EXHIBIT 10.39
[Conformed Copy]
AGREEMENT TO AMEND
REORGANIZATION AND DISTRIBUTION AGREEMENT
AGREEMENT TO AMEND, dated January 30, 1990 (this "Amendment Agreement"),
between National Medical Enterprises, Inc., a Nevada corporation ("NME"), and
The Hillhaven Corporation, a Nevada corporation ("New Hillhaven").
WITNESSETH;
WHEREAS, the parties to this Amendment Agreement are parties to a
Reorganization and Distribution Agreement, dated as of January 8, 1990 (the
"Original Agreement", which term shall include the Annexes, Exhibits and
Schedules thereto); and
WHEREAS, the parties to this Amendment Agreement deem it advisable that the
Original Agreement be amended and restated to read in its entirety as set forth
in Exhibit A hereto.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto hereby agree as follows:
1. The Original Agreement shall be amended and restated, effective as of
January 8, 1990, to read in its entirety as set forth in Exhibit A hereto.
2. This Amendment Agreement shall be governed by and construed in
accordance with the laws of the State of California.
3. This Amendment Agreement may be executed simultaneously in two or more
counterparts and by the different parties hereto on separate counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument, and this Amendment Agreement shall become effective
when one or more counterparts have been signed by each party and delivered to
the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement
to be duly executed as of the date and year first above written.
NATIONAL MEDICAL ENTERPRISES, INC.
By /s/ MARCUS E. POWERS
--------------------------------
Name: Marcus E. Powers
Title: Senior Vice President
and General Counsel
THE HILLHAVEN CORPORATION
By /s/ CHRISTOPHER J. MARKER
--------------------------------
Name: Christopher J. Marker
Title: President
2
EXHIBIT A
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REORGANIZATION AND DISTRIBUTION AGREEMENT
effective as of January 8, 1990
between
NATIONAL MEDICAL ENTERPRISES, INC.
and
THE HILLHAVEN CORPORATION
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 General................................................... 1
Section 1.02 Exhibits, etc............................................. 7
ARTICLE II
PRELIMINARY ACTION
Section 2.01 Cooperation Prior to the Distribution .................... 7
Section 2.02 Plan of Reorganization and Related
Transactions............................................. 8
Section 2.03 Cash Management and Bank Accounts After
the Distribution Date.................................... 8
Section 2.04 Transfers Not Effected Prior to the
Distribution; Transfers Deemed
Effective as of the Distribution Date.................... 9
Section 2.05 No Representations or Warranties;
Consents................................................. 10
Section 2.06 Conveyancing and Assumption Instruments................... 10
Section 2.07 Further Assurances........................................ 11
ARTICLE III
THE DISTRIBUTION
Section 3.01 Conditions Precedent to the
Distribution............................................. 11
Section 3.02 The Distribution.......................................... 12
ARTICLE IV
INDEMNIFICATION
Section 4.01 Indemnification by NME.................................... 12
Section 4.02 Indemnification by New Hillhaven ......................... 13
Section 4.03 Limitations on Indemnification
Obligations.............................................. 13
Section 4.04 Procedure for Indemnification............................. 13
Section 4.05 Remedies Cumulative....................................... 16
Section 4.06 Survival of Indemnities................................... 16
ARTICLE V
CERTAIN ADDITIONAL MATTERS
Section 5.01 Resignations.............................................. 17
Section 5.02 Outside Auditors.......................................... 17
Section 5.03 Relationships; Name Changes............................... 17
Section 5.04 Post-Distribution Adjustments............................. 18
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Page
ARTICLE VI
ACCESS TO INFORMATION AND SERVICES
Section 6.01 Provision of Corporate Records............................ 18
Section 6.02 Access to Information..................................... 19
Section 6.03 Provision of Services..................................... 19
Section 6.04 Production of Witnesses................................... 20
Section 6.05 Reimbursement............................................. 20
Section 6.06 Retention of Records...................................... 20
Section 6.07 Confidentiality........................................... 20
ARTICLE VII
MISCELLANEOUS
Section 7.01 Entire Agreement; Amendment............................... 21
Section 7.02 Survival of Agreements.................................... 21
Section 7.03 Expenses.................................................. 21
Section 7.04 Governing Law............................................. 22
Section 7.05 Notices................................................... 22
Section 7.06 Construction.............................................. 23
Section 7.07 Successors and Assigns.................................... 23
Section 7.08 Termination............................................... 23
Section 7.09 Subsidiaries.............................................. 23
Section 7.10 No Third Party Beneficiaries.............................. 23
Section 7.11 Further Assurances........................................ 23
Section 7.12 Annexes, Exhibits and Schedules........................... 24
Section 7.13 Legal Enforceability...................................... 24
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ANNEXES
I. Plan of Reorganization
II. Long Term Care Subsidiaries of NME Prior to the Plan of
Reorganization
III(a). Subsidiaries of Old Hillhaven after the Plan of Reorganization Is
Effected
III(b). Subsidiaries of New Hillhaven After the Plan of Reorganization Is
Effected
EXHIBITS
A. Benefits Agreement
B. Distribution Agency Agreement
C. Government Programs Agreement
D. Guarantee Agreement
E. Insurance Agreement
F. Form of Lease Agreement
G. Form of Lease Assumption Agreement
H. Form of Management Agreement
I. New Hillhaven By-Laws
J. New Hillhaven Charter
K-1. Form of New Hillhaven Subsidiary Note to be issued by FHC
K-2. Form of New Hillhaven Subsidiary Note to be issued by Medi$ave Pharmacies,
Inc.
L. Note Guarantee Agreement
M. Revolving Credit and Term Loan Agreement
N. Rights Agreement
O. Services Agreement
P. Tax Sharing Agreement
Q. Warrant and Registration Rights Agreement
SCHEDULES
4.01(b) NME Responsibility for Information Statement
4.02(b) New Hillhaven Responsibility for Information Statement
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REORGANIZATION AND DISTRIBUTION AGREEMENT, effective as of January 8,
1990 (this "Agreement"), between NATIONAL MEDICAL ENTERPRISES INC., a Nevada
corporation ("NME"), and THE HILLHAVEN CORPORATION, a Nevada corporation ("New
Hillhaven") and a wholly-owned subsidiary of The Hillhaven Corporation, a
Tennessee corporation ("Old Hillhaven") which in turn is wholly-owned by NME.
_________________________________
WHEREAS, the NME board of directors has determined it is appropriate
and desirable to separate the long term care business presently conducted by NME
through Old Hillhaven and the other businesses of NME by transferring certain
assets and related liabilities of Old Hillhaven and certain of its subsidiaries
to New Hillhaven and distributing approximately 85% of the outstanding shares of
New Hillhaven Common Stock on a pro rata basis to the holders of NME Common
Stock; and
WHEREAS, NME and New Hillhaven have determined that it is necessary
and desirable to set forth the principal corporate transactions required to
effect such separation and such distribution and to set forth other agreements
that will govern certain other matters following such distribution and, in
connection therewith, have entered into a Reorganization and Distribution
Agreement dated as of January 8, 1990 (the "Original Agreement"); and
WHEREAS, NME and New Hillhaven have further determined that it would
be desirable to amend certain provisions of the Original Agreement and to enter
into an amended and restated version thereof, as set forth below (the Original
Agreement as so amended and restated being herein called the "Agreement")
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
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Section 1.01 General. As used in this Agreement and the Annexes,
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Exhibits and Schedules hereto, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or
------
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
Affiliate: as defined in Regulation 12b-2 promulgated under the
---------
Exchange Act, as such Regulation is in effect on the date hereof.
Agent: Manufacturers Hanover Trust Company, the distribution agent
-----
appointed by NME under the Distribution Agency Agreement to assist in the
distribution of copies of the Information Statement and to distribute
certificates for shares of New Hillhaven Common Stock in connection with the
Distribution.
Ancillary Agreements: all of the agreements, instruments,
--------------------
understandings, assignments or other arrangements entered into in connection
with the transactions contemplated hereby, including, without limitation, the
Benefits Agreement, the Distribution Agency Agreement, the Government Programs
Agreement, the Guarantee Agreement, the Insurance Agreement, the Lease
Agreements, the Lease Assumption Agreements, the Management Agreements, the New
Hillhaven Subsidiary Notes, the Note Guarantee Agreement, the Revolving Credit
and Term Loan Agreement, the Rights Agreement, the Services Agreement, the Tax
Sharing Agreement and the Warrant and Registration Rights Agreement.
Benefits Agreement: the Employee and Employee Benefits Agreement, to
------------------
be dated as of the Distribution Date, between NME and New Hillhaven, the
proposed form of which is attached as Exhibit A, providing for, among other
things, the establishment of executive and incentive compensation plans for New
Hillhaven and certain adjustments under NME benefit plans.
Commission: the Securities and Exchange Commission.
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Conveyancing and Assumption Instruments: collectively, the various
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agreements, instruments and other documents to be entered into to effect the
transfer of assets and the assumption of Liabilities, effective on or prior to
the Distribution Date, in the manner contemplated by this Agreement and the
Ancillary Agreements.
Distribution: the distribution to holders of NME Common Stock of
------------
approximately 85% of the shares of New Hillhaven Common Stock to be owned by NME
immediately following completion of the Plan of Reorganization.
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Distribution Agency Agreement: the Distribution Agency Agreement,
-----------------------------
dated as of January 8, 1990, between NME and the Agent, the proposed form of
which is attached as Exhibit B, providing for, among other things, the
dissemination of the Information Statement to NME shareholders as of the Record
Date and the distribution of certificates evidencing shares of New Hillhaven
Common Stock to such shareholders.
Distribution Date: January 31, 1990.
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Exchange Act: the Securities Exchange Act of 1934, as amended.
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FHC: First Healthcare Corporation, a Delaware corporation and
---
Subsidiary of NME which will become a New Hillhaven Subsidiary pursuant to the
Plan of Reorganization.
FORM 10: the Registration Statement on Form 10 to be filed by New
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Hillhaven with the Commission to effect the registration of the New Hillhaven
Common Stock pursuant to the Exchange Act.
Government Programs Agreement: the Government Programs Agreement, to
-----------------------------
be dated as of the Distribution Date, between NME and New Hillhaven, the
proposed form of which is attached as Exhibit C, providing for, among other
things, the administration of certain matters, including cost reports, under
Medicare and Medicaid programs.
Guarantee Agreement: the Guarantee Reimbursement Agreement, to be
-------------------
dated as of the Distribution Date, between NME and New Hillhaven, the proposed
form of which is attached as Exhibit D, providing for, among other things, a
guarantee fee and the reimbursement by New Hillhaven to NME of amounts paid by
NME in respect of certain guarantee, lease or other obligations.
Information Statement: the information statement, constituting a
---------------------
part of the Form 10, in the form to be distributed to the holders of NME Common
Stock as of the Record Date in connection with the Distribution, and as it may
be amended or supplemented subsequent to such dissemination.
Insurance Agreement: the Insurance Agreement, to be dated as of the
-------------------
Distribution Date, between NME and New Hillhaven, the proposed form of which is
attached as Exhibit E, providing for, among other things, the allocation of
certain insurance claims and joint insurance arrangements on a transitional
basis.
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Lease Agreements: the Lease Agreements, to be dated on or prior to
----------------
the Distribution Date, between an NME Subsidiary, on the one hand, and FHC, on
the other hand, the proposed form of which is, together with the proposed
related Guarantee of Lease of New Hillhaven, attached as Exhibit F, respectively
providing for, among other things, the lease on a triple net basis by FHC of
long term care facilities or retirement housing centers and the guarantee by New
Hillhaven of such lease obligations of FHC.
Lease Assumption Agreements: the Assignment and Assumption of Lease
---------------------------
Agreements, to be dated on or prior to the Distribution Date, between NME or an
NME Subsidiary, on the one hand, and a New Hillhaven Subsidiary, on the other
hand, the proposed form of which, together with the proposed related Guaranty of
New Hillhaven, is attached as Exhibit G, providing for, among other things, the
assumption by a New Hillhaven Subsidiary of certain obligations and the
assignment to a New Hillhaven Subsidiary of certain rights under leases or
subleases and the guarantee of such obligations by New Hillhaven.
Liabilities: any and all debts, liabilities and obligations,
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absolute or contingent, mature or unmature, liquidated or unliquidated, accrued
or unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating thereto, and those
debts, liabilities and obligations arising under any law, rule, regulation,
Action, threatened Action, order or consent decree of any governmental entity or
any award of any arbitrator of any kind, and those arising under any contract,
commitment or undertaking.
Management Agreements: the Management Agreements, to be dated as of
---------------------
the Distribution Date, between FHC, as manager, and certain NME Subsidiaries,
the proposed form of which is attached as Exhibit H, providing for, among other
things, the management by FHC of such facilities.
New Hillhaven BY-Laws: the By-Laws of New Hillhaven, attached as
---------------------
Exhibit I and as in effect at the date hereof.
New Hillhaven Charter: the Amended and Restated Articles of
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Incorporation of New Hillhaven, attached as Exhibit J and as in effect at the
date hereof.
New Hillhaven Common Stock: the common stock, par value $0.15 per
--------------------------
share, of New Hillhaven.
New Hillhaven Employee: any individual who, immediately prior to the
----------------------
Distribution, was employed by NME or Old Hillhaven or any of the Old Hillhaven
Subsidiaries
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and who, immediately after the Distribution, is to be employed by New Hillhaven
or a Subsidiary of New Hillhaven.
New Hillhaven Liabilities: all of (i) the Liabilities of New
-------------------------
Hillhaven or any New Hillhaven Subsidiary under this Agreement or any of the
Ancillary Agreements to which any of them is a party and (ii) the Liabilities
arising out of any of the documents or instruments executed and delivered by New
Hillhaven or any New Hillhaven Subsidiary pursuant to the transactions
contemplated by the Plan of Reorganization or pursuant to any supplemental
agreement contemplated by Section 2.07.
New Hillhaven Subsidiaries: the corporations identified in Annex
--------------------------
III(b) hereto, which are now Subsidiaries of NME but which immediately following
the Distribution will be Subsidiaries of New Hillhaven.
New Hillhaven Subsidiary Notes: the promissory notes, to be dated
------------------------------
the Distribution Date, of (i) FHC, the proposed form of which is attached as
Exhibit K-1, to be issued to Old Hillhaven and (ii) Medi-$ave Pharmacies, Inc.,
the proposed form of which is attached as Exhibit K-2, to be issued to Hillhaven
Inc., in each case pursuant to the Plan of Reorganization.
NME Board: the Board of Directors of NME.
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NME Common Stock: the common stock, par value $0.15 per share, of
----------------
NME.
NME Liabilities: all of the Liabilities of NME or any NME Subsidiary
---------------
under this Agreement or any of the Ancillary Agreements to which any of them is
a party.
NME Subsidiary: any corporation that will be a Subsidiary of NME
--------------
immediately following the Distribution, including, without limitation, Old
Hillhaven and the Old Hillhaven Subsidiaries.
Note Guarantee Agreement: the Note Guarantee Agreement, to be dated
------------------------
as of the Distribution Date, among New Hillhaven, NME and the payees on the New
Hillhaven Subsidiary Notes, the proposed form of which is attached as Exhibit L,
providing for, among other things, the guarantee by New Hillhaven of all the
obligations of the obligors on the New Hillhaven Subsidiary Notes.
Old Hillhaven Subsidiary: any corporation that was a Subsidiary of
------------------------
Old Hillhaven prior to the Distribution, other than New Hillhaven and the New
Hillhaven Subsidiaries.
5
Plan of Reorganization: the series of transactions, more
----------------------
particularly described on Annex I hereto, providing, effective on or prior to
the Distribution Date, for the transfer of assets and liabilities to New
Hillhaven and New Hillhaven Subsidiaries, as contemplated by this Agreement and
the Information Statement.
Record Date: the close of business on January 12, 1990.
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Revolving Credit and Term Loan Agreement: the Revolving Credit and
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Term Loan Agreement, to be dated as of the Distribution Date, between NME and
New Hillhaven, the proposed form of which is attached as Exhibit M, providing
for, among other things, borrowings by New Hillhaven from NME from time to time
in order to meet the working capital and other cash flow needs of certain of New
Hillhaven's retirement housing and other discontinued operations and for capital
improvements on long term care facilities.
Rights: the preferred stock purchase rights, to be issued pursuant
------
to the Rights Agreement, which will initially be evidenced by the New Hillhaven
Common Stock certificates.
Rights Agreement: the Rights Agreement, to be dated as of the
----------------
Distribution Date, between New Hillhaven and Manufacturers Hanover Trust Company
of California, as Rights Agent, the proposed form of which is attached as
Exhibit N, providing for, among other things, the issuance of the Rights.
Services Agreement: the Services Agreement, to be dated as of the
------------------
Distribution Date, between NME and New Hillhaven, the proposed form of which is
attached as Exhibit O, providing for, among other things, the provision on a
transitional basis of certain management and incidental services and certain
joint purchasing and space-sharing arrangements.
Subsidiary: any corporation of which more than 50% of the
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outstanding shares of stock having ordinary voting power to elect a majority of
the board of directors (other than stock having such power only by reason of the
happening of a contingency) is at the time directly or indirectly owned by NME
or New Hillhaven, as the case may be.
Tax Sharing Agreement: the Tax Sharing Agreement, to be dated as of
---------------------
the Distribution Date, between NME and New Hillhaven, the proposed form of which
is attached as Exhibit P, providing for, among other things, the allocation of
liabilities with respect to federal, state and local income
6
taxes and the procedures for filing returns with respect to such taxes.
Warrant and Registration Rights Agreement: the Warrant and
-----------------------------------------
Registration Rights Agreement, to be dated as of the Distribution Date, among
NME, New Hillhaven and Manufacturers Hanover Trust Company of California, as
Warrant Agent, the proposed form of which is attached as Exhibit Q, providing
for, among other things, the issuance of warrants to purchase New Hillhaven
Common Stock and certain registration rights with respect to such stock and the
New Hillhaven Common Stock to be retained by NME.
Section 1.02 Exhibits, etc. References to an "Exhibit" or to an
-------------
"Annex" or to a "Schedule" are, unless otherwise specified, to one of the
Exhibits or Annexes or Schedules attached to this Agreement, and references to a
"Section" are, unless otherwise specified, to one of the Sections of this
Agreement.
ARTICLE II
PRELIMINARY ACTION
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Section 2.01 Cooperation Prior to the Distribution.
-------------------------------------
(a) Form 10; Information Statement. NME and New Hillhaven
------------------------------
have prepared, and New Hillhaven shall file with the Commission, the Form 10,
which shall include or incorporate by reference the Information Statement. NME
and New Hillhaven shall use reasonable efforts to cause the Form 10 to become
effective under the Exchange Act. NME and New Hillhaven shall also prepare, and
NME shall cause to be mailed, prior to midnight, January 12, 1990, to the
holders of NME Common Stock as of the Record Date, the Information Statement,
which shall set forth appropriate disclosures concerning New Hillhaven, the
Distribution and other matters.
(b) Benefit Plan Registrations. NME and New Hillhaven shall
--------------------------
cooperate in preparing, filing with the Commission and causing to become
effective any registration statements or amendments thereto which are necessary
to be so filed prior to the Distribution Date and appropriate to reflect the
establishment of, or amendments to, any employee benefit and other plans
contemplated by the Benefits Agreement.
(c) Blue Sky. NME and New Hillhaven shall take all such action
--------
as may be necessary or appropriate under the securities or blue sky laws of
states or other political subdivisions of the United States in connection
7
with the transactions contemplated by this Agreement and the Ancillary
Agreements.
(d) Listing. NME and New Hillhaven have prepared, and New
-------
Hillhaven shall file and pursue, an application to effect the listing of the New
Hillhaven Common Stock and the Rights on the American Stock Exchange ("ASE")
Section 2.02 Plan of Reorganization and Related Transactions. It is
-----------------------------------------------
the intention of the parties hereto that the transactions contemplated by this
Section 2.02 shall, to the extent practicable, be effected in the order in which
such transactions are set forth in this Section 2.02.
(a) Corporate Action. All necessary corporate action on the
----------------
part of NME, New Hillhaven, the New Hillhaven Subsidiaries, Old Hillhaven and
the Old Hillhaven Subsidiaries necessary to implement the transactions
contemplated hereby and by the Plan of Reorganization shall be taken.
(b) Plan of Reorganization. All of the transactions
----------------------
contemplated by the Plan of Reorganization shall be substantially completed as
provided therein. Annex II identifies and indicates the ownership of all of the
Subsidiaries of Old Hillhaven immediately prior to implementation of the Plan of
Reorganization. Annexes III(a) and III(b) identify and indicate the ownership of
all of the Subsidiaries of Old Hillhaven and New Hillhaven, respectively,
immediately after implementation of the Plan of Reorganization.
(c) Ancillary Agreements. Each of the Ancillary Agreements
--------------------
shall be executed and delivered by the parties thereto, with such additions,
deletions or other changes as may be authorized by the respective boards of
directors of the parties hereto.
(d) NME Capital Contribution. NME shall have made, either
------------------------
directly or through one or more of its Subsidiaries, capital contributions to
New Hillhaven of assets sufficient to increase the Stockholders' equity of New
Hillhaven to at least $170 million, after giving effect to the transaction
contemplated by the Plan of Reorganization.
Section 2.03 Cash Management and Bank Accounts After the
-------------------------------------------
Distribution Date. All cash management systems and bank accounts currently in
- -----------------
place will be subject to the procedures set forth in a memorandum to be
initialed by the parties hereto.
8
Section 2.04 Transfers Not Effected Prior to the Distribution;
-------------------------------------------------
Transfers Deemed Effective as of the Distribution Date. To the extent that any
- ------------------------------------------------------
transfers and assumptions contemplated by this Article II and Article III shall
not have been consummated prior to the Distribution Date, the parties shall
cooperate to effect such transfers as promptly following the Distribution Date
as shall be practicable, it nonetheless being agreed and understood by the
parties that neither party shall be liable in any manner to any other party for
any failure of any of the transfers or assumptions contemplated by this Article
II or Article III to be consummated prior to the Distribution Date. Nothing
herein shall be deemed to require the transfer of any assets or the assumption
of any Liabilities which by their terms or operation of law cannot be
transferred or assumed; provided, however, that NME, Old Hillhaven and their
-------- -------
respective Subsidiaries and New Hillhaven and the New Hillhaven Subsidiaries
shall cooperate to seek to obtain any necessary consents or approvals for the
transfer of all assets and assumption of all Liabilities contemplated to be
transferred or assumed pursuant to this Article II and Article III. In the event
that any such transfer of assets or assumption of Liabilities has not been
consummated, effective as of and after the Distribution Date, the party
retaining such asset or Liability shall thereafter hold such asset for the party
entitled thereto (at the expense of the party entitled thereto) and retain such
Liability for the account of the party by whom such Liability is to be assumed,
and take such other action as may be reasonably requested by the party to whom
such asset is to be transferred, or by whom such Liability is to be assumed, as
the case may be, in order to place such party, insofar as reasonably possible,
in the same position as would have existed had such asset or Liability been
transferred or assumed as of the Distribution Date. As and when any such asset
or Liability becomes transferable or assumable, such transfer or assumption
shall be effected forthwith. The parties agree that, as of the Distribution
Date, each party hereto shall be deemed to have assumed in accordance with the
terms of this Agreement and the Ancillary Agreements all of the Liabilities, and
all duties, obligations and responsibilities incident thereto, which such party
is required to assume pursuant to the terms hereof and thereof. New Hillhaven
shall take all necessary steps, with the assistance of NME if appropriate, to
effect any transfer of assets or assumption of Liabilities not transferred or
assumed effective as of the Distribution Date, and NME shall reimburse New
Hillhaven for all out-of-pocket expenses incurred in effecting such transfer or
assumption, provided that (i) New Hillhaven shall have provided back-up for such
expenses reasonably acceptable to NME and (ii) NME shall have approved in
advance any item of expense in excess of $5,000 to be incurred after the
Distribution Date, which approval shall not be unreasonably withheld.
9
Section 2.05 No Representations or Warranties; Consents. Each of
------------------------------------------
the parties hereto understands and agrees that no party hereto is, in this
Agreement or in any Ancillary Agreement or in any other agreement or document
contemplated by this Agreement or otherwise, representing or warranting in any
way (i) as to the value or freedom from encumbrance of, or any other matter
concerning, any assets of such party or (ii) as to the legal sufficiency to
convey title to any asset of the execution and delivery of this Agreement or any
Ancillary Agreement, including, without limitation, any Conveyancing and
Assumption Instruments, it being agreed and understood that all such assets are
being transferred "as is, where is" and that the party to which such assets are
to be transferred hereunder shall bear the economic and legal risk that any
conveyances of such assets shall prove to be insufficient or that such party or
any of its Subsidiaries' title to any such assets shall be other than good and
marketable and free from encumbrances. Similarly, each party hereto understands
and agrees that no party hereto is, in this Agreement or in any other agreement
or document contemplated by this Agreement or otherwise, representing or
warranting in any way that the obtaining of any consents or approvals, the
execution and delivery of any amendatory agreements and the making of any
filings or applications contemplated by this Agreement will satisfy the
provisions of any or all applicable agreements or the requirements of any or all
applicable laws or judgments, it being agreed and understood that the party to
which any assets are transferred shall bear the economic and legal risk that any
necessary consents or approvals are not obtained or that any requirements of
laws or judgments are not complied with. Notwithstanding the foregoing, the
parties shall use reasonable efforts to obtain all consents and approvals, to
enter into all amendatory agreements and to make all filings and applications
which may be required for the consummation of the transactions contemplated by
this Agreement, including, without limitation, all applicable regulatory filings
or consents under federal or state health care laws and all necessary consents,
approvals, agreements, filings and applications.
Section 2.06 Conveyancing and Assumption Instruments. In connection
---------------------------------------
with the transfers of assets (other than capital stock) and the assumptions of
Liabilities contemplated by this Agreement, and except as otherwise provided in
the Plan of Reorganization, the parties shall execute or cause to be executed by
the appropriate entities the Conveyancing and Assumption Instruments in such
forms as the parties shall agree. The transfer of capital stock shall be
effected by means of delivery of stock certificates and executed stock powers
and notation on the stock record books of the corporation or
10
other legal entities involved and, to the extent required by applicable law, by
notation on public registries.
Section 2.07 Further Assurances. Each of NME and New Hillhaven
------------------
agrees to execute, acknowledge and deliver, and to cause their respective
Subsidiaries to execute, acknowledge and deliver, any assurances, documents and
instruments of transfer reasonably requested by the other and will take any
other action consistent with the terms of this Agreement that may reasonably be
requested by the other for the purpose of consummating the transactions
contemplated by this Agreement. In particular, the parties agree to enter into
any supplemental agreements necessary or appropriate to provide for temporary
operation by NME or its Subsidiaries of facilities intended to be transferred to
New Hillhaven or its Subsidiaries in cases where any necessary consents or
approvals have not been obtained, or any other required actions have not been
completed, prior to the Distribution Date.
ARTICLE III
THE DISTRIBUTION
----------------
Section 3.01 Conditions Precedent to the Distribution. In no event
----------------------------------------
shall the Distribution occur unless prior to such time the following conditions
shall have been satisfied:
(i) the transactions contemplated by Section 2.02 shall have
been consummated in all material respects, except to the extent waived by NME;
(ii) the New Hillhaven Common Stock and the Rights shall have
been approved for listing on the ASE, subject to official notice of issuance;
(iii) the New Hillhaven Charter and New Hillhaven By-Laws shall
have been adopted and shall be in effect; and
(iv) the Form 10 shall have become effective under the Exchange
Act and no stop order which has not been lifted shall be in effect with respect
thereto;
provided, however, that the satisfaction of such conditions shall not create any
- -------- -------
obligation on the part of NME to effect the Distribution or in any way limit
NME's power of termination set forth in Section 7.08 or alter the consequences
of any such termination from those specified in such Section.
11
Section 3.02 The Distribution. New Hillhaven shall take all steps
----------------
required by NME or the Agent to effect the transactions contemplated by the
Distribution Agency Agreement. Prior to the Distribution, and in connection with
the Plan of Reorganization, New Hillhaven shall cause to be issued to NME or
Subsidiaries of NME (i) a certificate or certificates representing a sufficient
number of shares of New Hillhaven Common Stock so that one share of New
Hillhaven Common Stock may be distributed for each share of NME Common Stock
held by NME shareholders on the Record Date and (ii) a certificate or
certificates representing a sufficient number of shares of New Hillhaven Common
Stock so that, after giving effect to the issuance of the shares referred to in
clause (i) above, NME and Subsidiaries of NME will own in the aggregate 15% of
the outstanding New Hillhaven Common Stock.
ARTICLE IV
INDEMNIFICATION
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Section 4.01 Indemnification by NME.
----------------------
(a) NME Liabilities. Except as otherwise set forth in an
---------------
Ancillary Agreement, NME shall indemnify, defend and hold harmless New
Hillhaven, each New Hillhaven Subsidiary and each of their directors, officers,
employees and agents and each of the heirs, executors, successors and assigns of
any of the foregoing (the "New Hillhaven Indemnitees") from and against the NME
Liabilities and any and all losses, liabilities, claims, damages, obligations,
payments, costs and expenses, matured or unmatured, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, known or unknown, including,
without limitation, the costs and expenses of any and all Actions, threatened
Actions, demands, assessments, judgments, settlements and compromises relating
thereto and attorneys' fees and any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any such Actions or
threatened Actions (collectively, "Indemnifiable Losses" and, individually, an
"Indemnifiable Loss"), of the New Hillhaven Indemnitees arising out of or due to
the failure or alleged failure of NME to pay, perform or otherwise discharge in
due course any of the NME Liabilities.
(b) Exchange Act Liabilities. NME shall also indemnify, defend
------------------------
and hold harmless each of the New Hillhaven Indemnitees from and against any and
all Indemnifiable Losses of the New Hillhaven Indemnitees arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any portion of the Information Statement specified in Schedule
4.01(b),
12
or the omission or alleged omission to state in any such portion a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
Section 4.02 Indemnification by New Hillhaven.
--------------------------------
(a) New Hillhaven Liabilities. Except as otherwise set forth in
-------------------------
an Ancillary Agreement, New Hillhaven shall indemnify, defend and hold harmless
NME, each NME Subsidiary and each of their directors, officers, employees and
agents and each of the heirs, executors, successors and assigns of any of the
foregoing (the "NME Indemnitees") from and against the New Hillhaven Liabilities
and any and all Indemnifiable Losses of the NME Indemnitees arising out of or
due to the failure or alleged failure of New Hillhaven to pay, perform or
otherwise discharge in due course any of the New Hillhaven Liabilities.
(b) Exchange Act Liabilities. New Hillhaven shall also
------------------------
indemnify, defend and hold harmless each of the NME Indemnitees from and against
any and all Indemnifiable Losses of the NME Indemnitees arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any portion of the Information Statement specified in Schedule
4.02(b), or the omission or alleged omission to state in any such portion a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
Section 4.03 Limitations on Indemnification Obligations. The amount
------------------------------------------
which any party (an "Indemnifying Party") is or may be required to pay to any
other party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any such amounts which
such Indemnifying Party is or may be required to pay to such Indemnitee with
respect to the same matter under rights of indemnification pursuant to any
Ancillary Agreement, to the end that no duplicate payments will be required with
respect to any indemnified amount.
Section 4.04 Procedure for Indemnification.
-----------------------------
(a) If an Indemnitee shall receive notice or otherwise learn of
the assertion by a person (including, without limitation, any governmental
entity) who is not a party to this Agreement or to any of the Ancillary
Agreements of any claim or of the commencement by any such person of any Action
(a "Third Party Claim") with respect to which an Indemnifying Party may be
obligated to provide indemnification pursuant to this Agreement, such Indemnitee
13
shall give such Indemnifying Party written notice thereof promptly after
becoming aware of such Third Party Claim; provided, that the failure of any
--------
Indemnitee to give notice as provided in this Section 4.04 shall not relieve the
related Indemnifying Party of its obligations under this Article IV, except to
the extent that such Indemnifying Party is prejudiced by such failure to give
notice. Such notice shall describe the Third Party Claim in reasonable detail,
and shall indicate the amount (estimated if necessary) of the Indemnifiable Loss
that has been or may be sustained by such Indemnitee.
(b) An Indemnifying Party may elect to defend or to seek to
settle or compromise, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days of the
receipt of notice from an Indemnitee in accordance with Section 4.04(a) (or
sooner, if the nature of such Third Party Claim so requires), the Indemnifying
Party shall notify the related Indemnitee if the Indemnifying Party elects not
to defend or to seek to settle or compromise such Third Party Claim (which
election may be made only in the event of a good faith assertion by the
Indemnifying Party that a claim was inappropriately tendered under Section 4.01
or 4.02, as the case may be). Unless an Indemnifying Party elects not to assume
the defense of or to seek to settle or compromise a Third Party Claim, such
Indemnifying Party shall not be liable to such Indemnitee under this Article IV
for any legal or other expenses subsequently incurred by such Indemnitee in
connection with the defense thereof; provided, that, if the defendants in any
-------- ----
such claim include both the Indemnifying Party and one or more Indemnitees and
in any Indemnitee's reasonable judgment a conflict of interest between one or
more of such Indemnitees and such Indemnifying Party exists in respect of such
claim, such Indemnitees shall have the right to employ separate counsel to
represent such Indemnitees and in that event the reasonable fees and expenses of
such separate counsel (but not more than one separate counsel reasonably
satisfactory to the Indemnifying Party) shall be paid by such Indemnifying
Party. If an Indemnifying Party elects not to defend, or elects not to seek to
settle or compromise a Third Party Claim, such Indemnitee may defend or seek to
compromise or settle such Third Party Claim.
(c) If an Indemnifying Party chooses to defend or to seek to
compromise or settle any Third Party Claim, the related Indemnitee shall make
available to such Indemnifying Party any personnel or any books, records or
other documents within its control or which it otherwise has the ability to make
available that are necessary or appropriate for such defense, settlement or
compromise, and
14
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claim.
(d) Notwithstanding anything else in this Section 4.04 to the
contrary, neither an Indemnifying Party nor an Indemnitee shall settle or
compromise any Third Party Claim unless such settlement or compromise
contemplates as an unconditional term thereof the giving by such claimant or
plaintiff to the Indemnitee or the Indemnifying Party, respectively, of a
written release from all liability with respect to such Third Party Claim.
(e) Any claim on account of an Indemnifiable Loss which does not
result from a Third Party Claim shall be asserted by written notice given by the
Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall have
a period of 30 days after the receipt of such notice within which to respond
thereto. If such Indemnifying Party does not respond within such 30 day period,
such Indemnifying Party shall be deemed to have accepted responsibility to make
payment and shall have no further right to contest the validity of such claim.
If such Indemnifying Party does respond within such 30 day period and rejects
such claim in whole or in part, such Indemnitee shall be free to pursue such
remedies as may be available to such party under applicable law.
(f) In addition to any adjustments required pursuant to Section
4.03, if the amount of any Indemnifiable Loss shall, at any time subsequent to
the payment required by this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by the Indemnitee to the
Indemnifying Party.
(g) In the event of payment by an Indemnifying Party to any
Indemnitee in connection with any Third Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right
or claim relating to such Third Party Claim against any claimant or plaintiff
asserting such Third Party Claim. Such Indemnitee shall cooperate with such
Indemnifying Party in a reasonable manner, and at the cost and expense of such
Indemnifying Party, in prosecuting any subrogated right or claim.
(h) All disputes arising out of or relating to this Agreement
shall be resolved pursuant to the reference procedure set forth in California
Code of Civil Procedure Sections 638 et seq. The parties hereby agree to submit
-- ---
to the jurisdiction of the Superior Court of the County of Los Angeles, State
of California (the "Superior
15
Court") for such purpose. Either party may initiate the procedure set forth in
this subsection by providing the other party with notice setting forth the
nature of the dispute (the "Reference Notice"). The parties shall designate to
the Superior Court a referee who is an active attorney or retired judge living
in the County of Los Angeles who shall resolve the dispute. If the parties are
unable to designate a referee within 20 days after the receipt of the Reference
Notice, the parties shall request that the Superior Court appoint a referee. In
connection with any proceeding pursuant to this subsection, the parties shall
have any discovery rights which would have been available had the matters which
are the subject of the dispute been decided by the Superior Court. Discovery
proceedings may be noticed and commenced immediately after delivery of the
Reference Notice. The hearing before the referee shall begin no later than 60
days after the receipt of the Reference Notice. All discovery in connection with
the reference proceeding shall be concluded no later than 15 days prior to the
commencement of the hearing. Judgment upon the award rendered by the referee
shall be entered in the Superior Court. Nothing in this Section shall be
construed to impair the right of either party to appeal from such judgment.
(i) The parties hereto agree that the procedures set forth in
subsections (a) through (g) of this Section 4.04 shall be applicable to all
Ancillary Agreements and are deemed to be set forth therein as if such
procedures were fully set forth therein.
Section 4.05 Remedies Cumulative. The remedies provided in this
-------------------
Article IV shall be cumulative and shall not preclude assertion by any
Indemnitee of any other rights or the seeking of any and all other remedies
against any Indemnifying Party; provided, however, that all remedies sought or
-------- -------
asserted by an Indemnitee against an Indemnifying Party with respect to an
Indemnifiable Loss shall be limited by and be subject to the provisions of this
Article IV.
Section 4.06 Survival of Indemnities. The obligations of each of
-----------------------
(i) New Hillhaven, on the one hand, and (ii) NME, on the other hand, under this
Article IV, shall survive the sale or other transfer to or by it of any assets
or businesses or the assignment to or assumption by it of any Liabilities, with
respect to any Indemnifiable Loss of the other related to such assets,
businesses or Liabilities.
16
ARTICLE V
CERTAIN ADDITIONAL MATTERS
--------------------------
Section 5.01 Resignations. (a) New Hillhaven shall cause all New
------------
Hillhaven Employees, other than Messrs. Richard K. Eamer and Leonard Cohen, to
resign, effective as of the Distribution Date, from all boards of directors or
similar governing bodies of any NME Subsidiary on which they serve, and from all
positions as officers of NME or any NME Subsidiary in which they serve.
(b) NME shall cause all NME employees who are not also New
Hillhaven Employees to resign, effective as of the Distribution Date, from all
boards of directors or similar governing bodies of any New Hillhaven Subsidiary
on which they serve and from all positions as officers of any New Hillhaven
Subsidiary in which they serve.
Section 5.02 Outside Auditors. For periods ending through May 31,
----------------
1992, New Hillhaven shall appoint an accounting firm which is one of the "Big
Six" accounting firms or a successor thereto to perform the audit of New
Hillhaven's consolidated financial statements. During such periods, New
Hillhaven shall, and shall cause such auditors to, consult, within a reasonable
period of time prior to taking any action, with NME and its auditors in the
event that (i) New Hillhaven proposes to use accounting principles with respect
to New Hillhaven's consolidated financial statements different in any material
respect from the accounting principles currently used by NME in connection with
the preparation and audit of NME's consolidated financial statements or (ii) New
Hillhaven proposes to change its corporate structure from that indicated on
Annex III(b).
Section 5.03 Relationships; Name Changes.
---------------------------
(a) Relationships. As soon as practicable, and in any event not
-------------
later than one year after the Distribution, NME shall, and shall cause the NME
Subsidiaries to, cease using any existing printed material showing that New
Hillhaven or any New Hillhaven Subsidiary is a Subsidiary of NME, and New
Hillhaven shall, and shall cause the New Hillhaven Subsidiaries to, cease using
any existing printed material showing that New Hillhaven or any New Hillhaven
Subsidiary is a Subsidiary of NME.
(b) Name Changes. As soon as practicable, and in any event not
------------
later than one year after the Distribution, NME shall take all necessary steps
to change the corporate name of Old Hillhaven and any Old Hillhaven Subsidiary
using the word "Hillhaven" or any variation
17
thereof in its corporate name to eliminate such word or variation.
Section 5.04 Post-Distribution Adjustments. Promptly after the
-----------------------------
Distribution, New Hillhaven shall arrange for the preparation of a consolidated
balance sheet prepared in accordance with generally accepted accounting
principles applied on a basis consistent with past practice (the "Distribution
Date Balance Sheet") as of the Distribution Date and the delivery of such
Distribution Date Balance Sheet to NME not later than March 31, 1990. NME shall
have the right to oversee and participate fully in the preparation of the
Distribution Date Balance Sheet, and such balance sheet shall also be reviewed,
in accordance with the standards established by the American Institute of
Certified Public Accountants, by KPMG Peat Marwick prior to May 31, 1990. Based
upon the Distribution Date Balance Sheet as so reviewed, New Hillhaven and NME
shall execute and deliver the addendum set forth in the New Hillhaven Subsidiary
Note to be delivered by FHC, which will reflect the adjusted principal amount
determined in accordance with the formula set forth in such Note.
ARTICLE VI
ACCESS TO INFORMATION AND SERVICES
----------------------------------
Section 6.01 Provision of Corporate Records.
------------------------------
(a) Upon New Hillhaven's request NME shall arrange as soon as
practicable following the Distribution Date for the delivery to New Hillhaven of
existing corporate records in the possession of NME relating to New Hillhaven
and the New Hillhaven Subsidiaries and all active agreements and active
litigation files relating to the businesses to be transferred to New Hillhaven
or any New Hillhaven Subsidiary in connection with the Plan of Reorganization,
except to the extent such items are already in the possession of New Hillhaven
or any New Hillhaven Subsidiary. Such records shall be the property of New
Hillhaven, but shall be available to NME for review and duplication until NME
shall notify New Hillhaven in writing that such records are no longer of use to
NME.
(b) Upon NME's request New Hillhaven shall arrange as soon as
practicable following the Distribution Date, to the extent not previously
delivered in connection with the transactions contemplated in Article II and
Article III, for the delivery to NME of existing corporate records in its
possession relating to the real properties currently held by Old Hillhaven which
will not be transferred to New Hillhaven and other records relating to matters
other than the businesses to be transferred to New Hillhaven or any New
18
Hillhaven Subsidiary in connection with the Plan of Reorganization, except to
the extent such items are already in the possession of NME. Such records shall
be the property of NME, but shall be available to New Hillhaven for review and
duplication until New Hillhaven shall notify NME in writing that such records
are no longer of use to New Hillhaven.
Section 6.02 Access to Information.
---------------------
(a) From and after the Distribution Date, NME shall afford to
New Hillhaven and its authorized accountants, counsel and other designated
representatives reasonable access (including using reasonable efforts to give
access to persons or firms possessing information) and duplicating rights during
normal business hours to all records, books, contracts, instruments, computer
data and other data and information (collectively, "Information") within NME's
possession relating to the businesses to be transferred to New Hillhaven or any
New Hillhaven Subsidiary in connection with the Plan of Reorganization, insofar
as such access is reasonably required by New Hillhaven. Similarly, New Hillhaven
shall afford to NME and its authorized accountants, counsel and other designated
representatives reasonable access (including using reasonable efforts to give
access to persons or firms possessing Information) and duplicating rights during
normal business hours to Information within New Hillhaven's possession relating
to the NME business as constituted after the Distribution, insofar as such
access is reasonably required by NME. Information may be requested under this
Article VI for, without limitation, audit, accounting, claims, litigation
and tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations and for performing this Agreement and the Ancillary Agreements and
the transactions contemplated hereby and thereby.
(b) For a period of five years following the Distribution Date,
New Hillhaven shall provide to NME, promptly following such time at which such
documents shall be filed with the Commission, copies of all documents which
shall be filed by New Hillhaven or any of its Subsidiaries with the Commission
pursuant to the periodic and interim reporting requirements of the Exchange Act
and the rules and regulations of the Commission promulgated thereunder.
Section 6.03 Provision of Services. In addition to any services
---------------------
contemplated to be provided following the Distribution Date by the Services
Agreement or any other Ancillary Agreement, each party, upon written request,
shall make available to the other party, during normal business hours and in a
manner that will not unreasonably interfere with such party's business, its
financial, tax, accounting, legal, employee benefits and similar staff services
19
(collectively "Services") whenever and to the extent that they may be reasonably
required in connection with the preparation of tax returns, audits, claims,
litigation or administration of employee benefit plans, and otherwise to assist
in effecting an orderly transition following the Distribution.
Section 6.04 Production of Witnesses. At all times from and after
-----------------------
the Distribution Date, each of New Hillhaven and NME shall use reasonable
efforts to make available to the other upon written request its and its
Subsidiaries' officers, directors, employees and agents as witnesses to the
extent that such persons may reasonably be required in connection with legal,
administrative or other proceedings in which the requesting party may from time
to time be involved.
Section 6.05 Reimbursement. Except to the extent otherwise
-------------
contemplated by the Services Agreement or any other Ancillary Agreement, a party
providing Information or Services to the other party under this Article VI shall
be entitled to receive from the recipient, upon the presentation of invoices
therefor, payments for such amounts, relating to supplies, disbursements and
other out-of-pocket expenses, as may be reasonably incurred in providing such
Information or Services.
Section 6.06 Retention of Records. Each of NME and New Hillhaven
--------------------
shall retain, and shall cause its Subsidiaries to retain, pursuant to NME's
Record Retention Program, a copy of which has been made available to New
Hillhaven, all Information relating to the other and the other's Subsidiaries,
except as otherwise required by law or set forth in an Ancillary Agreement or
except to the extent that such Information is in the public domain or in the
possession of the other party; provided, that, after the expiration of the
-------- ----
applicable retention period set forth in such Program, such Information shall
not be destroyed or otherwise disposed of at any time, unless, prior to such
destruction or disposal, (a) the party proposing to destroy or otherwise dispose
of such Information shall provide no less than 90 days' prior written notice to
the other, specifying in reasonable detail the Information proposed to be
destroyed or disposed of and (b) if a recipient of such notice shall request in
writing prior to the scheduled date for such destruction or disposal that any of
the Information proposed to be destroyed or disposed of be delivered to such
requesting party, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such of the Information as was requested at the
expense of the party requesting such Information.
Section 6.07 Confidentiality. Subject to any contrary requirement
---------------
of law and the right of each party to
20
enforce its rights hereunder in any legal action, each party shall keep strictly
confidential, and shall cause its employees and agents to keep strictly
confidential, any Information of or concerning the other party which it or any
of its agents or employees may acquire pursuant to, or in the course of
performing its obligations under, any provisions of this Agreement; provided,
--------
however, that such obligation to maintain confidentiality shall not apply to
- -------
Information which (i) at the time of disclosure was in the public domain, (ii)
after disclosure enters the public domain not as a result of acts by the
receiving party, (iii) was already independently in the possession of the
receiving party at the time of disclosure or (iv) is received by the receiving
party from a third party who did not receive such Information from the
disclosing party under an obligation of confidentiality.
ARTICLE VII
MISCELLANEOUS
-------------
Section 7.01 Entire Agreement; Amendment. This Agreement and the
---------------------------
other agreements referred to herein or therein or entered into in connection
herewith or therewith set forth the entire agreement and understanding of the
parties with respect to the transactions contemplated hereby and supersede all
prior agreements, arrangements and understandings relating to the subject matter
hereof, including the Original Agreement. No representation, promise, inducement
or statement of intention has been made by either party hereto which is not
embodied in this Agreement or such other agreements, the Annexes, Schedules or
Exhibits hereto or thereto, or the written statements or other documents
delivered pursuant hereto or thereto, and neither party hereto shall be bound by
or liable for any alleged representation, promise, inducement or statement of
intention not so set forth. This Agreement may be amended or modified only by a
written instrument executed by both parties hereto or by their successors and
permitted assigns.
Section 7.02 Survival of Agreements. Except as otherwise
----------------------
contemplated by this Agreement, all covenants and agreements of the parties
contained in this Agreement shall survive the Distribution Date.
Section 7.03 Expenses. Except as otherwise set forth in this
--------
Agreement or any Ancillary Agreement, all costs and expenses in connection with
the preparation, execution, delivery and implementation of this Agreement and
with the consummation of the transactions contemplated by this Agreement shall
be paid by NME to the extent that appropriate documentation concerning such
costs and expenses shall be provided to NME, provided that NME shall have
approved in advance any item of expense in excess of $5,000 to be incurred after
the Distribution Date, which approval
21
shall not be unreasonably withheld. Such costs and expenses shall include,
without limitation, printing costs and other expenses related to the
preparation, printing and distribution of the Information Statement.
Section 7.04 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of California.
Section 7.05 Notices. All notices, consent, requests,
-------
instructions, approvals and other communications hereunder shall be in writing
and shall be deemed to have been duly given, if delivered in person or by
courier, telegraphed, telexed or sent by facsimile transmission or mailed, by
certified or registered mail, postage prepaid at the following address (or at
such other address provided by one party to the other in writing):
If to NME:
National Medical Enterprises, Inc.
2700 Colorado Avenue
P.O. Box 4070
Santa Monica, California 90404
Telecopy No.: (213) 315-6688
Attention: General Counsel
If to New Hillhaven:
The Hillhaven Corporation
1148 Broadway Plaza
Tacoma, Washington 98401-2264
Telecopy No.: (206) 756-4714
Attention: President
with a copy to:
The Hillhaven Corporation
1148 Broadway Plaza
Tacoma, Washington 98401-2264
Telecopy No.: (206) 756-4845
Attention: General Counsel
22
Section 7.06 Construction. In this Agreement,
------------
(i) unless the context otherwise requires, the terms "herein",
"hereof", "hereto", and "hereunder" refer to this Agreement; and
(ii) the headings of the sections and subsections hereof and the
table of contents hereof are inserted for convenience only and do not constitute
a part of this Agreement.
Section 7.07 Successors and Assigns. This Agreement and all of the
----------------------
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 7.08 Termination. This Agreement may be terminated and the
-----------
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the NME Board without the approval of New Hillhaven or of
NME's shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party.
Section 7.09 Subsidiaries. Each of the parties hereto shall cause
------------
to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth herein to be performed by any Subsidiary of
such party which is contemplated to be a Subsidiary of such party on and after
the Distribution Date.
Section 7.10 No Third Party Beneficiaries. Except for the
----------------------------
provisions of Article IV relating to Indemnitees, this Agreement is solely for
the benefit of the parties hereto and their respective Subsidiaries and
Affiliates and should not be deemed to confer upon third parties any remedy,
claim, Liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
Section 7.11 Further Assurances. The parties acknowledge and agree
------------------
that the execution, delivery and performance of this Agreement and the Ancillary
Agreements will give rise to substantial long term relationships and that the
exercise of certain contractual rights by one party under such agreements may
have an adverse effect on the other party. In light of such relationships
referred, to above, and so long as such relationships continue in substantially
the form contemplated by this Agreement and the Ancillary Agreements taken
together, each of the parties agrees to use its best efforts to consult with
each other in good faith as to such actions which may be taken under such
23
agreements or otherwise and which are reasonably believed to have a potentially
adverse effect on the business and affairs of the other. Notwithstanding the
foregoing, nothing in this Section shall be construed as limiting or otherwise
impairing the contractual rights and remedies exercisable by either party under
this Agreement or any of the Ancillary Agreements or otherwise in the conduct of
the business and affairs of either party.
Section 7.12 Annexes Exhibits and Schedules. The Annexes, Exhibits
------------------------------
and Schedules hereto shall be construed with and as an integral part of this
Agreement to the same extent as if the same had been set forth verbatim herein.
Section 7.13 Legal Enforceability. Any provision of this Agreement
--------------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision or remedies otherwise available to any party
hereto. Without prejudice to any rights or remedies otherwise available to any
party hereto, each party here to acknowledges that damages would be an
inadequate remedy for any breach of the provisions of this Agreement and agrees
that the obligations of the parties hereunder shall be specifically enforceable.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date and year first above written.
[signatures omitted]
24
ANNEX I
to
REORGANIZATION AND
DISTRIBUTION AGREEMENT
PLAN OF REORGANIZATION
Promptly following execution of the Agreement, the parties thereto
will commence implementation of the steps set forth below, in the sequence set
forth below, in order to permit the Distribution to be made as of the
Distribution Date. All such steps shall be implemented in accordance with the
Rules of Procedure set forth at the end of this Plan of Reorganization.
The key to abbreviations designating the nature of a transferor's
interest in the long term care facilities referred to herein is set forth in
paragraph (c) of the Rules of Procedure. Other defined terms used herein
without definition shall have the meaning ascribed to them in the Agreement.
Step 1. (i) FHC will sell and transfer its interest in all the
------
property, plant and equipment located at the 14 long term care facilities
identified below in this Step 1, together with any deferred finance charges,
prepaid interest and/or other assets related to the mortgage debt with respect
to such facilities including, without limitation, any sinking funds, escrow
accounts and replacement reserves (such deferred charges, prepaid
interest and other assets relating to the mortgage debt being referred to herein
collectively as the "Financing Assets"), to the NME Subsidiary listed below
under the caption "Purchaser" opposite the name of such facility. Each such NME
Subsidiary will purchase such assets on the terms contemplated hereby and, in
connection therewith, will assume all of the long-term mortgage debt, including
any accrued interest thereon, relating to the facilities so purchased. In each
case, the purchase price for such assets will equal the Book Value thereof.
Payment of the portion of such purchase price that exceeds the amount of debt so
assumed (such debt being valued for this purpose at its Book Value) will be made
via a credit in favor of FHC in the Purchaser's intercompany account with FHC.
All assets (other than the aforesaid property, plant and equipment and Financing
Assets) existing as of the respective effective dates of such transfers, and all
Liabilities other than the aforesaid long-term mortgage debt and any accrued
interest thereon existing as of such dates, related to such facilities will be
retained by FHC.
Facility Facility Transferor's
State Number Name and Address Interest Purchaser
----- -------- ---------------- ------------ ---------
CONNECTICUT
(1) 561 Adams House O HH Holding
Healthcare Co., Inc.
Torrington, Ct.
2
Facility Facility Transferor's
State Number Name and Address Interest Purchaser
----- -------- ---------------- ------------ ---------
(2) 562 Andrew House
Healthcare O HH Holding
New Britain, Ct. Co., Inc.
(3) 563 Camelot Nursing Home O HH Holding
New London, Ct. Co., Inc.
(4) 565 Hamilton Pavilion O HH Holding
Healthcare Co., Inc.
Norwich, Ct.
(5) 566 Mountain View O HH Holding
Healthcare Co., Inc.
Windsor, Ct.
(6) 567 Nutmeg Pavilion O HH Holding
Healthcare Co., Inc.
New London, Ct.
(7) 568 Parkway Pavilion O HH Holding
Healthcare Co., Inc.
Enfield, Ct.
NEW
HAMPSHIRE
(8) 591/8591 Dover House O Hillhaven,
Healthcare/Dover Inc.
Head Trauma Unit
Dover, NH
(9) 592 Greenbriar Terrace OB Old Hillhaven
Healthcare
Nusha, NH
(10) 593 Hanover Terrace O Hillhaven,
Healthcare Inc.
Hanover, NH
OHIO
(11) 560 Franklin Woods O Old Hillhaven
Health
Center
Columbus, OH
3
Facility Facility Transferor's
State Number Name and Address Interest Purchaser
----- -------- ---------------- ------------ ---------
(12) 570 Pickerington Health O Old Hillhaven
Convalescent Center
Pickerington, OH
(13) 572 Winchester Place I L Old Hillhaven
Winchester Place II O
Winchester, OH
VERMONT
(14) 559 Birchwood Terrace OB Hillhaven
Healthcare Inc.
Burlington, VT
(ii) The subsidiaries of NME identified as transferors in Exhibit
1(ii) hereto, each of which will either become a New Hillhaven Subsidiary or be
merged into a New Hillhaven Subsidiary pursuant to this Plan of Reorganization,
will sell and transfer the assets set forth in such Exhibit opposite the name of
such subsidiary to the transferees identified in such Exhibit, in each case for
a purchase price for such assets equal to the Book Value thereof. In connection
with such purchase, each transferee will assume all of the Liabilities of its
respective transferors existing as of the dates of such transfers relating to
the assets so transferred. Payment of the portion of such purchase price that
exceeds the amount of Liabilities so assumed-(such Liabilities being valued-for
this purpose at their Book Value) will be made via a credit in favor of each
transferor in the applicable transferee's intercompany account with such
transferor.
4
(iii) Old Hillhaven will assume the Liabilities described in
Exhibit l(iii) hereto of the subsidiaries identified as a transferor in such
Exhibit (each of which transferors will either become a New Hillhaven Subsidiary
or be merged into a New Hillhaven Subsidiary), such assumption to be reflected
as a charge against their respective intercompany accounts with Old Hillhaven.
Step 2. Medi-$ave Pharmacies, Inc. will declare a dividend in the
------
form of a New Hillhaven Subsidiary Note in the principal amount of $10 million,
payable to Hillhaven Inc., its stockholder of record as of the date of such
declaration, such dividend to be payable on January 31, 1990.
Step 3. FHC will, as lessee, enter into Lease Agreements covering
------
each of the 120 long term care facilities identified in Parts I and II of
Exhibit 3 hereto with the party listed in such Exhibit under the caption
"Owner/Lessor" opposite the name of such facility and management agreements with
respect to facility number 825 and facility number 829. The principal financial
terms of each such Lease Agreement are outlined on a Schedule of Lease Terms
initialed by the parties on January 8, 1990. All assets (other than property,
plant and equipment and Financing Assets) existing as of the respective
effective dates of such Lease Agreements and relating to the foregoing
facilities identified in Exhibit 3 owned by each such NME
5
Subsidiary will be sold and transferred by such NME Subsidiary to FHC, which
will purchase such assets on the terms contemplated hereby. In connection
therewith, FHC will assume all of the Liabilities (other than long-term mortgage
debt and any accrued interest thereon existing as of such date) of such NME
Subsidiary existing as of such dates related to the facilities so leased or the
assets so sold and transferred. The purchase price for such assets will equal
the Book Value thereof. Payment of the portion of such purchase price that
exceeds the amount of Liabilities so assumed (such Liabilities being valued for
this purpose at their Book Value) will be made via a credit in favor of the
transferor in FHC's intercompany account with such transferor.
Step 4. The following wholly-owned subsidiaries of HH Holding Co.,
------
Inc. will be merged upstream into HH Holding Co., Inc.:
(1) Aurora's Golden Age Nursing Home, Inc.
(2) NHE/Arizona, Inc.
(3) NHE/Lindenwood Nursing Home, Inc.
(4) NILE/South Carolina, Inc.
(5) Nursing Home of Cherry Hills, Inc.
By reason of such mergers, NH Holding Co., Inc. will succeed to all assets and
Liabilities of such merged corporations, including the interests in real
property and improvements thereon relating to the seven long term care
facilities of the corporations named above in this Step 4, as identified in
Exhibit 4 hereto.
6
Step 5. (i) Integrated Health Systems, Inc., a wholly-owned
------
Subsidiary of The Cadem Corporation, will be merged upstream into The Cadem
Corporation.
(ii) NME, owner of all of the outstanding capital stock of
The Cadem Corporation, will transfer such stock as a capital contribution to Old
Hillhaven.
Step 6. (i) Hillhaven West, Inc., owner of all the outstanding
------
capital stock of Pasatiempo Development, will sell that stock to FHC for a
purchase price equal to the Book Value of such stock. Payment of such purchase
price will be made via a credit in favor of the transferor in FHC's intercompany
account with such transferor.
(ii) The corporations listed in Exhibits 6(ii)(A) and
6(ii)(b) hereto will sell and transfer to FHC, and FHC will purchase on the
terms contemplated hereby, all (A) the assets of such transferor corporations
related to each of the 25 long term care facilities identified in Exhibit 6(ii)
(A) hereto under the respective names of such transferor corporations existing
as of the respective effective dates of such transfers related to such
facilities and (B) the notes receivable identified in Exhibit 6(ii) (B) hereto.
In connection with such sale and purchase, FHC will assume all of the
Liabilities of the transferors existing as of such dates related to the assets
so purchased. In each case, the purchase price for such assets will equal the
Book Value thereof. Payment of the portion of such purchase
7
price that exceeds the amount of Liabilities so assumed (such Liabilities being
valued for this purpose at their Book Value) will be made via a credit in favor
of the transferor in FHC's intercompany account with such transferor.
Step 7. (i) (a) Old Hillhaven, owner of all of the outstanding
------
capital stock of the corporations listed below in this Step 7, will transfer all
of such stock as a capital contribution to Hillhaven Inc., also a wholly-owned
subsidiary of Old Hillhaven:
(1) Brim of Massachusetts, Inc.
(2) The Cadem Corporation
(3) Chastain's of Ava, Inc.
(4) Chastain's of Buffalo, Inc.
(5) Chastain's of Clinton, Inc.
(6) Chastain's of Des Peres, Inc.
(7) Chastain's of Joplin, Inc.
(8) Chastain's of Lamar, Inc.
(9) Chastain's of Thayer, Inc.
(10) Cornerstone Child Care Centers, Inc.
(11) Hillhaven of Central Florida, Inc.
(12) Hillhaven of Hawaii, Inc.
(13) Hillhaven Properties, Ltd.
(14) Postcare Rehabilitation, Inc.
(15) Postcare Rehabilitation of Northern
California, Inc.
(16) Smith, Harst, Siebel and Associates Inc.
(b) Old Hillhaven, owner of all of the
outstanding preferred stock of Flagg Industries, Inc., will transfer all of such
stock as a capital contribution to Hillhaven Inc.
(ii) Old Hillhaven will transfer as a capital contribution to
Hillhaven Inc. all the assets
8
of Old Hillhaven related to each of the 68 long term care facilities identified
in Exhibit 7(ii) hereto, with the exception of that certain Option Agreement,
dated May 24, 1985, between Cardinal Medical Corporation and Old Hillhaven,
existing as of the respective effective dates of such transfers related to such
facilities. In connection with such transfer, Hillhaven Inc. will assume all of
the Liabilities of Old Hillhaven existing as of such dates related to the
facilities so transferred.
(iii) Old Hillhaven will transfer as a capital contribution to
Hillhaven Inc. all of the interest of Old Hillhaven in the
Partnership/stockholder interests and interests in real estate and improvements
thereon identified in Exhibit 7(iii) (A) hereto and the notes receivable
identified in Exhibits 7(iii) (B) and 7(iii) (C) hereto.
Step 8. HH Holding Co., Inc. will transfer to Hillhaven Inc., on the
------
terms contemplated hereby, all of the following assets:
(i) all of the outstanding common stock of Flagg Industries,
Inc. and Mediplex Pharmacy, Inc.
(ii) all of (A) the assets of HH Holding Co., Inc. related to
each of the 47 long term care facilities identified in Exhibit 8(ii)(A) hereto
existing as of the respective effective dates of such transfers related
9
to such facilities, and (B) the notes receivable identified in Exhibits 8(ii)(B)
and 8(ii)(C) hereto.
(iii) all of the assets related to the seven long term care
facilities acquired by HH Holding Co., Inc. pursuant to the mergers specified in
Step 4 hereof except the property, plant and equipment located at facility
number 742 (Bells Lodge Nursing Home) and any Financing Assets relating to such
facility.
In connection with the transfers provided for in paragraphs (ii) and
(iii) above of this Step 8, Hillhaven, Inc. will assume all of the Liabilities
of HH Holding Co., Inc. existing as of the respective effective dates of such
transfers related to the facilities referred to therein and other assets so
transferred, except Liabilities in respect of the mortgage debt (including
accrued interest thereon) relating to facility number 742. In exchange for the
transfers of assets referred to in paragraphs (i), (ii) and (iii) of this Step
8, net of the Liabilities assumed, Hillhaven Inc. will issue to HH Holding Co.,
Inc. 500 shares of Hillhaven Inc. common stock (such number of shares (the
"Estimate") constituting the best estimate of NME and New Hillhaven as of the
date of such transfer of the actual number of such shares issuable pursuant to
the formula set forth in the next sentence). As soon as practicable after the
Distribution, the actual number of such shares issuable in exchange for the
transfer of the aforesaid assets will be
10
determined for this purpose by calculating the Book Value per share of Hillhaven
Inc. common stock before giving effect to the transfers Provided for in this
Step 8 and then dividing the Book Value of such net assets transferred pursuant
to this Step 8 by such Book Value per share. To the extent the actual number of
shares issuable pursuant to such formula exceeds the Estimate, Hillhaven Inc.
will forthwith issue to HH Holding Co., Inc. a number of such shares equal to
such excess; to the extent such actual number of shares is less than the
Estimate, HH Holding Co., Inc. will forthwith return to Hillhaven Inc. a number
of such shares equal to such shortfall.
Step 9. Flagg Industries, Inc. will be merged upstream into
------
Hillhaven Inc.
Stem 10. (i) Hillhaven Inc., owner of all of the outstanding capital
-------
stock of the corporations listed below in this paragraph (i) of this Step 10,
will transfer all of such stock as a capital contribution to FHC:
(1) The Cadem Corporation
(2) Chastain's of Ava, Inc.
(3) Chastain's of Buffalo, Inc.
(4) Chastain's of Clinton, Inc.
(5) Chastain's of Des Peres, Inc.
(6) Chastain's of Joplin, Inc.
(7) Chastain's of Lamar, Inc.
(8) Chastain's of Thayer, Inc.
(9) Cornerstone Child Care Centers Inc.
(10) Hillhaven of Central Florida, Inc.
(11) Hillhaven of Hawaii, Inc.
(12) Hillhaven Properties, Ltd.
(13) Northwest Health Care, Inc.
(14) Postcare Rehabilitation, Inc.
(15) Postcare Rehabilitation of Northern California, Inc.
(16) Smith, Harst, Siebel and Associates, Inc.
11
(ii) Hillhaven Inc. will transfer to FHC without consideration,
other than the assumption of the Liabilities referred to in the next sentence,
all of the assets acquired by Hillhaven Inc. pursuant to Paragraphs (ii) and
(iii) of Step 7, Paragraphs (ii) and (iii) of Step 8 (with the exception of the
notes receivable identified in Exhibits 7(iii)(B) and 8(ii)(B)) and Step 9 (with
the exception of (1) the partnership interest in Healthcare Property Partners
(2) the property, plant and equipment located at facility number 203 (Hillhaven
Willow Pass) and any Financing Assets relating to such facility, and (3) any
prepaid Taxes (as defined in the Tax Sharing Agreement) and investment in life
insurance net of policy borrowings related to insurance policies issued on
November 1, 1984 and 1985 by Security Life of Denver originally obtained for
SERP participants and related prepaid interest on such policy borrowings). In
connection with such transfer, FHC will assume all of the Liabilities of
Hillhaven Inc. existing as of the date of such transfer relating to the assets
so transferred (with the exception, in the case of Liabilities to which
Hillhaven Inc. has succeeded by virtue of the merger into Hillhaven Inc. of
Flagg Industries, Inc., of (1) any Liability in respect of cash overdrafts in
disbursement and payroll bank accounts, (2) any Liability in respect of Taxes
for periods through and including the Distribution Date (including any Liability
in respect of deferred Taxes),
12
and (3) any Liability in respect of expenses related to the Distribution as set
forth in Section 7.03 of the Distribution Agreement.
(iii) (a) Old Hillhaven will transfer to Hillhaven Inc. as a
capital contribution a 98% limited partnership interest in facility number 7185.
(b) Old Hillhaven will transfer to Hillhaven Inc. as a capital
corporation the promissory note, in the principal amount of $1,750,000 dated as
of February 3, 1988 from Stockton Nursing Home Partners.
(c) Hillhaven Inc. will transfer to FHC without consideration other
than the assumption of associated Liabilities, including intercompany accounts,
(A) all the assets of Hillhaven Inc. related to the 49 long term care facilities
identified in Exhibit 10(iii)(A) hereto existing as of the respective dates of
such transfers related thereto, (B) the partnership interests and interests in
non-facility real estate and improvements thereon identified in Exhibit
10(iii)(B) hereto and (C) the notes receivable identified in Exhibit 10(iii)(C)
hereto. In connection with the transfer of the assets related to the 49 long
term care facilities referred to in clause (A) of the preceding sentence, FHC
will assume all of the Liabilities of Hillhaven Inc. existing as of the date of
such transfer relating to the assets so transferred.
13
Stem 11. (i) The following wholly-owned subsidiaries of FHC will be
-------
merged upstream into FHC:
(1) The Cadem Corporation
(2) Chastain's of Ava, Inc.
(3) Chastain's of Buffalo, Inc.
(4) Chastain's of Clinton, Inc.
(5) Chastain's of Des Peres, Inc.
(6) Chastain's of Joplin, Inc.
(7) Chastain's of Lamar, Inc.
(8) Chastain's of Thayer, Inc.
(9) Hillhaven of Hawaii, Inc.
(10) Postcare Rehabilitation, Inc.
(11) Postcare Rehabilitation of Northern
California, Inc.
(12) Smith, Harst, Siebel and Associates, Inc.
By reason of such mergers and the merger described in Step 5(i), FHC will
succeed to all the assets and Liabilities of such merged corporations, including
the assets relating to the 16 long term care facilities of certain of the
corporations identified in 11(i) (A) hereto and the note receivable identified
in Exhibit 11(i) (B) hereto.
(ii) FHC will execute and deliver to Old Hillhaven a New
Hillhaven Subsidiary Note evidencing existing intercompany indebtedness,
including such indebtedness assumed in connection with the transfers described
above, of FHC to Old Hillhaven (the initial aggregate principal amount of such
Note to be $127.3 million, subject to adjustment as provided in such Note). In
connection therewith and with the New Hillhaven Subsidiary Note referred to in
Step 2, the Note Guarantee Agreement will be executed and delivered.
14
Step 12. (i) Hillhaven Inc., owner of all of the outstanding capital
-------
stock of the corporations listed below in this Step 12, will transfer all of
such stock to New Hillhaven:
(1) Brim of Massachusetts, Inc.
(2) FHC
(3) Mediplex Pharmacy, Inc.
(4) Medi-$ave Pharmacies Inc.
(ii) Hillhaven Inc. will transfer to New Hillhaven (A) all the
notes receivable identified in Exhibits 7(iii) (B) and 8(ii) (B) hereto and
previously transferred to Hillhaven Inc. plus $30 million of cash and (B) all
its interests in the notes receivable identified in Exhibit 12(ii) hereto.
(iii) In exchange for the assets transferred pursuant to
paragraphs (i) and (ii) of this Step 12, New Hillhaven will transfer to
Hillhaven Inc. (1) such number of shares of New Hillhaven Common Stock so that
immediately after such issuance and after giving effect thereto, NME and its
Subsidiaries will own a number of such shares sufficient to enable NME to (a)
distribute to its shareholders one share of New Hillhaven Common Stock for each
share of NME Common Stock held on the record date for the Distribution and (b)
retain for its own account or the account of one of its Subsidiaries, in the
aggregate, a number of shares equal to 15% (rounded to the next highest full
share) of the outstanding New Hillhaven Common Stock and (2) warrants to
purchase 30 million shares of New Hillhaven Common Stock.
15
Step 13. New Hillhaven will transfer as a capital contribution all of
-------
the outstanding capital stock of Mediplex Pharmacy, Inc. to Medi-$ave Pharmacies
Inc.
Step 14. Hillhaven Inc. will distribute as a dividend to its
-------
shareholders, HH Holding Co., Inc. and Old Hillhaven, 85% of the shares of New
Hillhaven Common Stock it received in Step 12.
Step 15. HH Holding Co., Inc. will distribute as a dividend to its
-------
shareholder, Old Hillhaven, all of the shares of New Hillhaven Common Stock it
received in Step 14.
Step 16. Old Hillhaven will distribute as a dividend to its
-------
shareholder, NME, all of the shares of New Hillhaven Common Stock it received in
Steps 14 and 15.
Step 17. New Hillhaven will enter into an Assignment and Assumption
-------
Agreement, substantially in the form attached hereto as Exhibit 17, with each of
the NME Subsidiaries in order to accomplish the transfer from such NME
Subsidiaries to New Hillhaven of all additional miscellaneous assets and
Liabilities of such NME Subsidiaries that are not otherwise provided for in this
Plan of Reorganization, subject to the specific exclusions contemplated by such
Assignment and Assumption Agreement.
Rules of Procedure. The parties to the Agreement have established the
------------------
following Rules of Procedure for purposes of this Plan of Reorganization:
16
(a) Effectiveness of Transactions. The parties agree that the
-----------------------------
transactions contemplated in the various steps to this Plan of Reorganization
shall be deemed to take place in the sequence set forth herein and on the dates
set forth in the various instruments giving effect to such transactions, without
regard to the date of recordation of any instrument of conveyance or other
similar document or the date of the perfection of any security interest;
provided, however, that the effective date of any merger provided for in this
- -------- -------
Plan of Reorganization shall be determined in accordance with the applicable law
of the jurisdiction in question.
(b) Accounting. For purposes of this Plan of Reorganization, all
----------
references to "Book Value" shall be deemed to mean the amount at which the
particular asset or liability in question would, but for the transfers
contemplated hereby, have been reflected as of the Distribution Date on the
balance sheet of the entity which owns such asset or owes such liability on the
date of the Agreement.
The parties agree that such balance sheets will be prepared as of the
Distribution Date in accordance with generally accepted accounting principles
applied on a basis consistent with the audited balance sheet of NME as of May
31, 1989. A consolidated balance sheet of New Hillhaven as of the Distribution
Date is to be prepared by New
17
Hillhaven. Such balance sheet will be reviewed, in accordance with the standards
established by the American Institute of Certified Public Accountants, by KPMG
Peat Marwick. The books and records as of the Distribution Date that are to
serve as a basis for any computations contemplated by this Plan of
Reorganization shall have given effect to any changes therein required by such
accounting firm as a result of their review.
(c) Key to Transferor's Interest in Real Estate. The nature of the
-------------------------------------------
transferor's interest in the various long term care facilities to be transferred
pursuant to this Plan of Reorganization is designated in the lists referred to
above in accordance with the following key:
Nature of Interest Designation
------------------ -----------
Transferor is owner O
Transferor is sole lessee L
Transferor is co-lessee CL
Transferor is owner and O/L
lessor
Transferor is lessee and L/SL
sublessor
Transferor is manager, but M
not the owner or lessee
Transferor is owner of improvements,
but lessee of the land OB
Transferor is sublessee A
Transferor has contract to purchase
land L/C
(d) Definition of "Assets". For purposes of this Plan of
----------------------
Reorganization, references to "assets" unless otherwise indicated and except for
the transfers contemplated in Step 17 include, but are not limited to, property,
plant and equipment, including interests in real
18
property and improvements thereon, cash, inventory, accounts receivable,
intangible and other assets (including deferred financing costs).
(e) Settlement of Intercompany Accounts. The transfers of assets and
-----------------------------------
assumptions of Liabilities effected pursuant to this Plan of Reorganization will
result in the creation of net credits in favor of each transferor in FHC's
intercompany accounts with such transferor. Upon completion of the steps
provided above in this Plan of Reorganization, Old Hillhaven will cause all of
such transferors (all of which are Subsidiaries of Old Hillhaven) to transfer to
Old Hillhaven, by means of entries to the intercompany accounts, all of such
credits so created. Old Hillhaven will then deliver to FHC $127.3 million of
such credits in exchange for the issuance by FHC to Old Hillhaven of a New
Hillhaven Subsidiary Note in like principal amount, as contemplated by paragraph
(ii) of Step II of this Plan of Reorganization. Any additional credits
thereafter remaining at Old Hillhaven will then be contributed by Old Hillhaven
to the capital of New Hillhaven or to any New Hillhaven Subsidiary designated
for this purpose by New Hillhaven. Notwithstanding the foregoing, such
additional contribution may be effected in the accounts of the respective
companies in connection with any other step of this Plan of Reorganization.
19
EXHIBIT 1(ii)
to
Plan of Reorganization
----------------------
TRANSFER OF ASSETS FROM FHC
TO OLD HILLHAVEN AND HILLHAVEN INC.
-----------------------------------
Transferor Transferee Description of Assets
- ---------- ---------- ---------------------
Brim of Massachusetts, Inc. Old (1) All prepaid Taxes
FHC Hillhaven (as defined in the Tax
Cornerstone Child Care Centers, Inc. Sharing Agreement); and
Hillhaven of Central Florida, Inc. (2) investment in life
Hillhaven Properties, Ltd. insurance net of policy
Brim - Olive Grove, Inc. borrowings related to
Fairview Living Centers, Inc. insurance policies
Northwest Health Care, Inc. issued on November 1,
Professional Medical Enterprises, Inc. 1984 and 1985 by
Medi-Save Pharmacies, Inc. Security Life of Denver
Mediplex Pharmacy, Inc. originally obtained for
Pasatiempo Development SERP participants and
The Cadem Corporation related prepaid interest
Chastain's of Ava, Inc. on such policy
Chastain's of Buffalo, Inc. borrowings.
Chastain's of Clinton, Inc.
Chastain's of Des Peres, Inc.
Chastain's of Joplin, Inc.
Chastain's of Lamar, Inc.
Chastain's of Thayer, Inc.
Hillhaven of Hawaii, Inc.
Integrated Health Systems, Inc.
Postcare Rehabilitation, Inc.
Postcare Rehabilitation of Northern
California, Inc.
Smith, Harst, Siebel and Associates, Inc.
Twenty-Nine Hundred Corporation
FHC Hillhaven Partnership interest in
Inc. Health Care Property
Partners
Transferor Transferee Description of Assets
- ---------- ---------- ---------------------
FHC Hillhaven "Excess Land" consisting
Inc. of one-half of property
parcel related to
facility number 591 in
Dover, N.H. as shall
subsequently be more
particularly described.
EXHIBIT 1(ii), page 2
EXHIBIT 1(iii)
to
Plan of Reorganization
----------------------
ASSUMPTION OF LIABILITIES BY OLD HILLHAVEN
------------------------------------------
Transferor Description of Liability
- ---------- ------------------------
Brim of Massachusetts, Inc. (1) Any Liability in
FHC respect of cash
Cornerstone Child Care Centers, Inc. overdrafts in
Hillhaven of Central Florida, Inc. disbursement and
Hillhaven Properties, Ltd. payroll bank accounts
Brim - Olive Grove, Inc. maintained by
Fairview Living Centers, Inc. transferor; (2) any
Northwest Health Care, Inc. Liability in respect
Professional Medical Enterprises, Inc. of Taxes for periods
Medi-Save Pharmacies, Inc. through and including
Mediplex Pharmacy, Inc. the Distribution Date
Pasatiempo Development (including any
The Cadem Corporation Liability in respect
Chastain's of Ava, Inc. of deferred Taxes);
Chastain's of Buffalo, Inc. and (3) any Liability
Chastain's of Clinton, Inc. in respect of expenses
Chastain's of Des Peres, Inc. related to the
Chastain's of Joplin, Inc. Distribution as set
Chastain's of Lamar, Inc. forth in Section 7.03
Chastain's of Thayer, Inc. of the Distribution
Hillhaven of Hawaii, Inc. Agreement.
Integrated Health Systems, Inc.
Postcare Rehabilitation, Inc.
Postcare Rehabilitation of Northern
California, Inc.
Smith, Harst, Siebel and Associates, Inc.
Twenty-Nine Hundred Corporation
EXHIBIT 1(iii), page 1
EXHIBIT 3
to
Plan of Reorganization
----------------------
FACILITIES LEASED TO FHC
BY OLD HILLHAVEN OR ITS SUBSIDIARIES
------------------------------------
PART I
Facilities Owned Or Leased by NME Subsidiaries
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- ------------------------- ------
ALABAMA
(1) 791 Whitesburg Manor Health HH Holding Co.,
Care Center Inc.
105 Teakwood Drive
Huntsville, AL
ARIZONA
(2,3) 436, 437 Valley House Healthcare Hillhaven West,
5545 East Lee Street Inc.
Tucson, AZ
(4) 742 Bells Lodge Nursing Home NHE/Arizona,
4202 North 20th Avenue Inc.
Phoenix, AZ
(5) 851 Villa Campana Healthcare Old Hillhaven
6651 Carondelet Drive East
Tucson, AZ
ARKANSAS
(6) 818 Hillhaven Little Rock Old Hillhaven
5720 West Markam
Little Rock, AR
CALIFORNIA
EXHIBIT 3, page 1
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- ------------------------- ------
(7) 149 Fair Oaks Health Care Center Hillhaven Inc.
8845 Fair Oaks Boulevard
Sacramento, CA
(8) 150 Hillhaven San Francisco Hillhaven, Inc
1359 Pine Street
San Francisco, CA
(9) 203 Hillhaven Willow Pass Flagg
3318 Willow Pass Industries Inc.
Concord, CA
(10) 320 Hillhaven Convalescent Hillhaven, Inc
Hospital
1609 Trousdale Drive
Burlingame, CA
(11) 410 Santa Paula Healthcare Hillhaven West,
220 West Main Street Inc.
Santa Paula, CA
(12) 411 Alta Vista Healthcare Hillhaven West.
9020 Garfield Inc.
Arlington, CA
(13) 420 Maywood Acres Healthcare Hillhaven West,
South "C" Street Inc.
Oxnard, CA
(14) 427 Twin Pines Healthcare Hillhaven West,
250 March Street Inc.
Santa Paula, CA
(15) 727 Broodview Convalescent HH Holding Co..
Hospital Inc.
13228 San Pablo Avenue
San Pablo, CA
(16) 737 Hillhaven San Leandro HH Holding Co.
368 Juana Avenue Inc.
San Leandro, CA
(17) 738 Hillhaven Alameda HH Holding Co.
2116 Otis Drive Inc.
Alameda, CA
EXHIBIT 3, page 2
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- ------------------------- ------
COLORADO
(18) 859 Castle Gardens Nursing Home Old Hillhaven
401 Malley Drive
Northglenn, CO
CONNECTICUT
(19) 561 Adams House Health Care HH Holding Co.,
80 Fern Drive Inc.
Torrington, CT
(20) 562 Andrew House Health Care HH Holding Co.,
66 Clinic Drive Inc.
New Britain, CT
(21) 563 Camelot Nursing Home HH Holding Co.,
89 Viets Street Inc.
New London, CT
(22) 565 Hamilton Pavilion Health Care HH Holding Co.,
50 Palmer Street Inc.
Norwich, CT
(23) 566 Mountain View Health Care HH Holding Co.,
581 Poquonock Avenue Inc.
Windsor, CT
(24) 567 Nutmeg Pavilion Health Care HH Holding Co.,
78 Viets Street Extension Inc.
New London, CT
(25) 568 Parkway Pavilion Health Care HH Holding Co.,
1157 Enfield Street Inc.
Enfield, CT
FLORIDA
(26) 115 Convalescent Center of the Hillhaven, Inc.
Palm Beaches
300 15th Street
West Palm Beach, FL
(27) 117 East Manor Medical Center Hillhaven, Inc.
1524 East Avenue South
Sarasota, FL
EXHIBIT 3, page 3
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- ------------------------- ------
(28) 124 Hillhaven Health Care Center Old Hillhaven
950 Mellonville Avenue
Sanford, FL
(29) 125 Titusville Nursing and Old Hillhaven
Convalescent Center
1705 Jess Parrish Court
Titusville, FL
(30) 610 Boca Raton Convalescent Center Hillhaven, Inc.
755 Meadows Road
Boca Raton, FL
(31) 836 Medicenter - Tampa Old Hillhaven
4411 North Habana
Tampa, FL
GEORGIA
(32) 155 Savannah Convalescent Center Hillhaven, Inc.
815 East 63rd Street
Savannah, GA
(33) 645 Hillhaven Rehabilitation and Hillhaven, Inc.
Convalescent Center
26 Tower Road
Merrietta, GA
(34) 660 Hillhaven Convalescent Center Hillhaven, Inc.
11800 Abercorn Street
Savannah, GA
ILLINOIS
(35) 448 Dirkson House Health Care Hillhaven West,
555 West Carpenter Street Inc.
Box 7025
Springfield, IL
INDIANA
(36) 286 Columbia Nursing Plaza HH Holding Co.,
621 West Columbia Inc.
Evansville, IN
EXHIBIT 3, page 4
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- ------------------------- ------
(37) 779 Westview Manor Healthcare HH Holding Co.,
Center Inc.
1510 Clinic Drive
Bedford, IN
(38) 780 Columbus Convalescent Center HH Holding Co.,
2100 Midway Inc.
Columbia, IN
KANSAS
(39) 838 Hillhaven - Topeka Old Hillhaven
711 Garfield
Topeka, KS
(40) 844 Hillhaven - Wichita Old Hillhaven
932 North Topeka
Wichita, KS
KENTUCKY
(41) 783 Lexington Manor Healthcare HH Holding Co.,
Facility Inc.
353 Waller Avenue
Lexington, KY
MISSOURI
(42) 445 Clayton House Health Care Hillhaven West,
Center Inc.
13995 East Clayton Road
Manchester, MO
(43) 446 Columbia House Health Care Hillhaven West,
1801 Towne Drive Inc.
Columbia, MO
(44) 834 Medicenter - Springfield Old Hillhaven
1911 South National
Springfield, MO
MONTANA
(45) 416 Park Place Hillhaven Hillhaven West,
Convalescent Center Inc.
P.O. Box 5001
Great Falls, MT
EXHIBIT 3, page 5
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- ------------------------- ------
(46) 433 Parkview Acres Convalescent Hillhaven West,
Center Inc.
200 Oregon Street
Dillon, MT
NEVADA
(47) 145 Reno Healthcare Hillhaven, Inc.
1300 Mill Street
Reno, NV
(48) 640 Las Vegas Convalescent Center Hillhaven, Inc.
2832 Maryland Parkway
Las Vegas, NV
(49) 641 Torrey Pines Care Center Hillhaven, Inc.
1701 South Torrey Pines Drive
P.O. Box 26209
Las Vegas, NV
NEW HAMPSHIRE
(50) 593 Hanover Terrace Hillhaven, Inc.
Lyme Road
Hanover, NH
(51) 591/8591 Dover House Health Care/ Hillhaven, Inc.
Dover Trauma Unit
Plaza Drive
Dover, NH
NORTH CAROLINA
(52) 116 Durham Hillhaven Hillhaven, Inc.
Rehabilitation
and Convalescent Center
1515 West Pettigrew
Durham, NC
(53) 136 Hillhaven La Salle Nursing Hillhaven, Inc.
Center
411 South La Salle Street
Durhum, NC
(54) 137 Hillhaven - Sunnybrook Hillhaven, Inc.
Convalescent Center
25 Sunnybrook Road
Raleigh, NC
EXHIBIT 3, PAGE 6
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- ------------------------- ------
(55) 138 Hillhaven Rehabilitation and Hillhaven, Inc.
Care Center
91 Victoria Road
Asheville, NC
(56) 143 Hillhaven Convalescent Center Hillhaven, Inc.
616 Wade Avenue
Raleigh, NC
(57) 146 Hillhaven - Rose Manor Hillhaven, Inc
Convalescent Center
4230 North Roxboro Road
Durham, NC
(58) 176 Hillhaven - Orange Nursing Hillhaven, Inc.
Center
Route 1, Box 155
Durham, NC
(59) 188 Hillhaven Convalescent Center Hillhaven, Inc.
2006 South 16th Street
Wilmington, NC
(60) 190 Winston-Salem Convalescent Hillhaven, Inc.
Center
1900 West First Street
Winston-Salem, NC
(61) 191 Silas Creek Manor Hillhaven, Inc.
3350 Silas Creek Parkway
Winston Salem, NC
(62) 704 Guardian Care of Roanoke Guardian Medical
Rapids Services, Inc.
305 14th Street
Roanoke Rapids, NC
(63) 706 Guardian Care of Henderson Guardian Medical
519 Roanoke Avenue Services, Inc.
P.O. Box 1616
Henderson, NC
(64) 707 Guardian Care Center of Monroe Guardian Medical
1212 Sunset Drive Services, Inc.
P.O. Box 1189
Monroe, NC
EXHBIT 3, page 7
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- -------------------------- ------
(65) 710 Guardian Care of New Bern Guardian Medical
836 Hospital Drive Services, Inc.
P.O. Box 2037
New Bern, NC
(66) 711 Guardian Care of Kinston Guardian Medical
Cunningham Road Services, Inc.
P.O. Box 1438
Kinston, NC
(67) 713 Guardian Care of Zebulon Guardian Medical
509 Gannon Avenue Services, Ltd.
Zebulon, NC
(68) 724 Hillhaven Health Care of Guardian Medical
Gastonia Services, Ltd.
416 North Highland Street
Gastonia, NC
(69) 806 Hillhaven Convalescent of Hillhaven, Inc.
Chapel Hill
1602 East Franklin Street
Chapel Hill, NC
OHIO
(70) 560 Franklin Woods Nursing Home Old Hillhaven
2770 Clime Road
Columbus, OH
(71) 570 Pickerington Health Care Old Hillhaven
Center
1300 Hill Road North
Pickerington, OH
(72) 572 Winchester Place II Old Hillhaven
36 Lehman Drive
Canal Winchester, OH
(73) 802 Hillhaven Convalescent Center Old Hillhaven
145 Olive Street
Akron, OH
EXHIBIT 3, page 8
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- -------------------------- ------
OKLAHOMA
(74, 75) 233, 234 Heritage Manor Nursing and Old Hillhaven
Convalescent Center
215 Southeast Howard Street
Bartlesville, OK
TENNESSEE
(76) 132 Hillhaven Convalescent Center Hillhaven, Inc.
431 Larkin Springs Road
Madison, Tennessee
TEXAS
(77) 750 Golden Age Manor/Belfort HH Holding Co.,
7633 Belfort Inc.
Houston, TX
(78) 752 Golden Age Manor/Long Point HH Holding Co.,
8810 Long Point Road Inc.
Houston, TX
(79) 753 Golden Age Manor/North Loop HH Holding Co.,
1737 North Loop West Inc.
Houston, TX
(80) 754 Golden Age Manor/Rookin HH Holding Co.,
6500 Rookin Inc.
Houston, TX
UTAH
(81) 655 Hillhaven Convalescent Center Hillhaven, Inc.
41 South 9th East
Salt Lake City, UT
(82) 690 Wasatch Villa Convalescent Hillhaven, Inc.
Nursing Home
2200 East 33rd Street
Salt Lake City, UT
VIRGINIA
(83) 825 Nasamond Convalescent Center Old Hillhaven
200 Constance Road
Suffolk, VA
EXHIBIT 3, page 9
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- -------------------------- ------
(84) 826 Hillhaven Rehabilitation and Old Hillhaven
Convalescent Center
1005 Hampton Road
Norfolk, VA
(85) 829 Holmes Convalescent Home Old Hillhaven
4142 Bonney Road
Virginia Beach, VA
(86) 842 Medicenter - Virginia Beach Old Hillhaven
1148 First Colonial Road
Virginia Beach, VA
WASHINGTON
(87) 114 Arden Nursing Home Hillhaven, Inc.
16357 Aurora Avenue North
Seattle, WA
(88) 127 North West Continuum Care Northwest
Center Continuum Care
128 Beacon Hill Center, Inc. and
Longview, WA Hillhaven, Inc.
(89) 158 Bellingham Care Center Hillhaven, Inc.
1200 Birchwood Avenue
Bellingham, WA
(90) 160 First Hill Care Center Hillhaven, Inc.
1334 Terry Avenue
Seattle, WA
(91) 180 Hillhaven Convalescent Center Hillhaven, Inc.
400 East 33rd Street
Vancouver, WA
(92) 185 Hillhaven Nursing Home Hillhaven, Inc.
3605 "Y" Street
Vancouver, WA
(93) 461 Edmonds Care Center Hillhaven West,
21008 76th Avenue West Inc.
Edmonds, WA
(94) 462 Queen Anne Care Center Hillhaven West,
2717 Dexter Avenue North Inc.
Seattle, WA
EXHIBIT 3, page 10
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- -------------------------- ------
WISCONSIN
(95) 765 Eastview Manor HH Holding Co.,
729 Park Street Inc.
Antigo, WI
(96) 767 Colony Oaks Care Center HR Holding Co.,
602 Briarcliff Drive Inc.
Appleton, WI
(97) 770 Vallhaven Care Center HH Holding Co.,
125 Byrd Avenue Inc.
Neenah, WI
(98) 774 Mount Carmel Nursing Home HH Holding Co.,
5700 West Layton Avenue Inc.
Milwaukee, WI
(99) 775 Sheridan Nursing Home HH Holding Co.,
2400 Sheridan Road Inc.
Kenosha, WI
(100) 776 Woodstock/Kenosha Health HH Holding Co.,
Care Center Inc.
3415 Sheraton Road
Kenosha, WI
WYOMING
(101) 441 Mountain Towers Health Hillhaven West
Care Center Inc.
3129 Acacia Drive
Cheyenne, WY
(102) 481 Park Manor Nursing and Hillhaven West
Convalescent Home Inc.
542-16th Street
P.O. Box 1150
Rawlings, WY
(103) 482 Fremont Manor Nursing and Hillhaven West
Convalescent Home Inc.
1002 Forest Avenue
Riverton, WY
EXHIBIT 3, page 11
Facility Owner/
State Number Facility Name and Address Lessor
----- -------- -------------------------- ------
(104) 483 Kimberly Manor Nursing and Hillhaven West,
Convalescent Home Inc.
1325 Sage Street
P.O. 1146
Rock Springs, WY
EXHIBIT 3, page 12
PART II
(Facilities Subject to a Master Lease)
Facility Facility Name Description of Owner/
State Number and Address Master Lease Lessor
----- -------- ------------- -------------- ------
ALABAMA
(105) 804 Hillhaven Lease dated Old Hillhaven
Convalescent Center July 3, 1969, by
and Nursing Home and between
27RE28 10th Avenue St. Vincent's
Birmingham, AL Hospital, as
lessor, and
Medicenters of
America, Inc., as
lessee (ground
lease).
(106) 824 Hillhaven Lease dated Old Hillhaven
Convalescent Center November 30, 1966,
and Nursing Home by and between
1758 Springhill Earl B. Wert and
Avenue Ellen R. Wert, as
Mobile, AL lessors, and
Medicenters of
America, Inc., as
lessee (ground
lease).
ARIZONA
(107) 7104 Villa Campana Lease and Old Hillhaven &
Retirement Center Acquisition Hillhaven, Inc.
6653 E. Carondelet Agreement dated
Drive February 1, 1983
Tucson, AZ by and between the
Industrial
Development
Authority of the
County of Pima, as
lessor, and The
Hillhaven
Corporation, as
lessee.
EXHIBIT 3, page 13
Facility Facility Name Description of Owner/
State Number and Address Master Lease Lessor
----- -------- ------------- -------------- ------
CALIFORNIA
(108) 525 Hillhaven Lease dated June Hillhaven, Inc.
Convalescent 11, 1962, by and
Hospital between Mary G.
920 W. LaVeta Newcom, Richard B.
Orange, CA Newcom and Mary
Beth Potter
Querfurth, as
lessor, and Orange
Square Development
Corporation, as
lessee (ground
lease).
KANSAS
(109) 809 Country Club Home Lease and Old Hillhaven
400 Sunset Dr. Agreement dated
P.O. Box 319 January 1, 1973 by
Council Grove, KS and between the
City of Council
Grove, as lessor,
and Country Club
Home, Inc., as
lessee.
(110) 833 Sedgewick Lease and Sedgewick
Convalescent Agreement dated Convalescent
Center September 20, 1974 Center, Inc.
712 Monroe by and between the
Box 49 City of Sedgewick,
Sedgewick, KS as lessor, and
Sedgewick
Convalescent
Center, Inc., a
Kansas
corporation, as
lessee.
EXHIBIT 3, page 14
Facility Facility Name Description of Owner/
State Number and Address Master Lease Lessor
----- -------- ------------- -------------- ------
(111, 857, Hammond Holiday Lease dated Hammond Holiday
112) 858 Home January 1, 1980 by House, Inc.
114 West 11th and between the
Larned, KS City of Larned,
Kansas, as lessor,
and Hammond
Holiday Home,
Inc., a Kansas
corporation, as
lessee.
(113) 861 Green Meadows Lease dated July Old Hillhaven
Nursing Center 1, 1982 by and
215 N. Larmar St. between the City
Haysville, KS of Haysville,
Sedgewick County,
Kansas, as lessor,
and Green Meadows
Nursing Center,
Inc., as lessee.
KENTUCKY
(114) 781 Bashford East Lease dated HH Holding Co.,
Healthcare February 13, 1962 Inc.
3535 Bardstown Road by and between
Louisville, KY Cesare Bertoli and
Kathleen H.
Bertoli, as
lessor, and
Heritage Home
Nursing and
Convalescent Care.
NEW HAMPSHIRE
(115) 592 Greenbriar Terrace Lease dated Old Hillhaven
55 Harris Road October 1, 1972 by
Nashua, NH and between Samuel
A. Tamposi, Gerald
Q. Nash, as
lessor, and
Greenbriar Nursing
Home Corp., as
lessee (ground
lease).
EXHIBIT 3, page 15
Facility Facility Name Description of Owner/
State Number and Address Master Lease Lessor
----- -------- ------------- -------------- ------
OHIO
(116) 572 Winchester Place I Lease agreement Old Hillhaven
36 Lehman Drive dated October 29,
Canal Winchester, 1976 by and
Ohio between Harley B.
and George J.
Reynolds, as
lessor, and AEON,
Inc., as lessee.
TENNESSEE
(117) 822 Hillhaven Lease agreement Hillhaven, Inc.
Convalescent Center dated December 1,
605 Primary Parkway 1979 by and
Memphis, TN between The Health
and Educational
Facilities Board
of the County of
Shelby, Tennessee
and Hillhaven,
Inc.
VERMONT
(118) 559 Birchwood Lease dated June Hillhaven, Inc.
Healthcare Center 17, 1964 by and
43 Starr Farm Road between Henry H.
Burlington, VT Riordan and
Charles W. Jones,
Trustees of the
Will of John H.
Flynn, as lessor,
and Birchwood
Development
Corporation, as
lessee.
EXHIBIT 3, page 16
Facility Facility Name Description of Owner/
State Number and Address Master Lease Lessor
----- -------- ------------- -------------- ------
WISCONSIN
(119) 769 North Ridge Care Lease agreement HH Holding Co.,
Center dated June 1, 1983 Inc.
1445 N. 7th Street by and between
Manitowoc, WI City of Manitowoc,
Wisconsin, as
lessor, and HH
Holding Co., Inc.,
a Delaware
corporation, as
lessee.
(120) 773 Mount Carmel Lease agreement HH Holding Co.,
Healthcare Center dated June 1, Inc.
677 E. State St. 1983 by and
Burlington, WI between City of
Burlington, as
lessor, and HH
Holding Co., Inc.,
a Delaware
corporation, as
lessee.
EXHIBIT 3, page 17
EXHIBIT 4
to
Plan of Reorganization
----------------------
ASSETS ACQUIRED BY HH HOLDING CO., INC. BY MERGER
-------------------------------------------------
Facility Facility Transferor's
State Number Name and Address Interest
----- --------- ---------------- -------------
PRIOR OWNER: AURORA'S GOLDEN AGE NURSING HOME, INC.
-----------
COLORADO
(1) 745 Aurora Care Center L
Aurora, CO
PRIOR OWNER: NHE/ARIZONA, INC.
-----------
ARIZONA
(2) 742 Bells Lodge 0
Phoenix, AZ
(3) 743 Desert Life Healthcare Center 0
Tucson, AZ
PRIOR OWNER: NHE/LINDENWOOD NURSING HOME, INC.
-----------
NEBRASKA
(4) 793 Lindenwood 0/L
Omaha, NE
PRIOR OWNER: NHE/SOUTH CAROLINA, INC.
-----------
SOUTH CAROLINA
(5) 792 Hillhaven Health Care 0
Greenville, SC
(6) 984 Meridian Care Center M
Columbia, SC
PRIOR OWNER: NURSING HOME OF CHERRY HILLS, INC.
-----------
COLORADO
(7) 744 Cherry Hills Nursing Home L
Englewood, CO
EXHIBIT 4, page 1
EXHIBIT 6(ii)(A)
to
Plan of Reorganization
----------------------
ASSETS PURCHASED BY FHC
FROM OLD HILLHAVEN SUBSIDIARIES
-------------------------------
Facility Facility Name Transferor's
State Number and Address Interest
----- ------ ----------- --------
TRANSFEROR: THE HILLHAVEN CORPORATION OF TEXAS
----------
TEXAS
(1) 840 University Manor Nursing L/SL
Home, Lubbock, TX
(2) 841 Quaker Villa Nursing Home L/SL
Lubbock, TX
TRANSFEROR: HILLHAVEN WEST, INC.
----------
IDAHO
(3) 409 Shoshone Living Center 0
Kellogg, ID
CALIFORNIA
(4) 415 Hillhaven Highland House L
Highland, CA
(5) 428 Sunset Boulevard L
Convalescent Hospital,
Hayward, CA
MONTANA
(6) 418 Carbon County Healthcare L
Center, Red Lodge, MT
(7) 434 Livingston Convalescent L
Center, Livingston, MT
EXHIBIT 6(ii)(A), page 1
Facility Facility Name Transferor's
State Number and Address Interest
----- ------ ----------- --------
OREGON
(8) 451 Oak Crest Care Center L
Salem, OR
(9) 453 Villa Royal Healthcare L
Center, Medford, OR
(10) 455 Hyland Hills Care Center L
Beaverton, OR
CALIFORNIA
(11) 413 Hillhaven Care Center L/SL
Santa Barbara, CA
OREGON
(12) 452 Sunnyside Care Center L/SL
Salem, OR
(13) 454 Sunnyglen L/SL
Salem, OR
TRANSFEROR: GUARDIAN MEDICAL SERVICES, INC.
NORTH CAROLINA
(14) 716 Guardian Care of Farmville 0
Farmville, NC
(15) 708 Guardian Care of Goldsboro L
Goldsboro, NC
(16) 709 Guardian Care of Burgaw L
Burgaw, NC
(17) 717 Guardian Care of Scotland L
Neck, Scotland Neck, NC
(18) 718 Guardian Care of Ahoskie L
Ahoskie, NC
(19) 719 Guardian Care of Walnut L
Cove, Walnut Cove, NC
(20) 721 Guardin Care of Elkin L
Elkin, NC
EXHIBIT 6(ii)(A), page 2
Facility Facility Name Transferor's
State Number and Address Interest
----- ------ ----------- --------
(21) 722 Guardian Care of L
Kenansville
Kenansville, NC
(22) 723 Guardian Care of Rocky L
Mount, Rocky Mount, NC
(23) 726 Guardian Care of Elizabeth L
City, Elizabeth City, NC
TRANSFEROR: LAKE HEALTHCARE FACILITIES, INC.
----------
WISCONSIN
(24) 601 Columbus Care Center L
Columbus, WI
(25) 604 Omro Care Center L
Omro, WI
EXHIBIT 6(ii)(A), page 3
EXHIBIT 6(ii)(B)
to
Plan of Reorganization
----------------------
NOTES RECEIVABLE TRANSFERRED TO FHC
-----------------------------------
TRANSFEROR: Hillhaven West, Inc.
----------
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
------ ----- ----- ---- ---------------
414 Mid-Valley Associates Hillhaven 08/85 - 10/05 $2,250,000.00
West, Inc.
450 Royal Oak Corp. Hillhaven 01/88 - 10/89 $ 1,359.07
West, Inc.
TRANSFEROR: Lake Health Care Facilities, Inc.
----------
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31. 1989)
- ------- ----- ----- ---- ---------------
600 Equity Associates Elm Row 10/81 - 11/96 $1,065,992.92
Jefferson,
Inc.
602 Peter C. Kern Lake Health 05/88 - 06/96 $2,953,871.43
Care
Facilities,
Inc.
605 Cal-Iowa Associates Lake Health 05/86 - 05/06 $1,909,728.14
Care
Facilities,
Inc.
EXHIBIT 6(ii)(B), page 1
TRANSFEROR: Hillhaven of Michigan, Inc.
----------
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31. 1989)
------ ----- ----- ---- ---------------
698 Peter C. Kern Hillhaven 05/88 - 06/96 $2,054,973.26
of
Michigan,
Inc.
TRANSFEROR: The Hillhaven Corporation of Texas
----------
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31. 1989)
------ ----- ----- ---- ---------------
840 Texas Health Enterprises, The 04/88 - 04/94 $ 49,115.36
Inc. Hillhaven
Corporation
of Texas
841 Texas Health Enterprises, The 04/88 - 04/94 $ 98,230.76
Inc. Hillhaven
Corporation
of Texas
EXHIBIT 6(ii)(B), page 2
EXHIBIT 7(ii)
to
Plan of Reorganization
----------------------
OLD HILLHAVEN FACILITY ASSETS TRANSFERRED
-----------------------------------------
TO HILLHAVEN. INC. AS A CAPITAL CONTRIBUTION
--------------------------------------------
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
FLORIDA
(1) 122 Bradenton Convalescent 0
Center
Bradenton, FL
KANSAS
(2) 895 Indian Creek Nursing Center 0
Overland Park, KS
(3) 896 Indian Meadows Nursing 0
Center
Overland Park, KS
KENTUCKY
(4) 864 Harrodsburg Health Care 0
Manor
Harrodsburg, KY
LOUISIANA
(5) 816 Lake Charles Care Center 0
Lake Charles, IA
MISSOURI
(6) 260 Tradition House Healthcare 0
Joplin, MO
(7) 823 Charlevoix Nursing Center 0
St. Charles, MO
(8) 7180/ Villa Ventura 0
821 Kansas City, MO
EXHIBIT 7(ii), page 1
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
OHIO
(9) 868 Lebanon Country Manor 0
Nursing Home
Lebanon, OH
TENNESSEE
(10) 884 Masters Health Care Center 0
Algood, TN
WISCONSIN
(11) 771 Heritage Haven Care Center 0
Schofield, WI
ARIZONA
(12) 796 Sierra Vista Care Center L
Sierra, AZ
(13) 885 Hillhaven Health Care L
Center
Yuma, AZ
(14) 886 Devon Gables Health Care L
Center
Tucson, AZ
(15) 887 Devon Gables Apartments L
Tucson, AZ
COLORADO
(16) 696 Bear Creek Nursing Center L
Morrison, CO
(17) 849 Iliff Care Center L
Denver, CO
(18) 872 Inglenook Retirement Center L
Brighton, CO
(19) 873 Brighton Care Center L
Brighton, CO
(20) 883 Golden West Nursing Home L
Fort Collins, CO
EXHIBIT 7(ii), page 2
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
FLORIDA
(21) 123 Orlando Memorial L
Convalescent Center
Orlando, FL
(22) 837 Cape Coral Nursing Pavilion L
Cape Coral, FL
ILLINOIS
(23) 258 Chastain's of Highland L
Highland, IL
KANSAS
(24) 803 Bethesda Nursing Center L
Chanute, KS
(25) 845 Colonial Terrace - L
Independence
Independence, KS
(26) 846 Colonial Lodge - L
Independence
Independence, KS
KENTUCKY
(27) 277 Rosewood Manor Health Care L
Center
Bowling Green, KY
(28) 278 Oakview Manor Health Care L
Center
Calvert City, KY
(29) 279 Cedars of Lebanon Rest Home L
Lebanon, KY
(30) 280 Winchester Manor Health L
Care Center
Winchester, KY
(31) 281 Riverside Manor Health Care L
Center
Calhoun, KY
EXHIBIT 7(ii), page 3
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
(32) 282 Maple Manor Health Care L
Center
Greenville, KY
MISSOURI
(33) 263 Crane Health Care Center L
Crane, MO
(34) 264 Point Lookout Health Care L/SL
Center
Point Lookout, MO
(35) 265 Table Rock Health Care L
Center
Kimberling City, MO
(36) 266 Table Rock Health Care L
Center
Residential Project
Kimberling City, MO
(37) 267 Point Lookout Health Care L/SL
Center
Residential Project
Point Lookout, MO
(38) 819 Wornall Health Care Center L
Kansas City, MO
(39) 843 Blue Hills Living Center L
Kansas City, MO
(40) 860 Blue Hills Centre L
Kansas City, MO
MONTANA
(41) 439 Big Sky Care Center L
Helena, MT
OHIO
(42) 237 Newark Healthcare Center L
Newark, OH
(43) 295 Whitehouse Country Manor L
Whitehouse, OH
EXHIBIT 7(ii), page 4
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
(44) 870 Community Nursing Center L
Marion, OH
OKLAHOMA
(45) 889 Mayfair Nursing Home L
Tulsa, OK
TENNESSEE
(46) 171 Hillhaven Convalescent CL
Center - Bolivar
Bolivar, TN
(47) 174 Hillhaven Convalescent CL
Center - Camden
Camden, TN
(48) 175 Hillhaven of Jefferson City CL
Jefferson City, TN
(49) 177 Loudon Healthcare Center CL
Loudon, TN
(50) 179 Hillhaven Convalescent L
Center - Huntington,
Huntington, TN
(51) 182 Hillhaven Convalescent CL
Center - Germantown,
Germantown, TN
(52) 184 Greystone Healthcare Center L
Blountville, TN
(53) 877 Smith County Health Care A
Center
Carthage, TN
VIRGINIA
(54) 871 Montvue Nursing Home L
Luray, VA
OHIO
(55) 238 McMillen Senior Village L
Newark, OH
EXHIBIT 7(ii), page 5
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
(56) 297 Marigarde - Sylvania 0/L
Nursing Home
Toledo, OH
MISSISSIPPI
(57) 882 Hillhaven Convalescent L/SL
Center West Point
West Point, MS
TEXAS
(58) 879 Sun Valley Healthcare L/SL
Harlingen, TX
(59) 290 Oaks Living Center L/SL
Orange, TX
(60) 291 Jones Healthcare Center L/SL
Orange, TX
(61) 880 Four States Nursing Home L/SL
Texarkana, TX
FLORIDA
(62) 945/9945 Quality Care of Bay Point M
Nursing Pavilion
St. Petersburg, FL
(63) 972/9972 Carrollwood Care Center M
Tampa, FL
(64) 9918 Hillhaven Conv. Center M
Sarasota, FL
LOUISIANA
(65) 946/9972 Bayview Living Center M
Gretna, LA
(66) 7170 The Landing on Behrman M
Place
New Orleans, LA
MASSACHUSETTS
(67) 949/9949 Ledgewood Nursing Center M
Beverly, MA
EXHIBIT 7(ii), page 6
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
MISSISSIPPI
(68) 996/9996 Care Inn - Alcorn County M
Corinth, MS
EXHIBIT 7(ii), page 7
EXHIBIT 7(iii)(A)
to
Plan of Reorganization
----------------------
OLD HILLHAVEN TRANSFERRED TO HILLHAVEN INC. AS A CAPITAL CONTRIBUTION
(Partnership/stockholder interests and non-facility related
-----------------------------------------------------------
real estate interests)
---------------------
FACILITY PARTNERSHIP/STOCKHOLDERS INTERESTS
-------------------------------------------
Facility Extent and Nature
State Number of Interest
----- -------- -----------------
ARIZONA
7101 a 5% limited partnership interest
(1) in Kachina Pointe Limited
Partnership
Sedona, AZ
COLORADO
(2) 7125 a 98% limited partnership
interest in Castle Gardens
Retirement Center Limited
Partnership
FLORIDA
(3) 972 a 49% general partnership
interest in Carrollwood Care
Center
Tampa, FL
MASSACHUSETTS
(4) 949 7500 shares (a 50% stockholder's
interest) in Ledgewood Healthcare
Corporation
Beverly, MA
MISSISSIPPI
(5) 996 a 50% general partnership
interest in NHS, Inc., HH Inc.
Partnership
Corinth, MS
EXHIBIT 7(iii)(A), page 1
Facility Extent and Nature
State Number of Interest
----- -------- -----------------
NEW MEXICO
(6) 874 a 99% limited partnership
interest in Casa Arena Blanca
Limited Partnership
Alamagordo, NM
NON-FACILITY RELATED PARTNERSHIP INTERESTS
------------------------------------------
(1) an 85.5% general
partnership interest in
Denver Convalescent
Company
(2) a 51% general
partnership interest in
Southfield Convalescent
Company
NON-FACILITY RELATED REAL ESTATE INTERESTS
------------------------------------------
Transferor's Interest
---------------------
(1) Aurora Hillhaven L
Regional Office
Denver, CO
(2) Hillhaven Regional L
Office
Sarasota, FL
(3) Hillhaven Regional L
Office
Overland Park, KS
(4) Hillhaven Regional L
Office
Lexington, MA
(5) Haverhill Warehouse L
Haverhill, MA
EXHIBIT 7(iii)(A), page 2
Transferor's Interest
---------------------
(6) Hillhaven Regional L
Office
Charlotte, NC
(7) Hillhaven Regional L
Office
Winston-Salem, NC
(8) Hillhaven Regional L
Office
Columbus, OH
(9) Hillhaven Regional L
Office
Memphis, TN
(10) Hillhaven Regional L
Office
Virginia Beach, VA
(11) Broadway Building L
1132-1136 Broadway
Plaza
Tacoma, WA 98402
(12) The Annex L
1140 Court C
Tacoma, WA 98402
(13) The Warehouse L
3003-B South Pine
Street
Tacoma, WA 98409
(14) Hillhaven Regional L
Office
Menasha, WI
(1) condominium located 0
at the following
address:
5101 North Casa
Blanca Drive
Unit #22
Scottsdale, AZ
85253
(2) Hillhaven Corporate L
Headquarters Office
Tacoma, WA
EXHIBIT 7(iii)(A), page 3
Transferor's Interest
---------------------
(3) Contract to buy land L/C
and improvements
thereon at the
following address:
The Print Shop,
1016 South 28th
Street
Tacoma, WA 98409
EXHIBIT 7(iii)(A), page 4
EXHIBIT 7(iii)(B)
to
Plan of Reorganization
----------------------
OLD HILLHAVEN NOTES RECEIVABLE TRANSFERRED TO
---------------------------------------------
HILLHAVEN INC, AS A CAPITAL CONTRIBUTION
----------------------------------------
(Non-Working Capital Notes - Subsequent Transfer
To New Hillhaven Pursuant To Step 12(ii))
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------- ----- ----- ---- ---------------
9949 Ledgewood Healthcare Old 12/87 - $ 750,000.00
Corporation Hillhaven
9949 Ledgewood Healthcare Old 12/87 - $ 150,000.00
Corporation Hillhaven
050 D. Zulauf Old 01/87 - 01/91 $ 1,100.21
Hillhaven
141 Gal-Farm Associates Sentry 11/86 - 11/01 $ 850,000.00
Investment
Company,
Inc.
142 Gal-Farm Associates Argus 11/86 - 11/01 $ 850,000.00
Investment
Company,
Inc.
297 Health Enterprises of Old 05/88 - 06/94 $ 98,462.33
Michigan, Inc. Hillhaven
800/ Prowestern Developers Old 10/87 - 11/89 $ 697,500.00
1002 Financial, Inc. and Hillhaven
Executive Capital
Corporation
800 Royal Oak Old 08/85 - 08/89 $ 20,000.00
Hillhaven
800 Quality Care Management Old 06/85 - 05/90 $ 412,000.00
Co., Inc. Hillhaven
EXHIBIT 7(iii)(B), page 1
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------- ----- ----- ---- ---------------
800 Angell Care Incorporated Old 06/87 - 06/90 $ 204,009.91
Hillhaven
800/ NHS Properties, Inc. Old 01/88 - 07/88 $ 262,500.00
7175 Hillhaven
800 NHS Properties, Inc. Old 01/88 - 07/88 $ 680,000.00
Hillhaven
800 Bob Latch, Gail Carnes Old 05/86 - _____ $ 400,000.00
and George Carnes Hillhaven
101 Joseph D. Livingston and Old 08/82 - 09/86 $ 202,498.52
Patricia Blaney Hillhaven
Livingston
811 Mark V Ltd. #2 Old 07/75 - 12/90 $ 89,773.10
Hillhaven
811 Mark V Ltd. #3 Old 05/70 - 01/91 $ 156,434.47
Hillhaven
812 Peter C. Kern Old 05/88 - 06/08 $2,427,097.72
Hillhaven
813 Cal-Iowa Associates Old 05/86 - 05/06 $2,224,824.03
Hillhaven
820 Pavilion Louisville Old 05/84 - 07/94 $2,570,847.18
Partnership Hillhaven
830 Omaha Associates Old 10/89 - 10/04 $3,428,000.00
Hillhaven
839 Peter C. Kern Old 05/88 - 06/96 $3,396,952.19
Hillhaven
878 Tri-State Associates Old 08/86 - 08/06 $3,577,533.08
Hillhaven
EXHIBIT 7(iii)(B), page 2
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------- ----- ----- ---- ---------------
9972 Carrollwood Care Center Old ______________ $ 153,629.00
Partnership Hillhaven
808 Peter C. Kern Old 04/88 - 04/96 $1,974,439.27
Hillhaven
879 Texas Health Enterprises, Old 04/88 - 04/94 $ 98,230.76
Inc. Hillhaven
9972 Carrollwood Care Center Old 03/87 - _____ $ 112,182.11
Partnership Hillhaven,
Robert
Whitcomb,
Fred Beene
and Dixie
Taylor
9996 Johnson, Mooney-Bond, Old _____________ $ 119,500.00
Inc. Hillhaven
799 Cal-Bax Associates Old 08/87 - 08/90 $ 360,000.00
Hillhaven
946 Bayview Living Center, Old 1/89 - 2/94 $3,200,000.00
Ltd. Hillhaven
EXHIBIT 7(iii)(B), page 3
EXHIBIT 7(iii)(C)
to
Plan of Reorganization
----------------------
OLD HILLHAVEN NOTES RECEIVABLE TRANSFERRED TO
---------------------------------------------
HILLHAVEN INC. AS A CAPITAL CONTRIBUTION
----------------------------------------
(Working Capital Notes - Subsequent Transfer
To FHC Pursuant To Step 10 (ii))
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------- ----- ----- ---- ---------------
800/ Casa Arena Blanca Limited Old 11/86 - 11/93 $ 1,270,988.51
1874 Partnership Hillhaven
800 Stockton Health Care Old 12/86 - sale of $ 904,805.46
Center, Limited Hillhaven facility
Partnership
800 Casa Arena Blanca Limited Old $ 238,000.00
Partnership Hillhaven ______________
9922 Windsor Woods Ltd. Old 08/87 - ______ $ 1,551,543.51
Hillhaven
9976 Windsor Woods Ltd. Old $ 531,949.18
Hillhaven _____________
9919 Gene E. Lynn, Michael S. Old $ 870,000.00
Lynn, Ron Hayes and Nancy Hillhaven _____________
Hayes
9973 Gene E. Lynn, Michael S. Old 03/87 - 12/93 $ 810,000.00
Lynn, Ron Hayes and Nancy Hillhaven or sale of
Hayes facility
9975 Gene E. Lynn, Michael S. 03/87 - 12/94 $ 1,042,500.00
Lynn, Ron Hayes and Nancy or sale of
Hayes facility
9992 Paull Randle Associates Old $ 1,580,043.95
Hillhaven _____________
EXHIBIT 7(iii)(C), page 1
EXHIBIT 8(ii)(A)
to
Plan of Reorganization
----------------------
FACILITY ASSETS OF HH HOLDING CO., INC. TRANSFERRED TO HILLHAVEN INC.
---------------------------------------------------------------------
Facility Facility Name Transferor's
State Number and Address Interest
----- ------ ----------- --------
ARIZONA
(1) 853 Kachina Point Health Center 0
Sedona, AZ
CALIFORNIA
(2) 729 Hillhaven Convalescent Hospital 0
Castro Valley, CA
KENTUCKY
(3) 784 Northfield Manor Healthcare 0
Facility
Louisville, KY
(4) 785 Hillcrest Healthcare Center 0
Owensboro, KY
(5) 787 Woodland Terrace 0
Healthcare Facility
Elizabethtown, KY
MINNESOTA
(6) 764 Woodside Convalescent Center 0
Rochester, MN
WISCONSIN
(7) 772 Family Heritage Nursing 0
Home/Wisconsin Rapids
Wisconsin Rapids, WI
CALIFORNIA
(8) 730 Del Rosa Convalescent Hospital L
San Bernardino, CA
(9) 736 Oakridge Convalescent Hospital L
Oakland, CA
EXHIBIT 8(ii)(A), page 1
Facility Facility Name Transferor' s
State Number and Address Interest
----- ------ ----------- --------
INDIANA
(10) 285 Gertha's Nursing Center L
Evansville, IN
(11) 287 Crestview Convalescent Home L
Vincennes, IN
(12) 288 Indian Creek Convalescent Center L
Corydon, IN
(13) 293 Westfield Village L
Westfield, IN
(14) 294 Windsor Estates of Kokomo L
Kokomo, IN
(15) 694 Wedgewood Manor Convalescent L
Center
Clarksville, IN
KENTUCKY
(16) 271 Heritage Manor Healthcare Center L
Mayfield, KY
(17) 782 Fellowship Home & Friendship L
House
Danville, KY
(18) 786 River Front Terrace Healthcare L
Facility
Paducah, KY
NEBRASKA
(19) 746 Homestead Nursing Home L
Lincoln, NE
TENNESSEE
(20) 789 Northhaven Healthcare Center L
Knoxville, TN
EXHIBIT 8(ii)(A), page 2
Facility Facility Name Transferor's
State Number and Address Interest
----- ------ ----------- --------
WISCONSIN
(21) 289 San Luis Manors L
Green Bay, WI
(22) 766 Colonial Manor L
Wausau, WI
CALIFORNIA
(23) 731 High Street Convalescent 0/L
Hospital
Oakland, CA
(24) 734 MacArthur Convalescent Hospital 0/L
Oakland, CA
(25) 735 Oak Manor Convalescent Hospital 0/L
Oakland, CA
MICHIGAN
(26) 695 Grayling Health Care Center 0/L
Grayling, MI
(27) 777 Clara Barton Terrace 0/L
Convalescent Home
Flint, MI
(28) 778 Mary Ave Care Center 0/L
Lansing, MI
(29) 302 Birchwood Care Center L/C
Marne, MI
TEXAS
(30) 749 Garrett Park Manor O/L
Dallas, TX
CALIFORNIA
(31) 298 Driftwood Convalescent Hospital L/SL
Yuba City, CA
(32) 299 Marysville Convalescent Hospital L/SL
Marysville, CA
EXHIBIT 8(ii)(A), page 3
Facility Facility Name Transferor' s
State Number and Address Interest
----- ------ ----------- --------
(33) 728 Cabrillo Convalescent Hospital L/SL
Santa Cruz, CA
(34) 741 Hillhaven Manor L/SL
Yuba City, CA
INDIANA
(35) 292 Twin City Nursing Home L/SL
Gas City, IN
(36) 305 University Nursing Center L/SL
Upland, IN
MICHIGAN
(37) 300 Autumnwood of McBain L/SL
McBain, MI
(38) 301 Autumnwood of Deckerville Rd. L/SL
Deckerville, MI
(39) 303 Greenbriar Nursing Home L/SL
Sterling, MI
(40) 304 Pineview of Hillman L/SL
Hillman, MI
TEXAS
(41) 272 Hughes Spring Nursing Home L/SL
Hughes Springs, TX
(42) 273 Pinecrest Convalescent Home L/SL
Dangerfield, TX
(43) 274 Coastal Care Center L/SL
Texas City, TX
(44) 275 Great South West Convalescent L/SL
Center
Grant Prairie, TX
(45) 283 Country Club Manor Nursing Home L/SL
Amarillo, TX
EXHIBIT 8(ii)(A), page 4
Facility Facility Name Transferor' s
State Number and Address Interest
----- --------- ---------------- -------------
(46) 755 Greencrest Manor L/SL
Greenville, TX
(47) 760 Ridgeview Nursing and L/SL
Convalescent Center
Wichita Falls, TX
EXHIBIT 8(ii)(A), page 5
EXHIBIT 8(ii)(B)
to
Plan of Reorganization
----------------------
HH HOLDING CO., INC. NOTES RECEIVABLE TRANSFERRED TO HILLHAVEN INC.
-------------------------------------------------------------------
(Non.Working Capital Notes - Subsequent Transfer
To New Hillhaven Pursuant To Step 12 (ii))
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------- ----- ----- ---- ---------------
749 Southeastern Health Care, HH Holding 04/89 - 10/89 $ 20,491.78
Inc. and Prentiss Smith Co., Inc.
799 Jewell Brothers HH Holding 05/85 - 05/89 $ 50,000.00
Co., Inc.
075 R. Karman HH Holding 09/85 - 08/89 $ 99.00
Co., Inc.
075 S. Waeckerle HH Holding 11/85 - 10/89 $ 230.00
Co., Inc.
276 Texas Health Enterprises, HH Holding 10/86 - 02/97 $2,850,000.00
Inc. Co., Inc.
284 Odessa Associates HH Holding 11/86 - 11/01 $2,250,000.00
Co., Inc.
300 Health Enterprises of HH Holding 05/88 - 06/94 $ 49,231.15
Michigan, Inc. Co., Inc.
301 Health Enterprises of HH Holding 05/88 - 06/94 $ 49,231.15
Michigan, Inc. Co., Inc.
303 Health Enterprises of HH Holding 05/88 - 06/94 $ 49,231.15
Michigan, Inc. Co., Inc.
304 Health Enterprises of HH Holding 05/88 - 06/94 $ 49,231.15
Michigan, Inc. Co., Inc.
695 Health Enterprises of HH Holding 05/88 - 06/94 $ 49,231.15
Michigan, Inc. Co., Inc.
EXHIBIT 8(ii)(B), page 1
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------- ----- ----- ---- ---------------
703 M-Z Invest HH Holding _____ - 03/93 $ 453,332.05
Co., Inc.
728 Peter C. Kern and Susan HH Holding 09/88 - 09/97 $ 240,528.40
B.Kern Co. , Inc.
732 M.V. Associates HH Holding 10/85 - 10/05 $1,300,000.00
Co., Inc.
740 Yuba Associates Limited HH Holding 09/87 - 10/94 $ 840,510.35
Partnership dba Yuba-Zev Co., Inc.
Associates Limited
Partnership
747 Odessa Associates HH Holding 11/86 - 11/01 $1,440,000.00
Co., Inc.
748 Tri-State Associates HH Holding 11/86 - 11/01 $1,900,000.00
Co., Inc.
751 MWT Associates HH Holding 11/85 - 11/05 $1,817,378.81
Co., Inc.
755 Texas Health Enterprises, HH Holding 04/88 - 04/94 $ 98,230.76
Inc. Co., Inc.
756 Odessa Associates HH Holding 11/86 - 11/01 $1,000,000.00
Co., Inc.
759 Sunbelt 3 HH Holding 12/82 - 11/07 $1,299,907.19
Co., Inc.
761 Tri-State Associates HH Holding 11/86 - 11/01 $ 835,000.00
Co., Inc.
768 Cal-Iowa Associates HH Holding 05/86 - 05/06 $2,856,957.70
Co., Inc.
EXHIBIT 8(ii)(B), page 2
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------- ----- ----- ---- ---------------
788 Cove Manor HH Holding 08/84 - 11/10 $3,890,000.00
Co., Inc.
790 Court Manor HH Holding 08/84 - 12/10 $2,100,000.00
Co., Inc.
200/ Hill-Cal Properties NHE 10/84 - 12/04 $2,790,105.72
799 Northern
California,
Inc.
(25.54%)
and Flagg
Industries,
Inc.
(74.46%)
799 Jack Easterday U.S. Care 08/86 - 10/90 $ 617,861.90
Corporation
799 Oak/Jones, Inc. HH Holding 08/87 - 09/93 $ 148,158.17
Co., Inc.
757 Peter C. Kern HH Holding 04/88 - 04/96 $1,620,808.36
Co., Inc.
758 Peter C. Kern HH Holding 04/88 - 04/96 $1,448,904.47
Co., Inc.
760 Texas Health Enterprises, HH Holding 04/88 - 04/94 $ 49,115.36
Inc. Co., Inc.
606 MI-CON Associates HH Holding 05/86 - 05/06 $2,110,002.87
Co., Inc.
EXHIBIT 8(ii)(B), page 3
EXHIBIT 8(ii)(C)
to
Plan of Reorganization
----------------------
HH HOLDING CO., INC. NOTES RECEIVABLE TRANSFERRED TO HILLHAVEN INC.
-------------------------------------------------------------------
(Working Capital Notes - Subsequent Transfer
To FHC Pursuant To Step 10 (ii))
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------- ----- ----- ---- ---------------
9928 Meridian Care Center NHE/South 6/88 - sale of $466,505.16
Partners Carolina, the facility
Inc.
EXHIBIT 8(ii)(C)
EXHIBIT 10(iii)(A)
to
Plan of Reorganization
----------------------
FACILITY ASSETS OF HILLHAVEN INC.
TRANSFERRED TO FHC
---------------------------------
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
CALIFORNIA
(1) 167 Canyonwood Care Center 0
Redding, CA
NEVADA
(2) 144 Carson Convalescent Center 0
Carson City, NV
UTAH
(3) 140 Wasatch Care Center 0
Ogden, UT
CALIFORNIA
(4) 151 Buena Vista Convalescent L
Hospital
Anaheim, CA
(5) 170 Saylor Lane Convalescent L
Hospital
Sacramento, CA
(6) 330 Hillhaven Convalescent L
Hospital Claremont, CA
(7) 335 Hillhaven Lawton L
Convalescent Center
San Francisco, CA
(8) 340 Hillhaven Convalescent L
Hospital
Menlo Park, CA
(9) 342 Hillhaven Convalescent L
Center
Mill Valley, CA
EXHIBIT 10(iii)(A), page 1
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
(10) 343 Hillhaven Convalescent L
Center
Modesto, CA
(11) 345 Hillhaven Convalescent L
Center
Oakland, CA
(12) 358 San Jose-Hillhaven L/SL
Convalescent
Center
San Jose, CA
(13) 360 San Rafael, Hillhaven L
Convalescent Hospital
San Rafael, CA
(14) 368 Hillhaven Extended Care
Santa Cruz, CA
(15) 370 Hillhaven-Sherwood L
Convalescent Hospital
Sacramento, CA
FLORIDA
(16) 121 Town & Country Convalescent L
Center
Tampa, FL
NORTH CAROLINA
(17) 192 Country Villa L
Rockingham, NC
(18) 193 Hillhaven of Alamance L
Graham, NC
(19) 307 Lincoln Nursing Center, L
Inc.
Lincolnton, NC
TENNESSEE
(20) 171 Hillhaven Convalescent CL
Center - Bolivar
Bolivar, TN
EXHIBIT 10(iii)(A), page 2
Facility Facility Name Transferor's
State Number and Address Interest
----- ------- ------------ ------------
(21) 174 Hillhaven Convalescent CL
Center - Camden
Camden, TN
(22) 175 Hillhaven of Jefferson City CL
Jefferson City, TN
(23) 177 Loudon Healthcare Center CL
Loudon, TN
(24) 178 Hillhaven Convalescent L
Center - Raleigh
Memphis, TN
(25) 179 Hillhaven Convalescent L
Center - Huntington
Huntington, TN
(26) 182 Hillhaven Convalescent CL
Center - Germantown
Germantown, TN
(27) 183 Hillhaven Convalescent L
Center-Ripley
Ripley, TN
(28) 184 Greystone Healthcare Center L
Blountville, TN
(29) 187 Hillhaven Maryville L
Convalescent Center
Maryville, TN
(30) 189 Fairpark HealthCare Center L
Maryville, TN
WASHINGTON
(31) 161 Issaquah Care Center L
Issaquah, WA
(32) 162 Mercer Island Care Center L
Mercer Island, WA
(33) 163 Valley HealthCare Center L
South Renton, WA
EXHIBIT 10(iii)(A), page 3
Facility Facility Name Transferor's
State Number and Address Interest
----- -------- ------------- ------------
(34) 186 Park Manor Convalescent L
Center
Walla Walla, WA
WISCONSIN
(35) 195 Colonial Manor Nursing & L
Convalescent Home
Madison, WI
(36) 197 Oshkosh Care Center L
Oshkosh, WI
NEVADA
(37) 642 Las Vegas-Hillhaven 0/L
Convalescent Hospital
Las Vegas, NV
WASHINGTON
(38) *164 The Emeritus 0/L
Seattle, WA
CALIFORNIA
(39) 9926 Hillhaven Convalescent M
Hospital
San Francisco, CA
(40) 9940 Valley Gardens Health Care M
Stockton, CA
(41) 9981 Foothill Health Center M
Glendora, CA
(42) 9919 Carmel Mtn. Nursing Home M
San Diego, CA
(43) 9975 The Californian Care Center M
Bakersfield, CA
___________________
* A Title Commitment has been ordered from Chicago Title in order to
verify ownership of the facility.
EXHIBIT 10(iii)(A), page 4
Facility Facility Name Transferor's
State Number and Address Interest
----- --------- ---------------- -------------
FLORIDA
(44) 918 Hillhaven Convalescent M
Center
Sarasota, FL
(45) 922 Windsor Woods Convalescent M
Center
Hudson, FL
OKLAHOMA
(46) 9955 Heritage Villa Nursing M
Center
Bartlesville, OK
UTAH
(47) 9947 St. George Care Center M
St. George, UT
(48) 9992 Holladay Healthcare Center M
Salt Lake City, UT
(49) 9973 Crosslands Healthcare M
Center
Sandy, UT
EXHIBIT 10(iii)(A), Page 5
EXHIBIT 10(iii)(B)
to
Plan of Reorganization
----------------------
ASSETS OF HILLHAVEN INC. TRANSFERRED TO FHC
-------------------------------------------
(Partnership interests and
non-facility related real estate interests)
PARTNERSHIP INTERESTS
---------------------
Facility Extent and
State Number Nature of Interest
----- -------- ------------------
CALIFORNIA
(1) 919 a 50% general partnership
interest in Carmel Mountain
Nursing Home Partnership
San Diego, CA
(2) 926 a 50% general Partnership
interest in Hillhaven - MSC
Partnership
San Francisco, CA
(3) 940 a 50% general partnership
interest in Stockton
Nursing Home Partners
Stockton, CA
(4) 975 a 50% general partnership
interest in Bakersfield
Nursing Home Partnership
Bakersfield, CA
(5) 981 a 50% general partnership
interest in Foothill
Nursing Company Partnership
Glendora, CA
(6) 982 a 50% general partnership
interest in San Marcos
Nursing Home Partnership
San Marcos, CA
EXHIBIT 10(iii)(B), Page 1
Facility Extent and
State Number Nature of Interest
----- -------- ------------------
(7) 1003 a 90% general partnership
interest in Modesto Region
II investments
Modesto, CA
FLORIDA
(8) 918 a 50% general partnership
interest in Hillhaven
Community Health
Partnership
Sarasota, FL
(9) 922 a 50% general partnership
interest in Windsor Woods
Nursing Home Partnership
Hudson, FL
KANSAS
(10) 7165 a 90% general partnership
interest in Topeka
Retirement Center, Ltd.
Topeka, KS
OKLAHOMA
(11) 955 a 50% general partnership
interest in Bartlesville
Nursing Home Partnership
Bartlesville, OK
SOUTH CAROLINA
(12) 928/ a 50% general partnership
984 interest in Meridian
Operating Partners
Columbia, SC
UTAH
(13) 973 a 50% general partnership
interest in Sandy Nursing
Home Partnership
Sandy, UT
EXHIBIT 10(iii)(B), Page 2
Facility Extent and
State Number Nature of Interest
----- -------- ------------------
(14) 7185 a 98% limited partnership
interest in Sandy
Retirement Center Limited
Partnership
Sandy, UT
WASHINGTON
(15) 165 an 80% general partnership
interest in Rainier Vista
Partnership
Puyallup, WA
EXHIBIT 10(iii)(B), page 3
NON-FACILITY RELATED REAL ESTATE INTERESTS
------------------------------------------
Facility Transferor's
No. Assets Interest
-------- ------ ------------
(1) 104 Center Street Building 0
1016 So. 28th Street
Tacoma, WA
(2) 100 Lakewood Medical Office 0
Building
11311 Bridgeport Way
Tacoma, WA 98499
(3) 168 "Excess Land" consisting of 0
6.0 acres located on the
Lakewood Hospital Campus
Tacoma, WA 98499
(4) 022 Hillhaven Regional Office L
Richmond, CA
(5) 072 Hillhaven Regional Office L
Louisville, KY
(6) 041 Hillhaven Regional Office, L
Raleigh, NC
EXHIBIT 10(iii)(B), page 4
EXHIBIT 10(iii)(C)
to
Plan of Reorganization
----------------------
HILLHAVEN INC. NOTES RECEIVABLE TRANSFERRED TO FHC
--------------------------------------------------
(Working Capital Notes)
General Ledger
Facility Original Balance (As of
Number Payor Payor Terms August 31, 1989)
- -------- ----- ----- ----- ----------------
9984 Meridian Operating Hillhaven 2/89 - ____ $ 83,000.00
Partners Inc.
EXHIBIT 10(iii)(C)
EXHIBIT 11(i)A
to
Plan of Reorganization
----------------------
ASSETS ACQUIRED BY FHC BY UPSTREAM MERGER
-----------------------------------------
Facility Facility Transferor's
State Number Name and Address Interest
----- -------- ---------------- ------------
PRIOR OWNER: CHASTAIN'S OF AVA, INC.
------------
ARKANSAS
(1) 252 Pine Lane Healthcare L
Mountain Home, AR
MISSOURI
(2) 251 Crestview Healthcare L
Ava, MO
PRIOR OWNER: CHASTAIN'S OF BUFFALO, INC.
-----------
MISSOURI
(3) 253 Hickory Lane Care Center L
Buffalo, MO
PRIOR OWNER: CHASTAIN'S OF CLINTON, INC.
-----------
MISSOURI
(4) 254 Sycamore View Healthcare L
Clinton, MO
PRIOR OWNER: CHASTAIN'S OF DES PERES, INC.
-----------
MISSOURI
(5) 255 Des Peres Health Care L
Des Peres, MO
(6) 256 Hillside Healthcare L
Jefferson, MO
(7) 257 Marceline Healthcare L
Marceline, MO
EXHIBIT 11(i)(A), page 1
Facility Facility Transferor's
State Number Name and Address Interest
----- -------- ---------------- --------
PRIOR OWNER: CHASTAIN'S OF JOPLIN, INC.
-----------
MISSOURI
(3) 259 Joplin House Healthcare L
Joplin, MO
PRIOR OWNER: CHASTAIN'S OF LAMAR, INC.
-----------
MISSOURI
(9) 261 Lakeview Health Care L
Center,
Lamar, MO
PRIOR OWNER: CHASTAIN'S OF THAYER, INC.
-----------
MISSOURI
(10) 262 Shady Oaks Healthcare L
Center
Thayer, MO
PRIOR OWNER: HILLHAVEN OF HAWAII, INC.
-----------
HAWAII
(11) 166 Keauhou Kona Hawaii Project O
PRIOR OWNER: INTEGRATED HEALTh SYSTEMS, INC.
-----------
WASHINGTON
(12) 168 Lakewood Health Care Center O
Tacoma, WA
PRIOR OWNER: SMITH, HARST, SIEBEL AND ASSOCIATES, INC.
-----------
NEW MEXICO
(13) 854 Casa Real-Santa Fe L
Santa Fe, NM
(14) 817 Casa Del Sol Senior Care L
Center
Las Cruces, NM
EXHIBIT 11(i)(A), page 2
Facility Facility Transferor's
State Number Name and Address Interest
----- ------ ---------------- --------
(15) 874 Casa Arena Blanca Nursing L
Center
Alamogordo, NM
(16) 881 Southwest Senior Care O/L
Center
Las Vegas, NM
EXHIBIT 11(i)(A), page 3
EXHIBIT 11(i)(3)
to
Plan of Reorganization
----------------------
ASSETS ACQUIRED BY FHC BY UPSTREAM MERGER
-----------------------------------------
(note receivable - working capital)
General Ledger
Balance
Facility Facility (as of
Number Name and Address August 31, 1989)
-------- ---------------- ----------------
874 Casa Arena Blanca Nursing $
Center
Alamogordo, NM
EXHIBIT 11(i)(B), page 1
EXHIBIT 12(ii)
to
Plan of Reorganization
----------------------
HILLHAVEN INC, NOTES RECEIVABLE TRANSFERRED TO NEW HILLHAVEN
------------------------------------------------------------
(Non-Working Capital Notes)
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------ ----- ----- ---- ----------------
100 Mosca Hillhaven 08/86 - 08/90 $ 801.96
Inc.
100 Bowen Hillhaven 10/86 - 10/90 $ 2,391.44
Inc.
100 Dwyer Hillhaven 10/88 - 10/90 $ 778.50
Inc.
100 Esau Hillhaven 07/89 - 07/91 $ 1,750.00
Inc.
100 Fischer Hillhaven 03/87 - 03/91 $ 1,500.10
Inc.
100 Holloman Hillhaven 03/88 - 09/89 $ 175.87
Inc.
100 Ingram Hillhaven 04/89 - 04/90 $ 3,604.87
Inc.
100 Keiser Hillhaven 07/86 - 07/87 $ 84.21
Inc.
100 Kenney Hillhaven 07/89 - 07/91 $ 1,000.00
Inc.
100 Powell Hillhaven 12/87 - 06/89 $ 132.11
Inc.
100 Shipman Hillhaven 03/88 - 09/89 $ 316.95
Inc.
EXHIBIT 12(ii), page 1
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------ ----- ----- ---- ----------------
100 Spencer Hillhaven 07/89 - 07/91 $ 2,139.29
Inc.
100 Tobie Hillhaven 07/86 - 01/89 $ 1,576.74
Inc.
100 Toclan Hillhaven 07/86 - 05/87 $ 600.00
Inc.
100 Whitted Hillhaven 10/88 - 10/89 $ 66.53
Inc.
100 Bisaro Hillhaven 02/89 - 02/91 $ 750.00
Inc.
100 Scharfenberg Hillhaven 02/89 - 02/91 $ 632.50
Inc.
100 D.R.B. Holding, Inc. Hillhaven 02/85 - 12/92 $ 455,000.00
Inc.
100 Taravainen Hillhaven 03/86 - 08/86 $ 332.475.01
Inc.
100 Lakewood Hospital Hillhaven 08/88 - 12/89 $2,000,000.00
Inc.
100 Robert Miller, Agnes Hillhaven 02/85 - 12/90 $ 410,000.00
Miller and Chateau Inc.
Convalescent Hospital
105 Texville (former payor: Hillhaven 11/82 - 11/07 $1,133,052.35
Jewell Enterprises) Inc.
105 AMWAC Associates Hillhaven 09/92 - 09/97 $ 263,804.56
Inc.
173 Tri-State Associates Hillhaven 08/86 - 08/06 $2,039,598.01
Inc.
EXHIBIT 12(ii), page 2
General Ledger
Facility Original Balance (As of
Number Payor Payee Term August 31, 1989)
- ------ ----- ----- ---- ----------------
220 AMWAC Associates (former Hillhaven 09/82 - 09/91 $ 478,029.07
payor: Jewell Inc.
Enterprises)
240 AMWAC Associates (former Hillhaven 09/82 - 12/93 $ 982,628.29
payor: Jewell Inc.
Enterprises)
250 Tri-State Associates Hillhaven 11/86 - 01/03 $1,337,060.98
Inc.
347 Palo Alto Nursing Hillhaven 03/82 - 03/02 $ 553,607.44
Inc.
375 Tri-State Associates Hillhaven 09/86 - 08/06 $1,728,510.01
Inc.
377 Tri-State Associates Hillhaven 08/86 - 08/06 $2,087,931.25
Inc.
6000/ Foothill Hursing Company Hillhaven 08/86 - _____ $2,500,000.00
981 Partnership Inc.
270 Peter C. Kern Hillhaven 04/88 - 04/96 $2,946,924.33
Inc.
9940 Stockton Nursing Home Old 02/88 - _____ $1,500,943.27
Partners Hillhaven
9947 St. George Hillhaven _____________ $1,314,849.75
Inc.
200/ Hill-Cal Properties Flagg In- 10/84 - 12/04 $8,134,349.14
799 dustries,
Inc.
(74.46%)
and NHE/
Northern
California,
Inc.
(25.54%)
EXHIBIT 12(ii), page 3
EXHIBIT 17
to
Plan of Reorganization
----------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of January 31, 1990 (this
"Agreement"), between the subsidiaries of National Medical Enterprises, Inc.
("NME") signatories hereto (individually, an "NME Party" and collectively, the
"NME Parties"), on the one hand, and The Hillhaven Corporation, a Nevada
corporation ("New Hillhaven"), on the other hand. Defined terms used herein
without definition shall have the meanings ascribed to them in the
Reorganization and Distribution Agreement, dated as of January 8, 1990 and as
amended and restated as of January 30, 1990 (as from time to time amended, the
"Distribution Agreement").
_____________________________
WHEREAS, NME and New Hillhaven have entered into the Distribution Agreement
providing for the reorganization of certain of the businesses heretofore
conducted by NME's long term care group and a pro rata distribution to the
holders of NME's capital stock as of the record date established by NME in
connection therewith, of approximately 85% of the outstanding shares of capital
stock of New Hillhaven (the "Distribution") on or about January 31, 1990 (the
date on which the Distribution shall actually occur being herein referred to as
the "Distribution Date"); and
EXHIBIT 17, Page 1
WHEREAS, in connection with, and immediately prior to, the Distribution NME
and certain of its long term care subsidiaries are concurrently .entering into
the transactions contemplated by the Plan of Reorganization pursuant to which
NME and such subsidiaries will transfer, effective on or prior to the
Distribution Date, to New Hillhaven and those companies which will become
subsidiaries of New Hillhaven certain of the assets and liabilities relating to
the business to be conducted after the Distribution by New Hillhaven, as
contemplated by the Information Statement (the "New Hillhaven Business"); and
WHEREAS, the NME Parties desire to transfer to New Hillhaven, concurrently
with the aforementioned transfers, all of their remaining assets except for the
Excluded Assets (defined below), and New Hillhaven desires to assume all of the
NME Parties' remaining obligations and liabilities except for the Excluded
Liabilities (defined below).
NOW, THEREFORE, the parties hereto agree as follows:
1. Scope of Agreement. The parties hereto understand and agree that NME
------------------
and/or certain of its subsidiaries and New Hillhaven and/or certain of its
subsidiaries have effected various transfers of assets and assumptions of
liabilities in accordance with the Plan of Reorganization and have entered or
will enter into the Ancillary Agreements providing, among other things, for
EXHIBIT 17, Page 2
various additional transfers of assets and assumptions of liabilities and that
this Agreement effects certain transfers of assets and assumptions of
liabilities not covered by the Plan of Reorganization or the Ancillary
Agreements.
2. Assignment of Assets. Each of the NME Parties hereby sells, assigns,
--------------------
transfers and conveys to, and vests in, New Hillhaven, its successors and
assigns forever, and New Hillhaven agrees to accept, each of such NME Party's
right, title and interest, legal and equitable, in and to all of its assets
other than the Excluded Assets, including, without limitation, the right to
receive all of such Party's assets, properties, rights and business of every
type and description, real, personal and mixed, tangible and intangible,
constituting any portion of the New Hillhaven Business, wherever located and
whether or not reflected on the books and records of such Party. The "Excluded
Assets", with respect to each NME Party, shall mean the assets specified on
Exhibit A hereto. Notwithstanding anything to the contrary contained in any
other instrument of conveyance executed by any NME Party in connection with the
Distribution Agreement, the assets conveyed by such instrument shall not include
any assets specified on Exhibit A hereto with respect to such NME Party.
3. Assumption of Liabilities. New Hillhaven hereby assumes and agrees to
-------------------------
pay, perform or discharge all
EXHIBIT 17, Page 3
of the obligations and Liabilities of each of the NME Parties except for the
Excluded Liabilities. The "Excluded Liabilities", with respect to each NME
Party, shall mean the liabilities specified on Exhibit B hereto. Notwithstanding
anything to the contrary contained in any other instrument of assumption
executed by New Hillhaven in connection with the Distribution Agreement, the
Liabilities assumed pursuant to such instrument shall not include any
liabilities specified on Exhibit B hereto.
4. Further Actions.
---------------
4.1 Each of the NME Parties shall, at the request of New Hillhaven,
execute and deliver to New Hillhaven such further instruments and take such
further action as may reasonably be necessary or proper to effectuate the
assignment contemplated hereby, including, in connection with any notes
receivable being transferred to New Hillhaven hereunder, causing any such note
to be duly endorsed and registered in the name of New Hillhaven by means of an
instrument of assignment and, where appropriate, to be recorded.
4.2 New Hillhaven shall, whenever, and as often as required to do so by
any NME Party or its successors and assigns, execute, acknowledge and deliver
any and all further instruments, documents and agreements as may reasonably be
necessary or proper to complete, assure and perfect the assumption of the
obligations and liabilities assumed hereby.
EXHIBIT 17, Page 4
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE HILLHAVEN CORPORATION,
a Tennessee corporation
By:________________________________
Name: _________________________
Title: _________________________
GUARDIAN MEDICAL SERVICES, INC.
By:________________________________
Name: _________________________
Title: _________________________
HAMMOND HOLIDAY HOME, INC.
By:________________________________
Name: _________________________
Title: _________________________
HH HOLDING CO., INC.
By:________________________________
Name: _________________________
Title: _________________________
HILLHAVEN INC.
By:________________________________
Name: _________________________
Title: _________________________
EXHIBIT 17, Page 5
HILLHAVEN OF MICHIGAN, INC.
By:________________________________
Name: _________________________
Title: _________________________
HILLHAVEN WEST, INC.
By:________________________________
Name: _________________________
Title: _________________________
MORGAN MANORS, INC.
By:________________________________
Name: _________________________
Title: _________________________
LAKE HEALTH CARE FACILITIES, INC.
By:________________________________
Name: _________________________
Title: _________________________
NORTHWEST CONTINUUM CARE
CENTER, INC.
By:________________________________
Name: _________________________
Title: _________________________
EXHIBIT 17, Page 6
SEDGEWICK CONVALESCENT CENTER, INC.
By:________________________________
Name: _________________________
Title: _________________________
THE HILLHAVEN CORPORATION
OF TEXAS
By:________________________________
Name: _________________________
Title: _________________________
THE HILLHAVEN CORPORATION,
a Nevada Corporation
By:________________________________
Name: _________________________
Title: _________________________
EXHIBIT 17, Page 7
EXHIBIT A
TO
ASSIGNMENT AND ASSUMPTION
AGREEMENT
EXCLUDED ASSETS
---------------
I. General Excluded Assets:
1. All of the capital stock of the NME Parties directly or indirectly
owned by The Hillhaven Corporation, a Tennessee corporation ("Old
Hillhaven").
2. All prepaid Taxes (as defined in the Tax Sharing Agreement)
of the NME Parties.
3. Any investment in life insurance net of policy borrowings
related to insurance policies issued on November 1, 1984 and
1985 by Security Life of Denver originally obtained for SERP
participants and related prepaid interest on such policy
borrowings of the NME Parties.
4. All assets related to the following 8 "campus" facilities,
including investment accounts and partnership interests
related to two campus facilities currently owned by
partnerships (Slidell and Jo Ellen Smith):
Facility Number, Name and Address
---------------------------------
902
Alvarado Convalescent and
Rehabilitation Hospital
6599 Alvarado Road
San Diego, California 92120
904
Hillhaven Healthcare
610 North Garfield Avenue
Monterey Park, California 91754
974
J. D. French Center - Alzheimer's
3951 Katella Avenue
Los Alamitos, California
169
Menorah Hospital Campus
Palm Beach, Florida
EXHIBIT A, Page 1
815
Convalescent Center of Del
Ray Beach
5430 Linton Boulevard
Del Ray Beach, Florida 33445
954
Jo Ellen Smith Convalescent
Center
4502 General Mayer Avenue
New Orleans, Louisiana 70114
978
Northshore Living Center
106 Medical Center Drive
Slidell, Louisiana 70459
993
Brookhaven Nursing Center
1855 Cheyenne
Carrollton, Texas 75008
5. All intercompany accounts receivable.
6. Any and all partnership interests in Healthcare Property
Partners.
II. Specific Excluded Assets: In addition to those Excluded Assets set forth
above, the assets of the NME Party set forth below opposite such Party are
to be excluded and not transferred to New Hillhaven pursuant to the
Agreement:
Assets NME Party
------ ---------
1. Any assets subject to lease The applicable NME
pursuant to the Lease Agreements Party that is a
described in Step 3 of the Plan of party to the
Reorganization and any related relevant Lease
deferred finance charges, prepaid Agreement
interest or other assets related to
the mortgage debt (including any
accrued interest thereon) of the
facilities subject to such Lease
Agreements, such as escrow
accounts, replacement reserves and
sinking funds.
2. Any assets listed on Exhibit l(ii) Old Hillhaven and
to the Plan of Reorganization. Hillhaven Inc.
EXHIBIT A, page 2
Assets NME Party
------ ---------
3. All property, plant and equipment Hillhaven Inc. (as
located at facility number 203 and successor by merger
any deferred financing charges, to Flagg Industries,
prepaid interest and/or other Inc.)
assets related to the mortgage
debt, including any accrued
interest thereon, with respect to
such facility, including, without
limitation, any sinking funds,
escrow accounts and replacement
reserves.
4. Any shares of stock of Health Old Hillhaven
Facilities Insurance Corp. Ltd. or
Futura West.
5. Promissory Note, dated August 23, Hillhaven Inc.
1988 in the original principal
amount of $1.4 million due from
Lakewood Hospital (balance of $1.33
million as of August 31, 1989).
6. Annuity held for the benefit of Old Hillhaven
Marvin Wilensky.
7. "Excess land" consisting of (1) Hillhaven Inc.
parcel #01416-05-014 in Durham, NC;
(2) a portion of parcel #602-9944-
001 in Mt. Carmel, WI; (3) parcel
#602-9945 in Mt. Carmel, WI; (4)
parcel #6-3315 Washburn DLC T-2B-4
except T-28-4A; (5) parcel #06-4-
0123-07-378-017 in Kenosha, WI; and
(6) parcel #6-3311-01 Washburn DLC
T-28-6, 2B-1, in each case as shall
subsequently be more particularly
described.
8. "Excess Land" consisting of parcel Old Hillhaven
#06-4-0123-07-378-016 in Kenosha,
WI.
EXHIBIT A, Page 3
Assets NME Party
------ ---------
9. "Excess Land" consisting of Adams Hammond Holiday
Add. east 35 feet Lot 16, all lots Home, Inc.
18 and 20 except condominiums A & H
Blk 3, Adams Add. Lot 22 and 24 Blk
3, Adams Add. south 50 feet lot 2,
south 50 feet, lot 4 and south 50
feet lot 6, in each case as shall
subsequently be more particularly
described.
10. "Excess Land" consisting of parcel
#2-618, 2-628, 2-622B, 2-624 and 2-
625 in Neenah, WI, as shall
subsequently be more particularly
described.HH Holding Co., Inc.
11. "Excess Land" consisting of parcel Hillhaven West, Inc.
#352600 in West Falls, MI, as shall
subsequently be more particularly
described.
12. The New Hillhaven Subsidiary Note Hillhaven Inc.
received from Medi-$ave pursuant to
Step 2 of the Plan of
Reorganization.
13. Any benefit of that certain Option Old Hillhaven
Agreement, dated May 24, 1985,
between Cardinal Medical
Corporation and Old Hillhaven.
14. #814 Hillhaven Convalescent Old Hillhaven
Center
815-8th Avenue
Forth Worth, TX 76309
15. #443 Medical office building Hillhaven West, Inc.
adjacent to Mountain
Towers Healthcare
3129 Acacia Drive
Cheyenne, WY 82001
16. The New Hillhaven Subsidiary Note Old Hillhaven
received from FHC pursuant to Step
11(ii) of the Plan of
Reorganization.
EXHIBIT A, page 4
Assets NME Party
------ ---------
17. Any benefit of that certain Option Old Hillhaven
Agreement, dated January 31, 1990,
between Old Hillhaven and FHC
related to facilities #277, #278,
#279, #280, #281, and #262,
commonly referred to by the parties
as the "Cardinal Facilities."
EXHIBIT A, Page 5
EXHIBIT B
TO
ASSIGNMENT AND ASSUMPTION
AGREEMENT
EXCLUDED LIABILITIES
--------------------
I. General Excluded Liabilities:
1. Any Liability in respect of cash overdrafts in disbursement and
payroll bank accounts maintained by the NME Parties.
2. Any Liability of the NME Parties in respect of Taxes for periods
through and including the Distribution Date (including any Liability
in respect of deferred Taxes).
3. Any Liability of the NME Parties under the SERP program for any
current or former employees of the NME Parties who will not become
employees of New Hillhaven or a New Hillhaven Party.
4. Any Liability of the NME Parties to Daniel P. Baty or Marvin Wilensky,
other than the obligation to provide medical, dental and $50,000 life
insurance and related accidental death benefits for the individuals,
and dependents if so provided, pursuant to consulting agreements with
such individuals dated December 3, 1986 and March 2, 1988,
respectively.
5. Any Liability of the NME Parties in respect of expenses related to the
Distribution, as set forth in Section 7.03 of the Distribution
Agreement.
6. Any Liability of any NME Party related to the eight "campus"
facilities described in Exhibit A hereto.
7. Any intercompany payables.
8. Up to $1 million of state-required improvements on seven facilities in
Connecticut identified on Exhibit 3 (page 3) for work required to
relicense such facilities.
II. Specific Excluded Liabilities: In addition to those Excluded Liabilities
set forth above, the Liabilities of the NME Party set forth below opposite
such Party are to be excluded and not assumed by New Hillhaven pursuant to
the Agreement:
EXHIBIT B, Page 1
Liabilities NME Party
----------- ---------
1. Any Liability in respect of First Healthcare
mortgage debt on the facilities Corporation
subject to lease pursuant to the
Lease Agreements described in Step
3 of the Plan of Reorganization,
together with all related interest
or other accrued Liabilities or
Liabilities for land leases related
to such facilities.
2. Subordinated Debenture Bonds in the Hillhaven Inc.
aggregate amount of approximately
$400,000.
3. Any Liability listed on Exhibit Old Hillhaven
1(iii) to the Plan of Reorganization.
4. Any Liability in respect of that Old Hillhaven
certain Option Agreement, dated May
24, 1985, between Cardinal Medical
Corporation and Old Hillhaven.
5. Any Liability in respect of that Old Hillhaven
certain Option Agreement, dated
January 31, 1990 between Old
Hillhaven and FHC related to
facilities #277, #278, #279, #280,
#281 and #282, commonly referred to
by the parties as the "Cardinal
Facilities."
EXHIBIT B, Page 2
ANNEX II
TO REORGANIZATION AND DISTRIBUTION AGREEMENT
Long Term Care Subsidiaries of NME
Prior to the Plan of Reorganization
-----------------------------------
The Hillhaven Corporation
Arkmo Lumber & Supply Co., Inc.
Brim of Massachusetts, Inc.
Cascade Insurance Company Ltd.
Chastain's of Ava, Inc.
Chastain's of Buffalo, Inc.
Chastain's of Clinton, Inc.
Chastain's of Des Peres, Inc.
Chastain's of Joplin, Inc.
Chastain's of Lamar, Inc.
Chastain's of Thayer, Inc.
Cornerstore Child Care Centers, Inc.
Guardian Medical Services, Inc.
Hammond Holiday Home, Inc.
HH Holding Co., Inc.
Aurora's Golden Age Nursing Home, Inc.
Flagg Industries, Inc.
Northwest Health Care, Inc.
Mediplex Pharmacy, Inc.
NHE/Arizona, Inc.
NHE/Lindenwood Nursing Home, Inc.
NHE/South Carolina, Inc.
Nursing Home of Cherry Hills, Inc.
Hillhaven of Central Florida, Inc.
Hillhaven of Hawaii, Inc.
Hillhaven Inc.
First Healthcare Corporation
Professional Medical Enterprises, Inc.
Hillhaven of Michigan, Inc.
Hillhaven West, Inc.
Morgan Manors, Inc.
Pasatiempo Development
Lake Health Care Facilities, Inc.
Medi-$ave Pharmacies, Inc.
Northwest Continuum Care Center, Inc.
Hillhaven Properties, Ltd.
Brim-Olive Grove, Inc.
Fairview Living Centers, Inc.
Twenty-Nine Hundred Corporation
Medical Ambulatory Care, Inc.
Arizona/New Mexico Hemodialysis Community Services, Inc.
Kidney Dialysis Care Units, Inc.
New Mexico Dialysis Services, Inc.
Valley Dialysis Associates, Inc.
Postcare Rehabilitation, Inc.
Postcare Rehabilitation of Northern California, Inc.
Sedgewick Convalescent Center, Inc.
Smith, Harst, Siebel and Associates, Inc.
The Hillhaven Corporation
The Hillhaven Corporation of Texas
The Caden Corporation
Integrated Health Systems, Inc.
2
ANNEX III(a)
TO REORGANIZATION AND DISTRIBUTION AGREEMENT
Subsidiaries of Old Hillhaven
After the Plan of Reorganization Is Effected
--------------------------------------------
Arkmo Lumber & Supply Co., Inc.
Cascade Insurance Company, Ltd.
Guardian Medical Services, Inc.
Hammond Holiday Home, Inc.
HH Holding Co., Inc.
Hillhaven Inc.
Hillhaven of Michigan, Inc.
Hillhaven West, Inc.
Morgan Manors, Inc.
Lake Health Care Facilities, Inc.
Northwest Continuum Care Center, Inc.
Medical Ambulatory Care, Inc.
Arizona/New Mexico Hemodialysis Community Services, Inc.
Kidney Dialysis Care Units, Inc.
New Mexico Dialysis Services, Inc.
Valley Dialysis Associates, Inc.
Sedgewick Convalescent Center, Inc.
The Hillhaven Corporation of Texas
ANNEX 111(b)
TO REORGANIZATION AND DISTRIBUTION AGREEMENT
Subsidiaries of New Hillhaven
After the Plan of Reorganization Is Effected
--------------------------------------------
Brim of Massachusetts, Inc.
First Healthcare Corporation
Cornerstone Child Care Centers, Inc.
Hillhaven of Central Florida, Inc.
Hillhaven Properties, Ltd.
Brim-Olive Grove, Inc.
Fairview Living Centers, Inc.
Twenty-Nine Hundred Corporation
Northwest Health Care, Inc.
Pasatiempo Development
Professional Medical Enterprises, Inc.
Medi-$ave Pharmacies, Inc.
Mediplex Pharmacy, Inc.