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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d 1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
Mariner Post-Acute Network, Inc.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of class of securities)
698940103
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(CUSIP number)
Audrey A. Rohan, Esq.
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza, 24th Floor
New York, New York 10112
(212) 408-2400
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(Name, address and telephone number of person
authorized to receive notices and communications)
January 14, 2000
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(Date of event which required filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this Schedule because of Rule 13d-1(b)(3) or (4), check the following box .
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are being sent.
(Page 1 of 14 Pages)
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SCHEDULE 13D
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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1 NAME OF REPORTING PERSONS
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S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Chase Equity Associates, LLC (IRS Number 13-3371826)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X
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3 SEC USE ONLY
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4 SOURCE OF FUND*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(D) OR 2(E) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY ---------------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 0
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9 SOLE DISPOSITIVE POWER
0
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10 SHARED DISPOSITIVE POWER
0
-----------------------------------------------------------------
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
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14 TYPE OF REPORTING PERSON
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 2 of 14 Pages)
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SCHEDULE 13D
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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This Amendment No. 1 relates to the Statement on Schedule
13D dated November 12, 1997 and filed with the Securities and Exchange
Commission on behalf of Chase Equity Associates, LLC, a Delaware limited
liability company (formerly Chase Equity Associates, LP), which is hereby
amended and restated in its entirety to reflect the disposition of all of
the Issuer's Common Stock by the Reporting Person as follows:
Item 1. Security and Issuer.
The name of the issuer is Mariner Post-Acute Network, Inc., a
Delaware corporation (formerly Paragon Health Network, Inc., the "Company"
or the "Issuer"). The address of the Issuer's principal executive offices
is One Ravinia Drive, Suite 1500, Atlanta, Georgia 30346. This statement
relates to the Issuer's Common Stock, $.01 par value per share (the
"Common Stock").
Item 2. Identity and Background.
This statement is being filed by Chase Equity Associates, LLC,
a Delaware limited liability company, formerly Chase Equity Associates,
L.P. (hereinafter referred to as "CEA"), whose principal office is located
at c/o Chase Capital Partners, 380 Madison Avenue, 12th Floor, New York,
New York 10017.
CEA is engaged in the venture capital and leveraged buyout
business. The sole member of CEA is CCP-CMC Consolidating, LLC, a Delaware
limited liability company (hereinafter referred to as "CCP-CMC"). The
managing member of CCP-CMC is Chase Capital Partners, a New York general
partnership (hereinafter referred to as "CCP"). Pursuant to a master
advisory agreement, CCP-CMC has delegated its management authority of CEA
to CCP. CCP is also engaged in the venture capital and leveraged buyout
business. CCP-CMC's and CCP's principal office is located at the same
address as CEA.
Set forth below are the names of each general partner of CCP
who is a natural person. Each such general partner is a U.S. citizen,
whose principal occupation is general partner of CCP and whose business
address (except for Messrs. Britts, Meggs, Soghikian, Stuart and Yu-Seng)
is c/o Chase Capital Partners, 380 Madison Avenue, 12th Floor, New York,
New York 10017.
Ana Carolina Aidar
John R. Baron
Christopher C. Behrens
Mitchell J. Blutt, M.D.
David S. Britts
Arnold L. Chavkin
David Gilbert
Eric Green
Michael R. Hannon
Donald J. Hofmann
Jonathan Meggs
Stephen P. Murray
John M.B. O'Connor
(Page 3 of 14 Pages)
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SCHEDULE 13D
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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Brian J. Richmand
Robert Ruggiero
Susan Segal
Shahan D. Soghikian
Lindsay Stuart
Jeffrey C. Walker
Timothy Walsh
Rick Waters
Damion E. Wicker, M.D.
Ting Yu-Seng
Messrs. Britts' and Soghikian's address is c/o Chase Capital
Partners, 50 California Street, Suite 2940, San Francisco, CA 94111.
Messrs. Meggs' and Stuart's address is c/o Chase Capital Partners, 125
London Wall, Level 13, London, England EC2Y5AJ. Mr. Yu-Seng's address is
c/o Chase Asia Equity Partners, Suite 003, 30th Floor, 1 International
Finance Center, 1 Harbor View Street, Hong Kong.
Jeffrey C. Walker is the managing general partner of CCP. The
remaining general partners of CCP are Chase Capital Corporation, a New
York corporation (hereinafter referred to as "Chase Capital"), CCP
Principals, L.P., a Delaware limited partnership (hereinafter referred to
as "Principals") and CCP European Principals, L.P., a Delaware limited
partnership (hereinafter referred to as "European Principals"), each of
whose principal office is located at 380 Madison Avenue, 12th Floor, New
York, New York 10017. Chase Capital is a wholly-owned subsidiary of The
Chase Manhattan Corporation. The general partner of each of Principals
and European Principals is Chase Capital. Chase Capital, Principals and
European Principals are each engaged in the venture capital and leveraged
buyout business. Set forth in Schedule A hereto and incorporated herein by
reference are the names, business addresses and principal occupations or
employments of each executive officer and director of Chase Capital, each
of whom is a U.S. citizen.
The Chase Manhattan Corporation (hereinafter referred to as
"Chase") is a Delaware corporation engaged (primarily through
subsidiaries) in the commercial banking business with its principal office
located at 270 Park Avenue, New York, New York 10017. Set forth in
Schedule B hereto and incorporated herein by reference are the names,
business addresses, principal occupations and employments of each
executive officer and director of Chase, each of whom is a U.S. citizen.
To CEA's knowledge, the response to Items 2(d) and (e) of
Schedule 13D is negative with respect to CEA and all persons to whom
information is required hereunder by virtue of CEA's response to Item 2.
Insofar as the requirements of Items 3-6 inclusive of this
Schedule 13D Statement require that, in addition to CEA, the information
called for therein should be given with respect to each of the persons
listed in this Item 2, including CCP, CCP's individual general partners,
Chase Capital, Chase Capital's executive officers and directors,
Principals, and Principal's controlling partners, European Principals and
European Principal's controlling partners, Chase and Chase's executive
officers and directors, the information provided in Items
(Page 4 of 14 Pages)
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SCHEDULE 13D
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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3-6 with respect to CEA should also be considered fully responsive with
respect to the aforementioned persons who have no separate interests in the
Issuer's Common Stock which is required to be reported thereunder. Although
the definition of "beneficial ownership" in Rule 13d-3 under the Act might
also be deemed to constitute these persons beneficial owners of the
Issuer's Common Stock disposed of by CEA, neither the filing of this
statement nor any of its contents shall be deemed an admission that any of
such persons is a beneficial owner of the Issuer's Common Stock disposed of
by CEA or a member of a group together with CEA either for the purpose of
Schedule 13D of the Exchange Act or for any other purpose with respect to
the Issuer's Common Stock.
Item 3. Source and Amount of Funds or Other Considerations
Transactions Involving the Issuer.
Pursuant to an Amended and Restated Agreement and Plan of
Merger, dated as of September 17, 1997, entered into by Apollo LCA
Acquisition Corp., a Delaware corporation ("Acquisition Corp."), Apollo
Management, L.P., a Delaware limited partnership ("Apollo Management"),
and Living Centers of America, Inc. ("LCA"), a Delaware the Issuer
coporation (the "Recapitalization Agreement"), LCA was recapitalized as
the Issuer (at the time named Paragon Health Network, Inc., which was
later renamed Mariner Post-Acute Network, Inc.) and each share of
Acquisition Corp. common stock outstanding was converted into the right to
receive one share of Common Stock of the Issuer. The merger effecting the
recapitalization became effective on November 4, 1997.
