SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT made and entered into as of the _27th day of
October, 1996 by and among XXXXX X. XXXXXXXX of Boulder, Colorado, XXXXXXX X.
XXXXX, of Camden, Maine, XXXXXXX X. PRIOR, of Portland, Maine, XXXXXX X.
XXXXXXX, of Harpswell, Maine (referred to collectively as the "Individuals");
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., a Delaware
corporation with its principal place of business in Naples, Florida ("CCA") and
CCA OF MAINE, INC., a Delaware corporation with its principal place of business
in Naples, Florida ("CCA Maine") 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, Xxxx Xxxxxxxx, Xxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxxx Xxxxxxxx,
Xxxxx Xxxxxxxxx, Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx and D. Xxxxx Xxxxx, High
Valley Group, Inc. and Elder Solutions, Inc. (collectively the "Minority
Holders") and the Individuals entered into a certain Purchase Option Agreement
with CCA and CCA Maine dated June 23, 1995 (the "Option Agreement"); and
WHEREAS, CCA Maine entered into ten Management Agreements, all dated June
23, 1995, with certain of the Individuals and of the SRG Entities with respect
to Woodford Park Nursing Care Center, Pine Point Nursing Care Center, Marshwood
Nursing Care Center, RiverRidge, Springbrook Nursing Care Center, Xxxxx River
Nursing Care Center, Cedar Ridge Nursing Care Center, Sedgewood Commons, Harbor
Hill and Windward Gardens, all nursing homes owned by certain of the SRG
Entities, as well as a letter of intent dated August 14, 1995 with respect to
The Willows, Oak Grove and Birch Grove (collectively the "Facilities") (such
Management Agreements are referred to collectively herein as the "Management
Agreements"); and
WHEREAS, CCA Maine sent the SRG Entities a written notice on July 14, 1996
stating its intention to terminate the Management Agreements; and
WHEREAS, CCA and/or CCA Maine have entered into a number of other written
agreements with certain of the Individuals, Minority Holders and/or SRG
Entities, more particularly described on Exhibit A attached hereto and made a
part hereof (collectively the "Miscellaneous Agreements"); and
WHEREAS, certain of the SRG Entities commenced suit, for injunctive and
other relief, in
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Xxxxxxxx Xxxxx, Xxxxxxxxxxxx Xxxxxx, in a civil action captioned Nursing
Administrators, Inc. v. Community Care of America, Inc., et al., Docket No.
CV-96-____ (the "Lawsuit"); and
WHEREAS, the parties to this Agreement have determined that it is in their
mutual best interests to terminate the Management Agreements, modify the Option
Agreement and terminate or continue certain of the Miscellaneous Agreements and
to enter into a comprehensive financial settlement of their mutual obligations,
all on the terms and conditions set forth in this Agreement; and
WHEREAS, as part of the consideration for this settlement, SRHS is assuming
the obligation to settle any claims owed by CCA to the SRG Entities;
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
Termination of Management Agreements. Subject to the terms and conditions
of this Agreement, the Management Agreements and the letter of intent dated
August 14, 1995 with respect to Birch Grove, Oak Grove and The Willows are
hereby terminated effective the date of this Agreement. At the closing of the
settlement described in this Agreement, CCA Maine shall assign to SRHS all
accrued, unpaid management fees under the Management Agreements by assignment in
form and substance similar to that attached hereto as Exhibit B.
Limited Continuation of Option Agreement. The time during which the option
granted by the Option Agreement may be exercised, as provided in Section 3 of
the Option Agreement, is hereby made to expire at the close of business on
January 2, 1997. In the event CCA Maine exercises the option granted in the
Option Agreement pursuant to the terms of the Option Agreement on or before
January 2, 1997, and notwithstanding anything to the contrary contained in the
Option Agreement, CCA of Maine (a) shall pay as an additional non-refundable
deposit $480,000 as a condition of, and at the time of, such exercise, in
immediately available funds paid by wire transfer to SRHS as agent and (b) shall
have a period of 30 days after exercise, subject to the next sentence, in which
to close on its purchase of the Facilities. In no event shall the Option
Agreement extend beyond 5:00 PM February 3, 1997, even if the option has been
exercised. The Option Agreement shall be deemed modified by this Section and by
other provisions of this Agreement specifically amending, changing or modifying
the Option Agreement. The Option Agreement shall be construed together with this
Agreement, and to the extent there are any inconsistencies between the Option
Agreement and this Agreement, this Agreement shall be controlling.
Miscellaneous Agreements. Exhibit A attached hereto identifies those of the
Miscellaneous Agreements which shall survive and those which shall be terminated
effective as of the date of this Agreement. As to those Miscellaneous Agreements
listed on Exhibit A that are to terminate effective the date of this Agreement,
neither party shall have further liability to the other. CCA and CCA Maine agree
that they shall continue to perform their respective obligations under those
Miscellaneous Agreements that shall survive the closing of the settlement
described in this Agreement. SRHS shall be responsible for and shall have the
benefit of all cost reports and exceptions to the Routine Cost Limitations
("RCLs"). CCA Maine shall send all work relating to 1995 Medicare RCLs ,
including all work papers, diskettes and other materials to SRHS and SRHS shall
complete the 1995 Medicare RCLs. In addition, any other agreements between CCA
and/or CCA Maine and Xxxx Xxxxxxxx and Xxxx Xxxxx are not affected by this
Agreement.
Offset of Claims. In consideration of CCA and CCA Maine waiving, canceling
and forgiving all amounts due (including any interest accrued thereon) by
certain of the SRG Entities with respect to the Facilities and more particularly
described on Exhibit C attached hereto and made a part hereof (collectively the
"Working Capital Lines"), the SRG Entities and the Individuals, for themselves
and their successors and assigns, hereby forever waive and relinquish
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all claims against CCA and CCA Maine asserted in the Lawsuit, but not including
those obligations of CCA and CCA Maine undertaken, continued or modified
pursuant to this Agreement. In consideration of the foregoing waiver and
relinquishment by certain of the SRG Entities of all claims against CCA and CCA
Maine asserted in the Lawsuit, but not including those obligations of CCA and
CCA Maine undertaken, continued or modified pursuant to this Agreement, CCA and
CCA Maine, for themselves and their successors and assigns, do hereby waive,
cancel and forgive all amounts due under the Working Capital Lines (including
any interest accrued thereon). Upon executing this Settlement Agreement, CCA
Maine hereby authorizes and directs its attorney Xxxx X. Xxxxx, Xx. to execute
and to deliver to those SRG Entities that are liable on the Working Capital
Lines discharges and UCC-3 terminations of all mortgages and financing
statements securing the Working Capital Lines. CCA and CCA Maine shall deliver
the original Working Capital Line promissory notes to SRHS as agent marked "paid
in full." CCA and CCA Maine shall provide such evidence as the SRG Entities
shall request showing that NationsBank of Florida, N.A., has consented to the
cancellation of the Working Capital Lines and the return of the collateral for
the same.
Modification of Stock Options and Put Option with Respect to the
Individuals and Minority Holders.
(a) With respect to the rights granted by CCA and CCA Maine to the
Individuals to acquire shares of common stock of CCA (the "Stock
Options") in and pursuant to those certain Stock Option Agreements
between each of the Individuals and CCA dated July 11, 1995,
(collectively the "Stock Option Agreements"), and notwithstanding any
provisions in the Stock Option Agreements to the contrary dealing with
the vesting of the Stock Options, CCA and CCA Maine agree that all of
the shares of the common stock of CCA subject to the Stock Options,
for a total of twenty thousand (20,000) shares, are as of the date of
this Agreement fully vested with respect to the Stock Options, and, as
to such twenty thousand (20,000) shares, the Stock Options shall be
nonforfeitable and immediately exercisable, and, upon exercise
thereof, all stock so acquired shall be freely tradeable.
(b) With respect to the rights granted by CCA and CCA Maine under Section
9(j) of the Option Agreement to require the purchase of common stock
of CCA previously issued to each of the Individuals and the Minority
Holders in connection with the payment of the deposit under Section
8(a) of the Option Agreement (the "Put Option") covering the shares of
CCA common stock held by the Individuals, such Put Option shall
continue in full force and effect, as modified by this Section, and
CCA hereby agrees that it is liable with respect to the Put Option.
Without regard to any limitations as to percentages of such stock to
be put or as to dates for such puts, all shares of stock under the Put
Option are hereby exercised and CCA acknowledges and agrees to such
exercise. The Individuals agree they shall not demand payment for the
stock hereby put to CCA until the earlier to occur of (i) February 28,
1997 or (ii) 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 (each, a "Sale
Transaction"). If the sale of CCA is structured as a stock-for-stock
transaction, the Individuals and Minority Holders hereby agree to
accept, in lieu of cash, shares of stock in the acquiring entity in an
amount that results in the Individuals and Minority Holders receiving
stock in the acquiring entity of a market value on the date of closing
equal to the value of the shares in CCA held by the Individuals and
Minority Holders at the price under the Put Option, and provided that
the stock of the acquiring entity is fully registered and freely
tradeable upon issuance to the Individuals and Minority Holders.
