EXHIBIT 10.1
LEASE TERMINATION AGREEMENT
(PALMETTO VILLAGE OF XXXXXXX, SC)
THIS LEASE TERMINATION AGREEMENT (this "Agreement") is made and entered
into as of the 29th day of May, 2003 by and between (i) DIVERSICARE ASSISTED
LIVING SERVICES, INC., a Tennessee corporation ("DALS") and ADVOCAT INC., a
Delaware corporation ("Advocat") and (ii) 000 XXXXXX XXXXXX, XXX, x Xxxxx
Xxxxxxxx limited liability company ("Lessor") and XXXXXX X. XXXXX, an individual
("Prior Lessor").
RECITALS
A. Lessor is the owner of the land and improvements comprising the
assisted living facility located at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx
00000 and known as Palmetto Village of Xxxxxxx (the "Facility").
B. DALS is the current licensed operator of the Facility and leases the
Facility from Lessor pursuant to that certain Lease Agreement (With Option to
Purchase) made and entered into as of August 12, 1998 (the "Lease") by and
between Prior Lessor, the predecessor in interest of Lessor under the Lease, and
DALS, as Lessee, to which Lease reference is here made for a more particular
description of its terms, provisions and conditions.
C. Advocat has guaranteed the payment and performance by DALS of its
obligations under the Lease pursuant to the terms and provisions of that certain
Guaranty of Lease made by Advocat in favor of Lessor as of August 12, 1998 (the
"Guaranty"), to which Guaranty reference is here made for a more particular
description of its terms and conditions.
X. Xxxxxx and DALS now wish to terminate the Lease with possession of
all of the Leased Property (as described and defined in the Lease), being turned
over to Lessor and operation of the Facility being turned over to Senior
Management, Inc. ("New Operator") pursuant to an Operations Transfer Agreement
dated May 29, 2003 between DALS and New Operator (the "Operations Transfer
Agreement") in order that New Operator may replace DALS as the licensed operator
of the Facility and continue the operation of the Facility as a licensed
assisted living facility.
E. In order to terminate the Lease and facilitate an orderly transfer
of the operation of the Facility from DALS to New Operator, the parties desire
to enter into this Agreement to document the terms and conditions upon which
such transactions will be consummated.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements of the parties set forth herein, the parties
hereto agree as follows:
AGREEMENT
1. Transfer Date; Surrender of Facility.
1.1 Transfer Date. Subject to satisfaction of all of the conditions
to completion of the transactions contemplated herein, the termination of the
Lease and the transfer to New Operator of the operation of the Facility,
together with the transfer of possession and use of the Leased Property to
Lessor, contemplated herein shall occur simultaneously and be effective as of
12:00:01 a.m., local time at the Facility, on June 1, 2003 (the "Transfer
Date"). In the event that the Transfer Date is so extended, the parties shall
promptly execute an addendum to this Agreement establishing such date as the
Transfer Date for purposes of this Agreement and any documents executed in
connection herewith. The parties acknowledge that DHEC Regulations require that
DALS remain responsible for the operation of the Facility until the Operating
License is issued to New Operator and the parties agree to cooperate with each
other in order that the Operating License can be issued to New Operator as soon
as reasonably permitted under the procedures established by DHEC for the
issuance of a license in connection with the change of ownership of a licensed
assisted living facility and the Provider Number can be issued as soon as
reasonably permitted under the procedures established by DHHS for the issuance
of a new provider number in connection with the change of ownership of a
licensed assisted living facility. As of the Transfer Date, DALS shall vacate
and deliver full possession of the Leased Property to Lessor and shall transfer
operation of the Facility to New Operator. DALS acknowledges and agrees that
title to (i) any governmental permits or approvals which, by their nature,
pertain to the Facility, its ownership, use and occupancy and (ii) all
certificates of need or similar certificates which, by their nature, pertain to
the Facility, its ownership, use and occupancy, shall remain with the Facility;
provided, however, that DALS shall retain, and Lessor shall not have, any rights
in or to the use of the name "Advocat" or "Diversicare", or any derivative
thereof, in connection the Facility.
1.2 Termination of Lease. Effective as of the Transfer Date, the
Lease shall be and hereby is terminated, and all of its respective terms and
conditions (including without limitation the option to purchase the Leased
Property provided to the Lessee under the Lease) shall be and hereby are deemed
to be of no further force and effect, with the same effect as if the Transfer
Date was the expiration date of the Lease. Lessor and DALS hereby agree that,
effective as of the Transfer Date, all obligations and duties of DALS as Lessee
under the Lease arising after the Transfer Date shall terminate. As of the
Transfer Date, DALS shall and does hereby release and forever discharge any and
all right, title and interest in and to the Leased Property that it has, had or
may have under the Lease, including without limitation the right and option to
purchase the Leased Property provided to the Lessee under the Lease. On the
Transfer Date, DALS and Lessor shall execute and deliver a Notice of Termination
of Lease, in the form attached hereto as Exhibit A, evidencing the termination
of the Lease and sufficient for recording in the real estate records of the
county in which the Facility is located.
1.3 Delivery of Leased Property; Transfer of DALS's Personal
Property. On the Transfer Date, DALS will vacate and surrender to Lessor, and
will deliver possession and control to Lessor, of all of the Leased Property. On
the Transfer Date, DALS will also transfer, assign and deliver to Lessor all of
DALS's right, title and interest in and to, and the possession
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and control of, all equipment, machinery, furniture, fixtures, trade fixtures,
inventory of goods and supplies and all other tangible and intangible personal
property owned or leased by DALS and located at or used in connection with or
necessary for the operation of the Facility ("DALS's Personal Property"), but
specifically excluding: (i) the following property which will be transferred by
DALS to the New Operator: the right to the use of the name under which the
Facility is doing business or has done business during DALS's use and occupancy,
the Facility phone number, the full-sized Ford van currently used by the
Facility to transport residents (the "Van"), all drugs and medical supplies, and
all resident, medical, clinical, personnel files and other records related to
operation of the Facility including, without limitation, the Operations Manual
of Policies and Procedures for Meeting and Exceeding Minimum Licensure Standards
(1999) (the so-called "Blue Book") that was at the Facility at the commencement
of the Lease and subsequently modified and updated by DALS, (ii) any leased
property, (iii) DALS's wide area network and associated software provided on the
Diversicare wide area network, (iv) DALS's or its affiliate's Keys to Marketing
and Continuous Quality Improvement program manuals and materials, management
information systems, policy, procedure and educational manuals and materials,
and similar proprietary property of DALS or its affiliates, and (v) any rights
in or to the use of the name "Advocat" or "Diversicare", or any derivative
thereof. On the Transfer Date, DALS will make, execute and deliver a Xxxx of
Sale and Assignment in the form attached hereto as Exhibit B sufficient to
transfer DALS's Personal Property to Lessor. The presence of the DALS's Personal
Property at the Facility on the Transfer Date shall constitute delivery thereof.
Any items of DALS's Personal Property containing the name or logo of
"Diversicare" or "Advocat", or any derivative thereof, at the Facility as of the
Transfer Date shall be replaced and either destroyed by Lessor or returned to
DALS.
1.4 Modification of Advocat Guaranty. Effective as of the Transfer
Date: (a) the Lessor and Advocat agree that, for purposes of the Guaranty, the
term "Lease" shall mean the Lease and this Agreement, and the "Payment
Obligations", "Performance Obligations" and "Obligations" shall be limited to
those arising pursuant to the Lease prior to Transfer Date, (except as provided
in Paragraph 2 hereof), but shall include all obligations of DALS arising
pursuant to this Agreement, whether prior to, on or after the Transfer Date,
including without limitation the Lease Termination Fee and, if applicable,
Lessor's Liquidated Damages to be paid by DALS in accordance with Paragraph 1.5
hereof, and (b) Advocat confirms and restates its liabilities, obligations and
agreements under the Guaranty and acknowledges and agrees that every right,
power and remedy of the Lessor thereunder is in full force and effect, including
without limitation such rights powers and remedies relating the Payment
Obligations and Performance Obligations as defined herein. On the Transfer Date,
Lessor and Advocat shall execute a Modification of Guaranty in substantially the
form attached hereto as Exhibit D.
