Exhibit 10.54
AGREEMENT AND WAIVER
This AGREEMENT AND WAIVER (this "Agreement") dated as of
September 2, 1993, by and among National Medical Enterprises,
Inc., a Nevada corporation ("NME"), the subsidiaries of NME which
are signatories hereto, The Hillhaven Corporation, a Nevada
corporation ("Hillhaven"), and First Healthcare Corporation, a
Delaware corporation ("FHC").
WITNESSETH:
WHEREAS, pursuant to that certain Revolving Credit and Term
Loan Agreement dated as of January 31, 1990 between NME and
Hillhaven, as amended by that certain First Amendment thereto
dated as of November 12, 1992 (as amended, the "Revolving Credit
Agreement"), NME agreed to make certain loans to Hillhaven
through May 31, 1994 subject to the conditions set forth therein;
and
WHEREAS, pursuant to that certain Commitment Letter dated
May 31, 1990, between NME and FHC, as amended by that certain
Amendment No. One thereto dated as of May 1, 1991 (as amended,
the "Commitment Letter"), NME agreed to make certain loans to FHC
subject to the conditions set forth therein; and
WHEREAS, pursuant to that certain Master Loan Agreement
dated as of April 1, 1992 among the lenders parties thereto, NME,
FHC and Hillhaven, as amended by that certain First Amendment
thereto dated as of November 12, 1992 (as amended, the "Master
Loan Agreement"), the lenders which were parties thereto agreed
to finance up to 100% of the purchase price of the facilities
referred to therein; and
WHEREAS, pursuant to that certain Guaranty dated as of April
1, 1992 from Hillhaven in favor of the lenders listed thereon
(the "Master Loan Agreement Guaranty"), Hillhaven guaranteed the
obligations of FHC under the Master Loan Agreement; and
WHEREAS, pursuant to that certain Master Loan Agreement for
Purchase of Nine Facilities dated as of June 1, 1992 among the
lenders parties thereto and FHC (the "Second Master Loan
Agreement"), the lenders which were parties thereto agreed to
finance up to 100% of the purchase price of the facilities
referred to therein; and
WHEREAS, pursuant to that certain Guaranty dated as of June
1, 1992 from Hillhaven in favor of the lenders listed thereon
(the "Second Master Loan Agreement Guaranty"), Hillhaven
guaranteed FHC's obligations under the Second Master Loan
Agreement; and
WHEREAS, pursuant to that certain Promissory Note dated
January 31, 1990 (the "Promissory Note") by FHC in favor of NME
Properties Corp., a Tennessee corporation (formerly known as The
Hillhaven Corporation), FHC owes certain monies to NME Properties
Corp.; and
WHEREAS, pursuant to that certain Note Guarantee Agreement
dated as of January 31, 1990 among Hillhaven, NME and the payees
identified therein (the "Note Guarantee Agreement"), Hillhaven
guaranteed FHC's obligations under the Promissory Note; and
WHEREAS, Hillhaven is restructuring its relationship with
NME to, inter alia, repay amounts owing to NME pursuant to the
Master Loan Agreement, the Second Master Loan Agreement and the
Promissory Note, and terminate NME's commitment to loan funds
pursuant to the Revolving Credit Agreement and the Master Loan
Agreement; and
WHEREAS, in connection therewith the parties desire to
eliminate NME's commitments under the Revolving Credit Agreement,
and the Master Loan Agreement, and to terminate Hillhaven's
obligations under the Master Loan Agreement Guaranty, Second
Master Loan Agreement Guaranty and Note Guarantee Agreement; and
WHEREAS, the aforesaid restructuring will be financed
through (1) the issuance by Hillhaven to NME or its subsidiaries
of $120 million of a newly created series of payable-in-kind
preferred stock, (2) the incurrence by FHC of up to $360 million
of indebtedness in the form of term loans, letters of credit and
working capital loans under a secured credit facility with Morgan
Guaranty Trust Company of New York and a syndicate of other
lenders (the "Bank Financing"), (3) the sale by Hillhaven of
senior subordinated notes in the approximate amount of $175
million (the "Notes"), (4) the extension of FHC's commercial
paper program backed by certain of its (and certain of its
subsidiaries') Medicaid accounts receivable and increase in
permitted borrowings under such program from $30.0 million to
$40.0 million and (5) the use of available cash; and
WHEREAS, in connection with the Bank Financing, Hillhaven
has transferred its bank accounts to FHC; and
WHEREAS, pursuant to Sections 5(a), 5(b) and 5(i) of that
certain Guarantee Reimbursement Agreement, as amended (as so
amended, the "Guarantee Reimbursement Agreement"), Hillhaven
agreed, inter alia, to certain covenants which may be violated as
a result of the Bank Financing, the Notes and the transfer of
bank accounts to FHC;
NOW, THEREFORE, in consideration of the foregoing recitals
and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto
intending to be legally bound, hereby agree as follows:
1. Termination of Obligations to Lend. NME's obligations
to loan funds to Hillhaven under the Revolving Credit Agreement,
the Master Loan Agreement, the Second Master Loan Agreement, the
Promissory Note and the Commitment Letter shall terminate as of
the date hereof.
2. Termination of Guarantees. Hillhaven's obligations
under the Master Loan Agreement Guaranty, Second Master Loan
Agreement Guaranty and Note Guarantee Agreement shall terminate
as of the date hereof.
3. Waiver. NME hereby waives compliance with the
following provisions of the Guarantee Reimbursement Agreement:
(a) Sections 5(a) and 5(b) of the Guarantee
Reimbursement Agreement are hereby waived to the
extent necessary to permit (i) the transactions
contemplated by the Bank Financing, including the
placement of mortgages on facilities owned by FHC
or its subsidiaries, the substitution of
facilities as collateral and any subsequent
addition of collateral, and (ii) the issuance of
the Notes.
(b) Section 5(i) of the Guarantee Reimbursement
Agreement is hereby waived to the extent necessary
to permit Hillhaven to transfer any or all of its
bank accounts to FHC.
4. Costs. Each party shall bear its own cost and expenses
in connection with the transactions contemplated in this
Agreement.
5. Cooperation. The parties agree to execute and deliver
such other documents and instruments and do all such other acts
and things as may be reasonably required to give effect to the
agreements contained in this Agreement.
6. Amendment. No amendment or modifications of this
Agreement shall be effective unless in writing signed by the
parties.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with California law.
8. Counterparts. This Agreement 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.
9. No Further Waiver. The waivers set forth herein shall
be effective only for the specific purposes for which given.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be duly executed on its behalf as of the date
first set forth above.
NATIONAL MEDICAL ENTERPRISES, INC.,
a Nevada corporation
By: /s/ Timothy Pullen
Its: Vice President
NME PROPERTIES CORP.,
a Tennessee corporation
By: /s/ Timothy Pullen
Its: Vice President
NME PROPERTIES, INC.,
a Delaware corporation
By: /s/ Timothy Pullen
Its: Vice President
NME PROPERTY HOLDING CO., INC.,
a Delaware corporation
By: /s/ Timothy Pullen
Its: Vice President
NME PROPERTIES WEST, INC.,
a Delaware corporation
By: /s/ Timothy Pullen
Its: Vice President
HAMMOND HOLIDAY HOME, INC.,
a Kansas corporation
By: /s/ Timothy Pullen
Its: Vice President
SEDGWICK CONVALESCENT CENTER, INC.,
a Kansas corporation
By: /s/ Timothy Pullen
Its: Vice President
NORTHWEST CONTINUUM CARE
CENTER, INC.,
a Washington corporation
By: /s/ Timothy Pullen
Its: Vice President
FLAGG INDUSTRIES, INC.,
a California corporation
By: /s/ Timothy Pullen
Its: Vice President
GUARDIAN MEDICAL SERVICES, INC.,
a North Carolina corporation
By: /s/ Timothy Pullen
Its: Vice President
NHE ARIZONA, INC.,
an Arizona corporation
By: /s/ Timothy Pullen
Its: Vice President
LAKE HEALTH CARE FACILITIES, INC.,
a Delaware corporation
By: /s/ Timothy Pullen
Its: Vice President
THE HILLHAVEN CORPORATION,
a Nevada corporation
By: /s/ Robert K. Schneider
Its: Vice President & Treasurer
FIRST HEALTHCARE CORPORATION
a Delaware corporation
By: /s/ Robert K. Schneider
Its: Vice President & Treasurer