EXHIBIT 10.5
AMENDMENT TO SETTLEMENT AGRFEMENT
Amendment (this "Amendment"), dated as of June 29, 2000, among
Integrated Health Services, Inc. and each of its direct or indirect subsidiaries
executing this Amendment, and Senior Housing Properties Trust and each of its
direct or indirect subsidiaries executing this Amendment, Advisors Healthcare
Group, Inc. and Five Star Quality Care, Inc.
BACKGROUND
WHEREAS, the parties hereto are all of the parties to a Settlement
Agreement, dated as of April 11. 2000 (the "Settlement Agreement"), and the
parties desire to clarify and amend certain provisions of the Settlement
Agreement; and
WHEREAS, concurrently herewith the parties hereto are entering into a
Stipulation with the United States Department of Health and Human Services
Regarding Treatment of Medicare Provider Agreements Pertaining to Certain
"Transfer Facilities" and Order Thereon (the "Stipulation");
NOW THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, the parties hereto, intending to be bound,
hereby agree as follows:
1. Capitalized terms used herein and not otherwise defined herein are
used with the meanings ascribed to such terms in the Settlement Agreement.
2. The Settlement Agreement, including without limitation, Exhibits C
and D and all other exhibits and schedules to the Settlement Agreement, is
hereby amended to the extent necessary, to reflect that:
(a) instead of entering into a Sublease with Shopco-KS, LLC (the
"Proposed New Kansas Operator") of the Demised Premises relating to the IHS of
Woodhaven Facility, in Ellinwood, Kansas (the "Kansas Facility"), ECA Holdings,
Inc. ("ECA") will directly lease said Demised Premises from SPTIHS Properties
Trust (the "Kansas Landlord") pursuant to a lease that will have all of the same
substance as the Sublease except that ECA will be the direct tenant thereunder
(instead of the Sublessee) and the Kansas Landlord shall be the direct landlord
thereunder (instead of the Proposed New Kansas Operator as the Sublessor
thereunder);
(b) instead of the Manager subcontracting obligations with respect
to the Kansas Facility to ECA in the capacity as the Servicer under the
Management Agreement, ECA shall retain such obligations in its capacity as the
Relevant Licensee until such time as the Proposed New Kansas Operator becomes
the Relevant Licensee with respect to the Kansas Facility, in which case, ECA
shall thereafter satisfy only such obligations in its capacity as Servicer as
shall not require a license under the applicable laws of the State of Kansas;
provided, however, that the foregoing amendment shall not be deemed to change in
any respect any of the obligations of any of the parties under the Management
Agreement, but shall only serve to clarify the capacity in which ECA shall be
acting;
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(c) the Demised Premises to be sublet pursuant to the Subleases
and the Kansas Lease shall include all of the personal property necessary for
the operation of the Facility to which the Sublease or Kansas Lease relates to
the extent that the applicable Sublessor or, in the case of the Kansas Lease,
the Kansas Landlord, has any right, title or interest therein;
(d) that neither CCA Acquisition 1, Inc. nor Community Care of
America, Inc. shall be a party to the Settlement Agreement and neither of them
shall be deemed to be an IHS Acquisition Subsidiary;
(e) Section 12.1 of the Management and Servicing Agreement shall
be amended in full to provide that neither the Management and Servicing
Agreement nor any of the terms thereof may be terminated, amended, supplemented,
waived or modified orally, but only by an instrument in writing signed by each
party (x)against whom the enforcement of the termination, amendment, supplement,
waiver or modification shall be sought or (y) who is affected (or whose rights,
obligations or remedies are affected) by such termination, amendment,
supplement, waiver or modification;
(f) under Section 3.2.5(i) of the Settlement Agreement, if SPTIHS
or HRES1 designates a New LLC Operator as the entity to which a relevant
Mortgaged Facility is to be conveyed as provided therein, then the instrument of
conveyance shall be a quitclaim deed (rather than a quitclaim deed in lieu of
foreclosure);
(g) no recoupment, offset or other payment of the Cure Amount (as
such term is defined in the Stipulation), and no release or waiver of any
underpayment claim pursuant to the Stipulation, shall constitute a Reduction
Claim (as such term is defined in the Management and Servicing Agreement), and
no IHS Entity shall have any liability with respect thereto;
(h) the amount of the monthly payment referred to in Section 3.3
of the Settlement Agreement shall be $600,000 in lieu of $500,000;
(i) the SNH Entities acknowledge that the Facility located in
