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Exhibit 10.7
MASTER
OPERATIONS TRANSFER AGREEMENT
THIS MASTER OPERATIONS TRANSFER AGREEMENT (the "Agreement") is made and
entered into as of the 12th day of January, 2001 (the "Effective Date") by and
between NEW OPERATORS, LANDLORDS and TRANSFERORS (each as identified and defined
in the Recitals below).
RECITALS
A. The entities identified on Schedule 1 as Landlords (collectively,
"Landlords") and the entities identified on Schedule 1 as Tenants (collectively,
"Tenants") are parties to those certain Master Lease and Security Agreements
identified on Schedule 1 (collectively, the "Master Leases"), under which
Landlords, as landlords, agreed to lease to Tenants those certain real
properties, all improvements thereon and all appurtenances thereto
(collectively, the "Facilities"), as located, described and identified on
Schedule 2.
B. The Facilities are presently utilized by Tenants as personal
care/assisted living facilities (as so utilized, collectively, the "ALFs"), each
duly licensed for a specified number of units, all as located, described and
identified on Schedule 2.
C. Tenants and the entities identified on Schedule 1 as Managers
(collectively, "Managers") are parties to those certain Management Agreements
identified on Schedule 1 (collectively, the "Management Agreements") for the
operation and management of the Facilities as ALFs.
D. Tenants and Managers are collectively referred to herein as
"Transferors".
E. Balanced Care Corporation, a Delaware corporation ("BCC"), is an
affiliate of Transferors.
F. Pursuant to that certain Master Termination and Release Agreement
dated as of even date herewith and attached hereto as Exhibit A (the
"Termination Agreement"), Landlords and Transferors have agreed to terminate the
Master Leases, the Management Agreements and the other NHP Documents (as defined
in the Termination Agreement) on and as of December 31, 2000 at 11:59 p.m.
Eastern Standard Time (the "Termination Date").
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G. As a condition precedent to Landlords' agreement to enter into the
Termination Agreements, certain Transferors have executed and delivered those
certain Interim Management Agreements of even date herewith in favor of
Landlords (collectively, the "Interim Management Agreements"), pursuant to which
certain Transferors will continue on an interim basis to operate and manage the
Facilities beginning immediately following the Termination Date and ending on
the respective termination dates in accordance with the terms of the Interim
Management Agreements (the "Takeover Date").
H. In order to facilitate an orderly transfer of the operational and
financial responsibility from Transferors to the entities identified on Schedule
1 as New Operators (collectively, "New Operators") or Landlords or Landlords'
designee, Transferors, Landlords and New Operators desire to document certain
terms and conditions relevant to the transfer of operational and financial
responsibility for the Facilities.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and agreements set forth herein, and intending to be legally bound hereby,
Landlords, New Operators and Transferors hereby agree as follows.
AGREEMENT
1. Surrender. Immediately following the Termination Date, Transferors
shall surrender to Landlords possession of the Facilities (including all
resident charts and records along with appropriate resident consents, if
necessary) in AS IS WHERE IS condition; provided, however that title to each of
the Facilities shall be free and clear of all liens and encumbrances created or
consented to by Transferors, except for (i) such liens and encumbrances
consented to by Landlords; (ii) subject to the provisions set forth below, the
mechanics liens set forth on Schedule 3 (the "Mechanics Liens"); and (iii) any
judgment or other court order in favor of Landlords. Notwithstanding the
foregoing, Transferors shall have the non-exclusive right to enter, occupy and
use the Facilities as managers of the Facilities in accordance with the
provisions of the Interim Management Agreements.
2. Conveyance of Tenants' Personal Property, Inventory, Intangible
Property, Xxxxx Cash and Prepaid Expenses; Use of Names.
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2.1. Transferors acknowledge that Landlords own all right,
title and interest in and to some of the furniture, machinery, equipment,
appliances, fixtures and other personal property used in connection with the
Facilities (excluding the personal property of the residents and the time clocks
at the Facilities). Notwithstanding the foregoing, for and in partial
consideration of the Transfer Consideration (as defined below), immediately
following the Effective Date, Transferors shall sell, transfer and convey to
Landlords or Landlords' designee all of Transferors right, title and interest in
and to all furniture, machinery, equipment, appliances, fixtures and other
personal property owned by Transferors and used in connection with the
Facilities (excluding the personal property of the residents) (collectively, the
"Tenants' Personal Property"). It is understood and agreed that the presence of
the Tenants' Personal Property at the Facilities on the Effective Date shall
constitute delivery thereof.
2.2 For and in partial consideration of the Transfer
Consideration, immediately following the Effective Date, Transferors shall sell,
transfer and convey to New Operators or Landlords' designee all consumable
inventories of every kind and nature whatsoever (specifically including, but not
limited to, all pharmacy supplies, medical supplies, office supplies, other
supplies and foodstuffs) owned by Transferors as of the Effective Date and
located at the Facilities (the "Inventory"). Transferors shall have no
obligation to deliver the Inventory to any location other than the Facilities,
it being understood and agreed that the presence of the Inventory at the
Facilities on the Effective Date shall constitute delivery thereof. New
Operators or Landlords' designee shall pay any sales or use tax which may be
payable with respect to the sale of the Inventory to New Operators or Landlords'
designee.
2.3 Transferors shall execute a Xxxx of Sale in form and
substance reasonably acceptable to Transferors and Landlords that confirms the
conveyance of the Tenants' Personal Property, if any.
