EXHIBIT 10.91
FORBEARANCE AGREEMENT
FORBEARANCE AGREEMENT, dated as of November 9, 1999 (this "Forbearance
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Agreement"), to the Credit Agreement, dated as of November 4, 1997 (as amended
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by the First Amendment, dated as of July 8, 1998, the Second Amendment, dated as
of December 22, 1998, the Third Amendment, dated as of May 11, 1999, and the
Acknowledgment and Amendment, dated as of August 16, 1999, and as the same may
be amended, supplemented or otherwise modified from time to time, the "Credit
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Agreement"), among MARINER POST-ACUTE NETWORK, INC. (formerly known as Paragon
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Health Network, Inc.), a Delaware corporation (the "Borrower"), the several
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banks and other financial institutions or entities from time to time parties
thereto (the "Lenders"), BANK OF AMERICA, N.A. (formerly known as NationsBank,
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N.A.), as documentation agent, and THE CHASE MANHATTAN BANK ("Chase"), as
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administrative agent (in such capacity, the "Administrative Agent").
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W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to the
Borrower;
WHEREAS, the Borrower has advised the Agent and the Lenders of the
current existence and the imminent occurrence of certain Defaults and Events of
Default under the Credit Agreement;
WHEREAS, the Borrower has requested that the Lenders forbear from
exercising certain remedies under the Credit Agreement with respect to such
Defaults and Events of Default and the Lenders are willing to so forbear, but
only on the terms and subject to the conditions set forth herein;
WHEREAS, Chase Securities Inc. has agreed to act as the lead arranger
and book manager in arranging the consents necessary for the effectiveness of
this Forbearance Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Terms defined in the Credit Agreement and used
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herein shall, unless otherwise indicated, have the meanings given to them in the
Credit Agreement. As used in this Forbearance Agreement, terms defined in the
preamble or the recitals shall have the meanings so assigned and the following
terms shall have the following meanings:
"Basic Rent": as defined in Annex A to the to the Amended and Restated
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Participation Agreement dated as of November 4, 1997 (as amended,
supplemented or
1
otherwise modified from time to time), among Living Centers Holding Company
and the parties to the Synthetic Credit Agreement.
"Forbearance Period": the period from the date hereof to the earlier
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of (i) January 14, 2000, and (ii) the date on which the forbearance
provided in Section 2 of this Forbearance Agreement terminates in
accordance with its terms.
"HCFA": the Health Care Financing Administration.
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"Synthetic Agent": Chase in its capacity as agent under the Synthetic
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Credit Agreement.
"Synthetic Credit Agreement": the Amended and Restated Credit
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Agreement, dated as of November 4, 1997, among FBTC Leasing Corp., as
borrower, the lenders from time to time party thereto, the Synthetic Agent
and The Fuji Bank, Limited (Houston Agency), as co-agent, as amended,
supplemented or otherwise modified from time to time.
"Synthetic Forbearance Agreement": the Forbearance Agreement, dated as
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of the date hereof, among the Borrower and certain of its direct and
indirect subsidiaries that are party thereto, FBTC Leasing Corp., the
lenders party thereto, the Synthetic Agent and The Fuji Bank, Limited
(Houston Agency), as co-agent under the Synthetic Credit Agreement.
"Synthetic Guarantee": the Amended and Restated Guarantee, dated as of
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November 4, 1997, made by the Borrower and its direct and indirect
subsidiaries that are party thereto in favor of the Synthetic Agent, as the
same has been amended, supplemented or otherwise modified from time to
time.
"Synthetic Lease": the Lease, dated as of October 10, 1996 (as
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amended, supplemented or otherwise modified from time to time), between
FBTC Leasing Corp., as Lessor, and Living Centers Holding Company, as
Lessee.
2. Forbearance. The Administrative Agent and the Lenders agree to
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forbear, during the Forbearance Period, from the exercise of any rights or
remedies under the Credit Agreement, the Notes and the other Loan Documents
(including, without limitation, the right to accelerate the Obligations) in
respect of Defaults or Events of Default arising as a result of (a) events or
conditions first arising or coming into existence prior to the date hereof, (b)
the Borrower's failure to pay interest on, or letter of credit, commitment or
similar fees in respect of, the obligations outstanding under the Credit
Agreement and the Deficiency Note first becoming due and payable during the
Forbearance Period, (c) the Borrower's failure to pay interest due and owing on
November 1, 1999 in respect of the Senior Subordinated Notes, (d) the Borrower's
failure to pay principal due and owing on December 31, 1999 on the Term Loans
(collectively, the "December 31 Amortization Payments") or (e) the events or
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conditions that are the subject of the Synthetic Forbearance Agreement; provided
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that the Forbearance Period shall immediately terminate in the event that the
Borrower breaches its obligations under Section 3 below.
