EXHIBIT 10.92
FORBEARANCE AGREEMENT
FORBEARANCE AGREEMENT, dated as of November 9, 1999 (this "Forbearance
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Agreement"), to:
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(i) the Amended and Restated Credit Agreement, dated as of
November 4, 1997 (as amended by the First Amendment, dated as of July
8, 1998, the Second Amendment, dated as of December 22, 1998, the
Third Amendment, dated as of May 11, 1999, the Acknowledgment and
Amendment, dated as of August 16, 1999, and as the same may be further
amended, supplemented or otherwise modified from time to time, the
"Synthetic Credit Agreement"), among FBTC LEASING CORP., as Borrower
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(the "Borrower"), the lenders party thereto (the "Lenders"), THE CHASE
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MANHATTAN BANK ("Chase"), as agent (in such capacity, the "Agent") and
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THE FUJI BANK, LIMITED (HOUSTON AGENCY), as co-agent (in such
capacity, the "Co-Agent");
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(ii) the Amended and Restated Guarantee, dated as of November 4,
1997 (as amended by the First Amendment to Guarantee, dated as of July
8, 1998, the Second Amendment to Guarantee, dated as of December 22,
1998, the Third Amendment to Guarantee, dated as of May 11, 1999, the
Acknowledgment and Amendment to Guarantee, dated as of August 16,
1999, and as the same may be further amended, supplemented or
otherwise modified from time to time, the "Synthetic Guarantee"), made
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by MARINER POST-ACUTE NETWORK, INC. (formerly known as Paragon Health
Network, Inc., "Mariner"), a Delaware corporation, and the other
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guarantors which are signatories thereto (Mariner and each such other
guarantor, individually, a "Guarantor"; collectively, the
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"Guarantors"), in favor of the Agent; and
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(iii) the Lease, dated as of October 10, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Lease"),
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between Borrower, as Lessor, and Living Centers Holding Company, as
Lessee.
W I T N E S S E T H:
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WHEREAS, pursuant to the Synthetic Credit Agreement, the Lenders have
agreed to make, and have made, certain loans and other extensions of credit to
the Borrower;
WHEREAS, pursuant to the Guarantee, the Guarantors agreed to guarantee
the prompt and complete performance of the Guaranteed Obligations (as defined in
the Guarantee);
WHEREAS, Mariner has advised the Agent, the Lenders and the Borrower
(in its capacity as Lessor) of the current existence and the imminent occurrence
of certain Defaults and Events of Default under the Synthetic Credit Agreement,
the Synthetic Guarantee and the Lease;
WHEREAS, Mariner has requested that the Agent, the Lenders and the
Borrower (in its capacity as Lessor) forbear from exercising certain remedies
under the Synthetic Credit Agreement, the Synthetic Guarantee and the Lease with
respect to such Defaults and Events of Default and the Lenders are willing to so
forbear, but only on the terms and subject to the conditions set forth herein;
WHEREAS, Chase Securities Inc. has agreed to act as the lead arranger
and book manager in arranging the consents necessary for the effectiveness of
this Forbearance Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Terms defined in Annex A to the Amended and
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Restated Participation Agreement, dated as of November 4, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Participation
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Agreement"), among Living Centers Holding Company, a Delaware corporation, the
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Borrower, the Agent, the Co-Agent and the Lenders, and used herein shall, unless
otherwise indicated, have the meanings given to them in the Annex A to the
Participation Agreement. As used in this Forbearance Agreement, terms defined
in the preamble or the recitals shall have the meanings so assigned and the
following terms shall have the following meanings:
"Corporate Agent": Chase in its capacity as administrative agent under
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the Corporate Credit Agreement.
"Corporate Credit Agreement": the Credit Agreement, dated as of
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November 4, 1997, among Mariner, as borrower, the several banks and other
financial institutions or entities from time to time parties thereto, Bank
of America, N.A. (formerly known as NationsBank, N.A.), as documentation
agent, and the Corporate Agent, as amended, supplemented, or otherwise
modified from time to time.
"Corporate Forbearance Agreement": the Forbearance Agreement, dated as
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of the date hereof, among Mariner, the lenders party thereto, Chase, as
administrative agent under the Corporate Credit Agreement and Bank of
America, N.A. (formerly known as NationsBank, N.A.), as documentation agent
under the Corporate Credit Agreement.
"Forbearance Period": the period from the date hereof to the earlier
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of (i) January 14, 2000, and (ii) the date on which the forbearance
provided in Section 2 of this Forbearance Agreement terminates in
accordance with its terms.
"HCFA": the Health Care Financing Administration.
