1
EXHIBIT 10.6
CONFIDENTIAL: THIS DOCUMENT IS PROVIDED FOR SETTLEMENT PURPOSES ONLY AND IS
SUBJECT TO THE PROTECTIONS OF FEDERAL RULE OF EVIDENCE 408 AND ALL SIMILAR
PROVISIONS AND SUPPORTING AUTHORITIES.
ANCILLARY RESTRUCTURING AGREEMENT
THIS ANCILLARY RESTRUCTURING AGREEMENT (this "Agreement") is made as of
this 21st day of December, 2000, by and among (a) OMEGA HEALTHCARE INVESTORS,
INC., a Maryland corporation ("Omega"), (b) PROFESSIONAL HEALTH CARE MANAGEMENT,
INC., a Michigan corporation ("PHCM"), (c) each of the Michigan subsidiaries of
PHCM listed on the signature page hereto (the "Michigan Subsidiaries"), (d)
LIVING CENTERS - PHCM, INC., a North Carolina corporation ("LC-PHCM"), (e)
GRANCARE, INC., a Delaware corporation formerly known as New GranCare, Inc.
("GranCare"), and (f) MARINER POST-ACUTE NETWORK, INC., a Delaware corporation
formerly known as Paragon Health Network, Inc. ("Mariner," and, together with
PHCM, the Michigan Subsidiaries, LC-PHCM and GranCare, collectively, the
"Mariner Entities").
WITNESSETH:
WHEREAS, PHCM is the owner of thirteen (13) skilled nursing facilities
located in the State of Michigan and identified more particularly on Schedule A
hereto attached and incorporated herein by reference (the "Michigan
Facilities"), and leases each Michigan Facility to the Michigan Subsidiary
indicated opposite the name of such Michigan Facility on Schedule A under
separate facility leases (as amended, collectively, the "Michigan Facility
Leases"); and
WHEREAS, LC-PHCM is the owner of the three (3) North Carolina skilled
nursing facilities more particularly identified on Schedule A hereto attached
and incorporated herein by this reference (the "North Carolina Facilities", and
together with the Michigan Facilities, the "Facilities") and has leased the
North Carolina Facilities to PHCM, which operates the North Carolina Facilities
under facility leases between LC-PHCM, as lessor, and PHCM, as lessee
(collectively, the "North Carolina Facility Leases", and together with the
Michigan Facility Leases, the "Facility Leases"); and
WHEREAS, Omega has previously made a loan to PHCM in the original
principal amount of $58,800,000 (the "Omega Loan") pursuant to that certain
Michigan Loan Agreement
1
2
dated as of June 7, 1992 (as heretofore amended, the "Omega Loan Agreement")
between Omega and PHCM; and
WHEREAS, the Omega Loan is evidenced by that certain Mortgage Note
dated August 14, 1992 (as amended, the "Omega Note"), issued by PHCM and payable
to the order of Omega in the original principal amount of $58,800,000, is
guaranteed by LC-PHCM and the Michigan Subsidiaries, and such loan and guaranty
obligations are secured by, among other things, mortgages on the Facilities and
blanket security interests in the personal property of PHCM and the affiliated
guarantors (the Omega Loan Agreement, the Omega Note and all documents,
instruments and agreements evidencing, guaranteeing or securing the Omega Loan
being hereinafter collectively referred to as the "Omega Loan Documents"); and
WHEREAS, the Mariner Entities have filed voluntary petitions under
chapter 11 of the United States Bankruptcy Code, 11 U.S.C. ss.ss.101 et seq., as
amended (the "Bankruptcy Code"), on January 18, 0000 (xxx "Xxxxxxxx Xxxx"),
xxxxxx xxx Xxxxxx Xxxxxx Bankruptcy Court for the District of Delaware (the
"Court"), bearing the case numbers set forth on Schedule B hereto attached and
incorporated herein by this reference (collectively, the "Cases"), which Cases
are currently pending and are being jointly administered; and
WHEREAS, no payments have been made on or with respect to the Omega
Loan since the Petition Date, and various disputes have arisen and now exist
between Omega and the Mariner Entities with respect to the Omega Loan, Omega's
ability to foreclose on the Facilities and related matters; and
WHEREAS, Omega and the Mariner Entities have been negotiating for an
extended period of time in an effort to resolve their disputes and restructure
the obligations of the Mariner Entities to Omega (the "Restructuring"); and
WHEREAS, the Mariner Entities desire to proceed with a portion of the
Restructuring - namely, the conveyance of the four (4) Michigan Facilities
identified on Schedule A as the "Ciena Facilities" (the "Ciena Facilities") to
an affiliate of Ciena Healthcare Management, Inc. ("Ciena Buyer") on the terms
and conditions set forth in the Ciena Purchase Agreement (as hereinafter
defined), free and clear of the Facility Leases pertaining to such Facilities
and free and clear of the liens and security interests securing the Omega Loan
(the "Ciena Transaction") - prior to finalizing the terms of the rest of the
Restructuring; and
WHEREAS, Omega is willing to permit the Ciena Transaction to occur
notwithstanding that the other aspects of the Restructuring have not been
finalized, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, Omega
and the Mariner Entities (collectively, the "Parties") hereby agree as follows:
2
3
ARTICLE 1
DEFINITIONS
1.1. The following capitalized terms shall have the meanings set
forth below:
"Applicable Prepayment Amount" shall mean, with respect to any
particular Mandatory Prepayment Date under the Maintenance Obligation Note, the
amount by which the Net Lowest Daily Cash Balance for the second preceding
calendar month exceeds $850,000. If the Net Lowest Daily Cash Balance is equal
to or less than $850,000, the Applicable Prepayment Amount will be zero.
