TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (as the same may be amended or supplemented from time to time, this Agreement) is entered into as of October 1, 2019, by and between The Ensign Group, Inc., a Delaware corporation (Ensign), and The Pennant Group, Inc., a Delaware corporation (Pennant). Ensign and Pennant are sometimes referred to herein individually as a Party, and collectively as the Parties. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Separation Agreement.
WHEREAS, Ensign, through its direct and indirect Subsidiaries, owns the Ensign Business and the Pennant Business;
WHEREAS, Ensign and Pennant have entered into a Master Separation Agreement, dated as of the date hereof (the Separation Agreement), pursuant to which Ensign will be separated into two independent publicly-traded companies: (a) Pennant, which, following consummation of the transactions contemplated by the Separation Agreement, will own and conduct the Pennant Business, and (b) Ensign, which, following the consummation of the transactions contemplated by the Separation Agreement, will own and conduct the Ensign Business;
WHEREAS, in connection with the transactions contemplated by the Separation Agreement, (a) Pennant desires to procure certain services from Ensign, and Ensign is willing to provide such services to Pennant and (b) Ensign desires to procure certain services from Pennant, and Pennant is willing to provide such services to Ensign, in each case during a transition period and on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, each Party desires to set forth in this Agreement the principal terms and conditions pursuant to which it will, as applicable, provide or receive such services; and
WHEREAS, the execution of this Agreement by the Parties is a condition precedent to the consummation of the transactions contemplated by the Separation Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
Section 1.1 Certain Definitions. As used in this Agreement (including in Exhibit A), the following capitalized terms shall have the following meanings, applicable both to the singular and the plural forms of the terms described:
Additional Interest has the meaning set forth in Section 3.3(b).
Additional Services has the meaning set forth in Section 2.2.