EXHIBIT 10.29
CONSENT AND AMENDMENT
TO TRANSACTION DOCUMENTS
CONSENT AND AMENDMENT TO TRANSACTION DOCUMENTS dated as of December 31,
1996 among HEALTH AND RETIREMENT PROPERTIES TRUST (f/k/a "Health and
Rehabilitation Properties Trust") (known in Wisconsin as "Health and Retirement
Properties REIT"), a real estate investment trust formed under the laws of the
State of Maryland ("HRP"), GRANCARE, INC. (f/k/a AMS Holding Co.), a California
---
corporation ("GranCare"), AMS PROPERTIES, INC., a Delaware corporation ("AMS
-------- ---
Properties"), GCI HEALTH CARE CENTERS, INC., a Delaware corporation ("GCIHCC"),
---------- ------
and NEW GRANCARE, INC., a Delaware corporation and wholly-owned subsidiary of
GranCare ("New GranCare").
------------
W I T N E S S E T H
WHEREAS, HRP, HostMasters, Inc., a California corporation ("HMI"),
---
GranCare, American Medical Services, Inc., a Wisconsin corporation ("AMS") and
---
AMS Properties have entered into an Acquisition Agreement, Agreement to Lease
and Mortgage Loan Agreement dated as of December 28, 1990, as amended (as so
amended, the "Acquisition Agreement"), under which, inter alia, (A) HRP has
--------------------- ----- ----
leased 18 nursing properties located in Wisconsin, California, Colorado and
Illinois to AMS Properties pursuant to the several Facility Leases (as amended,
the "AMS Properties Facility Leases"), each incorporating a Master Lease
------------------------------
Document General Terms and Conditions dated as of December 28, 1990 (as amended,
the "AMS Properties Master Lease") between HRP, as landlord, and AMS Properties,
---------------------------
as tenant, and (B) HRP has made a mortgage loan to AMS Properties in the
original principal amount of $11,500,000, the payment of which is currently
evidenced by a Promissory Note dated as of October 1, 1994 by AMS Properties to
HRP (the "Mortgage Note") and is secured, inter alia by Mortgage and Security
------------- ----------
Agreements dated as of March 31, 1995 (collectively, the "Mortgages") by AMS
---------
Properties in favor of HRP encumbering the two nursing facilities in Wisconsin;
WHEREAS, the terms defined in the Acquisition Agreement are used herein as
therein defined, unless otherwise defined herein;
WHEREAS, (a) in May 1991, the AMSHC Exchange (as defined in the Acquisition
Agreement) took place, whereby GranCare, which previously had been a wholly-
owned subsidiary of HMI, became the sole stockholder of HMI and AMS; and (b) in
December 1993, AMS, which previously had owned all the outstanding common stock
of AMS Properties, and AMS Rehab, Inc., a Delaware corporation and a wholly-
owned subsidiary of GranCare, each merged into AMS Properties, with AMS
Properties as the surviving corporation;
WHEREAS, HRP has leased 7 nursing and/or residential living properties
located in Arizona, California and South Dakota to GCIHCC pursuant to the
several Facility Leases (as amended, the "GCIHCC Facility Leases"), each
----------------------
incorporating a Master Lease Document General
Terms and Conditions dated as of June 30, 1992 (as amended, the "GCIHCC Master
-------------
Lease") between HRP, as landlord, and GCIHCC, as tenant;
-----
WHEREAS, GranCare, which holds beneficially and of record all of the
outstanding capital stock of AMS Properties and GCIHCC, proposes to transfer all
of its skilled nursing, home health care, assisted living and contract
management business (including, without limitation, such capital stock), and
related assets, to New GranCare, with GranCare thereafter distributing New
GranCare common stock to GranCare shareholders (collectively, the
"Distribution"), pursuant to an Agreement and Plan of Distribution dated as of
------------
September 3, 1996 between GranCare and New GranCare (the "Distribution
------------
Agreement");
WHEREAS, immediately following the Distribution, GranCare shall merge with
and into Vitalink Pharmacy Services, Inc., a Delaware corporation ("Vitalink"),
--------
with Vitalink as the surviving corporation (the "Merger"), pursuant to an
------
Amended and Restated Agreement and Plan of Merger dated as of September 3, 1996
between Vitalink and GranCare (the "Merger Agreement"); and
----------------
WHEREAS, XxxxXxxx has requested that HRP agree to (a) waive the provisions
of Section 9.15A of the Acquisition Agreement to permit the Distribution and
Merger and (b) release Vitalink and its subsidiaries (including any remaining
Subsidiary of GranCare that becomes a subsidiary of Vitalink as a result of the
Merger) and their respective successors and assigns from and against any and all
claims, liabilities and obligations, as successor by merger to GranCare, under
(A) the Acquisition Agreement, (B) the Representation Letter and Indemnification
Agreement dated June 30, 1992 by GCIHCC, AMS Properties and GranCare to HRP (the
"GCIHCC Indemnity Agreement"), (C) the Guaranty, dated as of December 28, 1990,
--------------------------
as amended, by GranCare in favor of HRP in respect of the obligations of AMS
Properties (the "AMS Properties Guaranty"), (D) the Guaranty dated as of June
-----------------------
30, 1992, as amended, by GranCare in favor of HRP in respect of the obligations
of GCIHCC (the "GCIHCC Guaranty"), (E) the Pledge Agreement, dated as of
---------------
December 28, 1990, as amended, by GranCare in favor of HRP (the "AMS Properties
--------------
Pledge Agreement"), (F) the Pledge Agreement, dated as of June 30, 1992 as
----------------
amended, by GranCare in favor of HRP (the "GCIHCC Pledge Agreement"), (G) the
-----------------------
Subordination Agreement, dated as of December 28, 1990, as amended, among
GranCare, as subordinate creditor, AMS Properties, as debtor and HRP, as senior
creditor (the "AMS Properties Subordination Agreement"), (H) the Subordination
--------------------------------------
Agreement, dated as of June 30, 1992, as amended, among GranCare, as subordinate
creditor, GCIHCC, as debtor and HRP, as senior creditor (the "GCIHCC
------
Subordination Agreement"), and (I) any other agreements, instruments or
-----------------------
understandings, written or oral, of GranCare with HRP or any of its affiliates
relating to or arising out of the transactions contemplated by the agreements
described in clauses (A) through (H) above; and HRP is, subject to the terms and
provisions hereof, willing to so agree;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
2
SECTION 1. CONSENT TO DISTRIBUTION AND MERGER; RELEASE OF VITALINK.
-------------------------------------------------------
Effective as of the Effective Time (as defined in Section 3 hereof), HRP
---------
hereby:
(1) consents to the terms of the Distribution Agreement and Merger
Agreement, and the consummation of the transactions contemplated thereby;
(2) releases Vitalink and its successors and assigns from and against any
and all claims, liabilities and obligations, as successor by merger to GranCare,
under (i) the Acquisition Agreement, (ii) the GCIHCC Indemnity Agreement, (iii)
the AMS Properties Guaranty, (iv) the GCIHCC Guaranty, (v) the AMS Properties
Pledge Agreement, (vi) the GCIHCC Pledge Agreement, (vii) the AMS Properties
Subordination Agreement, (viii) the GCIHCC Subordination Agreement and (ix) any
other agreements, instruments or understandings, written or oral, of GranCare
with HRP or any of its affiliates relating to or arising out of the transactions
contemplated by the agreements described in clauses (i) through (viii) above;
(3) agrees to execute and deliver to Vitalink, at the sole cost and expense
of Vitalink, such instruments and documents, including UCC-3 financing
statements and other instruments of termination or release as may be reasonably
requested by Vitalink in order to effectuate the agreement in paragraph (b)
above; and
(4) agrees that it will, at the request of New GranCare, and without the
payment of any additional consideration by New GranCare (except for the out of
pocket cost and expense of HRP in connection therewith, which shall be at the
sole expense of New GranCare), to enter into a consent, waiver and estoppel
agreement and an intercreditor agreement in connection with New Credit Facility
(as that term is defined in the Preliminary Prospectus for New GranCare, Inc.
included in the Schedule 14A filed with the Securities Exchange Commission on
November __, 1996 (the "Schedule 14A")), in each case in substantially the form
------------
of the Consent, Waiver and Estoppel Agreement and an Intercreditor Agreement,
each dated March 31, 1995, executed by HRP in connection with the Credit
Agreement dated as of March 31, 1995 among GranCare, certain lenders and First
Union National Bank of North Carolina, as agent.
3
SECTION 2. AMENDMENT OF TRANSACTION DOCUMENTS
----------------------------------
The parties hereto hereby agree, effective as of the Effective Time (as
defined in Section 3 hereof), that:
---------
(1) The Acquisition Agreement, each other "Transaction Document", as such
term is defined in Section 1.1 of the Acquisition Agreement (hereinafter the
"AMS Transaction Documents") and each "Transaction Document" as such term is
--------------------------
defined in Article 1 of the GCIHCC Master Lease (hereinafter the "GCI
---
Transaction Documents", and with the AMS Transaction Documents, the "Transaction
--------------------- -----------
Documents") shall be amended such that each reference therein to "GranCare,
---------
Inc.," "GranCare," "AMS Holding Co.," "AMSHC" or words of like import referring
to GranCare, Inc. shall mean and be a reference to New GranCare.
(2) HRP shall send Vitalink (at its address set forth in the Vitalink
Guaranty, as hereinafter defined) copies of any notice of default sent to New
GranCare, AMS Properties or GCIHCC under any Transaction Document at the time
that such notice is sent to New GranCare, AMS Properties or GCIHCC.