2.4. For and in partial consideration of the Transfer
Consideration, immediately following the Effective Date, Transferors shall sell,
transfer and convey to New Operators or Landlords' designee all of Transferors'
right, title and interest in and to the technical systems, methods, policies,
processes, procedures and controls, and the information and materials compiled
or prepared in connection therewith, used by Transferors in operating the
Facilities, including, without
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limitation, marketing plans, business plans, pricing information, information on
competition, demographics, suppliers and providers of services and financing
arrangements (excluding the materials subject to Section 10 and excluding the
intellectual property licensed to Landlords, New Operators or Landlords'
designee pursuant to Section 2.5) (collectively, the "Intangible Property").
2.5 Transferors, Landlords and New Operators agree that
Landlords, New Operators or Landlords' designee may use the trade or service
names, associated marks and other intellectual property, including the name
"Outlook Pointe," royalty-free for a period of two (2) years beginning
immediately following the Effective Date in accordance with the provisions of
that certain License Agreement of even date herewith between New Operators and
Transferors in the form attached hereto as Exhibit B (the "License Agreement").
2.6 For and in partial consideration of the Transfer
Consideration, immediately following the Effective Date, Transferors shall sell,
transfer and convey to New Operators or Landlords' designee all of Transferors'
right, title and interest in and to the xxxxx cash maintained at the Facilities
as of the Termination Date (the "Xxxxx Cash").
2.7 For and in partial consideration of the Transfer
Consideration, immediately following the Effective Date, Transferors shall sell,
transfer and convey to New Operators or Landlords' designee all of Transferors'
right, title and interest in and to any prepaid expenses with respect to the
Facilities as of the Termination Date (the "Prepaid Expenses").
3. Transfer Consideration.
3.1 The total consideration (the "Transfer Consideration") to
be paid to Transferors by New Operators or Landlords or Landlords' designee for
the Tenants' Personal Property, the Inventory, the Intangible Property, the
Xxxxx Cash, the Prepaid Expenses and leasehold improvements at the Facility
located in Murfreesboro, Tennessee, with the agreed upon value of $62,500
(collectively, the "Transferred Assets") shall be an amount equal to: (A) the
net book value of the Transferred Assets as of the dates set forth on the
Closing Schedule attached hereto as Exhibit C (the "Closing Schedule") less (B)
the amount of the accrued liabilities of Transferors as of December 31, 2000
(the "Payables") less (C) the aggregate amount of the Mechanics Liens as set
forth on Schedule 3. The
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Closing Schedule sets forth in reasonable detail Transferors' best estimate of
the amount of the Payables and the net book value of the Transferred Assets.
Immediately following the Effective Date, Transferors shall sell, transfer and
convey the Transferred Assets to New Operators or Landlords or Landlords'
designee in accordance with Section 2. Within ten (10) days following the
Effective Date, Transferors shall deliver to New Operators or Landlords or
Landlords' designee (i) an open accounts payable report including all of the
Payables and (ii) payment information for each creditor or vendor listed on the
open accounts payable report, including the name and address of the creditor or
vendor, the amount payable and any other relevant information, such as account
or invoice numbers to be referenced with payment (the "Check Run"). Following
receipt of the Check Run, New Operators and Landlords or Landlords' designee
shall be entitled to review and request copies of the books and records and
supporting material relating to the Payables, to the extent reasonably necessary
to enable New Operators and Landlords or Landlords' designee to verify the Check
Run. After New Operators and Landlords or Landlords' designee have verified the
Check Run to their satisfaction, New Operators or Landlords or Landlords'
designee shall promptly deliver payment to the creditors or vendors in
accordance with the Check Run. Transferors hereby represent and warrant that
other than the Payables set forth on the Closing Schedule, as of December 31,
2000, there were no liabilities of any nature, whether accrued, unmatured,
absolute, contingent or otherwise, and whether due or to become due, probable of
assertion or not, relating to the Facilities, in excess of an aggregate of
$75,000.
3.2 From and after the Effective Date, Transferors shall allow
New Operators and Landlords or Landlords' designee or their respective agents
and representatives to have reasonable access to (upon reasonable prior notice
and during normal business hours) the books and records and supporting material
of the Facilities relating to the Transferred Assets and the Payables, to the
extent reasonably necessary to enable New Operators and Landlords or Landlords'
designee to verify the Transferred Assets and the Payables. The Closing Schedule
shall be deemed to be accepted by New Operators and Landlords or Landlords'
designee and shall be final and binding for all purposes of this Agreement
unless New Operators and Landlords or Landlords' designee, within thirty (30)
days following the Effective Date, give notice to Transferors stating the items
as to which New Operators and Landlords or Landlords' designee take exception
("Objections"). If an Objection is disputed by
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Transferors, then the parties shall negotiate in good faith to resolve such
dispute. If after a period of thirty (30) days following the date on which New
Operators and Landlords or Landlords' designee delivered the Objections, any
Objection still remains disputed, then Transferors, New Operators and Landlords
or Landlords' designee shall together choose an independent firm of public
accountants of nationally recognized standing to resolve such remaining
Objections. The accounting firm shall act as an arbitrator and shall have the
power and authority to determine those issues still in dispute. The accounting
firm shall use the following standards in the evaluation of any Objection
regarding a Transferred Asset: (i) existence, and presence at or proper
attribution to one of the Facilities, of the Transferred Asset, (ii) proper
recording on the books of the appropriate entity of the Transferred Asset, (iii)
appropriate method and useful life used in depreciating the Transferred Asset,
and (iv) appropriate classification of the Transferred Asset in one of the
classifications included in the definition of "Transferred Asset." The
determination of the accounting firm shall be final and binding. The fees and
expenses of the accounting firm shall be paid equally by Transferors and New
Operators or Landlords or Landlords' designee.
