Exhibit 10.1
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS..............................................................................................1
Section 1.1 Certain Defined Terms..................................................................1
ARTICLE II
BOARD OF DIRECTORS AND OFFICERS..........................................................................4
Section 2.1 Board of Directors.....................................................................4
Section 2.2 Officers...............................................................................4
ARTICLE III
RESTRICTIONS ON TRANSFERS OF STOCK.......................................................................4
Section 3.1 Restrictions on Transfer...............................................................4
Section 3.2 Offer..................................................................................5
Section 3.3 Option to Genesis Stockholders.........................................................5
Section 3.4 Delivery after Exercise................................................................6
Section 3.5 Right to Transfer......................................................................6
ARTICLE IV
OTHER ARRANGEMENTS.......................................................................................7
Section 4.1 Irrevocable Proxy. ....................................................................7
ARTICLE V
SUBORDINATION............................................................................................7
Section 5.1 General Subordination..................................................................7
Section 5.2 Payment Blockage.......................................................................7
Section 5.3 Distributions..........................................................................8
Section 5.4 Distributions to be Held in Trust......................................................8
Section 5.5 Continuing Subordination...............................................................8
Section 5.6 Subrogation............................................................................9
Section 5.7 Relative Rights of Creditors..........................................................10
Section 5.8 Subordinated Obligations; Rights of Senior Creditors as to Security...................10
Section 5.9 Undertakings in Insolvency Proceedings................................................10
Section 5.10 Further Assurances....................................................................10
Section 5.11 Specific Enforcement; Remedies........................................................11
ARTICLE VI
MISCELLANEOUS...........................................................................................11
Section 6.1 Legend. .............................................................................11
Section 6.2 Notices...............................................................................12
Section 6.3 Severability. .......................................................................15
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Page
Section 6.4 Entire Agreement......................................................................15
Section 6.5 Amendment and Waiver..................................................................15
Section 6.6 Consent to Specific Performance.......................................................15
Section 6.7 Assignment; Responsibility for Affiliates.............................................16
Section 6.8 Variations in Pronouns................................................................16
Section 6.9 Term..................................................................................16
Section 6.10 Governing Law.........................................................................16
Section 6.11 Further Assurances....................................................................16
Section 6.12 Headings..............................................................................16
Section 6.13 Counterparts..........................................................................16
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AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
This Amended and Restated Stockholders Agreement ("Agreement") is made
and dated this day of November 15, 1999 by and among Genesis ElderCare Corp.
(formerly known as Waltz Corp.), a Delaware corporation ("Corporation"), The
Cypress Group L.L.C., a Delaware limited liability company ("Cypress"), TPG
Partners II, L.P., a Delaware limited partnership ("TPG"), Genesis Health
Ventures, Inc. a Pennsylvania corporation ("Genesis"), Nazem, Inc., a Delaware
corporation ("Nazem") and the other signatories hereto.
WITNESSETH
Cypress, TPG, Genesis and Nazem and/or their Affiliates own in the
aggregate 745,000 shares of Common Stock, par value $.01 per share (the "Common
Stock"), of the Corporation, which Common Stock constitutes all of the issued
and outstanding capital stock of the Corporation.
Pursuant to the Agreement and Plan of Merger, dated as of June 16, 1997
(the "Merger Agreement"), by and among the Corporation, Genesis ElderCare
Acquisition Corp. (formerly known as Waltz Acquisition Corp.), a Delaware
corporation, and a wholly owned subsidiary of the Corporation ("Acquisition
Corp."), Genesis and The Multicare Companies, Inc., a Delaware corporation
("Multicare"), Acquisition Corp. was merged with and into Multicare with
Multicare being the surviving corporation and a wholly owned subsidiary of the
Corporation (the "Merger").
On October 9, 1997, the Cypress, TPG, Genesis and Nazem entered into a
Stockholders Agreement (the "Stockholders Agreement") which imposed certain
restrictions and obligations on themselves and/or their Affiliates, as
applicable, and on the shares of capital stock of the Corpora tion. The parties
now desire to restructure their joint investment in the Corporation. In
connection therewith, the parties desire to amend and restate such Stockholders
Agreement to read in full as set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. Capitalized terms used herein and
not otherwise defined herein shall have the following meanings:
"Affiliate" of any Person means any other Person that directly or
indirectly controls, is controlled by, or is under common control with, such
Person.
"Board of Directors" means the Board of Directors of the Corporation.
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"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the City of New York are required or permitted by
law to close.
"Credit Agreement" means the Fourth Amended and Restated Credit
Agreement, dated August 20, 1999, by and among Genesis and certain of its
subsidiaries as borrowers, Mellon Bank, N.A. as issuer of letters of credit,
Mellon Bank, N.A. as administrative agent, Citicorp USA, Inc. as syndication
agent, First Union National Bank, as documentation agent, Bank of America, N.A.
as syndication agent and certain other financial institutions identified therein
as lenders, together with any agreements that refinance any of the indebtedness
under the aforementioned agreement, in each case, as the same may be amended,
restated, modified and/or supplemented from time to time.