(3) The Acquisition Agreement shall be amended in the following respects:
(1) Section 1.1 is amended to add the following new definitions
thereto:
New GranCare - New GranCare, Inc., a Delaware corporation,
------------
together with its permitted successors and assigns.
Old GranCare - GranCare, Inc., a California corporation, together
------------
with its permitted successors and assigns.
Supply Contracts - agreements or arrangements between Vitalink
----------------
and AMS Properties providing for pharmaceuticals or other supplies or
services to be furnished to any facility operated by AMS Properties;
provided that each such agreement or arrangement shall provide that it
shall be terminated and of no further force and effect, and all
obligations and liabilities thereunder released and terminated (other
than obligations to pay for services or supplies previously rendered
or furnished), at any time upon notice to Vitalink by HRP after either
(i) HRP terminates any lease of such facility with AMS Properties,
accelerates the maturity of any promissory note of AMS Properties or
GCIHCC, or forecloses upon or exercises remedies of like effect in
respect of the stock of GCIHCC or AMS Properties pledged to HRP, or
(ii) the occurrence of an Event of Default hereunder or under any
other Transaction Document involving the bankruptcy or insolvency of
AMS Properties, GCIHCC, New GranCare or Vitalink.
4
Vitalink - Vitalink Pharmacy Services Inc., a Delaware
--------
corporation, together with its permitted successors and assigns.
(2) Section 1.1 is further amended by amending the definitions
"Security Documents" and "Transaction Documents" in full to read as
follows:
Security Documents - each of the mortgages, leasehold mortgages
------------------
or deeds of trust, security agreements, pledge agreements, voting
trust agreements, collateral assignments of contracts and permits,
stock powers and Uniform Commercial Code financing statements listed
on Schedule 1.1 hereto, as each of the same has been or may be
amended, amended and restated, modified or supplemented from time to
time.
Transaction Documents - means, collectively, (a) those documents
---------------------
listed on Schedule 1.1 hereto, in each case as such documents have
been or may be amended, amended and restated, modified or supplemented
from time to time, together with any and all other documents executed
in connection with, relating to, evidencing, or creating or perfecting
collateral or security for, any such document and (b) all GCIHCC
Transaction Documents.
(3) Section 9.17 is amended by amending paragraphs (b), (c) and (e)
thereof in full to read as follows:
(b) unsecured Indebtedness consisting of accounts payable,
accruals and similar items incurred in the ordinary course of business
in accordance with reasonable and customary trade practices, that are
neither owed to any Affiliate nor constitute Indebtedness for money
borrowed or a Guarantee thereof;
(c) Indebtedness for taxes, assessments, governmental charges or
levies to the extent that payment thereof shall not at the time be
required to be made in accordance with the provisions of Section 9.5
-----------
hereof or of the other applicable provisions of the Transaction
Documents;
(e) unsecured Indebtedness (including without limitation, accrued
and unpaid management fees) of AMS Properties (i) owed to GranCare or
any wholly-owned Subsidiary of GranCare (provided that the payment of
such Indebtedness shall be subject to the terms of a subordination
agreement in form and substance satisfactory to HRP among AMS
Properties as debtor, GranCare or such wholly-owned Subsidiary as
subordinate creditor and HRP as senior creditor) or (ii) owed to
Vitalink under any Supply Contract.
(4) The Acquisition Agreement is further amended by adding a new
Schedule 1.1 thereto to read as set forth in Exhibit E hereto.
---------
5
(4) The AMS Properties Master Lease shall be amended in the following
respects:
(1) Article I is amended by amending the definitions "Guarantor" and
"Transaction Documents" in full to read as follows:
Guarantor shall mean any guarantor of Tenant's obligations under
---------
the applicable Lease, including, without limitation, New GranCare,
Inc., a Delaware corporation and GCI Health Care Centers, Inc., a
Delaware corporation (but excluding in any event, Vitalink), in each
case together with their respective successors and assigns.
Transaction Documents shall mean those documents listed on
---------------------
Schedule I hereto, and shall also include all documents constituting
Transaction Documents as such term is defined in the Acquisition
Agreement, in each case as such documents may be modified, amended or
supplemented from time to time, together with any and all other
documents executed in connection with, relating to, evidencing, or
creating collateral or security for, any Lease.
(2) Section 1.1 is further amended to add the following new
definitions thereto:
Vitalink shall mean Vitalink Pharmacy Services Inc., a Delaware
--------
corporation, together with its permitted successors and assigns.
Vitalink Guaranty shall mean the Limited Guaranty delivered by
-----------------
Vitalink in favor of Landlord pursuant to Consent and Amendment to
Transaction Documents dated as of December 31, 1996 among Tenant,
Landlord, GranCare, Inc., New GranCare, Inc. and GCI Health Care
Centers, Inc., as such Limited Guaranty may be amended, modified or
supplemented from time to time.
(3) Section 12.1 is amended by adding the word "or" immediately after
the semicolon at the end of paragraph (o) thereof, and by adding a new
paragraph (p) thereto to read as follows:
(p) the occurrence of a Guarantor Event of Default (as such term
is defined in the Vitalink Guaranty) at any time prior to the Release
Date (as such term is defined in the Vitalink Guaranty);
(5) The GCIHCC Master Lease shall be amended in the following respects:
(1) Article I is further amended by amending the definition
"Guarantor" and "Transaction Documents" in full to read as follows:
6
Guarantor shall mean any guarantor of Tenant's obligations under
---------
the applicable Lease, including, without limitation, New GranCare,
Inc., a Delaware corporation, and AMS Properties, Inc., a Delaware
corporation (but excluding in any event, Vitalink), in each case
together with their respective successors and assigns.
Transaction Documents shall mean those documents listed on
---------------------
Schedule I hereto, and shall also include all documents constituting
Transaction Documents as such term is defined in the Acquisition
Agreement, Agreement to Lease and Mortgage Loan Agreement dated as of
December 28, 1990, as amended, among Landlord, HostMasters, Inc., a
California corporation, GranCare, Inc., American Medical Services,
Inc., a Wisconsin corporation and AMS Properties, Inc., a Delaware
corporation, in each case as such documents may be modified, amended
or supplemented from time to time, together with any and all other
documents executed in connection with, relating to, evidencing, or
creating collateral or security for, any Lease.
(2) Section 1.1 is further amended to add the following new
definitions thereto:
Supply Contracts - agreements or arrangements between Vitalink
----------------
and Tenant providing for pharmaceuticals or other supplies or services
to be furnished to any facility operated by Tenant; provided that each
such agreement or arrangement shall provide that it shall be
terminated and of no further force and effect, and all obligations and
liabilities thereunder released and terminated (other than obligations
to pay for services or supplies previously rendered or furnished), at
any time upon notice to Vitalink by Landlord after either (i) Landlord
terminates any Lease of such facility with Tenant, accelerates the
maturity of any promissory note of AMS Properties, Inc. or Tenant, or
forecloses upon or exercises remedies of like effect in respect of the
stock of Tenant or AMS Properties, Inc. pledged to Landlord, or (ii)
the occurrence of an Event of Default hereunder or under any other
Transaction Document involving the bankruptcy or insolvency of Tenant,
AMS Properties, Inc., GranCare or Vitalink.
Vitalink - shall mean Vitalink Pharmacy Services Inc., a Delaware
--------
corporation, together with its permitted successors and assigns.
Vitalink Guaranty shall mean the Limited Guaranty delivered by
-----------------
Vitalink in favor of Landlord pursuant to the Consent and Amendment to
Transaction Documents dated as of December 31, 1996 among Tenant,
Landlord, GranCare, Inc., New GranCare, Inc. and AMS Properties, Inc.,
as such Limited Guaranty may be amended, modified or supplemented from
time to time.
7
(3) Section 12.1 is amended by adding the word "or" immediately after
the semicolon at the end of paragraph (o) thereof, and by adding a new
paragraph (p) thereto to read as follows:
(p) the occurrence of a Guarantor Event of Default (as such term
is defined in the Vitalink Guaranty) at any time prior to the Release
Date (as such term is defined in the Vitalink Guaranty);
(4) Section 23.7 is amended by deleting paragraph (e) thereof in its
entirety and by amending paragraphs (b) and (f) thereof in full read as
follows:
(b) unsecured Indebtedness consisting of accounts payable,
accruals and similar items incurred in the ordinary course of business
in accordance with reasonable and customary trade practices, that are
neither owed to any Affiliate nor constitute Indebtedness for money
borrowed or a Guarantee thereof;
(f) unsecured Indebtedness (including without limitation, accrued
and unpaid management fees) of Tenant (i) owed to GranCare or any
wholly-owned Subsidiary of GranCare (provided that the payment of such
Indebtedness shall be subject to the terms of a subordination
agreement in form and substance satisfactory to Landlord among Tenant
as debtor, GranCare or such wholly-owned Subsidiary as subordinate
creditor and Landlord as senior creditor) or (ii) owed to Vitalink
under any Supply Contract;
(5) The GCIHCC Master Lease is further amended by amending Schedule 1
thereto in full to read as set forth in Exhibit F hereto.
---------
(6) Each of the Transaction Documents remain in full force and effect and
is hereby ratified and confirmed in all respects, except as specifically
modified hereby or by the other Vitalink Documents (as hereinafter defined).
The amendments set forth herein (i) do not constitute an amendment, waiver or
modification of any term, condition or covenant of any Transaction Document, or
any of the instruments or documents referred to therein, other than as
specifically set forth herein, and (ii) shall not prejudice any rights which HRP
or its successors and assigns may now or hereafter have under or in connection
with any Transaction Document, as amended hereby, or any of the instruments or
documents referred to therein.