Continuation and Extension of Put Rights with Respect to Maine Head Trauma
Center. The put options granted to the Individuals in the Stock Purchase
Agreement (the "MHTC Agreement") among CCA, CCA Maine, Maine Head Trauma Center,
Inc. and the Individuals
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and others dated as of November 1, 1995 (the "MHTC Put Options") shall continue
in full force and effect, and the dates contained in Section 2.1(j) of the MHTC
Agreement governing the period during which the MHTC Put Options may be
exercised are hereby changed as follows: The shares subject to the First Put
Period (as defined in the MHTC Agreement) and the Second Put Period (as defined
in the MHTC Agreement) are hereby exercised and shall be paid at the same time
as those Put Option rights set forth in Section 5(b) above and the MHTC
Agreement shall be deemed to be amended accordingly. The Put Option price shall
be as provided in the MHTC Agreement.
Appointment of Agent with Respect to Put Option. The holders of the rights
described in Sections 5 and 6 above hereby irrevocably appoint Xxxxx X. Xxxxxx,
Esquire, Xxxxxx Xxxxxxx Xxxxxxx Broder & Micoleau, Xxx Xxxxx Xxxxx, Xxxxxxxx,
Xxxxx 00000 as agent to hold the shares of stock to be tendered under Sections 5
and 6 and to deliver the certificates evidencing said shares upon tender of
payment as required hereunder. In the event CCA fails to make payment of or to
otherwise perform under this Agreement, CCA agrees that such holders shall be
entitled to recover from CCA their reasonable legal fees and expenses in
addition to any other damages incurred by reason of CCA's said failure. CCA
waives any conflict of interest arising from Xx. Xxxxxx'x serving as escrow
agent under this Section and releases Xx. Xxxxxx from all liability except for
that arising from his intentional tortious acts.
Additional Consideration for Settlement. The consideration for the
Settlement described herein shall be the mutual offset described in Section 4
above. In addition, CCA and CCA Maine agree jointly and severally to pay to
SRHS, as agent for the SRG Entities and the Individuals, including, without
limitation, Xxxxx X. Xxxxxxxx, without offset or deduction, $50,000 in
immediately available funds, as follows: $25,000 on or before November 15, 1996,
and $25,000 on the earlier to occur of (i) February 28, 1997, or (ii) the
closing of a Sale Transaction, in payment of legal fees and expenses paid or
accrued by the SRG Entities and the Individuals, including Xxxxx X. Xxxxxxxx,
between September 15, 1996 and the closing of this Agreement.
Rehab Ambassadors. CCA represents and warrants to the SRG Entities and the
Individuals that One Hundred Twenty Thousand Dollars ($120,000.00) previously
paid to CCA in July or August 1996 was applied on that date to the account of
Rehab Ambassadors, an affiliate of CCA. Provided the $120,000 payment was made
to Rehab Ambassadors, the SRG Entities agree that they shall continue to use the
services of Rehab Ambassadors, except that the SRG Entities shall have the right
to terminate Rehab Ambassadors severally on thirty (30) days notice. In
addition, Rehab Ambassadors will be treated the same as other trade payables,
i.e., shall be paid no sooner or later than any other accounts payable of the
SRG Entities. The amounts owing to Rehab Ambassadors as of August 31, 1996 are
as shown on Exhibit D hereto and are hereby confirmed by CCA and Rehab
Ambassadors.
Office Lease. SRHS shall enter into a Sublease with CCA Maine in form and
substance similar to that attached hereto as Exhibit E. The rent payable by SRHS
shall be the rent payable by CCA Maine to Dead River Properties, the Landlord
under the Lease. The Sublease shall be for an initial term expiring on February
14, 1997 with the right to extend for additional six month terms. CCA and CCA
Maine acknowledge that all furniture, fixtures, machinery and equipment located
on the premises described in the Sublease belong to SRHS. Any additions,
accessions, modifications or substitutions to such equipment are hereby
transferred, sold and conveyed to SRHS.
Continuation of Workers Compensation Program. The SRG Entities agree to
continue utilizing the workers compensation program currently covering the SRG
Entities' employees until the end of the current policy term, which is March 31,
1997.
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No Amounts Owed to Medical Supply. CCA and CCA Maine acknowledge and
confirm that none of the SRG Entities and none of the Individuals owes any sums
whatsoever to Medical Supply of America, an affiliate of CCA.
Representations and Warranties of CCA and CCA Maine. CCA and CCA Maine
jointly and severally warrant and represent to the Individuals and the SRG
Entities 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 Agreement and
to complete the transactions described herein. Certified corporate
resolutions to that effect will be delivered to SRHS within 5 days of
execution of this Agreement.
b. Neither CCA nor CCA Maine is required to obtain the consent of any
party in order to enter into this Agreement and to perform its
respective obligations hereunder.
c. Except for the Lawsuit, 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 Agreement.
d. Except for an assignment in favor of NationsBank of Florida, N.A., CCA
Maine is the holder of the promissory notes, security agreements, and
all other documents and instruments evidencing or securing the Working
Capital Lines, has not assigned or transferred the Working Capital
Lines, and has the right to discharge and terminate the same as
required by the terms of this Agreement. NationsBank of Florida N.A.
has consented to the terms of this Settlement Agreement.