3.3 Within ten (10) days following resolution of all
Objections, (i) if the Transfer Consideration is an amount greater than zero,
then New Operators or Landlords or Landlords' designee shall pay the amount of
the excess to Transferors, by wire transfer or certified check or (ii) if the
Transfer Consideration is an amount less than zero, then Transferors or BCC on
behalf of Transferors shall pay the amount of the deficiency to New Operators or
Landlords or Landlords' designee, by wire transfer or certified check; provided,
however, that if Transferors and BCC are unable to pay the amount of such
deficiency, Transferors and New Operators or Landlords or Landlords' designee
shall negotiate in good faith to agree upon the terms of a promissory note to be
executed by BCC and/or Transferors (at the option of New Operators and Landlords
or Landlords' designee) in favor of New Operators or Landlords or Landlords'
designee in the amount of such deficiency.
3.4 For a period of sixty (60) days following the Effective
Date, Transferors shall use their best efforts to cause all Mechanics Liens to
be released and removed. In the event that any Mechanics Lien remains
outstanding after such sixty (60) day period, New Operators or Landlords or
Landlords' designee shall have the option, but not the obligation, upon
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five (5) days written notice to Transferors, to pay the amount of or otherwise
satisfy or settle such outstanding Mechanics Lien and take any actions necessary
to cause the removal and release of such Mechanics Lien. Within five (5) days
following the removal or release of any Mechanics Lien at any time through the
efforts of Transferors and to the satisfaction of New Operators and Landlords or
Landlords' designee, New Operators or Landlords or Landlords' designee shall pay
Transferors the applicable amount of such removed and released Mechanics Lien as
set forth on Schedule 3, by wire transfer or certified check. Notwithstanding
the foregoing, if (i) BCC and/or Transferors have any outstanding obligation to
New Operators or Landlords or Landlords' designee pursuant to Section 3.3, in
the form of a promissory note or otherwise (the "Transfer Consideration
Deficiency"), then New Operators and Landlords or Landlords' designee shall have
no obligation to deliver the applicable payment amount of such removed and
released Mechanics Lien to Transferors and (ii) New Operators and Landlords or
Landlords' designee shall apply the amount of such payment against any
outstanding Transfer Consideration Deficiency. In the event that the amount of
any such removed and released Mechanics Lien applied against the Transfer
Consideration Deficiency exceeds the amount of the Transfer Consideration
Deficiency, New Operators or Landlords or Landlords' designee shall pay
Transferors the amount of such excess by wire transfer or certified check within
ten (10) days following the removal and release of such Mechanics Lien in
accordance with the provisions set forth above. In the event that Transferors do
not cause any Mechanics Lien to be released and removed within the sixty (60)
day period following the Effective Date and New Operators or Landlords or
Landlords' designee subsequently pay the amount of or otherwise satisfy or
settle such outstanding Mechanics Lien in accordance with the provisions set
forth above, then Transferors shall have no right to any payment or offset
against any Transfer Consideration for the applicable amount of such Mechanics
Lien as set forth on Schedule 3.
4. Resident Property.
4.1. Within fifteen (15) days after the Effective Date,
Transferor shall prepare and deliver to New Operators or Landlords' designee a
true, correct, and complete accounting and inventory (properly reconciled) of
any resident trust funds, security deposits, entrance deposits and residents'
property, if any, held by Transferors as of the Termination Date in trust for
residents at the Facilities (collectively the "Resident Property").
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4.2. Within fifteen (15) days after the Effective Date,
Transferors hereby agree to transfer to New Operators or Landlords' designee the
Resident Property and New Operators and Landlords hereby agree that they or
Landlords' designee will accept such Resident Property in trust for the
residents/responsible parties and be accountable to the residents/responsible
parties for such Resident Property in accordance with the terms of this
Agreement and applicable statutory and regulatory requirements.
4.3. New Operators or Landlords' designee shall have no
responsibility to the applicable resident/responsible party and regulatory
authorities in the event the Resident Property delivered by Transferors to New
Operators or Landlords' designee pursuant to Section 4.2 are demonstrated to be
less than the full amount of the Resident Property for such resident as of the
Effective Date, for inaccuracies in the accounting and inventory provided by
Transferors, or for claims which arise from actions or omissions of Transferors
with respect to the Resident Property on or before the Effective Date.
4.4. Transferors shall have no responsibility to the
applicable resident/responsible party and regulatory authorities arising after
the delivery of the Resident Property to New Operators or Landlords' designee
pursuant to Section 4.2.
5. Employees.
5.1 Within fifteen (15) days after the Effective Date,
Transferors shall have delivered to New Operators or Landlords' designee a
schedule which reflects the following for each of the Facilities: (i) the names
of all of Transferors' employees, (ii) such employees' positions and rates of
pay, and (iii) accounting of all Employee Liabilities through the Termination
Date. For the purposes of this Agreement, "Employee Liabilities" shall mean all
wages, salaries, commissions, earned or accrued vacation, holiday or sick pay,
earned or accrued bonuses due to and/or coming due to the employees, severance
pay, any contributions required or costs associated with any employee welfare
benefit plan as defined by Section 3(1) of ERISA, any contributions required or
costs associated with any employee pension benefit plan as defined by Section
3(2) of ERISA, any contributions required or costs associated with any
non-qualified employee benefit plan, federal, state and/or local payroll taxes,
unemployment insurance costs, any contributions required or costs associated
with workers' compensation
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liabilities, and any claims made by any employee arising out of or connected
with his or her employment or the termination thereof.
5.2 On the Takeover Date, New Operators or Landlords' designee
shall have the right, in their sole and absolute discretion, but not the
obligation to offer to employ Transferors' employees that work at each of the
Facilities. Transferors shall use their best efforts to assist New Operators or
Landlords' designee in their efforts to employ any of Transferors' employees.
Effective as of the Takeover Date, Transferors shall terminate the employment of
all employees at each of the Facilities. New Operators or Landlords on behalf of
any designee of Landlords agree to cooperate with Transferors to provide
information concerning which employees, if any, are being offered employment by
New Operators or Landlords' designee (collectively, the "Retained Employees")
and the service descriptions and salary levels for any such Retained Employees.
5.3 Transferors shall continue to employ the employees of the
Facilities and shall remain liable for all Employee Liabilities relating to all
employees up through the Takeover Date and for all Employee Liabilities, if any,
relating to the termination of all employees on the Takeover Date. New Operators
or Landlords' designee shall be responsible for all Employee Liabilities
relating to the Retained Employees that arise or accrue on or after the Takeover
Date. Notwithstanding the foregoing, Landlords and New Operators acknowledge and
agree that the following Employee Liabilities for the period beginning
immediately following the Termination Date and ending on the Takeover Date and
attributable to work performed during such period shall be a pass-through cost
of the Facilities in accordance with Section 10 of the Interim Management
Agreements: (i) wages, salaries, commissions and bonuses, (ii) vacation, holiday
or sick pay, (iii) any contributions required or costs associated with any
employee welfare benefit plan as defined by Section 3(1) of ERISA, (iv) any
contributions required or costs associated with any employee pension benefit
plan as defined by Section 3(2) of ERISA, (v) any contributions required or
costs associated with any non-qualified employee benefit plan, (vi) unemployment
insurance costs, (vii) any contributions required or costs associated with
workers' compensation liabilities and (viii) all federal, state, and/or local
payroll taxes (the "Pass-Through Employee Liabilities").
5.4 Transferors and New Operators or Landlords' designee shall
cooperate and use their respective best efforts
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(i) to determine with respect to each of the Facilities whether Transferors are
required to give notice to the employees of each of the Facilities under the
Worker Adjustment and Retraining Notification Act (the "WARN Act") or under any
comparable State law on or before the Takeover Date of any plant closure or mass
layoff occurring as a result of the transfer of operations pursuant to this
Agreement and (ii) if such notice is required, give notice to employees in
conformity with the WARN Act or comparable State law.
5.5 Transferors shall offer and provide, as appropriate, group
health plan continuation coverage pursuant to the requirements of Section 601,
et seq. of ERISA and Section 4980B of the Internal Revenue Code ("COBRA") to all
of the employees of the Facilities to whom it is required to offer the same
under applicable law up through and including the Takeover Date. New Operators
or Landlords on behalf of any designee of Landlords agree to cooperate with
Transferors in providing information concerning the Retained Employees, if any,
after the Takeover Date, and the nature of the benefits offered to each such
employee. As of the Takeover Date, all Retained Employees shall be eligible for
participation in a group health plan (as defined for purposes of Internal
Revenue Code Section 4980B) established and maintained by New Operators or
Landlords' designee for the general benefit of its employees and their
dependents.
6. Accounts Receivable.
6.1 Transferors shall retain their right, title and interest in
and to all unpaid accounts receivable with respect to the Facilities that relate
to the period up through and including the Termination Date. Within fifteen (15)
days after the Effective Date, Transferors shall provide New Operators or
Landlords' designee with a schedule setting forth by resident its outstanding
accounts receivable as of the Termination Date.
6.2 Payments received by New Operators, Landlords' designee or
Transferors after the Termination Date from third party payors and private pay
residents shall be handled as follows:
6.2.1 If such payments either specifically indicate
on the accompanying remittance advice, or if the parties agree, that they relate
to the period on or prior to the Termination Date, they shall be forwarded to
Transferors, along with the applicable remittance advice, in accordance with the
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provisions of Section 6.2.4 below;
6.2.2 If such payments indicate on the accompanying
remittance advice, or if the parties agree, that they relate to the period after
the Termination Date, they shall be deposited and retained in the Operating
Accounts (as defined in the Interim Management Agreements) for the benefit of
New Operators or Landlords' designee.
6.2.3 If such payments indicate on the accompanying
remittance advice, or if the parties agree, that they relate to periods for
which both parties are entitled to reimbursement under the terms hereof, the
portion thereof which relates to the period after the Termination Date shall be
deposited and retained in the Operating Accounts and the balance shall be
remitted to Transferors in accordance with the provisions of Section 6.2.4
below.
6.2.4 All amounts owing to Transferor under this
Section 6.2 shall be settled within ten (10) days after the end of each month in
which the payment was received.
6.3 Payments received by Transferors prior to the Termination
Date from third party payors and private pay residents for periods following the
Termination Date shall be deposited in the Operating Accounts within ten (10)
days following the Effective Date.
6.4 In the event the parties mutually determine that any third
party payors or private pay residents are entitled to a refund of payments that
relate to a period beginning before the Termination Date and ending after the
Termination Date, the portion thereof that relates to the period after the
Termination Date shall be paid from the funds in the Operating Accounts and the
portion thereof that relates to the period prior to the Termination Date shall
immediately be paid by Transferors to such third party payor or private pay
resident.