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2. Forbearance. The Agent, the Lenders and the Borrower (in its
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capacity as Lessor) agree to forbear, during the Forbearance Period, from the
exercise of any rights or
remedies under the Lease, the Synthetic Credit Agreement, the Notes, the
Synthetic Guarantee or any other Credit Document (including, without limitation,
the right to accelerate the Obligations) in respect of Defaults or Events of
Default arising as a result of (a) events or conditions first arising or coming
into existence prior to the date hereof, (b) the Lessee's failure to pay Basic
Rent or fees under the Lease first becoming due and payable during the
Forbearance Period, (c) the Borrower's failure to pay interest on, or commitment
or other fees in respect of, the obligations outstanding under the Synthetic
Credit Agreement first becoming due and payable during the Forbearance Period,
(d) Mariner's failure to pay interest due and owing on November 1, 1999 in
respect of the Senior Subordinated Notes and (e) the events or conditions that
are the subject of the Corporate Forbearance Agreement; provided that the
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Forbearance Period shall immediately terminate in the event that Mariner
breaches its obligations under Section 3 below or Section 3 of the Corporate
Forbearance Agreement.
3. Application of Prudent Buyer Settlement Proceeds. In
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consideration for the forbearance granted hereunder, and in order to induce the
Lenders to enter into this Forbearance Agreement, Mariner shall pay to Chase, as
Agent and Corporate Agent, within one Business Day of its receipt thereof all
amounts representing the "Paragon Disallowance Settlement" (as that term is used
on page 9 of the bank books presented by Mariner to the Lenders at the meeting
of Lenders in New York City on November 3, 1999) and received, in cash, from
HCFA or any other Governmental Authority by Mariner or any Subsidiary Guarantor
in respect of charges previously disallowed for allegedly failing to satisfy
HCFA's "prudent buyer" standard. Any amounts so paid to Chase shall be applied
(without duplication) to the payment in full of interest, Basic Rent and fees
due and owing (at the applicable non-default rates) on the obligations
outstanding under the Corporate Credit Agreement, the Synthetic Credit
Agreement, the Lease and the Deficiency Note (as defined in the Corporate Credit
Agreement), ratably in the proportion that the amount (without duplication) of
interest, Basic Rent and fees then due and owing under each of the Corporate
Credit Agreement, the Synthetic Credit Agreement, the Lease or the Deficiency
Note bears to the aggregate amount (without duplication) of the interest, Basic
Rent and fees then due and owing under the Corporate Credit Agreement, the
Synthetic Credit Agreement, the Lease and the Deficiency Note.
4. Conditions to Effectiveness. The forbearance and agreements
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provided for herein shall become effective, and shall be deemed to be effective
as of the date hereof, upon the Agent's receipt of counterparts of this
Forbearance Agreement duly executed and delivered by the Borrower, Mariner and
the subsidiaries of Mariner set forth on the signature pages hereto and the
Required Lenders. The execution and delivery of this Forbearance Agreement by
any Lender shall be binding upon each of its successors and assigns (including
Transferees of its commitments and Loans in whole or in part prior to
effectiveness hereof) and binding in respect of all of its Commitments and
Loans, including any acquired subsequent to its execution and delivery hereof
and prior to the effectiveness hereof.
5. Representations and Warranties. Mariner, as of the date hereof
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and after giving effect to the agreements contained herein, hereby confirms,
reaffirms and restates that representations and warranties made by it in Section
9 of the Synthetic Guarantee (other than the last sentence of such Section 9 and
other than with respect to any matters previously disclosed in writing to the
Lenders or disclosed in any of the Mariner's public filings, including, without
limitation, matters disclosed in its financial statements); provided, that each
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reference to the Synthetic Guarantee therein shall be deemed to be a reference
to the Synthetic Guarantee after giving effect to this Forbearance Agreement.
6. Payment of Expenses. Mariner agrees to pay or reimburse the
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Agent for all of its out-of-pocket costs and expenses incurred in connection
with this Forbearance Agreement and any other documents prepared in connection
herewith, including, without limitation, the reasonable fees and disbursements
of counsel to the Agent.
7. Reference to and Effect on the Credit Documents; Limited Effect.
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This Forbearance Agreement shall be deemed to be a Credit Document for all
purposes. The execution, delivery and effectiveness of this Forbearance
Agreement shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or any Agent under any of the Credit
Documents, nor constitute a waiver of or forbearance with respect to any
provisions of any of the Credit Documents. Except as expressly provided herein,
all of the provisions and covenants of the Synthetic Guarantee and the other
Credit Documents are and shall continue to remain in full force and effect in
accordance with the terms thereof and are hereby in all respects ratified and
confirmed.
8. Counterparts. This Forbearance Agreement may be executed by one
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or more of the parties hereto in any number of separate counterparts (which may
include counterparts delivered by facsimile transmission) and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Any executed counterpart delivered by facsimile transmission shall
be effective as for all purposes hereof.
9. GOVERNING LAW. THIS FORBEARANCE AGREEMENT AND THE RIGHTS AND
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OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Forbearance
Agreement to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
MARINER POST-ACUTE NETWORK, INC.
By:_______________________________________________
Name:
Title:
AMERICAN-CAL MEDICAL SERVICES, INC.
AMS GREEN TREE, INC.
AMS PROPERTIES, INC.
CONNERWOOD HEALTHCARE, INC.
COORDINATED HOME HEALTH SERVICES, INC.
CORNERSTONE HEALTH MANAGEMENT COMPANY
EH ACQUISITION CORP.
EH ACQUISITION CORP. II
EH ACQUISITION CORP. III
EVERGREEN HEALTHCARE, INC.