SECTION 3. EFFECTIVENESS
-------------
Sections 1 and 2 of this Agreement shall become effective on the date and
---------- -
time (the "Effective Time") that a counterpart to this Agreement shall have been
--------------
executed by each of the parties hereto and each of the following conditions
shall have been satisfied (provided that the Effective Time may not be later
than March 31, 1997):
8
(1) Vitalink shall have paid HRP a non-refundable $10,000,000 lease
modification fee in immediately available funds to reflect the change in
guarantors;
(2) Vitalink shall have executed and delivered to HRP a Guaranty in the
form attached hereto as Exhibit A (the "Vitalink Guaranty");
--------- -----------------
(3) New GranCare shall have executed and delivered to HRP an Assumption
Agreement in the form attached hereto as Exhibit B (the "Assumption Agreement,"
--------- --------------------
and together with this Agreement, the Vitalink Guaranty and each other
agreement, instrument or other document delivered by any party pursuant to this
Section 3, collectively, the "Vitalink Documents"; the Vitalink Documents and
--------- ------------------
the Transaction Documents, as amended hereby, are collectively referred to
herein as the "Documents"), which Assumption Agreement shall have been accepted
---------
by GranCare for the limited purpose specified therein;
(4) the Distribution and the Merger shall have occurred substantially
concurrently with the Effective Time, in accordance with the description of the
Distribution and Merger in the Schedule 14A;
(5) giving effect to the Distribution and the Merger, and occurrence of the
Effective Time, no Event of Default, or event or condition that with the giving
of notice or the lapse of time or both would become an Event of Default, shall
have occurred and be continuing under any Document, and all warranties and
representations contained in each Vitalink Document shall be true and correct at
the Effective Time as if made at such time;
(6) HRP shall have received a certificate of a senior executive officer of
New GranCare and Vitalink confirming satisfaction of the conditions described in
paragraphs (d) and (e) above;
-------------- ---
(7) HRP shall have received opinions addressed to it, each dated the
Effective Time, from counsel to GranCare and New GranCare, and from Xxxxxx
Xxxxxx & Xxxxxxx, counsel to Vitalink, covering the matters set forth in
Exhibits C and D respectively, and otherwise in form and substance reasonably
---------- -
satisfactory to HRP; and
(8) New GranCare or Vitalink shall have paid all costs, expenses and taxes
provided for in Section 4 hereof, as well as all fees and expenses currently
---------
payable by New GranCare, Vitalink, GranCare, AMS Properties and GCIHCC under any
Document.
SECTION 4. COSTS, EXPENSES AND TAXES
-------------------------
New GranCare, AMS Properties and GCIHCC hereby jointly and severally agrees
to pay all costs and expenses of HRP in connection with the preparation,
reproduction, execution and delivery, and administration, of this Agreement,
including the reasonable fees and expenses of Xxxxxxxx & Worcester LLP, special
counsel to HRP with respect thereto and the payment of all
9
recording fees, real estate transfer taxes, title insurance premiums and other
expenses related to the satisfaction of the conditions in Section 3 hereof.
---------
SECTION 5. AMENDMENTS
----------
No provision of this Agreement may be amended or modified without the
written consent of the Person entitled to the benefits thereof.
SECTION 6. GOVERNING LAW
-------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL SUBSTANTIVE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
SECTION 7. NO LIABILITY OF TRUSTEES
------------------------
THE DECLARATION OF TRUST OF HRP, DATED OCTOBER 9, 1986, A COPY OF WHICH,
TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED IN THE
OFFICE OF THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND,
PROVIDES THAT THE NAME "HEALTH AND RETIREMENT PROPERTIES TRUST" REFERS TO THE
TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR
PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF HRP
SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, HRP. ALL PERSONS DEALING WITH HRP, IN ANY WAY,
SHALL LOOK ONLY TO THE ASSETS OF HRP FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.
10
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
HEALTH AND RETIREMENT
PROPERTIES TRUST (f/k/a "Health and Rehabilitation
Properties Trust") (known in
Wisconsin as "Health and
Retirement Properties REIT")
By:
----------------------------
Its:
GRANCARE, INC.
(f/k/a AMS Holding Co.)
By:
-----------------------------
Its:
AMS PROPERTIES, INC.
By:
-------------------------------
Its:
GCI HEALTH CARE CENTERS, INC.
By:
-----------------------------
Its:
NEW GRANCARE, INC.
By:
-----------------------------
Its:
11
LIMITED GUARANTY
----------------
LIMITED GUARANTY (this "Guaranty") dated as of February 12, 1997, made by
VITALINK PHARMACY SERVICES, INC., a Delaware corporation (the "Guarantor"), in
favor of HEALTH AND RETIREMENT PROPERTIES TRUST, a real estate investment trust
formed under the laws of the State of Maryland (together with its successors and
assigns, "HRP").
WITNESSETH
----------
WHEREAS, HRP, HostMasters, Inc., a California corporation ("HMI"),
GranCare, Inc. (f/k/a AMS Holding Co.), a California corporation ("GranCare") ,
American Medical Services, Inc., a Wisconsin corporation ("AMSI") and AMS
Properties, Inc., a Delaware corporation ("AMS") have entered into an
Acquisition Agreement, Agreement to Lease and Mortgage Loan Agreement dated as
of December 28, 1990, as amended (as so amended, the "Acquisition Agreement"),
under which, inter alia, (A) HRP has leased 18 nursing properties located in
Wisconsin, California, Colorado and Illinois to AMS pursuant to the several
Facility Leases (as amended, the "AMS Facility Leases"), each incorporating a
Master Lease Document General Terms and Conditions dated as of December 28, 1990
(as amended, the "AMS Master Lease") between HRP, as landlord, and AMS, as
tenant, and (B) HRP has made a mortgage loan to AMS in the original principal
amount of $11,500,000, the payment of which is currently evidenced by a
Promissory Note dated as of October 1, 1994 by AMS to HRP (the "AMS Note") and
is secured, inter alia by Mortgage and Security Agreements dated as of March 31,
1995 (collectively, the "AMS Mortgages") by AMS in favor of HRP encumbering the
two nursing facilities in Wisconsin;
WHEREAS, the terms defined in the Acquisition Agreement are used herein as
therein defined, unless otherwise defined herein;
WHEREAS, (a) in May 1991, the AMSHC Exchange (as defined in the Acquisition
Agreement) took place, whereby GranCare, which previously had been a wholly-
owned subsidiary of HMI, became the sole stockholder of HMI and AMSI; and (b) in
December 1993, AMSI, which previously had owned all the outstanding common stock
of AMS, and AMS Rehab, Inc., a Delaware corporation and a wholly-owned
subsidiary of GranCare, each merged into AMS, with AMS as the surviving
corporation;
WHEREAS, HRP has leased 7 nursing and/or residential living properties
located in Arizona, California and South Dakota to GCI Health Care Centers,
Inc., a Delaware corporation ("GCI") pursuant to the several Facility Leases (as
amended, the "GCI Facility Leases"), each incorporating a Master Lease Document
General Terms and Conditions dated as of June 30, 1992 (as amended, the "GCI
Master Lease") between HRP, as landlord, and GCI, as tenant;
12
WHEREAS, GranCare, which holds beneficially and of record all of the
outstanding capital stock of AMS and GCI, proposes to transfer all of its
skilled nursing, home health care, assisted living and contract management
business (including, without limitation, such capital
13
stock), and related assets, to New GranCare, Inc., a Delaware corporation and a
wholly-owned subsidiary of GranCare ("New GranCare"), with GranCare thereafter
distributing New GranCare common stock to GranCare shareholders (collectively,
the "Distribution");
WHEREAS, immediately following the Distribution, GranCare shall merge with
and into the Guarantor, with the Guarantor as the surviving corporation (the
"Merger");
WHEREAS, GranCare has requested that HRP agree to (a) waive the provisions
of Section 9.15A of the Acquisition Agreement to permit the Distribution and
Merger and (b) release the Guarantor and its subsidiaries (including any
remaining Subsidiary of GranCare that becomes a subsidiary of the Guarantor as a
result of the Merger) and their respective successors and assigns from and
against any and all claims, liabilities and obligations, as successor by merger
to GranCare, under (A) the Acquisition Agreement, (B) the Representation Letter
and Indemnification Agreement dated June 30, 1992 by GCI, AMS and GranCare to
HRP (the "GCI Indemnity Agreement"), (C) the Guaranty, dated as of December 28,
1990, as amended, by GranCare in favor of HRP in respect of the obligations of
AMS (the "AMS Guaranty"), (D) the Guaranty dated as of June 30, 1992, as
amended, by GranCare in favor of HRP in respect of the obligations of GCI (the
"GCI Guaranty"), (E) the Pledge Agreement, dated as of December 28, 1990, as
amended, by GranCare in favor of HRP (the "AMS Pledge Agreement"), (F) the
Pledge Agreement, dated as of June 30, 1992 as amended, by GranCare in favor of
HRP (the "GCI Pledge Agreement"), (G) the Subordination Agreement, dated as of
December 28, 1990, as amended, among GranCare, as subordinate creditor, AMS, as
debtor and HRP, as senior creditor (the "AMS Subordination Agreement"), (H) the
Subordination Agreement, dated as of June 30, 1992, as amended, among GranCare,
as subordinate creditor, GCI, as debtor and HRP, as senior creditor (the "GCI
Subordination Agreement"), and (I) any other agreements, instruments or
understandings, written or oral, of GranCare with HRP or any of its affiliates
relating to or arising out of the transactions contemplated by the agreements
described in clauses (A) through (H) above; and HRP is, subject to the terms and
provisions of the Consent and Amendment to Transaction Documents dated as of
December 31, 1996 among GranCare, New GranCare, AMS, GCI and HRP (the
"Amendment"), willing to so agree, subject to, inter alia, the execution and
delivery of this Guaranty by the Guarantor;
NOW, THEREFORE, in consideration of the premises contained herein and to
induce HRP to consent to the Distribution and Merger, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Guarantor hereby agrees with HRP as follows:
SECTION 8. Defined Terms. Unless otherwise defined herein, terms which are
defined in the AMS Master Lease and used herein are so used as so defined.
