Document:

Exhibit 10.9

 

Exhibit
10.9

BEHRMAN
BROTHERS MANAGEMENT CORP.

126 East 56th Street 

New York, New York 10022

March 25, 1998

Tandem Health Care, Inc.

Persimmon Road

Sewickley, Pennsylvania 15143

Attention: Lawrence R. Deering

Re: Financial Advisor Fee

Dear Sirs:

          Behrman Brothers Management Corp. (“Behrman Management”) has provided and will continue to
provide financial advisory services in connection with the investigation, negotiation and
completion by Tandem Health Care, Inc. (“Tandem”), of “Initial Acquisitions” and “Additional
Acquisitions,” as such terms are defined in the Securities Purchase Agreement, dated as of March
24, 1998 (the “Securities Purchase Agreement”), among Tandem, Behrman Capital II L.P. (“Behrman
Capital”) and the Purchasers listed in Schedule I thereto. Tandem acknowledges that such services
have inured to its benefit. Capitalized terms used herein without definition have the respective
meanings assigned to them in the Securities Purchase Agreement.

          As payment in full to Behrman Management for all such advisory services rendered by it for the
benefit of Tandem, Tandem agrees to pay Behrman Management a fee in the amount of $680,000 (the
“Initial Fee”) in the event, and only in the event, that the Initial Acquisitions are consummated.
Such fee represents two percent (2%) of the aggregate consideration payable in the Initial
Acquisitions of the skilled nursing facilities located in Florida. Additionally, upon and subject
to the consummation of each Additional Acquisition (which term does not include new development and
construction projects initiated by Tandem), Tandem agrees to pay to Behrman Management a fee equal
to two percent (2%) of the aggregate consideration payable in such Additional Acquisition (whether
or not any or all of the funds needed to consummate such Additional Acquisition are received from
Behrman Capital or any of its affiliates).

 

 

          The Initial Fee shall be payable in the form of a promissory note on mutually
satisfactory terms. Such note shall bear interest at the rate of 9% per annum and shall be payable
upon the redemption or liquidation of Tandem’s Redeemable Preferred Stock. Such note (and any note
that may be deliverable pursuant to the following paragraph) shall also contain a covenant by
Tandem to use its best efforts, consistent with its development and operating plans, to cause the
note to be paid as soon as practicable, whether from operating cash flows or from external
financing.

          Any fees payable in respect of Additional Acquisitions shall be paid upon the consummation
thereof. All cash payments shall be made by wire transfer to, or in accordance with the written
instructions of, Behrman Management. In the event that Tandem is not able to provide for payment of
such fees in the external financing relating to any such transaction (provided that Tandem shall
have used its best efforts to obtain funds for such payment), Behrman Management shall grant a
request by Tandem to pay such fees in the form of a promissory note on mutually satisfactory terms.

          Please confirm that the foregoing is in accordance with your understanding by signing and
returning to us the enclosed duplicate copy of this letter.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	BEHRMAN BROTHERS MANAGEMENT CORP.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Darryl Behrman
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

Confirmed and agreed as of
the 25th day of March, 1998

	 	 	 	 	 
	TANDEM HEALTH CARE, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Lawrence R. Deering	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 

2Exhibit 10.10

 

Exhibit 10.10

FINANCIAL ADVISOR AGREEMENT

     THIS FINANCIAL ADVISOR AGREEMENT (this “Agreement”) entered into as of August 24,
2005, is made by and between Behrman Brothers Management Corp. (the “Advisor”), and Tandem
Health Care, Inc., a Pennsylvania corporation (the “Company”).

RECITALS

     WHEREAS, the Company and the Advisor are parties to that certain Financial Advisor Fee Letter
dated as of March 25, 1998 (the “Original Agreement”) pursuant to which the Advisor has
advised the Company and its subsidiaries with respect to the financial matters set forth therein;

     WHEREAS, the Company and the Advisor desire to amend and restate the Original Agreement in its
entirety;

     WHEREAS, the Company and the Advisor desire to continue their business relationship pursuant
to the terms of this Agreement under which the Company desires to retain the Advisor to advise it
regarding the types of transactions set forth below with respect to the Company and its current and
future subsidiaries (collectively, the “Tandem Companies”).

AGREEMENT

     NOW, THEREFORE, in consideration of the premises, mutual agreements and provisions herein
contained, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as follows:

     1. Original Agreement. This Agreement amends and restates in its entirety the
Original Agreement. The Company and the Advisor hereby agree that the Original Agreement is hereby
terminated and of no further legal force or effect.

     2. Appointment.

 

 

          (a) The Company hereby retains the Advisor, on a nonexclusive basis, to provide advice to the
Tandem Companies regarding dispositions and change of control opportunities that may become
available to one or more of them, including: (i) evaluating potential dispositions and change of
control transactions; (ii) assisting in identifying potential dispositions and change of control
transaction candidates; (iii) advising on proposed purchase prices and forms of consideration for
dispositions and change of control transactions; (iv) assisting in structuring potential
dispositions and change of control transactions; and (v) advising on such other matters as are
mutually agreed upon by the Company and the Advisor.

          (b) The Advisor will devote such time and effort in providing the services contemplated hereby
as it deems reasonably necessary or appropriate; provided, that (i) no minimum number of
hours is required to be devoted by the Advisor on a weekly, monthly, annual or other basis and (ii)
the Advisor reserves the right at any time not to provide services hereunder in connection with any
particular Transaction (as defined below) (in which case no Transaction Fee (as defined below) will
be payable by the Company in connection therewith). The Advisor may provide services hereunder in
connection with multiple Transactions occurring concurrently or consecutively and, in such case,
shall be entitled to receive a Transaction Fee with respect to each Transaction. The Company
acknowledges that the Advisor’s services are not exclusive and that the Advisor will render similar
services to other persons or entities. The Advisor and the Company understand that the Company
may, at times, engage one or more investment bankers or financial advisors to provide services in
addition to, but not in lieu of, services provided by the Advisor under this Agreement.

          (c) The parties hereto acknowledge that, in rendering advice and services hereunder, the
Advisor will act as an independent contractor and it is expressly understood and agreed that this
Agreement is not intended to create, and does not create, any partnership, agency, joint venture,
or similar relationship and that no party has the right or ability to contract for or on behalf of
the other party or to effect any transaction for the account of the other party.

     3. Compensation.

          (a) Fees for Transaction Services.

          (i) In connection with each Transaction (as defined below) which is consummated
following the date hereof, the Company shall pay to the Advisor in cash, in the portions and
to the accounts specified by the Advisor, an aggregate of 2% of the Transaction Price (as
defined below) (each, a “Transaction Fee”).

          (ii) As used herein, “Transaction” shall mean the sale, merger, consolidation
or any other business combination resulting in a change of control, in one or a series of
transactions, involving the business, securities or assets, or any portion thereof, of any
or all of the Tandem Companies, but not including any capitalized leases (collectively, a
“Sale”). Any transaction the sole purpose of which is to change the domicile of a
Tandem Company shall not be deemed to be a Sale.

          (iii) As used herein, “Transaction Price” shall mean with respect to a Sale,
the aggregate consideration received by the Tandem Companies or the Company’s

2

 

shareholders in the form of cash, securities or other non-cash property, including any
contingent or post-closing payments and amounts paid into escrow, plus any funded debt and
capitalized leases less cash and cash equivalents of the entities transferred in the Sale or
otherwise assumed in the Sale, directly or indirectly.

          (b) Reimbursement of Expenses. The Company shall promptly reimburse the
Advisor, upon request from time to time, for all of its reasonable out-of-pocket expenses
(including fees and expenses of its accountants, lawyers, consultants and other advisors and
travel expenses) of the Advisor and its affiliates incurred in connection with the
Advisor’s, its affiliates’ and their accountants, lawyers, consultants and other advisors’
services hereunder. The Advisor shall provide the Company with documentation substantiating
all such expenses.

     4. Term. This Agreement shall continue in effect until the earlier of (i) its
termination by mutual written consent of the parties hereto; (ii) upon consummation of a
Transaction the result of which neither the Advisor nor any of its affiliates owns any equity
securities of the Company; and (iii) upon consummation of the Company’s Initial Public Offering.
Upon any termination of this Agreement, the Advisor will be entitled to prompt payment of all fees
accrued prior to such termination and reimbursement of all out-of-pocket expenses. For purposes of
this Agreement, “Initial Public Offering” shall mean the consummation of the first fully
underwritten, firm commitment public offering pursuant to an effective registration statement under
the Securities Act of 1933, as amended, covering the offer and sale by the Company of its equity
securities.

     5. Termination Fee. Upon termination of this Agreement in connection with the
Company’s Initial Public Offering, the Company shall promptly pay to the Advisor in cash, in the
portions and to the accounts specified by the Advisor, an aggregate of 2% of the aggregate gross
purchase price (including the underwriters’ discount) of the securities sold in the Initial Public
Offering and, in the event the underwriters exercise any over-allotment option and notwithstanding
any prior termination of this Agreement, the securities sold in the over-allotment by the Advisor
and any of its affiliates.

     6. Notices. Any notice or other communication required or permitted hereunder shall
be in writing and shall be delivered personally or sent by facsimile transmission, overnight air
courier, or first class certified or registered mail, postage prepaid, as follows:

     If to the Advisor, to:

c/o Behrman Capital

126 East 56th Street

New York, New York 10022

Attn: Mark Visser

Fax: 212-980-7024

     If to the Company, to:

Tandem Health Care, Inc.

800 Concourse Parkway South

3

 

Suite 200

Maitland, FL 32751

Attn: Larry Deering

Fax: 407-571-0595

     With a copy (not constituting notice) to:

Tandem Health Care, Inc.

301 Grant Street, 16th Floor

One Oxford Centre

Pittsburgh, PA 15219

Attn: Rosemary L. Corsetti, Esq.

Fax: (412) 281-4435

All notices and communications shall be deemed to have been received unless otherwise set forth
herein: (i) in the case of personal delivery, on the date of such delivery; (ii) in the case of
facsimile transmission, on the date on which the sender receives confirmation by facsimile
transmission that such notice was received by the addressee; (iii) in the case of overnight air
courier, on the second business day following the day sent, with receipt confirmed by the courier;
and (iv) in the case of mailing by first class certified or registered mail, postage prepaid,
return receipt requested, on the fifth business day following such mailing.

     7. Entire Agreement. This Agreement and the documents referred to herein constitute
the entire agreement and understanding of the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous agreements and understandings, oral or written, between the
parties relating to such subject matter.

     8. Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of, and shall be binding upon, the Company, the Advisor, each Indemnified Party (as defined
below) and their respective successors and assigns. Neither party may assign this Agreement
without the prior written consent of the other party.

     9. Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by written consent of the Company and the
Advisor.

     10. Titles and Subtitles. The headings of this Agreement are inserted for convenience
only and shall not constitute a part of this agreement in construing or interpreting any provision
hereof.

     11. Counterparts. This Agreement may be executed simultaneously in multiple
counterparts, each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

     12. Governing Law and Severability. This Agreement shall, in all respects, be
construed in accordance with and governed by the internal laws of the State of New York. If any

4

 

provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any
jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall
be deemed amended to the extent necessary to conform to applicable law so as to be valid and
enforceable or, if such provision cannot be so amended without materially altering the intention of
the parties, then such provision shall be stricken and the remainder of this Agreement shall
continue in full force and effect. Should there ever occur any conflict between any provision
contained in this Agreement and any present or future statute, law, ordinance or regulation
contrary to which the parties have no legal right to contract, the latter shall prevail, but the
provision of this Agreement affected thereby shall be curtailed and limited only to the extent
necessary to bring it into compliance with the law. All the other terms and provisions of this
Agreement shall continue in full force and effect without impairment or limitation.

     13. Dispute Resolution; Waiver of Jury Trial. Any dispute, controversy or claim
arising out of this Agreement shall be settled by mandatory binding arbitration in accordance with
this Section 12. Any arbitration under this Section 12 shall be conducted by the National
Arbitration Forum, under the Code of Procedure then in effect, and judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof. The place of
arbitration shall be New York, New York. The arbitrators shall decide legal issues pertaining to
the dispute, controversy or claim pursuant to the laws of the State of New York. Subject to the
control of the arbitrators, or as the parties may otherwise mutually agree, the parties shall have
the right to conduct reasonable discovery pursuant to the Federal Rules of Civil Procedure. The
arbitrators shall not have the authority to award punitive damages, but shall have authority to
award equitable relief. THE PARTIES UNDERSTAND THAT THEY ARE KNOWINGLY AND WILLINGLY EXPRESSLY
WAIVING A RIGHT TO JURY TRIAL CONCERNING ANY MATTERS RELATING TO THIS AGREEMENT.

     14. Attorneys’ Fees. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement or to protect the rights obtained hereunder, the prevailing
party shall be entitled to its reasonable attorneys’ fees, including attorneys’ fees on appeal,
costs, and disbursements in addition to any other relief to which it may be entitled.

     15. Indemnification; Contribution.

          (a) The Company agrees to indemnify and hold harmless the Advisor and its affiliates
and each of their respective partners, executives, officers, directors, employees, agents
and advisors (each such person and entity, including the Advisor, being an “Indemnified
Party”) from and against any and all losses, claims, damages, judgments, liabilities and
expenses, joint, several or otherwise, to which such Indemnified Party may become subject
under any applicable federal or state law, or otherwise, related to or arising out of any
activity contemplated by this Agreement or the Advisor’s retention pursuant to, and the
Advisor’s or its affiliates’ performance of the services contemplated by, this Agreement or
any action, claim, proceeding or investigation, whether or not in connection with pending
litigation related thereto and will reimburse any Indemnified Party for all expenses
(including counsel fees and disbursements) upon request as they are incurred in connection
with the investigation of, preparation for or defense of any pending or threatened action,
claim, litigation, proceeding or investigation arising therefrom, whether or not such
Indemnified Party is a

5

 

party and whether or not such action, claim, litigation, proceeding or investigation is
initiated or brought by the Company; provided, however, that the Company
shall not be liable under the foregoing indemnification provision (and amounts previously
paid that are determined not required to be paid by the Company pursuant to the terms of
this paragraph shall be repaid promptly) to the extent that any loss, claim, damage,
judgment, liability or expense is found in a final non-appealable judgment by a court of
competent jurisdiction to have resulted solely from the Advisor’s willful misconduct or
gross negligence in connection with any of the advice, actions, inactions or services
referred to above. The Company also agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the Company
related to or arising out of the Advisor’s retention pursuant to or performance of the
services contemplated by this Agreement, except to the extent that the Advisor’s conduct in
connection with such retention or performance is found in a final, non-appealable judgment
by a court of competent jurisdiction to have constituted willful misconduct or gross
negligence.

          (b) If the indemnification provided for hereunder is finally judicially determined by a
court of competent jurisdiction to be unavailable to an Indemnified Party, or insufficient
to hold any Indemnified Party harmless, in respect of any losses, claims, damages,
judgments, liabilities or expenses (other than any losses, claims, damages, judgments,
liabilities or expenses found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted solely from an Indemnified Party’s willful misconduct or gross
negligence), then the Company, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result of such
losses, claims, damages, judgments, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received, or sought to be received, by the
Company, on the one hand, and the Indemnified Parties, on the other hand, in connection with
the transactions to which such indemnification, contribution or reimbursement is sought, or
(ii) if (but only if) the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative fault of the Company, on the one
hand, and the Indemnified Parties, on the other hand, as well as any other relevant
equitable considerations; provided, however, that in no event shall the
Indemnified Parties’ aggregate contribution hereunder exceed the amount of fees actually
received by the Advisor in respect of the transaction at issue pursuant to this Agreement.
The amount paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above will be deemed to include any legal or other fees or expenses
reasonably incurred in defending any action or claim. The Company and the Advisor agree
that it would not be just and equitable if contribution pursuant to this paragraph were
determined by pro rata allocation or by any other method which does not take into account
the equitable considerations referred to in this paragraph. The indemnity, contribution and
expense reimbursement obligations of the Company under this Section 14 shall be in addition
to any liability the Company may have, and notwithstanding any other provision of this
Agreement, shall survive the termination of this Agreement.

[SIGNATURE PAGE FOLLOWS]

6

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date
first written above.

	 	 	 	 	 
	 	BEHRMAN BROTHERS 

MANAGEMENT CORP.

 	 
	 	By:  	/s/
Grant G. Behrman 	 
	 	 	Name:  	Grant G. Behrman 	 
	 	 	Title:  	Managing Partner 	 
	 

	 	 	 	 	 
	 	TANDEM HEALTH CARE, INC.

 	 
	 	By:  	/s/
Lawrence R. Deering 	 
	 	 	Name:  	Lawrence R. Deering 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]