1.5 Lease Termination Payment. In consideration of the termination
of the Lease and the other transactions contemplated herein, DALS shall pay and
deliver to Lessor the sum of Three Hundred Fifty-Five Thousand Two Hundred
Ninety Five and 00/100 Dollars ($355,295.00) (the "Lease Termination Fee") which
shall be payable as follows:
1.5.1 On the Transfer Date, Seventy Five Thousand Two Hundred
Ninety-Five and 00/100 Dollars ($75,295.00) shall be paid by wire delivery of
immediately available, same day, federal funds, to the account of Lessor; and
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1.5.2 Provided that New Operator has and is cooperating with
DALS in connection with the efforts of DALS to xxxx and collect its accounts
receivable from the Facility after the Transfer Date in accordance with the
Transfer Agreement, the remaining Two Hundred Eighty Thousand and 00/100 Dollars
($280,000.00) shall be paid in monthly installments following the Transfer Date
in accordance with the terms of a promissory note in substantially the form
attached hereto as Exhibit C (the "Note") to be delivered by DALS to Lessor on
the Transfer Date.
1.5.3 This Lease Termination Agreement, the payment by DALS of
the Lease Termination Fee, and the other matters set forth herein, are being
made and agreed to in full settlement, compromise and satisfaction of certain
disputes and claims arising as a result of the termination of the Lease,
including but not limited to Lessor's claim for loss or damages as a result of
the termination of the Lease, and nothing contained herein shall be deemed or
construed as an admission of fault or wrongdoing by any party in connection with
the termination of the Lease. In consideration of the termination of the Lease
and Lessor's acceptance of payment of the Lease Termination Fee as herein
provided, DALS and Advocat hereby agree that if (i) DALS fails to make the
payments of the Lease Termination Fee called for under the Note and, a result of
such default, Lessor elects to accelerate the maturity of the remaining unpaid
balance of the Lease Termination Fee by giving written notice of its election to
exercise such option to both DALS and Advocat as provided in the Note ("Lessor's
Acceleration Notice") and (ii) DALS or Advocat fail to deliver (or cause to be
delivered) to Lessor payment of the full amount of the remaining unpaid balance
of the Lease Termination Fee, and any interest due thereon, within thirty (30)
days of the date DALS and Advocat receive Lessor's Acceleration Notice, then
Lessor may and shall have the right after (but not before) the expiration of
said thirty (30) day period, and without the necessity of any further demand or
notice, to commence and prosecute legal action against DALS and Advocat, jointly
or severally, to collect and recover the sum of One Million Three Hundred
Thousand and 00/100 Dollars ($1,300,000.00) as full liquidated damages for
termination of the Lease ("Lessor's Liquidated Damages"). Solely for purposes
and in consideration of this Lease Termination Agreement, DALS, Advocat, Lessor
and Prior Lessor hereby agree that, in view of the uncertainty and inconvenience
of ascertaining the actual damages to Lessor as a result of the termination of
Lease, the amount of Lessor's Liquidated Damages constitutes a reasonable
estimate of the loss and damages that would be sustained by Lessor as a result
of such termination and is not intended as a penalty.
1.5.3.1 Upon the payment by DALS or Advocat of (i) the
full amount of the Lease Termination Fee, and, if applicable, any interest due
thereon, in accordance with the terms and provisions of the Note or (ii) the
full amount of the remaining unpaid balance of the Lease Termination Fee,
together with any interest due thereon, within thirty (30) days after receipt of
Lessor's Acceleration Notice as provided in Paragraph 1.5.3, above, then, upon
the occurrence of either of such events, the right of Lessor to recover Lessor's
Liquidated Damages provided in Paragraph 1.5.3, above, shall immediately and
automatically terminate and be of no further force and effect, and any and all
loss, damages, costs or expenses which Lessor may have suffered or incurred as a
result of the termination of the Lease shall be deemed to be fully paid,
satisfied and discharged forever. Promptly following such payment, the original
Note, marked "paid-in-full", shall be returned to DALS.
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1.5.3.2 Any and all payments of the Lease Termination Fee
made by DALS or Advocat shall be a credit against the amount of Lessor's
Liquidated Damages, which shall be reduced by the total amount of the Lease
Termination Fee payments so made. Upon the commencement of any action by Lessor
to recover Lessor's Liquidated Damages as provided in Paragraph 1.5.3, above,
the Note shall be deemed to be cancelled and of no further force and effect and
DALS and Advocat shall have no further obligation to make payment of the then
remaining unpaid balance of the Lease Termination Fee, or any interest thereon,
it being the intent of this Paragraph 1.5 that Lessor shall be entitled to
receive either the Lease Termination Fee or Lessor's Liquidated Damages, but not
both, in full settlement, discharge and satisfaction all sums due or to become
due Lessor as a result of the termination of the Lease and transfer of the
operations of the Facility to the New Operator. Promptly following the
commencement of any such legal action, the original Note, marked "cancelled",
shall be returned to DALS.
1.6 Security Deposit. DALS acknowledges that the Security Deposit in
the amount of Thirty-Five Thousand Dollars ($35,000.00) called for under Section
4.4 of the Lease was never delivered to Lessor and releases any claim it may
have with respect thereto. Lessor and Prior Lessor hereby release and discharge
DALS and Advocat from any obligation to pay or deliver the Security Deposit.
2. As Is/Where Is.
All of the Leased Property and DALS's Personal Property (collectively,
the "Real and Personal Property") will be transferred and delivered to Lessor by
DALS on the Transfer Date, and will be accepted by Lessor "as-is," "where-is,"
subject however to the provisions of Section 7.3 of the Lease, but with no other
warranties, including the warranty of habitability, use or fitness for
habitation with respect to any real estate and improvements and with no other
warranties, including the warranty of merchantability or fitness for a
particular purpose, with respect to all of the other property, and all of which
warranties (both express and implied) DALS hereby disclaims. Lessor has, or will
have on or before the Transfer Date, examined and inspected the Real and
Personal Property and knows and is satisfied with, or will know and be satisfied
with, its condition and is not now relying, and will not later rely, upon any
representations or warranties made (or asserted to have been made) by DALS,
Advocat or anyone claiming to act by, through or under or on their behalf
concerning the Real and Personal Property except for the representations and
warranties set forth in Section 7.3 of the Lease and the representations and
warranties as to title and the representations and warranties as to liens and
encumbrances set forth in this Agreement and the Xxxx of Sale and Assignment to
be delivered on the Transfer Date in the form attached hereto as Exhibit B.
Except for liabilities, obligations and responsibilities of DALS arising prior
to the Transfer Date under Article 5, Section 7.3, Section 9.2, Article 11 and
Article 19 of the Lease, Lessor shall and does hereby release and discharge
DALS, effective as of the Transfer Date, from any liabilities, obligations or
responsibilities that DALS had, has or may have with respect to the Real and
Personal Property under the Lease whether arising prior to, on or after the
Transfer Date, including without limitation any obligation to install a fire
sprinkler system, radiation fire dampers and fire alarm indicator lights at the
Facility as required by DHEC. Prior to the Transfer Date, Lessor shall have the
right, upon reasonable advance notice and during normal business hours, to enter
the
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Facility for the purpose of inspecting the Real and Personal Property, subject
to any security, health, safety or privacy requirements or rights of the
residents and employees of each Facility. DALS shall have the right to have a
representative present at all times during any such inspection by Lessor.
3. Prorations; Liabilities.
3.1 Real and personal property taxes shall be prorated between DALS
and Lessor, as applicable, as of the Transfer Date. 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 tax information or tax bills
available to DALS and Lessor.
3.2 There shall be no proration of utility charges or any other
payables or expenses attributable to the Facility as of the Transfer Date, it
being the intent of the parties that DALS shall pay the bills therefore for the
period prior to the Transfer Date and New Operator shall pay the bills therefore
for the period on and after the Transfer Date. Utilities for the Facility will
be cut off in DALS's name on the Transfer Date and DALS shall be entitled to the
return of any deposit in respect thereof. New Operator shall be responsible for
obtaining utility services in its own name for the Facility, ensuring that the
same are available on the Transfer Date, and making any deposits necessary
therefore prior to the Transfer Date. DALS will notify its suppliers that the
cut off date for their provision of supplies or services to the Facility will be
the last day prior to the Transfer Date.
