Exhibit 10.49
EIGHTH AMENDMENT TO GUARANTEE REIMBURSEMENT AGREEMENT
This Eighth Amendment to Guarantee Reimbursement Agreement
("Amendment") dated as of September 2, 1993, is entered into by
and between National Medical Enterprises, Inc., a Nevada
corporation ("NME") and The Hillhaven Corporation, a Nevada
corporation ("New Hillhaven").
RECITALS
A. New Hillhaven and NME are parties to that certain Guarantee
Reimbursement Agreement, dated as of January 31, 1990 (as the
same has been or may be amended, restated, modified,
supplemented, renewed or replaced from time to time, the
"Reimbursement Agreement"), which provides, among other things,
for the reimbursement by New Hillhaven of all Obligations (as
defined in the Reimbursement Agreement) paid by NME. Unless
otherwise defined herein, all capitalized terms used herein shall
have the same meaning ascribed to such terms in the Reimbursement
Agreement.
B. New Hillhaven, NME, and certain subsidiaries of New
Hillhaven and NME, have entered into that certain letter
agreement dated June 22, 1993 (the "June 22 Letter"), which among
other things, restructures certain relationships of the
companies. Among the provisions contained in the June 22 letter
that are pertinent to this Reimbursement Agreement, are the
following:
(1) New Hillhaven will obtain financing consisting of
(a) third party bank financing in the approximate
amount of $400 million, and (b) public or private debt
financing in the approximate amount of $175 million
(collectively, the "Financing"), a portion of the
proceeds of which Financing will be used to (i) repay
certain Obligations currently guaranteed by NME, and
(ii) cause NME and/or certain of its subsidiaries to be
released from certain other Obligations currently
guaranteed by NME and/or certain of its subsidiaries;
(2) The annual guarantee fee payable by New Hillhaven
under this Reimbursement Agreement in connection with
the Obligations shall be limited to a maximum of 2% of
the Obligations outstanding and the manner of
calculating the fee charged on the Obligations
outstanding shall be revised; and
(3) NME and/or certain subsidiaries of NME shall assign
to New Hillhaven's subsidiary, First Healthcare
Corporation ("FHC"), and FHC shall assume the renewal
and/or purchase options contained in the Assumed Leases
(as that term is defined in the Reimbursement
Agreement) that were not assigned to FHC on or before
the Distribution Date for those facilities described in
Exhibit 1 attached hereto and incorporated herein by this
reference (the "Assumed Lease Options"), and those Assumed
Lease Options shall be added to the Obligations covered by
this Reimbursement Agreement, as more specifically provided
herein.
C. New Hillhaven and NME desire to amend the Reimbursement
Agreement as set forth in this Agreement.
NOW THEREFORE, in consideration of the foregoing Recitals and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree to amend, modify and
supplement the Reimbursement Agreement as follows:
AGREEMENT
1. Calculation of the Guarantee Fee After Completion of
Financing. The provisions of Section 2(c) of the Reimbursement
Agreement are hereby amended to provide that, commencing with the
quarterly payment due for the fiscal quarter ending February 28,
1993, the guarantee fee for each quarter shall be the product of
(i) the amount of the Obligations outstanding at the close of
business on the last day of the preceding fiscal quarter
multiplied by (ii) a fraction which is equal to the applicable
fraction for the previous fiscal year multiplied by 1.2;
provided, however, that at no time shall the fraction to be used
in calculating the guarantee fee exceed 2%. Furthermore,
notwithstanding the foregoing guaranty fee provisions, the
principal amounts of the Obligations described in Exhibit 2 and
Exhibit 3 attached hereto shall not be included as part of the
Obligations for the purposes of calculating the guarantee fee in
the foregoing sentence. Instead, in accordance with prior
agreements, (x) New Hillhaven shall pay to NME a guarantee fee of
1% per annum on those Obligations described in Exhibit 2, and (y)
no guarantee fee shall be charged on those Obligations described
in Exhibit 3.
2. Proration of Guarantee Fee on Obligations Paid With Proceeds
of Financing. Notwithstanding any provisions to the contrary,
the guarantee fee paid with respect to those Obligations that are
paid in full, or as to which NME's guaranty has been released,
with proceeds of the Financing during the fiscal year ending May
31, 1994 shall be prorated to the date of payoff, based on the
actual number of days elapsed until such Obligation is paid in
full or such guaranty has been released.
3. Inclusion of the Assumed Lease Options as Obligations. The
Assumed Lease Options are hereby added as, and shall be deemed to
be, "Obligations" under (and as defined in) the Reimbursement
Agreement, and all terms, covenants and conditions of the
Reimbursement Agreement shall apply; provided, however, that the
guarantee fee set forth in Paragraph 1 above shall be charged on
the aggregate amount of the rents that will become due for the
renewal period for any such Assumed Lease, commencing on the
earlier of the date that FHC exercises or is required to exercise
such Assumed Lease Option, as provided by the terms of the
assignment of such Assumed Lease Option.
4. Inclusion of Certain Assumed Obligations. To the extent NME
or any subsidiary or affiliate of NME remains primarily or
contingently liable therefor, each of the Assumed Existing Debt
and the Assumed Lease described in Exhibit 4 attached hereto is
hereby added as, and shall be deemed to be, an "Obligation" under
(and as defined in) the Reimbursement Agreement, and all terms,
covenants and conditions of the Reimbursement Agreement,
including payment of a guarantee fee as provided in Paragraph 1
above, shall apply to such Assumed Existing Debt and Assumed
Lease.
5. Reaffirmation of Reimbursement Agreement. New Hillhaven
reaffirms that the Reimbursement Agreement, as amended hereby,
shall remain in full force and effect, and shall continue to be
binding upon New Hillhaven.
6. Captions. The captions and headings used herein are for
the convenience of reference and shall not be construed in any
manner to limit or modify any of the terms hereof.
7. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California.
8. Counterparts. This Amendment may be executed in
counterparts, each of which shall be an original, but all of
which together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Amendment to be duly executed on its behalf as of the date
first set forth above.
NATIONAL MEDICAL ENTERPRISES,
INC.
By: _________________________
Title: ______________________
THE HILLHAVEN CORPORATION
By: _________________________
Title: ______________________
EXHIBIT 1
No. Facility Name
272 Hughes Springs Nursing Home
Hughes Springs, Texas
273 Pinecrest Convalescent Home
Daingerfield, Texas
274 Coastal Care Center
Texas City, Texas
275 Great Southwest Convalescent Center
Grand Prairie, Texas
292 Twin City Nursing Home
Gas City, Indiana
298 Driftwood Convalescent Hospital
Yuba City, California
299 Marysville Convalescent Hospital
Marysville, California
305 University Nursing Center
Upland, Indiana
880 Four States Nursing Home
Texarkana, Texas
881 Southwest Senior Care Center
Las Vegas, New Mexico
760 Ridgeview Nursing and Convalescent Center
Wichita Falls, Texas 76392
860 Blue Hills Centre
Kansas City, Missouri
849 Iliff Care Center
Denver, Colorado
295 Whitehouse Country Manor
Whitehouse, Ohio
184 Greystone Healthcare Center
Blountville, Tennessee
183 Hillhaven Convalescent Center - Ripley
Ripley, Tennessee
189 Fairpark Healthcare Center
Maryville, Tennessee
179 Hillhaven Convalescent Center of Huntington
Huntington, Tennessee
175 Hillhaven of Jefferson City
Jefferson City, Tennessee
171 Hillhaven Convalescent Center
Bolivar, Tennessee
EXHIBIT 2
A ONE PERCENT GUARANTEE FEE IS PAYABLE ON OBLIGATIONS COVERING
THE FOLLOWING FACILITIES:
Facility 462: Queen Anne Care Center, WA
Facility 158: Bellingham Care Center, Bellingham, WA
Facility 461: Edmonds Care Center, Edmonds, WA
Facility 825: Nansemond Convalescent Center, Suffolk, VA
Facility 829: Holmes Convalescent Center, Virginia Beach, VA
EXHIBIT 3
NO GUARANTEE FEE IS PAYABLE ON OBLIGATIONS COVERING THE FOLLOWING
FACILITIES:
Facility 525: Hillhaven Convalescent Hospital, Orange, CA
Facility 781: Bashford East Health Care Center, Bashford, KY
Facility 804: Hillhaven Convalescent Center and Nursing Home,
Birmingham, AL
Facility 824: Hillhaven Convalescent Center & Nursing Home,
Mobile, AL
Facility 160: First Hill Care Center, WA
Facility 560: Franklin Woods Healthcare Center, OH
Facility 570: Pickerington Health Care Center, OH
Facility 822: Hillhaven Convalescent Center, Memphis, TN
Facility 416: Park Place Hillhaven Convalescent Center, Great
Falls, MT
Facility 572: Canal Winchester, OH -- No guarantee fee shall be
payable on the Assumed Lease. A guarantee shall
be payable on the Assumed Existing Debt as
provided in Paragraph 1 of the Amendment.
EXHIBIT 4
ASSUMED OBLIGATIONS
ASSUMED EXISTING DEBT
Facility 572: Canal Winchester Loan Agreement, dated April 1,
1983, between County of
Franklin and Aeon, Inc., with
an outstanding principal
balance as of September 2,
1993 of $1,955,000, secured by
an Open-End Mortgage and
Security Agreement dated April
1, 1983.
Facility 416: Park Place All-Inclusive Promissory
Note Secured by Mortgage,
dated September 1, 1983,
in favor of B.G.M.
Enterprises, with an
outstanding principal
balance as of September
2, 1993 of $257,998.44.
All-Inclusive Promissory
Note Secured by Mortgage,
dated September 1, 1983,
in favor of B.G.M.
Enterprises, with an
outstanding principal
balance as of September
2, 1993 of $1,357,016.39.
ASSUMED LEASE
Facility 572: Canal Winchester Lease and Sublease Agreement,
dated October 10, 1985,
between Aeon, Inc. and First
Healthcare Corporation, and
any amendments thereto.