"Genesis Stockholders" means, as of any date, the collective reference
to Genesis and its Affiliates then owning one or more shares of Stock.
"Insolvency Proceeding" means any bankruptcy, reorganization,
arrangement, composition, insolvency, liquidation or other proceeding for relief
by or against Genesis or any Affiliate of Genesis under any Federal or state
bankruptcy or similar law relating to the relief of debtors or the readjustment
of indebtedness.
"Non-Genesis Stockholders" means, as of any date, the collective
reference to Persons, other than Genesis Stockholders, then owning one or more
shares of Stock.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or other
entity or a country or government or any agency or political subdivision or
instrumentality thereof or of such subdivision.
"Put/Call Agreement" means the "Put/Call Agreement" dated October 9,
1997, as amended and restated as of the date hereof, by and among the
Stockholders.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Loan" means, collectively, all obligations of the Corporation,
Multicare or any of their respective affiliates or co-borrowers under or in
respect of any or all of the Credit Agreement, dated as of October 9, 1997, as
amended, by and among The Multicare Companies, Inc., certain Subsidiaries of
Multicare, the Lenders referred to therein, Mellon Bank, N.A. as Issuer of
Letters of Credit, Mellon Bank, N.A. as Administrative Agent, Citibank, N.A. as
Syndication Agent, First Union National Bank as Documentation Agent and
Nationsbank N.A. as Syndication Agent together with any agreements that
refinance any of the indebtedness under the aforementioned agreement, in each
case, as the same may be amended, restated, modified and/or supplemented from
time to time.
"Senior Creditor" means each Person entitled to the benefits of any of
the Senior Obligations as described in clauses (1) through (4) of the definition
of Senior Obligations below.
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"Senior Obligations" means all liabilities or obligations of any type
or nature, whether for principal, interest and fees (including, without
limitation, interest accruing after the initiation of any Insolvency Proceeding)
charges and expenses, and without limitation as to amount or terms thereof,
presently owing or hereafter created or due from Genesis and/or any of its
Affiliates, and their respective successors and assigns, (1) to the Agents,
Issuer and/or Lenders (as defined in the Credit Agreement), and their respective
successors, assigns and participants, arising under or incidental to the Credit
Agreement, (2) to the participants under the Synthetic Lease Facility, and their
respective successors, assigns and participants, arising under or incidental to
the Synthetic Lease Facility, (3) to any other lender or lenders or other
creditors and its or their respective successors, assigns and participants,
under any credit arrangement that replaces all or any part of the indebtedness
or other obligations of Genesis or its Affiliates under the Credit Agreement or
the Synthetic Lease Facility, or (4) to any counterparty in connection with any
interest rate swap, hedging or similar obligation in respect of all or any
portion of the liabilities described in clauses (1), (2) or (3).
"Stock" means all shares of all classes of the capital stock of the
Corporation now or hereafter owned or held by the Stockholders or any other
Person including, without limitation, the Common Stock.
"Stockholders" means the collective reference to Non-Genesis
Stockholders and Genesis Stockholders.
"Subordinated Notes" means the 9% Senior Subordinated Notes due 2007
issued pursuant to the Indenture dated August 11, 1997 by and between
Acquisition Corp., PNC Bank, National Association, as trustee, and Banque
Internationale a Luxembourg S.A., as paying agent.
"Subordinated Obligations" means any obligations of Genesis, whether
liquidated or unliquidated, and without limitation as to amount, whether payable
in cash or other property (other than Genesis common stock), to the Subordinated
Creditors arising out of or in respect of the Put/Call Agreement.
"Synthetic Lease Facility: means the Amended and Restated Lease and
Agreement dated as of October 7, 1996, and any sublease thereunder, between
Lessor and Lessee, as the same may be amended, modified or supplemented from
time to time.
"Transfer" means to sell, give, transfer, assign, pledge, hypothecate
or otherwise dispose of all or a portion of an interest (legal or equitable) by
any means, direct or indirect, absolute or conditional, voluntary or
involuntary, including, but not limited to, by court order, operation of law,
settlement, exchange, waiver, abandonment, gift, alienation, bequest or
disposal, or to contract or agree to do any of the foregoing.