In addition, the following terms shall have the meanings set forth below:
"Applicable Law" shall mean shall mean any law of any governmental
authority, whether domestic or foreign, including without limitation all
federal and state laws, to
14
which the Person in question is subject or by which it or any of its
property is bound, and including without limitation any: (a)
administrative, executive, judicial, legislative or other action, code,
consent decree, constitution, decree, directive, enactment, finding,
guideline, injunction, interpretation, judgment, law, order, ordinance,
policy statement, proclamation, promulgation, regulation, requirement,
rule, rule of law, rule of public policy, settlement agreement, statute, or
writ, of any governmental authority, domestic or foreign, whether or not
having the force of law; (b) common law or other legal or quasi-legal
precedent; or (c) arbitrator's, mediator's or referee's award, decision,
finding or recommendation, or, in any case, any particular section, part or
provision thereof.
"Assumption Agreement" shall mean the Assumption Agreement dated as of
even date herewith by New GranCare in favor of HRP, as the same may be
amended, amended and restated, supplemented or modified from time to time,
pursuant to which New GranCare has agreed to assume the obligations of
GranCare under, inter alia, the Acquisition Agreement, the GCI Indemnity
Agreement, the AMS Guaranty, the GCI Guaranty, the AMS Pledge Agreement.
the GCI Pledge Agreement, the AMS Subordination Agreement and the GCI
Subordination Agreement.
"Bankruptcy Code" means Title 11 of the United States Code.
"Consolidated Net Worth" of any Person shall mean, at any date as of
which the amount thereof shall be determined, the consolidated total assets
of such Person and its Subsidiaries, minus all obligations that should, in
accordance with GAAP, be classified as liabilities on the consolidated
balance sheet of such Person and its Subsidiaries, including in any event
all Indebtedness.
"Contingent Obligation" shall mean, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person (i)
with respect to any Indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, or (ii) with respect to any letter
of credit issued for the account of that Person or as to which that Person
is otherwise liable for reimbursement of drawings. Contingent Obligations
shall include, without limitation (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to
make take-or-pay or similar payments if required regardless of non-
performance by any other party or parties to an agreement and (c) any
liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of
15
loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described
under subclauses (X) or (Y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"Default Amount" shall mean $15,000,000 or such lesser amount to which
the Guarantor's maximum liability hereunder has been reduced pursuant to
the second paragraph of Section 2 hereof.
"Default Rate" shall mean 18% per annum.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"GranCare Companies" shall mean, collectively, New GranCare, AMS, GCI
and all Subsidiaries of any thereof (after giving effect to the Merger and
the Distribution), whether now existing or hereafter created, and any
successors of any thereof (individually, a "GranCare Company").
"GranCare Default" shall mean any GranCare Event of Default and any
event or condition which with the passage of time or giving of notice, or
both, would become a GranCare Event of Default.
"GranCare Documents" shall mean, collectively,
(1) the Acquisition Agreement, the GCI Indemnity Agreement, the AMS
Leases, the AMS Master Lease, the AMS Note, the GCI Leases, the
GCI Master Lease, all Security Documents (as such term is defined
in the Acquisition Agreement, and including, without limitation,
the AMS Guaranty, the GCI Guaranty, the AMS Pledge Agreement and
the GCI Pledge Agreement, in each case as modified by the
Assumption Agreement) and the Assumption Agreement, in each case
as from time to time in effect; and
(2) any other present or future undertaking, agreement or instrument
of any kind whatsoever from time to time entered into by one or
more GranCare Companies with HRP (and any applicable third
parties), or to or for the benefit of HRP (and any applicable
third parties), each as from time to time in effect (and, in each
case, whether or not related to any transaction contemplated by
any documents, instruments or agreements listed in subparagraph
(i) above).
16
"GranCare Event of Default" shall mean an "Event of Default" under and
as defined in any GranCare Document.
"Guarantor Default" shall mean any Guarantor Event of Default and any
event or condition which with the passage of time or giving of notice, or
both, would become a Guarantor Event of Default.
"Guarantor Event of Default" shall mean an Event of Default under and
as defined in Section 15 hereof.
"Indebtedness" of any Person at any date shall mean, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (excluding current trade liabilities incurred
in the ordinary course of business and payable in accordance with customary
practices, but including any class of capital stock of such Person with
fixed payment obligations or with redemption at the option of the holder),
or which is evidenced by a note, bond, debenture or similar instrument, (b)
all obligations of such Person under leases that should be treated as
capitalized leases in accordance with GAAP, (c) all obligations of such
Person in respect of acceptances issued or created for the account of such
Person, and all reimbursement obligations (contingent or otherwise) of such
Person in respect of any letters of credit issued for the account of such
Person, and (d) all liabilities secured by any Lien on any property owned
by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the
foregoing.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of the Guarantor, or of the Guarantor and its Subsidiaries taken
as a whole, (b) the ability of the Guarantor to perform its obligations
under this Guaranty, or (c) the validity or enforceability of this
Guaranty, or the rights of HRP hereunder.
"Obligations" shall mean the payment and performance of each and every
obligation and liability of any GranCare Company to HRP under any GranCare
Document, whether now existing or hereafter arising or created, joint or
several, direct or indirect, absolute or contingent, due or to become due,
matured or unmatured, liquidated or unliquidated, arising by contract,
operation of law or otherwise, and including, without limitation, payment
of the principal, premium or prepayment fee and interest (including,
without limitation, Minimum Interest and Additional Interest, as such terms
are defined in
17
the AMS Note) under any promissory note payable to HRP, and the payment of
rent under any lease with HRP as landlord (including, without limitation,
any Minimum Rent, Additional Rent and Additional Charges, as such terms are
defined in the AMS Leases or the GCI Leases).
"Person" shall mean any individual, corporation, firm, unincorporated
organization, association, partnership, trust, business trust, joint stock
company, joint venture or other organization, entity or business, or any
governmental organization or authority.
"Subsidiary" shall mean any Person of which any specified Person shall
at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own at least 50% of the outstanding capital stock (or
other shares of beneficial interest) entitled to vote generally, (b) hold
at least 50% of the partnership, joint venture or similar interests or (c)
be a general partner or joint venturer.
SECTION 9. Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees to HRP the prompt and complete payment and performance by the
GranCare Companies (and each of them), when due (whether at stated
maturity, by acceleration or otherwise), of the Obligations. The Guarantor
further agrees to pay any and all expenses (including, without limitation,
all reasonable fees and disbursements of counsel to HRP) which may be paid
or incurred by HRP in enforcing, or obtaining advice of counsel in respect
of, any of its rights under this Guaranty. This Guaranty is a guaranty of
payment and not of collectibility and is absolute and in no way conditional
or contingent. The Guarantor's liability hereunder is direct and
unconditional and may be enforced after nonpayment or nonperformance by any
GranCare Company of any Obligation without requiring HRP to resort to any
other Person (including without limitation such GranCare Company) or any
other right, remedy or collateral. This Guaranty shall remain in full
force and effect until the Obligations are paid in full.
Notwithstanding the aggregate amount of the Obligations at any time or from
time to time payable or to be payable by the GranCare Companies to HRP, the
liability of the Guarantor to HRP under this Section 2 shall not exceed the
principal sum of Fifteen Million Dollars ($15,000,000) in the aggregate less
amounts paid by the Guarantor hereunder in respect of such principal sum;
provided that whenever, at any time, or from time to time, Guarantor shall make
any payment to HRP on account of its liability hereunder, it will notify HRP in
writing that such payment is made under this Guaranty for such purpose. The
Guarantor agrees that the Obligations may at any time and from time to time
exceed the amount of the liability of the Guarantor hereunder without impairing
this Guaranty or affecting the rights and remedies of HRP hereunder. No payment
or payments made by any GranCare Company or any other Person or received or
collected by HRP from any GranCare Company or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application, at any time
or from time to time, in reduction of or in payment of the Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder which shall, notwithstanding any such
18
payment or payments, remain liable for the amount of the Obligations until the
Obligations are paid in full (but subject as provided in this paragraph).
SECTION 10. Costs and Expenses of Collection. The Guarantor agrees, as
principal obligor and not as a guarantor only, to pay to HRP forthwith upon
demand, in immediately available funds, all costs and expenses (including,
without limitation, all court costs and all fees and disbursements of
counsel to HRP) incurred or expended by HRP in connection with the
enforcement of this Guaranty, together with interest on amounts recoverable
under this Guaranty from the time such amounts become due until payment at
the Default Rate. The Guarantor's covenants and agreements set forth in
this Section 3 shall survive the termination of this Guaranty.
SECTION 11. Right of Setoff. Regardless of the adequacy of any collateral or
other means of obtaining repayment of the Obligations, HRP is hereby
authorized, without notice to the Guarantor or compliance with any other
condition precedent now or hereafter imposed by Applicable Law (all of
which are hereby expressly waived to the extent permitted by Applicable
Law) and to the fullest extent permitted by Applicable Law, to set off and
apply the Deposit Balance (as hereinafter defined), interest thereon, and
any other monies, securities, deposits or other property now or hereafter
delivered to HRP as collateral pursuant hereto, and all proceeds of any
thereof, against the obligations of the Guarantor under this Guaranty,
whether or not HRP shall have made any demand under this Guaranty, at any
time and from time to time after the occurrence of a Guarantor Event of
Default, in such manner as HRP in its sole discretion may determine, and
the Guarantor hereby grants HRP a continuing security interest in such
Deposit Balance, interest, monies, securities, deposits and property as
collateral for the payment and performance of such obligations.
SECTION 12. Subrogation and Contribution. Until the Obligations shall have
been paid and performed in full, the Guarantor irrevocably and
unconditionally waives any and all rights to which it may be entitled, by
operation of law or otherwise, to be subrogated, with respect to any
payment made by the Guarantor hereunder, to the rights of HRP against any
GranCare Company, or otherwise to be reimbursed, indemnified or exonerated
by any GranCare Company in respect thereof or to receive any payment, in
the nature of contribution or for any other reason, from any other
guarantor of the Obligations with respect to any payment made by the
Guarantor hereunder (provided that the foregoing shall not prevent the
Guarantor from drawing (and retaining any amounts so drawn) under any
letter of credit issued by a bank for the account of any Person). Until the
Obligations shall have been paid and performed in full, the Guarantor
waives any defense it may have based upon any election of remedies by HRP
which impairs the Guarantor's subrogation rights or the Guarantor's rights
to proceed against any GranCare Company for reimbursement (including
without limitation any loss of rights the Guarantor may suffer by reason of
any rights, powers or remedies of such GranCare Company in connection with
any anti-deficiency laws or any other laws limiting, qualifying or
discharging any
19
indebtedness to HRP). Until the Obligations shall have been paid, performed
and satisfied in full, the Guarantor further waives any right to enforce
any remedy which HRP now has or may in the future have against any GranCare
Company, any other guarantor or any other Person and any benefit of, or any
right to participate in, any security whatsoever now or in the future held
by HRP.
SECTION 13. Effect of Bankruptcy Stay. If acceleration of the time for
payment or performance of any of the Obligations is stayed upon the
insolvency, bankruptcy or reorganization of any GranCare Company or any
other Person or otherwise, all such amounts otherwise subject to
acceleration shall nonetheless be payable by the Guarantor under this
Guaranty forthwith upon demand.
SECTION 14. Receipt of GranCare Documents, etc. The Guarantor confirms,
represents and warrants to HRP that (i) it has received true and complete
copies of all existing GranCare Documents from the GranCare Companies, has
read the contents thereof and reviewed the same with legal counsel of its
choice; (ii) no representations or agreements of any kind have been made to
the Guarantor which would limit or qualify in any way the terms of this
Guaranty; (iii) HRP has made no representation to the Guarantor as to the
creditworthiness of any GranCare Company; and (iv) the Guarantor has
established adequate means of obtaining from each GranCare Company on a
continuing basis information regarding such GranCare Company's financial
condition. The Guarantor agrees to keep adequately informed from such
means of any facts, events, or circumstances which might in any way affect
the Guarantor's risks under this Guaranty, and the Guarantor further agrees
that HRP shall have no obligation to disclose to the Guarantor any
information or documents acquired by HRP in the course of its relationship
with the GranCare Companies.
SECTION 15. Amendments, etc. with Respect to the Obligations. The obligations
of the Guarantor under this Guaranty shall remain in full force and effect
without regard to, and shall not be released, altered, exhausted,
discharged or in any way affected by any circumstance or condition (whether
or not any GranCare Company shall have any knowledge or notice thereof),
including without limitation (a) any amendment or modification of or
supplement to any GranCare Document, or any obligation, duty or agreement
of the GranCare Companies or any other Person thereunder or in respect
thereof; (b) any assignment or transfer in whole or in part of any of the
Obligations; any furnishing, acceptance, release, nonperfection or
invalidity of any direct or indirect security or guaranty for any of the
Obligations; (c) any waiver, consent, extension, renewal, indulgence,
settlement, compromise or other action or inaction under or in respect of
any GranCare Document, or any exercise or nonexercise of any right, remedy,
power or privilege under or in respect of any such instrument (whether by
operation of law or otherwise); (d) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or
similar proceeding with respect to any GranCare Company or any other Person
or any of their respective properties or creditors or any
20
resulting release or discharge of any Obligation (including without
limitation any rejection of any lease pursuant to Section 365 of the
Federal Bankruptcy Code); (e) any new or additional financing arrangements
entered into by any GranCare Company or by any other Person on behalf of or
for the benefit of any GranCare Company; (f) the merger or consolidation of
any GranCare Company with or into any other Person or of any other Person
with or into any GranCare Company; (g) the voluntary or involuntary sale or
other disposition of all or substantially all the assets of any GranCare
Company or any other Person; (h) the voluntary or involuntary liquidation,
dissolution or termination of any GranCare Company or any other Person; (i)
any invalidity or unenforceability, in whole or in part, of any term hereof
or of any GranCare Document, or any obligation, duty or agreement of any
GranCare Company or any other Person thereunder or in respect thereof; (j)
any provision of any applicable law or regulation purporting to prohibit
the payment or performance by any GranCare Company or any other Person of
any Obligation; (k) any failure on the part of any GranCare Company or any
other Person for any reason to perform or comply with any term of any
GranCare Document or any other agreement; or (l) any other act, omission or
occurrence whatsoever, whether similar or dissimilar to the foregoing. The
Guarantor authorizes each GranCare Company, each other guarantor in respect
of the Obligations and HRP at any time in its discretion, as the case may
be, to alter any of the terms of any of the Obligations.
SECTION 16. Guarantor as Principal. If for any reason the GranCare Companies,
or any of them, or any other Person is under no legal obligation to
discharge any Obligation, or if any other moneys included in the
Obligations have become unrecoverable from the GranCare Companies, or any
of them, or any other Person by operation of law or for any other reason,
including, without limitation, the invalidity or irregularity in whole or
in part of any Obligation or of any GranCare Document, the legal disability
of any GranCare Company or any other obligor in respect of Obligations, any
discharge of or limitation on the liability of any GranCare Company or any
other Person or any limitation on the method or terms of payment under any
Obligation, or of any GranCare Document, which may now or hereafter be
caused or imposed in any manner whatsoever (whether consensual or arising
by operation of law or otherwise), this Guaranty shall nevertheless remain
in full force and effect and shall be binding upon the Guarantor to the
same extent as if the Guarantor at all times had been the principal obligor
on all Obligations (subject as provided in Section 2 hereof).
SECTION 17. Waiver of Demand, Notice, Etc. The Guarantor hereby waives, to
the extent not prohibited by applicable law, all presentments, demands for
performance, notice of nonperformance, protests, notices of protests and
notices of dishonor in connection with the Obligations or any GranCare
Document, including but not limited to (a) notice of the existence,
creation or incurring of any new or additional obligation or of any action
or failure to act on the part of any GranCare Company, HRP, any endorser or
creditor of any GranCare Company or any other Person; (b) any notice of any
indulgence, extensions or renewals granted to any obligor with respect to
the Obligations; (c) any requirement of
21
diligence or promptness in the enforcement of rights under any GranCare
Document, or any other agreement or instrument directly or indirectly
relating thereto or to the Obligations; (d) any enforcement of any present
or future agreement or instrument relating directly or indirectly thereto
or to the Obligations; (e) notice of any of the matters referred to in
Section 9 above; (f) any defense of any kind which the Guarantor may now
have with respect to his liability under this Guaranty; (g) any right to
require HRP, as a condition of enforcement of this Guaranty, to proceed
against any GranCare Company or any other Person or to proceed against or
exhaust any security held by HRP at any time or to pursue any other right
or remedy in HRP's power before proceeding against the Guarantor; (h) any
defense that may arise by reason of the incapacity, lack of authority,
death or disability of any other Person or Persons or the failure of HRP to
file or enforce a claim against the estate (in administration, bankruptcy,
or any other proceeding) of any other Person or Persons; (i) any defense
based upon an election of remedies by HRP; (j) any defense arising by
reason of any "one action" or "anti-deficiency" law or any other law which
may prevent HRP from bringing any action, including a claim for deficiency,
against the Guarantor, before or after HRP's commencement of completion of
any foreclosure action, either judicially or by exercise of a power of
sale; (k) any defense based upon any lack of diligence by HRP in the
collection of any Obligation; (l) any duty on the part of HRP to disclose
to the Guarantor any facts HRP may now or hereafter know about any GranCare
Company or any other obligor in respect of Obligations; (m) any defense
arising because of an election made by HRP under Section 1111(b)(2) of the
Federal Bankruptcy Code; (n) any defense based on any borrowing or grant of
a security interest under Section 364 of the Federal Bankruptcy Code; (o)
and any defense based upon or arising out of any defense which any GranCare
Company or any other Person may have to the payment or performance of the
Obligations (including but not limited to failure of consideration, breach
of warranty, fraud, payment, accord and satisfaction, strict foreclosure,
statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability and usury). Guarantor acknowledges and agrees that each of the
waivers set forth herein on the part of the Guarantor is made with
Guarantor's full knowledge of the significance and consequences thereof and
that, under the circumstances, the waivers are reasonable. If any such
waiver is determined to be contrary to Applicable Law such waiver shall be
effective only to the extent not prohibited by such Applicable Law.