"Business Day" shall mean any day other than a Saturday, Sunday, or any
other day on which banking institutions in the State of Georgia are authorized
by law or executive action to close.
"Ciena Closing" shall mean the consummation of the Ciena Transaction.
"Ciena Event of Default" means an Event of Default by Ciena Buyer or
Ciena Guarantor as defined in the Purchase Money Financing Documents.
"Ciena Facility Subsidiaries" shall mean the subsidiaries of PHCM
indicated opposite the names of the respective Ciena Facilities on Schedule A.
"Ciena Purchase Agreement" shall mean that certain Asset Purchase
Agreement dated as of December 21, 2000, by and among PHCM, the Ciena Facility
Subsidiaries and the Ciena Buyer, pursuant to which PHCM has agreed to sell, and
the Ciena Buyer has agreed to buy, the Ciena Facilities, a copy of which is
attached hereto as Exhibit A.
"Ciena Transaction" shall mean the purchase and sale of the Ciena
Facilities pursuant to the Ciena Purchase Agreement.
"Final Audit Report" shall mean the final audit report for the Michigan
Facilities issued to PHCM by the applicable Governmental Authority of the State
of Michigan with respect to Medicaid cost reports for the years 1998 and 1999.
"GAAP" shall mean generally accepted accounting principles in effect at
the time in question.
"Governmental Authority" shall mean all agencies, authorities, bodies,
boards, commissions, courts, instrumentalities, legislatures and offices of any
nature whatsoever, of any government unit or political subdivision, whether
federal, state, county, district, municipal, city or otherwise, and whether now
or hereafter in existence.
3
4
"Mandatory Prepayment Date" shall mean the 15th day of the second
calendar month after the calendar month in which PHCM receives the Final Audit
Report, and the 15th day of each successive calendar month thereafter until the
non-contingent portion of the Maintenance Obligation Note shall have been paid
in full.
"Medicaid Overpayment Claims" shall mean all claims for overpayment
under the State of Michigan Medicaid program asserted in the Final Audit Report
by any Governmental Authority of the State of Michigan against PHCM or the
Michigan Subsidiaries, whether or not relating to the Ciena Facilities, less any
amount thereof which has been waived or forgiven by the applicable Governmental
Authority or repaid by PHCM or the Michigan Subsidiaries.
"Net Lowest Daily Cash Balance" shall mean (i) at the time of closing
of the Ciena Transaction, the amount determined by deducting Medicaid
Overpayment Claims from the lowest daily consolidated cash balances of PHCM and
the Michigan Subsidiaries for the thirty-one (31)-day period immediately
preceding the date of the Ciena Closing, and (ii) at any other date, the amount
determined by deducting the Medicaid Overpayment Claims from the lowest daily
consolidated cash balances of PHCM and the Michigan Subsidiaries for the second
preceding calendar month ending prior to the date.
"Operators" shall mean PHCM, LC-PHCM and the Michigan Subsidiaries.
"Person" shall mean all individuals, corporations, general and limited
partnerships, limited liability companies, stock companies or associations,
joint ventures, unincorporated associations, companies, trusts, banks, trust
companies, land trusts, business trusts, Governmental Authorities and other
entities of every kind and nature.
"Purchase Money Financing Documents" shall mean all documents
evidencing, guaranteeing and securing the Purchase Money Loan, including, but
not limited to the Purchase Money Note and all guaranties, mortgages, security
agreements, pledge agreements, and UCC financing statements.
"Purchase Money Loan" shall mean the $9,000,000 purchase money loan to
be made by PHCM to Ciena Buyer in connection with the Ciena Transaction.