2
3. Application of Prudent Buyer Settlement Proceeds. In
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consideration for the forbearance granted hereunder, and in order to induce the
Lenders to enter into this Forbearance Agreement, the Borrower shall pay to
Chase, as Administrative Agent and Synthetic Agent, within one Business Day of
its receipt thereof all amounts representing the "Paragon Disallowance
Settlement" (as that term is used on page 9 of the bank books presented by the
Borrower to the Lenders at the meeting of Lenders in New York City on November
3, 1999) and received, in cash, from HCFA or any other Governmental Authority by
the Borrower or any Subsidiary Guarantor in respect of charges previously
disallowed for allegedly failing to satisfy HCFA's "prudent buyer" standard.
Any amounts so paid to Chase shall be applied (without duplication) as follows:
first, to the payment in full of interest, Basic Rent and fees due and owing (at
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the applicable non-default rates) on the obligations outstanding under the
Credit Agreement, the Synthetic Credit Agreement, the Synthetic Lease and the
Deficiency Note, ratably in the proportion that the amount (without duplication)
of interest, Basic Rent and fees then due and owing under each of the Credit
Agreement, the Synthetic Credit Agreement, the Synthetic Lease or the Deficiency
Note bears to the aggregate amount (without duplication) of all interest, Basic
Rent and fees then due and owing under the Credit Agreement, the Synthetic
Credit Agreement, the Synthetic Lease and the Deficiency Note, second, to the
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extent any such amounts are so paid to Chase prior to December 31, 1999, to
prepayment of the Term Loans in accordance with Section 2.17(b) and third, to
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the extent that such amounts are so paid to Chase on or after December 31, 1999
and the December 31 Amortization Payments have not otherwise been paid in full,
to the payment in full of the December 31 Amortization Payments, ratably in
accordance with the proportion that each December 31 Amortization Payment bears
to the aggregate of all of the December 31 Amortization Payments (with any
excess amount to be applied to prepayment of the Term Loans in accordance with
Section 2.17(b)).
4. Conditions to Effectiveness. The forbearance and agreements
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provided for herein shall become effective, and shall be deemed to be effective
as of the date hereof, upon the Administrative Agent's receipt of counterparts
of this Forbearance Agreement duly executed and delivered by the Borrower and
the Required Lenders. The execution and delivery of this Forbearance Agreement
by any Lender shall be binding upon each of its successors and assigns
(including Transferees of its commitments and Loans in whole or in part prior to
effectiveness hereof) and binding in respect of all of its Commitments and
Loans, including any acquired subsequent to its execution and delivery hereof
and prior to the effectiveness hereof.
5. Representations and Warranties. The Borrower, as of the date
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hereof and after giving effect to the agreements contained herein, hereby
confirms, reaffirms and restates that representations and warranties made by it
in Section 4 of the Credit Agreement (other than the last sentence of Section
4.7 and other than with respect to any matters previously disclosed in writing
to the Lenders or disclosed in any of the Borrower's public filings, including,
without limitation, matters disclosed in its financial statements); provided,
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that each reference to the Credit Agreement therein shall be deemed to be a
reference to the Credit Agreement as amended.
3
6. Payment of Expenses. The Borrower agrees to pay or reimburse the
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Administrative Agent for all of its out-of-pocket costs and expenses incurred in
connection with this Forbearance Agreement and any other documents prepared in
connection herewith, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent.
7. Reference to and Effect on the Loan Documents; Limited Effect.
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This Forbearance Agreement shall be deemed to be a Loan Document for all
purposes. The execution, delivery and effectiveness of this Forbearance
Agreement shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or any Agent under any of the Loan
Documents, nor constitute a waiver of or forbearance with respect to any
provisions of any of the Loan Documents, provided that the forbearance provided
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hereunder shall constitute a forbearance under the Deficiency Note. Except as
expressly provided herein, all of the provisions and covenants of the Credit
Agreement and the other Loan Documents are and shall continue to remain in full
force and effect in accordance with the terms thereof and are hereby in all
respects ratified and confirmed.