Pursuant to a Stock Purchase Agreement, dated as of September
17, 1997 (the "Stock Purchase Agreement"), entered into by Acquisition
Corp., CEA and Apollo Investment Fund III, L.P., a Delaware limited
partnership ("Fund III"), Apollo U.K. Partners III, L.P., a limited
partnership organized under the laws of the United Kingdom ("UK
Partners"), Apollo Overseas Partners III, L.P., a Delaware limited
partnership ("Overseas Partners" and together with Fund III and UK
Partners, the "Apollo Purchasers") and the other parties named thereto
(the Apollo Purchasers, CEA and the other parties thereto are collectively
referred to as the "Purchasers") purchased shares of common stock of
Acquisition Corp. for the sum of $40.50 per share, in cash. Pursuant to
the Stock Purchase Agreement, CEA acquired beneficial ownership of
2,000,001 shares of the Issuer's Common Stock (after giving effect to a
3-for-1 stock split effective December 30, 1997).
In connection with the Stock Purchase Agreement, Apollo
Management and the Purchasers entered into the Proxy and Voting Agreement,
dated as of November 4, 1997 (the "Proxy and Voting Agreement"), by which,
among other things: (i) Apollo Management was granted an irrevocable
proxy, with full power of substitution, as attorneys and proxies to vote
all shares acquired by the Purchasers on matters as to which the
Purchasers are entitled to vote at a meeting of the stockholders of the
Issuer or to which they are entitled to express consent or dissent to
corporate action in writing without a meeting, in Apollo Management's
absolute, sole and binding discretion for a period of three years, and
(ii) the Purchasers agreed not to transfer their interest in the Issuer
unless Apollo Management is given notice five business days in advance of
the transfer, and the transferee becomes a party to the Proxy and Voting
Agreement.
The Apollo Purchasers and CEA entered into a Warrant Purchase
Agreement, dated as of September 17, 1997 (the " Warrant Purchase
Agreement"), and on November 4, 1997, the Apollo Purchasers granted to CEA
a warrant (the "Warrant") evidencing the right to
(Page 5 of 14 Pages)
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SCHEDULE 13D
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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purchase a total of 592,593 shares of the Issuer's Common Stock (after
giving effect to a 3-for-1 stock split effective December 30, 1997) at a
price of $0.00033 per share. On December 20, 1999, CEA exercised the
Warrant and, as a result, the Apollo Purchasers transferred 592,593 shares
of the Issuer's Common Stock to CEA. In connection therewith, CEA
transferred 2,821 shares of the Issuer's Common Stock to the Apollo
Purchasers in payment of the Warrant exercise price. As a result thereof,
CEA became the beneficial owner of 2,589,773 shares of the Issuer's Common
Stock.
Pursuant to a Transfer Agreement and a Put Option Agreement,
in each case, dated as of January 14, 2000 (collectively, the "Transfer
Agreements"), CEA in a private transaction sold 2,589,773 shares of the
Issuer's Common Stock held by CEA (the "Sale") to Credit Suisse First
Boston Management Corporation (hereinafter referred to as "CSFBMC"), a
privately held affiliate of Credit Suisse First Boston, a Swiss bank
(hereinafter referred to as "CSFB"), for consideration consisting of an
aggregate of (i) $376,010, (ii) 15,040 shares of 9.75% Redeemable
Preferred Stock, par value $1.00 per share (the "Preferred Stock") of
CSFBMC and (iii) a "put option" granted to CEA of the Preferred Stock of
CSFBMC requiring the New York branch of CSFB to purchase the Preferred
Stock held by CEA under certain circumstances. After giving effect to the
Sale, CEA will not be the record owner of any shares of the Issuer's
Common Stock.
All reference to, and summaries of, the Recapitalization
Agreement, the Stock Purchase Agreement, the Proxy and Voting Agreement,
the Warrant Purchase Agreement and the Transfer Agreements in this
Amendment No. 1 to Schedule 13D are qualified in their entirety by
reference to such agreements, the full texts of which are filed as
Exhibits 1, 2, 3, 4 and 5 hereto, respectively, and are incorporated
herein by this reference.
Source of Funds.
The funds provided by CEA for the original purchase of the
Issuer's Common Stock were obtained from CEA's contributed capital, which
included funds that are held available for such purpose. CEA disclaims
that it is a member of a group with any other persons either for purposes
of this Schedule 13D or for any other purpose related to its disposition
of the Issuer's Common Stock.
Item 4. Purpose of the Transactions.
The disposition of the Issuer's Common Stock has been made by
CEA for investment purposes.
The Purchasers and the Issuer entered into a Stockholders
Agreement, dated as of November 4, 1997, amended April 13, 1998 (the
"Stockholders Agreement"), which, among other things: (i) provides that
Apollo Management, and each person who controls or is controlled by Apollo
Management has the right to nominate certain nominees to the board of
directors of the Issuer; (ii) contains certain "standstill" provisions
limiting the Purchasers' ability to purchase additional shares of Common
Stock of the Issuer; (iii) contains "drag-along" rights which require the
Purchasers to transfer all shares of Common Stock in connection and
together with the sale of all of the shares then owned by the Apollo
Purchasers in certain transactions; and (iv) contains "tag-along" rights
which require that if any of the Apollo Purchasers enter into an agreement
to sell their shares of the Issuer's Common Stock to a third party other
than an affiliate of the Apollo Purchasers, the Apollo Purchaser shall
first provide
(Page 6 of 14 Pages)
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SCHEDULE 13D
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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the Issuer and each other Purchaser written notice of the proposed
transaction so that any other Purchasers may exercise their "co-sale"
rights, thus being permitted to sell a portion of their Common Stock of
the Issuer on the same terms as the Apollo Purchasers.
The Purchasers and the Issuer also entered into a Registration
Rights Agreement, dated as of November 4, 1997 (the "Registration Rights
Agreement"), which, among other things, entitles the Purchasers to (i)
require the Issuer to register under the Securities Act of 1933 the shares
of Common Stock that were acquired by the Purchasers in connection with
the Recapitalization Agreement (the "Registrable Shares") and (ii) subject
to certain exceptions, require the Issuer to include the Registrable
Shares in any registration of equity securities of the Issuer under the
Securities Act of 1933.
Pursuant to a Termination of Amended and Restated Stockholders
Agreement and Proxy and Voting Agreement, dated as of December 20, 1999
and executed by all of the parties thereto on or before January 5, 2000
(the "Termination Agreement") by and among the Issuer, CEA and the other
parties thereto (collectively, the "Terminating Parties"), the Terminating
Parties (i) terminated the Voting Agreement and, thus, the Proxy and (ii)
terminated the Stockholders Agreement. Accordingly, Apollo Management is
no longer entitled to direct the voting of CEA's shares of the Issuer's
Common Stock.
All reference to, and summaries of, the Stockholders
Agreement, the Registration Rights Agreement and the Termination Agreement
in this Amendment No. 1 to Schedule 13D are qualified in their entirety by
reference to such agreements, the full texts of which are filed as
Exhibits 5, 6, 7 and 8 hereto, respectively, and are incorporated herein
by this reference.
Although CEA has no present intention to do so, CEA may make
additional purchases of the Issuer's Common Stock either in the open
market or in privately negotiated transactions, including transactions
with the Issuer, depending on an evaluation of the Issuer's business
prospects and financial condition, the market for the Common Stock, other
available investment opportunities, money and stock market conditions and
other future developments.
Except as set forth in this Item 4, CEA has no present plans
or proposals that relate to or would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D. However,
CEA reserves the right to propose or participate in future transactions
which may result in a merger, reorganization or liquidation, of a material
amount of assets of the Issuer or its subsidiaries, or other transactions
which might have the effect of causing the Issuer's Common Stock to cease
to be listed on the New York Stock Exchange or causing the Common Stock to
become eligible for termination of registration, under Section 12(g) of
the Exchange Act.
Item 5. Interest in Securities of the Issuer.
------- ------------------------------------
(a) and (b).
As of January 14, 2000, CEA does not have any beneficial
ownership in the Common Stock of the Issuer.