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 Agreement 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 Agreement and to perform its
respective obligations hereunder.
c. Except for the Lawsuit, there is no litigation pending or threatened,
nor any proceeding before any other court or tribunal either pending
or threatened against any of the SRG Entities that would have a
material adverse affect upon the performance by the SRG Entities of
their respective obligations under this Agreement.
Indemnification by CCA and CCA of Maine. CCA and CCA Maine, and their
respective successors and assigns, shall jointly and severally indemnify and
defend the SRG Entities, the Individuals, and their respective successors,
assigns, heirs and personal representatives from and against any and all
liability, costs, damages, and claims arising from or in any way related to (i)
all claims, demands and liabilities by or in favor of Rehab Ambassadors arising
from or in any way related to the $120,000 payment referred to in Section 9
above, including whether or not such payment was in fact received by Rehab
Ambassadors, (ii) all claims, demands and liabilities (including fines) that may
be imposed upon or asserted against the SRG Entities by reason of operational
matters within the Facilities arising from actions or omissions of CCA Maine or
any affiliates between August 15, 1995 and August 14, 1996 and (iii) any breach
of the representations and warranties set forth in Section 13 above. Upon the
happening of any event covered by this indemnity, CCA and CCA Maine shall pay
the amount of such loss upon
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demand. This indemnity shall also cover all costs associated with collection or
enforcement of this indemnity, including reasonable attorneys' fees. This
indemnity shall continue in full force and effect for a period of six (6) years
from the closing of this settlement.
Indemnification by SRG Entities. The SRG Entities and their respective
successors and assigns, shall jointly and severally indemnify and defend CCA,
CCA Maine, and their respective successors and assigns, from and against any and
all liability, costs, damages, and claims arising from or in any way related to
(i) any breach of the representations and warranties set forth in Section 14
above, and (ii) any claims by the Minority Holders arising from the settlement
described in this Agreement, except with respect to continuing obligations of
CCA or CCA Maine to certain of the Minority Holders as described in Sections 3,
5 and 6 above. This indemnity shall also cover all costs associated with
collection or enforcement of this indemnity, including reasonable attorneys'
fees. This indemnity shall continue in full force and effect for a period of six
(6) years from the closing of this settlement.
Closing. The closing of the settlement described in this Agreement shall
take place on October 27, 1996. At the closing:
a. CCA shall execute and deliver original termination statements and
mortgage discharges releasing all of the mortgages and all of the
UCC-1 financing statements covering the Facilities, in form for proper
recording and filing at the appropriate public office.
b. CCA Maine shall execute and deliver the Assignment with respect to
unpaid management fees, the form of which is attached hereto as
Exhibit B.
c. CCA Maine and SRHS shall execute the Sublease, the form of which is
attached hereto as Exhibit E.
d. The parties shall execute such other and further documents as shall be
necessary to complete the settlement described in this Agreement.
Release by CCA and CCA of Maine. CCA and CCA of Maine, for themselves and
their respective successors and assigns, hereby remise, release and forever
discharge and, by these presents, do, for themselves and for their agents and
representatives, hereby remise, release and forever discharge the SRG Entities,
the Individuals and the Facilities and their respective heirs, successors,
agents, attorneys, personal representatives and assigns of and from all claims,
debts, demands, actions, causes of action, covenants, contracts, controversies,
agreements, promises, doings, omissions, variances, damages, executions, claims,
rights, liabilities, suits, dues, sums and sums of money, accounts, reckonings,
presentments, liens and any other claim of whatsoever kind or nature, whether
known or unknown, of every name and nature, either at law or in equity or
otherwise, which CCA and CCA Maine, or either of them, ever had, now have or
which may result in the future from the existing or past state of things, from
the beginning of time to the date of closing specified in Section 17 above,
arising from, or in any way relating to, the Management Agreements, the Option
Agreement (except as provided below), and those Miscellaneous Agreements listed
on Exhibit A attached hereto that are being terminated pursuant to this
Agreement, as well as the Lawsuit. This release shall not cover or apply to any
obligations of the SRG Entities or the Individuals under this Agreement,
including, without limitation, the indemnities set forth in Section 16 above, or
under the Option Agreement as it has been modified by this Agreement, all of
which obligations shall continue in full force and effect.
Release by the Individuals and the SRG Entities. The Individuals and the
SRG Entities, for themselves and their respective heirs, successors and assigns,
hereby remise, release and forever discharge and, by these presents, do, for
themselves and for their agents and representatives, hereby remise, release and
forever discharge CCA and CCA Maine and their respective successors, assigns,
agents and attorneys of and from all claims, debts, demands, actions, causes
54
of action, covenants, contracts, controversies, agreements, promises, doings,
omissions, variances, damages, executions, claims, rights, liabilities, suits,
dues, sums and sums of money, accounts, reckonings, presentments, liens and any
other claim of whatsoever kind or nature, whether known or unknown, of every
name and nature, either at law or in equity or otherwise, which the Individuals
and the SRG Entities, or any of them, ever had, now have or which may result in
the future from the existing or past state of things, from the beginning of time
to the date of closing specified in Section 17 above, arising from, or in any
way relating to, the Management Agreements, the Option Agreement (except as
provided below), and those Miscellaneous Agreements listed on Exhibit A attached
hereto that are being terminated pursuant to this Agreement, as well as the
Lawsuit. This release shall not cover or apply to (i) any obligations of CCA or
CCA Maine under this Agreement, including, without limitation, the indemnities
set forth in Section 15 above and under the Option Agreement, Stock Option
Agreement and MHTC Agreement, as they have been modified by this Agreement, all
of which obligations shall continue in full force and effect, or to (ii) any
liability of CCA or CCA Maine arising from operation of the Facilities, other
than the third party reimbursement or other financial obligations that have been
addressed by this Agreement. The parties' intent is that this release shall not
cover obligations owed by CCA and CCA Maine as Manager to patients and with
respect to day-to-day operations of the Facilities.
Further Assurances. The parties to this Agreement agree that they shall
perform all such further acts and execute all such further documents as may be
necessary or required in order to complete the transactions described in this
Agreement.
Miscellaneous. Time is of the essence. This Agreement sets forth the entire
Agreement of the parties and supersedes all prior agreements and understandings,
whether oral or written. No modification or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and executed by
all parties hereto. All notices, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given to the
recipient if mailed by certified mail, postage-prepaid, or if by sent by hand
delivery or by reputable overnight delivery service, address to the recipient at
the following addresses:
If to CCA and CCA Maine:
0000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxxxx Xxxxx, Esquire
Blass & Xxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to any of the SRG Entities or Individuals:
c/o Xxxxx River Development
000 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxxxx 00000
with a copy to:
Xxxxx X. Xxxxxx, Esquire
Xxxxxx Xxxxxxx Xxxxxxx Broder & Micoleau LLC
Xxx Xxxxx Xxxxx--X.X. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Any party may change addresses by providing written notice of such change to the
other parties hereto. All representations and warranties made by the parties in
this Agreement shall survive
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the delivery of this Agreement shall continue in full force and effect. This
Agreement shall be binding upon and shall inure the benefit of the parties and
their respective successors, assigns, heirs and personal representatives. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. The representations, warranties and indemnities contained in
Sections 13, 14, 15 and 16 of this Agreement shall survive the closing of the
settlement described herein. This Agreement shall be construed under the laws of
the State of Maine. Section headings used in this Agreement are for convenience
only and shall not affect the construction of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first written above.
WITNESS:
COMMUNITY CARE OF AMERICA, INC.
_________________________________ By:/s/Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title:Director
CCA OF MAINE, INC.
_________________________________ By:/s/Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title:Director
MEDICAL SUPPLY OF AMERICA
BY: COMMUNITY CARE OF AMERICA, INC.,
By its duly authorized agent
_________________________________ By:/s/Xxxxxxx Xxxx
Name: Xxxxxxx Xxxxx
Title:Director
REHAB AMBASSADORS
BY: COMMUNITY CARE OFAMERICA, INC.,
its duly authorized agent
_________________________________ By:/s/Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title:Director
CEDAR RIDGE MANAGEMENT, INC.
________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
BIRCH GROVE MANAGEMENT COMPANY, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
CEDAR RIDGE NURSING CARE
CENTER ASSOCIATES
BY: XXXXX RIVER GROUP, its
General Partner
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
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HARBOR HILL LIMITED LIABILITY COMPANY
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
HOMEWOOD LIMITED PARTNERSHIP
BY:SEDGEWOOD LIMITED LIABILITY
COMPANY, its General Partner
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
NURSING ADMINISTRATORS, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
OAK GROVE MANAGEMENT COMPANY, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
PINE POINT NURSING CARE CENTER,INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
RIVER RIDGE MANAGEMENT, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
RIVER RIDGE ASSOCIATES
BY:XXXXX RIVER GROUP, its
General Partner
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
XXXXX RIVER DEVELOPMENT, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
XXXXX RIVER GROUP
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
SPRINGBROOK ASSOCIATES
BY:XXXXX RIVER GROUP, its
General Partner
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
SPRINGBROOK MANAGEMENT, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
SRG/HOMEWOOD, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
00
XXX/XXXXXXXX XXXXXXX, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
THE WILLOWS MANAGEMENT COMPANY, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
XXXXXX STREAM MANAGEMENT, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
WINDWARD GARDENS LIMITED
PARTNERSHIP
BY:WINDWARD GARDENS LIMITED
LIABILITY COMPANY, its General Partner
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
WOODFORD PARK NURSING CARE
CENTER, INC.