Palmer, Nebraska has been closed and the SNH Entities waive any breaches of
representations, warranties and covenants and any closing conditions that arise
by reason of such closure;
(j) the IHS Entities shall withdraw the Debtors' motions described
on Schedule A hereto promptly after the Closing documents are executed,
delivered and the Closing occurred, and the SNH Entities shall withdraw SNH's
motions described on Schedule B hereto promptly after the Closing documents are
executed, delivered and the Closing occurred;
(k) the Closing Date for the transactions contemplated by the
Settlement Agreement shall be deemed to be June 30, 2000 and the Effective Time
will be deemed to be 12:01 a.m. (Boston time) on July 1, 2000 notwithstanding
that the Closing documents may be executed, delivered, and the Closing occur on
a later date; provided, however, that this subsection (k) shall have no force or
effect if the Closing documents are not, in all material respects, executed,
delivered and the Closing occur on or prior to July 15, 2000;
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(l) subject to the occurrence of the Closing, the IHS Entities
assign, set over, and convey to such entities as SNH may designate any right,
title and interest any of them may have to any underpayment claim under the
Nebraska Medicaid program (or if such claim cannot be assigned in accordance
with applicable law, the proceeds thereof) arising out of any services provided
by any Facility in Nebraska on or prior to the Effective Time and shall
cooperate fully and take all reasonable actions requested by the SNH Entities
with regard to the collection of such funds, provided that any reasonable cost
or expense incurred by the IHS Entities in connection therewith shall be
reimbursed to them by the SNH Entities; and
(m) at such time as the relevant SNH Entity for any Transfer
Facility has all necessary licenses and the relevant IHS Entity transfers the
patient trust accounts held for the benefit of residents of the relevant
Facility to such SNH Entity, the relevant IHS Entity shall provide to such SNH
Entity all records and an accounting regarding such patient trust accounts.
3. Except as expressly amended hereby, all of the terms and conditions
of the Settlement Agreement shall remain in full force and effect.
4. This Amendment may be executed in counterparts, each of which shall
be deemed an original and all of which, when taken together, shall constitute
one and the same agreement. Signatures sent by telefacsimile transmission shall
be deemed to constitute delivery for purposes of creating a binding agreement.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, each of the undersigned has executed and delivered
this Amendment as of the date first above written.
INTEGRATED HEALTH SERVICES, INC.
COMMUNITY INC.
COMMUNITY CARE OF AMERICA, INC.
ECA HOLDINGS, INC.
COMMUNITY CARE OF NEBRASKA, INC.
W.S.T. CARE, INC.
QUALITY CARE OF LYONS, INC.
CCA ACQUISITION I, INC.
MARIETTA/SCC INC.
GLENWOOD/SCC, INC.
DUBLIN/SCC, INC.
COLLEGE PARK/SCC, INC.
IHS ACQUISITION NO. 108, INC.
IHS ACQUISITION NO. 112, INC.
IHS ACQUISITION NO. 113, INC.
IHS ACQUISITION NO. 135, INC.
IHS ACQUISITION NO. 148, INC.
IHS ACQUISITION NO. 152, INC.
IHS ACQUISITION NO. 153, INC.
IHS ACQUISITION NO. 154, INC.
IHS ACQUISITION NO. 155, INC.
IHS ACQUISITION NO. 175, INC.
INTEGRATED HEALTH SERVICES AT GRANDVIEW CARE CENTER, INC.
ECA PROPERTIES, INC.
CCA OF MIDWEST, INC.
QUALITY CARE OF COLUMBUS, INC.
By: /s/ Daniel J. Booth
Its: Senior Vice President
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SENIOR HOUSING PROPERTIES TRUST
SPTIHS PROPERTIES TRUST
HRES1 PROPERTIES TRUST
HRES2 PROPERTIES TRUST
SHOPCO-COLORADO, LLC
SHOPCO-CT, LLC
SHOPCO-GA, LLC
SHOPCO-IA, LLC
SHOPCO-KS, LLC
SHOPCO-MA, LLC
SHOPCO-MI, LLC
SHOPCO-MO, LLC
SHOPCO-NE, LLC
SHOPCO-WY, LLC
SNH-NEBRASKA, INC.
SNH-IOWA, INC.
SNH-MASSACHUSETTS, INC.
SNH-MICHIGAN, INC.
By: /s/Ajay Saini
Its: Treasurer
ADVISORS HEALTHCARE GROUP, INC.
By: /s/Jennifer B. Clark
Its: Assistant Secretary
FIVE STAR QUALITY CARE, INC.
By: /s/Ajay Saini
Its: Treasurer
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SCHEDULE A
Motion Pursuant to Section 365(d)(4) of the Bankruptcy Code for an Order
Extending the Time to Assume or Reject Unexpired Leases of Nonresidential Real
Property
Motion to Reject that Certain Management Agreement Between IHS Acquisition No.
175 and Advisors Healthcare Group, Inc. Pursuant to Section 365(a) of the
Bankruptcy Code and Rule 6006 of the Federal Rules of Bankruptcy Procedure
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SCHEDULE B
Motion of Senior Housing Properties Trust and Related Entities to Compel Debtors
to pay Postpetition rent or Use and Occupancy and for Other Relief