6.5 Nothing herein shall be deemed to limit in any way
Transferors' rights and remedies to recover accounts receivable due and owing
Transferors under the terms of this Agreement.
6.6 In the event the parties mutually determine that any
payment hereunder was misapplied by the parties, the party which erroneously
received said payment shall remit the same to
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the other within ten (10) business days after said determination is made.
6.7 For the three (3) month period following the Takeover Date
or until Transferors receive payment of all accounts receivables attributed to
the operation of the Facilities prior to the Termination Date, whichever is
sooner, New Operators or Landlords' designee shall provide Transferors with an
accounting by the 20th day of each month setting forth all amounts received by
New Operators or Landlords' designee during the preceding month with respect to
the accounts receivable of Transferors which are set forth in the schedule
provided by Transferor pursuant to Section 6.1. New Operators or Landlords'
designee shall deliver such accounting to the following address: Xxxxx X. Xxxxx,
Balanced Care Corporation, 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx, XX 00000.
Transferors shall have the right to inspect all cash receipts of New Operators
or Landlords' designee during weekday business hours in order to confirm New
Operators' or Landlords' designee's compliance with the obligations imposed on
it under this Section 6.
7. Prorations; Liabilities.
7.1 As between New Operators or Landlords' designee and
Transferors, revenues and expenses, utility charges for the billing period in
which the Termination Date occurs, real and personal property taxes, insurance
premiums, liabilities under the Assumed Contracts and the Operating Contracts
(each as defined in Section 9 below), vendor payables for the billing period in
which the Termination Date occurs, the Pass-Through Employee Liabilities,
prepaid expenses, entrance fees and other related items of revenue or expense
attributable to the Facilities shall be prorated between Transferors and New
Operators or Landlords' designee as of the Termination Date. In general, such
prorations shall be made so that as between New Operators or Landlords' designee
and Transferors, Transferors shall be reimbursed for prepaid expense items to
the extent that the same are attributable to the periods after the Termination
Date and Transferors shall be charged for unpaid expenses to the extent that the
same are attributable to periods prior to the Termination Date. Notwithstanding
the foregoing, Transferors shall not be obligated to pay any Rent or Additional
Rent (as such terms are defined in the Master Leases) or late charges or
interest thereon for the period commencing on or after December 1, 2000 due
under the Master Leases with respect to any of the Facilities. The intent of
this provision shall be implemented by New Operators or Landlords' designee
remitting to Transferors
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any invoices that describe goods or services provided to or expenses incurred by
the Facilities before the Termination Date and by New Operators or Landlords'
designee assuming responsibility for the payment of any invoices that describe
goods or services provided to or expenses incurred by the Facilities on and
after the Termination Date.
7.2 All such prorations 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 Transferors. Utility charges that are
not metered and read on the Termination Date shall be estimated based on prior
charges, and shall be re-prorated upon receipt of statements therefor.
7.3 All amounts owing from one party hereto to the other party
hereto that require adjustment after the Termination Date shall be settled
within thirty (30) days after the Termination Date or, in the event the
information necessary for such adjustment is not available within said thirty
(30) day period, then as soon thereafter as practicable.
8. Access to Records.
8.1. On the Takeover Date, Transferors shall deliver to New
Operators or Landlords' designee all of the records of the Facilities relating
to the period after the Termination Date. Nothing herein shall be construed as
precluding Transferors from retaining copies of the financial records that
relate to their operations at the Facilities and/or the originals of any
proprietary materials related to their overall corporate operations that are not
necessary to the efficient operation of the Facilities.
8.2. From and after the Takeover Date and for a period of five
(5) years thereafter, New Operators or Landlords' designee shall allow
Transferors 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 and supporting material of the Facilities
relating to the period prior to and including the Takeover Date, to the extent
reasonably necessary to enable Transferors to among other things investigate and
defend malpractice, employee or other claims, to file or defend tax returns, to
verify accounts receivable collections due Transferors.
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8.3. Transferors shall be entitled to remove the originals of
any records delivered to New Operators or Landlords' designee, for purposes of
litigation involving a resident or employee to whom such record relates, if an
officer of or counsel for Transferor 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. Any record so removed
shall promptly be returned to New Operators or Landlords' designee following its
use, and nothing herein shall be interpreted to prohibit New Operators or
Landlords' designee from retaining copies of any such documents.
8.4. New Operators or Landlords on behalf of any designee of
Landlords agree to maintain such books, records and other material comprising
records of the Facilities' operations prior to the Takeover Date that have been
received by New Operators or Landlords' designee from Transferors 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, at Transferors' request, allow Transferors a reasonable opportunity to
remove such documents, at Transferors' expense, at such time after such record
retention period as may be required by law as New Operators or Landlords'
designee shall decide to dispose of such documents.
9. Contracts.
9.1 Transferors do hereby assign, and New Operators or
Landlords' or Landlords' designee do hereby assume and agree to be bound by all
of the terms and conditions of, Transferors' interest and obligations under the
resident agreements relating to the Facilities and the sublease agreements
identified in Schedule 4 hereto (collectively, the "Assumed Contracts"), such
assignment and assumption to be effective on and as of the Termination Date.
Transferors will cooperate with New Operators or Landlords' designee in
obtaining any required consent, waiver, release or approval in connection with
the assignment to and assumption by New Operators or Landlords' designee of
Transferors' interests under the Assumed Contracts.
9.2 Schedule 5 sets forth a list of operating contracts and
equipment financing agreements relating to the Facilities (collectively, the
"Operating Contracts"). Transferors hereby represent and warrant that there are
no material operating contracts or equipment financing agreements relating to
the Facilities other than the Operating Contracts.