"Purchase Money Note" shall mean the promissory note from Ciena Buyer
and payable to the order of PHCM in the original principal amount of $9,000,000,
evidencing the Purchase Money Loan.
"Retained Facilities" shall mean the Retained Michigan Facilities plus
the North Carolina Facilities.
"Retained Michigan Facilities" shall mean the nine (9) Michigan
Facilities identified under the heading "Retained Facilities" on Schedule A
hereto.
4
5
"Stay" shall mean an order of a court of competent jurisdiction staying
the Approval Order pending appeal.
"Subsidiary Guarantors" shall mean the Michigan Subsidiaries and
LC-PHCM, as guarantors of the Omega Loan.
"Third Party Payor Programs" shall mean all third party payor programs
in which any Facility participates, including, without limitation, Medicare,
Medicaid, CHAMPUS, Blue Cross and/or Blue Shield, TriCare, managed care plans,
other private insurance programs, workers compensation and employee assistance
programs.
"Third Party Payors" shall mean Medicare, Medicaid, CHAMPUS, Blue Cross
and/or Blue Shield, TriCare, private insurers and any other Person which
maintains Third Party Payor Programs.
ARTICLE 2
PROCEDURAL MATTERS
2.1. Court Approval. Promptly following execution of this Agreement
by all parties and otherwise within seven (7) days after such date, the Mariner
Entities will file a motion with the Court seeking authority to proceed with the
Ciena Transaction and other matters provided for in this Agreement (the
"Transaction Approval Motion"), together with a proposed form of order (the
"Approval Order"). The Approval Order shall satisfy the requirements of Section
4.1 hereof, and shall otherwise be in a form, and include such other provisions,
as Omega and the Mariner Entities may deem appropriate under the circumstances.
The Mariner Entities and Omega shall exercise good faith efforts to obtain the
Approval Order from the Court.
2.2. Effectiveness. Those provisions of this Agreement which
require the exercise of good faith efforts by the Parties hereto shall be
effective immediately while all other provisions of this Agreement shall be
effective upon entry of the Approval Order, unless implementation is stayed by
appeal.
ARTICLE 3
CLOSING OF CIENA TRANSACTION
3.1 Consent to Ciena Transaction. Omega hereby consents to the
closing of the Ciena Transaction in accordance with the terms of the Ciena
Purchase Agreement and this Agreement. At the Ciena Closing, the Facility Leases
relating to the Ciena Facilities will be surrendered and terminated by mutual
agreement of the Ciena Facility Subsidiaries, PHCM and Omega, and Omega agrees
to release the Ciena Facilities and related personal property being sold to the
Ciena Buyer from all mortgages, security interests and other liens arising under
or by virtue of the Omega Loan Documents.
5
6
3.2 Deferred Maintenance Obligations for Ciena Facilities. In
order to induce the Ciena Buyer to purchase the Ciena Facilities, PHCM has
agreed to reimburse Ciena for the cost of certain deferred maintenance repairs
required at the Ciena Facilities. Because PHCM does not have the funds to cover
the cost of the deferred maintenance repairs, Omega has agreed to assume PHCM's
obligations to Ciena with respect to the deferred maintenance repairs; and PHCM
has agreed to pay Omega for such assumption and for the other obligations of
Omega herein set forth the sum of $1,000,000, to be paid as follows:
(a) (i) if the applicable Governmental Authority of the
State of Michigan has not issued the Final Audit
Report, PHCM will pay Omega $300,000 in immediately
available funds at the Ciena Closing, or (ii) if the
applicable Governmental Authority of the State of
Michigan has issued the Final Audit Report by the
time of the Ciena Closing, PHCM will pay Omega in
immediately available funds at the Ciena Closing an
amount equal to the greater of (1) $300,000, and (2)
the amount (not to exceed $600,000) by which the Net
Lowest Daily Cash Balance exceeds $850,000; and
(b) at the Ciena Closing, PHCM will deliver to Omega the
Maintenance Obligation Note (as defined in Section
3.3 hereof).
3.3 Maintenance Obligation Note. The Maintenance Obligation Note
to be delivered to Omega pursuant to Section 3.2(b) shall (1) be in the original
principal amount of $1,000,000, less the amount paid to Omega pursuant to
Section 3.2(a) hereof; (2) bear interest at the rate of eleven and one-quarter
percent (11.25%) per annum; (3) provide that PHCM's obligation to pay Contingent
Principal (as hereinafter defined) and interest thereon shall be contingent on
the consummation, on or before May 31, 2001, of a restructuring of the rest of
the Mariner Entities' obligations to Omega either as part of a restructuring or
a plan of reorganization approved by the Court; (4) be payable from PHCM's share
of Purchase Money Note Payments (as hereinafter defined) if, as and when they
are received; (5) be subject to mandatory prepayment in an amount equal to the
Applicable Prepayment Amount on each Mandatory Prepayment Date until the
non-contingent portion of the Maintenance Obligation Note has been paid in full
(and to the contingent portion, as well, once the applicable contingency has
been satisfied); (6) in any event be due and payable in full on the earlier of
(A) the tenth (10th) anniversary of the Ciena Closing, or (B) payment in full of
the Omega Loan; and (7) be substantially in the form attached hereto as Exhibit
B attached hereto. The term "Contingent Principal" shall mean a portion of the
principal amount of the Maintenance Obligation Note equal to $400,000.
3.4 Partial Assignment of Purchase Money Financing Documents.
Contemporaneously with the Ciena Closing, PHCM shall assign, set over and
transfer to Omega (without recourse of any kind) an undivided fifty percent
(50%) interest in PHCM's right, title and interest in, to and under the Purchase
Money Financing Documents, in consideration of which PHCM shall receive a
$4,500,000 credit first against non-default interest owing on the Omega Loan and
second against the principal amount of the Omega Loan as of the Petition Date
3.5 Pledge of PHCM's Interest in Purchase Money Financing
Documents. At the closing of the Ciena Transaction, PHCM shall pledge and
collaterally assign to Omega all of PHCM's right, title and interest in, to and
under the Purchase Money Financing Documents, as
6
7
security for the obligations of PHCM under the Maintenance Obligation Note (if
any) and the Omega Loan Documents. Such pledge shall be made pursuant to a
collateral assignment in form and substance reasonably acceptable to Omega.
3.6 Servicing of Purchase Money Loan and Application of Funds. For
the administrative convenience of the Mariner Entities, Omega hereby agrees to
administer and function as servicer for the Purchase Money Loan, including,
without limitation, to maintain custody of the Purchase Money Financing
Documents for the benefit of PHCM and Omega, as their interests may appear, to
receive and apply payments made from time to time in respect of the Purchase
Money Loan by the Ciena Buyer and to give, on behalf of the holders thereof, all
notices to the Ciena Buyer and any guarantors of the Purchase Money Loan (each,
a "Ciena Guarantor") which are necessary or appropriate in respect of the
Purchase Money Loan. Copies of each such notice, and each notice (if any)
received by Omega from the Ciena Buyer or any Ciena Guarantor, shall be given to
PHCM as soon as reasonably practicable after receipt thereof by Omega. As
between the Ciena Buyer, on the one hand, and the holders of the Purchase Money
Note, on the other, payments received by Omega on the Purchase Money Note
("Purchase Money Note Payments") shall be applied against the Purchase Money
Loan obligations as provided in the Purchase Money Financing Documents. As
between PHCM, on the one hand, and Omega, on the other, each Purchase Money Note
Payment shall be applied as follows:
(a) an amount equal to fifty percent (50%) of each
Purchase Money Note Payment shall be retained by
Omega; and
(b) the balance of each Purchase Money Note Payment shall
be applied, first, against the outstanding balance of
the Maintenance Obligation Note (if any), until all
principal and interest thereunder have been paid in
full, and thereafter shall be applied against the
outstanding principal balance of the Omega Loan.
Omega shall not modify any of the Purchase Money Financing Documents,
without the prior written consent of PHCM, which consent shall not be
unreasonably withheld or delayed so long as the proposed modification is not
adverse to the interests of PHCM or the other Mariner Entities. Upon the
occurrence of a Ciena Event of Default, Omega may after consultation with PHCM
exercise such remedies or forbear from exercising remedies as Omega determines
in good faith to be in the best interest of both PHCM and Omega. Omega shall not
be entitled to any fee for servicing the Purchase Money Loan, but Omega shall be
entitled to reimbursement, on a pro rata basis, for 50% of all out-of-pocket
expenses which it reasonably incurs in so doing. Omega shall service the
Purchase Money Loan in good faith and with the same degree of care that it
exercises in servicing loans made directly by it; but Omega shall be liable to
PHCM in connection with servicing the Purchase Money Loan only for acts of bad
faith, gross negligence or willful dishonesty.
3.7 The Omega Improvement Loan. At the Ciena Closing, and as a
material inducement for the Ciena Buyer to close the Ciena Transaction, Omega
has agreed to enter into the Improvement Agreement with the Ciena Buyer,
pursuant to which Omega will agree to lend the Ciena Buyer up to Five Hundred
Thousand Dollars ($500,000) to be used to make certain
7
8
repairs and improvements to the Ciena Facilities, all on the terms and
conditions set forth in the Improvement Agreement. The Improvement Loan will be
secured by the same security documents that secure the Purchase Money Loan. PHCM
agrees that repayment of the Purchase Money Loan is subordinate and junior to
repayment of the Improvement Loan. So long as no Improvement Loan Event of
Default exists, payments received by either PHCM or Omega from the Ciena Buyer
will be applied to the Purchase Money Loan and the Omega Improvement Loan as
designated by the Ciena Buyer. However, from and after the occurrence of any
Improvement Loan Event of Default, and so long as the Improvement Loan Event of
Default continues in effect, as between Omega and the PHCM Entities, any payment
received from the Ciena Buyer by either Omega or the PHCM on either the Purchase
Money Loan or the Improvement Loan shall be applied first to the Improvement
Loan until the Improvement Loan is paid in full. Subject to the payment in full
of the Improvement Loan, the holders of the Purchase Money Loan shall be
subrogated to the rights of the holder of the Improvement Loan until the
obligations arising under the Purchase Money Financing Documents have been paid
in full. For purposes of such subrogation, no payments or distributions to the
holder of the Improvement Loan of any cash, properties or securities to which
the holders of the Purchase Money Loan would, except for the operation of this
Section 3.7, be entitled shall, as among Ciena Buyer, its creditors other than
the holder of the Improvement Loan, and the holders of the Purchase Money Loan
be deemed to be a payment on or distribution by Ciena Buyer to or on account of
the Improvement Loan.
3.8 Accounting by Omega for Application of Funds. Within twenty
(20) days after each application of funds against the Omega Loan or the
indebtedness evidenced by the Maintenance Obligation Note pursuant to the
provisions of Section 3.6 hereof, and also within twenty (20) days after the
application of any Ciena Loan Payments against the Omega Improvement Loan, Omega
shall confirm such application in writing to PHCM.
ARTICLE 4
CLOSING CONDITIONS
The obligation of Omega and the Mariner Entities to consummate
the transactions contemplated by this Agreement shall be subject to the
satisfaction of each of the conditions set forth in this Article 4.
4.1. Approval Order. The Court shall have entered the Approval
Order and no court of competent jurisdiction shall have entered an order staying
the Approval Order pending appeal, or, in the event a stay of the Approval Order
shall have been entered, then the Stay shall have been terminated. The Approval
Order as entered by the Court shall contain no modifications unacceptable to
Omega or the Mariner Entities and shall include, without limitation, provisions
substantially as follows (or as otherwise agreed in writing by Omega and the
Mariner Entities):
(a) Findings determining that notice of the Transaction
Approval Motion and hearing thereon have been
adequate under the circumstances;
8
9
(b) Findings that the consideration provided to the
Mariner Entities by Omega and the Ciena Buyer in
connection with the Ciena Transaction is adequate;
(c) Findings that proceeding with those matters provided
for in this Agreement and the Ciena Purchase
Agreement is in the best interest of the Mariner
Entities and their respective creditors; and
(d) An Order that any claim of Medicare, the applicable
fiscal intermediary, HHS, or any other governmental
entity against Ciena or the Ciena Facility
Subsidiaries under the assumed and assigned Medicare
Provider Agreements arising prior to the January 18,
2000 petition date shall be treated as an expense of
administration of PHCM and the Michigan Subsidiaries.
4.2. Notice. Within a reasonable time following the filing with the
Court of the Transaction Approval Motion, and prior to the hearing and relevant
objection date, the Mariner Entities shall have served notice of the Transaction
Approval Motion in a form acceptable to Omega upon (i) those Persons entitled to
such notice under the terms of the notice procedures order entered by the Court
on or about the Petition Date, and (ii) those Persons who have alleged personal
injury claims against the Ciena Facility Subsidiaries based on the quality of
care received or the condition of the Ciena Facilities.
4.3. Chase/Lender Approval. Omega shall have received evidence
satisfactory to it that The Chase Manhattan Bank, in its capacity as
administrative agent for the Mariner Entities' pre-petition senior secured
lenders and as administrative agent for the Mariner Entities'
debtor-in-possession lender (individually and in its capacity as agent as
aforesaid, "Chase"), has approved and consented to the transactions contemplated
under this Agreement and the Ciena Purchase Agreement, and has agreed that Chase
shall not seek to set aside the contemplated transactions or any part thereof.
4.4. Xxxx-Xxxxx-Xxxxxx. There shall be no filing required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, relating to
the consummation of the transactions contemplated by the Ciena Purchase
Agreement or this Agreement.
4.5 Approval of Purchase Money Financing Documents. Omega and the
Mariner Entities shall have approved the form and substance of the Purchase
Money Financing Documents.
4.6 Execution of Purchase Money Financing Documents. Each of the
Purchase Money Financing Documents shall have been executed and delivered by
each other Person party thereto.
9
10
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF OMEGA
Omega hereby represents and warrants as follows to the Mariner Entities
as of the date of this Agreement, which representations and warranties will be
deemed to have been reaffirmed as of the date of the Ciena Closing:
5.1. Organization. Omega is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland. Omega has
all requisite power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby.
5.2. Required Consents. No material consent, approval or other
authorization of, or registration, declaration or filing with, any court or
Governmental Authority which has not been heretofore obtained or which will not
be obtained prior to the Ciena Closing is required for the due execution,
delivery or performance of its obligations under this Agreement by Omega, for
the consummation of the transactions contemplated herein or for the validity or
enforceability thereof against Omega.
5.3. Authorization; Enforceability. The execution and delivery by
Omega of this Agreement and each other document, instrument or agreement
contemplated herein to which Omega is a party, and the performance of its
obligations thereunder have been duly authorized by all necessary corporate and
stockholder action on the part of Omega. This Agreement has been duly authorized
executed by Omega and constitutes the valid and binding obligation of Omega,
enforceable in accordance with its terms, except as enforceability thereof may
be limited by general principles of equity.
5.4. Brokerage. Omega has not used the services of any broker or
finder in connection with the transactions contemplated by this Agreement or the
Ciena Transaction, and it will indemnify and hold harmless the Mariner Entities
from and against all claims, actions, causes of action, costs, expenses,
including attorneys' fees, and liabilities arising in or out of, or related to
any broker or finder claiming any compensation or fee by reason of an alleged
agreement or understanding with Omega.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE MARINER ENTITIES
Each of the Mariner Entities hereby represents and warrants as follows
to Omega as of the date of this Agreement, which representations and warranties
will be deemed to have been reaffirmed as of the date of the Ciena Closing:
6.1. Organization. Each of the Mariner Entities is a corporation,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Subject to the entry of the Approval Order,
each of the Mariner Entities has full power, authority
10
11
and legal right to execute, deliver and perform under this Agreement, to enter
into, the Ciena Purchase Agreement and the other documents contemplated herein
and therein (collectively, the "Ciena Documents") to which they are a party and
to take all other actions necessary to carry out the intents and purposes of
this Agreement.
6.2. Required Consents. No material consent, approval or other
authorization of, or registration, declaration or filing with, any court or
Governmental Authority which has not been heretofore obtained or which will not
be obtained prior to the Ciena Closing is required for the due execution,
delivery or performance of this Agreement, the other Ciena Documents to which
they are a party, the transactions contemplated herein or therein or for the
validity or enforceability thereof against any of the Mariner Entities.
6.3. Authorization; Enforceability. The execution and delivery by
the Mariner Entities of this Agreement and each other document, instrument or
agreement contemplated herein to which they are a party and the performance of
their respective obligations thereunder have been duly authorized by all
necessary corporate and stockholder action on the part of the Mariner Entities.
This Agreement has been duly executed by each Mariner Entity and, subject to the
entry of the Approval Order, constitutes the valid and binding obligation of
each Mariner Entity, enforceable in accordance with its terms, except as
enforceability thereof may be limited by general principles of equity.
6.4. Brokerage. Each of the Mariner Entities represents that it has
not used the services of any broker or finder in connection with the
transactions contemplated by this Agreement and each of the Mariner Entities
will indemnify and hold harmless Omega from and against all claims, actions,
causes of action, costs, expenses, including attorneys' fees, and liabilities
arising in or out of, or related to any broker or finder claiming any
compensation or fee by reason of an alleged agreement or understanding with any
of the Mariner Entities.
ARTICLE 7
GENERAL PROVISIONS
7.1. MUTUAL WAIVER OF RIGHT TO JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO: (A) THIS AGREEMENT, OR ANY OF THE
AGREEMENTS, INSTRUMENTS OR DOCUMENTS REFERRED TO HEREIN; OR (B) ANY OTHER
PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN OR AMONG THEM; OR (C) ANY
CONDUCT, ACTS OR OMISSIONS OF ANY PARTY HERETO OR ANY OF THEIR DIRECTORS,
TRUSTEES, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED
WITH THEM; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE.
