Exhibit Q
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AGREEMENT
THIS AGREEMENT, dated as of August 5, 2005, is entered into by and between
FORMATION CAPITAL, LLC, a Pennsylvania limited liability company
("Formation"), and SENIOR CARE HOLDINGS, LLC, a Delaware limited liability
company ("SCH"), provides:
RECITALS
WHEREAS, Formation has entered into that certain Term Sheet dated December
14, 2004 by and among Appaloosa Management L.P., Franklin Mutual Advisers,
LLC, Eureka Capital Markets, LLC and Formation (the "Term Sheet"), a copy
of which is attached hereto as Exhibit A, pursuant to which FC has certain
rights and obligations in a newly formed Delaware limited liability company
("Newco") which will acquire Xxxxxxx Enterprises, Inc. ("Xxxxxxx");
WHEREAS, SCH has agreed to participate with Formation in the transactions
envisaged by the Term Sheet; and
WHEREAS, the parties shall form a new company, FC XXX Acquisition Co., LLC,
a Delaware limited liability company ("FC XXX") for the purpose of
investing in Newco.
NOW THEREFORE, the parties hereto, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, agree as follows:
AGREEMENT
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Term Sheet.
1. Newco Contribution.
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(a) Formation has agreed pursuant to the Term Sheet to make an
equity contribution to Newco in an amount equal to $50,000,000 (the "Newco
Contribution"). Formation and SCH hereby agree that SCH shall contribute
the amounts set forth in Exhibit B attached hereto and such amount shall be
applied by FC XXX to the Newco Contribution.
(b) The parties acknowledge that the amounts used to fund SCH's
contribution as set forth in Exhibit B (the "SCH Contribution") do not need
to be provided from SCH's own resources and that SCH may raise the
necessary equity to fund the SCH Contribution in such manner as it deems
necessary and appropriate. Any preferred returns, promotes, fees or other
amounts payable to SCH by any party that agrees to contribute a portion of
the SCH Contribution in connection with such capital raising activities
shall remain the exclusive property of SCH and Formation shall not have any
claim to such preferred returns or fees.
(c) The parties acknowledge that the amounts used to fund the
remaining portion of the Newco Contribution (the "Formation Contribution")
do not need to be provided from Formation's own resources and that
Formation may raise the necessary equity to fund the Formation Contribution
in such manner as it deems necessary and appropriate. Any preferred
returns, promotes, fees or other amounts payable to Formation by any party
that agrees to contribute a portion of the Formation Contribution in
connection with such capital raising activities shall remain the exclusive
property of Formation and SCH shall not have any claim to such preferred
returns or fees.
(d) Notwithstanding anything herein to the contrary, each party's
obligation to fund the Newco Contribution is conditioned upon mutual
agreement between the parties as to all economic terms of the Xxxxxxx
transaction. The parties acknowledge and agree that they have previously
agreed to the economic terms set forth in the Term Sheet.
2. Indemnification. SCH shall defend, indemnify and hold harmless
Formation from and against any and all losses, liabilities, damages, costs
and expenses (including, without limitation, reasonable attorneys' fees)
that Formation incurs as a result of or with respect to that certain
Indemnification Agreement dated February 3, 2005 (the "Indemnification
Agreement") by and among Appaloosa Management L.P., Franklin Mutual
Advisers, LLC, Formation, Xxxxxxx X. Xxxxxxx, Xxx Xxxxxx, Xxxxxx X. Xxxxxx,
Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxx and Xxxxxx Xxxxxxx (the "Indemnification
Costs"); provided, however, that SCH shall not be liable for any amount in
excess of 12.5% of the Indemnification Costs incurred by Formation.
3. Expenses. All (i) third party fees and expenses incurred by FC XXX
or Formation that are reimbursable by Newco or the parties to the Term
Sheet relating to the acquisition of Xxxxxxx, including, without
limitation, sums paid to or for the benefit of Newco in accordance with the
Term Sheet, reasonable legal fees and expenses related to the acquisition
of Xxxxxxx and (ii) third party fees and expenses paid by Formation that
are not reimbursed by Newco or any other person or entity, that relate to
the acquisition of Xxxxxxx (collectively, the "Expenses") shall be paid in
accordance with Exhibit B.
4. Financial Advisory Fee. A Financial Advisory fee will be
distributed to Formation in accordance with the terms and conditions of the
Term Sheet. The parties acknowledge and agree that neither SCH nor FC XXX
shall be entitled to receive from Formation any portion of such Financial
Advisory fee.
5. Break-Up Fee. To the extent the members of Newco enter into an
agreement with Xxxxxxx whereby Newco or its members become entitled to a
Break-Up Fee, any portion of fees distributed to Class A Members will be
distributed in accordance with Exhibit B.
6. Further Assurances. The parties hereto agree to execute,
acknowledge, deliver, file and record such further certificates,
amendments, instruments and documents, and to do all such other acts and
things, as may be required by law or as, in the reasonable judgment of the
parties hereto, may be necessary or advisable to carry out the intent and
purpose of this Agreement.
7. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally or when
received if sent by registered or certified mail to the parties at the
following addresses (or such other address as a party may specify by
written notice):
If to Formation: Formation Capital, LLC
0000 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
With copy to: Xxxxxxxx X. Xxxxxx, Esq.
Xxxxxxxx Xxxxxx
000 Xxxxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx Xxxxx, XX 00000-0000
Fax: 000-000-0000
If to SCH: Xxxxx Xxxx
00 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
With copy to: Xxxx X. Xxxxxxx, Esq.
Xxxxxxx, Xxxxxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
8. Headings and Captions. All headings and captions contained in this
Agreement and the table of contents hereto is inserted for convenience only
and shall not be deemed a part of this Agreement.
9. Variance of Pronouns. All pronouns and variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural,
as the identity of the person or entity may require.
10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original and all of which,
when taken together, shall constitute one Agreement.
11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.
12. Consent to Jurisdiction. To the fullest extent permitted by law,
each party hereto hereby irrevocably consents and agrees, for the benefit
of each party, that any legal action, suit or proceeding against it with
respect to its obligations, liabilities or any other matter under or
arising out of or in connection with this Agreement, shall be brought in
any state or federal court located in Atlanta, Georgia (the "Designated
Courts"), and hereby irrevocably accepts and submits to the jurisdiction of
the Designated Courts (and of the appropriate appellate courts) of each
such Designated Court with respect to any such action, suit or proceeding.
Each party hereto also hereby irrevocably consents and agrees, for the
benefit of each other party, that any legal action, suit or proceeding
against it shall be brought in any Designated Court, and hereby irrevocably
accepts and submits to the exclusive jurisdiction of each such Designated
Court with respect to any such action, suit or proceeding. Each party
hereto waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions, suits or proceedings
brought in any such Designated Court and hereby further waives and agrees
not to plead or claim in any such Designated Court that any such action,
suit or proceeding brought therein has been brought in an inconvenient
forum. Each party agrees that (i) to the fullest extent permitted by law,
service of process may be effectuated hereinafter by mailing a copy of the
summons and complaint or other pleading by certified mail, return receipt
requested, at its address set forth above and (ii) all notices that are
required to be given hereunder may be given by the attorneys for the
respective parties.
13. Validity. Every provision of this Agreement is intended to be
severable. The invalidity and unenforceability of any particular provision
of this Agreement in any jurisdiction shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
14. Entire Agreement. This Agreement supersedes all prior agreements
among the parties with respect to the subject matter hereof and contains
the entire Agreement among the parties with respect to such subject matter.
15. Amendment/Waivers. This Agreement may only be amended,
supplemented or otherwise modified (including any waiver of any provision
hereof) with the prior written consent of all parties hereto.
16. No Brokers. Each of the parties hereto warrants to each other that
there are no brokerage commissions or finders' fees (or any basis therefor)
resulting from any action taken by such party or any Person acting or
purporting to act on their behalf upon entering into this Agreement.
17. No Third Party Beneficiaries. Except as expressly stated herein,
this Agreement is not intended and shall not be construed as granting any
rights, benefits or privileges to any Person not a party to this Agreement.
18. Construction of Documents. The parties hereto acknowledge that
they were represented by separate and independent counsel in connection
with the review, negotiation and drafting of this Agreement and that this
Agreement shall not be subject to the principle of construing its meaning
against the party that drafted same.
19. Time is of the Essence. Time is of the essence with respect to any
of the matters set forth in this Agreement.
20. Successor and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successor, executors, administrators,
legal representative, heir and legal assigns and shall inure to the benefit
of the parties hereto and, except as otherwise provided herein, their
respective successors, executors, administrators, legal representatives,
heirs and legal assigns. No person or entity other than the parties hereto
and their respective successors, executors, administrators, legal
representatives, heirs and permitted assigns shall have any rights or
claims under this Agreement. Neither party shall be entitled to assign its
rights or delegate its obligations hereunder without the prior written
consent of the other party, except that (i) Formation may assign all or
portions of its rights hereunder to any entity in which Xxxxxx Xxxxxxx
and/or Xxxxxx Xxxxxxx have a controlling ownership interest and (ii) SCH
may assign all or portions of its rights hereunder to any entity in which
Xxxxx Xxxx has a controlling ownership interest; it being agreed that Xxxxx
Xxxx shall be deemed to have a controlling interest in the following
entities (which shall not be an exclusive list): any partnership of which
Xxxxx Xxxx (or any entity in which Xxxxx Xxxx has a 51% voting interest) is
the sole general partner or any limited liability company of which Xxxxx
Xxxx (or any entity in which Xxxxx Xxxx has a 51% voting interest) is the
managing member.
21. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, ANY PRESENT OR FUTURE MODIFICATION HEREOF OR (B) IN ANY WAY
CONNECTED OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS AGREEMENT (AS NOW OR HEREAFTER MODIFIED)
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND THE COMPANY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE PARTIES HERETO TO THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE
TO TRIAL BY JURY.
[EXECUTION PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FORMATION CAPITAL, LLC
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Manager
SENIOR CARE HOLDINGS, LLC
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Managing Member