8. Counterparts. This Forbearance Agreement may be executed by one
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or more of the parties hereto in any number of separate counterparts (which may
include counterparts delivered by facsimile transmission) and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Any executed counterpart delivered by facsimile transmission shall
be effective as for all purposes hereof.
9. GOVERNING LAW. THIS FORBEARANCE AGREEMENT AND THE RIGHTS AND
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OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Forbearance
Agreement to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
MARINER POST-ACUTE NETWORK, INC.
By:____________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By:____________________________________
Name:
Title:
BANK OF AMERICA, N.A.
By:____________________________________
Name:
Title:
5
ABN AMRO Bank N.V.
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
6
Alliance Investments, Limited
By:____________________________________
Name:
Title:
7
Allstate Insurance Company
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
8
AmSouth Bank of Alabama
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
9
Arab Banking Corporation (B.S.C.)
By:__________________________________
Name:
Title:
10
Archimedes Funding, L.L.C.,
By: ING Capital Advisors, Inc.,
As Collateral Manager
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
11
Ares Leveraged Investment Fund, LP
By: Ares Management L.P.
By:_________________________________
Name:
Title:
12
Balanced High Yield Fund I Ltd.
By: BHF (USA) Capital Corporation, As
Attorney-In-Fact
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
13
Bank Austria Creditanstalt Corporate Finance Inc.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
14
Bank of America, N.A.
By:________________________________
Name:
Title:
00
Xxx Xxxx xx Xxxx Xxxxxx
By:_______________________
Name:
Title:
00
Xxxx xx Xxxxxxxx
By:____________________________
Name:
Title:
17
Bankers Trust Company
By:_________________________
Name:
Title:
18
Banque Worms Capital Corporation
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
00
Xxxxxxxxx Xxxx XXX
By: General Re-New England Asset
Management, Inc., as Collateral Manager
By:__________________________________________
Name:
Title:
00
Xxxxxxxxxx Xxxx xxx Xxxxxxxxxxx XX,
Xxx Xxxx Branch
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
21
Bear Xxxxxx Investment Products, Inc.
By:___________________________________
Name:
Title:
22
BHF(USA) Capital Corporation
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
23
Captiva Finance Ltd.
By:_____________________
Name:
Title:
24
Ceres Finance Ltd.
By:________________________
Name:
Title:
25
Conseco Capital Management, Inc.
By:__________________________________
Name:
Title:
26
Credit Lyonnais New York Branch
By:___________________________
Name:
Title:
27
CypressTree Investment Partners I, Ltd.,
By: CypressTree Investment Management
Company, Inc., as Portfolio Manager
By:_____________________________________
Name:
Title:
00
XXX Xxxxxxx Xxxxxxx, Xxx.
By:_________________________
Name:
Title:
00
Xxxxxxxx Xxxx XX, Xxx Xxxx and Grand Cayman
Branches
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
30
Xxxxx Xxxxx Senior Income Trust
By: Xxxxx Xxxxx Management,
As Investment Advisor
By:________________________________
Name:
Title:
31
Erste Bank Der
Oesterreichishen Sparkassen AG
By:______________________________
Name:
Title:
By:_______________________________
Name:
Title:
32
First American National Bank
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
First Source Financial LLP
By: First Source Financial, Inc.,
its Agent/Manager
By:________________________________
Name:
Title:
First Union National Bank N.C.
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
Floating Rate Portfolio
By: INVESCO Senior Secured Management
Inc., as attorney in fact
By:____________________________________
Name:
Title:
Foothill Partners III, LP
By:_____________________________
Name:
Title:
Franklin Mutual Advisors, Inc.
By:_______________________________
Name:
Title:
The Fuji Bank, Limited
By:___________________________________
Name:
Title:
General Electric Capital Corporation
By:_______________________________
Name:
Title:
Xxxxxxx Xxxxx Credit Partners L.P.
By:____________________________________
Name:
Title:
HSBC Bank,U.S.A.