SECTION 18. Reinstatement. This Guaranty shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations or the payment of the Deposit Amount (as
hereinafter defined) is rescinded or must otherwise be restored or returned
by HRP upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any GranCare Company or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, any GranCare Company or any substantial part of its
property, or otherwise, all as though such payments had not been made.
22
SECTION 19. Payments. The Guarantor hereby agrees that the Obligations, and
all amounts payable hereunder, will be paid to HRP without set-off or
counterclaim in U.S. Dollars at the office of HRP located at 000 Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or to such other location as HRP shall
notify the Guarantor.
SECTION 20. Representations and Warranties. The Guarantor represents and
warrants that:
(1) Corporate Existence. The Guarantor is a corporation duly
incorporated and validly existing under the laws of the jurisdiction of its
incorporation, and is duly licensed or qualified as a foreign corporation
in all states wherein the nature of its property owned or business
transacted by it makes such licensing or qualification necessary, except
where the failure to be licensed or to so qualify could not have a Material
Adverse Effect.
(2) No Violation. The execution, delivery and performance of this
Guaranty will not contravene any provision of law, statute, rule or
regulation to which the Guarantor or any of its Subsidiaries is subject or
any judgment, decree, franchise, order or permit applicable to the
Guarantor or any of its Subsidiaries, or conflict or be inconsistent with
or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of
the property or assets of the Guarantor or any of its Subsidiaries pursuant
to the terms of any agreement or instrument to which the Guarantor or any
of its Subsidiaries is party, or violate any provision of the respective
corporate charters or bylaws of the Guarantor or any of its Subsidiaries.
(3) Corporate Authority and Power. The execution, delivery and
performance of this Guaranty is within the corporate powers of the
Guarantor and has been duly authorized by all necessary corporate action.
(4) Enforceability. This Guaranty has been duly executed and
delivered by the Guarantor, and this Guaranty constitutes the valid and
binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and
except as enforceability may be subject to general principles of equity,
whether such principles are applied in a court of equity or at law.
(5) Governmental Approvals. No order, permission, consent, approval,
license, authorization, registration or validation of, or filing with, or
exemption by, any governmental authority is required to authorize, or is
required in connection with, the execution, delivery and performance of
this Guaranty, or the taking of any action contemplated hereby or thereby.
23
(6) Financial Statements. The financial statements of the Guarantor
contained in the Guarantor's Registration Statement on Form S-4 filed in
connection with the Merger, fairly present the consolidated financial
condition of the Guarantor and its Subsidiaries as of their date of
presentation, and the consolidated results of their operations and their
consolidated cash flows for the respective fiscal period then ended. The
Financial Statements (including in each case the related schedules and
notes) (i) have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as disclosed therein), (ii) are
true, complete and correct, and (iii) do not omit any material fact
necessary to make them not misleading.
(7) No Adverse Change. Other than as set forth in or contemplated by
the Guarantor's Registration Statement on Form S-4 filed in connection with
the Merger, since May 31, 1996, there has been no change in the business
operations, management or properties, or in the condition, financial or
other, of the Guarantor and its Subsidiaries taken as a whole that has had
or could have a Material Adverse Effect.
(8) Litigation. The Guarantor has no notice or knowledge of any
action, suit or proceeding pending or threatened against or affecting it at
law or in equity or before or by any governmental department, court,
commission, board, bureau, agency or instrumentality, domestic or foreign,
or before any arbitrator of any kind that would, to the best of its
knowledge, information or belief, materially and adversely affect its
ability to perform its obligations under this Guaranty.
(9) No Restrictions. Neither the Guarantor nor any of its
Subsidiaries has entered into any agreement or arrangement, written or
oral, direct or indirect, with any GranCare Company that either now or in
the future would have the effect of restricting the ability of any GranCare
Company, or would conflict with the right of any GranCare Company, to (a)
enter into any new or additional mortgage or lease financing, or any other
transaction, with HRP (including, without limitation, any transaction
contemplated by Section 9.27 of the Acquisition Agreement), (b) extend or
renew the term of any mortgage or lease financing with HRP, (c) exercise
any option to purchase property from HRP or (d) take any other action
permitted or required to be taken by any GranCare Company pursuant to the
terms of any GranCare Document.
SECTION 21. Covenants. The Guarantor hereby covenants and agrees with HRP
that, from and after the date of this Guaranty until the Obligations are
paid in full or until the Release Date (as defined in Section 16 hereof):
(1) the Guarantor shall not enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, sub-lease, transfer or
otherwise dispose of in one transaction or a series of transactions, all or
substantially all of its business, property or fixed assets, whether now owned
or hereafter
24
acquired, except that the Guarantor may merge or consolidate with any Person, or
convey, transfer or lease substantially all of its assets so long as
(1) no condition or event shall exist, either before or immediately
after giving effect to such merger or consolidation, or such conveyance,
transfer or lease, that constitutes a Guarantor Default;
(2) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Guarantor, as the case may be, shall
be a corporation organized and existing under the laws of the United States
or any State thereof (including the District of Columbia), and, if the
Guarantor is not such corporation, (i) such corporation shall have executed
and delivered to HRP its assumption of the due and punctual performance and
observance of each covenant and condition of this Guaranty to the same
extent and with the same effect as though such corporation was a party
hereto and was named and defined as the "Guarantor" herein and (ii) shall
have caused to be delivered to HRP an opinion of nationally recognized
independent counsel, or other independent counsel reasonably satisfactory
to HRP, to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and comply with
the terms hereof; and
(1) if the survivor of any such merger is the Guarantor, the
Consolidated Net Worth of the Guarantor giving effect to such
merger shall not be less than $100,000,000; or
(2) if the successor formed by such consolidation or the survivor of
such merger, if other than the Guarantor, or the Person that
acquires by conveyance, transfer or lease substantially all of
the assets of the Guarantor as an entirety, as the case may be,
giving effect to such consolidation or merger, or such
conveyance, transfer or lease, has either (x) a Consolidated Net
Worth of not less than $100,000,000 or (y) (A) paid HRP an amount
in immediately available funds equal to the Default Amount, free
and clear of claims of third parties, to be held by HRP as cash
collateral for the payment of the Guarantor's obligations
hereunder (such amounts to be applied by HRP to the payment and
performance of the obligations of the Guarantor (and its
successors) hereunder as and when the same become due and payable
in accordance with the provisions of this Guaranty) and (B)
executed and delivered a cash collateral pledge agreement in
favor of HRP in respect of such cash collateral (together with
UCC-1 financing statements or similar instruments if requested by
HRP, and in form satisfactory to HRP), which cash collateral
pledge agreement shall be in form and substance satisfactory to
HRP in its sole discretion.
25
(2) The Guarantor shall not, and shall not permit any of its Subsidiaries
to, enter into any agreement or arrangement, written or oral, direct or
indirect, with any GranCare Company that would have the effect of restricting
the ability of any GranCare Company, or would conflict with the right of any
GranCare Company, to (a) enter into any new or additional mortgage or lease
financing, or any other transaction, with HRP (including, without limitation,
any transaction contemplated by Section 9.27 of the Acquisition Agreement), (b)
extend or renew the term of any mortgage or lease financing with HRP, (c)
exercise any option to purchase property from HRP or (d) take any other action
permitted or required to be taken by any GranCare Company pursuant to the terms
of any GranCare Document.
SECTION 22. Guarantor Events of Default. If one or more of the following
events (a "Guarantor Event of Default") shall have occurred:
(1) the Guarantor shall fail to make punctual payment of any amount
payable hereunder as the same shall become due and payable; or
(2) any representation or warranty of the Guarantor contained in this
Guaranty, or any statement or certificate furnished pursuant to any
provision of this Guaranty or the Amendment, shall have been false,
incorrect or misleading in any material respect when made or so certified
to; or
(3) the Guarantor shall breach any of the provisions of, or fail duly
to observe or perform any covenant, agreement or provision contained in,
this Guaranty; or
(4) any obligation of the Guarantor in respect of any Indebtedness or
any Contingent Obligation with an aggregate amount of principal outstanding
(whether or not due) exceeding $10,000,000 (but excluding, in any event,
the obligations of the Guarantor hereunder) shall be declared to be or
shall become due and payable prior to the stated maturity thereof, or such
Indebtedness or Contingent Obligation shall not be paid as and when the
same becomes due and payable, or there shall occur and be continuing any
default under any instrument, agreement or evidence of indebtedness
relating to any such Indebtedness the effect of which is to permit the
holder or holders of such instrument, agreement or evidence of
indebtedness, or a trustee, agent or other representative on behalf of such
holder or holders, to cause such Indebtedness to become due prior to its
stated maturity; or
(5) the Guarantor shall apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator
of itself or of all or a substantial part of its property, make a general
assignment for the benefit of its creditors, commence a voluntary case
under the Bankruptcy Code, file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or readjustment of debts, fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against
it in an involuntary case under
26
the Bankruptcy Code, or take any corporate action for the purpose of
effecting any of the foregoing; or
(6) a proceeding or case shall be commenced, without the application
or consent of the Guarantor thereof in any court of competent jurisdiction,
seeking its liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of its debts, the appointment of a trustee,
receiver, custodian, liquidator or the like of the Guarantor or of all or
any substantial part of its assets, or similar relief in respect of the
Guarantor under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such proceeding or
case shall continue undismissed, or an order, judgment or decree approving
or ordering any of the foregoing shall be entered and continue unstayed and
in effect, for a period of 60 days; or an order for relief against the
Guarantor shall be entered in an involuntary case under the Bankruptcy
Code; or
(7) A judgment or judgments for the payment of money in excess of
$[10,000,000] (net of insurance proceeds) in the aggregate shall be
rendered against the Guarantor and any such judgment or judgments shall not
have been vacated, discharged, stayed or bonded pending appeal within
thirty (30) days from the entry thereof;
THEN, notwithstanding that no GranCare Event of Default may then have occurred
and be continuing, (a) in the event of a Guarantor Event of Default described in
paragraph (E) or (F) above, there shall become due and payable to HRP, and the
Guarantor shall immediately pay HRP, without notice or demand of any kind
whatsoever, an amount in immediately available funds equal to the Default
Amount, and (b) in the event of any other Guarantor Event of Default, upon
notice from HRP specifying such Guarantor Event of Default, there shall become
due and payable to HRP, and the Guarantor shall immediately pay HRP, an amount
in immediately available funds equal to Default Amount. The amounts so paid to
HRP shall be held as collateral for the payment of the Guarantor's obligations
hereunder. Such amounts shall be applied by HRP to the payment and performance
of the obligations of the Guarantor hereunder as and when the same become due
and payable in accordance with the provisions of this Guaranty.
SECTION 23. Payment of Default Amount. Notwithstanding anything herein to
the contrary, upon the Guarantor's (i) payment to HRP of an amount in
immediately available funds equal to the Default Amount, free and clear of
claims of third parties, to be held by HRP as cash collateral for the
payment of the Guarantor's obligations hereunder (such amounts to be
applied by HRP to the payment and performance of the obligations of the
Guarantor (and its successors) hereunder as and when the same become due
and payable in accordance with the provisions of this Guaranty) and (ii)
execution and delivery of a cash collateral pledge agreement in favor of
HRP in respect of such cash collateral (together with executed UCC-1
financing statements or similar instruments if requested by HRP, and in
form satisfactory to HRP), which cash collateral pledge agreement shall be
in form and substance satisfactory to HRP in its sole discretion (the date
upon which the
27
conditions in clauses (i) and (ii) have been satisfied, the "Release
Date"), Sections 14 and 15 hereof shall have no further force and effect,
and (subject to Section 11 hereof) HRP shall look solely to such cash
collateral for payment of the Guarantor's obligations hereunder (so long as
such cash collateral shall not thereafter become subject to any Lien or
other claim of any Person, other than the rights of the Guarantor
hereunder). Without limiting the foregoing, such cash collateral pledge
agreement shall provide that (A) the amount paid to HRP pursuant to this
Section 16 , less amounts applied by HRP from time to time to the payment
of the Obligations (the "Deposit Balance"), shall bear interest at a per
annum rate equal to the lesser of eight percent (8%) per annum or the T-
Bill Rate (as hereinafter defined), which interest shall be payable to the
Guarantor or to its order on each anniversary of the date of the payment of
such amount to HRP (the "Deposit Payment Date") so long as no GranCare
Event of Default shall have occurred and be continuing on such interest
payment date, (B) the Deposit Balance, together with accrued but unpaid
interest thereon, shall be released to the Guarantor or to its order upon
the payment in full of the Obligations, and (C) the Deposit Balance and
accrued interest thereon may be commingled with the general assets of HRP.
The term "T-Bill Rate" means, with respect to the Deposit Balance, the
yield to maturity implied by (i) the yields reported as of 10:00 A.M. (New
York City time) on the Deposit Payment Date on the display designated as
"Page 678" on the Telerate Access Service (or such other display as may
replace Page 678 on Telerate Access Service) for 30-year U.S. Treasury
securities, or (ii) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which such
yields have been so reported as of the Deposit Payment Date in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for 30-year U.S. Treasury securities. Such implied yield will
be determined, if necessary, by converting U.S. Treasury bill quotations to
per annum bond-equivalent yields in accordance with accepted financial
practice.
SECTION 24. Supply Contracts. The Guarantor agrees that all agreements or
arrangements between the Guarantor and its Subsidiaries or representative
or agents on the one hand, and AMS or GCI on the other, providing for
pharmaceuticals or other supplies or services to be furnished to any
facility operated by AMS or GCI, shall provide that each such agreement or
arrangement shall be terminated and of no further force and effect, and all
obligations and liabilities thereunder released and terminated (other than
obligations to pay for services or supplies previously rendered or
furnished), at any time upon notice to the Guarantor by HRP after either
(i) HRP terminates such lease with AMS or GCI, accelerates the maturity of
any promissory note of AMS or GCI, or forecloses upon or exercises remedies
of like effect in respect of the stock of GCI or AMS pledged to HRP or (ii)
the occurrence of an Event of Default hereunder or under any other GranCare
Document involving the bankruptcy or insolvency of New GranCare, AMS, GCI
or the Guarantor.
28
SECTION 25. Severability. Any provision of this Guaranty 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, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 26. Additional Guaranties. This Guaranty shall be in addition to any
other guaranty or other security for the Obligations, and it shall not be
prejudiced or rendered unenforceable by the invalidity of any such other
guaranty or security.
SECTION 27. Paragraph Headings. The paragraph headings used in this Guaranty
are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
SECTION 28. No Waiver, Cumulative Remedies. HRP shall not by any act (except
by a written instrument pursuant to Paragraph 22 hereof), delay,
indulgence, omission or otherwise, be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or in any breach of
any of the terms and conditions hereof. No failure to exercise, nor any
delay in exercising, on the part of HRP, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by HRP of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which HRP
would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and
are not exclusive of any rights or remedies provided by law.
SECTION 29. Waivers and Amendments; Successors and Assigns. None of the
terms or provisions of this Guaranty may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the
Guarantor and HRP, provided that any provision of this Guaranty may be
waived by HRP in a letter or agreement executed by HRP or by telecopy from
HRP. This Guaranty shall be binding upon the successors and assigns of the
Guarantor and shall inure to the benefit of HRP and its successors and
assigns.
SECTION 30. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; GOVERNING LAW.
THE GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY NOW OR HEREAFTER
HAVE TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING WHICH ARISES OUT OF
OR BY REASON OF THIS GUARANTY, ANY GRANCARE DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY.
29
BY ITS EXECUTION AND DELIVERY OF THIS GUARANTY, THE GUARANTOR (1) ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT OR
PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
GUARANTY, ANY GRANCARE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ADDITION TO ANY OTHER COURT IN WHICH SUCH ACTION, SUIT OR PROCEEDING
MAY BE BROUGHT; (2) IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED BY
ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR PROCEEDING IN WHICH IT SHALL HAVE
BEEN SERVED WITH PROCESS IN THE MANNER HEREINAFTER PROVIDED; (3) TO THE EXTENT
THAT IT MAY LAWFULLY DO SO, WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION,
AS A DEFENSE OR OTHERWISE, IN SUCH ACTION, SUIT OR PROCEEDING ANY CLAIM THAT IT
IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT ITS PROPERTY
IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION, SUIT OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS
IMPROPER; AND (4) AGREES THAT PROCESS MAY BE SERVED UPON IT IN ANY SUCH ACTION,
SUIT OR PROCEEDING IN THE MANNER PROVIDED BY CHAPTER 223A OF THE GENERAL LAWS OF
MASSACHUSETTS, RULE 4 OF THE MASSACHUSETTS RULES OF CIVIL PROCEDURE OR RULE 4 OF
THE FEDERAL RULES OF CIVIL PROCEDURE.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
SECTION 31. Notices. All notices under this Guaranty shall be in writing,
and shall be delivered by hand, by a nationally recognized commercial
overnight delivery service, by first class mail or by telecopy, delivered,
addressed or transmitted, if to HRP, at 000 Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: President (telecopy no. 617-332-2261), with
a copy to Xxxxxxxx & Worcester LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxxxx X. Xxxxxxxxxx, Esq. (telecopy no.
617-338-2880), and if to the Guarantor, at its address or telecopy number
set out below its signature in this Guaranty. Such notices shall be
effective: in the case of hand deliveries, when received; in the case of an
overnight delivery service, on the next business day after being placed in
the possession of such delivery service, with delivery charges prepaid; in
the case of mail, three days after deposit in the postal system, first
class postage prepaid; and in the case of telecopy notices, when electronic
indication of receipt is received. Either party may change its address and
telecopy number by written notice to the other delivered in accordance with
the provisions of this Section.
30
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be
duly executed and delivered as of the date first above written.
VITALINK PHARMACY SERVICES, INC.
By:
--------------------------------
Title:
--------------------------
Address for Notices:
Vitalink Pharmacy Services, Inc.
