EXHIBIT 2.1
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
AMONG NATIONAL SENIOR CARE, INC.,
NCARE ACQUISITION CORP. AND
MARINER HEALTH CARE, INC.
This FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER, dated as of
October 21, 2004 (this "First Amendment"), by and among MARINER HEALTH CARE,
INC., a Delaware corporation (the "Company"), NATIONAL SENIOR CARE, INC., a
Delaware corporation ("Purchaser") and NCARE ACQUISITION CORP., a Delaware
corporation and wholly owned subsidiary of Purchaser ("Merger Sub").
WHEREAS, the Company, Purchaser and Merger Sub have entered into that
certain Agreement and Plan of Merger (the "Merger Agreement"), dated as of June
28, 2004;
WHEREAS, the capitalized terms used herein, including in the preamble
and recitals hereto, not otherwise defined herein or otherwise amended hereby
shall have the meanings ascribed thereto in the Merger Agreement;
WHEREAS, Purchaser and Merger Sub have previously requested that the
Company postpone the exercise of its right, under the Merger Agreement, to draw
on the LC (as defined below); and
WHEREAS, the Company is willing to agree, on the terms and conditions
hereinafter set forth and in consideration of the amendments to the Merger
Agreement agreed to by Purchaser and Merger Sub described herein, to postpone
the time at which it may draw on the LC from October 22, 2004, to December 8,
2004;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Company, Purchaser and Merger Sub
hereby agree as follows:
SECTION 1. AMENDMENTS
1.1 AMENDMENTS TO SECTION 3.1: ORGANIZATION AND
QUALIFICATION. Section 3.1 of the Merger Agreement is hereby amended by deleting
the final sentence of Section 3.1 in its entirety and substituting the
following:
""Company Material Adverse Change" or "Company Material Adverse
Effect," as the case may be, shall mean any change, effect, event or condition
occurring on or prior to the date of this First Amendment (i) which,
individually or in the aggregate, has had a material adverse effect on the
business, results of operations or financial condition or assets of the Company
and the Subsidiaries, taken as a whole, or (ii) that could reasonably be
expected to prevent or materially delay the Company's ability to consummate the
transactions contemplated hereby;
provided, however, that, in no event will any of the following, alone or in
combination, constitute a Company Material Adverse Effect or a Company Material
Adverse Change: (a) a change in the trading prices of any of the Company's
securities, in and of itself; (b) general economic, political and financial
market changes and the effects, changes, events, circumstances and conditions
resulting therefrom, to the extent not having a materially disproportionate
impact on the Company and the Subsidiaries taken as a whole than the effect on
similarly situated companies; (c) reductions in regulatory reimbursement rates
affecting the Company taking effect after the Effective Time and the effects,
changes, events, circumstances and conditions resulting therefrom, to the extent
not having a materially disproportionate impact on the Company and the
Subsidiaries taken as a whole than the effect on similarly situated companies;
(d) any effects, changes, events, circumstances or conditions resulting from the
announcement or pendency of any of the transactions provided for in this
Agreement; (e) any effects, changes, events, circumstances or conditions
resulting from compliance by the Purchaser or the Company with the terms of, or
the taking of any action specifically required to be taken in, this Agreement;
(f) the effect of any matters specifically disclosed in the Company Disclosure
Schedule or in the Company SEC Filings (as defined below) as filed or amended
through the date hereof, excluding any disclosures set forth under captions
entitled "Risk Factors," and "Forward-looking Statements" unless the same
information is appropriately set forth on the Company Disclosure Statement, (g)
any effects, changes, events, circumstances or conditions resulting from the
matters that have been addressed in any notices delivered to Purchaser or Merger
Sub subsequent to the date of the Merger Agreement and prior to the date of this
First Amendment, including, without limitation, any interim financial reports
("Reported Events"), and (h) any effects, changes, events, circumstances or
conditions resulting from any fact, circumstance, event, development or similar
matters as to which Purchaser or Merger Sub or any of their affiliates had
knowledge as of the date of this First Amendment regardless of whether or not
such fact, circumstance, event, development or similar matter was the subject of
any notice delivered by the Company pursuant to the Merger Agreement or
otherwise ("Known Events", and together with the Reported Events, the "Events").
1.2 AMENDMENTS TO SECTION 5.1: CONDUCT OF THE COMPANY.
Section 5.1 of the Merger Agreement is hereby amended by deleting Section
5.1(b)(i) in its entirety and substituting the following:
"(i) adopt or propose any change in the Company's articles
of incorporation or in the case of the Company's by laws, adopt or propose any
change which would have a Company Material Adverse Effect (for purposes of this
clause (i), even if such event resulting in a Company Material Adverse Effect
occurs after October 21, 2004);"
1.3 AMENDMENTS TO SECTION 5.3: NOTICES OF CERTAIN EVENTS.
Section 5.3 of the Merger Agreement is hereby amended by deleting Section 5.3(d)
in its entirety and substituting the following:
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"(d) the occurrence, to the Company's Knowledge, of any
event that has had a Company Material Adverse Change (for this purpose, even if
such event occurs on or after October 21, 2004);"
1.4 AMENDMENTS TO SECTION 9.2: EFFECT OF TERMINATION.
Section 9.2 of the Merger Agreement is hereby amended by deleting Section 9.2(c)
in its entirety and substituting the following:
"(c) (i) Purchaser has caused to be delivered to the
Company an irrevocable letter of credit issued by HSBC Bank USA (the "LC
Issuer") in the face amount of $40,000,000 (the "LC"). If, at any time on or
prior to the close of business on December 6, 2004, Purchaser shall deliver to
the Company, by wire transfer of immediately available funds from a Qualified
Source (as defined below), cash in the amount of $40,000,000, the Company shall
promptly, but in any event within two (2) business days, return the LC to
Purchaser undrawn for returning to the LC Issuer for cancellation. Such cash
provided by the Purchaser or the proceeds from the LC drawn pursuant to Section
9.2(c)(iii) are hereinafter referred to as the "LC Proceeds." A "Qualified
Source" shall include (i) ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, provided that at the request of the
Company, Purchaser shall provide an appropriate legal opinion from Jenkens &
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP, in form and substance reasonably satisfactory to
the Company, that the payment is duly authorized and is not a fraudulent
conveyance or subject to any preference risk under applicable state and federal
bankruptcy law, or (ii) any other source which may be approved by the Company in
its sole discretion.
(ii) If the Closing shall have occurred on or
prior to December 7, 2004, the Company shall, at the Closing, deliver the LC
to Purchaser undrawn for return to the LC Issuer for cancellation or the LC
Proceeds, as the case may be.
(iii) If the Closing shall fail to occur at or
prior to the close of business on December 7, 2004 for any reason other than a
termination of this Agreement pursuant to Sections 9.1(a) or by Purchaser
pursuant to Sections 9.1(c), (e), (f), (g) (in connection with the Company
accepting an Acquisition Proposal for a Covered Acquisition Transaction), (h) or
(j), or by the Company pursuant to Section 9.1(c)(i), 9.1(h) or 9.1(i), the LC
may be drawn upon by the Company on or after December 8, 2004 (unless cash has
been substituted therefor) and the LC Proceeds shall be held by the Company in
accordance with the remaining provisions of this Section 9.2(c). If this
Agreement was terminated prior to the close of business on December 7, 2004
pursuant to Sections 9.1(a), (c), (e), (f), (g) (in connection with the Company
accepting an Acquisition Proposal for a Covered Acquisition Transaction), (h),
(i), or (j), the Company shall, within two (2) business days of such
termination, deliver the LC to Purchaser undrawn for return to the LC Issuer for
cancellation or the LC Proceeds, as the case may be, which return shall be in
addition to any payment to Purchaser of Purchaser's Break Up Fee and Expense
Reimbursement required, if any, in connection with such termination pursuant to
Section 9.2(b).
(iv) If the Closing shall occur at any time after
the Company has drawn upon or received the LC Proceeds, the Company shall, on or
prior to the Effective Time, transmit
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to the Purchaser or its designee an amount of cash equal to the LC Proceeds, by
wire transfer of immediately available funds.
(v) The Company shall be entitled to retain the
LC Proceeds as the Company Break-Up Fee unless (A) the Closing shall not have
occurred on or prior to December 7, 2004 as a result of the failure to satisfy
the conditions set forth in (i) Section 8.2(a), (b) or (c) that may otherwise be
required pursuant to this Agreement or (ii) Section 8.3(d) and Purchaser shall
not be in breach of Section 6.3 or (B) this Agreement shall have been terminated
pursuant to Section 9.1(a) or by Purchaser pursuant to Section 9.1(c), (e), (f),
(g) (in connection with the Company accepting an Acquisition Proposal for a
Covered Acquisition Transaction), (h) or (j) or by the Company pursuant to
Section 9.1(c)(i), 9.1(h) or 9.1(i), in any of which events under clauses (A) or
(B) the Company shall, within two (2) business days of such termination, pay an
amount equal to the LC Proceeds to the Purchaser or its designee by wire
transfer of immediately available funds, which payment shall be in addition to
any payment to Purchaser of Purchaser's Break Up Fee and Expense Reimbursement,
if any, required in connection with such termination pursuant to Section 9.2(b).
(vi) In the event that Purchaser shall dispute
the Company's right to submit a draw to obtain the LC Proceeds, the Company
shall nevertheless be permitted to draw on the LC and receive the LC Proceeds
but such draw shall be without prejudice to Purchaser's right to assert
subsequently that such draw was improper and to obtain from the Company the LC
Proceeds."
1.5 ADDITION OF NEW SECTION 10.13. The Merger Agreement
is hereby amended by adding the following provision as Section 10.13:
"Section 10.13 Waiver in Connection with PL/GL Matters. The Purchaser
and Merger Sub hereby agree that no past or future reports, conclusions,
commentaries, opinions, or description of developments described in actuarial
reports or any other source regarding the Company's PL/GL exposure relating to
conditions, claims, events or circumstances existing on or before October 21,
2004, or any risk or liability associated therewith, regardless if such reports,
risks or liabilities have an impact on the past or future reserves established
by the Company and reflected in the Company's financial statements or any other
impact on the Company (either alone or with other matters) (collectively, the
"PL/GL Matters"), directly or indirectly (i) shall serve as a basis for
Purchaser or Merger Sub asserting (and none of the PL/GL Matters shall otherwise
constitute) a breach or default pursuant to the terms and conditions of the
Merger Agreement, including without limitation, any breach or default of any of
the Company's representations and warranties (whether made or to be made),
covenants or other obligations described in the Merger Agreement; (ii) shall
serve as a basis for Purchaser or Merger Sub asserting that any of the
conditions to the obligations of Purchaser or Merger Sub to consummate the
transactions contemplated by the Merger Agreement have not been satisfied (and
none of the PL/GL Matters shall constitute or result in any failure of any such
condition), and (iii) shall serve as a basis for Purchaser or Merger Sub
terminating or seeking to terminate the Merger Agreement."
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1.6 ADDITION OF NEW SECTION 10.14. The Merger Agreement
is hereby amended by adding the following provision as Section 10.14:
"Section 10.14 Waiver in Connection with Certain Other Matters. The
Purchaser and Merger Sub hereby agree that no Event either alone or with other
matters, directly or indirectly (i) shall serve as a basis for Purchaser or
Merger Sub asserting (and no Event shall otherwise constitute), a breach or
default pursuant to the terms and conditions of the Merger Agreement, including
without limitation, any breach or default of any of the Company's
representations and warranties (whether made or to be made), covenants or other
obligations described in the Merger Agreement; (ii) shall serve as a basis for
Purchaser or Merger Sub asserting that any of the conditions to the obligations
of Purchaser or Merger Sub to consummate the transactions contemplated by the
Merger Agreement have not been satisfied (and no Event shall constitute or
result in any failure of any such condition), and (iii) shall serve as a basis
for Purchaser or Merger Sub terminating or seeking to terminate the Merger
Agreement.
SECTION 2. LIMITATION OF AMENDMENTS
2.1 Except as expressly amended by the foregoing, the
Merger Agreement shall remain unchanged and in effect and the terms of the
Merger Agreement not expressly amended by this First Amendment are hereby
incorporated by reference into this First Amendment as if set forth fully
herein.
SECTION 3. ACKNOWLEDGMENT AND CONSENT
3.1 Each of the Company, the Purchaser and the Merger Sub
hereby acknowledges that it has reviewed the terms and provisions of the Merger
Agreement and this First Amendment and consents to the amendments effected
pursuant to this First Amendment.
SECTION 4. DUE AUTHORIZATION; LEGALLY VALID
4.1 Each of the parties to this First Amendment
represents and warrants to the other parties hereto that the execution, delivery
and performance of this First Amendment by such party has been duly authorized
by all necessary action on the part of such parties.
4.2 Each of the parties to this First Amendment
represents and warrants to the other parties hereto that the Merger Agreement as
amended by this First Amendment has been duly executed and delivered by such
party and is the legally valid and binding obligation of such party, enforceable
against such party in accordance with its terms.
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IN WITNESS WHEREOF, this First Amendment has been duly executed by the
parties hereto as of the date first above written.
NATIONAL SENIOR CARE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
NCARE ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
MARINER HEALTH CARE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