7.2. Survival. Except as otherwise provided by this Agreement, all
covenants, agreements, representations and warranties made by Omega or any
Mariner Entity herein and in all certificates delivered pursuant to this
Agreement shall survive for a period of one (1) year
11
12
immediately following the Ciena Closing; provided, however, that the Mariner
Entities shall be and remain liable for breaches of the provisions of this
Agreement or contravention of the Approval Order only for the period including
the greater of one (1) year or the last administrative claims bar date that is
established by order of the Court. If, and to the extent, the Mariner Entities
shall emerge from the Cases pursuant to a confirmed plan of reorganization prior
to the expiration of such period, then the obligations provided herein shall be
a continuing obligation of the reorganized Mariner Entities and any plan
confirmed in the Cases shall so provide.
7.3. Notices. All notices, demands and other communications
hereunder shall be in writing and delivered by nationally recognized overnight
courier service, by facsimile transmission or by first class registered or
certified U.S. Mail, (with postage or courier charges prepaid) addressed as
follows:
(a) if to Omega:
OMEGA HEALTHCARE INVESTORS, INC.
000 Xxxxxxx Xxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Chief Operating Officer
Fax No. (000) 000-0000
with copies to:
XXXXXX XXXXXXX PLLC
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxxx, Esq.;
Fax No. (000) 000-0000; and
XXXXXXXX XXXX LODGE & HUTZ LLP
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax No. (000) 000-0000
(b) if to any Mariner Entity:
MARINER POST-ACUTE NETWORK, INC.
Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Senior Vice President and Treasurer
Fax No. (000) 000-0000
12
13
with copies to:
MARINER POST-ACUTE NETWORK, INC.
Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Associate General Counsel
Fax No. (000) 000-0000; and
XXXXXXX, XXXXXXXX & XXXXX PROFESSIONAL CORPORATION
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax No. (000) 000-0000; and
POWELL, GOLDSTEIN, XXXXXX & XXXXXX LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Fax No. (000) 000-0000
or to such other address as may hereafter be designated by any party for such
other purpose, and shall be effective upon receipt if hand delivered or sent by
overnight courier service, or upon receipt of transmission confirmation if sent
by facsimile transmission, upon the expiration of the fifth Business Day after
the day of mailing by certified or registered U.S. Mail.
7.4. Governing Law. This Agreement shall be governed by,
interpreted, construed, applied and enforced in accordance with the Bankruptcy
Code and the laws of the State of Michigan applicable to contracts between
residents of the State of Michigan which are to be performed entirely within the
State of Michigan, regardless of (a) where this Agreement is executed or
delivered; or (b) where any payment or other performance required by this
Agreement is made or required to be made; or (c) where any breach of any
provision of this Agreement occurs, or any cause of action otherwise accrues; or
(d) where any action or other proceeding is instituted or pending; or (e) the
nationality, citizenship, domicile, principal place of business or jurisdiction
of organization or domestication of any party; or (f) whether the laws of the
forum jurisdiction otherwise would apply the laws of the jurisdiction other than
the State of Michigan; or (g) any combination of the foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement shall be brought and prosecuted in the Court. If and only if such
action cannot be brought and prosecuted in the Court, then such action may be
brought and prosecuted in such court or courts located in the State of Michigan
as is provided by law; and the parties consent to the jurisdiction of said court
or courts located in the State of Michigan and to service of process by
registered mail, return receipt requested, or by any other manner provided by
applicable law.
7.5. Successors and Assigns. This Agreement shall be binding upon
each party thereto and its successors and assigns. The rights and obligations of
any party hereto under this
13
14
Agreement may not be assigned by any party hereto without the prior written
consent of each of the parties hereto.
7.6. Entire Agreement. This Agreement, together with the exhibits
and schedules hereto and such other documents as are referred to herein,
constitute the entire agreement of the parties in respect of the subject matter
described herein. This Agreement may not be changed or modified except by an
agreement in writing signed by the parties hereto.
7.7. Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby and the Agreement shall thereupon be reformed and construed and enforced
to the maximum extent permitted by applicable law.
7.8. Attorneys' Fees. If any legal action is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach, default
or misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable and documented attorneys' fees and other costs actually incurred in
that action in addition to any other relief to which it or they may be entitled.
7.9. Confidentiality. The parties agree not to disclose or permit
their respective representatives, attorneys, auditors or agents to disclose,
except as may be required by law or performance hereunder, any confidential,
non-public information of the others which is obtained by any of them in
connection with the transactions contemplated by this Agreement.
7.10. Reservation of Rights. Each Party hereto acknowledges that it
and the other Parties hereto have entered into this Agreement in connection with
negotiations concerning the Restructuring, that the Restructuring has not been
finalized and that all Parties expressly reserve their rights with respect to
the Omega Loan Documents and related disputes, and the Restructuring. The
execution, delivery and performance of this Agreement by the Parties hereto is
not an admission of any Party's obligations or liabilities whatsoever. This
document is subject to the protections of Federal Rule of Evidence 408 and all
similar provisions and supporting authorities.
7.11. Third Party Beneficiaries. This Agreement and all other
instruments executed and delivered in connection herewith are not intended to
benefit any third parties, including, without limitation, any such parties that
may have claims against any of the Mariner Entities.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
14
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written and their respective seals to
be hereunto affixed and attested by their respective duly authorized officers.
OMEGA: OMEGA HEALTHCARE INVESTORS, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
PHCM: PROFESSIONAL HEALTH CARE
MANAGEMENT, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MICHIGAN SUBSIDIARIES: CAMBRIDGE BEDFORD, INC., CAMBRIDGE EAST,
INC., CAMBRIDGE NORTH, INC., CAMBRIDGE
SOUTH, INC., CLINTONAIRE NURSING HOME, INC.,
CRESTMONT HEALTH CENTER, INC., HERITAGE
NURSING HOME, INC., NIGHTINGALE EAST NURSING
CENTER, INC. AND MIDDLEBELT - HOPE NURSING
HOME, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Signature Page 1
16
LC-PHCM: LIVING CENTERS - PHCM, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
GRANCARE: GRANCARE, INC.
By:
---------------------------------------
Name:
---------------------------------
Title:
--------------------------------
MARINER: MARINER POST-ACUTE NETWORK, INC.
By:
---------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Signature Page 1
17
SCHEDULE A
LIST OF FACILITIES
I. RETAINED FACILITIES
A. RETAINED MICHIGAN FACILITIES
Name of Facility Subsidiary Lessee/Operator
---------------- --------------------------
1. Bedford Villa Healthcare Center Cambridge Bedford, Inc.
Southfield, MI
2. Cambridge East Healthcare Center Cambridge East, Inc.
Madison Heights, MI
3. Cambridge North Healthcare Center Cambridge North, Inc.
Clawson, MI
4. Cambridge South Healthcare Center Cambridge South, Inc.
Beverly Hills, MI
5. Clinton-Aire Healthcare Center ClintonAire Nursing Home,
Clinton Township, MI Inc.
6. Crestmont Health Care Center Crestmont Health Center,
Fenton, MI Inc.
7. Heritage Manor Nursing Center Heritage Nursing Home, Inc.
Flint, MI
8. Nightingale Healthcare Center Nightingale East Nursing
Warren, MI Center, Inc.
9. Hope Healthcare Center Middlebelt-Hope Nursing
Westland, MI Home, Inc.
X-0
00
X. XXXXX XXXXXXXX FACILITIES
Name of Facility Subsidiary Lessee/Operator
---------------- --------------------------
1. Xxxxx Center Health and Rehabilitation
Center - Statesville PHCM
Statesville, NC
2. Xxxxx Center Health and Rehabilitation
Center - Goldsboro PHCM
Goldsboro, NC
3. Xxxxx Center Health and Rehabilitation
Center -Durham PHCM
Durham, NC
II. CIENA FACILITIES (ALL LOCATED IN MICHIGAN)
Name of Facility Subsidiary Lessee/Operator
---------------- --------------------------
1. Frenchtown Healthcare Center Frenchtown Nursing Home,
Monroe, MI Inc.
2. St. Xxxxxxx Health Care Center St. Xxxxxxx Nursing Home,
Warren, MI Inc.
3. Xxxxxxx Healthcare Center Xxxxxxx Nursing Center, Inc.
Detroit, MI
4. Middlebelt Healthcare Center Middlebelt Nursing Home,
Livonia, MI Inc.
Note: The Ciena Facilities and the Retained Michigan Facilities together
---- constitute the "Michigan Facilities."
A-2
19
SCHEDULE B
CASES
Name of Entity Case No.
-------------- --------
Mariner 00-00113
PHCM 00-00198
Cambridge Bedford, Inc. 00-00134
Xxxxxxxxx Xxxx, Xxx. 00-00000
Xxxxxxxxx Xxxxx, Inc. 00-00136
Cambridge South, Inc. 00-00137
ClintonAire Nursing Home, Inc. 00-00138
Crestmont Health Center, Inc. 00-00141
Heritage Nursing Home, Inc. 00-00172
Nightingale East Nursing Center, Inc. 00-00196
Middlebelt-Hope Nursing Home, Inc. 00-00193
Frenchtown Nursing Home, Inc. 00-00148
St. Xxxxxxx Nursing Home, Inc. 00-00202
Xxxxxxx Nursing Center, Inc. 00-00190
Middlebelt Nursing Home, Inc. 00-00192
LC-PHCM 00-00183
B-1