_________________________________ By:_/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
XXXXX RIVER HEALTH SYSTEM LLC
_________________________________ By:/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, its President
_________________________________ /s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
________________________________ /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
________________________________ /s/ Xxxxxxx X. Prior
Xxxxxxx X. Prior
_______________________________ /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
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LIMITED JOINDER
The undersigned, being all of the Minority Holders identified above, hereby join
in this Settlement Agreement for the purpose of agreeing to the provisions of
Sections 5(b), 6 and 7 above, as applicable.
WITNESS:
________________________________ /s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
_________________________________ /s/ Xxxx Xxxxx
Xxxx Xxxxx
________________________________ /s/ D. Xxxxx Xxxxx
D. Xxxxx Xxxxx
________________________________ /s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
________________________________ /s/ Xxxxxxxxx Xxxxxxxx
Xxxxxxxxx Xxxxxxxx
_________________________________ /s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
_________________________________ /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
_________________________________ /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
HIGH VALLEY GROUP, INC.
_________________________________ By:______________________________
ELDER SOLUTIONS, INC.
_________________________________ By:______________________________
_________________________________ /s/ Xxxx Xxxx
Xxxx Xxxx
_________________________________ /s/ Xxxxx-Xxx Xxxxx
Xxxxx-Xxx Xxxxx
_________________________________ /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
_________________________________ /s/ Xxxxxx Xxxx
Xxxxxx Xxxx
_________________________________ /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
_________________________________ /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
59
SETTLEMENT AGREEMENT--LIST OF EXHIBITS
Exhibit A: Miscellaneous Agreements.
Exhibit B: Form of Assignment of unpaid management fees.
Exhibit C: List of Working Capital Lines.
Exhibit D: Rehab Ambassadors Payables.
Exhibit E: Form of Sublease.
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EXHIBIT A
MISCELLANEOUS AGREEMENTS
MISCELLANEOUS AGREEMENTS BEING TERMINATED:
1. Side letter to Xxxxx X. Xxxxxxxx from CCA and CCA Maine dated June 23,
1995 re depreciation recapture.
2. Side letter between Harbor Hill Limited Liability Company and CCA
dated June 23, 1995, as amended, re Harbor Hill start-up.
3. Side letter between CCA and Xxxxx X. Xxxxxxxx dated June 23, 1995 re
automobile leases.
4. Consulting Agreement dated July 10, 1995 between CCA and Xxxxx River
Development, Inc.
5. Services Agreement dated June 23, 1995 between CCA Maine and Xxxxx
River Development, Inc.
6. Development Agreement term sheet dated June 30, 1995 between CCA and
Xxxxx River Development, Inc.
7. Replacement Promissory Note in the original principal amount of
$21,846.61 dated July 12, 1991 made by River ridge Management, Inc. in
favor of Amethyst E.G. Mountfort Revocable Trust and endorsed to CCA
Maine.
8. Replacement Promissory Note in the original principal amount of
$21,704.31 dated August 6, 1991 made by River ridge Management, Inc.
in favor of Amethyst E.G. Mountfort Revocable Trust and endorsed to
CCA Maine.
9. Replacement Promissory Note in the original principal amount of
$14,470.20 dated August 2, 1991 made by River ridge Management, Inc.
in favor of Xxxxxxxxx Xxxxxxxx and endorsed to CCA Maine.
10. Replacement Promissory Note in the original principal amount of
$14,564.40 dated July 15, 1991 made by River ridge Management, Inc. in
favor of Xxxxxxxxx Xxxxxxxx and endorsed to CCA Maine.
11. Replacement Promissory Note in the original principal amount of $8,000
dated August 4, 1992 made by River ridge Management, Inc. in favor of
Xxxxxxxxx Xxxxxxxx and endorsed to CCA Maine.
12. Replacement Promissory Note in the original principal amount of
$12,000 dated August 7, 1992 made by River ridge Management, Inc. in
favor of Xxxxx X. Xxxxxxxx and endorsed to CCA Maine.
13. Side letter to Xxxxx Xxxxx from Xxxxx Xxxxxxxx dated August 10, 1995
re Owner Entities' working capital loans.