EVERGREEN HEALTHCARE LTD., L.P.
GC SERVICES, INC.
GCI BELLA VITA, INC.
GCI CAMELLIA CARE CENTER, INC.
GCI XXXXXX VILLAGE, INC.
GCI EAST VALLEY MEDICAL & REHABILITATION CENTER,
INC.
GCI FAITH NURSING HOME, INC.
GCI HEALTH CARE CENTERS, INC.
GCI XXXXXX ACRES, INC.
GCI PALM COURT, INC.
GCI PRINCE XXXXXX, INC.
GCI REHAB, INC.
GCI SPRINGDALE VILLAGE, INC.
GCI THERAPIES, INC.
GCI VALLEY MANOR HEALTH CARE CENTER, INC.
GCI VILLAGE GREEN, INC.
GCI-CAL HEALTH CARE CENTERS, INC.
GCI-CAL THERAPIES COMPANY
GCI-WISCONSIN PROPERTIES, INC.
MARINER HEALTH MANAGEMENT COMPANY (f/k/a
GRANCARE GPO SERVICES, INC.)
GRANCARE HOME HEALTH SERVICES, INC.
GRANCARE, INC.
GRANCARE NURSING SERVICES AND HOSPICE, INC.
GRANCARE OF MICHIGAN, INC.
GRANCARE OF NORTH CAROLINA, INC.
GRANCARE OF NORTHERN CALIFORNIA, INC.
GRANCARE SOUTH CAROLINA, INC.
HERITAGE OF LOUISIANA, INC.
HMI CONVALESCENT CARE, INC.
HOSTMASTERS, INC.
NATIONAL HERITAGE REALTY, INC.
OMEGA/INDIANA CARE CORPORATION
RENAISSANCE MENTAL HEALTH CENTER, INC.
STONECREEK MANAGEMENT COMPANY, INC.
By:___________________________________________
Name:
Title:
AMERICAN PHARMACEUTICAL SERVICES, INC.
AMERICAN REHABILITY SERVICES, INC.
AMERICAN SENIOR HEALTH SERVICES, INC.
APS HOLDING COMPANY, INC.
APS PHARMACY MANAGEMENT, INC.
XXXXX CENTER HEALTH & REHABILITATION/TAMPA, INC.
XXXXX CENTER HEALTH & RETIREMENT/ALLEGHANY, INC.
XXXXX CENTER HEALTH & RETIREMENT/XXXXXXX, INC.
XXXXX CENTER HEALTH & RETIREMENT/XXXXXXX, INC.
XXXXX CENTER MANAGEMENT CORPORATION
XXXXX CENTER NURSING CARE/AUSTELL, INC.
XXXXX CENTER NURSING CARE/FINCASTLE, INC.
XXXXX CENTER NURSING CARE/HICKORY, INC.
XXXXX CENTER NURSING CARE/POWDER SPRINGS, INC.
XXXXX CENTER OF ASHEBORO, INC.
XXXXX CENTER OF CENTRAL COLUMBIA, INC.
XXXXX CENTERS HEALTH & RETIREMENT/XXXXXXX, INC.
DEVCON HOLDING COMPANY
EXTENDED ACUTE HOSPITALS OF AMERICA, INC.
HOME HEALTH MANAGEMENT ASSOCIATES OF AMERICA, INC.
HOMECARE ASSOCIATES OF AMERICA, INC.
HOSPICE ASSOCIATES OF AMERICA, INC.
LC MANAGEMENT COMPANY
LCA OPERATIONAL HOLDING COMPANY
LCR, INC.
LIVING CENTERS DEVELOPMENT COMPANY
LIVING CENTERS - EAST, INC.
LIVING CENTERS HOLDING COMPANY
LIVING CENTERS LTCP DEVELOPMENT COMPANY
LIVING CENTERS OF TEXAS, INC.
LIVING CENTERS - ROCKY MOUNTAIN, INC.
LIVING CENTERS - SOUTHEAST DEVELOPMENT CORPORATION
LIVING CENTERS - SOUTHEAST, INC.
MED-THERAPY REHABILITATION SERVICES, INC.
PROFESSIONAL RX SYSTEMS, INC.
REHABILITY HEALTH SERVICES, INC.
THERACARE HOME HEALTH AGENCY, INC.
By:_________________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Agent and
as a Lender
By:__________________________________
Name:
Title:
Bank of America, N.A.
By:__________________________________
Name:
Title:
The Bank of Nova Scotia
By:___________________________________
Name:
Title:
Credit Lyonnais New York Branch
By:________________________________
Name:
Title:
Dresdner Bank AG, New York and Grand Cayman
Branches
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
FBTC Leasing Corp.
By:_______________________________
Name:
Title:
Fuji Bank, Limited (Houston Agency), as Co-Agent
By:___________________________________
Name:
Title:
Union Bank of California, N.A.
By:_______________________________
Name:
Title:
General Electric Capital Corporation
By:________________________________
Name:
Title:
HSBC Bank, U.S.A.
By:___________________________________
Name:
Title:
Toronto Dominion Bank (Texas), Inc.
By:___________________________________
Name:
Title: