EXHIBIT 10.125
REVENUE SHARING AGREEMENT
THIS REVENUE SHARING AGREEMENT (this "Agreement") made as of the 30th
day of September, 2001, by and among ADVOCAT INC., a Delaware corporation
("Advocat"), of 000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxx 00000,
DIVERSICARE LEASING CORP., a Tennessee corporation ("DLC"), of 000 Xxxxxxx
Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxx 00000, OMEGA HEALTHCARE INVESTORS,
INC., a Maryland corporation ("Omega"), of 000 Xxxxxxx Xxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxxxx 00000, and OHI SUNSHINE, INC., a Florida corporation
("Sunshine"), of 000 Xxxxxxx Xxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxx 00000.
R E C I T A L S:
A. DLC is the current operator of the those two certain skilled-nursing
facilities commonly known as DeSoto Health Care Manor, Arcadia, Florida
("DeSoto"), and Leesburg Health Care Center, Leesburg, Florida ("Leesburg")
pursuant to that certain Florida Lease Agreement dated May 10, 1994 by and
between Counsel Nursing Properties, Inc., a Delaware corporation ("CNP") and
DLC.
B. Omega is the current mortgagee of both DeSoto and Leesburg.
C. Advocat, DLC, and Omega, among others, are parties to that certain
Settlement and Restructuring Agreement made as of October 1, 2000 (the
"Settlement Agreement"), whereby Advocat and DLC agreed, upon the satisfaction
of certain conditions, to cause the transfer of title from CNP to Omega, or its
designees, of both DeSoto and Leesburg.
D. Omega has elected to designate Sunshine, a wholly-owned subsidiary
of Omega, to take title to DeSoto and Leesburg when and if Xxxxxxx Xxxxxxxxxx,
or his related entities, has successfully completed the transfer of the
operating license from DLC to his related entities (the "New Operator"), and CNP
has agreed to transfer title to DeSoto and Leesburg to Sunshine in connection
with such transfer of the operations.
E. As contemplated in part by the Settlement Agreement, the parties
have agreed that after the contemplated transfer of DeSoto and Leesburg to
Sunshine, Advocat and Sunshine shall share all future net income and net sale
proceeds received from the operations, leasing and/or sale of DeSoto and
Leesburg by Sunshine and its respective affiliates as further set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are acknowledged hereby, Advocat, DLC, Omega, and
Sunshine covenant and agree as follows:
A G R E E M E N T:
1. Revenue Sharing. From and after the date of the transfer of DeSoto
and/or Leesburg to Sunshine, all "Net Rental Revenue", "Net Income" and "Net
Sale Proceeds" received by Omega, Sunshine, or their respective affiliates from
the operations, leasing and/or sale of either DeSoto or Leesburg (each, a
"Facility"), shall be shared by Advocat and Sunshine as follows: (a) eighty
percent (80%) of all Net Rental Revenue, Net Income and Net Sale Proceeds shall
be paid to or retained by Sunshine, and (b) twenty percent (20%) of all Net
Rental Revenue, Net Income and Net Sale Proceeds shall be paid to or retained by
Advocat. As used herein, "Net Rental Revenue" shall mean any rental payments or
other sums received in connection with the leasing of a Facility, less
reasonable and prudent third-party expenses incurred in connection with the
leasing of such Facility, including, without limitation, all third-party costs
of collection or enforcement of the lease or to preserve or protect the
operation of the Facility as a licensed nursing home, reasonable legal fees,
insurance costs and real estate taxes, and less the costs of the acquisition of
such Facility, including reasonable attorneys fees and transfer or stamp taxes.
As used herein, "Net Income" shall mean any sums (other than Net Rental Revenue)
received in connection with the ownership or operation of a Facility, less all
expenses incurred in connection with and specifically related to the
acquisition, ownership or operation of such Facility, including, without
limitation, all reasonable and prudent operating costs, collection costs,
reasonable legal fees, insurance costs, real estate taxes, and transfer or stamp
taxes. As used herein, "Net Sale Proceeds" shall be the gross sale price from a
sale of a Facility by Sunshine, or its affiliated successors, to an unrelated
third-party, less (i) bona fide commissions payable to third-party brokers not
related to or affiliated with Advocat or Omega, and (ii) ordinary and customary
closing costs and expenses, including title insurance premiums, transfer or
stamp taxes, and property tax prorations.
2. Payment. Within ten (10) business days following the receipt by
Omega, Sunshine or any affiliate thereof of any Net Rental Revenue, Net Income
or Net Sale Proceeds, Omega shall cause twenty percent (20%) of such Net Rental
Revenue, Net Income or Net Sale Proceeds to be paid and delivered to Advocat.
Omega and/or Sunshine shall provide Advocat, on a semiannual basis, with a
written accounting of all Net Rental Revenue and Net Income received by Omega,
Sunshine or any affiliate thereof for the previous six (6) month period.
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Omega and Sunshine shall each be jointly and severally liable for any payments
of Net Rental Revenue, Net Income or Net Sale Proceeds due Advocat hereunder,
notwithstanding the fact that such sums may be received by only one of them or
an affiliate.
3. Term. This Agreement shall continue in full force and effect with
respect to DeSoto and Leesburg, individually and separately, until such date as
Sunshine, or its affiliated successors shall sell such property to an unrelated
third-party. The subsequent repurchase of such property by Omega or its
affiliates shall in no way act to reinstate this Agreement with respect to such
property.
4. Settlement Agreement. Except as amended by this Agreement, the
Settlement Agreement shall remain in full force and effect, including, without
limitation, those indemnification obligations set forth in Paragraph 3.C of the
Settlement Agreement.
5. Time of the Essence. Time shall be of the essence in all respects
under this Agreement.
6. Notices. All notices given pursuant to this Agreement shall be in
writing and shall be delivered by ordinary first class mail (postage prepaid),
personal delivery, overnight courier service, or confirmed fax, at the addresses
set forth above.
7. Authorization. Advocat and DLC jointly and severally represent and
warrant to Omega and Sunshine that the execution, delivery and performance of
this Agreement has been duly approved and authorized by all necessary corporate
action of Advocat and DLC (including without limitation, all necessary action of
the shareholders and directors of Advocat and DLC), and that no consent or
approval from any other person or entity is required for the due and valid
execution, delivery and performance of this Agreement by Advocat and DLC. Omega
and Sunshine jointly and severally represent and warrant to Advocat and DLC that
the execution, delivery and performance of this Agreement has been duly approved
and authorized by all necessary corporate action of Omega and Sunshine
(including without limitation, all necessary action of the shareholders and
directors of Omega and Sunshine), and that no consent or approval from any other
person or entity is required for the due and valid execution, delivery and
performance of this Agreement by Omega and Sunshine.
8. 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: (i) THIS AGREEMENT, OR (ii) ANY
CONDUCT, ACTS OR OMISSIONS OF ANY PARTY HERETO OR ANY OF THEIR
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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.
9. Miscellaneous. The recitals to this Agreement are incorporated into
and made a part of this Agreement. This Agreement may be executed in any number
of counterparts, each of which counterparts, when so executed and delivered,
shall be deemed to be an original, but all such counterparts taken together
shall constitute one and the same instrument. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective heirs,
legatees, personal representatives, successors and permitted assigns. This
Agreement shall not be construed so as to confer any right or benefit upon any
person other than the parties to this Agreement and their respective successors
and permitted assigns. This Agreement shall be governed by and construed only in
accordance with Michigan law, without regard to conflicts of law principles. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction, which provisions shall remain in full force and
effect. This Agreement, together with the Settlement Agreement, constitute the
entire agreement between the parties with respect to the transaction herein
contemplated and, except as set forth herein, supersede all prior agreements or
negotiations between the parties. Any modification or amendment to this
Agreement shall be effective only if in writing and executed by the party
against whom enforcement of the modification or amendment is sought. Section
headings used in this Agreement are for convenience of reference only and shall
not affect the construction of this Agreement. ALL THE PARTIES HAVE ENTERED INTO
THIS AGREEMENT VOLUNTARILY, WITHOUT DURESS OR INFLUENCE, WITHOUT RELYING ON ANY
AGREEMENT OR REPRESENTATION NOT SPECIFICALLY SET FORTH IN THIS AGREEMENT, AND
AFTER HAVING AN ADEQUATE OPPORTUNITY TO CONSULT WITH COUNSEL OF THEIR CHOICE.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized officers as of the date first written above.
ADVOCAT, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Council, III
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Name: Xxxxxxx X. Council, III
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Its: Executive Vice President
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DIVERSICARE LEASING CORPORATION,
a Tennessee corporation
By: /s/ Xxxxxxx X. Council, III
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Name: Xxxxxxx X. Council, III
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Its: Executive Vice President
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OMEGA HEALTHCARE INVESTORS, INC.,
a Maryland corporation
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Its: Chief Operation Officer
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OHI SUNSHINE, INC., a Florida corporation
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Its: Chief Operation Officer
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