14. Non-Competition Agreements of various dates between CCA Maine and
Xxxxxxx Xxxxxxxx and Xxxxxxxxx Xxxxxxxx, Xxxx Xxxxxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx
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Xxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxx Xxxxxxx and Xxxxx River
Development, Inc.
MISCELLANEOUS AGREEMENTS CONTINUING IN FULL FORCE AND EFFECT:
1. The MHTC Agreement and all documents and instruments executed in
connection therewith, as modified by this Agreement.
2. The Stock Options, as modified by this Agreement.
62
EXHIBIT B
ASSIGNMENT
KNOW ALL PERSONS BY THESE PRESENTS, that CCA OF MAINE, INC., a Delaware
corporation with a place of business in Naples, Florida (the "Assignor"), for
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby grants, transfers, assigns, sets over and delivers to XXXXX
RIVER HEALTH SYSTEM LLC, a Maine limited liability company with a place of
business in Portland, Maine (the "Assignee"), all accrued, unpaid management
fees due to assignor under those certain Management Agreements dated June 23,
1995 with Assignor as manager with respect to Woodford Park Nursing Care Center,
Pine Point Nursing Care Center, Marshwood Nursing Care Center, RiverRidge,
Springbrook Nursing Care Center, Xxxxx River Nursing Care Center, Cedar Ridge
Nursing Care Center, Sedgewood Commons, Harbor Hill and Windward Gardens.
This Assignment is the assignment referred to in Section 1 of that certain
Settlement Agreement by and among Assignor, Assignee and others. This Assignment
is subject to and shall be construed consistently with such Settlement
Agreement.
IN WITNESS WHEREOF, CCA of Maine, Inc. has caused this Assignment to be
executed by _____________________________, its ________________, thereunto duly
authorized, this _27____ day of October, 1996.
WITNESS: CCA OF MAINE, INC.
________________________________ By:/s/ Xxxxxxx Xxxxx
Its:Director
Print Name: Xxxxxxx Xxxxx
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EXHIBIT C
LIST OF WORKING CAPITAL LINES
OUTSTANDING LINE AMOUNT
NAME OF FACILITY FACE AMOUNT OF AS OF August 14, 1996
---------------- -------------- ---------------------
Windward Gardens Limited Partnership $145,000 $
Revolver
Windward Gardens Term Note $200,000 $
Homewood Limited Partnership Revolver $450,000 $
Nursing Administrators, Inc. Revolver $325,000 $
Springbrook Management Revolver $350,000 $ *
RiverRidge Management Revolver $570,000 $ *
Cedar Ridge Management Revolver $225,000 $ *
Pine Point Nursing Care Center, Inc. $150,000 $
Revolver
Xxxxxx Stream Management Revolver $200,000 $
Woodford Park Nursing Care Center, Inc. $300,000 $
Revolver
* Includes principal amount of SRG land loans with respect to land adjacent to
these Facilities.
To be agreed upon
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EXHIBIT D
SUMMARY
ACCOUNTS PAYABLE DUE TO
REHAB AMBASSADORS
AS OF AUGUST 31, 1996
Xxxxx River Nursing Care Center $
Marshwood Nursing Care Center $
Springbrook Nursing Care Center $
Pine Point Nursing Care Center $
Woodford Park Nursing Care Center $
TOTAL: $
To be agreed upon.
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EXHIBIT E
SUBLEASE
SUBLEASE made this __27____ day of October, 1996, by and between CCA OF
MAINE, INC., a Delaware corporation with a place of business in Portland, Maine
("Landlord") and XXXXX RIVER HEALTH SYSTEM LLC, a Maine limited liability
company with a place of business in Portland, Maine ("Tenant")
W I T N E S S E T H:
WHEREAS, Landlord is tenant under that certain Lease dated November 14,
1995 (the "Prime Lease") with Dead River Company, acting by and through its
division, Dead River Properties, as Landlord (the "Prime Landlord") with respect
to approximately 3,838 square feet of office space in Prime Landlord's building
known as Atlantic Place and located at Xxxxxxx Xxxxxx xxx Xxxxx Xxxx, Xxxxx
Xxxxxxxx, Xxxxx; and
WHEREAS, Landlord wishes to sublease such space to Tenant upon the terms
and conditions contained in this Sublease and in the Prime Lease;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Premises Subleased.Landlord subleases to Tenant, and Tenant subleases
from Landlord, the entire space leased to Landlord by Prime Landlord
under the terms of the Prime Lease, with all rights in common with
others in common areas in Prime Landlord's building (collectively the
"Premises").
2. Term; Right to Renew. The term of this Sublease shall be for six
months beginning on the date of this Lease and ending on February ___,
1997. Provided Tenant is not in default under this Sublease, Tenant
may renew this Sublease for successive terms, each of six months'
duration, upon the terms and conditions contained herein, provided
Tenant gives written notice to Landlord of Tenant's election to renew
at least sixty (60) days before the end of the then-current term.
3. Rent. Tenant covenants and agrees to pay rent during the term in the
amount of ___(same as prime lease)___________________ Dollars
($__________) per month, payable in advance on the first day of each
month during the term. Rent for partial months shall be prorated.
4. Utilities. Tenant shall pay all charges for gas, electricity, lights,
heat, water, sewer and telephone or other communication service used,
rendered or supplied to the Premises.
5. Use of Premises. Tenant shall use the Premises only for the purposes
allowed in Section 4.1 of the Prime Lease.
6. Maintenance and Repair. Tenant acknowledges that the Premises are in
reasonable condition as of the date of this Sublease. Tenant shall at
all times maintain the Premises in the same order and repair as they
are in at the commencement of the term, reasonable use and wear and
damage by fire or other casualty only excepted; shall keep all
fixtures and equipment in the Premises, including without limitation
all heating, plumbing, electrical and mechanical fixtures and
equipment in the same operating condition as they are in on the date
of this Sublease, reasonable use and wear and damage by fire or
casualty only excepted. At the end of the term, Tenant shall surrender
the Premises to Landlord in the same condition as they were in on the
date of this Sublease, reasonable use and wear and damage by fire or
other casualty only excepted. Tenant shall make no alterations or
modifications to the Premises without the Landlord's written consent,
which consent shall not be unreasonably withheld.
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7. Insurance. Tenant shall maintain a policy of general liability
insurance insuring Landlord and Tenant, said policy to be in the
amounts required of the tenant under the Prime Lease. The policy shall
name Landlord as an additional insured.
8. Indemnification. Except for claims arising before the date of this
Lease, and except for claims arising at any time due in whole or in
part to Landlord's negligence or wilful acts, Tenant shall indemnify
and hold Landlord harmless from and against any and all claims for
injury to persons or damage to property in or about the Premises or
arising in any way from the use or condition of the Premises, and
against any costs or damages which Landlord may incur by reason of the
assertion of any such claims.
9. Assignment and Subletting. Tenant shall not assign this Sublease or
sublet the Premises or any part thereof without the prior written
consent of Landlord, which consent shall not be unreasonably withheld.
Landlord represents and warrants to Tenant that Landlord has received
all approvals from Prime Landlord that are necessary in order for
Landlord to enter into this Sublease.
10. Damage or Destruction by Fire, Eminent Domain or Casualty. In the
event that the Premises or any part thereof shall be taken by eminent
domain or shall be so damaged or destroyed by fire or unavoidable
casualty, that the Premises are thereby rendered untenantable, then
either Landlord or Tenant may terminate this Sublease upon written
notice to the other and the rent shall be prorated as of the date of
such termination.
11. Tenant's Property. All property of every kind of Tenant's or Tenant's
employees or invitees which may be on the Premises during the term or
any occupancy by Tenant thereof, shall be at the sole risk and hazard
of Tenant.
12. Default. If Tenant shall default in the performance of any of its
obligations hereunder, and such default is not cured within fifteen
(15) days of the date of a written notice from Landlord if the default
is a failure to pay rent, or thirty (30) days from the date of a
written notice from Landlord in the case of other defaults, including
any default under the Prime Lease, or if Tenant shall file or have
filed against it a petition in bankruptcy or if an assignment shall be
made by Tenant for the benefit of creditors, then in any of such cases
Landlord may lawfully, immediately and at any time thereafter, without
further notice or demand, and without prejudice to any other remedies,
terminate this Sublease by written notice addressed to Tenant at the
Premises, and upon such mailing this Sublease shall terminate.
13. Successors and Assigns; Incorporation of the Prime Lease. The
provisions of this Sublease shall be binding upon and inure to the
benefit of the respective successors and assigns of Landlord and
Tenant. The Prime Lease is incorporated herein by reference and a copy
of the Prime Lease is attached hereto as Exhibit A. Tenant shall abide
by all terms and conditions of the Prime Lease.
14. Settlement Agreement. This Sublease is the Sublease referred to in
Section 10 of that certain Settlement Agreement dated as of October
___, 1996 by and among Landlord, Tenant and others, and shall be
subject to and construed consistently with, such Settlement Agreement.
67
IN WITNESS WHEREOF, Landlord and Tenant have executed this Sublease as of
the date first above written.
WITNESS: CCA OF MAINE, INC., Landlord
_________________________________ By:/s/ Xxxxxxx Xxxxx
Its:Director
XXXXX RIVER HEALTH SYSTEM
LLC, Tenant
________________________________ By:______________________________
Its Member
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