Document:

Exhibit 10.1

 

Exhibit 10.1

PROMISSORY NOTE

			
	$150,000,000
	 	August 1, 2007

Valencia, California

     For Value Received, MannKind Corporation, a Delaware corporation
(“Borrower”), hereby promises to pay to the order of Alfred E. Mann (“Lender”), in lawful
money of the United States of America and in immediately available funds, the principal sum of One
Hundred and Fifty Million Dollars ($150,000,000) or the aggregate principal amount of all Advances
(as defined below) made hereunder, whichever is less (the “Loan”) together with accrued and unpaid
interest thereon, each due and payable on the dates and in the manner set forth below.

     1. Principal Repayment. The outstanding principal amount of each Advance together with all
accrued and unpaid interest thereon shall be due and payable one year from the date of the Advance
(the “Maturity Date”).

     2. Interest Rate. Borrower further promises to pay interest on the outstanding principal
amount of each Advance from the date thereof until payment in full, which interest shall be payable
at a rate equal to the one year London Interbank Offered Rate (LIBOR) reported by the Wall Street
Journal (or a comparable periodical if such periodical is no longer published) on the day of such
Advance plus 3% per annum, or the maximum rate permissible by law (which under the laws of the
State of California shall be deemed to be the laws relating to permissible rates of interest on
commercial loans), whichever is less. Interest shall be due and payable quarterly in arrears not
later than the first day of each calendar quarter for the preceding quarter, commencing on the
first day of the calendar quarter following the calendar quarter in which an Advance is made, and
shall be calculated on the basis of a 365/366-day year for the actual number of days elapsed.

     3. Place of Payment. All amounts payable hereunder shall be payable in lawful money of the
United States of America at the office of Lender, 28903 North Avenue Paine, Valencia, CA 91355,
unless another place of payment shall be specified in writing by Lender.

     4. Application of Payments; Prepayment.

          4.1 Payment on this Note shall be applied first to accrued interest, and thereafter to the
outstanding principal balance hereof.

          4.2 This Note may be prepaid in whole or in part without penalty or premium. Any amount
prepaid pursuant to this Section 4.2 may be reborrowed in accordance with Section 5 hereof except
to the extent that said prepayment is made pursuant to the provisions of Section 4.3 hereof.

          4.3 If a Financing Event (as defined below) occurs at any time when there is any principal or
interest outstanding under this Note, Borrower shall, promptly following the closing of such
Financing Event, prepay all or a portion of the outstanding principal amount of

1.

 

this Note in an amount equal to the difference between (i) the Borrower’s cash balance
immediately following the closing of such Financing Event and (ii) the Borrower’s projected cash
requirements (as determined by Borrower in its sole discretion) for the six month period
immediately following the closing of such Financing Event. A “Financing Event” means (i) the
closing of an equity or a debt financing, (ii) the entry into a strategic transaction with a third
party or third parties, including without limitation, joint ventures, manufacturing, marketing or
distribution arrangements, collaborations, partnerships, technology transfer or development
arrangements, or (iii) any transaction involving a combination of (i) and (ii), in each case of (i)
through (iii), where the Borrower receives at least $300 million in cash at the closing of such
transaction. The closing of a Financing Event shall terminate Lender’s commitment to make further
Advances pursuant to Section 5 hereof. Any amount prepaid pursuant to this Section 4.3 may not be
reborrowed.

          4.4 Any partial prepayment shall be applied to interest first and then to principal, and shall
be applied to the oldest outstanding Advance first. At the time of any prepayment of principal
hereunder, Borrower shall also pay all accrued and unpaid interest on the amount prepaid through
the date of prepayment.

     5. Loan Requests. From the date of this Note and through the first anniversary thereof,
Lender shall at all times make available to Borrower the principal amount indicated on the face of
this Note for borrowings by Borrower from time to time (each, an “Advance”). Borrower shall be
entitled to no further Advances hereunder after the first anniversary date hereof and the total
maximum amount of this Note shall be the total amount of the Advances taken by the Borrower as of
that date. Each Advance shall be in a minimum principal amount of $10,000,000. Each Advance shall
be made at such time when Borrower’s cash balance is less than its projected cash requirements for
the three month period following such Advance (as determined by Borrower in its sole discretion).
Whenever Borrower desires an Advance hereunder, Borrower shall notify Lender by facsimile with a
transmission confirmation or by electronic mail as long as a read receipt is requested and received
no later than 4:00 p.m. Pacific time, fourteen (14) calendar days prior to the date on which the
Advance is requested to be made. At the time of any borrowing under this Note (or at the time of
receipt of any payment of principal), Lender shall make or cause to be made, an appropriate
notation on the Exhibit A attached hereto reflecting the amount of such borrowing (or the amount of
such payment). The outstanding amount of this Note set forth on such Exhibit A shall be prima
facie evidence of the principal amount thereof outstanding, but the failure to record, or any error
in so recording, shall not limit or otherwise affect the obligations of Borrower to make payments
of principal of or interest on this Note when due.

     6. Default. Each of the following events shall be an “Event of Default” hereunder:

          (a) Borrower fails to pay timely any of the principal amount due under this Note or any
accrued interest or other amounts due under this Note on the date the same becomes due and payable
or within five (5) business days thereafter;

          (b) Borrower files any petition or action for relief under any bankruptcy, reorganization,
insolvency or moratorium law or any other law for the relief of, or relating to,

2.