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
31
EXHIBIT E TO CONSENT
AND AMENDMENT
SCHEDULE 1.1 TO ACQUISITION AGREEMENT, AGREEMENT TO LEASE
AND MORTGAGE LOAN AGREEMENT
SCHEDULE OF TRANSACTION DOCUMENTS
---------------------------------
(1) The Acquisition Agreement, Agreement to Lease and Mortgage Loan
Agreement dated as of December 28, 1990 among HRP, HMI, GranCare, AMS and AMS
Properties;
(2) The Facility Leases dated as of December 28, 1990 or March 27, 1992
between HRP, as landlord, and AMS Properties, as tenant;
(3) A Master Lease Document General Terms and Conditions dated as of
December 28, 1990 between HRP, as landlord, and AMS Properties, as tenant;
(4) A Promissory Note dated as of October 1, 1994 by AMS Properties to HRP
in the original principal amount of $11,500,000;
(5) A Guaranty, dated as of December 28, 1990, from Old GranCare in favor
of HRP pursuant to which all obligations of AMS Properties are guaranteed; the
obligations and liabilities under such Guaranty having been assumed by New
GranCare pursuant to the Assumption Agreement;
(6) A Limited Guaranty from Vitalink in favor of HRP pursuant to which the
obligations of New GranCare, AMS Properties and GCIHCC are guaranteed as
provided therein;
(7) A Guaranty, Cross Default and Cross Collateralization Agreement, dated
as of June 30, 1992, from AMS Properties and GCIHCC in favor of HRP;
(8) Memoranda of Lease, each dated as of December 28, 1990 or March 27,
1992 recorded with the Registry of Deeds of the appropriate county with respect
to each Leased Property;
(9) Precautionary UCC Financing Statements by AMS Properties, showing AMS
Properties, as lessee, and HRP, as lessor, filed with the appropriate State and
County UCC filing office with respect to each Leased Property;
(10) Amended and Restated HRP Shares Pledge Agreement, dated as of June 30,
1992, between HRP and AMS Properties, pursuant to which AMS Properties has
pledged the HRP Shares to HRP to secure its obligations to HRP;
32
(11) Amended and Restated Voting Trust Agreement, dated as of June 30, 1992
from AMS Properties to HRPT Advisors, Inc., as voting trustee;
(1) Voting Trust Certificate;
(2) Stock Power;
(12) The Mortgage and Security Agreements each dated as of March 31, 1995
by AMS Properties as mortgagor in favor of HRP as mortgagee with respect to the
Northwest and River Hills West Mortgaged Properties;
(13) A Security Agreement, dated as of December 28, 1990 from AMS
Properties to HRP, granting HRP a security interest in all now owned and
hereafter acquired tangible personal property and all accounts receivable,
contract rights and general intangibles of AMS Properties;
(14) A Collateral Assignment of Contracts and Permits, dated as of December
28, 1990 from AMS Properties to HRP, assigning to HRP all contracts and permits
of AMS Properties;
(15) UCC Financing Statements/Fixture Filings by AMS Properties, showing
AMS Properties, as debtor, and HRP, as secured party, filed with the appropriate
UCC filing office and registries of deeds to perfect the interests of HRP as a
secured creditor under the security instruments referred to above;
(16) An Amended and Restated Renovation Funding Agreement dated as of
January 13, 1992, between AMS Properties and HRP;
(17) A Memorandum of Option and Right of First Refusal dated as of March
30, 1995, between AMS Properties and HRP relating to the option to purchase the
Mortgaged Properties granted by AMS Properties to HRP (the "Option Agreement");
----------------
(18) Renovation Loan Agreement, dated as of March 28, 1992, by and between
AMS Properties and HRP relating to certain renovations to be made at the
Xxxxxxxxxxx East Health Care Center, Milwaukee, Wisconsin;
(19) Promissory Note, dated as of March 28, 1992, in the original principal
amount of $1,250,000, executed by AMS Properties and accepted by HRP;
(20) Security Agreement, dated as of March 28, 1992, made by AMS Properties
in favor of HRP;
(21) A Pledge Agreement dated as of December 28, 1990, as supplemented by a
Pledge Agreement Supplement dated as of December 29, 1993, from Old GranCare (as
successor to AMS) to HRP pursuant to which all shares of capital stock of AMS
Properties are pledged to HRP, together with certificates relating to the AMS
Properties shares and stock powers relating to such shares; the obligations and
liabilities under such Pledge Agreement and Pledge Agreement Supplement having
been assumed by New GranCare pursuant to the Assumption Agreement;
33
(22) A Subordination Agreement dated as of December 28, 1990 among GranCare
as subordinate creditor, AMS Properties as debtor, and HRP as senior creditor;
the obligations and liabilities under such Subordination Agreement having been
assumed by New GranCare pursuant to the Assumption Agreement;
(23) A Subordination Agreement dated as of December 28, 1990 among HMI as
subordinate creditor, AMS Properties as debtor and HRP as senior creditor;
(24) A Subordination Agreement dated as of December 28, 1990 among AMS
Green Tree as subordinate creditor, AMS Properties as debtor and HRP as senior
creditor;
(25) A Subordination Agreement dated as of December 28, 1990 among Am-Cal
as subordinate creditor, AMS Properties as debtor and HRP as senior creditor;
(26) Assignment of Sublease Documents dated ___________, 1992 between AMS
Properties and HRP, re: Friendship Manor Sublease;
(27) Consent Letter dated __________, 1992 by HRP and consented to by
GranCare and AMS Properties re: Friendship Manor Sublease;
(28) Assignment of Leases and Rents dated __________, 1992 by AMS
Properties re: Friendship Manor Sublease;
(29) Consent Letter dated March 31, 1995 by HRP and consented to by
GranCare, AMS Properties and GCIHCC re: Subleases;
(30) Assignment of Sublease Documents dated March 31, 1995 between AMS
Properties and HRP;
(31) Assignment of Leases and Xxxxx dated March 31, 1995 by AMS Properties
re: Subleases;
(32) The Consent and Amendment to Transaction Documents dated as of
December __, 1996 among AMS Properties, GCIHCC, Old GranCare and New GranCare;
(33) An Amendment to Acquisition Agreement, Agreement to Lease and Mortgage
Loan Agreement dated as of December 29, 1993 among Old GranCare, AMS Properties,
GCIHCC and HRP;
(34) A Rescission Agreement and Amendment to Transaction Documents dated as
of October 1, 1994 among Old GranCare, AMS Properties, GCIHCC and HRP; and
(35) The Assumption Agreement by New GranCare, Inc. in favor of HRP.
34
EXHIBIT F TO CONSENT
AND AMENDMENT
SCHEDULE 1 TO MASTER LEASE AGREEMENT,
GENERAL TERMS AND CONDITIONS
SCHEDULE OF TRANSACTION DOCUMENTS
---------------------------------
(36) Letter Agreement dated April 25, 1992, from HRP to GranCare, accepted
by GranCare;
(37) Closing Escrow Agreement, dated May 29, 1992, among HRP, Samaritan,
Samaritan Arizona, Samaritan California, Samaritan South Dakota and GCI and the
Title Company, as escrow agent, delivering various closing documents and
providing information and instructions regarding delivery and recording of such
documents;
(38) Master Lease Document, dated as of June 30, 1992, between HRP as
Landlord and GCI as Tenant;
(39) Facility Leases, each dated as of June 30, 1992, between HRP as
Landlord and GCI as Tenant, for each Facility;
(40) Amended and Restated HRP Shares Pledge Agreement, dated as of June 30,
1992, between HRP and AMS, pursuant to which AMS has pledged the HRP Shares to
HRP to secure its obligations to HRP;
(41) Amended and Restated Voting Trust Agreement, dated as of June 30, 1992
from AMS to HRPT Advisors, Inc., as voting trustee;
(1) Voting Trust Certificate
(2) Stock Power;
(42) Guaranty, Cross Default and Cross Collateralization Agreement, dated
as of June 30, 1992, from AMS and GCI, in favor of HRP;
(43) A Guaranty, dated as of June 30, 1992 from GranCare in favor of HRP
pursuant to which all obligations of AMS are guaranteed; the obligations and
liabilities under such Guaranty having been assumed by New GranCare, Inc.
pursuant to the Assumption Agreement referenced below;
(44) A Limited Guaranty from Vitalink Pharmacy Systems, Inc. in favor of
HRP pursuant to which the obligations of New GranCare, Inc., AMS and GCI are
guaranteed as provided therein;
35
(45) Security Agreement, dated as of June 30, 1992, from GCI to HRP,
granting HRP a security interest in all tangible and intangible personal
property and including all accounts receivable, contract rights and general
intangibles;
(46) Assignment of Contracts, Licenses and Permits, dated as of June 30,
1992, from GCI to HRP, assigning to HRP, all contracts, licences and permits
used in connection with the operation of the Facilities;
(47) Pledge Agreement, dated as of June 30, 1992 Date, from GranCare
pursuant to which all of the capital stock of GCI is pledged to HRP to secure
the obligations of GCI;
(1) Stock power relating to pledged shares;
(48) A Subordination Agreement dated as of June 30, 1992 among GranCare as
subordinate creditor, GCI as debtor, and HRP as senior creditor; the obligations
and liabilities under such Subordination Agreement having been assumed by New
GranCare pursuant to the Assumption Agreement;
(49) Subordination Agreement, dated as of June 30, 1992, among AMS as
subordinated creditor, GCI, as debtor and HRP as senior creditor, pursuant to
which all obligations of GCI to the subordinated creditor are subordinated;
(50) Representation Letter and Indemnification Agreement, dated June 30,
1992, from GranCare, AMS and GCI, with respect to, inter alia, the continued
----- ----
effectiveness of the representations and warranties made by GranCare and GCI in,
and the absence of any Defaults under, the Transaction Documents;
(51) Consent Letter dated March 31, 1995 by HRP and consented to by GCI,
GranCare and AMS re: HealthQuest Subleases;
(52) Assignment of Sublease Documents dated March 31, 1995 between GCI and
HRP re: HealthQuest Subleases;
(53) Assignment of Leases and Xxxxx dated March 31, 1995 by GCI re:
HealthQuest Subleases;
(54) Amendment to Acquisition Agreement, Agreement to Lease and Mortgage
Loan Agreement dated as of December 29, 1993 among GranCare, AMS, GCI and HRP;
(55) Rescission Agreement and Amendment to Transaction Documents dated as
of October 1, 1994 among GranCare, AMS, GCI and HRP;
(56) Consent and Amendment to Transaction Documents dated as of December
__, 1996 among AMS, GCI, Old GranCare and New GranCare; and
36
(57) Assumption Agreement by New GranCare, Inc. in favor of HRP (the
"Assumption Agreement").
---------------------
37