3.3 Notwithstanding the fact that the Transfer Date occurs on the
first day of a calendar month, there shall be no proration of and DALS shall not
be required to pay all or any portion of the monthly installment of Rent which,
by the terms of the Lease, is due on the first day of each calendar month.
4. Releases; Indemnification.
4.1 Mutual Releases.
4.1.1 Release by DALS. Effective as of the Transfer Date, DALS
shall and does hereby release and forever discharge Lessor, Prior Lessor, their
employees, agents, and representatives, from any and all liabilities or
obligations, of whatever kind or nature, known or unknown, that Lessor, Prior
Lessor, their agents, employees, or representatives, has, had or may have to
DALS arising out of or based upon the Lease, or the use and occupancy of the
Facility by DALS, except with respect to (i) any breach of this Agreement by
Lessor; (ii) any future performance of Lessor required by this Agreement; or
(iii) any claim for indemnification pursuant to Section 4.2, below.
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4.1.2 Release by Lessor. Effective as of the Transfer Date,
Lessor and Prior Lessor each shall and do hereby release and forever discharge
DALS, its employees, agents and representatives, from any and all liabilities or
obligations, of whatever kind or nature, known or unknown, that DALS or its
agents, employees and representatives, has, had or may have to Lessor arising
out of or based upon the Lease, or the use and occupancy of the Facility by
DALS, except with respect to (i) any liabilities or obligations arising prior to
the Transfer Date to the extent set forth in Section 2 and Section 4.2 of this
Agreement; (ii) any breach of this Agreement by DALS; (iii) any future
performance of DALS required by this Agreement; or (iv) any claim for
indemnification pursuant to Section 4.2, below.
4.2 Indemnification.
4.2.1 DALS. DALS does hereby agree to indemnify and to defend
and hold harmless Lessor, Prior Lessor, their successors and assigns, from and
against any and all demands, claims, causes of action, fines, penalties,
damages, liabilities, costs and expenses (including, without limitation,
reasonable attorneys' and professional fees) incurred or suffered by Lessor or
Prior Lessor in connection with or arising from (i) the inaccuracy of any
representation, breach of any warranty or default in the performance of any
covenant on the part of DALS contained in this Agreement or any document or
instrument delivered by DALS pursuant to this Agreement; (ii) any default or
alleged default on the part of DALS in the faithful performance of all of the
terms, conditions, covenants and agreements contained in the Lease and arising
prior to the Transfer Date, specifically including without limitation, any
liability arising in connection with the placement or presence of any hazardous
materials in or about the Leased Property, but specifically excluding any
liability arising in connection with the condition of the Real and Personal
Property (as defined in Paragraph 2, above); or (iii) any claim made by or for
any third party against Lessor or Prior Lessor based upon the occupancy or
operation of the Facility by DALS prior to the Transfer Date, including without
limitation any claims, liabilities, penalties and sanctions for overpayment made
to DALS under any Medicaid or other third party payor contract arising from
services provided by DALS prior to the Transfer Date, or any claims for personal
injury (including death) resulting from the acts, omissions or negligence of
DALS or the contractors, agents, employees, invitees or visitors of DALS with
respect to the Facility prior to the Transfer Date; provided, however, that
nothing herein shall be construed as imposing any liability on DALS to
indemnify, defend or hold harmless Lessor or Prior Lessor with respect to their
own acts or omissions from and after the Transfer Date.
4.2.2 Lessor. Lessor and Prior Lessor do hereby, jointly and
severally, agree to indemnify and to defend and hold harmless DALS, its
successors and assigns, from and against any and all demands, claims, causes of
action, fines, penalties, damages, liabilities, costs and expenses (including,
without limitation, reasonable attorneys' fees) incurred or suffered by DALS in
connection with or arising from (i) the inaccuracy of any representation, breach
of any warranty or default in the performance of any covenant on the part of
Lessor contained in this Agreement or any document or instrument delivered by
Lessor pursuant to this Agreement; or (ii) any default or alleged default on the
part of Lessor or Prior Lessor in the faithful performance of all of the terms,
conditions, covenants and agreements contained in the Lease and arising prior to
the Transfer Date; provided, however, that nothing herein shall be construed as
imposing any
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liability on Lessor or Prior Lessor to indemnify, defend or hold harmless DALS
with respect to DALS's own acts or omissions from and after the Transfer Date.
4.2.3 Procedure for Indemnification.
(a) Notice. Within thirty (30) days after receipt of written or
actual notice of any action or claim (the "Claim") as to which it asserts a
right to indemnification, the party seeking indemnification hereunder (the
"Indemnitee") shall give written notice thereof (the "Notice") to the person
from whom indemnification is sought (the "Indemnitor"), provided that the
failure of the Indemnitee to give the Indemnitor notice within the specified
number of days shall not relieve the Indemnitor of any of its obligations
hereunder, but may create a cause of action for breach for damages directly
attributable to such delay. Indemnitor shall be liable to Indemnitee with
respect to a Claim only so long as Indemnitee gives Indemnitor written notice
thereof prior to the expiration of the survival period set forth in Section
10.6.
(b) Third Party Claims.
(i) If any claim for indemnification by Indemnitee arises
out of a Claim by a person other than Indemnitee, the Indemnitor shall be
entitled to assume the defense thereof, by written notice to the Indemnitee
within fifteen (15) days after receipt of the Notice. Indemnitor shall thereupon
undertake to take all steps or proceedings to defeat or compromise any such
Claim, including retaining counsel reasonably satisfactory to the Indemnitee.
Except as otherwise provided herein, all costs, fees and expenses with respect
to any such Claim shall be borne by Indemnitor. If the Indemnitor assumes the
defense of a Claim, it shall not settle such Claim unless such settlement
includes as an unconditional term thereof a release by the claimant of the
Indemnitee, reasonably satisfactory to the Indemnitee and except that Indemnitor
shall not, without the prior written consent of Indemnitee, directly or
indirectly require Indemnitee to take or refrain from taking any action, or make
any public statement, or consent to any settlement, which it reasonably
considers to be against its interest. Indemnitee shall have the right to
participate at its own expense, in such proceedings, but control of such
proceedings shall remain exclusively with Indemnitor.
(ii) If the Indemnitor shall fail to notify the Indemnitee
of its desire to assume the defense of any such claim or action within the
prescribed period of time, then the Indemnitee may assume such defense in such
manner as it may deem appropriate, and the Indemnitor shall be bound by any
determinations made or any settlements thereof effected by the Indemnitee. The
Indemnitor shall be permitted, at its own expense, to join in such defense and
to employ its own counsel but control of such proceedings shall remain
exclusively with Indemnitee.
(iii) Indemnitor and Indemnitee agree to make available to
each other, their counsel and other representatives, all information and
documents reasonably available to them reasonably requested by the other which
relate to any such claim or action, and to render to each other such reasonable
assistance as may be reasonably requested in order to insure the proper and
adequate defense of such claim or action, but any costs or expenses related
thereto shall be borne by Indemnitor; and provided that any failure (after
written notice with
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specificity and an opportunity to cure) shall not relieve the Indemnitor of any
of its obligations hereunder but may create a cause of action for breach for
damages directly attributable to such failure.
(c) Other Claims. In the event of any Claim other than those
provided for in subsection (b) hereof, Indemnitee shall be entitled to
indemnification hereunder as provided herein.
(d) Payment of Claims. Amounts payable by the Indemnitor to
the Indemnitee shall be payable by the Indemnitor as incurred by the Indemnitee.
In the event Indemnitor fails to pay, timely and fully, any such amounts,
Indemnitee may pay such Claim. In such event, the Indemnitee may recover from
the Indemnitor, in an addition to the amount so paid, reasonable attorneys' fees
in connection with the enforcement of any payment due hereunder.
5. Representations, Warranties and Covenants.
5.1 Lessor hereby represents and warrants that it has all necessary
power and authority to enter into this Agreement and to execute all documents
and instruments referred to herein or contemplated hereby and all necessary
action has been taken to authorize the individual executing this Agreement to do
so, and this Agreement has been duly and validly executed and delivered by each
of them and is enforceable against each of them in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy laws and
general principles of equity.
5.2 Advocat and DALS each hereby represents and warrants that it has
all necessary power and authority to enter into this Agreement and to execute
all documents and instruments referred to herein or contemplated hereby and to
consummate the transaction provided for herein, and all necessary action has
been taken to authorize the individual executing this Agreement to do so, and
this Agreement has been duly and validly executed and delivered by each of them
and is enforceable against each of them in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy laws and general
principles of equity.
5.3 DALS covenants and agrees that between the date hereof and the
Transfer Date: (i) DALS will provide all necessary information requested by New
Operator for the preparation and filing of any and all necessary applications or
notifications to any federal or state governmental authority having jurisdiction
over a change in the operational control of the Facility, and any other
information reasonably required to effect an orderly transfer of the Facility
(provided, however, that New Operator will be solely responsible for all cost
and expense of the processing of such application), (ii) DALS shall use its
reasonable best efforts to keep the business and organization of the Facility
intact and to preserve for New Operator the goodwill of the suppliers,
distributors, residents and others having business relations with DALS with
respect to the Facility; (iii) except in the case of an emergency or if required
by law, DALS shall not move or solicit the move of any residents presently
situated at any of the Facility; (iv) DALS will continue to carry on its
operation of the Facility in the substantially same manner as
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it did prior to the date hereof, (v) DALS will continue to perform its
obligations as Lessee under the Lease, (vi) DALS will not enter into any new
contract or other agreement that will be an obligation affecting the Facility
subsequent to the Transfer Date without the prior written consent of the New
Operator, and (vii) DALS will not dispose of any equipment, machinery,
furnishings, fixtures or inventory, except in the ordinary course of business.
5.4 DALS represents and warrants (i) that DALS has permitted no
liens or encumbrances (except for the current year's taxes to be prorated as of
the Transfer Date) to be placed upon any of the Leased Property; (ii) that none
of DALS's Personal Property is leased or otherwise subject to any lien or
encumbrance except as listed on Exhibit E attached hereto; and (iii) that as to
any such lien or encumbrance on any of the Leased Property or any of DALS's
Personal Property which is to be transferred to Lessor pursuant to this
Agreement, DALS will cause the same to be removed prior to the Transfer Date.
6. Conditions to Close. The obligations of the parties to consummate
the transactions contemplated by this Agreement are subject to the satisfaction
of the following conditions on or prior to the Transfer Date or the dates
designated elsewhere in this Agreement for the satisfaction of such conditions:
(a) All of the representations and warranties of the parties
contained herein shall be true and correct in all material respects as of the
date of this Agreement and as of the Transfer Date;
(b) As of the Transfer Date, each party shall have performed its
obligations hereunder and all documents to be made executed and/or delivered on
the Transfer Date shall have been tendered;
(c) There shall exist no actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, pending or threatened against
any party hereto that would materially and adversely affect the ability of any
party hereto to perform its obligations under this Agreement;
(d) There shall exist no pending or threatened action, suit or
proceeding with respect to any party hereto before or by any court or
administrative agency which seeks to restrain or prohibit, or to obtain damages
or a discovery order with respect to, this Agreement or the consummation of the
transactions contemplated hereby;
(e) The parties shall have obtained all consents, releases and
approvals from all third parties from whom such consents, releases or approvals
are necessary to consummate the transactions contemplated hereby, including
without limitation, in the case of Advocat and DALS, the consent of AmSouth
Bank, and in the case of the Lessor, the holders of any mortgages on the
Facility; and
(f) New Operator shall have entered into the Operations Transfer
Agreement providing for the transfer of Facility operations from DALS to New
Operator on the Transfer Date and shall have obtained all of the licenses,
permits, approvals and certifications necessary
10
for its continued operation of the Facility as a licensed assisted living
facility, including without limitation the Operating License and the Provider
Number.
7. Termination. Notwithstanding anything in this Agreement to the
contrary, this Agreement and the obligations of the parties hereunder may be
terminated on or prior to the Transfer Date as follows:
(a) By Advocat and DALS (i) in the event the transactions
contemplated by this Agreement have been prohibited or enjoined by reason of any
final judgment, decree or order entered or issued by a court of competent
jurisdiction in litigation or proceedings involving any of the parties; or (ii)
in the event Lessor breaches or violates any material provision of this
Agreement or fails to perform any material covenant or agreement to be performed
by Lessor under the terms of this Agreement, and Advocat or DALS has provided
written notice thereof to Lessor giving reasonable specificity and Lessor has
not cured same within a reasonable period of time and such breach is not waived
by Advocat and DALS in writing.
(b) By Lessor (i) in the event the transactions contemplated by this
Agreement have been prohibited or enjoined by reason of any final judgment,
decree or order entered or issued by a court of competent jurisdiction in
litigation or proceedings involving any of the parties; or (ii) in the event
Advocat or DALS breaches or violates any material provision of this Agreement or
fails to perform any material covenant or agreement to be performed by Advocat
or DALS under the terms of this Agreement and Lessor has provided written notice
thereof to Advocat and DALS giving reasonable specificity and Advocat or DALS,
as applicable, has not cured same within a reasonable period of time and such
breach is not waived by Lessor in writing.
(c) By Lessor (i) in the event the transactions contemplated by the
Operations Transfer Agreement have been prohibited or enjoined by reason of any
final judgment, decree or order entered or issued by a court of competent
jurisdiction in litigation or proceedings involving any of the parties; or (ii)
in the event DALS breaches or violates any material provision of the Operations
Transfer Agreement or fails to perform any material covenant or agreement to be
performed by DALS under the terms of the Operations Transfer Agreement and New
Operator has provided written notice thereof to DALS giving reasonable
specificity and DALS has not cured same within a reasonable period of time and
such breach is not waived by New Operator in writing.
(d) By Lessor, or by Advocat and DALS, (i) in the event New Operator
breaches or violates any material provision of the Operations Transfer Agreement
or fails to perform any material covenant or agreement to be performed by New
Operator pursuant to the Operations Transfer Agreement, and DALS has provided
written notice thereof to New Operator giving reasonable specificity and New
Operator has not cured same within a reasonable period of time and such breach
is not waived by DALS in writing; or (ii) if the Transfer Date hereunder shall
not have taken place by June 1, 2003, or by such later date as shall be agreed
upon by an appropriate amendment to this Agreement if the parties agree in
writing to an extension, provided that a party shall not have the right to
terminate under this subparagraph (c) if the conditions precedent to such
party's obligation to close have been fully satisfied and such party
11
has failed or refused to close within a reasonable time after being requested in
writing to close by the other party.
8. 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.
9. Notices. All notices to be given by any party to this Agreement to
the other party hereto shall be in writing, and shall be (a) given in person,
(b) deposited in the United States mail, certified or registered, postage
prepaid, return receipt requested or (c) sent by national overnight courier
service, each addressed as follows:
(a) If to Lessor: Xxxxx X. Xxxxx, Manager
000 Xxxxxx Xxxxxx, LLC
0 Xxxxxxxx Xxxxxx Xxxxx
Xxxx xx Xxxxx, XX 00000
With a copy by facsimile to: Xxxxx X. Xxxxxxxx, Esq.
Young, Clement, Rivers & Tisdale, LLP
00 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
(c) If to DALS or Advocat: Diversicare Assisted Living Services, Inc.
000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: President
With a copy by facsimile to: Xxxx X. Xxxxxx, Esq.
Xxxxxxx, Xxxxxx, Xxxx, Xxxxxxx & Manner
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Any such notice personally delivered shall be deemed delivered when actually
received, any such notice deposited in the United States mail, registered or
certified, return receipt requested, with all postage prepaid, shall be deemed
to have been given on the earlier of the date received or the date when delivery
is first refused, and any notice deposited with an overnight courier service for
deliver shall be deemed delivered on the business day following such deposit.