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ARTICLE II
BOARD OF DIRECTORS AND OFFICERS
Section 2.1 Board of Directors. The Board of Directors shall consist of
six directors. During the term of this Agreement, Genesis shall be entitled to
nominate four directors to the Corporation's board of directors and Genesis
agrees to vote the proxies granted pursuant to Section 4.1 hereof to elect such
nominees. During the term of this Agreement and for so long as Cypress or any of
its Affiliates owns Stock, Cypress will be entitled to nominate one director to
the Corporation's board of directors and Genesis agrees to vote the proxies
granted pursuant to Section 4.1 hereof to elect such nominee. During the term of
this Agreement and for so long as TPG or any of its Affiliates owns Stock, TPG
will be entitled to nominate one director to the Corporation's board of
directors and Genesis agrees to vote the proxies granted pursuant to Section 4.1
hereof to elect such nominee. In the event of any vacancy on the Board of
Directors, Genesis agrees to vote the proxies granted pursuant to Section 4.1
hereof for the person nominated by the Person who was entitled to nominate the
director for whom the vacancy exists.
Section 2.2 Officers. The officers of the Corporation shall consist of
a President and Chief Executive Officer, two Vice Presidents, a Treasurer and a
Secretary and such other officers as the President of the Corporation may from
time to time establish.
ARTICLE III
RESTRICTIONS ON TRANSFERS OF STOCK
Section 3.1 Restrictions on Transfer. No Non-Genesis Stockholder may
Transfer Stock except as provided in the Put/Call Agreement and except a
Non-Genesis Stockholder may Transfer its Stock in strict accordance with the
terms and conditions of this Article III. Notwithstanding any of the provisions
of this Agreement to the contrary:
(a) Cypress, TPG and Nazem and their Affiliates may Transfer
any shares of Stock to any Person who agrees to be bound
to this Agreement and to the Put/Call Agreement by
executing and delivering to Genesis a Joinder hereto in
the form of Exhibit "A" hereto, the Irrevocable Proxy in
the form of Exhibit "B" hereto and a Joinder to the
Put/Call Agreement in the form of Exhibit "A" thereto,
provided that such Transfer (either by itself or when
taken together with other Transfers under this Article
III) if consummated would not constitute a "change in
control" of the Corporation as such term is defined in
the Indenture governing the Subordinated Notes, the
credit agreements governing the Senior Loan, and any
other agreements to which the Corporation is bound (the
parties acknowledge that there are no such agreements as
of the date hereof);
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(b) a Genesis Stockholder may Transfer any shares of Stock
(1) to any Person who agrees to be bound to this
Agreement by executing a Joinder hereto in the form of
Exhibit "A" hereto, provided that such Transfer (either
by itself or when taken together with other Transfers
under this Article III) if consummated would not
constitute a "change in control" of the Corporation as
such term is defined in the Indenture governing the
Subordinated Notes, the credit agreements governing the
Senior Loan and any other agreements to which the
Corporation is bound (the parties acknowledge that there
are no such agreements as of the date hereof) or (2)
pursuant to any pledge agreement securing any or all of
the Senior Obligations to the pledgee of such pledge
agreement or any assignee of such pledgee as a result of
such pledge (a "Pledge Transferee"); but each Pledge
Transferee (A) shall be bound by the terms, other than
Article V, and shall be entitled to the benefits, of
this Agreement to the same extent as a Genesis
Stockholder, and (B) shall have no obligation or
liability with respect to the obligations of Genesis
under the Put/Call Agreement. In connection with any
sale of Stock to a third party, no Pledge Transferee
shall be required to make any representations or
warranties to the third party other than customary and
reasonable representations and warranties as to (1) its
ownership of Stock, (2) its authority to transfer such
Stock, (3) the absence of conflicts arising under such
Pledge Transferee's constituent documents as a result of
such transfer of Stock, (4) the absence of liens on such
Stock created by such Pledge Transferee, and (5) the
absence of any requirement on the part of such Pledge
Transferee to obtain any third party consents (other
than those which have been obtained) in connection with
such transfer;
(c) the limited partners of TPG and Cypress (or their
Affiliates owning Common Stock) may transfer their
limited partnership or other ownership interests in TPG
and Cypress (or their Affiliates owning Common Stock);
and
(d) the parties hereto consent to the pledge existing on the
date hereof by the limited partner of the Affiliate of
Nazem owning Common Stock of its limited partnership
interest in such Affiliate and agree that such limited
partner may transfer such limited partnership interest
to such pledgee or any assignee of such pledgee.
Any Transfer of Stock in violation of this Agreement shall be void ab initio. No
Stockholder may do indirectly, through a sale of its Stock or other equity
interest or otherwise, that which is not permitted by this Section 3.1.
Section 3.2 Offer. If a Non-Genesis Stockholder, other than Cypress,
TPG, Nazem or any of their Affiliates ("Selling Stockholder"), determines to
sell all or any part of its Stock ("Offered Stock"), the Selling Stockholder
must first offer (the "Offer") to sell the Offered Stock to
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the Genesis Stockholders, in accordance with Section 3.3 herein, by giving
written notice ("Notice") to the Corporation and to the Genesis Stockholders
setting forth the proposed terms of such sale (the "Offer Terms").