(Page 7 of 14 Pages)
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SCHEDULE 13D
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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Except as reported in Items 3-6 herein and incorporated herein
by reference, there have been no transactions in the Issuer's Common Stock
during the past sixty days which are required to be reported in this
Statement. No person other than CEA has the right to receive or the power
to direct the receipt of dividends from or the proceeds from the sale of
the Issuer's Common Stock disposed of by CEA.
(c) The responses to Items 3 and 4 of this Statement are
incorporated herein by reference.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
Reference is made to the information disclosed under Items 2,
3 and 4 of this Statement, which is incorporated by reference in response
to this Item.
Except as set forth in this Statement, to the best knowledge
of the Reporting Persons, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) between the persons
named in Item 2 and any other person with respect to any securities of
the Issuer, including but not limited to transfer or voting of any
securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of profits, division of profits or loss, or the
giving or withholding of proxies.
(Page 8 of 14 Pages)
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SCHEDULE 13D
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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Item 7. Material to be Filed as Exhibits
(1) *Recapitalization Agreement
(2) *Stock Purchase Agreement
(3) *Proxy and Voting Agreement
(4) *Warrant Purchase Agreement
(5) Transfer Agreements
(6) *Stockholders Agreement
(7) *Registration Rights Agreement
(8) Termination Agreement
*Filed previously.
SCHEDULE A
Item 2 information for executive officers and directors of
Chase Capital Corporation.
SCHEDULE B
Item 2 information for executive officers and directors of The
Chase Manhattan Corporation.
(Page 9 of 14 Pages)
<PAGE>
SCHEDULE 13D
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
CHASE EQUITY ASSOCIATES, LLC
By: CHASE CAPITAL PARTNERS, its Manager
By: /s/ Christopher C. Behrens
------------------------------
Name: Christopher C. Behrens
Title: General Partner
Date: January 24, 2000
(Page 10 of 14 Pages)
<PAGE>
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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SCHEDULE A
CHASE CAPITAL CORPORATION
Executive Officers
Chairman & Chief Executive Officer William B. Harrison, Jr.*
President Jeffrey C. Walker**
Executive Vice President Mitchell J. Blutt, M.D.**
Vice President & Secretary Gregory Meridith*
Assistant Secretary Robert C. Carroll*
Assistant Secretary Anthony J. Horan*
Assistant Secretary Denise G. Connors*
Directors
William B. Harrison, Jr.*
Jeffrey C. Walker**
_____________________
* Principal occupation is employee and/or officer of Chase. Business
address is c/o The Chase Manhattan Corporation, 270 Park Avenue,
New York, New York 10017.
** Principal occupation is employee of Chase and/or general partner of
Chase Capital Partners. Business address is c/o Chase Capital Partners,
380 Madison Avenue, 12th Floor, New York, NY 10017.
(Page 11 of 14 Pages)
<PAGE>
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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SCHEDULE B
THE CHASE MANHATTAN CORPORATION
Executive Officers*
Walter V. Shipley, Chairman of the Board
William B. Harrison, Jr., President and Chief Executive Officer
Donald L. Boudreau, Vice Chairman
James B. Lee, Jr., Vice Chairman
Denis J. O'Leary, Executive Vice President
Marc J. Shapiro, Vice Chairman
Joseph G. Sponholz, Vice Chairman
John J. Farrell, Director, Human Resources
Frederick W. Hill, Director Corporate Marketing and Communication
William H. McDavid, General Counsel
Directors**
Principal Occupation or Employment;
Name Business or Residence Address
- ---- -----------------------------
Hans W. Becherer Chairman of the Board
Chief Executive Officer
Deere & Company
8601 John Deere Road
Moline, IL 61265
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Frank A. Bennack, Jr. President and Chief Executive Officer
The Hearst Corporation
959 Eighth Avenue
New York, New York 10019
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Susan V. Berresford President
The Ford Foundation
320 E. 43rd Street
New York, New York 10017
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M. Anthony Burns Chairman of the Board, President and
Chief Executive Officer
Ryder System, Inc.
2800 N.W. 82nd Avenue
Miami, Florida 33166
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_______________________
* Principal occupation is executive officer and/or employee of The
Chase Manhattan Bank. Business address is c/o The Chase Manhattan
Bank, 270 Park Avenue, New York, New York 10017. Each executive
officer of Chase is a citizen of the United States of America.
** Each of the persons named below is a citizen of the United States of
America.
(Page 12 of 14 Pages)
<PAGE>
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
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- --------------------------------------------------------------------------------
H. Laurence Fuller Co-Chairman of the Board and
Chief Executive Officer
Amoco Corporation
200 East Randolph Drive
Chicago, Illinois 60601
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William H. Gray, III President and Chief Executive Officer
The College Fund/UNCF
9860 Willow Oaks Corporate Drive
P.O. Box 10444
Fairfax, Virginia 22031
- --------------------------------------------------------------------------------
William B. Harrison, Jr. President and Chief Executive Officer
The Chase Manhattan Corporation
270 Park Avenue, 8th Floor
New York, New York 10017-2070
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Harold S. Hook Retired Chairman and Chief Executive Officer
American General Corporation
2929 Allen Parkway
Houston, Texas 77019
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Helene L. Kaplan Of Counsel
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue - Room 29-72
New York, New York 10022
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Thomas G. Labrecque Retired President and Chief Operating Officer
The Chase Manhattan Corporation
270 Park Avenue
New York, New York 10017
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Henry B. Schacht Director and Senior Advisor
E.M. Warburg, Pincus & Co., LLC
466 Lexington Avenue, 10th Floor
New York, New York 10017
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Walter V. Shipley Chairman of the Board
The Chase Manhattan Corporation
270 Park Avenue
New York, New York 10017
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Andrew C. Sigler Retired Chairman of the Board and
Chief Executive Officer
Champion International Corporation
One Champion Plaza
Stamford, Connecticut 06921
- --------------------------------------------------------------------------------
John R. Stafford Chairman, President and
Chief Executive Officer
American Home Products Corporation
5 Giralda Farms
Madison, New Jersey 07940
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(Page 13 of 14 Pages)
<PAGE>
Issuer: Mariner Post-Acute Network, Inc. CUSIP Number: 698940103
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Marina v.N. Whitman Professor of Business Administration
and Public Policy
The University of Michigan
School of Public Policy
411 Lorch Hall, 611 Tappan Street
Ann Arbor, MI 48109-1220
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(Page 14 of 14)
<PAGE>
EXHIBIT 5
TRANSFER AGREEMENT
CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION
Dated as of January 14, 2000
CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION, a Delaware
corporation ("CSFBM"), hereby agrees with each transferor named on the signature
pages hereof (such transferors being referred to individually as a "Transferor"
and collectively as the "Transferors") as follows with respect to the transfer
of certain interests, rights and obligations described in Section 1.1 below:
1. The Shares.
1.1 The Shares. Each Transferor is the owner of the number of
shares of common stock, par value $0.01 per share, of Mariner Post Acute Network
Inc. (the "Common Stock"), a Delaware corporation (the "Company"), set forth
below its name on the signature pages hereto (all such Common Stock hereinafter
referred to as the "Shares").
1.2 The Transferors. Each of the Transferors hereby agrees,
severally and not jointly, to transfer to CSFBM all of the Shares set forth
below its name on the signature pages hereto. CSFBM shall not be obligated to
accept the transfer of any of the Shares unless the Transferors shall have
delivered all of the Shares to be transferred hereunder.