Any party to whom notices are to be sent pursuant to this Agreement may from
time to time change its address for further communications thereunder by giving
notice in the manner prescribed herein to all other parties hereto.
10. 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
12
and the consummation of the transaction contemplated hereby, whether or not the
transaction is consummated.
11. Entire Agreement; Amendment; Waiver. This Agreement, together with
the other agreements referred to herein, constitutes the entire understanding
among the parties with respect to the subject matter hereof, superseding all
negotiations, prior discussions and preliminary agreements. This Agreement may
not be modified or amended except in writing signed by the parties hereto. No
waiver of any term, provision or condition of this Agreement in any one or more
instances, shall be deemed to be or be construed as a further or continuing
waiver of any such term, provision or condition of this Agreement. No failure to
act shall be construed as a waiver of any term, provision, condition or rights
granted hereunder.
12. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the respective legal representatives, heirs, successors
and assigns of the parties hereto.
13. No Joint Venture; Third Party Beneficiaries. Nothing contained
herein shall be construed as forming a joint venture or partnership among the
parties with respect to the subject matter hereof. The parties hereto do not
intend that any third party shall have any rights under this Agreement.
14. Captions. The section headings contained herein are for convenience
only and shall not be considered or referred to in resolving questions of
interpretation.
15. 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.
16. Governing Law. This Agreement and the legal relations between the
parties shall be governed and construed in accordance with the laws of the State
of South Carolina without application of conflict of law principles, and the
parties hereto specifically agree to submit to and be bound by the jurisdiction
of the courts, either federal or state, of the State of South Carolina. Venue
for any action brought to enforce this Agreement, or to recover Lessor's
Liquidated Damages in accordance with Paragraph 1.5.3, shall lie in Charleston
County, South Carolina.
17. Attorneys' Fees. In the event that any party hereto shall bring an
action to enforce the terms hereof or to declare rights hereunder, the
prevailing party in any such action shall be entitled to court costs and
reasonable attorneys' fees to be paid by the non-prevailing party as fixed by
the court of appropriate jurisdiction, including, but not limited to, attorney's
fees and court costs incurred in courts of original jurisdiction, bankruptcy
courts, or appellate courts.
18. Public Announcements. DALS and Advocat agree not to make any public
announcements or other public communications concerning this Agreement and the
conveyance of the Facility operations prior to the Transfer Date, except to the
extent necessary to comply with applicable law or any reporting requirements to
which DALS or Advocat are subject, and except to the extent necessary to
consummate the transactions contemplated by this Agreement.
13
19. Nature and Survival of Terms. All representations, warranties, and
covenants of the parties set forth in this Agreement or in any document
delivered in connection herewith, shall survive the closing of the transactions
contemplated hereby, notwithstanding any investigation made by any party hereto.
No modification, waiver, termination, rescission, discharge or cancellation of
this Agreement shall affect the right of any party to enforce any claim, whether
or not liquidated, which accrued prior to the date of such modification, waiver,
termination, rescission, discharge or cancellation, and no waiver of any
provisions of, or default under, this Agreement shall affect the right of any
party thereafter to enforce said provision or to exercise any right or remedy in
the event of any other default, whether or not similar.
[SIGNATURE PAGE FOLLOWS]
14
IN WITNESS WHEREOF, the parties hereby execute this Lease Termination
Agreement (Palmetto Village of Xxxxxxx, SC) as of the day and year first set
forth above.
SIGNED, SEALED AND DELIVERED DIVERSICARE ASSISTED LIVING
IN THE PRESENCE OF: SERVICES, INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx X. Council, III
--------------------------------- ------------------------------
Name: Xxxxxxx X. Council, III
------------------------------
/s/ Xxxxxx Xxxxx Title: President
--------------------------------- ------------------------------
ADVOCAT INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx X. Council, III
--------------------------------- ------------------------------
Name: Xxxxxxx X. Council, III
------------------------------
/s/ Xxxxxx Xxxxx Title: President
--------------------------------- ------------------------------
LESSOR:
000 XXXXXX XXXXXX, LLC
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
--------------------------------- ------------------------------
Name: Xxxxx X. Xxxxx
------------------------------
/s/ Xxxxxxxx X. Xxxxxxxxx Title: Manager
--------------------------------- ------------------------------
PRIOR LESSOR:
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
--------------------------------- ------------------------------
/s/ Xxxxxxxx X. Xxxxxxxxx Xxxxxx X. Xxxxx
-------------------------------
15
STATE OF SOUTH CAROLINA )
) ACKNOWLEDGMENT
COUNTY OF CHARLESTON )
The foregoing instrument was acknowledged before me this 18th day of
April, 2003 by 000 XXXXXX XXXXXX, LLC acting herein by Xxxxx X. Xxxxx, its
Manager, on behalf of the said company.
/s/ Xxxxxxxx X. Xxxxxxxxx (SEAL)
-----------------------------------
Notary Public for South Carolina
My Commission Expires 6-01-2010
-----------------
[Affix official notarial seal or stamp]
STATE OF TENNESSEE )
--------------------- ) ACKNOWLEDGMENT
COUNTY OF XXXXXXXXXX )
--------------------
The foregoing instrument was acknowledged before me this 29th day of
May, 2003 by DIVERSICARE ASSISTED LIVING SERVICES, INC. acting herein by
Xxxxxxx X. Council, III its President, on behalf of the said company.
/s/ Xxxxxxxxxx X. Xxxx (SEAL)
-----------------------------------
Notary Public for Tennessee
---------------------
My Commission Expires 2/20/2006
-----------------
[Affix official notarial seal or stamp]
STATE OF TENNESSEE )
--------------------- ) ACKNOWLEDGMENT
COUNTY OF XXXXXXXXXX )
--------------------
The foregoing instrument was acknowledged before me this 29th day of
May, 2003 by ADVOCAT, INC. acting herein by Xxxxxxx X. Council, III its
President, on behalf of the said company.
/s/ Xxxxxxxxxx X. Xxxx (SEAL)
-----------------------------------
Notary Public for Tennessee
---------------------
My Commission Expires 2/20/2006
-----------------
[Affix official notarial seal or stamp]
00
XXXXX XX XXXXX XXXXXXXX )
) ACKNOWLEDGMENT
COUNTY OF CHARLESTON )
The foregoing instrument was acknowledged before me this 18th day of
April, 2003 by XXXXXX X. XXXXX.
/s/ Xxxxxxxx X. Xxxxxxxxx (SEAL)
-----------------------------------
Notary Public for South Carolina
---------------------
My Commission Expires 6-01-2010
-----------------
[Affix official notarial seal or stamp]
17
EXHIBIT A
STATE OF SOUTH CAROLINA
COUNTY OF XXXXXXX
NOTICE OF TERMINATION OF LEASE AGREEMENT
This NOTICE OF TERMINATION OF LEASE AGREEMENT ("Agreement") is made and entered
into as of this ___ day of ____________, 2003, to be effective as of 12:01 a.m.
EST, ____________ 1, 2003 by and between 000 XXXXXX XXXXXX, XXX, x Xxxxx
Xxxxxxxx limited liability company ("Lessor") and DIVERSICARE ASSISTED LIVING
SERVICES, INC., a Tennessee corporation ("Lessee").
W I T N E S S E T H:
WHEREAS, Lessor's predecessor in interest, Xxxxxx X. Xxxxx ("Prior
Lessor") and Lessee have previously entered into a Lease Agreement (With Option
to Purchase) (the "Lease") dated as of August 12, 1998 providing for the lease
by Lessee from Lessor of certain real property, improvements, fixtures and
equipment comprising an assisted living facility known as Palmetto Village of
Xxxxxxx, South Carolina and located in Xxxxxxx County, South Carolina
(collectively, the "Leased Property"); and
WHEREAS, Lessor and Lessee entered into a Memorandum of Lease with
Option dated December 11, 1998 and recorded January 12, 1999 in the Office of
the Clerk of Court (now the Register of Deeds) for Xxxxxxx County, South
Carolina in Deed Book 750 at Page 119 to which reference is here made; and
WHEREAS, Lessor and Lessee have elected to terminate the Lease and in
connection therewith, the parties have entered into that certain Lease
Termination Agreement dated _____________, 2003 (the "Termination Agreement")
relating to the termination of the Lease, the surrender of possession and return
to Lessor of the Leased Property, and the transfer of certain personal property
of the Lessee to Lessor necessary or useful in the operation of the Leased
Property; and
NOW THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and further for the purpose of providing notice of the termination
of the Lease in accordance with the Termination Agreement, the parties hereby
state, acknowledge and confirm as follows:
1. Termination. The Lease shall be and is hereby terminated, effective
as of 12:00:01 a.m., E.S.T., ____________ 1, 2003 ("Effective Date"). As of the
Effective Date, each of Lessor and Lessee shall be released in full from each
and all of its respective covenants, agreements, duties, responsibilities,
liabilities and obligations arising under the Lease on or after the Effective
Date and Lessor and Lessee each hereby releases and forever discharges the other
from any claims or demands that either party now has or may have against the
other with respect thereto.
2. Surrender of Leased Property. Lessee shall and does hereby vacate
and surrender possession of the Leased Property to Lessor as of the Effective
Date and the Lessor accepts the Leased Property from Lessee in "as is" condition
as of the Effective Date subject however to compliance by Lessee prior to the
Effective Date with the provisions of Section 7.3 of the Lease.
3. Release of Leasehold Interest. As of the Effective Date, Lessee
shall and does hereby release and forever discharge any right, title or interest
it has, had or may have in and to the Leased Property under the Lease, including
without limitation the right and option to purchase the Leased Property provided
to Lessee under the Lease.
IN WITNESS WHEREOF, the parties hereto have caused this Notice of
Termination of Lease Agreement to be executed as of the effective date set forth
herein.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF:
LESSOR:
000 XXXXXX XXXXXX, LLC
------------------------------
By:
----------------------------------
Its:
------------------------------ ----------------------------------
As to Lessor
LESSEE:
DIVERSICARE ASSISTED LIVING SERVICES,
INC. [SEAL]
------------------------------
By:
----------------------------------
Its:
------------------------------ ----------------------------------
As to Lessee
STATE OF SOUTH CAROLINA )
) ACKNOWLEDGMENT
COUNTY OF XXXXXXX )
The foregoing instrument was acknowledged before me this ____ day of
_______, 2003 by 000 XXXXXX XXXXXX, LLC acting herein by ___________________ its
_________________________, on behalf of the said company.
(SEAL)
-----------------------------------
Notary Public for South Carolina
My Commission Expires
-----------------
[Affix official notarial seal or stamp]
STATE OF )
--------------------- ) ACKNOWLEDGMENT
COUNTY OF )
--------------------
The foregoing instrument was acknowledged before me this ____ day of
________, 2003 by DIVERSICARE ASSISTED LIVING SERVICES, INC. acting herein by
____________________ its ________________________, on behalf of the said
company.
(SEAL)
-----------------------------------
Notary Public for
---------------------
My Commission Expires
-----------------
[Affix official notarial seal or stamp]
EXHIBIT B
XXXX OF SALE AND ASSIGNMENT
THIS XXXX OF SALE AND ASSIGNMENT ("Xxxx of Sale") is made and entered
into effective as of the ____ day of _____________, 2003 by and between
DIVERSICARE ASSISTED LIVING SERVICES, INC., a Tennessee Corporation ("Grantor")
and 000 XXXXXX XXXXXX, XXX, x Xxxxx Xxxxxxxx limited liability company
("Grantee").
W I T N E S S E T H:
WHEREAS, Grantor and Grantee, and certain of their affiliates, have
entered into a certain Lease Termination Agreement dated as of _________, 2003
(the "Transfer Agreement") pursuant to which Grantor has agreed to transfer and
deliver to Grantee certain personal property used by Grantor in the operation of
an assisted living facility located at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx
Xxxxxxxx known as Palmetto Village of Xxxxxxx (the "Facility"), as described
therein.
NOW THEREFORE, in consideration of the foregoing premises, and pursuant
to the Transfer Agreement and for the consideration therein specified and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Sale and Assignment. Except for the Excluded Assets described in
Paragraph 2 hereof, Grantor hereby grants, bargains, sells, conveys, assigns,
transfers, and delivers to Grantee, its successors and assigns, forever, all
right, title and interest of Grantor in and to the following property owned by
Grantor and located at or used in connection with, and necessary to the
operation of the Facility:
(a) All furniture, furnishings, trade fixtures, fittings, computers,
appliances, apparatus, equipment, machinery, tools, leasehold improvements and
fixtures, and all other tangible personal property of every kind and
description, together with all accessions, additions, attachments, accessories,
appurtenances and replacements parts thereto and thereof (collectively,
"Personal Property");
(b) All assignable warranties, surety agreements or guaranties (express
or implied) issued in connection with or arising out of the purchase,
construction, repair or replacement of any of the foregoing Personal Property,
and all rights of Grantor which have accrued or may accrue thereunder;
(c) All inventories of consumable and disposable goods and supplies of
every kind and description, including without limitation, raw materials, work in
progress, stock in trade, finished goods, supplies, paper, food, cleaning
materials, disposables, linens and office supplies, (collectively, "Inventory");
(d) All books and records pertaining to the above described Assets.
Items (a) through (d) above are sometimes hereinafter
collectively referred to as the "Assets".
TO HAVE AND TO HOLD, all and singular the said property unto Grantee,
Grantee's successors and assigns, to their own use and enjoyment forever.
And the Grantor does hereby covenant with the Grantee that Grantor is,
to the best of Grantor's knowledge, the lawful owner of the Assets, that the
Assets are free from all liens and encumbrances claiming by, through or under
Grantor, and that Grantor has good right and authority to sell the same as
aforesaid. Grantor covenants on behalf of itself and its successors and assigns
to warrant and forever defend the title to the Assets against all persons
whomsoever lawfully claiming, or to claim, by, through or under Grantor, the
same or any part thereof.
2. Excluded Assets. The following items of property are expressly
excluded from the transfer of the Assets provided for herein and for purposes of
this Xxxx of Sale are not, and shall not be deemed to be, a part of the "Assets"
described herein: (i) the property being transferred to the New Operator of the
Facility all of which is listed in Exhibit A attached hereto; (ii) any leased
property all of which is listed on Exhibit B attached hereto, (iii) Grantor's
wide area network and associated software provided on the Diversicare wide area
network, (iv) Grantor's continuous quality improvement program, manuals and
materials, management information systems, policy, procedure and educational
manuals and materials, and similar proprietary property of Grantor, and (v) any
rights in or to the use of the name "Advocat" or "Diversicare", or any
derivative thereof.
3. As Is/Where Is. The Assets hereby conveyed and assigned are being
transferred to and accepted by Grantee "as-is" "where-is", without any warranty,
express or implied, statutory or otherwise, and including without limitation any
warranty as to condition, merchantability or fitness for a particular purpose,
all of which warranties (both express and implied) Grantor hereby disclaims.
4. Delivery of Documents; Further Assurances. Simultaneously with the
execution of this Xxxx of Sale, Grantor has caused to be delivered to Grantee
all agreements, books, instruments, documents, records, invoices, manuals,
warranties and other materials, records and documents evidencing or relating to
the Assets transferred hereby. If additional records or documents evidencing or
relating to the Assets are subsequently found or received by Grantor, Grantor
will immediately forward them to Grantee. Grantor further agrees to cooperate
with Grantee and to execute and deliver, or cause to be executed and delivered,
any and all such further documents, instruments, materials or records, as may be
necessary or required or reasonably requested by Grantee in order to further
perfect Grantee's right, title and interest in and to the Assets and to
otherwise carry out the intent and purpose of this Xxxx of Sale.
