customary
amounts of coverage for similar types of nursing homes in
New Jersey. Each of the policies of insurance (except the
worker's compensation insurance, fire, earthquake, and
extended coverage insurance and use and occupancy insurance)
shall insure any lender whose loans are secured by the
Facility or any other assets of the Operator, the Operator
and Manager and their respective officers, agents and
employees, and the rights of Manager and its officers,
agents and employees under such policies shall be severable
from and independent of the Operator's rights;
(ii) Manager shall obtain and maintain at the Operator's expense,
worker's compensation, malpractice insurance, business
interruption insurance with provision for loss of profit
insurance, key employee insurance, and such other similar
insurance as may be required by law or as may be required to
insure the Operator and Manager against loss for the payment
of damages for such liabilities as may be imposed by law and
such
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fidelity and honesty insurance in such amount as Manager
shall deem advisable consistent with customary practice in
similar businesses;
(iii) Manager shall investigate and furnish the Operator with
full reports as to all accidents, claims and potential
claims for damage relating to the Facility and shall
cooperate with the aforesaid insurers in connection
therewith;
(iv) Upon request, Manager will provide evidence of the foregoing
insurance coverages to Operator.
(n) Licenses; Permits; Compliance with Governmental Regulation and
Orders. Manager shall apply for, obtain, and maintain in the
Operator's name and as a Facility Expense, all licenses and
permits required in connection with the management and operation
of the Facility. The Operator agrees to cooperate with Manager's
applying for, obtaining, and maintaining such licenses and,
permits. Manager shall cause, as a Facility Expense, all acts and
things to be done in and about the Facility as shall be required
by any statute, ordinance, law, rule, regulation, or order of any
governmental or regulatory body having jurisdiction over the
premises respecting the use or manner of use of the Facility;
provided however, that if the Operator shall adequately secure
and protect Manager from loss, cost, damage, or expense by bond
or other means satisfactory to Manager, the Operator, at its sole
expense, may contest the validity or applicability of any such
statute, ordinance, law, rule, regulation, or order provided such
contest shall not result in the suspension of operations of the
Facility. Manager shall notify the Operator in writing of all
notices of such orders or other requirements, as soon as possible
after their receipt.
(o) Taxes. Manager shall arrange and supervise the preparation, on
behalf of Operator and as a Facility Expense, of all returns and
other documents required under F.I.C.A., the Federal Unemployment
Compensation Act, the Internal Revenue Code of 1986, as amended
(including all withholding tax returns), and all other similar
documentation required by federal or state law. Manager may
employ, as a Facility Expense, consultants to prepare said
returns or other documents. Manager shall pay, as a Facility
Expense, the amount of any taxes payable by Operator to any
governmental authority on account of the income or operation of
the Facility in a timely manner. Manager shall cause, as a
Facility
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Expense, all taxes, assessments, charges of every kind imposed
upon the Operator by any governmental authority, contributions or
payments required to be paid on behalf of employees of the
Operator pursuant to such state or federal legislation as above
described (excluding the Operator's income (to the extent
unrelated to the Facility), gift or inheritance taxes), including
interest and penalties thereon to be paid when due, unless
payment thereof is in good faith being contested by the Operator
at its sole expense and without cost to Manager, and enforcement
thereof is stayed and the Operator shall have given Manager
written notice of such contest and stay and authorized the
non-payment thereof, not less than ten (10) days prior to the
date on which such tax, assessment, or charge is due and payable;
provided that such interest or penalty payments shall be
reimbursed by Manager to the Operator if imposed upon the
Operator by reason of negligence or default on the part of
Manager in making the payment if authorized in writing by the
Operator.
(p) Deposit and Disbursement of Funds.
(i) Manager shall establish and administer the overall charge
structure of the Facility and shall supervise the issuance
of bills and the collection of accounts for the Facility.
Manager shall take possession of and endorse the name of the
Operator on all notes, checks, money orders, insurance
payments, and any other instruments received in payment of
accounts described below;
(ii) Manager shall establish such accounts for the Facility in
Manager's name, separate from all other accounts and funds
of Manager, with a bank or banks whose deposits are insured
by the Federal Deposit Insurance Corporation ("FDIC") or
with a savings and loan institution or institutions whose
deposits are insured by the Federal Savings and Loan
Insurance Corporation ("FSLIC") as it deems necessary or
desirable. Manager, on behalf of the Operator, shall use
reasonable efforts to collect when due all accounts
receivable arising out of the operation of the Facility
(whether from patients, third-party payors or others) in
connection with the operation of the Facility and deposit
all monies received in such accounts. Upon Manager's
request, subject to applicable law, the Operator shall
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assign any past due account receivable to the Manager so
that Manager may take any steps it may deem necessary, in
its sole discretion, to collect such account receivable;
(iii) Draws on such accounts may be made by the sole signature of
an authorized representative of the Manager (or by wiring
instructions from such authorized representative of Manager)
and shall be used to pay Facility Expenses and, provided
that Manager has paid or provided for the timely payment of
Facility Expenses then due or to become due, paid to Manager
(or its affiliates) to reimburse Manager (or its affiliates)
for payments made pursuant to this Agreement by Manager (or
its affiliates) from its own accounts. Operator hereby
grants Manager for the term of this Agreement the right to
collect the accounts receivable of the Facility, depositing
the same and withdrawing, by writing checks against such
accounts, funds for payment of Facility Expenses and
reimbursement of all amounts payable to Manager pursuant to
this Agreement in connection with the operation of the
Facility. Operator agrees to execute, from time to time, any
additional documents reasonably required by any bank wherein
such accounts are held to effectuate these agreements,
including without limitation, a power of attorney if
required in order to collect any account receivable or if
required to establish any banking relationship for the
Facility. Manager shall disburse and pay such sums from such
accounts in such amounts and at such times as the same are
deemed by Manager to be appropriate.
(iv) On the tenth (10th) day of any month, to the extent there is
Positive Cash Flow for the preceding month, and provided
that Manager has paid or provided for the timely payment of
Facility Expenses then due or to become due, then any such
Positive Cash Flow shall be paid to the Manager as its
management fee pursuant to Section 9 of this Agreement.
(v) The Manager shall indemnify and hold the Operator harmless
from and against any and all claims, liabilities, expenses,
damages
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judgments, actions and causes of action arising out of, in
connection with or relating to any Negative Cash Flow.
(q) Legal Actions. With the prior written approval of the Operator,
Manager shall institute, in its own name or in the name of the
Operator, but in any event as a Facility Expense, any and all
legal actions or proceedings to collect charges, or other income
for the Facility or to lawfully oust or dispossess tenants or
other persons in possession under, or lawfully cancel, modify, or
terminate any lease, license, or concession agreement for the
breach thereof or default thereunder by the tenant, licensee,
concessionaire. After notifying Operator and obtaining Operator's
approval, Manager shall take, as a Facility Expense, any
appropriate steps to protect and/or litigate the final decision
in any appropriate court of forum any violation, order, rule, or
regulation affecting the Facility.
Section 4 - Non-discrimination. In the performance of its obligations under
this Agreement, Manager shall comply with the provisions of any applicable
federal, state or local law prohibiting discrimination on the grounds of age,
race, color, creed, sex or national origin.
Section 5 - Warranties and Representations of Operator. The Operator makes
the additional representations and warranties set forth in this Section, which
are material representations and warranties and upon which Manager relies as an
inducement to enter into this Agreement.
(a) This Agreement constitutes a valid and binding agreement by the
Operator, enforceable in accordance with its terms; and neither the
execution and delivery of the Agreement nor the consummation of the
transactions contemplated hereby nor compliance with any of the
provisions hereof will:
(i) conflict with, or result in, a breach of the certificate of
incorporation or bylaws of the Operator;
(ii) violate any applicable statute, law, rule or regulation or any
order, writ, injunction or decree of any court or governmental
authority;
(iii) violate or conflict with or constitute a default under (or give
rise to any right of
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termination, cancellation or acceleration under) the terms or
conditions or provisions of any note, instrument, bond, lease,
mortgage, obligation, agreement, understanding, arrangement or
restriction of any kind to which the Operator is a party or by
which the Operator or its assets or properties may be bound; or
(iv) require the consent or approval by any governmental authority.
(b) The Operator is a corporation, duly organized, validly existing, and
in good standing under the laws of the State of New Jersey, and has
all requisite power and authority to own, and to carry on its business
as now being conducted or as contemplated at the Facility, and to
perform its obligations hereunder.
Section 6 - Warranties and Representations of Manager. The Manager makes
the additional representations and warranties set forth in this Section, which
are material representations and warranties and upon which Operator relies as an
inducement to enter into this Agreement.
(a) This Agreement constitutes a valid and binding agreement by the
Manager, enforceable in accordance with its terms; and neither the
execution and delivery of the Agreement nor the consummation of the
transactions contemplated hereby nor compliance with any of the
provisions hereof will:
(i) conflict with, or result in, a breach of Manager's bylaws or
articles of incorporation;
(ii) violate any applicable statute, law, rule or regulation or any
order, writ, injunction or decree of any court or governmental
authority;
(iii) violate or conflict with or constitute a default under (or give
rise to any right of termination, cancellation or acceleration
under) the terms or conditions or provisions of any note,
instrument, bond, lease, mortgage, obligation, agreement,
understanding, arrangement or restriction of any kind to which
the Manager is a party or by which the Manager or its assets or
properties may be bound; or
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(iv) require the consent or approval by any governmental authority .
(b) The Manager is a corporation duly organized, validly existing, and in
good standing under the laws of the State of New Jersey and has all
requisite power and authority to own, and to carry on its business as
now being conducted or as contemplated at the Facility, and to perform
its obligations hereunder.
Section 7 - Covenants by Operator. The Operator makes the additional
covenants set forth in this Section, which are material covenants and upon which
Manager relies as inducement to enter into this Agreement.
(a) The Operator will cooperate with Manager in every reasonable respect
and will furnish Manager with all information required by it for the
performance of its services hereunder and will permit Manager to
examine and copy any data in possession and control of the Operator
affecting management and/or operation of the Facility and will in
every reasonable way cooperate to enable Manager to perform its
services hereunder.
(b) Operator will examine documents submitted by Manager and render
decisions pertaining thereto, when required, promptly, to avoid
unreasonable delay in the progress of Manager's work. Operator shall
execute and deliver any and all applications and other documents that
may be reasonably deemed by Manager to be necessary or proper to be
executed by Operator in connection with the Facility provided that
such documents do not require Operator to incur any liability or
obligation, other than Operator's statutory or regulatory obligations
by virtue of its ownership of the Facility.
(c) Operator shall comply with all federal, state and local laws, rules,
regulations and requirements which are applicable to Operator and are
not within the control of or the responsibility hereunder of Manager;
provided that Operator, at its sole expense and without cost to
Manager, shall have the right to contest by proper legal proceedings
the validity, so far as applicable to it, of any such law, rule,
regulation or requirement, provided that such contest shall not result
in a suspension of operations of the Facility.
(d) Operator hereby grants to Manager an exclusive irrevocable (except in
accordance with the termination provisions of the Agreement) and
nonassignable license to use the Facility during the Term of this
Agreement,
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for the purposes described herein. Any attempted assignment of the
license to use this Facility shall be null and void.
(e) Operator acknowledges that Manager retains all ownership and other
rights in all systems, manuals, materials, and other information, in
whatever form, developed by Manager in the performance of its services
hereunder
(f) Whenever Operator is requested hereunder to give its approval to a
matter, such approval shall not be unreasonably withheld or delayed.
If Operator shall not respond negatively in writing to the notice
within twenty (20) days after the sending thereof (unless some other
period for response is specified in this Agreement), Operator shall be
deemed to have approved the matter referred to in the notice. Any
provision hereof to the contrary notwithstanding, in emergency
situations an approval sought and given in any manner reasonable under
the circumstances shall be effective.
Section 8 - Covenants by Manager. The Manager makes the additional
covenants set forth in this Section, which are material covenants and upon which
Operator relies as inducement to enter into this Agreement.
(a) The Manager will cooperate with Operator in every reasonable respect
and will furnish Operator with all information required by it which
relates to the Facility, including information to enable the Operator
to review, prepare and pay its taxes (if applicable), its financial
statements and those of its parent company and any reports required of
the Operator or those of its parent company, whether to any regulatory
agency or to any lender.
