S-4: Registration of securities issued in business combination transactions
Published on August 24, 1994
EXHIBIT 99.3
CONSULTING AND NONCOMPETITION AGREEMENT
THIS CONSULTING AND NONCOMPETITION AGREEMENT (this "Agreement"), dated
as of the ______ day of ____________, 1994, by and between Residential
Properties Management, Inc. ("Consulting Company"), a North Carolina
corporation and a wholly owned subsidiary of Taylor House Enterprises, Limited
("Taylor House"), a North Carolina corporation, and Omega Healthcare Investors,
Inc. ("Purchaser"), a Maryland corporation, is executed and delivered in
connection with the merger by Omega with Health Equity Properties Incorporated
("Acquired Company"), a North Carolina corporation, pursuant to that certain
Amended and Restated Merger Agreement and Plan of Reorganization dated as of
June 17, 1994, by and between Purchaser and Acquired Company (the "Merger
Agreement"). Capitalized terms used herein, but not otherwise defined herein,
shall have the meanings ascribed to them in the Merger Agreement.
In consideration of the mutual covenants and agreements and subject to
the terms and conditions hereinafter set forth and to induce Purchaser to
consummate the Merger, the parties hereto agree as follows:
1. CONSULTING SERVICES. (a) During the period commencing on the
date hereof and expiring five years from the Effective Time of the Merger (the
"Term of this Agreement"), Consulting Company will provide consulting services
on the terms
set forth below, including consulting services by any of William G. Benton,
G.L. Clark, Jr. and Susan L. Christiansen (individually a "Consultant" and
collectively the "Consultants"), at such times and places as may be mutually
convenient to Purchaser and Consulting Company with due regard for Consultants'
other employment and vacation arrangements, which consulting services (the
"Consulting Services") shall be limited to the provision of such business
consulting and advisory services as may be reasonably requested by Purchaser
from time to time with respect to Purchaser's business of (i) owning and
leasing and (ii) providing mortgage financing secured by, in either case,
income producing health care properties, with a principal focus on long-term
care facilities (the "Business"), including, without limitation, consulting and
advisory services regarding the business and properties of Acquired Company.
(b) Commencing with the first full calendar week following the
Effective Time and continuing through the fourth full calendar week following
the Effective Time (the "Initial Consulting Period"), Consulting Company will
make each Consultant available for the provision of Consulting Services for up
to 50% of the aggregate time of each Consultant reasonably available during the
Initial Consulting Period for the pursuit of professional activities, it being
expressly acknowledged that 40 hours per calendar week shall constitute a
reasonable aggregate period of time to expend on professional activities in any
calendar week. As a result of the foregoing, Consulting Company
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will make each Consultant available to provide up to 80 hours of Consulting
Services during the Initial Consulting Period.
(c) Commencing with the fifth full calendar week following the
Effective Time and continuing through the eighth full calendar week following
the Effective Time (the "Second Consulting Period"), Consulting Company will
make each Consultant available for the provision of Consulting Services for up
to 40% of the aggregate time of each Consultant reasonably available during the
Second Consulting Period and as a result, Consulting Company will make each
Consultant available to provide up to 64 hours of Consulting Services during
the Second Consulting Period.
(d) Commencing with the ninth full calendar week following the
Effective Time and continuing through the twelfth full calendar week following
the Effective Time (the "Third Consulting Period"), Consulting Company will
make each Consultant available for the provision of Consulting Services for up
to 30% of the aggregate time of each Consultant reasonably available during the
Third Consulting Period and as a result, Consulting Company will make each
Consultant available to provide up to 48 hours of Consulting Services during
the Third Consulting Period.
(e) Commencing with the thirteenth full calendar week following the
Effective Time and continuing through the sixteenth full calendar week
following the Effective Time (the "Fourth Consulting Period"), Consulting
Company will make each Consultant available for the provision of Consulting
Services for up to 20% of the aggregate time of each Consultant reasonably
available during the Fourth Consulting Period and as a result, Consulting
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Company will make each Consultant available to provide up to 32 hours of
Consulting Services during the Fourth Consulting Period.
(f) Commencing with the seventeenth full calendar week following the
Effective Time and extending through June 30, 1995 (the "Final Consulting
Period"), Consulting Company will make each Consultant available for up to 10%
of the aggregate time of each Consultant reasonably available during each
calendar week comprising the Final Consulting Period and as a result,
Consulting Company will make each Consultant available to provide up to 4 hours
of Consulting Services during each full calendar week comprising the Final
Consulting Period.
(g) Subsequent to June 30, 1995, Consulting Company will provide such
Consulting Services as Purchaser may, from time to time, reasonably request and
as to which Consulting Company may agree to provide. The Purchaser expressly
acknowledges that the failure of Consulting Company to provide any Consulting
Services subsequent to June 30, 1995 will not constitute a breach of this
Agreement.
(h) The Consulting Services are to be provided by Consulting Company
as an independent contractor and not as an employee of Purchaser. All
reasonable out-of-pocket expenses including, without limitation, travel, meals
and lodging expenses, as well as the direct cost actually incurred by
Consulting Company or any of the Consultants for telephone, telefax, photocopy
and similar expenses incurred by Consulting Company or any of the Consultants
in connection with the provision of Consulting Services including, without
limitation,
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the cost and/or expense of any equipment which the Consulting Company or any of
the Consultants must lease or purchase in connection with the provision of
Consulting Services, shall be reimbursed by the Purchaser within 30 days
following receipt of supporting documentation for all such expenses in excess
of $25.00; provided, however, that any lease or purchase of equipment shall be
approved in writing by Purchaser in advance.