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Within five (5) days following the Effective Date, Transferors shall provide a
copy of each Operating Contract to New Operators or Landlords or Landlords'
designee. Within two (2) weeks following the Effective Date, New Operators or
Landlords or Landlords' designee shall notify Transferors as to which Operating
Contracts New Operators or Landlords or Landlords' designee desire to reject
(the "Rejected Operating Contracts"). Immediately following such notification,
Transferors shall use their commercially reasonable efforts to terminate all
Rejected Operating Contracts in accordance with the terms thereof. Effective on
and as of the date Transferors receive notification regarding the Rejected
Operating Contracts, Transferors agree to assign, and New Operators or
Landlords' or Landlords' designee agree to assume and be bound by all of the
terms and conditions of, Transferors' interest and obligations under all
Operating Contracts other than the Rejected Operating Contracts (the "Assumed
Operating Contracts"). Transferors will cooperate with New Operators or
Landlords' designee in obtaining any required consent, waiver, release or
approval in connection with the assignment to and assumption by New Operators or
Landlords' designee of Transferors' interests under the Assumed Operating
Contracts. Landlords and New Operators acknowledge and agree that the costs and
expenses relating to the Operating Contracts for the period immediately
following the Termination Date and ending on the Takeover Date shall be a
pass-through cost of the Facilities in accordance with Section 10 of the Interim
Management Agreements.
9.3 Except as specifically set forth in Section 10 of the
Interim Management Agreements, nothing herein shall be construed as imposing any
liability on New Operators or Landlords' designee with respect to any
obligations under the Assumed Contracts and the Operating Contracts which relate
to the period on or prior to the applicable date of assignment of such contracts
even if the same are not payable until after such date of assignment, it being
specifically understood and agreed that New Operators' or Landlords or
Landlords' designee's liability shall be limited to its acts and omissions
thereunder from and after the applicable date of assignment of such contracts.
9.4 Transferors hereby represent and warrant that all Assumed
Contracts and Operating Contracts were entered into in the ordinary course of
business upon commercially reasonable terms in arm's length transactions.
10. Policy and Procedure Manuals. Subject to the terms of
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the License Agreement, Transferors agree to leave their policy and procedure
manuals and other proprietary material at the Facilities for a period of ninety
(90) days after the Takeover Date and New Operators or Landlords on behalf of
any designee of Landlords agree to forward such manuals to a location designated
by Transferors, at New Operators' or Landlords' designee's sole cost and
expense, at the end of such ninety (90) day period, it being understood and
agreed that the maintenance of such manuals until new manuals are delivered to
the Facilities by New Operators or Landlords' designee is critical to the
ongoing compliance of the Facilities after the Takeover Date with applicable
licensure and certification laws.
11. Representations and Warranties. Each of Landlords, New Operators
and Transferors represent and warrant as follows:
11.1 Landlords and New Operators have 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 individuals executing this Agreement, the
Termination Agreement, the Interim Management Agreements and the License
Agreement to do so. This Agreement has been duly and validly executed and
delivered by Landlords and New Operators and is enforceable against Landlords
and New Operators in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy laws and general principals of equity.
11.2 Transferors hereby represent and warrant that Transferors
have 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, including, but not
limited to, the transfer to Landlords of the Tenants' Personal Property and the
transfer to New Operators or Landlords' designee of the personal property
described in Sections 2.2 and 2.4, and all necessary action has been taken to
authorize the individuals executing this Agreement, the Termination Agreement,
the Interim Management Agreements and the License Agreement to do so. This
Agreement has been duly and validly executed and delivered by Transferors and is
enforceable against Transferors in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy laws and general
principals of equity.
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12. Indemnification.
12.1 Notwithstanding the indemnification obligations of
Transferors pursuant to the Interim Management Agreements, Transferors and BCC
hereby indemnify and agree to defend and hold harmless New Operators, Landlords
and any other designee of Landlords and their respective directors, officers,
employees, agents, successors and assigns from and against any and all demands,
claims, causes of action, fines, penalties, damages (including consequential
damages), losses, liabilities (including strict liability), judgments, and
expenses (including, without limitation, reasonable attorneys' and other
professionals' fees and court costs) incurred in connection with or arising
from: (i) a breach by Transferors of their representations, warranties and
obligations under this Agreement, (ii) the acts or omissions of Transferors
under the Assumed Contracts and the Operating Contracts on or prior to the
Effective Date, (iii) the occupancy or operation of the Facilities on or prior
to the Effective Date, (iv) any acts, omissions or negligence of Transferors or
any person claiming under Transferors, or the contractors, agents, employees,
invitees or visitors of Transferors with respect to the Facilities on or prior
to the Effective Date, or (v) any Employee Liabilities (other than the
Pass-Through Employee Liabilities) arising out of facts occurring at any time
before the Takeover Date, including, but not limited to, all Employee
Liabilities relating to the termination of all employees on the Takeover Date.
12.2 New Operators, Landlords and Landlords on behalf of any
designee of Landlords hereby indemnify and agree to defend and hold harmless
Transferors and their respective directors, officers, employees, agents,
successors and assigns from and against any and all demands, claims, causes of
action, fines, penalties, damages (including consequential damages), losses,
liabilities (including strict liability), judgments, and expenses (including,
without limitation, reasonable attorneys' and other professionals' fees and
court costs) incurred in connection with or arising from: (i) a breach by New
Operators, Landlords or Landlords' designee of their representations, warranties
and obligations under this Agreement, (ii) the acts or omissions of New
Operators or Landlords' designee under the Assumed Contracts and the Operating
Contracts after the Effective Date, (iii) the occupancy or operation of the
Facilities after the Effective Date, or (iv) any acts, omissions or negligence
of New Operators or Landlords' designee or any person claiming under New
Operators or Landlords' designee, or
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the contractors, agents, employees, invitees or visitors of New Operators or
Landlords' designee with respect to the Facilities after the Effective Date.
12.3 The foregoing indemnification obligations shall survive
this Agreement. All matters arising from an indemnified party's negligence,
gross negligence or willful misconduct are excluded from the scope of the
indemnification of such party set forth in Sections 12.1 and 12.2.
13. Transfer of Licenses.
13.1 New Operators or Landlords' designee shall use their best
efforts to obtain all necessary licenses and certifications to operate the
Facilities as ALFs as soon as reasonably practicable.
13.2 Transferors agree to cooperate fully with New Operators
or Landlords' designee to accomplish the transfer of such management and
operation of the Facilities upon the Takeover Date, without materially
interrupting the business or operation of the Facilities. Transferors shall not
commit any act or be remiss in the undertaking of any act that would jeopardize
any licensure or certification of the Facilities, and Transferors shall, at the
time of the Takeover Date and to the extent permitted by applicable law, comply
with the reasonable requests of New Operators or Landlords' designee for an
orderly transfer of the ALF or any other applicable Facility license or
certifications. Notwithstanding the foregoing, Transferors shall not be
obligated to provide any representations or warranties regarding the operation
or condition of the Facilities in favor of New Operators or Landlords or
Landlords' designee with respect to any of the matters that Transferors have
been released from under the Termination Agreement.
14. 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.
15. Notices and Demands. All notices and demands, requests, consents,
approvals, and other similar communications under this Agreement shall be in
writing and shall be sent by personal delivery or by either (a) United States
certified or registered mail, return receipt requested, postage prepaid, or
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(b) Federal Express or similar generally recognized overnight carrier regularly
providing proof of delivery, addressed as follows:
To Transferors:
c/o Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
With Copy To:
Xxxxxxxxxxx & Xxxxxxxx, LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
To Landlords or New Operators or Landlords' designee:
Nationwide Health Properties, Inc.
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
With Copy To:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Any notice so given by mail shall be deemed to have been given as of the date of
delivery (whether accepted or refused) established by U.S. Post Office return
receipt or the overnight carrier's proof of delivery, as the case may be,
whether accepted or refused. Any such notice not so given shall deemed given
upon receipt of the same by the party to whom the same is to be given. Any party
hereto may designate a different address for itself by notice to the other party
in accordance with this Section 15. If Transferors are not individuals, notice
may be made to any officer, general partner or principal thereof.
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16. 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.
17. Entire Agreement; Amendment; Waiver. This Agreement, together with
the other agreements referred to herein, constitutes the entire understanding
between 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.
18. Assignment. Neither this Agreement nor the rights, duties or
obligations arising hereunder shall be assignable or delegable by Transferors,
without the prior written consent of Landlords and New Operators or Landlords'
designee, which may be granted, denied or conditioned in their respective
absolute discretion. This Agreement is freely assignable and transferable by
Landlords, New Operators and any designee of Landlords; provided, that (i)
notice of any such assignment or transfer is provided to Transferors within ten
(10) days following such assignment or transfer and (ii) New Operators and
Landlords or Landlords' designee shall not be released from any obligations
under this Agreement in connection with any such assignment or transfer. This
Agreement shall be binding upon, and inure to the benefit of the successors and
assigns of Transferors, Landlords, New Operators and any designee of Landlords.
19. Joint Venture; Third Party Beneficiaries. Nothing contained herein
shall be construed as forming a joint venture or partnership between the parties
hereto with respect to the subject matter hereof. The parties hereto do not
intend that any third party shall have any rights under this Agreement.
20. Announcements. The parties hereto acknowledge and agree that any
communications to the employees of the Facilities regarding the terms of this
Agreement and the transactions contemplated hereunder shall be mutually
acceptable to the
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parties hereto unless required to made pursuant to court order or law.
21. Captions. The section headings contained herein are for convenience
only and shall not be considered or referred to in resolving questions of
interpretation.
22. 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.
23. Governing Law. This Agreement shall be governed in accordance with
the laws of the State of California without regard to the conflict of rules of
such State.
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IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the
day and year first set forth above.