2. Closing. The closing (the "Closing") of the
transactions contemplated by this Transfer Agreement shall take place as
follows:
2.1 Transfer of the Shares.
(a) On the basis of the representations and
warranties hereinafter set forth, each of the Transferors hereby shall, at the
Closing, transfer to CSFBM, and CSFBM shall accept the transfer from each of the
Transferors of, the Shares set forth below the respective names of the
Transferors on the signature pages hereto, for aggregate consideration (the
"Consideration") consisting of (i) $376,010 (the "Cash Consideration"); (ii)
15,040 shares of 9.75% Redeemable Preferred Stock of CSFBM, par value $1.00 per
share (the "Preferred Stock"), to be issued under and entitled to the benefits
of a Certificate of Designation, a copy of which has heretofore been delivered
to Transferor (the "Certificate"); and (iii) a put option on the terms described
in the Put Option Agreement dated as of January 14, 2000 by and between the New
York Branch of Credit Suisse First Boston and the Transferors (the "Put
Option"). The consideration for the Shares set forth below the name of each
Transferor on the signature pages hereto is the aggregate consideration for all
of the Shares transferred by each respective Transferor.
1
(b) At the Closing, in order that the Shares be
transferred to CSFBM, each of the Transferors will deliver to the Company
certificates representing such Transferor's Shares, appropriate stock powers and
any instruments required by the terms of the Shares as necessary to effect the
valid transfer of ownership of the Shares against receipt by such Transferor of
its respective portion of (i) the Cash Consideration in federal (same day) funds
by wire transfer to an account at a bank designated by such Transferor, (ii)
certificates representing the Preferred Stock and (iii) the Put Option. The
Closing will take place at the offices of Shearman & Sterling, 599 Lexington
Avenue, New York, New York 10022, at 9:00 a.m., New York time, simultaneously
with the execution of this Transfer Agreement (the "Closing Date").
<PAGE>
2.2 Public Disclosures. Each of the parties will take all
reasonable actions necessary to keep each other party's identity confidential
and will not disclose each party's identity or the substance of the transactions
contemplated herein in any public announcement, governmental filing,
registration or otherwise without each other party's prior written consent
except to the extent required under the party's disclosure obligations under
Section 13 of the Securities Exchange Act of 1934, as amended. If such
disclosure is so required, the disclosing party will give written notice to each
other party describing in reasonable detail the proposed content of such
disclosure and will afford each other party in good faith an opportunity to
suggest modifications in the form and substance of such proposed disclosure
prior to making such disclosure.
3. Common Representations and Warranties. CSFBM and
the Transferors, severally and not jointly, represent, warrant and covenant to
the other party hereto as follows:
3.1 Organization. CSFBM, on its behalf, represents that it is
a corporation duly incorporated under the laws of the State of Delaware, and
each of the Transferors, on its behalf, represents that it is a duly formed
corporation or partnership under the laws of its respective jurisdiction of
incorporation or formation, as the case may be, and each of CSFBM and the
Transferors (i) is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, as the case may be; (ii) has the
necessary power and authority, either corporate or partnership, as the case may
be, for the conduct of its business as presently conducted; and (iii) is duly
qualified to transact business and is in good standing in each jurisdiction in
which the nature of the business transacted or property owned or leased by it
requires such qualification, except, in the case of (ii) or (iii) above, for
such power and authority, either corporate or partnership, as the case may be,
the absence of which, or such jurisdictions where the failure to so qualify,
would not have a material adverse effect on its consolidated business, assets,
results of operations or condition, financial or otherwise (a "Material Adverse
Effect").
3.2 Authorization; Valid and Binding Agreements. Each has the
requisite power and authority, either corporate or partnership, as the case may
be, to enter into, execute or deliver this Transfer Agreement and the other
agreements, instruments, documents and other materials to which it is a party to
be entered into, executed or delivered in connection herewith (collectively, the
"Implementing Agreements") and to transfer the Shares or to issue and sell the
shares of Preferred Stock and to deliver the Cash Consideration, as the case may
be, all as contemplated herein and to
2
consummate the transactions contemplated hereby and thereby (collectively, the
"Transactions") and to perform all of its respective obligations and
undertakings hereunder and thereunder. The execution, delivery and performance
of each of the Implementing Agreements has been duly authorized and each of the
Implementing Agreements will constitute, upon execution and delivery, a valid
and legally binding obligation of such party enforceable against it in
accordance with its terms subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
3.3 No Violation. Neither the execution and delivery by it of
the Implementing Agreements, nor the performance of its obligations under the
Implementing Agreements, nor the consummation of the Transactions, will (i)
violate any provision of its constitutional documents; (ii) violate any material
statute or law or any judgment, decree, order, regulation or rule of any court
or governmental authority to which it or any of its properties may be subject;
<PAGE>
(iii) cause the acceleration of the maturity of any material debt or obligation
of it; or (iv) (with or without the giving of notice or lapse of time, or both)
violate, or be in conflict with, or constitute a default under, or permit the
termination of, or require the prior approval or consent of (or filing with) any
governmental authority or person under, or result in the creation of any lien
upon any of its property under, any material agreement to which it is a party or
by which it is bound.
3.4 Private Offering. No securities of the same class as the
Shares or shares of Preferred Stock have been issued and sold by it within the
six-month period immediately prior to the date hereof, except, in the case of
shares of Preferred Stock, shares issued on December 20, 1999 in connection with
the acquisition of Shares of the Company. Each party hereto agrees that neither
it nor anyone acting on its behalf has or will offer the Shares or shares of
Preferred Stock, as the case may be, so as to bring the transfer or the issuance
and sale thereof, as the case may be, within the provisions of Section 5 of the
Securities Act of 1933, as amended (the "Securities Act").
3.5 Investment Representations. Each party hereto represents
that it is receiving the transfer of all of the Shares or is acquiring the
shares of Preferred Stock, as the case may be, pursuant to the terms hereof for
its own account. Each party hereto further represents that (i) it has authority
to make the representations contained in this Article 3; (ii) it is an
institutional "accredited investor" within the meaning of Rule 501 (a) (1), (2),
(3) or (7) under the Securities Act; (iii) it is acquiring all of the Shares or
shares of Preferred Stock, as the case may be, to be transferred or sold to it
hereunder for investment purposes and with no view or intention to offer for
sale or to make distributions of any of the Shares or shares of Preferred Stock,
as the case may be, in a manner which would violate federal or state securities
laws; (iv) it acknowledges and understands that the Shares or shares of
Preferred Stock, as the case may be, to be transferred or sold to it pursuant to
this Transfer Agreement (x) will not be registered under the Securities Act or
qualified under state securities laws and that no party has any obligation
whatsoever to register or qualify the Shares or shares of Preferred Stock, as
the case may be, now or at any time in the future, (y) are being transferred to
it in reliance on its representations and warranties contained in this Section
3.5 pursuant to a transaction that is exempt from the registration requirements
of the Securities Act, and (z) cannot be offered, sold or otherwise transferred
except pursuant to an exemption from the
3
registration requirements of the Securities Act or pursuant to an effective
registration statement under the Securities Act; and (v) it has conducted its
own investigation and/or appraisal and in connection therewith has received such
financial and other information about the Company or CSFBM, as the case may be,
as it has deemed necessary in connection with its execution and delivery of this
Transfer Agreement and the transfer to or acquisition by it of the Shares or
shares of Preferred Stock, as the case may be.
3.6 Other Acknowledgments. Each party represents, acknowledges
and confirms as of the date of this Transfer Agreement with respect to the
Transactions or when agreeing to any other matter with such party (or any
affiliate thereof) that it is acquiring the Shares or shares of Preferred Stock,
as the case may be, for investment purposes and not with a view to or for a
resale in connection with any distribution of the shares of Preferred Stock and
that it has not (i) entered into any agreement, contract, binding commitment or
understanding to offer, sell, transfer or otherwise dispose of any of the shares
of the Preferred Stock either currently or after the passage of a fixed or
determinable period of time or upon the occurrence or non-occurrence of any
predetermined event or circumstance or (ii) offered for sale or entered into any
negotiations or discussions for the sale or transfer of any of such shares of
<PAGE>
Preferred Stock.