By:____________________________
Name:
Title:
Indosuez Capital Funding III, Limited
By: Indosuez Capital, as Portfolio Manager
By:___________________________________
Name:
Title:
The Industrial Bank of Japan, Limited
By:___________________________________
Name:
Title:
Kislak National Bank
By: ING Capital Advisors, Inc.,
As Investment Advisors
By:_____________________________
Name:
Title:
KZH III LLC
By:____________________
Name:
Title:
KZH Pamco LLC
By:____________________________
Name:
Title:
KZH - CNC LLC
By:_____________________
Name:
Title:
KZH - ING-3 LLC
By:___________________________
Name:
Title:
KZH Riverside LLC
By:____________________
Name:
Title:
KZH - Soleil LLC
By:____________________________
Name:
Title:
KZH - Shoshone LLC
By:_____________________________
Name:
Title:
KZH - Sterling LLC
By:_____________________________
Name:
Title:
Xxxxxxx Xxxxx Debt Strategies Portfolio
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By:__________________________________
Name:
Title:
Xxxxxxx Xxxxx Global Investment Series: Income
Strategies Portfolio
By: Xxxxxxx Xxxxx Asset Management, L.P., as
Investment Advisor
By:_________________________________
Name:
Title:
Xxxxxxx Xxxxx Prime Rate Portfolio
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By:________________________________
Name:
Title:
Xxxxxxx Xxxxx Senior Floating Rate Fund, Inc.
By:________________________________________
Name:
Title:
The Mitsubishi Trust and Banking Corporation
By:________________________________
Name:
Title:
ML CBO IV (Cayman) Ltd.
By: Highland Capital Management, L.P., as
Collateral Manager
By:__________________________
Name:
Title:
ML Debt Strategies Fund, Inc.
By:_____________________________
Name:
Title:
ML CLO XII Pilgrim America (Cayman), Ltd.
By: Xxxxxxx Investments, Inc., as its
Investment Manager
By:__________________________________
Name:
Title:
Natexis Banque BFCE
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
National City Bank of Indiana
By:______________________________
Name:
Title:
OCM Administrative Services II LLC
By:_________________________________
Name:
Title:
Olympic Funding Trust, Series 1999-1
By:___________________________________
Name:
Title:
ORIX USA Corporation
By:_____________________
Name:
Title:
Pacific Life CBO 1998-1 LTD
By: Pacific Life Insurance Company,
as Collateral Manager
By:______________________________
Name:
Title:
PAMCO Cayman Ltd.
By: Highland Capital Management, L.P., as
Collateral Manager
By:________________________________________
Name:
Title:
XXX Capital Funding L.P.
By: Highland Capital Management, L.P., as
Collateral Manager
By:_______________________________________
Name:
Title:
Paribas
By:____________________________
Name:
Title:
By:___________________________
Name:
Title:
Paribas Capital Funding LLC
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Pilgrim Prime Rate Trust
By: Pilgrim Investments, Inc., as its Investment
Manager
By:____________________________________________
Name:
Title:
Royalton Company
By: Pacific Investments Management Company,
as its Investment Advisor
By: PIMCO Management Inc., a general
partner
By:_____________________________________
Name:
Title:
Senior Debt Portfolio
By: Boston Management and Research, as
Investment Advisor
By:___________________________________
Name:
Title:
Senior High Income Portfolio, Inc.
By:___________________________________
Name:
Title:
SEQUILS - Pligrim I Ltd.
By:_____________________________
Name:
Title:
Skandinaviska Enskilda Xxxxxx XX (publ.)
New York Branch
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
Societe Generale
By:_______________________________
Name:
Title:
Southern Pacific Bank
By:___________________________
Name:
Title:
SPS SWAPS
By:_________________________
Name:
Title:
SPS High Yield Loan Trading
By:_________________________________
Name:
Title:
Strata Funding Ltd.
By:________________________
Name:
Title:
The Sumitomo Bank, Limited, New York Branch
By:___________________________________________
Name:
Title:
Toronto Dominion Bank (Texas), Inc.
By:___________________________________
Name:
Title:
Transamerica Business Credit Corporation
By:______________________________________
Name:
Title:
Union Bank of California, N.A.
By:_______________________________
Name:
Title:
Xxx Xxxxxx Prime Rate Income Trust
By:___________________________________
Name:
Title:
Wachovia Bank, N.A.
By:_____________________
Name:
Title: