EXHIBIT 10.22(o)
AMENDMENT TO THE OCTOBER 27, 1996
SETTLEMENT AGREEMENT
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THIS AMENDMENT TO THE OCTOBER 27, 1996 SETTLEMENT AGREEMENT is made and
entered into as of this 1st day of March, 1997, by and among XXXXX X. XXXXXXXX
of Boulder, Colorado, individually and is his capacity as Trustee of the
AMETHYST E.G. MONTFORT REVOCABLE TRUST, XXXXXXX X. XXXXX of Camden, Maine,
XXXXXXX X. PRIOR of Portland, Maine, XXXXXX X. XXXXXXX of Harpswell, Maine,
XXXXX-XXX XXXXX of Bangor, Maine, XXXXXX X. XXXX and XXXXXX XXXXXXX XXXX of
Boulder, Colorado, XXXX XXXX of Stillwater, Maine, XXXX XXXXXXX of Boston,
Massachusetts, XXXXX X. XXXXXX of South Freeport, Maine, XXXXXX XXXXX of
Orrington, Maine, XXXXXXXXX X. XXXXXXXX of Springvale, Maine, XXXXXXX X.
XXXXXXXX of Springvale, Maine, XXXX X. XXXXX of Portland, Maine, XXXX X.
XXXXXXXX of Portland, Maine, XXXXXXX X. XXXXXXXX of Portland, Maine, D. XXXXX
XXXXX of Washington D.C., XXXXX X. XXXXXXXXX of Waterville, Maine, XXXX X.
XXXXXXXXX of Waterville, Maine (each referred to as a "Holder" and collectively
as the "Holders"), BIRCH GROVE MANAGEMENT COMPANY, INC., a Maine corporation,
CEDAR RIDGE MANAGEMENT, INC., a Maine corporation, CEDAR RIDGE NURSING CARE
CENTER ASSOCIATES, a Maine limited partnership, HARBOR HILL LIMITED LIABILITY
COMPANY, a Maine limited liability company, HOMEWOOD LIMITED PARTNERSHIP, a
Maine limited partnership, NURSING ADMINISTRATORS, INC., a Maine corporation,
OAK GROVE MANAGEMENT COMPANY, INC., a Maine corporation, PINE POINT NURSING CARE
CENTER, INC., a Maine corporation, RIVERRIDGE MANAGEMENT, INC., a Maine
corporation, RIVER RIDGE ASSOCIATES, a Maine general partnership, XXXXX RIVER
DEVELOPMENT, INC., a Maine corporation, XXXXX RIVER GROUP, a Maine corporation,
SPRINGBROOK ASSOCIATES, a Maine general partnership, SPRINGBROOK MANAGEMENT,
INC., a Maine corporation, SRG/HOMEWOOD, INC., a Maine corporation, SRG/WINDWARD
GARDENS, INC., a Maine corporation, THE WILLOWS MANAGEMENT COMPANY, INC., a
Maine corporation, XXXXXX STREAM MANAGEMENT, INC., a Maine corporation, WINDWARD
GARDENS LIMITED PARTNERSHIP, a Maine limited partnership, WOODFORD PARK NURSING
CARE CENTER, INC., a Maine corporation (collectively the "SRG Entities") and
XXXXX RIVER HEALTH SYSTEM LLC, a Maine limited liability company, as agent for
the SRG Entities ("SRHS"), and COMMUNITY CARE OF AMERICA, INC., and CCA OF
MAINE, INC., both being Delaware corporations with their principal places of
business in Naples, Florida (collectively "CCA") and CCA acting on behalf of
MEDICAL SUPPLY OF AMERICA and REHAB AMBASSADORS, such entities being affiliates
of CCA.
W I T N E S S E T H:
WHEREAS, certain of the Holders and CCA entered into a certain Purchase
Option Agreement, dated June 23, 1995 (the "Option Agreement"); and
WHEREAS, certain of the Holders and CCA entered into a certain Stock
Purchase Agreement, dated November 1, 1995 (the "Purchase Agreement"); and
WHEREAS, pursuant to the Option Agreement and the Purchase Agreement CCA
issued to the Holders an aggregate of 219,798 shares of common stock, par value
$.0025 per share, of CCA (the "CCA Shares") and granted to the Holders the right
to require CCA to purchase the CCA Shares back from the Holders at stated prices
and terms (the "Put Option"); and
WHEREAS, in October, 1996, certain of the SRG Entities commenced suit
against CCA, for injunctive and other relief, in the State of Maine, Superior
Court (Androscoggin County), Docket No. CV-96-___ (the "Lawsuit); and
WHEREAS, all the parties to this Amendment entered into a Settlement
Agreement dated October 27, 1996 (the "Settlement Agreement"), attached hereto
as Exhibit A, to resolve the issues raised by the Lawsuit and to modify certain
portions of the Option Agreement; and
WHEREAS, pursuant to the Settlement Agreement, CCA acknowledged that the
Holders had exercised the Put Option and the Holders agreed not to demand
payment on the Put Option from CCA until the earlier of a "Sale Transaction" as
defined in the Settlement Agreement or February 28, 1997; and
WHEREAS, pursuant to Section 5(b) of the Settlement Agreement, the Holders
have now properly demanded payment from CCA of the stock put to CCA; and
WHEREAS, CCA has failed to timely pay for the stock put to CCA pursuant to
the Settlement Agreement and now seeks to amend the Settlement Agreement with
respect to its payment obligation; and
WHEREAS, the parties to this Amendment have determined that it is in their
mutual best interest to amend Sections 5(b), 6 and 7 of the Settlement
Agreement, on the terms and conditions set forth in this Amendment; and
WHEREAS, except as specifically amended herein, the Settlement Agreement
remains in full force and effect.
NOW, THEREFORE, for valuable consideration, the receipt and sufficient of
which are hereby acknowledged, the parties amend Sections 5(b), 6 and 7 of the
Settlement Agreement as follows:
1. AMOUNT TO BE PAID BY CCA. In full satisfaction and discharge of its
obligation to purchase the common stock of CCA pursuant to Sections 5(b) and 6
of the Settlement Agreement, CCA shall pay to the Holders the aggregate sum of
Two Million One Hundred Eighty-One Thousand Seven and 19/100 Dollars
($2,181,007.19), payable as follows:
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(i) CCA shall pay to the Holders Five Hundred Thousand Dollars
($500,000.00) in cash simultaneously with the execution by all parties of
this Amendment; and
(ii) On the earlier of either (a) September 1, 1997, or (b) the sale
of all or substantially all of the assets of CCA or the sale of a majority
of the issued and outstanding shares of stock of CCA to a third party, or
the merger of CCA with or into another entity, or any similar type of
transaction, CCA will pay to the Holders the remaining principal, One
Million Six Hundred Eighty-One Thousand Seven and 19/100 Dollars
($1,681,007.19), together with interest accruing from February 28, 1997 on
the principal amount outstanding from time to time at the rate of 8.50% per
annum. CCA shall pay interest to Holders on the thirtieth (30th) day of
every month until final payment, commencing with the first interest payment
due on or before April 30, 1997.
2. MEANS OF PAYMENT. All amounts to be paid by CCA pursuant to Section 1
above shall be paid as follows: by wire transfer to: Key Bank, Xxx Xxxxx Xxxxx,
Xxxxxxxx, Xxxxx 00000, ABA #000000000; for the account of: Xxxxxx Xxxxxxx
Xxxxxxx Broder & Micoleau LLC, client escrow account #000-0000-0. Payment shall
be deemed to have been made on the date on which the wire transfer is complete.
3. SECURITY FOR PAYMENT. As security for payment, simultaneously with the
execution by all parties of this Amendment, CCA shall deliver to Xxxxx X.
Xxxxxx, as escrow agent for Holders, a Promissory Note of CCA, dated as of March
1, 1997 in the principal amount of One Million Six Hundred Eighty-One Thousand
Seven and 19/100 Dollars ($1,681,007.19) payable to Holders, such Note in form
and substance identical to that attached hereto as Exhibit B. As stated in
Exhibit B, interest shall accrue from February 28, 1997 on the principal amount
outstanding from time to time at the rate of 8.50% per annum; the Note shall
require CCA to pay interest to Holders on the thirtieth (30th) day of every
month until final payment, commencing with the first interest payment due on or
before April 30, 1997.
4. SALE OF SHARES.
(a) The Holders agree to deliver to Xxxx Xxxx of Xxxxx Xxxxxx, Inc.,
Philadelphia, Pennsylvania, (or other stock broker identified by CCA if Xxxx
Xxxx is unwilling to accept delivery of the CCA Shares) all certificates
representing the CCA Shares, together with duly executed stock powers and such
other documents as may be reasonably necessary or appropriate to effect the
transfer of the CCA Shares as aforesaid. The Holders agree through Xxxx Xxxx to
sell all of the CCA Shares over a period of thirty (30) days, commencing no
later than August 1, 1997 (the "Sale Period"), to the extent legally permissible
under Rule 144 of the Securities and Exchange Commission under the Securities
Act of 1933, as amended ("Rule 144"). CCA agrees to furnish a legal opinion to
Holders and Xxxx Xxxx that the proposed sale of the CCA Shares complies with
Rule 144. CCA further agrees to (i) indemnify and hold harmless the Holders and
their agents from any claim against the Holders and/or their Agents made by
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anyone arising out of or relating to the sale of the CCA Shares; (ii) pay all
legal costs, including attorneys fees, incurred by Holders related to any such
claim; and (iii) assume the defense of any such claim. The Holders will instruct
Xxxx Xxxx that the sale of the CCA Shares shall not at any time, in the
aggregate, exceed Sixty Thousand (60,000) shares during any period of five (5)
consecutive business days. CCA shall have no recourse to the Holders in the
event Xxxx Xxxx fails to follow the foregoing instructions. The proceeds from
the sale of the CCA Shares, net of all brokerage commissions and other expenses,
shall be paid to the Holders in the manner described in Section 2 and
automatically shall offset and reduce amounts owing under the Promissory Note on
a dollar-for-dollar basis. The amount of such payment shall be applied first
against unpaid fees and costs of collection of the note, then against accrued
and unpaid interest and then against principal. Payment of the proceeds shall be
made by wire transfer pursuant to the instructions set forth in Section 2 of
this Amendment.
5. APPOINTMENT OF AGENT WITH RESPECT TO HOLDERS' RECEIPT OF PAYMENTS FROM
CCA. The Holders irrevocably appoint Xxxxx X. Xxxxxx, Esquire, Xxxxxx Xxxxxxx
Xxxxxxx Broder & Micoleau LLC, Xxx Xxxxx Xxxxx, Xxxxxxxx, Xxxxx 00000 as agent
(the "Escrow Agent") to receive all payments from CCA and/or proceeds from the
sale of CCA Shares, as provided for in this Amendment. The Holders agree that
upon receipt of any payments, the funds received, net of the Escrow Agent's
expenses shall be disbursed according to the percentages set forth in Exhibit C
attached hereto. Expenses include the Escrow Agent's fees for services since
January 31, 1997 in connection with the Settlement Agreement, expenses incurred
in connection with the negotiation and execution of this Amendment and such
other expenses related to the delivery of CCA Shares and collection of funds as
described herein. Payments from Escrow Agent to Holders shall be made by check
drawn on the Xxxxxx Xxxxxxx Xxxxxxx Broder & Micoleau LLC client escrow account.
The Holders expressly release the Escrow Agent from all liability arising from
his service as Escrow Agent, except for his intentional tortious acts, it being
acknowledged by the Holders that the Escrow Agent's willingness to serve is
premised on this release of Escrow Agent. The Holders also authorize Escrow
Agent to deliver the certificates evidencing the CCA Shares as required in
Section 4 of this Amendment.
6. REPRESENTATIONS AND WARRANTIES OF CCA AND CCA MAINE. CCA and CCA Maine
jointly and severally warrant and represent to the Holders, the SRG Entities and
SRHS as follows:
(a) Each of CCA and CCA Maine is a validly created corporation in good
standing under the laws of Delaware and has been authorized by all necessary
corporate action to execute and deliver this Amendment and to complete the
transactions described herein. Certified corporate resolutions to that effect
will be delivered to Agent within five (5) days of execution of this Amendment;
(b) Neither CCA nor CCA Maine is required to obtain the consent of any
party in order to enter into this Amendment and to perform its respective
obligations hereunder.
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(c) Accept as disclosed on Exhibit D attached hereto, there is no
litigation pending or threatened, nor any proceeding before any other court or
tribunal either pending or threatened against CCA or CCA Maine that would have a
material adverse effect upon the performance by CCA or CCA Maine of their
respective obligations under this Amendment.
7. REPRESENTATIONS AND WARRANTIES BY THE SRG ENTITIES. The SRG Entities
jointly and severally warrant to CCA and CCA Maine as follows:
(a) Each of the SRG Entities is a validly created corporation, general
partnership, limited partnership or limited liability company, as the case may
be, in good standing under the laws of Maine and has been authorized by all
necessary corporate action to execute and deliver this Amendment and to complete
the transactions described herein.
(b) None of the SRG Entities is required to obtain the consent of any
party in order to enter into this Amendment and to perform its respective
obligations hereunder.
8. REPRESENTATIONS AND WARRANTIES BY SRHS. SRHS jointly and severally
warrant to CCA and CCA Maine as follows:
(a) SRHS is a validly created corporation, general partnership,
limited partnership or limited liability company, as the case may be, in good
standing under the laws of Maine and has been authorized by all necessary
corporate action to execute and deliver this Amendment and to complete the
transactions described herein.
(b) SRHS is required to obtain the consent of any party in order to
enter into this Amendment and to perform its respective obligations hereunder.
9. REPRESENTATIONS AND WARRANTIES BY THE HOLDERS. The Holders jointly and
severally warrant to CCA and CCA Maine as follows:
(a) None of the Holders is required to obtain the consent of any party
in order to enter into this Amendment and to perform his/her respective
obligations hereunder.
10. MISCELLANEOUS. This Amendment to the Settlement Agreement contains the
entire agreement between the parties with respect to the amendment of the
Settlement Agreement and the terms of this Amendment are actual and not a mere
recital. As modified in this Amendment, the Settlement Agreement remains in full
force and effect and the parties ratify and reaffirm their obligations to one
another thereunder. CCA reaffirms its existing obligation contained in paragraph
7 of the Settlement Agreement that in the event CCA fails to make payment of or
to otherwise perform under this Amendment and/or Settlement Agreement, the
Holders shall be entitled to recover from CCA their reasonable legal fees and
expenses in addition to any other damage incurred by reason of CCA's said
failure. CCA agrees to pay Holders' legal fees and expenses incurred in
negotiating and finalizing this Amendment within (ten) 10 days of
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presentment of a statement. This Amendment may be executed in counterparts all
of which taken together shall constitute one enforceable instrument. The
undersigned state that each has read this Amendment and knows the contents
thereof and signs the same of its own free act. This Amendment shall be governed
in accordance with the laws of the State of Maine.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
COMMUNITY CARE OF AMERICA, INC.
By:__________________________________
Xxxxxxx X. Xxx, President and Chief
Executive Officer
CCA OF MAINE, INC.
By:__________________________________
Xxxxxxx X. Xxx, President and Chief
Executive Officer
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Xxxxx X. Xxxxxxxx individually and as Trustee
of the Amethyst E.G. Montfort Revocable
Trust
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Xxxxxxx X. Xxxxx
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Xxxxxxx X. Prior
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Xxxxxx X. Xxxxxxx
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Xxxxx Xxx Xxxxx
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Xxxxxx X. Xxxx
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Xxxxxx Xxxxxxx Xxxx
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Xxxx Xxxx
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Xxxx Xxxxxxx
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Xxxxx X. Xxxxxx
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Xxxxxx Xxxxx
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Xxxxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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Xxxx X. Xxxxx
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Xxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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D. Xxxxx Xxxxx
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Xxxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
XXXXX GROVE MANAGEMENT
COMPANY, INC.,
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
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CEDAR RIDGE MANAGEMENT, INC.,
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
CEDAR RIDGE NURSING CARE CENTER
ASSOCIATES,
By: XXXXX RIVER GROUP, its
General Partner
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
HARBOR HILL LIMITED LIABILITY
COMPANY
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
HOMEWOOD LIMITED PARTNERSHIP
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
NURSING ADMINISTRATORS, INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
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OAK GROVE MANAGEMENT
COMPANY, INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
PINE POINT NURSING CARE CENTER,
INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
RIVERRIDGE MANAGEMENT, INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
RIVER RIDGE ASSOCIATES
By: XXXXX RIVER GROUP, its
General Partner
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
XXXXX RIVER DEVELOPMENT, INC.
By:_______________________________
Xxxxxxx X. Xxxxx, its President
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XXXXX RIVER GROUP
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
SPRINGBROOK ASSOCIATES
By:_______________________________
XXXXX RIVER GROUP, its
General Partner
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
SPRINGBROOK MANAGEMENT, INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
SRG/HOMEWOOD, INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
SRG/WINDWARD GARDENS, INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
THE WILLOWS MANAGEMENT
COMPANY, INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
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XXXXXX STREAM MANAGEMENT, INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
WINDWARD GARDENS LIMITED
PARTNERSHIP
By:_______________________________
WINDWARD GARDENS
LIMITED LIABILITY COMPANY,
its General Partner
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
WOODFORD PARK NURSING CARE
CENTER, INC.
By:_______________________________
Xxxxx X. Xxxxxxxx, its President
XXXXX RIVER HEALTH SYSTEM LLC
By:_______________________________
Xxxxx X. Xxxxxxxx, its Member
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