3.7 Independent Parties. There is no agency or partnership
between CSFBM, on the one hand, and any of the Transferors, on the other hand,
and each has a valid business purpose independent of the other to enter into
transactions contemplated hereby.
4. Additional Representations by the Transferors. Each
Transferor, severally and not jointly, represents, warrants and covenants to
CSFBM as to itself as follows:
4.1 Documentation; Title to Shares; Encumbrances. Such
Transferor has provided to CSFBM copies of such documents and other material and
information as has been requested by CSFBM and all such documents, materials and
the information contained therein are true and correct in all material respects.
Such Transferor has good and valid title to all of the Shares to be transferred
by it pursuant hereto. Upon the transfer of such Shares to CSFBM in accordance
with the terms hereof, such Transferor will transfer to CSFBM good and valid
title to the Shares, free and clear of all liens, claims and encumbrances
created by the Transferor.
4.2 Investment with "Plan Assets". Such Transferor is not
acquiring the shares of Preferred Stock to be acquired by it hereunder directly
or indirectly with "plan assets" within the meaning of Department of Labor
Regulation 29 C.F.R. Section 2510.3-101.
5. Additional Representations by CSFBM. CSFBM hereby
represents, warrants and covenants to the Transferors as follows:
5.1 Preferred Stock. The shares of Preferred Stock to
be issued to the Transferors pursuant to this Agreement will be duly authorized,
executed and delivered by CSFBM pursuant to the Certificate of Designations
therefor and as filed with the Secretary of State of the State of
4
Delaware and when paid for through the exchange of Shares as contemplated
herein, will be validly issued, fully paid and non-assessable and not subject to
any pre-emptive rights and, when issued and paid for as contemplated herein,
will be free and clear of all liens, claims and encumbrances created by CSFBM.
5.2 Documentation. CSFBM has provided to the Transferors
copies of such documents and other material and information as has been
requested by the Transferors and all such documents and the information
contained therein are true and correct in all material respects.
6. Acknowledgments; Covenants.
(a) The Transferors hereby acknowledge that CSFBM and its
affiliates have had access to certain information (the "Information") which may
be material regarding CSFBM, its financial condition, results of operations,
management, projections and businesses. The Transferors acknowledge that CSFBM
has offered the Information to the Transferors and that the Transferors have
refused that offer and therefore agree that CSFBM shall have no obligation to
disclose to the Transferors any of the Information. The Transferors further
acknowledge that they have conducted their own investigation, to the extent that
they have determined necessary or desirable regarding CSFBM and the transactions
contemplated hereby, and that the Transferors have determined to enter into and
complete this transaction based on, among other things, such investigation. In
connection with the foregoing, and to the fullest extent permitted by law, the
Transferors hereby waive and release any and all claims they may have against
CSFBM or their affiliates and its respective officers, directors and employees
by reason of such nondisclosure of the Information.
<PAGE>
(b) CSFBM hereby repeats the acknowledgment appearing in (a)
above, mutatis mutandis, with respect to certain information known to the
Transferors, which may be material regarding the Company, its financial
condition, results of operations, management, projections and business.
(c) Each of the Transferors agree to provide a release or
termination letter with respect to its interest in any stockholders' or similar
agreement relating to the Shares to be acquired by CSFBM hereunder.
7. _ Consent to Transfers; Minimum Number of Shares, Notice of
Proposed Transfers. The shares of Preferred Stock issued hereunder may be
transferred only with the consent of CSFBM; provided, however, that no such
consent shall be required in the case of any transfer of such shares from one of
the Transferors (or any of their respective affiliates) to an affiliate of such
Transferor. CSFBM shall respond as promptly as reasonably practicable to any
request for such consent hereunder. Any attempted transfer of shares of
Preferred Stock in violation of the other terms of this Section 7 shall be null
and void. In addition, any transfer of such shares issued hereunder shall
involve the transfer of at least the lesser of (i) 20,000 shares of Preferred
Stock and (ii) all such shares of Preferred Stock held by the particular
transferor, as the case may be. As used in this Section 8, (i) the term
"transfer" encompasses (x) any offer, pledge, sale, contract to sell, the
5
sale of any option or contract to purchase, the purchase of any option or
contract to sell, the grant of any option, right or warrant to purchase,
transfer, or other disposition of any securities referred to herein or any
securities convertible into or exercisable or exchangeable for the securities
referred to herein and (y) entering into any swap or other arrangement that
transfers all or a portion of the economic consequences associated with the
ownership of any of the securities referred to herein (regardless of whether any
transaction described in clause (x) or (y) is to be settled by the delivery of
the securities referred to herein, or such other securities, in cash or
otherwise) and (ii) the term "affiliate" shall have the meaning ascribed to it
in Rule 144 under the Securities Act.
8. Expenses, Etc. All reasonable fees and expenses incurred by
the Transferors and CSFBM in connection with this Transfer Agreement, the
Implementing Agreements and the transactions contemplated hereby and thereby
shall be paid by CSFBM. The Transferors shall provide detailed support therefor
(including lawyers involved, hours billed, rates, etc.) and if it appears
reasonably likely that such amount shall exceed $50,000, the Transferors must
give written notice to CSFBM to this effect prior to incurring expenses in
excess of such amount. The agreement of the parties in this Section 8 shall
survive the payment for or transfer of any of the Shares or shares of Preferred
Stock.
9. Counterparts. This Transfer Agreement may be
executed in two or more counterparts, but all such counterparts shall constitute
but one and the same instrument.
10. Survival of Covenants. All covenants, agreements,
representations and warranties made by the parties in the Implementing
Agreements shall survive indefinitely any investigation made by, or on behalf
of, CSFBM, the Transferors or any person controlling any of them or acting on
their behalf, and the Closing of the transactions contemplated hereby and
thereby.
11. Law Governing. THIS TRANSFER AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF.
<PAGE>
12. Integration and Severability. The Implementing Agreements
embody the entire agreement and understanding between the Transferors and CSFBM
with respect to the subject matter hereof, and supersedes all prior agreements
and understandings relating to the subject matter hereof. In case any one or
more of the provisions contained in this Transfer Agreement or in any instrument
contemplated hereby, or any application thereof, shall be invalid, illegal or
unenforceable in any respect, under the laws of any jurisdiction, the validity,
legality and enforceability of the remaining provisions contained herein and
therein, and any other application thereof, shall not in any way be affected or
impaired thereby or under the laws of any other jurisdiction.
13. Binding Effect; Assignment; Third Party
Beneficiaries. This Transfer Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, assigns, heirs,
executors, administrators and other legal representatives. At any time or
6
from time to time following the Closing, CSFBM shall be permitted to assign any
and all of its rights and obligations hereunder to any affiliate of CSFBM;
provided, however, that, at the time of any such assignment, the overall
financial condition and prospects of such affiliate shall be at least comparable
to that of CSFBM; provided, further, however, that such affiliate shall assume
in writing all of the obligations and duties of CSFBM hereunder), and thereafter
any and all references herein to CSFBM shall refer to such affiliate. Except as
set forth in the preceding sentence, no party shall assign any of its rights or
delegate any of its duties under this Transfer Agreement (by operation of law or
otherwise) without the prior written consent of CSFBM or holders of a majority
of the shares of Preferred Stock outstanding and acquired hereunder at the time
of such proposed assignment, as applicable. Any assignment of rights or
delegation of duties under this Transfer Agreement by a party without the prior
written consent of the other party or parties, if such consent is required
hereby, shall be void.
7
If the foregoing is in accordance with your understanding,
please sign and complete the enclosed copy of this letter on the signature page
provided and return it to CSFBM, whereupon this letter shall then become a
binding agreement in accordance with its terms.
Very truly yours,
CREDIT SUISSE FIRST BOSTON
MANAGEMENT CORPORATION
By: /s/Chung W. Chey
-----------------------
Name: Chung W. Chey
Title: Attorney-in-fact
8
<PAGE>
TRANSFER AGREEMENT SIGNATURE PAGE
The undersigned hereby agrees to transfer the Shares as set
forth below and agrees to the manner of payment specified below:
TRANSFEROR: CHASE EQUITY ASSOCIATES, LLC (formerly Chase Equity
Associates, L.P.)