Section 3.3 Option to Genesis Stockholders. The Genesis Stockholders
shall have the option to purchase all, or any part, of the Offered Stock on the
Offer Terms and may exercise their options by giving written notice of exercise
to the Selling Stockholder and the other Genesis Stockholders, within thirty
(30) days after the date of the Notice of the Offer. The notice given by each
Genesis Stockholder shall state the maximum number of shares of the Offered
Stock which it is willing to purchase. Each Genesis Stockholder shall have the
option to purchase that proportion, rounded to the nearest whole number to
eliminate fractional shares, of the Offered Stock which the number of shares of
Stock held by such Genesis Stockholder bear to the number of shares of Stock
then held by all Genesis Stockholders. If a Genesis Stockholder does not
exercise its option to purchase its full proportionate share of the Offered
Stock, the Genesis Stockholders who have exercised their options may purchase
the Stock not purchased by such Genesis Stockholder in such proportions as they
shall agree upon or, failing such agreement, pro rata as provided above, by
giving written notice of the exercise of their options to the Selling
Stockholder within forty (40) days after the date of the Notice of the Offer.
Section 3.4 Delivery after Exercise. If the Genesis Stockholders shall
have exercised their option to purchase all or any part of the Offered Stock,
closing on the sale of such Offered Stock shall occur, and all certificates for
such Offered Stock (or, if such Offered Stock is subject to pledge,
hypothecation or other encumbrance, evidence of the Selling Stockholder's rights
therein) shall be delivered to the purchaser(s) thereof, duly endorsed for
transfer, at the earlier of fifty (50) days after the date of the Notice of the
Offer or ten (10) days after the exercise of the option to purchase the Offered
Stock (the "Transfer Date") at the then principal office of the Corporation.
Section 3.5 Right to Transfer. If all the Offered Stock is not
purchased, the Selling Stockholder may, for a period of forty-five (45) days
following the final date for acceptance under Section 3.3 herein, enter into a
binding agreement (subject to customary conditions) to sell any balance of the
Offered Stock to a third party ("Third Party Purchaser"); provided, however,
that (a) the proposed sale to the Third Party Purchaser must be approved by
Genesis prior to any offer of the Offered Stock to a Third Party Purchaser (with
such approval not to be unreasonably withheld or delayed, provided, that it
shall not be unreasonable for Genesis to withhold its consent to any Transfer
which, either by itself or taken together with other Transfers under this
Article III, would result in a "change in control" (or similar concept) under
the Indenture governing the Subordinated Notes, the Credit Agreement or any
other agreement to which the Corporation is a party), (b) such Stock is sold to
the Third Party Purchaser upon terms not more favorable to the Third Party
Purchaser than the Offer Terms and (c) the Third Party Purchaser agrees to be
bound to this Agreement and to the Put/Call Agreement by executing and
delivering to Genesis a Joinder hereto in the form of Exhibit "A" hereto and a
Joinder to the Put/Call Agreement in the form of Exhibit "A" thereto. If the
Selling Stockholder wishes to sell its Stock on other than the Offer Terms or
has not sold such Stock on the Offer Terms within that thirty (30) day period,
it shall be obligated to make
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new offers and re-offers to the Genesis Stockholders, in accordance with
subsections 3.3 and 3.4 herein, before it shall be permitted to offer to
Transfer its Stock, or any part thereof, to any Person.
ARTICLE IV
OTHER ARRANGEMENTS
Section 4.1 Irrevocable Proxy. Each Non-Genesis Stockholder hereby
agrees to grant to Genesis an irrevocable proxy and power of attorney
substantially in the form of Exhibit "B"attached hereto.
ARTICLE V
SUBORDINATION
Section 5.1 General Subordination. Genesis and each of the Non-Genesis
Stockholders acknowledge and agree that the Subordinated Obligations are and
shall be subordinate and subject in right of payment to the prior indefeasible
payment in full in cash of the Senior Obligations to the extent, and in the
manner, set forth in this Article V. Genesis agrees that it shall not, and shall
not cause, permit or suffer any Affiliate of Genesis to, impair in any manner
the rights of the Senior Creditors to enforce or otherwise receive the benefits
of the subordination set forth in this Article V.
Section 5.2 Payment Blockage.
(a) Unless the Senior Obligations shall have been indefeasibly
paid in full in cash, and except as otherwise provided in subsection (b) below,
no payment or distribution of any of the assets of Genesis or any Affiliate of
Genesis shall be made by Genesis or any Affiliate of Genesis, or received or
accepted by any Subordinated Creditor, in respect of the Subordinated
Obligations:
(1) at any time there shall have occurred and be
continuing any default (a "Payment Default") in the payment when due (at
maturity, upon acceleration, upon mandatory prepayment or otherwise) of any
amount owing in respect of any of the Senior Obligations, unless such default
shall have been cured or waived in writing by or on behalf of the Senior
Creditors; or
(2) at any time there shall have occurred, and
Genesis and the Subordinated Creditors shall have received notice (a "Deferral
Notice") of such occurrence, and be continuing any default or event of default
in respect of the Senior Obligations other than a Payment Default (a
"Non-Payment Default"); provided, however, that the prohibition on any payment
or distribution in respect of the Subordinated Obligations in the event of any
Non-Payment Default shall apply only for a period (the "Payment Blockage
Period") commencing upon the receipt by Genesis and the Subordinated Creditors
of a Deferral Notice and continuing until the earlier of (i) the date on which
such Non-Payment Default shall have been cured, waived in writing, by or on
behalf of the Senior Creditors, or otherwise cease to exist, or (ii) 179 days
after the Deferral Notice, or (iii) the date such Payment Blockage Period and
any other Payment Blockage Period initiated during
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such period have been terminated by written notice to Genesis and the
Subordinated Creditors from or on behalf of the Senior Creditors.
Notwithstanding any other provision of this Agreement, in no event shall a
Payment Blockage Period extend beyond 179 days from the date of receipt by
Genesis or the Subordinated Creditors of a Deferral Notice (the "Initial
Blockage Period"). Any number of Deferral Notices may be given during the
Initial Blockage Period; provided that during any 365-day consecutive period
only one such period may commence and the duration of such period may not exceed
179 days. No Non-Payment Default which existed and was continuing on the date of
the commencement of any Payment Blockage Period shall be made the basis for the
commencement of a second Payment Blockage Period, whether or not within a period
of 365 consecutive days, unless such default shall have been cured or waived for
period of not less than 90 consecutive days.
Section 5.3 Distributions. In the event of any distribution, division
or application, partial or complete, voluntary or involuntary, by operation of
law or otherwise, of all or any part of the assets or property of Genesis or any
Affiliate of Genesis or the proceeds thereof, to creditors of Genesis or any
Affiliate of Genesis, or upon any repayment of indebtedness of Genesis or any
Affiliate of Genesis, by reason of (1) the liquidation, dissolution or other
winding up, partial or complete, of Genesis or any Affiliate of Genesis or its
or their respective business, or (2) any Insolvency Proceeding, then, and in any
such event, any payment or distribution of any kind or character, whether in
cash, securities or other property which but for this Article V would be payable
or deliverable to any Subordinated Creditor on account of the Subordinated
Obligations (whether or not such payment or distribution shall have been made in
accordance with any plan approved in an Insolvency Proceeding), shall instead be
paid or delivered directly to the Senior Creditors for application to the Senior
Obligations, whether then due or not due, until the Senior Obligations shall
have been indefeasibly paid in full in cash; provided that, for purposes of
determining whether the Senior Obligations have been indefeasibly paid in full
in cash, the Senior Creditors shall be required to use reasonable efforts to
sell all securities and other property received by virtue of this provision for
cash at fair market value.
Section 5.4 Distributions to be Held in Trust. Unless and until the
Senior Obligations shall have been indefeasibly paid in full in cash, if any
payment, distribution of security or proceeds of any security are received by
any Subordinated Creditor upon or in respect of the Subordinated Obligations
which are not permitted to be paid in accordance with the provisions of this
Article V, such Subordinated Creditor will forthwith deliver the same to the
Senior Creditors in precisely the form received (except for the endorsement or
assignment of such Subordinated Creditor where necessary), for application to
the Senior Obligations, whether then due or not due, and, until so delivered,
the same shall be held in trust by such Subordinated Creditor as property of the
Senior Creditors. In the event of the failure of any Subordinated Creditor to
make any such endorsement or assignment, the Senior Creditors or their agent, or
any of its or their officers or employees, are hereby irrevocably authorized to
make the same.
Section 5.5 Continuing Subordination. The subordination effected by
this Article V is a continuing subordination, and each Subordinated Creditor
hereby agrees that at any time and from time to time, without notice to it:
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(a) the time, place or manner for payment or performance by
Genesis or any Affiliate of Genesis of, or compliance with any of its agreements
or instruments evidencing, the Senior Obligations may be extended or waived by
the Senior Creditors;
(b) any act permitted to be taken by Genesis, any Affiliate of
Genesis or any Senior Creditor under agreements or instruments evidencing the
Senior Obligations may be so taken;
(c) any of the agreements or instruments evidencing the Senior
Obligations may be amended, or modified in any manner, including for the purpose
of adding any provisions thereto, increasing the amount of, or changing the
terms of, the Senior Obligations, adding or releasing any security or collateral
therefor, or changing in any manner the covenants or rights of the Senior
Creditors or Genesis or any Affiliate of Genesis or any other Person thereunder;
(d) the maturity of any of the Senior Obligations may be
accelerated;
(e) any or all collateral security for the Senior Obligations
may be exchanged, sold, surrendered, released or otherwise dealt with;
(f) Genesis or any Affiliate of Genesis, any co-borrower with
Genesis or any Affiliate of Genesis, any guarantor or any other Person may be
released of its obligations in respect of the Senior Obligations, whether or not
in connection with any Insolvency Proceeding;
(g) payments received by any Senior Creditor from any source
which could lawfully be applied to payment, in full or in part, of the Senior
Obligations, but which could also lawfully be used for some other purpose may be
used for such other purpose with or without the consent of the Senior Creditors;
and
(h) any other event which could, but for this provision, be
used as a defense to the obligations of the Subordinated Creditor hereunder may
occur; all without impairing or affecting the obligations of the Subordinated
Creditors or the rights of the Senior Creditors hereunder. The rights and
remedies of the Senior Creditors hereunder shall be irrevocable and shall remain
in full force and effect notwithstanding (i) any lack of validity or
enforceability of the Senior Obligations, (ii) any circumstance which might
constitute a defense available to, or the discharge of, Genesis in respect of
the Senior Obligations, or (iii) the occurrence of any of the circumstances
described in clauses (a) through (h) of the preceding sentence. The provisions
of this Article V shall continue to be effective or be reinstated, as the case
may be, if at any time any payment in respect of the Senior Obligations is
rescinded or must otherwise be returned by any Senior Creditor in any Insolvency
Proceeding, all as though such payment had not been made.
Section 5.6 Subrogation. No payment or distribution to the Senior
Creditors pursuant to the provisions of this Article V shall entitle the
Subordinated Creditors to exercise any rights of subrogation in respect thereof
(and any such rights existing under law are hereby waived) until such time as
the Senior Obligations have been indefeasibly paid in full in cash. After the
Senior
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Obligations have been indefeasibly paid in full in cash and until the
Subordinated Obligations are paid in full, the Subordinated Creditors shall be
subrogated to the rights of the Senior Creditors to receive distributions
applicable to the Senior Obligations to the extent that distributions otherwise
payable to the Subordinated Creditors have been applied to the payment of Senior
Obligations. A distribution made under Section 5.3 of this Agreement to the
Senior Creditors which otherwise would have been made to the Subordinated
Creditors is not, as between Genesis and the Subordinated Creditors, a payment
by Genesis on the Senior Obligations.
Section 5.7 Relative Rights of Creditors. The provisions of this
Article V are intended only for the purpose of defining the relative rights of
the Senior Creditors, on the one hand, and the Subordinated Creditors, on the
other hand. Nothing herein is intended to, nor shall the subordination
provisions of this Article V, impair, as between Genesis, its creditors other
than the Senior Creditors and the Subordinated Creditors, the obligation of
Genesis to pay to the Subordinated Creditors the Subordinated Obligations or any
other amounts due to Subordinated Creditors under the Put/Call Agreement as and
when the same shall become due and payable, or to affect the relative rights of
the Subordinated Creditors and creditors of the Company other than the Senior
Creditors nor shall the foregoing or provisions to implement the foregoing
prevent the Subordinated Creditors from exercising all remedies otherwise
permitted by applicable law upon any breach of the Put/Call Agreement, subject
to the rights contemplated herein of the Senior Creditors.
Section 5.8 Subordinated Obligations; Rights of Senior Creditors as to
Security.
(a) The Subordinated Creditors and Genesis acknowledge and
agree that the Put/Call Agreement evidences the full and complete obligations of
Genesis comprising the Subordinated Obligations, and Genesis shall not issue any
further instrument or agreement in respect of the Subordinated Obligations. All
certificates evidencing the stock of Genesis ElderCare Corporation to which are
attached or associated any rights of the Subordinated Creditors under the
Put/Call Agreement shall contain a legend to the effect that, the payment
obligations of Genesis thereunder are expressly subordinated and junior in right
of payment to the Senior Obligations as provided in this Agreement. The
Subordinated Creditors and Genesis shall not amend, or modify or supplement the
Put/Call Agreement without the written consent of the Senior Creditors, except
for such amendments, modifications or supplements which could not reasonably be
expected to have a material adverse effect on any Senior Creditor.
Section 5.9 Undertakings in Insolvency Proceedings. In furtherance of
the subordination provided herein, each of the Subordinated Creditors, for
itself, its successors and assigns, agrees that in any Insolvency Proceeding, it
shall not vote is claim(s) or take any other consensual actions in a manner
inconsistent with the terms of this Agreement.
Section 5.10 Further Assurances. The Subordinated Creditors agree that
(a) promptly upon the written request of the Senior Creditors, such Subordinated
Creditor shall take such other action, at Genesis' expense, as may be reasonably
requested by the Senior Creditors for the protection of the rights of the Senior
Creditors under this Agreement or to effectuate the
10
subordination provided herein, and (b) payment of the Subordinated Obligations
shall not at any time be secured by any lien or security interest on property of
Genesis or any Affiliate of Genesis.