2. NONCOMPETITION. (a) Consulting Company covenants that during
the Term of this Agreement, without the prior written approval of Purchaser,
none of Consulting Company, the Consultants or Taylor House will, directly or
indirectly, either alone or in conjunction with any person, firm, corporation,
association, or other entity, whether as officer, director, principal, agent,
shareholder (except as the beneficial owner (as defined in Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder) of less than
a 5% interest in a corporation or other entity whose shares or other securities
are actively traded on a national securities exchange or quoted on an automated
interdealer quotation system), consultant, or in any other capacity whatsoever:
(1) carry on, engage in, represent, advise, be concerned with or otherwise
interested in, directly or indirectly, any business, enterprise, or undertaking
which is in whole or in part in any way competitive with the Business within
the continental United States; (2) attempt to direct or discourage any lessee,
operator, mortgagor, or other supplier or customer of Acquired Company from
doing business with Purchaser, or offer, solicit or accept any business for the
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provision of financial products or services competitive with the financial
products or services offered or rendered by the Purchaser in the ordinary
course of conducting the Business following the Effective Time of the Merger;
(3) solicit or attempt to solicit any employee of the Purchaser to leave his or
her employment and accept employment elsewhere or solicit any person who was an
employee of Purchaser to accept employment elsewhere within three months of the
termination of such employee's employment with Purchaser; or (4) take any
action as a result of which the relations between Acquired Company or Purchaser
and any of their respective lessees, operators, mortgagors or other suppliers
or customers is adversely affected; provided, however, that the provisions of
this Agreement shall not preclude (i) Consulting Company or Consultants from
owning, operating, managing, financing or otherwise investing in assisted
living facilities, (ii) any of the Consultants from being on the Board of
Directors of any not-for-profit entity engaged in the Business or (iii) any of
the Consultants from providing legal or accounting advice to the operators of
income producing health care properties with a principal focus on long-term
care as long as such advice is rendered pursuant to the Consultant's regular
full-time employment with a legal or accounting firm, which employment
contemplates the rendering of such advice as a part of the professional
services rendered by a licensed attorney or accountant affiliated with such a
firm.
(b) Consulting Company further covenants and agrees that during the
Term of this Agreement, Consulting Company will
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notify each officer, director, employee, affiliate, agent or consultant of the
Consulting Company prior to their election, appointment, employment or
engagement, as appropriate, of the existence of this Agreement and will provide
a copy of this Agreement to such person and simultaneously with the execution
and delivery of this Agreement, Consulting Company will enter into a consulting
and noncompetition agreement with each of the Consultants in the form attached
hereto as Exhibit A (the "Individual Consulting and Noncompetition
Agreements").
3. NONCOMPETE AND CONSULTING SERVICES FEE. (a) In consideration
of Consulting Company's covenants and agreements pursuant to this Agreement,
Purchaser will pay to Consulting Company a fee in the amount of $4,982,269 (the
"Noncompete and Consulting Fee"), which will be earned by Consulting Company
over the Term of this Agreement as hereinafter provided. The Noncompete and
Consulting Fee is not additional consideration payable by Purchaser for the
purchase of the shares of Company Common Stock held by Consulting Company or
any of its affiliates, but instead is payable by Purchaser in consideration of
the covenants and agreements of Consulting Company contained herein.
(b) At the Effective Time of the Merger, Purchaser will advance the
Noncompete and Consulting Fee to Consulting Company provided that as a
condition to the obligation of Purchaser to advance the Noncompete and
Consulting Fee (i) Consulting Company will execute a note (the "Note"), in the
form attached hereto as Exhibit B; and (ii) each Consultant will execute the
Guaranty of Payment, in the form attached hereto as Exhibit C.
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4. EQUITABLE RELIEF. Consulting Company acknowledges that Consulting
Company's expertise in the Business (obtained by reason of Consulting Company's
access to the services of the Consultants) is of a special, unique, unusual,
extraordinary and intellectual character, which gives said expertise a peculiar
value, that a breach by Consulting Company or any of the Consultants or Taylor
House of any of the provisions of this Agreement that constitutes an Event of
Default (as defined in the Note) under the terms of the Note that is not cured
in accordance with the terms thereof, cannot reasonably or adequately be
compensated with monetary damages in an action at law and that such a breach
will cause the Purchaser irreparable injury and damage. Consulting Company
further acknowledges that Consulting Company possesses unique skills, knowledge
and ability (obtained by reason of Consulting Company's access to the services
of the Consultants) and that competition in violation of this Agreement or any
other breach of the provisions of this Agreement by Consulting Company or any
of the Consultants or Taylor House would be extremely detrimental to the
Purchaser. By reason thereof, Consulting Company expressly acknowledges and
agrees that the Purchaser shall be entitled, in addition to any other remedies
it may have under this Agreement or otherwise, to temporary, preliminary and
permanent injunctive and other equitable relief to prevent or curtail any
breach or threatened breach of this Agreement by Consulting Company; provided,
however, that no specification in this Agreement of a specific legal or
equitable remedy shall be construed as a waiver or
8
prohibition against pursuing other legal or equitable remedies in the event of
a breach of the terms hereof. In the event Purchaser brings any action to
enforce any provisions hereof, to secure specific performance hereof or to
collect damages of any kind for any breach hereof, Purchaser shall be entitled
to all court costs, all expenses arising out of or incurred by reason of such
action, and reasonable attorneys' fees expended or incurred in any such action,
and all such costs and expenses shall be included in any final judgment;
provided, however, that Purchaser shall reimburse Consulting Company and
Consultants for such costs and expenses incurred by Consulting Company and any
Consultants in the event any such action brought by Purchaser is unsuccessful.
Consulting Company further agrees that it will use its best efforts to enforce
the terms and conditions of this Agreement and the Individual Consulting and
Noncompetition Agreements, including, but not limited to, seeking injunctive
relief against the Consultants or Taylor House to protect against breach of
this Agreement or the Individual Consulting and Noncompetition Agreements.
5. RELIANCE BY PURCHASER. Consulting Company acknowledges that
each of the covenants contained in Sections 1 and 2 hereof or Sections 1 and 2
of the Individual Consulting and Noncompetition Agreements are a material
inducement for Purchaser to complete the transactions contemplated by the
Merger Agreement and that Purchaser is relying upon such covenants in
connection therewith.
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6. SEVERABILITY AND JUDICIAL MODIFICATION. If the scope of any
restriction contained in Section 2 hereof is too broad to permit enforcement of
such restriction to its full extent, then such restriction shall be enforced to
the maximum extent then permitted by applicable law, and Consulting Company
hereby consents and agrees that such scope may be judicially modified
accordingly in the proceeding brought to enforce such restriction; provided,
however, that any judicial modification shall not expand the scope of any
restriction contained in Section 2 hereof.
7. AMENDMENTS. This Agreement may be amended only by a writing
executed by each of the parties hereto.
8. ENTIRE AGREEMENT. This Agreement and the other agreements
expressly referred to herein set forth the entire understanding of the parties
hereto concerning the subject matter hereof and supersede all prior contracts,
agreements, arrangements, communications, discussions, representations and
warranties, whether oral or written, between the parties.
9. GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of North
Carolina.
10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
11. WAIVERS. Any waiver by any party of any violation of, breach
of or default under any provision of this Agreement by
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the other party shall be effective only if in writing and no such waiver shall
be construed as, or constitute, a continuing waiver of such provision, or
waiver of any other violation of, breach of or default under any other
provision of this Agreement.
12. ASSIGNMENT. (a) Neither Purchaser nor Consulting Company
shall assign or delegate this Agreement or any of its rights or obligations
hereunder without the prior written consent of the other party; provided,
however, that Purchaser may assign this Agreement to any wholly owned
subsidiary of Purchaser (a "Subsidiary") by giving notice to Consulting
Company. Notwithstanding the foregoing, to provide Purchaser with the benefits
intended to be conferred hereby and by any of the Individual Consulting and
Noncompetition Agreements, and to provide Purchaser with the ability to enforce
any of the Individual Consulting and Noncompetition Agreements directly against
any Consultant, Consulting Company does hereby assign all of its rights (but
not any obligations) under each Individual Consulting and Noncompetition
Agreement to Purchaser, including, without limitation, the right to enforce the
terms and conditions of each Individual Consulting Agreement against the
appropriate Consultant; provided, however, that Purchaser will not avail itself
of this assignment until such time as an Event of Default shall have occurred
under the Note by reason of a breach under any Individual Consulting and
Noncompetition Agreement that is not cured in accordance with the terms of the
Note; and provided, further, that such assignment shall not be effective upon
the occurrence of a Bankruptcy Event of the Purchaser. For purposes
11
hereof, a Bankruptcy Event, with respect to any person, shall occur if: (i)
such person, pursuant to or within the meaning of any Bankruptcy Law (as
hereinafter defined), (A) commences a voluntary case or proceeding, (B)
consents to the entry of an order for relief against it in an involuntary case
or proceeding, (C) consents to the appointment of a Custodian (as hereinafter
defined) of it or for all or substantially all of its property, or (D) makes a
general assignment for the benefit of its creditors; or (ii) a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law (x)
for relief against such person in an involuntary case or proceeding, (y)
appointing a Custodian of such person for all or substantially all of its
properties, or (z) ordering the liquidation of such person. The term
"Bankruptcy Law" means Title 11 U.S. Code or any similar federal or state law
for the relief of debtors. The term "Custodian" means any receiver, trustee,
liquidator or similar official under any Bankruptcy Law.
(b) In case of an assignment of this Agreement by Purchaser to
a Subsidiary, such assignment shall not be effective unless the Subsidiary to
which this Agreement is being assigned assumes all of the rights and
obligations of the Purchaser under this Agreement and the Note, including,
without limitation, the limitation on assignment of the Individual Consulting
and Noncompetition Agreements upon the occurrence of a Bankruptcy Event of such
Subsidiary.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
inure to the benefit of, and may be enforced by,
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each of the parties to this Agreement and its successors and permitted assigns.
14. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given, if delivered in person, by telecopy, by United States mail
(certified or registered, postage prepaid, return receipt requested) or by any
recognized overnight courier service to the respective parties as follows:
(a) If to Purchaser, to:
Omega Healthcare Investors, Inc.
905 W. Eisenhower Circle, Suite 110
Ann Arbor, Michigan 48103
Attention: Essel W. Bailey, Jr.
Telecopy: (313) 996-0020
(b) If to Consulting Company, to:
Residential Properties Management, Inc.
915 West Fourth Street
Winston-Salem, North Carolina 27102
Attention: William G. Benton
Telecopy: (910) 724-6765
or to such other address as the party to be notified shall have furnished to
the other party in accordance with this Section 14. Any notice given in
accordance with the foregoing shall be effective only upon receipt.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Consulting and Noncompetition Agreement as of the date first above written.
OMEGA HEALTHCARE INVESTORS, INC.
By:
--------------------------------
Name: Essel W. Bailey, Jr.
Title: President
RESIDENTIAL PROPERTIES MANAGEMENT, INC.
By:
---------------------------------
Name: William G. Benton
Title: President
EXHIBIT A
INDIVIDUAL CONSULTING AND NONCOMPETITION AGREEMENT
THIS INDIVIDUAL CONSULTING AND NONCOMPETITION AGREEMENT (this
"Agreement"), dated as of the ______ day of ____________, 1994, by and between
________________ ("Consultant") and Residential Properties Management, Inc.
("Consulting Company"), a North Carolina corporation and a wholly owned
subsidiary of Taylor House Enterprises, Limited, is executed and delivered
pursuant to the Consulting and Noncompetition Agreement (the "Consulting
Company Noncompetition Agreement") of even date herewith by and between
Consulting Company and Omega Healthcare Investors, Inc. ("Purchaser"), a
Maryland corporation, in connection with the merger by Omega with Health Equity
Properties Incorporated ("Acquired Company"), a North Carolina corporation,
pursuant to that certain Amended and Restated Merger Agreement and Plan of
Reorganization dated as of June 17, 1994, by and between Purchaser and Acquired
Company (the "Merger Agreement"). Capitalized terms used herein, but not
otherwise defined herein, shall have the meanings ascribed to them in the
Merger Agreement.
In consideration of the mutual covenants and agreements and subject to
the terms and conditions hereinafter set forth and to induce Purchaser to
consummate the Merger, the parties hereto agree as follows:
1. SERVICES. (a) During the period commencing on the date hereof
and expiring five years from the Effective Time of the
1
Merger (the "Term of this Agreement") and pursuant to the
Consulting Company Noncompetition Agreement, Consultant hereby agrees to
provide consulting services on the terms set forth below, at such times and
places as may be mutually convenient to Consulting Company or Purchaser, as the
case may be, with due regard for Consultant's other employment and vacation
arrangements, which consulting services (the "Consulting Services") shall be
limited to the provision of such business consulting and advisory services as
may be reasonably requested by Consulting Company or Purchaser from time to
time with respect to Purchaser's business of (i) owning and leasing and (ii)
providing mortgage financing secured by, in either case, income producing
health care properties, with a principal focus on long-term care facilities
(the "Business"), including, without limitation, consulting and advisory
services regarding the business and properties of Acquired Company. The
Consulting Services are to be provided by Consultant as an executive officer of
Consulting Company and not as an independent contractor or employee of
Purchaser.
(b) Commencing with the first full calendar week following the
Effective Time and continuing through the fourth full calendar week following
the Effective Time (the "Initial Consulting Period"), Consultant will be
available for the provision of Consulting Services for up to 50% of the
aggregate time of Consultant reasonably available during the Initial Consulting
Period for the pursuit of professional activities, it
2
being expressly acknowledged that 40 hours per calendar week shall constitute a
reasonable aggregate period of time to expend on professional activities in any
calendar week. As a result of the foregoing, Consultant will be available to
provide up to 80 hours of Consulting Services during the Initial Consulting
Period.
(c) Commencing with the fifth full calendar week
following the Effective Time and continuing through the eighth full calendar
week following the Effective Time (the "Second Consulting Period"), Consultant
will be available for the provision of Consulting Services for up to 40% of the
aggregate time of Consultant reasonably available during the Second Consulting
Period and as a result, Consultant will be available to provide up to 64 hours
of Consulting Services during the Second Consulting Period.
(d) Commencing with the ninth full calendar week
following the Effective Time and continuing through the twelfth full calendar
week following the Effective Time (the "Third Consulting Period"), Consultant
will be available for the provision of Consulting Services for up to 30% of the
aggregate time of Consultant reasonably available during the Third Consulting
Period and as a result, Consultant will be available to provide up to 48 hours
of Consulting Services during the Third Consulting Period.
(e) Commencing with the thirteenth full calendar week
following the Effective Time and continuing through the sixteenth
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full calendar week following the Effective Time (the "Fourth Consulting
Period"), Consultant will be available for the provision of Consulting Services
for up to 20% of the aggregate time of Consultant reasonably available during
the Fourth Consulting Period and as a result, Consultant will be available to
provide up to 32 hours of Consulting Services during the Fourth Consulting
Period.
(f) Commencing with the seventeenth full calendar week
following the Effective Time and extending through June 30, 1995 (the "Final
Consulting Period"), Consultant will be available for up to 10% of the
aggregate time of Consultant reasonably available during each calendar week
comprising the Final Consulting Period and as a result, Consultant will be
available to provide up to 4 hours of Consulting Services during each full
calendar week comprising the Final Consulting Period.
(g) Subsequent to June 30, 1995, Consultant will provide
such Consulting Services as Consulting Company or Purchaser, as the case may
be, may, from time to time, reasonably request and as to which Consultant may
agree to provide. Consulting Company and Purchaser expressly acknowledge that
the failure of Consultant to provide any Consulting Services subsequent to June
30, 1995 will not constitute a breach of this Agreement.
2. NONCOMPETITION. (a) Consultant covenants that during the Term
of this Agreement, without the prior written approval of Consulting Company and
Purchaser, in accordance with the
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Consulting Company Noncompetition Agreement, Consultant shall not, directly or
indirectly, either alone or in conjunction with any person, firm, corporation,
association, or other entity, whether as officer, director, principal, agent,
shareholder (except as the beneficial owner (as defined in Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder) of less than
a 5% interest in a corporation or other entity whose shares or other securities
are actively traded on a national securities exchange or quoted on an automated
interdealer quotation system), consultant, or in any other capacity whatsoever:
(1) carry on, engage in, represent, advise, be concerned with or otherwise
interested in, directly or indirectly, any business, enterprise, or undertaking
which is in whole or in part in any way competitive with the Business within
the continental United States; (2) attempt to direct or discourage any lessee,
operator, mortgagor, or other supplier or customer of Acquired Company from
doing business with Purchaser, or offer, solicit or accept any business for the
provision of financial products or services competitive with the financial
products or services offered or rendered by the Purchaser in the ordinary
course of conducting the Business following the Effective Time of the Merger;
(3) solicit or attempt to solicit any employee of the Purchaser to leave his or
her employment and accept employment elsewhere or solicit any person who was an
employee of Purchaser to accept employment elsewhere within three months of the
termination of such employee's employment with
5
Purchaser; or (4) take any action as a result of which the relations between
Acquired Company or Purchaser and any of their respective lessees, operators,
mortgagors or other suppliers or customers is adversely affected; provided,
however, that the provisions of this Agreement shall not preclude Consultant
from (i) owning, operating, managing, financing or otherwise investing in
assisted living facilities, (ii) being on the Board of Directors of any
not-for-profit entity engaged in the Business, or (iii) providing legal or
accounting advice to the operators of income producing health care properties
with a principal focus on long-term care as long as such advice is rendered
pursuant to Consultant's regular full-time employment with a legal or
accounting firm, which employment contemplates the rendering of such advice as
a part of the professional services rendered by a licensed attorney or
accountant affiliated with such a firm.
3. EQUITABLE RELIEF. Consultant acknowledges that Consultant's
expertise in the Business is of a special, unique, unusual, extraordinary and
intellectual character, which gives said expertise a peculiar value, that a
breach by Consultant of any of the provisions of this Agreement that
constitutes an Event of Default (as defined in the Note) under the terms of the
Note that is not cured in accordance with the terms thereof, cannot reasonably
or adequately be compensated with monetary damages in an action at law and that
such a breach will cause Consulting Company and Purchaser irreparable injury
and damage. Consultant further acknowledges that Consultant possesses unique
skills,
6
knowledge and ability and that competition in violation of this Agreement or
any other breach of the provisions of this Agreement by Consultant would be
extremely detrimental to the Consulting Company and/or to the Purchaser. By
reason thereof, Consultant expressly acknowledges and agrees that the
Consulting Company (and the Purchaser by assignment pursuant to Section 12 of
the Consulting Company Noncompetition Agreement) shall be entitled, in addition
to any other remedies it may have under this Agreement or otherwise, to
temporary, preliminary and permanent injunctive and other equitable relief to
prevent or curtail any breach or threatened breach of this Agreement by
Consultant; provided, however, that no specification in this Agreement of a
specific legal or equitable remedy shall be construed as a waiver or
prohibition against pursuing other legal or equitable remedies in the event of
a breach of the terms hereof. In the event Consulting Company (or Purchaser by
assignment pursuant to Section 12 of the Consulting Company Noncompetition
Agreement) brings any action to enforce any provisions hereof, to secure
specific performance hereof or to collect damages of any kind for any breach
hereof, Consulting Company or Purchaser, as the case may be, shall be entitled
to all court costs, all expenses arising out of or incurred by reason of such
action, and reasonable attorneys' fees expended or incurred in any such action,
and all such costs and expenses shall be included in any final judgment;
provided, however, that Consulting Company or Purchaser, as the case may be,
shall reimburse Consultant for
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such costs and expenses incurred by Consultant in the event any such action
brought by Consulting Company or Purchaser, as the case may be, is
unsuccessful.
4. THIRD PARTY BENEFICIARY; RELIANCE BY PURCHASER. It is expressly
intended and acknowledged that Purchaser is a third- party beneficiary of this
Agreement and that the benefit to Purchaser of Consultant's performance under
this Agreement is direct and not incidental. Consultant further expressly
acknowledges that each of the covenants contained in Sections 1 and 2 hereof
are a material inducement for Purchaser to complete the transactions
contemplated by the Merger Agreement and that Purchaser is relying upon such
covenants in connection therewith. Consultant further expressly acknowledges
that Consultant directly benefits from the completion of the transactions
contemplated by the Merger Agreement, including, without limitation, the
payment by Purchaser of the Noncompete and Consulting Fee (as defined in the
Consulting Company Noncompetition Agreement), and that such benefits are
sufficient consideration for the covenants contained herein.
5. SEVERABILITY AND JUDICIAL MODIFICATION. If the scope of any
restriction contained in Section 2 hereof is too broad to permit enforcement of
such restriction to its full extent, then such restriction shall be enforced to
the maximum extent then permitted by applicable law, and Consultant hereby
consents and agrees that such scope may be judicially modified accordingly in
the proceeding brought to enforce such restriction; provided,
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however, that any judicial modification shall not expand the scope of any
restriction contained in Section 2 hereof.
6. AMENDMENTS. This Agreement may be amended only by a writing
executed by each of the parties hereto and acknowledged and consented to by
Purchaser.
7. ENTIRE AGREEMENT. This Agreement and the other agreements
expressly referred to herein set forth the entire understanding of the parties
hereto concerning the subject matter hereof and supersede all prior contracts,
agreements, arrangements, communications, discussions, representations and
warranties, whether oral or written, between the parties.
8. GOVERNING LAW. This Agreement shall in all respects be governed by
and construed in accordance with the laws of the State of North Carolina.
9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
10. WAIVERS. Any waiver by any party of any violation of, breach of
or default under any provision of this Agreement by the other party shall be
effective only if in writing and, in the case of any waiver by Consulting
Company, only if acknowledged and consented to by Purchaser, and no such waiver
shall be construed as, or constitute, a continuing waiver of such provision, or
waiver of any other violation of, breach of or default under any other
provision of this Agreement.
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11. ASSIGNMENT. Neither Consulting Company nor Consultant shall
assign or delegate this Agreement or any of its respective rights or
obligations hereunder without the prior written consent of the other party and
with the acknowledgment and consent of Purchaser; provided, however, that
pursuant to the Consulting Company Noncompetition Agreement, Consulting Company
has assigned its rights under this Agreement to Purchaser (except in certain
bankruptcy events as described in Section 12 of the Consulting Company
Noncompetition Agreement) and Consultant expressly acknowledges and consents to
such assignment; provided, further, that Purchaser may assign its rights under
this Agreement to any Subsidiary (as defined in the Consulting Company
Noncompetition Agreement) by giving notice to Consulting Company and Consultant
upon compliance with any applicable provisions set forth in the Consulting
Company Noncompetition Agreement pertaining to any such assignment.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
inure to the benefit of, and may be enforced by Consulting Company, Consultant,
and under certain circumstances, Purchaser, and their respective successors and
permitted assigns.
13. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered in person, by telecopy, by United States mail (certified or
registered, postage prepaid, return receipt requested) or by any recognized
overnight courier service to the respective parties as follows:
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(a) If to Consulting Company, to:
Residential Properties Management, Inc.
915 West Fourth Street
Winston-Salem, North Carolina 27102
Attention: William G. Benton
Telecopy: (910) 724-6765
(b) If to Consultant, to:
--------------------------------
915 West Fourth Street
Winston-Salem, North Carolina 27102
Telecopy: (910) 724-6765
(c) If to Purchaser, to:
Omega Healthcare Investors, Inc.
905 W. Eisenhower Circle, Suite 110
Ann Arbor, Michigan 48103
Attention: Essel W. Bailey, Jr.
Telecopy: (313) 996-0020
or to such other address as the party to be notified shall have furnished to
the other party in accordance with this Section 13. Any notice given in
accordance with the foregoing shall be effective only upon receipt.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Individual Consulting and Noncompetition Agreement as of the date first above
written.
RESIDENTIAL PROPERTIES MANAGEMENT, INC.
By:
---------------------------------
Name: William G. Benton
Title: President
-----------------------------------
Name:
Consultant
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EXHIBIT B
PROMISSORY NOTE
$____________ Winston-Salem, North Carolina _________________, 1994
THIS PROMISSORY NOTE (hereinafter referred to as the "Note"), is made
as of this ___ day of __________________, 1994.
WHEREAS, Residential Properties Management, Inc., a North Carolina
corporation ("Maker") has entered into a five (5) year Consulting and
Noncompetition Agreement (the "Consulting Company Noncompetition Agreement") of
even date herewith by and between Maker and Omega Healthcare Investors, Inc., a
Maryland corporation ("Omega"), in connection with the merger of Health Equity
Properties Incorporated, a North Carolina corporation ("HEP"), with and into
Omega pursuant to an Amended and Restated Merger Agreement and Plan of
Reorganization (the "Merger Agreement") dated as of June 17, 1994 by and
between Omega and HEP; and
WHEREAS, pursuant to the Merger Agreement, at the Effective Time of
the Merger (each as defined in the Merger Agreement), Maker is obligated to
execute and deliver the Consulting Company Noncompetition Agreement and to
execute and deliver the Individual Consulting and Noncompetition Agreements
with each Consultant (each as defined in the Consulting Company Noncompetition
Agreement), and in consideration thereof, Omega is obligated to advance as a
lump sum an aggregate fee to be earned by Maker pursuant to the Consulting
Company Noncompetition Agreement in the amount of $4,982,269 upon the execution
and delivery by (i) Maker of this Note and (ii) each Consultant of a Guaranty
of Payment (a "Guaranty") relating to this Note; and
WHEREAS, the conditions set forth in the preceding paragraph have been
satisfied;
FOR VALUE RECEIVED, Maker promises to pay to the order of Omega on
demand, the principal sum of Four Million Nine Hundred Eighty Two Thousand Two
Hundred Sixty Nine Dollars and 00/100 ($4,982,269.00); provided, however, that
Omega may not demand repayment of the principal of this Note except as
hereinafter expressly provided. Prior to any demand by Omega for repayment
pursuant to the terms of this Note, the principal of this Note shall be
forgiven in five (5) equal annual installments on each of the annual
anniversary dates following the date hereof provided that, as of each such
anniversary date, none of the conditions described in the immediately
succeeding paragraph has occurred. Any payment of principal on this Note,
together with any accrued interest thereon, required hereunder shall be made to
Omega by wire transfer of immediately available funds to an account designated
in writing by Omega.
If (i) Maker shall take or fail to take any action that constitutes a
breach of the covenants or obligations of Maker under the Consulting Company
Noncompetition Agreement or (ii) any Consultant shall take or fail to take any
action that constitutes a breach of the covenants or obligations of such
Consultant under such Consultant's Individual Consulting and Noncompetition
Agreement, or (iii) this Note shall be assigned (including any attempted
assignment hereof) by Maker, whether by contract, operation of law or
otherwise, without the prior written consent of Omega, then Omega, at its
option, shall promptly notify Maker and, unless otherwise cured, be entitled on
the date that is ten (10) business days from the date of the occurrence of any
of the foregoing events (each such event which has not been cured in accordance
with the terms hereof, is hereinafter referred to as an "Event of Default"), to
accelerate any and all of the then outstanding indebtedness evidenced by this
Note which has not been forgiven as of the date of the occurrence of any Event
of Default, and the same shall become immediately due and payable in full, and
to exercise cumulatively any and all other rights and privileges provided by
law or this Note; provided, however, that in the event Omega does not prevail
in any action brought seeking to enforce an acceleration of this Note as a
result of an alleged Event of Default under clauses (i) or (ii) above, then
this Note shall be deemed reset and the asserted acceleration of amounts due
and payable previously asserted by Omega shall be null and void.
Maker hereby represents and warrants to Omega that (i) Maker is a
corporation duly organized, validly existing and in good standing under the
laws of the State of North Carolina and is duly registered and qualified as a
foreign corporation in good standing in each state where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify would not
have a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of Maker, (ii) Maker has as its
corporate name, as registered with the Department of the Secretary of State of
the State of North Carolina, the words first inscribed hereinabove as its name,
and has not done business under any other registered name (including, without
limitation, any registered tradename) for at least the past seven (7) years,
(iii) Maker has the corporate power and authority to make, execute, deliver and
perform under this Note, and to borrow hereunder, and has taken all necessary
and appropriate corporate action to authorize the execution, delivery and
performance of this Note, (iv) this Note constitutes the valid obligations of
Maker, legally binding upon it and enforceable against it in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally, (v) the
undersigned officer of Maker is duly authorized and empowered to execute and
deliver this Note for and on behalf of Maker, and to bind Maker accordingly
thereby, and (vi) after giving effect to the execution and delivery of this
Note and the making of any disbursements hereunder, Maker will not be unable to
pay its debts generally as such debts become due.
Time is of the essence with respect to this Note, and except as
otherwise provided herein, diligence, presentment, demand, protest, notice of
demand and non-payment and all other notices whatsoever, are hereby waived by
Maker. In the event the indebtedness evidenced by this Note shall not be paid
within ten (10) business days of the date when payment is due, thereafter the
unpaid principal balance of such indebtedness shall bear interest at the rate
of twelve percent (12%) per annum until the then outstanding indebtedness
(inclusive of all accrued interest) is paid in full, but in no event shall such
rate of interest exceed the highest rate permitted from time to time by
applicable law. Should this Note, or any part of the indebtedness evidenced by
this Note, be collected by or through an attorney-at-law, Omega shall be
entitled to collect reasonable attorneys' fees and all other reasonable costs
and expenses of collection from Maker or any Consultant who has executed and
delivered a Guaranty to Omega; provided, however, that Omega will reimburse
Maker and each Consultant who has delivered a Guaranty for all such costs and
expenses incurred by them in the event that any such enforcement action brought
by Omega is unsuccessful. For purposes of this Note, the term "business day"
shall mean any day when federally chartered banking institutions located in the
State of North Carolina are open for transacting business.
If delivered personally, the date on which a notice or demand
hereunder is delivered shall be the date of receipt or delivery, and if
delivered by mail, such notice or demand shall be sent by United States
registered or certified mail, return receipt requested, postage prepaid, and
the date on which such notice or demand is received (as evidenced by the
registered or certified mail receipt) shall be the date of delivery. If
delivered by an overnight courier service, such notice or demand shall be sent
by a recognized overnight courier service, return receipt requested, courier
service charges prepaid, and the date on which such notice or demand is
received (as evidenced by the overnight courier service receipt) shall be the
date of delivery. In the event any notice or demand is mailed to a party in
accordance with this paragraph, and is returned to the sender as
nondeliverable, then such notice or demand shall be deemed to have been
delivered or received on the fifth day following the deposit of such notice or
demand in the United States mail; provided that such notice or demand shall
have been properly addressed to the party to whom notice or demand is sent and
postage shall have been properly paid by the sender. Notices and demands made
hereunder shall be addressed to Omega at 905 W. Eisenhower Circle, Suite 110,
Ann Arbor, Michigan 48103, Attention: Essel W. Bailey, Jr. and to Maker at 915
West Fourth Street, Winston-Salem, North Carolina 27102, Attention: William G.
Benton or at such other address as the party to be notified shall give to the
other party pursuant to this paragraph.
This Note may not be assigned except in conjunction with a permitted
assignment by Omega of the Consulting Company Noncompetition Agreement.
This Note shall be governed by and construed in accordance with the
laws of the State of North Carolina.
This Note may not be changed, modified, amended or terminated orally,
but only by an agreement in writing signed by Omega and Maker.
IN WITNESS WHEREOF, Maker has caused this Promissory Note to be
executed on the date first above written.
RESIDENTIAL PROPERTIES MANAGEMENT,
INC.
Attest:
By:
- ------------------------ --------------------------------
Susan L. Christiansen William G. Benton
Title: Secretary Title: President
EXHIBIT C
GUARANTY OF PAYMENT
THIS GUARANTY OF PAYMENT (hereinafter referred to as the "Guaranty")
made and entered into this _____ day of __________, 1994 by and among William
G. Benton, G.L. Clark, Jr. and Susan L. Christiansen, jointly and severally
(each a "Guarantor" of the Note and hereinafter sometimes referred to
collectively as the "Guarantors"), and Omega Healthcare Investors, Inc., a
Maryland corporation ("Omega"), having as its mailing address 905 W. Eisenhower
Circle, Suite 110, Ann Arbor, Michigan 48103,
W I T N E S S E T H:
WHEREAS, Residential Properties Management, Inc. ("Maker") has entered
into a five (5) year Consulting and Noncompetition Agreement (the "Consulting
Company Noncompetition Agreement") of even date herewith by and between Maker
and Omega in connection with the merger of Health Equity Properties
Incorporated, a North Carolina corporation ("HEP"), with and into Omega
pursuant to an Amended and Restated Merger Agreement and Plan of Reorganization
(the "Merger Agreement") dated as of June 17, 1994 by and between Omega and
HEP; and
WHEREAS, pursuant to the Merger Agreement, at the Effective Time of
the Merger (each as defined in the Merger Agreement), Maker is obligated to
execute and deliver the Consulting Company Noncompetition Agreement and to
execute and deliver the Individual Consulting and Noncompetition Agreements
with each Consultant (each as defined in the Consulting Company Noncompetition
Agreement), and in consideration thereof, Omega is obligated to advance to
Maker as a lump sum the aggregate fee to be earned by Maker pursuant to the
Consulting Company Noncompetition Agreement in the amount of $4,982,269 upon
the execution and delivery by Maker of a Promissory Note (the "Note"); and
WHEREAS, Omega, as one of the conditions of advancing the funds under
the Note, requires that each Guarantor guarantee the payment of the
indebtedness of Maker in favor of Omega evidenced by the Note in the event of
the occurrence of an Event of Default (as defined in the Note) under the Note.
NOW, THEREFORE, for and in consideration of the premises and the sum
of Ten and 00/100 Dollars ($10.00) and of other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Guarantor,
jointly and severally, hereby covenants and agrees with Omega as follows:
1. GUARANTY OF PAYMENT. Each Guarantor hereby absolutely and
unconditionally guarantees the prompt, complete and full payment, when due, and
no matter how such shall become due, of all indebtedness now or hereafter owing
by Maker to Omega under the Note upon the occurrence of an Event of Default
thereunder pursuant to which Omega is entitled to accelerate the repayment of
the indebtedness then outstanding under the Note. This Guaranty is a guaranty
of payment and not a guaranty of collection, and the obligations of each
Guarantor hereunder are independent of the obligations of Maker or any other
Guarantor.
2. BENEFIT OF GUARANTY. The benefit of this Guaranty shall
automatically pass with a transfer or assignment of the Note or portions
thereof by Omega to any permitted transferee thereunder without any action,
consent or acknowledgment by any Guarantor.
3. ACTIONS BY OMEGA. No action which Omega may take or omit to take
in connection with the Note, any indebtedness owing by Maker to Omega, or any
security for the payment of the indebtedness of Maker to Omega or for the
performance of any obligations or undertakings of Maker, nor any course of
dealing with Maker or any other person, shall release a Guarantor's obligations
hereunder, affect this Guaranty in any way or afford a Guarantor any recourse
against Omega. By way of example, but not in limitation of the foregoing, each
Guarantor hereby expressly agrees that Omega may, from time to time, without
notice to Guarantor:
(a) amend, change or modify, in whole or in part, the
Note;
(b) accelerate, change, extend or renew the time for
payment of the Note;
(c) compromise or settle any amount due or owing, or
claimed to be due or owing, under the Note;
(d) surrender, release or subordinate any or all security
for the Note or accept additional or substituted security therefor;
(e) release, substitute or add guarantors; and
(f) release Maker or any affiliate thereof.
The provisions of this Guaranty shall extend and be applicable to all renewals,
amendments, extensions and modifications of the Note, and all references herein
to the Note shall be deemed to include any renewals, extensions, amendments or
modifications thereof.
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4. WAIVER OF CLAIMS. So long as the obligations of Maker under the
Note have not been fully satisfied, each Guarantor hereby expressly waives,
renounces and agrees not to assert, any right, claim, or cause of action,
including, without limitation, a claim for reimbursement, subrogation,
indemnification or otherwise, against Maker arising out of or by reason of this
Guaranty or the obligations of any Guarantor hereunder, including, without
limitation, the payment or securing or purchasing of any of the obligations of
Maker to Omega. The waiver, renunciation and agreement contained in the
preceding sentence is for the benefit of Omega and also for the benefit of
Maker, who may assert the benefits thereof as a third party beneficiary, and
any Guarantor may be released from such waiver, renunciation and agreement only
by the execution and delivery by Omega of an instrument expressly releasing
such Guarantor therefrom.
5. WAIVER OF NOTICE. Each Guarantor expressly waives notice of
acceptance of this Guaranty, presentment for payment of the Note, protest and
notice of protest, demand, notice of dishonor, notice of any and all
proceedings to collect amounts due under the Note and to enforce any security
given therefor and all other notices whatsoever and diligence in collecting
sums due under the Note or the taking of any action with reference to the Note
or to any liability under this Guaranty.
6. DEFAULT. Upon the occurrence of an Event of a Default under the
Note, Omega shall have the right to enforce its rights, powers and remedies
under the Note or hereunder or under any other instrument concerning or
securing the indebtedness evidenced by the Note in any order and all rights,
powers and remedies available to Omega in such event shall be nonexclusive and
cumulative of all other rights, powers and remedies provided under the Note or
hereunder or by law or in equity. The obligations of each Guarantor hereunder
are independent of the obligations of Maker, or any other Guarantor hereunder,
and Omega may proceed directly to enforce all rights under this Guaranty
against any Guarantor without proceeding against or joining Maker, all of the
Guarantors, or any other person and without applying or enforcing any security
for the Note. Each Guarantor hereby agrees that Omega may accept any
payment(s), plan for adjustment of debts, plan for reorganization or
liquidation, or plan of composition or extension proposed by, or on behalf of,
Maker without in any way affecting or discharging the liability of any
Guarantor hereunder. If the obligations of Maker to Omega are partially paid,
each Guarantor shall remain liable for any unpaid balance of such obligations
upon the occurrence of an Event of Default under the Note. This Guaranty shall
be revived and reinstated in the event that any payment(s) received by Omega,
or any of Omega's successors or permitted assigns under the Note, on any of
the obligations of Maker to Omega, is required to be repaid or rescinded under
present or future state
3
or federal law or regulation relating to bankruptcy, insolvency, or other
relief of debtors, to the same extent as if such payment had never been made,
and the amount of such payment and interest thereon shall be part of the
obligations guaranteed hereby. Each Guarantor hereby authorizes and empowers
Omega upon acceleration of the maturity of the Note, at its sole discretion,
and without notice to any Guarantor, to exercise any right or remedy which
Omega may have, including, but not limited to, judicial foreclosure, exercise
of rights of power of sale, acceptance of a deed or assignment in lieu of
foreclosure, appointment of a receiver to collect rents and profits, exercise
of remedies against personal property, or enforcement of any assignment of
leases, as to any security, whether real, personal or intangible, and each
Guarantor shall be liable to Omega for any deficiency resulting from the
exercise by Omega of any such remedy, even though any rights which any
Guarantor may have against Maker or others may be destroyed or diminished by
exercise of any such remedy. Until all of the obligations of Maker to Omega
under the Note have been paid and performed in full, none of the Guarantors
shall have any right of subrogation to Omega against Maker and each Guarantor
hereby waives any rights to enforce any remedy which Omega may have against
Maker and any rights to participate in any security for the Note. In the event
that all of the obligations of Maker under the Note shall be paid and performed
in full and are no longer subject to possible repayment or rescission under any
present or future state or federal law or regulation relating to the
bankruptcy, insolvency or other relief of debtors, Omega shall, upon the
written request of any Guarantor, execute and deliver to such Guarantor such
documents as may be necessary to evidence the transfer by subrogation to such
Guarantor of any interest in the obligations of Maker under the Note resulting
from any payment by such Guarantor thereunder.
7. PROCEEDS. Each Guarantor hereby authorizes Omega, without notice
to any Guarantor, to apply all payments and credits received from Maker or from
any Guarantor or realized from any security in such manner and in such priority
as Omega in its sole judgment shall see fit to the indebtedness, obligations
and undertakings under the Note which are the subject of this Guaranty.
8. SUCCESSORS AND ASSIGNS. Each Guarantor's obligations hereunder
shall not be assigned or delegated but this Guaranty shall pass to and be fully
binding upon the estate, heirs, legatees and legal representatives of such
Guarantor if, but only if, prior to the death of such Guarantor Omega has
delivered a notice to Maker asserting the occurrence of a breach under the Note
and the Maker shall not have cured any such asserted breach prior to the
expiration of the period set forth in the Note during which period Maker is
permitted to cure any asserted breaches. This Guaranty shall apply to and
inure to the benefit of Omega and the successors and permitted assigns of Omega
and
4
may only be assigned in connection with a permitted assignment by Omega of the
Consulting Company Noncompetition Agreement.
9. NO ORAL CHANGE. This Guaranty may not be changed orally, and no
obligation of any Guarantor can be released or waived by Omega except by a
writing signed by Omega.
10. GOVERNING LAW. This Guaranty is to be performed in and shall be
governed by and construed in accordance with the laws of the State of North
Carolina. Each Guarantor hereby submits to personal jurisdiction in said State
in any federal court located in Winston-Salem, North Carolina for the
enforcement of this Guaranty and waives any and all personal rights under the
laws of said State to object to jurisdiction within said State or in said
courts for the purposes of litigation to enforce this Guaranty.
11. TERM. This Guaranty shall be irrevocable by any Guarantor until
the later to occur of ___________, 1999 or the date on which all indebtedness
owed by Maker to Omega under the Note has been completely repaid and all
obligations and undertakings of Maker under, by reason of or pursuant to the
Note, have been completely performed and are no longer subject to possible
repayment or rescission under any present or future state or federal law or
regulation relating to the bankruptcy, insolvency or other relief of debtors;
provided, however, that if all indebtedness owed by Maker to Omega under the
Note shall have been so completely repaid and all such obligations and
undertakings of Maker so completely performed on a date that is prior to
____________, 1999, then this Guaranty shall terminate on such earlier date,
and provided, further, that upon the ocurrence of a Bankruptcy Event (as such
term is defined in the Consulting Company Non competition Agreement) with
respect to Omega or a ermitted assignee of Omega under the Consulting Company
Noncompetition Agreement, this Guaranty shall terminate on the date of such
Bankruptcy Event.
12. NOTICES, DEMANDS AND REQUESTS. If delivered personally, the date
on which a notice or demand hereunder is delivered shall be the date of receipt
or delivery, and if delivered by mail, such notice or demand shall be sent by
United States registered or certified mail, return receipt requested, postage
prepaid, and the date on which such notice or demand is received (as evidenced
by the registered or certified mail receipt) shall be the date of delivery. If
delivered by an overnight courier service, such notice or demand shall be sent
by a recognized overnight courier service, return receipt requested, courier
service charges prepaid, and the date on which such notice or demand is
received (as evidenced by the overnight courier service receipt) shall be the
date of delivery. In the event any notice or demand is mailed to a party in
accordance with this paragraph, and is returned to the sender as
nondeliverable, then such notice or demand shall be deemed to
5
have been delivered or received on the fifth day following the deposit of such
notice or demand in the United States mail; provided that such notice or demand
shall have been properly addressed to the party to whom notice or demand is
sent and postage shall have been properly paid by the sender. Notices and
demands made hereunder shall be addressed to Omega at 905 W. Eisenhower Circle,
Suite 110, Ann Arbor, Michigan 48103, Attention: Essel W. Bailey, Jr. and to
Guarantor at 915 West Fourth Street, Winston-Salem, North Carolina 27102 or at
such other address as the party to be notified shall have furnished to each of
the other parties to this Guaranty in accordance with this Section 12.
13. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and
warrants to Omega that (i) he or she has all requisite legal capacity to
execute, deliver and perform this Guaranty and that this Guaranty is a valid
and binding obligation of him or her enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally, (ii) he or she
has carefully reviewed this Guaranty and, after consultation with his or her
attorney and accountant, understands the terms hereof, (iii) he or she is not
relying on any representation or other statement made by any director or
officer of Omega or Maker in connection with his or her decision to enter into
this Guaranty or to consummate the transactions contemplated hereby, and (iv)
after giving effect to the execution and delivery of this Guaranty, he or she
will not be unable to pay his or her debts generally as such debts become due.
[Balance of page intentionally left blank]
IN WITNESS WHEREOF, each Guarantor has executed this Guaranty of
Payment on the date first above written.
Witness:__________________ --------------------------
Name:_____________________ William G. Benton
Guarantor
Witness:__________________ Address: 915 West Fourth Street
Name:_____________________ Winston-Salem, North
Carolina 27102
Witness:__________________ --------------------------
Name:_____________________ G.L. Clark, Jr.
Guarantor
Witness:__________________ Address: 915 West Fourth Street
Name:_____________________ Winston-Salem, North
Carolina 27102
Witness:__________________ --------------------------
Name:_____________________ Susan L. Christiansen
Guarantor
Witness:__________________ Address: 915 West Fourth Street
Name:_____________________ Winston-Salem, North
Carolina 27102
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