LANDLORDS:
WITNESS: NATIONWIDE HEALTH PROPERTIES,
INC., a Maryland corporation
/s/Xxxxxx Xxxxx By:/s/Xxxx Xxxxx
Name: Name: Xxxx Xxxxx
Title: Vice President
WITNESS: MLD DELAWARE TRUST, a Delaware
business trust
/s/Xxxxxx Xxxxx By:/s/Xxxx X. Xxxxxxx
Name: Name: Xxxx X. Xxxxxxx
Title: as Trustee and not
individually
NEW OPERATORS:
WITNESS: NATIONWIDE HEALTH PROPERTIES,
INC., a Maryland corporation
/s/Xxxxxx Xxxxx By:/s/Xxxx Xxxxx
Name: Name: Xxxx Xxxxx
Title: Vice President
WITNESS: MLD DELAWARE TRUST, a Delaware
business trust
/s/Xxxxxx Xxxxx By:/s/Xxxx X. Xxxxxxx
Name: Name: Xxxx X. Xxxxxxx
Title: as Trustee and not
individually
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TRANSFERORS:
WITNESS: C&G HEALTHCARE AT HAGERSTOWN,
L.L.C., a Delaware limited liability
company
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: ELDER CARE OPERATORS OF BRISTOL,
LLC, a Delaware limited liability
company
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: C&G HEALTHCARE AT XXXXXXX CITY,
L.L.C., a Delaware limited liability
company
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: ELDER CARE OPERATORS OF
MURFREESBORO, LLC, a Delaware limited
liability company
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: C&G HEALTHCARE AT TEAY'S VALLEY,
L.L.C., a Delaware limited liability
company
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/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: C&G HEALTHCARE AT TALLAHASSEE,
L.L.C., a Delaware limited liability
company
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: C&G HEALTHCARE AT PENSACOLA, L.L.C.,
a Delaware limited liability company
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: ELDER CARE OPERATORS OF YORK, LLC,
a Delaware limited liability company
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: ELDER CARE OPERATORS OF LAKEMONT
FARMS, LLC, a Delaware limited liability
company
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: ELDER CARE OPERATORS OF XXXXXXXX,
LLC, a Delaware limited liability
company
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/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: ELDER CARE OPERATORS OF AKRON,
LLC, a Delaware limited liability
company
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT HAGERSTOWN, INC.,
a Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT BRISTOL, INC., a
Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT XXXXXXX CITY,
INC., a Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT MURFREESBORO,
INC., a Delaware corporation
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/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT TEAY'S VALLEY, INC.,
a Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT TALLAHASSEE,
INC., a Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT PENSACOLA, INC.,
a Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT YORK, INC., a
Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT LAKEMONT FARMS,
INC., a Delaware corporation
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/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT XXXXXXXX, INC., a
Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
WITNESS: BALANCED CARE AT AKRON, INC., a
Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BCC:
FOR PURPOSES OF SECTIONS 3.3 AND 12.1 OF
THIS AGREEMENT ONLY:
WITNESS: BALANCED CARE CORPORATION, a
Delaware corporation
/s/Xxxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name:Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Senior Vice
President and Legal
Counsel and Assistant
Secretary
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SCHEDULE 1
MASTER OPERATIONS TRANSFER AGREEMENT
"Landlords":
1. Nationwide Health Properties, Inc., a Maryland Corporation
2. MLD Delaware Trust, a Delaware business trust
"New Operators":
1. Nationwide Health Properties, Inc., a Maryland Corporation
2. MLD Delaware Trust, a Delaware business trust
"Tenants":
1. C&G Healthcare at Hagerstown, L.L.C., a Delaware limited liability
company
2. Elder Care Operators of Bristol, LLC, a Delaware limited liability
company
3. C&G Healthcare at Xxxxxxx City, L.L.C., a Delaware limited liability
company
4. Elder Care Operators of Murfreesboro, LLC, a Delaware limited liability
company
5. C&G Healthcare at Teay's Valley, L.L.C., a Delaware limited liability
company
6. C&G Healthcare at Tallahassee, L.L.C, a Delaware limited liability
company
7. C&G Healthcare at Pensacola, L.L.C., a Delaware limited liability
company
8. Elder Care Operators of York, LLC, a Delaware limited
Schedule 1-1
29
liability company
9. Elder Care Operators of Lakemont Farms, LLC, a Delaware limited
liability company
10. Elder Care Operators of Xxxxxxxx, LLC, a Delaware limited liability
company
11. Elder Care Operators of Akron, LLC, a Delaware limited liability
company
"Master Leases":
1. Master Lease and Security Agreement (Cumberland) dated as of July 1,
2000.
2. Master Lease and Security Agreement (Migratory) dated as of July 1,
2000.
"Managers":
1. Balanced Care at Hagerstown, Inc., a Delaware corporation
2. Balanced Care at Bristol, Inc., a Delaware corporation
3. Balanced Care at Xxxxxxx City, Inc., a Delaware corporation
4. Balanced Care at Murfreesboro, Inc., a Delaware corporation
5. Balanced Care at Teay's Valley, Inc., a Delaware corporation
6. Balanced Care at Tallahassee, Inc., a Delaware corporation
7. Balanced Care at Pensacola, Inc., a Delaware corporation
8. Balanced Care at York, Inc., a Delaware corporation
9. Balanced Care at Lakemont, Inc., a Delaware corporation
10. Balanced Care at Xxxxxxxx, Inc., a Delaware corporation
Schedule 1-2
30
11. Balanced Care at Akron, Inc., a Delaware corporation
"Management Agreements":
1. First Amended and Restated Management Agreement dated as of May 31,
2000 (Hagerstown)
2. Second Amended and Restated Management Agreement dated as of May 31,
2000 (Bristol)
3. First Amended and Restated Management Agreement dated as of May 31,
2000 (Xxxxxxx City)
4. Second Amended and Restated Management Agreement dated as of May 31,
2000 (Murfreesboro)
5. First Amended and Restated Management Agreement dated as of May 31,
2000 (Teay's Valley)
6. First Amended and Restated Management Agreement dated as of May 31,
2000 (Tallahassee)
7. First Amended and Restated Management Agreement dated as of May 31,
2000 (Pensacola)
8. Second Amended and Restated Management Agreement dated as of May 31,
2000 (York)
9. Second Amended and Restated Management Agreement dated as of May 31,
2000 (Lakemont Farms)
10. Second Amended and Restated Management Agreement dated as of May 31,
2000 (Xxxxxxxx)
11. Second Amended and Restated Management Agreement dated as of May 31,
2000 (Akron)
Schedule 1-3