Section 5.11 Specific Enforcement; Remedies. The Senior Creditors are
hereby authorized to demand the specific performance of this Article V, whether
or not Genesis shall have complied with any provisions hereof applicable to it,
at any time when the Subordinated Creditors (or any of them) shall have failed
to comply with the terms hereof, and the Subordinated Creditors hereby waive any
objection or defense in any action for the specific performance hereof based
upon the adequacy of any remedy at law; but nothing herein shall limit the right
of the Senior Creditors to seek damages at law for any failure by the
Subordinated Creditors or Genesis to perform their respective obligations
hereunder. In any action or suit for the enforcement of any right or remedy
under this Agreement, the parties acknowledge and agree that a court may assess
reasonable costs, including reasonable attorneys fees, against any party
litigant in such action, having due regard for the merits and good faith of the
claims or defenses made by such party.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Legend. Each certificate representing shares of Common
Stock hereafter acquired shall bear the following legend (until such time as
subsequent transfers thereof are no longer restricted in accordance with the
Securities Act or this Agreement):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT DATED AS OF NOVEMBER15,
1999 (THE "STOCKHOLDERS AGREEMENT") AND AN AMENDED AND RESTATED
PUT/CALL AGREEMENT DATED AS OF NOVEMBER 15, 1999(THE "PUT/CALL
AGREEMENT") AMONG, INTER ALIA, GENESIS ELDERCARE CORP. (THE "COMPANY"),
THE CYPRESS GROUP L.L.C., TPG PARTNERS II, L.P., NAZEM, INC. AND
GENESIS HEALTH VENTURES, INC. A COPY OF THE SHAREHOLDERS AGREEMENT AND
THE PUT/CALL AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE COMPANY.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE GIVEN, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF
UNLESS SUCH GIFT, SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE STOCKHOLDERS
AGREEMENT AND THE PUT/CALL AGREEMENT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND NO SALE,
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ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND IN
COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS OR
(B) IF THE COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL WHICH
SHALL BE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
IS NOT IN VIOLATION OF THE ACT OR APPLICABLE STATE SECURITIES LAWS."
Section 6.2 Notices. Notices hereunder shall be given only by personal
delivery, registered or certified mail, return receipt requested, overnight
courier service, or by telecopy (and subsequently confirmed by any other
permitted means hereunder) and shall be deemed transmitted when personally
delivered or deposited in the mail or delivered to a courier service or sent by
telecopy (as the case may be), postage or charges prepaid, and addressed to the
particular party to whom the notice is to be sent as follows:
(a) in the case of the Corporation:
Genesis ElderCare Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esquire
with a copy to:
Blank Rome ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
(b) in the case of Cypress:
The Cypress Group L.L.C.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
(c) in the case of TPG:
TPG Partners II, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esquire
(d) in the case of Genesis:
Genesis Health Ventures, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esquire
with a copy to:
Blank Rome ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
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(e) in the case of Nazem:
Nazem, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
with a copy to:
Bartoma Corporation, ▇.▇.
▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
Telecopier: ▇▇▇▇-▇▇▇-▇▇-▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(f) in the case of the Senior Creditors:
Mellon Bank, N.A., as Administrative Agent and
Synthetic Lease Agent
Street Address:
AIM 199-5220
Mellon Independence Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Mailing Address:
AIM 199-5220
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Loan Administration
14
with a copy to:
Mellon Bank, N.A.
One Mellon Bank Center
Room 151-4440
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
with a copy for notices respecting assignments to:
Mellon Bank, N.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
(g) in the case of any other Person, to the address of such Person set
forth on the Joinder hereto executed by such Person.
or to such address as a party may instruct by notice hereunder.
Section 6.3 Severability. In the event any provision hereof is held
void or unenforceable by any court, then such provision shall be severable and
shall not affect the remaining provisions hereof.
Section 6.4 Entire Agreement. This Agreement, together with the other
agreements referred to herein, is the entire Agreement among the parties, and,
when executed by the parties hereto, supersedes all prior agreements and
communications, either verbal or in writing between the parties hereto with
respect to the subject matter contained herein.
Section 6.5 Amendment and Waiver. This Agreement may not be amended,
modified or supplemented unless consented to in writing by the Genesis
Stockholders and a majority (by voting power) of the Non-Genesis Stockholders.
Any amendment, modification or supplement so consented to shall be binding upon
and inure to the benefit of any subsequent Stockholder. Any waiver or failure to
insist upon strict compliance with any obligation, agreement or condition herein
shall not operate as a waiver of, or estoppel with respect to, any such
subsequent or other failure.
Section 6.6 Consent to Specific Performance. The parties hereto declare
that it is impossible to measure in money the damages which would accrue to a
party by reason of failure to perform any of the obligations hereunder.
Therefore, if any party shall institute any action or
15
proceeding to enforce the provisions hereof, any party against whom such action
or proceeding is brought hereby waives any claim or defense therein that the
other party has an adequate remedy at law.
Section 6.7 Assignment; Responsibility for Affiliates. The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors. No party may assign to any Person any of
its rights or obligations hereunder. Notwithstanding the foregoing provision, a
Genesis Stockholder may assign any of its rights hereunder pursuant to any
security agreement or pledge agreement entered into for the benefit of Genesis'
senior lenders.
Section 6.8 Variations in Pronouns. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine or neuter, singular
or plural, as the identity of the antecedent person or persons or entity or
entities may require.
Section 6.9 Term. This Agreement shall terminate upon the earlier to
occur of (i) the mutual written agreement of the Stockholders; or (ii)
consummation of the exercise of the Call Option pursuant to the Put/Call
Agreement, without any default in connection therewith.
Section 6.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
Section 6.11 Further Assurances. Each of the parties shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.
Section 6.12 Headings. The headings in this Agreement are intended
solely for convenience of reference and shall be given no effect in the
interpretation of this Agreement.
Section 6.13 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Remainder of page intentionally left blank]
16
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first above written.
GENESIS ELDERCARE CORP.
By:
THE CYPRESS GROUP L.L.C.
By:
TPG PARTNERS II, L.P.
BY: TPG GenPar II, L.P.
BY: TPG ADVISORS II, INC.
By:_______________________________________
GENESIS HEALTH VENTURES, INC.
By:_______________________________________
NAZEM, INC.
By:_______________________________________
17
The foregoing provisions of this Agreement applicable to Affiliates of
Stockholders owning Common Stock shall be binding upon and inure to the benefit
of the undersigned.
Affiliates of The Cypress Group L.L.C.
CYPRESS MERCHANT BANKING
PARTNERS L.P.
By: Cypress Associates L.P.
By: The Cypress Group L.L.C.
By:
Name:
Title:
CYPRESS OFFSHORE PARTNERS L.P.
By: Cypress Associates L.P.
By: The Cypress Group L.L.C.
By:
Name:
Title:
Affiliates of TPG PARTNERS II, L.P.
TPG PARALLEL II, L.P.
By: TPG GenPar II, L.P.
By: TPG Advisors II, Inc.
By:
Name:
Title:
TPG INVESTORS II, L.P.
By: TPG GenPar II, L.P.
By: TPG Advisors II, Inc.
By:
Name:
Title:
[Signatures continued on following page]
18
TPG MC COINVESTMENT, L.P.
By: TPG GenPar II, L.P.
By: TPG Advisors II, Inc.
By:
Name:
Title:
Affiliate of Nazem
GENESIS ELDERCARE PORTFOLIO K. LP
By: Healthworth Associates I, L.L.C.
By:
Name:
Title:
Acknowledged and accepted with respect to Article V:
MELLON BANK, N.A., as Administrative Agent under the Credit Agreement and Agent
under the Synthetic Lease Facility
By:
Name:
Title:
19
EXHIBIT A
Joinder
The undersigned hereby agrees to be bound to the attached Amended and
Restated Stockholders Agreement as a Non-Genesis Stockholder in accordance with
the terms thereof.
The address for notices or other communications to the undersigned
under the Amended and Restated Stockholders Agreement is:
[ ]
[ ]
[ ]
Attention:
Telecopier:
[ ]
Title:
20
EXHIBIT B
Irrevocable Proxy
[ ] (collectively, "Stockholder") hereby grant to and appoint Genesis
Health Ventures, Inc. ("Genesis"), Stockholder's irrevocable proxy and
attorney-in-fact (with full power of substitution) to vote in their sole
discretion all the shares of common stock, par value $.01 per share (the "Common
Stock"), of Genesis ElderCare Corp. now or hereafter owned by Stockholder with
all powers Stockholder would possess if acting personally. Stockholder intends
this proxy to be irrevocable and coupled with an interest and hereby revokes any
proxy previously granted by Stockholder with respect to the Common Stock owned
by Stockholder.
Stockholder agrees to take or cause to be taken all action and to do or
cause to be done all things necessary or advisable to make this irrevocable
proxy effective.
No action taken pursuant to this proxy shall be nullified or otherwise
affected by any interest that Genesis or any of its affiliates may have in the
matter acted upon, notwithstanding any interest that Stockholder may have in any
such matter. Genesis shall not have any fiduciary or other duty to Stockholder.
This proxy shall be valid and in effect for so long as Stockholder
shall own any shares of Common Stock (which may be longer than three years),
notwithstanding any earlier termination of the Amended and Restated Stockholders
Agreement, dated November , 1999, by and among Genesis ElderCare Corp., The
Cypress Group L.L.C., TPG Partners II, L.P., Genesis, Nazem, Inc. and the other
signatories thereto.
THIS PROXY SHALL BE GOVERNED BY THE LAW OF THE STATE OF DELAWARE.
By:___________________________________
Name:
Title:
By:
Name:
Title:
21