5. Attorney-In-Fact. Grantor hereby constitutes and appoints Grantee,
its successors and assigns, the true and lawful attorney, irrevocably, of
Grantor with full power of substitution, in the name of Grantor or otherwise,
and on behalf and for the benefit of Grantee, its successors and assigns, to
demand and receive from time to time any and all property of Grantor hereby
conveyed, transferred, assigned and delivered or intended so to be; to give
receipts, releases, and acquitances for or in respect of the same or any part
thereof; to collect for the account of Grantee all other items transferred to
Grantee as provided herein, and to defend and compromise any and all actions,
suits or proceedings in respect of any of the properties hereby assigned and
transferred or intended so to be, that Grantee, its successors or assigns shall
deem desirable. Grantor hereby declares that the foregoing powers are coupled
with an interest and shall not be revocable by it in any manner or for any
reason. Grantee shall indemnify and save Grantor harmless from any losses or
expenses suffered by Grantor as a result of Grantee's exercise of the rights
granted hereunder.
6. Effective Date. This Xxxx of Sale shall be effective as of 12:00:01
a.m., EST, on ___________ 1, 2003.
7. Binding Effect. This Xxxx of Sale shall be binding upon and shall
inure to the benefit of the respective legal representatives, successors and
assigns of the Grantor and Grantee.
IN WITNESS WHEREOF, Grantor and Grantee have caused this Xxxx of Sale
to be executed as of effective date stated herein.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF:
GRANTOR:
----------------------------
DIVERSICARE ASSISTED LIVING SERVICES,
INC.
----------------------------
As to Grantor By:
--------------------------------
Its:
--------------------------------
GRANTEE:
----------------------------
000 XXXXXX XXXXXX, LLC
----------------------------
As to Grantee By:
--------------------------------
Its:
--------------------------------
STATE OF SOUTH CAROLINA )
) ACKNOWLEDGMENT
COUNTY OF XXXXXXX )
The foregoing instrument was acknowledged before me this ____ day of
_______, 2003 by 000 XXXXXX XXXXXX, LLC acting herein by ___________________ its
_________________________, on behalf of the said company.
(SEAL)
-----------------------------------
Notary Public for South Carolina
My Commission Expires
-----------------
[Affix official notarial seal or stamp]
STATE OF )
--------------------- ) ACKNOWLEDGMENT
COUNTY OF )
--------------------
The foregoing instrument was acknowledged before me this ____ day of
________, 2003 by DIVERSICARE ASSISTED LIVING SERVICES, INC. acting herein by
____________________ its ________________________, on behalf of the said
company.
(SEAL)
-----------------------------------
Notary Public for
---------------------
My Commission Expires
-----------------
[Affix official notarial seal or stamp]
EXHIBIT A
(to Xxxx of Sale and Assignment)
(a) All resident, medical, clinical, personnel files and other records
related to the Facility (including both hard and microfiche copies) and all
databases, computer programs, books and records used in operating the Facility,
specifically including, without limitation, the Operations Manual of Policies
and Procedures for Meeting and Exceeding Minimum Licensure Standards (1999) (the
so-called "Blue Book") that was at the Facility at the commencement of the Lease
and subsequently modified and updated by DALS (collectively, "Books and
Records");
(b) All drugs and medical supplies;
(c) All rights to use of the Facility phone number: (000) 000-0000;
(d) All trade names under or by which the Facility may be operated or
known and all trademarks, trade names and goodwill related to the Facility or
the operation of the business of the Facility; and
(e) One (1) 1998 Ford Van, Vehicle ID No. 1FBS31DOWHA84686
EXHIBIT B
(to Xxxx of Sale and Assignment)
LEASED PROPERTY
One (1) Xxxxxx Model No. 5618AG Digital Copier with DF71-RADF
Serial No: 92840453 (copier), 2840395 (document feeder)
Xxxxxx Lease No: 000-0000000-000
The Leased Property as described and defined in that certain Lease Agreement
(With Option to Purchase) made and entered into as of August 12, 1998 by and
between Xxxxxx X. Xxxxx, as Lessor and Assignor, as Lessee.
EXHIBIT C
PROMISSORY NOTE
$280,000.00 Charleston, South Carolina
____________, 2003
FOR VALUE RECEIVED the undersigned, DIVERSICARE ASSISTED LIVING
SERVICES, INC., a Tennessee corporation (the "Maker"), promises to pay to 000
XXXXXX XXXXXX, LLC (collectively, together with any subsequent holder of this
note, referred to as the "Holder") or order, the principal sum of Two Hundred
Eighty Thousand and 00/100 Dollars ($280,000.00) payable in lawful money of the
United States, at the address of Holder or at such other place as the Holder
hereof may designate in writing.
Maker shall make payments of said principal sum in twelve equal
consecutive monthly installments of Twenty-two Thousand Five Hundred and 00/100
Dollars ($22,500.00) each commencing on the first day of ________, 2003 and
continuing on the first (1st) day of each and every month thereafter through and
including _________, 2004 and one final payment of the entire remaining
principal balance on ______, 2004. This Note may be prepaid at any time, without
notice, in whole or in part without premium or penalty. Prepayments shall be
applied to payments hereunder in the reverse order of their maturity. Any
partial prepayment shall not release Maker from the obligation to make regularly
scheduled payments hereunder remaining due after application of such partial
prepayment to the principal balance due hereunder.
If the full amount of any payment due hereunder is not received by
Holder within five (5) business days following the date specified herein for
payment, such unpaid amount shall thereafter bear interest from the due date
thereof until payment at an annual rate of interest equal to three (3)
percentage points above the rate of interest published by the Wall Street
Journal from time to time as the Prime Rate (the "Overdue Rate"). In the event
of default in full payment of any monthly installment when due hereunder which
is not cured within ten (10) days following written notice for the first
occurrence of such a default, or in the event of any subsequent default in
payment of any such sum when due hereunder which is not cured within five (5)
business days following the date specified herein for payment, the Holder may,
upon written notice and demand therefore given to Maker and Advocat Inc.,
guarantor of the indebtedness evidenced hereby, declare the full amount of the
remaining unpaid balance of the principal indebtedness evidenced by this note at
once due and payable. Failure to exercise this option shall not constitute a
waiver of the right to exercise the same in the event of any subsequent default.
Immediately upon any such acceleration by Holder of the maturity of the
indebtedness evidenced hereby, the entire unpaid principal balance then
outstanding shall bear interest thereafter until paid at an annual rate equal to
the lesser of (i) the rate that is five percentage points (5%) in excess of the
above specified Overdue Rate or (ii) the maximum rate allowed by applicable law.
All terms, covenants and conditions respecting this note are expressly
limited so that in no event whatsoever, whether by reason of advancement of
money, acceleration of maturity of the unpaid balance of this note, or
otherwise, shall the amount paid or agreed to be paid to the
Holder for the use, forbearance or detention of money to be advanced hereunder
exceed the highest rate permitted by applicable law. If, under any
circumstances, the Holder receives an amount which would exceed the highest rate
permitted by applicable law, the interest shall be automatically reduced to the
highest lawful rate, and all payments in excess thereof shall be applied to the
reduction of principal due hereunder and not to the payment of interest. The
Maker represents and warrants to the Holder that this note is part of a
commercial transaction.
All parties to this note, whether Maker, principal, surety, guarantor
or endorser, hereby forever waive presentment for payment, demand, protest and
notice of dishonor and nonpayment of this note, and all defenses on the ground
of extension of time for the payment hereof, which may be given by the Holder to
them or any one of them, or to anyone who has assumed the payment of this note,
and agree to pay all reasonable costs and expenses of collection and enforcement
of this note, including all court costs and reasonable attorneys' fees.
ALL PARTIES TO THIS NOTE AND THE HOLDER FURTHER WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE RIGHT TO A JURY TRIAL IN ANY LITIGATION CONCERNING
THIS NOTE AND IN ANY LITIGATION CONCERNING ANY DEFENSE, CLAIM, COUNTERCLAIM,
CLAIM OF SET-OFF, OR SIMILAR CLAIM OF ANY NATURE THAT MAY BE ASSERTED AGAINST
THE HOLDER.
Holder is not required to rely on any collateral for the payment of
this note in the event of default by the Maker, but may proceed directly against
the Maker and/or any endorsers or guarantors in such manner as Holder deems
desirable. None of the rights and remedies of Holder hereunder shall be waived
or affected by failure or delay to exercise them. All remedies conferred on
Holder by this note or any other instrument or agreement shall be cumulative,
and none is exclusive. Such remedies may be exercised concurrently or
consecutively at the option of the Holder.
Wherever possible each provision of this note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this note or portion thereof shall be prohibited by or be invalid
under such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this note. This note shall inure to the benefit
of the Holder and its successors and assigns, and shall be binding upon the
undersigned Maker, its successors and assigns.
This note and the legal relations between the parties shall be governed
by and construed in accordance with the laws of the State of South Carolina, and
the parties hereto specifically agree to submit to and be bound by the
jurisdiction of the courts, either federal or state, of the State of South
Carolina. Venue for any action brought to enforce this note shall lie in
Charleston County, South Carolina.
The individual executing this promissory note on behalf of the Maker,
hereby represents and warrants that the Maker is duly organized and validly
existing pursuant to the laws of the State of South Carolina, and that the
execution, delivery and performance of this note has been
approved by all requisite action and such individual has been duly authorized to
execute and deliver this note to the Holder.
THIS NOTE HAS BEEN MADE AND DELIVERED PURSUANT TO THE TERMS OF THAT
CERTAIN LEASE TERMINATION AGREEMENT MADE AND ENTERED INTO AS OF THE ____ DAY OF
______________, 2003 BY AND BETWEEN MAKER, HOLDER AND CERTAIN AFFILIATED
PARTIES, TO WHICH LEASE TERMINATION AGREEMENT REFERENCE IS HERE MADE, AND THIS
NOTE IS SUBJECT TO CERTAIN TERMS AND CONDITIONS SET FORTH IN PARAGRAPH 1.5
THEREOF WITH RESPECT TO THE PAYMENTS MADE OR TO BE MADE UNDER THIS NOTE.
IN WITNESS WHEREOF, the undersigned Maker has caused this promissory
note to be executed, as of the day and year first above written.
SIGNED, SEALED AND DELIVERED DIVERSICARE ASSISTED LIVING
IN THE PRESENCE OF: SERVICES, INC.
By:
--------------------------------- ---------------------------------
Name:
---------------------------------
Title:
--------------------------------- ---------------------------------
STATE OF )
--------------------- ) ACKNOWLEDGMENT
COUNTY OF )
--------------------
The foregoing instrument was acknowledged before me this ____ day of
________, 2003 by DIVERSICARE ASSISTED LIVING SERVICES, INC. acting herein by
____________________ its ________________________, on behalf of the said
company.
(SEAL)
-----------------------------------
Notary Public for
---------------------
My Commission Expires
-----------------
[Affix official notarial seal or stamp]
EXHIBIT D
MODIFICATION OF GUARANTY OF LEASE
This MODIFICATION OF GUARANTY OF LEASE ("Modification") is made and
entered into as of the ___ day of ____, 2003 by and between (i) XXXXXX X. XXXXX
("Prior Lessor") and 000 XXXXXX XXXXXX, XXX, x Xxxxx Xxxxxxxx limited liability
company ("Lessor") and (ii) ADVOCAT INC., a Delaware corporation ("Guarantor").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Guaranty of Lease made as of August
12, 1998 (the "Guaranty"), Guarantor has guaranteed the payment and performance
by Diversicare Assisted Living Services, Inc. ("Lessee") under that certain
Lease Agreement (With Option to Purchase) dated as of August 12, 1998 (the
"Lease") by and between Lessee and Prior Lessor, all of the interests and
obligations of Prior Lessor under the Lease having been transferred to and
assumed by Lessor; and
WHEREAS, pursuant to that certain Lease Termination Agreement dated as
of ________, 2003 made by and among Guarantor, Lessee, Lessor and Prior Lessor
(the "Lease Termination Agreement"), Guarantor and Lessor have agreed to modify
the Guaranty as set forth herein.
NOW, THEREFORE, in consideration of the execution of Lease Termination
Agreement, the mutual promises, covenants, and conditions set forth therein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby expressly acknowledged, the parties hereto agree as follows:
1. GUARANTY. This Modification modifies and amends, and is attached to
and forms a part of, the Guaranty and the provisions hereof are incorporated
into and made a part of the Guaranty. Except where otherwise indicated, all
terms used in this Modification shall have the same meanings as indicated in the
Guaranty or the Lease Termination Agreement, as applicable. In the event of any
conflict between the terms of the Guaranty and the terms of this Modification,
the terms of this Modification shall prevail.
2. LIMITATION OF GUARANTY. Anything in the Guaranty to the contrary
notwithstanding, it is understood and agreed that, effective as of the Transfer
Date, the indebtedness, obligations and liabilities of Lessee to Prior Lessor
and Lessor guaranteed by Guarantor under the Guaranty shall be and hereby are
limited to, and the terms "Payment Obligations", "Performance Obligations" and
"Obligations" as and when used in the Guaranty shall be and hereby are deemed to
mean, include and apply only to, (i) those obligations, liabilities and
responsibilities of Lessee arising pursuant to the Lease prior to the Transfer
Date, except for any liabilities, obligations or responsibilities that Lessee
had, has or may have with respect to the Real and Personal Property under the
Lease whether arising prior to, on or after the Transfer Date (other than those
set forth
in Article 5, Section 7.3, Section 9.2, Article 11 and Article 19 of the Lease)
or with respect to the Security Deposit and (ii) those obligations of Lessee
arising pursuant to the Lease Termination Agreement, whether prior to, on or
after the Transfer Date, including without limitation any obligations of Lessee
to pay the Lease Termination Fee and, if applicable, Lessor's Liquidated
Damages, in accordance with Paragraph 1.5 of the Lease Termination Agreement.
3. REAFFIRMATION. Guarantor hereby confirms and restates its
liabilities, obligations and agreements under the Guaranty as modified herein,
and agrees that, except as modified herein, every right, power and remedy of the
Lessor thereunder remains in full force and effect.
4. BINDING EFFECT. This Modification shall be binding upon and inure to
the benefit of the respective legal representatives, successors and assigns of
the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be
duly executed as of the day of the year first written above.
ADVOCAT INC.
By:
------------------------------- ---------------------------------
Name:
---------------------------------
Title:
------------------------------- ---------------------------------
LESSOR:
000 XXXXXX XXXXXX, LLC
By:
------------------------------- ---------------------------------
Name:
---------------------------------
Title:
------------------------------- ---------------------------------
PRIOR LESSOR:
By:
------------------------------- ---------------------------------
Xxxxxx X. Xxxxx
-------------------------------
STATE OF )
-------------------- ) ACKNOWLEDGMENT
COUNTY OF )
-------------------
The foregoing instrument was acknowledged before me this ____ day of
________, 2003 by ADVOCAT, INC. acting herein by __________________ its
___________________, on behalf of the said company.
(SEAL)
-----------------------------------
Notary Public for
---------------------
My Commission Expires
-----------------
[Affix official notarial seal or stamp]
STATE OF SOUTH CAROLINA )
) ACKNOWLEDGMENT
COUNTY OF CHARLESTON )
The foregoing instrument was acknowledged before me this _____ day of
_______, 2003 by 000 XXXXXX XXXXXX, LLC acting herein by Xxxxx X. Xxxxx, its
Manager, on behalf of the said company.
(SEAL)
-----------------------------------
Notary Public for South Carolina
My Commission Expires
-----------------
[Affix official notarial seal or stamp]
STATE OF SOUTH CAROLINA )
) ACKNOWLEDGMENT
COUNTY OF CHARLESTON )
The foregoing instrument was acknowledged before me this _____ day of
_______, 2003 by XXXXXX X. XXXXX.
(SEAL)
-----------------------------------
Notary Public for South Carolina
My Commission Expires
-----------------
[Affix official notarial seal or stamp]
EXHIBIT E
LIENS, ENCUMBRANCES AND LEASES COVERING ANY OF
DALS'S PERSONAL PROPERTY
Liens:
1. Security interest in favor of AmSouth Bank on all of DALS's Personal
Property.
Leased Property:
1. One (1) Xxxxxx copier with document feeder.