(b) Manager shall comply with all federal, state and local laws, rules,
regulations and requirements which are applicable to Manager or the
operation or administration of the Facility; provided that Manager, at
its sole expense and without cost to Operator, shall have the right to
contest by proper legal proceedings the validity, so far as applicable
to it, of any such law, rule, regulation or requirement, provided that
such contest shall not result in a suspension of operations of the
Facility and that the Manager shall adequately secure and protect the
Operator from loss,
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cost, damage or expense by bond or other means satisfactory to the
Operator.
Section 9 - Compensation. As compensation for the services to be rendered
by Manager during the term of this Agreement, the Manager shall pay itself as a
Facility Expense, at its principal office given below (or at such other place as
Manager may from time to time designate in writing), and at the times
hereinafter specified, a management fee equal to, out of and to the extent of
Positive Cash Flow, each month through the term of this Agreement. Such
management fee shall be paid in monthly installments on the twentieth (20th) day
of each month based on a determination of Positive Cash Flow for the preceding
month, ("Due Date"). The management fee shall begin to accrue upon the opening
of the Facility.
Section 10 - Subordination. The right of Manager to receive its management
fee under Section 9 of this Agreement shall in all respects submit and be
subordinate to the rights of any lender providing permanent financing to the
Facility to receive amounts under any loan agreement under which permanent
financing is provided for the original project cost of the Facility and to the
payment of all Facility Expenses. Manager and its affiliates shall not be
entitled to receive, and the Facility shall not be required to pay, management
fees under Section 9 of this Agreement for any month or reimbursement of their
expenses until the Manager shall have first paid, or made adequate provision for
the payment of, all current, accrued or delinquent payments under any loan
agreement providing financing for the original project cost of the Facility for
such month and all Facility Expenses.
Section 11 - Term of Agreement.
(a) The initial term of this Agreement shall commence on the date hereof
(such date of commencement to be referred to as the "Commencement
Date"), and shall have an initial term of ten (10) years from the date
on which the Facility is first licensed, unless extended or sooner
terminated as provided herein. This Agreement may be extended for an
additional term of ten (10) years upon written notice from the Manager
to Operator.
(b) This Agreement may be terminated by the mutual written consent of the
Operator and Manager as of the end of any calendar month, provided
that at least thirty (30) days advance written notice thereof is given
to any lender providing permanent financing for the Facility.
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(c) Manager may terminate this Agreement if the Operator defaults in its
obligations hereunder after providing the Operator with written notice
of its intent to terminate this Agreement and a reasonable period
within which Operator may cure such default which shall not be less
than thirty (30) days.
(d) Operator or Manager may terminate this Agreement in the event that the
CON or License for the Facility expires or such CON is transferred to
the Manager prior to licensure
(e) Upon termination of this Agreement, Manager, shall submit to the
Operator, at the Facility's cost, any financial statements and other
information required by governmental agencies, and after the Operator
and Manager have accounted to each other with respect to all matters
outstanding as of the date of termination. In the event that, upon
termination of this Agreement, Operator remains the licensed operator
of the Facility, then the Manager shall submit to the Operator any and
all records relating to the operation of the Facility, including,
without limitation, patient records, lists of account payable,
accounts receivable, general ledgers, admissions records and the like.
(f) If Manager or Operator shall apply for or consent to the appointment
of a receiver, trustee, or liquidator of Manager or Operator or of all
or a substantial part of either's respective assets; file a voluntary
petition in bankruptcy; make a general assignment for the benefit of
creditors, file a petition or an answer seeking reorganization or
arrangement with creditors or to take advantage of any insolvency law;
or if an order, judgment, or decree shall be entered by any court of
competent jurisdiction, on the application of a creditor, adjudicating
Manager or Operator bankrupt or insolvent or approving a petition
seeking reorganization of Manager or Operator or appointing a
receiver, trustee, or liquidator of Manager or Operator or of all or a
substantial part of either's respective assets, and such order,
judgment, or decree shall continue unstayed and in effect for a period
of ninety (90) consecutive days ("Insolvent Party"), then in case of
any such event and upon the expiration of the period of grace
applicable thereto, this Agreement may be terminated, at the option of
the party which is not the Insolvent Party upon written notice to the
Insolvent Party.
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(g) Upon any termination of this Agreement, the Manager shall satisfy any
Facility Expense incurred prior to the effective date of such
termination.
Section 12 - Arbitration.
(a) If any controversy should arise between the parties in the
performance, interpretation, and application of this Agreement which
involves accounting matters, either party may serve upon the other a
written notice stating that such party desires to have the controversy
reviewed by an arbitrator, who shall be a representative of a firm
specializing in accounting in the medical services industry. If the
parties cannot agree within fifteen (15) days from the service of such
notice upon the other party upon the selection of such arbitrator, he
shall be selected or designated by the American Arbitration
Association upon the written request of either party hereto.
Arbitration of such controversy, disagreement, or dispute shall be
conducted in accordance with the rules then in force of the American
Arbitration Association, and the decision and award of the arbitrator
so selected shall be binding upon both the Operator and Manager.
(b) If any controversy should arise between the parties in the
performance, interpretation, or application of this Agreement,
involving any matter other than an accounting matter within the scope
of the preceding paragraph, either party may serve upon the other a
written notice stating that such party desires to have the controversy
reviewed by a board of three (3) arbitrators and naming the person
whom such party has designated to act as an arbitrator. Within fifteen
(15) days after receipt of such notice, the other party shall
designate a person to act as arbitrator and shall notify the party
requesting arbitration of such designation and the name of the person
so designated. The two (2) arbitrators designated as aforesaid shall
promptly select a third arbitrator, and if they are not able to agree
on said third arbitrator, then either arbitrator, on five (5) day's
written notice to the other, or both arbitrators, shall apply to the
American Arbitration Association to designate and appoint said third
arbitrator. Any and all arbitrators chosen or appointed to arbitrate
such matters shall be experienced in the field of nursing home
operation and management. If the party upon whom said written request
for arbitration is served shall fail to designate its arbitrator
within fifteen (15) days after receipt of such notice, then the
arbitrator designated
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by the party requesting arbitration shall act as the sole arbitrator
to resolve the controversy, disagreement, or dispute. Arbitration of
such controversy, disagreement, or dispute shall be conducted in
accordance with the rules then in force of the American Arbitration
Association, and the decision and award of a majority of the
arbitrators, or of such sole arbitrator, shall be binding upon both
the Operator and Manager, and shall be enforceable in accordance with
the then applicable laws of the State of New Jersey.
Section 13 - Agreements Entered Into By Manager. Any agreements entered
into by the Manager for the provision of goods or services to the Facility shall
be entered into on an arms-length competitive basis.
Section 14 - Miscellaneous.
(a) Notices and Addresses. Unless specifically provided herein, all
notices provided to be given under this Agreement shall be given in
writing and may be deemed to have been given three (3) days after
being deposited in the United States certified or registered mail, or
Federal Express, postage prepaid, and addressed to the proper party,
at the following addresses, or to such other address as such party
shall give notice to the other party:
OPERATOR:
SVT CORPORATION
000 Xxxxxxxx Xxxx - Xxxxx X0
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
With Copies To:
Xxx Xxxxx, Esq.
Xxxxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxxx X. Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
MANAGER:
CCC of New Jersey, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President and General Counsel
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With Copies To:
Xxxxxxxx X. Xxxxxx, Esq.
Fox, Rothchild, O'Brien & Xxxxxxx
Princeton Pike Corporate Center
000 Xxxxxx Xxxxx, Xxxxxxxx 0
Xxxxxxxxxxxxx, XX 00000-0000
And:
Xxxxxx X. Xxxxxx, Esq.
Levy & Xxxxxx, P.C.
00 Xxxxxxxxx Xxxx Xxxx
P.O. Box 887
Farmington, Connecticut 06032-0887
(b) Severability. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, the other provisions hereof and this
Agreement shall be construed in accordance with the original intent of
the parties hereto.
(c) Amendment. No amendment, modification, or alteration of the terms
hereof shall be binding unless the same be in writing dated subsequent
to the date hereof, and duly executed by the parties hereto.
(d) Rights and Remedies Cumulative. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy
by either party shall not preclude or waive its right to use any or
all other remedies. Said rights and remedies are given in addition to
any other rights the parties may have by law, statute, ordinance, or
otherwise.
(e) Waiver of Default. No waiver by the parties hereto of any default or
breach of any term condition, or covenant of this Agreement shall be
deemed to be a waiver of any other breach of the same or any other
term, condition, or covenant contained herein. The waiver by a party
of any breach of any term, covenant or condition herein contained
shall not be deemed to be a waiver of such term, covenant or condition
or any subsequent breach of the same or any other term, covenant or
condition herein contained. The subsequent acceptance by a party of
performance by the other shall not be deemed to be a waiver of any
preceding breach of any term, covenant or condition of this Agreement,
other than failure to perform the particular duties so
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accepted, regardless of the knowledge of such preceding breach at the
time of acceptance of the performance.
(f) No Partnership Agency or Joint Venture. Nothing contained in this
Agreement shall constitute or be construed to be or create a
partnership or joint venture between the Operator, their respective
successors and assigns, on the one part, and Manager, its successors
or assigns, on the other part. It is expressly understood and agreed
by the parties hereto that Manager shall at all times during the
performance of services pursuant to this Agreement be acting as an
independent contractor and that no act or commission or omission of
any party hereto shall be construed to make or render the other party
its principal, agent or associate.
(g) Parties Bound; Assignment. The Manager reserves the right to assign
this Agreement, so long as the Manager remains primarily liable under
this Agreement and provided that such assignee is an Affiliate, as
that term is defined under the Securities Act of 1933 and the
regulations promulgated thereunder, of Continuum Care Corporation or
Xxxxxxx X. Xxxxxx. At all times, this Agreement, shall inure to the
benefit of the Operator and Manager and their respective successors
and assigns and constitute a binding obligation upon the Operator and
Manager and their respective successors and assigns. Except as set
forth above, neither party shall assign this Agreement, except with
the prior written consent of the other party.
(h) Entire Agreement. This Agreement and the instruments and agreements
referred to herein and the Option Agreement constitute the entire
agreement between the Operator and Manager with respect to the
management and operation of the Facility, and the other subject
matters of this Agreement, and supersede all prior agreements,
understandings and letters related thereto (all of which are merged
herein) and no change hereto shall be valid, unless made by
supplemental written agreement, executed and approved by the Operator
and Manager.
(i) Captions. The headings used before the various paragraphs of this
Agreement are for ease of reference only and do not constitute parts
of this Agreement.
(j) Counterparts. This Agreement has been executed in several
counterparts, each of which shall constitute a complete original
Agreement which may be introduced in
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evidence or used far any other purpose without production of any of
the other counterparts
(k) Governing Law. This Agreement shall be governed by and interpreted
under the law of the State of New Jersey.
(1) Joint Effort. Preparation of this Agreement has been a joint effort of
the parties, and the resulting document shall not be construed more
severely against one of the parties then the other.
(m) Manager's Indemnification of Operator. Manager hereby agrees to defend
with counsel reasonably acceptable to operator and to indemnify and
hold the Operator harmless from and against any and all claims,
damages, losses, liabilities, debts, dues, reckonings or dues of money
suffered, incurred, sustained or required to be paid by the operator
in connection with or arising out of the operation of the Facility or
this Agreement, including, without limitation, reasonable attorney's
foes or court costs incurred, suffered or paid by the operator in
connection therewith, including further, without limitation, on amount
of taxes, employment issues, negative cash flow, Facility Expenses,
malpractice or regulatory sanctions, except, however, that Manager
need not indemnify or hold the Operator harmless from any matter
caused by or arising out of the operator us grass negligence or
willful misconduct, and including further still all costs, including
attorneys' fees and costs of enforcing this indemnification provision
(collectively, an "Indemnification Loss) . Should operator
nevertheless incur an Indemnification Loss, then Manager shall
reimburse operator for the amount of such Indemnification Lass on
demand.
Date as of the 23rd day of June, l995.
ATTEST: SVT CORPORATION
/s/ Surleh Tarkas By /s/ Surleh Tarkas
--------------------------------- -------------------------------------
Secretary
Its
--------------------------------- Duly Authorized President
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CCC OF NEW JERSEY, INC.
[ILLEGIBLE] By /s/ Xxxxxxx Xxxxxx
--------------------------------- -------------------------------------
[ILLEGIBLE] Its Vice President
--------------------------------- Duly Authorized
STATE OF NEW JEERSEY }
} ss.
COUNTY OF MORCER }
The foregoing instrument was acknowledged before me this 23rd day of June,
1995 by Surbni Tarkas, President of SVT CORPORATION, a New Jersey corporation,
on behalf of the corporation.
/s/ [ILLEGIBLE]
--------------------------------------
An Attorney of the State of New Jersey
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