By CHASE CAPITAL PARTNERS,
as Manager
By: /s/ Jeffrey Walker
--------------------------
Name: Jeffrey Walker
Title: General Partner
Address: 380 Madison Avenue
12th Floor
New York, NY 10017
SHARES TO BE TRANSFERRED: 1,330,513 shares (Certificate No. PHN 0466)
666,667 shares (Certificate No. PHN 0092)
6,724 shares (Certificate No. PHN 0359)
10,765 shares (Certificate No. PHN 0360)
180,109 shares (Certificate No. PHN 0361)
13,247 shares (Certificate No. PHN 0412)
21,530 shares (Certificate No. PHN 0413)
360,218 shares (Certificate No. PHN 0414)
CONSIDERATION:
Cash Consideration: $376,010
Shares of Preferred Stock: 15,040
MANNER OF PAYMENT: Wire Transfer
Chase Manhattan Bank
401 Madison Avenue
New York, NY 10017
ABA No. 02100021
For the a/c of:
Chase Equity Associates, L.P.
A/C No: 006-070949
9
<PAGE>
PUT OPTION AGREEMENT
This Put Option Agreement dated as of January 14, 2000 (this "Agreement")
is entered into by and between the New York Branch (the "Branch") of Credit
Suisse First Boston, a banking corporation organized under the laws of
Switzerland (the "Bank"), and the holder named on the signature page hereof (the
"Holder").
W I T N E S S E T H
WHEREAS, the Holder will acquire an aggregate of 15,040 shares (the
"Shares") of 9.75% Redeemable Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), of Credit Suisse First Boston Management Corporation, a
Delaware corporation and indirect subsidiary of the Bank ("CSFBM"), pursuant to
a Transfer Agreement of even date herewith by and between the Holder and CSFBM
(the "Transfer Agreement"); and
WHEREAS, in order to induce the Holder to enter into the Transfer
Agreement, the Branch will grant the Holder a put option on the terms herein
described.
NOW, THEREFORE, the parties, intending to be bound hereby agree as
follows:
ARTICLE I
DEFINITIONS
-----------
"Business Day" shall mean any day other than a Saturday, Sunday or any day
on which banking institutions are authorized to close in New York, New York.
ARTICLE II
PUT OPTION
----------
Section 2.1 Grant. The Branch hereby grants to the Holder an irrevocable
option (the "Put Option") to require the Branch to purchase all (but not a
portion) of the Shares owned by the Holder in the circumstances and on the terms
set forth below.
Section 2.2 Exercise of Put Option. Provided that the optional redemption
rights under Section 5 of the Certificate of Designation relating to the
Preferred Stock have not been exercised with respect to such Shares, the Put
Option shall be exercisable at any time after 9:00 a.m. New York time on January
15, 2020 (or if such date is not a Business Day, then commencing at such time on
the next day that is a Business Day) and ending at February 14, 2021, in whole
but not in part, by the Holder with respect to the Shares then held by it in the
manner described in Article III below.
1
<PAGE>
Section 2.3 Put Option Price. The price per Share payable by the Branch
upon the exercise of the Put Option shall be equal to the liquidation preference
thereof plus accumulated and unpaid dividends thereon (whether or not declared,
and including any additional dividends payable pursuant to the last sentence of
Section 3(a) of the Certificate of Designation relating to the Preferred Stock)
to the date of exercise of the Put Option (the "Put Option Price"); provided,
however, that under no circumstances shall the Put Option Price include any
amounts attributable to dividends accumulated and unpaid on the Shares in excess
of the dividend rate set forth in Section 3(a) of the Certificate of Designation
relating to the Preferred Stock (including without limitation any such excess
dividends required to be paid pursuant to Section 3(i) of the Certificate of
Designation relating to the Preferred Stock). Payment of the Put Option Price
shall be made without withholding or deduction for or on account of any taxes,
duties, assessments or governmental charges of whatever nature imposed,
withheld, or assessed by or on behalf of the United States or any political
subdivision or taxing authority thereof, or therein, unless such withholding or
deduction is required by law or governmental policy having the effect of law.
Section 2.4 Liquidation, etc. In the event of the voluntary or involuntary
liquidation, dissolution or winding up (subject to the limitation in Section
7(c) of the Certificate of Designation relating to the Preferred Stock, a
"Liquidation") of CSFBM at any time prior to the exercise of the Put Option
hereunder as a result of which the Shares cease to be outstanding, a Holder of
certificates representing what would otherwise constitute outstanding Shares
shall be entitled nonetheless to exercise the Put Option granted hereunder in
accordance with the terms hereof by surrendering such certificates in lieu of
surrendering the outstanding Shares; provided, however, that in any such
instance, the Put Option Price payable by the Branch shall be equal to (x)
$25.00 per share, less any amounts per share received in such Liquidation in
respect of the liquidation preference of such Shares (the "Remaining Liquidation
Preference Amount"), plus (y) any accumulated and unpaid dividends on the Shares
through the date of such Liquidation which were not otherwise provided for in
such Liquidation, plus (z) an additional payment in an amount equal to what
would have been accumulated and unpaid dividends from the date of such
Liquidation through the Exercise Date (as defined below) on the Remaining
Liquidation Preference Amount had such dividends accumulated on such Remaining
Liquidation Preference Amount pursuant to the terms of the Certificate of
Designation relating to the Preferred Stock.
ARTICLE III
EXERCISE OF PUT OPTION
----------------------
Section 3.1 Exercise Mechanics. (a) In the event that the Holder elects to
exercise its Put Option with respect to all but not a portion of the Shares then
held by it, notice of such election to exercise the Put Option (an "Exercise
Notice") shall be given by hand or by nationally recognized "overnight courier"
for delivery at the earliest time offered by such overnight courier (which may
not necessarily be the next day) or by facsimile (with original copies to be
delivered by overnight courier) to the Branch at the address set forth in
Section 4.1 below at least 30 but not more than 60 days before the date fixed
for the exercise of the Put Option (the "Exercise Date"). Each such Exercise
Notice shall state: (i) the Exercise Date and (ii) the number of shares of
Redeemable Preferred Stock held by the Holder with respect to which the Put
Option is to be
2
<PAGE>
exercised. Each such Exercise Notice shall be effective upon
delivery if given by hand, upon deposit with a nationally recognized overnight
courier if given by such a courier, or upon telephone confirmation of receipt if
delivered by fax. Upon giving any Exercise Notice pursuant to Articles II and
III hereof, the Branch shall become obligated to purchase the shares of
Redeemable Preferred Stock specified in such notice on the Exercise Date
specified in such Exercise Notice at the Put Option Price.
(b) Payments to be made by the Branch hereunder shall be made in Federal
(same day) funds by official check or checks drawn to the order of the Holder or
wire transfer to an account at a bank designated by the Holder and reasonably
acceptable to the Branch.
(c) As a condition precedent to the exercise of the Put Option by the
Holder, the Holder shall be deemed to represent, warranty and covenant, and the
Exercise Notice related to any such exercise shall include a representation,
warranty and covenant of the Holder, that the Holder has good, valid and
marketable title to all of the Shares covered by the relevant Exercise Notice
and, upon transfer of the Shares to the Branch pursuant to the exercise of the
Put Option and receipt of the Put Option Price therefor, the Holder will
transfer to the Branch good, valid and marketable title to the relevant Shares,
free and clear of all objections, liens, equitable interests, rights of first
refusal, claims, charges, security interests or other encumbrances or
restrictions of any nature whatsoever, including, without limitation, leases,
mortgages, conditional sales contracts, or collateral security arrangements.
ARTICLE IV
MISCELLANEOUS PROVISIONS
------------------------
Section 4.1 Notices. Except as otherwise provided in this Agreement, all
communications and notices provided for in this Agreement shall be in writing
and (i) if to the Branch mailed by first class mail or overnight courier to them
at 11 Madison Ave., New York, NY 10010, Telefax - (212) 325-8227, Attention:
Treasurer, with a copy to Shearman & Sterling, 599 Lexington Avenue, New York,
New York 10022, Telefax - (212) 848-7179, Attention: Stuart K. Fleischmann, Esq.
or any other office that the Branch may hereafter designate by written notice to
the Holder and (ii) if to the Holder, mailed by first class mail or overnight
courier to the address of the Holder specified in the signature page hereto, or
to such other address and for such attention as the Holder may from time to time
designate to the Branch in writing.
Section 4.2 Counterparts. This Agreement may be executed in one or
more counterparts, but all such counterparts shall constitute but one and the
same instrument.
Section 4.3 Amendments. This Agreement may be amended with the prior
written consent of the Branch and the Holder.
3
<PAGE>
Section 4.4 Law Governing. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 4.5 Integration and Severability. This Agreement embodies the
entire agreement and understanding between the Holder and the Branch with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings relating to the subject matter hereof. In case any one or more of
the provisions contained in this Agreement or in any instrument contemplated
hereby, or any application thereof, shall be invalid, illegal or unenforceable
in any respect, under the laws of any jurisdiction, the validity, legality and
enforceability of the remaining provisions contained herein and therein, and any
other application thereof, shall not in any way be affected or impaired thereby
or under the laws of any other jurisdiction.
Section 4.6 Headings. The headings of the articles, sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
Section 4.7 No Recourse Against Others; Limited Liability. No director,
officer, employee or stockholder, as such, of the Branch or the Bank shall have
any liability hereunder or for any claim based on, in respect or by reason of,
such obligations or their creation. Holder, by execution of this Agreement,
waives and releases all such persons for all such liabilities. In addition, the
liabilities and obligations of the Branch and the Bank to the Holder with
respect to the Shares shall be for all purposes limited to the obligations set
forth herein and, by execution of this Agreement the Holder, acknowledges that
the liabilities and obligations of the Branch and the Bank shall be so limited
and forever waives, on its own behalf and on behalf of its successors and
assigns, any claim to the contrary.
Section 4.8 Binding Effect; Assignment; Third Party Beneficiaries. This
Agreement shall be binding upon the parties and their respective successors,
assigns, heirs, executors, administrators and other legal representatives and
shall inure to the benefit of the parties and their respective successors,
permitted assigns, heirs, executors, administrators and other legal
representatives. Except as set forth in Sections 4.9 and 4.10 below, no party
shall assign any of its rights or delegate any of its obligations under this
Agreement (by operation of law or otherwise) without the prior written consent
of the Company or the Holder, as applicable; provided, however, that the Holder
shall be permitted to assign its rights and obligations hereunder to any
transferee of its Shares to the extent that such transfer is in compliance with
all of the terms of the Transfer Agreement and the Certificate of Designation
relating to the Preferred Stock and such transferee assumes in a writing
reasonably satisfactory to the Branch all of the obligations and duties of the
Holder hereunder (and provided that thereafter all references to a "Holder"
hereunder shall refer to such transferee). Any assignment of rights or
delegation of duties under this Agreement by a party without the prior written
consent of the other party or parties, if such consent is required hereby, shall
be void.
4
<PAGE>
Section 4.9 Transferability of the Branch's Obligations. Notwithstanding
anything else herein to the contrary, the Branch shall be entitled to transfer
all of its rights and obligations hereunder to any other branch or other
affiliate of the Bank (the "Affiliate") having, in the case of an affiliate
other than another branch of the Bank, a long-term debt rating with Standard &
Poor's Rating Group, Moody's Investors Service Inc., BankWatch or Fitch IBCA
Limited (or any successor rating agencies) on the date of the transfer that is
at least equal to that of the Bank immediately prior to such transfer, or if
such Affiliate or the Bank shall not then have a long-term debt rating, then
having a consolidated net worth after such transfer at least equal to 50% of the
consolidated net worth of the Bank immediately prior to such transfer, provided
the following conditions are met:
(i) the Branch shall provide notice of such transfer to the Holder
in accordance with Section 4.1 hereof at least five Business
Days prior to the date of the transfer;
(ii) the Affiliate shall have obtained all authorizations, consents
and approvals necessary for or in connection with the
assumption by it of the rights and obligations of the Branch
under this Agreement; and
(iii) the Affiliate shall assume and acquire all rights and
obligations of the Branch under this Agreement and all
references to the Branch shall thereafter refer solely to the
Affiliate.
Upon compliance with the terms of this Section 4.9, the Branch shall be
released from all of its obligations hereunder and all references herein to the
"Branch" shall thereafter be deemed to refer to the Affiliate (and in the case
of a transfer to an Affiliate other than another branch of the Bank, all
references herein to the "Bank" shall thereafter also be deemed to refer to such
Affiliate), and, upon the request of the Holder, the Affiliate shall execute a
put option agreement in substantially the same form as this Agreement which
shall be substituted for this Agreement for all purposes.
In the case of any transfer of all of the rights and obligations of the
Branch to another branch of the Bank (together with any Substitute Branch (as
defined below), a "Transferee Branch") pursuant to the terms of this Section
4.9, if at any time after such transfer (or any subsequent transfer to a
Substitute Branch (as defined below) pursuant to the terms of this paragraph)
there shall be enacted any laws, regulations, rulings or orders applicable to
such Transferee Branch having the effect of preventing or limiting such
Transferee Branch from fulfilling its obligations under this Agreement (as to an
affected branch, a "Sovereign Event"), then the rights and obligations under
this Agreement shall be deemed to be transferred to any such other branch (a
"Substitute Branch") of the Bank (to be determined in the sole discretion of the
Bank) which is not then subject to a Sovereign Event. Upon the request of the
Holder, the Substitute Branch shall execute a put option agreement in
substantially the same form as this Agreement which shall be substituted for
this Agreement for all purposes.
5
<PAGE>
Section 4.10 Merger, Sale, etc. Notwithstanding anything else herein to
the contrary, the Bank may consolidate or merge with or into (whether or not the
Bank is the surviving or resulting entity), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of the properties or
assets of the Bank in one or more related transactions, to another corporation,
person or entity if (i) the Bank is the surviving corporation or the entity
formed by or surviving any such consolidation or merger (if other than the Bank)
or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is an entity validly organized under the laws
of its jurisdiction, and (ii) the obligations of the Branch hereunder (including
in respect of the Put Option) shall (x) be converted into or exchanged for and
shall become obligations of such successor, transferee or resulting entity,
having in respect of such successor, transferee or resulting entity
substantially similar terms, rights and obligations that the obligations
hereunder had immediately prior to such transaction or (y) if the Bank is the
surviving corporation in such transaction, remain in effect as to the Branch
with substantially similar terms, rights and obligations as had been in effect
immediately prior to such transaction.
Section 4.11 Recapitalization, Exchanges, etc. Affecting the Preferred
Stock. The provisions of this Agreement shall apply, mutatis mutandis, to the
full extent set forth herein with respect to any and all shares of capital stock
of CSFBM or any successor or assign of CSFBM (whether by merger, consolidation,
sale of assets or otherwise) which may be issued in respect of, in exchange for,
or in substitution for the Shares, by combination, recapitalization,
reclassification, merger, consolidation or otherwise. In the event of any change
in the capitalization of CSFBM, as a result of any stock split, stock dividend
or stock combination, the provisions of this Agreement shall be appropriately
adjusted.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH
By:_______________________________________
Name: GRAHAM F. HUNT
Title: DIRECTOR
By:_______________________________________
Name: THOMAS G. MUDIO
Title: VICE PRESIDENT
<PAGE>
PUT OPTION AGREEMENT SIGNATURE PAGE
-----------------------------------
HOLDER: CHASE EQUITY ASSOCIATES, LLC (formerly Chase Equity Associates, L.P.)
By CHASE CAPITAL PARTNERS, as Manager
By: /s/ Jeffrey Walker
---------------------------
Name: Jeffrey Walker
Title: General Partner
Address: 380 Madison Avenue
12th Floor
New York, NY 10017
Number of Preferred Shares: 15,040
<PAGE>
EXHIBIT 8
TERMINATION OF
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT AND
PROXY AND VOTING AGREEMENT
This TERMINATION OF AMENDED AND RESTATED STOCKHOLDERS AGREEMENT AND
PROXY AND VOTING AGREEMENT (the "Termination"), dated as of December 20, 1999,
by and among Apollo Management, L.P., a Delaware limited partnership ("Apollo
Management" and together with its affiliates and managed investment funds,
"Apollo"), Mariner Post-Acute Network, Inc., a Delaware corporation (the
"Company") and the stockholders (including Apollo) listed on the signature pages
attached hereto (the "Stockholders").
W I T N E S S E T H:
WHEREAS, the parties hereto are all of the parties to that certain
Stockholders Agreement, dated as of November 4, 1997, amended as of April 13,
1998 and amended and restated as of November 25, 1998 (the "Stockholders
Agreement") pursuant to which the parties provided for certain rights and
obligations in respect of the Shares (defined in the Stockholders Agreement);
WHEREAS, in addition to the Stockholders Agreement, the Stockholders
provided for certain voting rights and obligations in respect to Shares pursuant
to that certain Proxy and Voting Agreement, dated as November 4, 1997 (the
"Proxy Agreement"), by and among Apollo Management and the Other Stockholders
(defined in the Stockholders Agreement);
WHEREAS, each Stockholder party hereto owns the number of shares of
common stock, par value $.01 per share ("Common Stock") set forth under its name
on the signature pages attached hereto, and the Stockholders party hereto
collectively beneficially own all of the shares of Common Stock currently
subject to the Stockholders Agreement and the Proxy Agreement;
WHEREAS, in connection with the sale of the shares of Common Stock
owned by Apollo to Credit Suisse First Boston Management Corporation ("CSFBMC")
pursuant to a Transfer Agreement between CSFBMC and Apollo (the "Sale
Transaction"), Apollo, the Stockholders and the Company have agreed to enter
into this Termination to become effective (the "Effective Time") (i) with
respect to the Stockholders Agreement immediately upon its execution by Apollo,
the Company and Stockholders holding the requisite number of shares, and (ii)
with respect to the shares of Common Stock owned by each Other Stockholder
subject to the Proxy Agreement, immediately upon its execution by Apollo
Management and such Other Stockholder; and
NOW, THEREFORE, the parties hereto agree as follows:
1. REPRESENTATION AND WARRANTIES. Each party hereto represents
and warrants to the other party as follows:
(a) AUTHORITY RELATIVE TO THIS TERMINATION. Each party hereto has
the requisite
1
power and authority to execute and deliver this Termination and to consummate
the transactions contemplated hereby. The execution and delivery of this
Termination and the consummation of the transactions contemplated hereby have
been duly and validly authorized by such party and no other proceedings on the
<PAGE>
part of such party are necessary to authorize this Termination or to consummate
the transactions so contemplated. This Termination has been duly and validly
executed and delivered by such party, and assuming that this Termination has
been duly and validly authorized, executed and delivered by the other parties
hereto, this Termination constitutes a valid and binding obligation of such
party, enforceable against such party in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency and
similar laws affecting creditor's rights generally and to general principles of
equity (whether considered in a proceeding in equity or at law).
(b) NO CONFLICTS. Neither the execution and delivery of this
Termination nor the consummation of the transactions contemplated hereby will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which such
party is a party or by which such party is bound. Other than the Stockholders
Agreement and the Proxy Agreement there are no other agreements or
understandings with respect to the voting of the Shares.
2. TERMINATION OF RIGHTS AND OBLIGATIONS. As of the applicable
Effective Time, the rights and obligations of (i) Apollo, the Company and the
Stockholders under the Stockholders Agreement and (ii) Apollo Management and
each of the Other Stockholders under the Proxy Agreement (including, without
limitation, the irrevocable proxy granted by each of the Other Stockholders to
Apollo Management), shall be deemed to be terminated and of no further effect
with respect to any shares of Common Stock beneficially owned by any of Apollo,
the Stockholders, or the Other Stockholders, as the case may be. Notwithstanding
anything herein to the contrary, this Section 2 shall not terminate or interfere
with any Other Stockholder's right to exercise its "tag-along rights" pursuant
to Section 6.2 of the Stockholders Agreement with respect to the Sale
Transaction.
3. GOVERNING LAW. This Termination shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Delaware (without giving effect to the provisions thereof relating to
conflicts of law).
4. COUNTERPARTS. This Termination may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
5. DESCRIPTIVE HEADINGS. The headings herein are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Termination.
2
IN WITNESS WHEREOF, the parties hereto have executed this Termination
as of the date first above written.
MARINER POST-ACUTE
NETWORK, INC.
By: /s/ Francis W. Cash
----------------------------------
Name: Francis W. Cash
Title:
Date: January 5, 2000
APOLLO MANAGEMENT, L.P.,
on behalf of one or more managed
investment funds
<PAGE>
By: AIF III Management, Inc.
Its General Partner
By: /s/ Michael D. Weiner
------------------------------------
Name: Michael D. Weiner
Title: Vice President
Date: December 20, 1999
APOLLO INVESTMENT FUND III, L.P.
By: Apollo Advisors II, L.P.
Its General Partner
By: Apollo Capital Management II, Inc.
Its General Partner
By: /s/ Michael D. Weiner
------------------------------------
Name: Michael D. Weiner
Title: Vice President
13,100,370 Shares of Common Stock
Date: December 20, 1999
3
APOLLO UK PARTNERS III, L.P.
By: Apollo Advisors II, L.P.
Its General Partner
By: Apollo Capital Management II, Inc.
Its General Partner
By: /s/ Michael D. Weiner
------------------------------------
Name: Michael D. Weiner
Title: Vice President
484,188 Shares of Common Stock
Date: December 20, 1999
APOLLO OVERSEAS PARTNERS III, L.P.
By: Apollo Advisors II, L.P.
Its General Partner
By: Apollo Capital Management II, Inc.
Its General Partner
By: /s/ Michael D. Weiner
------------------------------------
Name: Michael D. Weiner
Title: Vice President
783,033 Shares of Common Stock
Date: December 20, 1999
<PAGE>
4
CHASE EQUITY ASSOCIATES, L.P.
By: Chase Capital Partners
Its General Partner
By: /s/ Christopher C. Behrens
-------------------------------------
Partner
2,592,594 Shares of Common Stock
Date: December 30, 1999
5
DRAX HOLDINGS L.P.
By: Inman Corporation
Its General Partner
By: /s/ Linda Hamilton
------------------------------------
Name: Linda Hamilton
Title: Executive Vice President
75,000 Shares of Common Stock
Date: December 30, 1999
6
WALNUT GROWTH PARTNERS LIMITED
PARTNERSHIP
By: Walnut GP, L.L.C.
Its General Partner
By: Walnut Funds, Inc.
By: /s/ Joel Kanter
---------------------------------
Name: Joel Kanter
Title: President
74,073 Shares of Common Stock
Date: December 28, 1999
7
PATRICIAN CORPORATION
(as successor to Healthcare Equity Partners,
L.P., Healthcare Equity QP Partners, L.P.,
Key Capital Corporation, and Key Equity
<PAGE>
Partners 97)
By: /s/ John Power
-----------------------------------
Its: President
1,111,113 Shares of Common Stock
Date: January 5, 2000
8