 

debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or
takes any corporate action in furtherance of any of the foregoing; or

          (c) An involuntary petition is filed against Borrower (unless such petition is dismissed or
discharged within sixty (60) days) under any bankruptcy statute now or hereafter in effect, or a
custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is
appointed to take possession, custody or control of any property of Borrower.

Upon the occurrence of an Event of Default hereunder, all unpaid principal, accrued interest and
other amounts owing hereunder shall, at the option of Lender, and, in the case of an Event of
Default pursuant to (b) or (c) above, automatically, be immediately due, payable and collectible by
Lender pursuant to applicable law and the interest rate upon an Event of Default shall increase to
LIBOR calculated on the date of the initial Advance or the date of the Event of Default (whichever
is greater) plus 5% per annum for the period after said Event of Default until payment, or the
maximum rate permissible by law as defined above, whichever is less.

     7. Waiver. Borrower waives presentment and demand for payment, notice of dishonor, protest
and notice of protest of this Note, and shall pay all costs of collection when incurred, including,
without limitation, reasonable attorneys’ fees, costs and other expenses.

     The right to plead any and all statutes of limitations as a defense to any demands hereunder
is hereby waived to the full extent permitted by law.

     8. Governing Law. This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles that would cause
the application of laws of any other jurisdiction. Borrower consents to in personam jurisdiction
for any legal action or proceeding with respect to this Note in the Los Angeles Superior Court.
Borrower, by execution and delivery of this Note, hereby irrevocably accepts in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid court.

     9. Successors and Assigns. This Note shall be binding upon and inure to the benefit of the
Borrower and Lender and their respective successors, heirs and assigns. Lender may assign to one
or more other persons all or a portion of its rights (but not his obligations) under this Note with
respect to all or a portion of the Advances made by him.

     10. Integration. This Note reflects the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or qualified by any other
agreement or instrument, oral or written, before the date hereof.

     11. Amendments, Modification, Etc. No amendment, modification or waiver of any provision of
this Note, and no consent to any departure by Lender or Borrower and their assigns therefrom, shall
in any event be effective unless the same shall be in writing and signed by the Lender and
Borrower, and then such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.

     12. No Waiver. No failure on the part of the Lender to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or partial

3.

 

exercise of any right under this Note preclude any other or further exercise thereof or the
exercise of any other right. The rights of the Lender under this Note against Borrower are not
conditional or contingent on any attempt by the Lender to exercise any of his rights under this
Note against Borrower or any other person.

     13. Amendment and Restatement of Original Note. This Note amends, re-evidences, restates, and
supersedes in full, but does not in any way satisfy or discharge the outstanding indebtedness, if
any, owed under that Note dated August 2, 2006 in the original principal amount of One Hundred and
Fifty Million Dollars ($150,000,000), made by the undersigned in favor of Lender, as amended by
Allonge # 1 dated October 30, 2006 (the “Original Note”). Lender agrees to return the Original
Note to Borrower promptly after the execution and delivery of this Note, and Borrower agrees to
promptly cancel the Original Note upon receipt thereof.

	 	 	 	 	 
	Borrower	MannKind Corporation

 	 
	 	By:  	
/s/ Richard Anderson 	 
	 	 	Richard Anderson 	 
	 	 	Chief Financial Officer 	 
	 
	Acknowledged and Agreed:

	 	 
	Lender	
/s/ Alfred E. Mann 	 
	 	Alfred E. Mann

 	 
	 	 	 
	 	 	 
	 	 	 

4.

 

	 	 	 	 	 

EXHIBIT A

Principal Borrowings Schedule

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date	 	Borrowing	 	Repayment	 	Principal Balance
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 

5.EX-4.1

 

Exhibit 4.1

SUPPLEMENTAL INDENTURE

          This Supplemental Indenture, dated as of May 17, 2006 (this “Supplemental Indenture”
or “Guarantee”), among the subsidiary guarantors named in Annex A hereto (the
“Guarantors”), Manor Care, Inc. (together with its successors and assigns, the
“Company”), each other then existing Subsidiary Guarantor under the Indenture referred to
below, and U.S. Bank National Association (as successor to Wachovia Bank, National Association), as
Trustee under the Indenture referred to below.

W I T N E S S E T H:

          WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have heretofore executed and
delivered an Indenture, dated as of August 1, 2005 (as amended, supplemented, waived or otherwise
modified, the “Indenture”), providing for the issuance of an aggregate principal amount of
$400.0 million of 2.125% Convertible Senior Notes due 2035 of the Company (the
“Securities”);

          WHEREAS, Section 3.3 of the Indenture provides that the Company is required to cause
each Subsidiary (other than a Subsidiary that does not Guarantee obligations under the Senior
Credit Obligations, the 2006 Notes, the 2008 Notes, the 2013 Notes or the 2023 Notes) created or
acquired by the Company or one or more of its Subsidiaries or any Subsidiary that Guarantees the
payment of Debt of the Company to execute and deliver to the Trustee a supplemental indenture
pursuant to which such Subsidiary will unconditionally Guarantee, on a joint and several basis with
the other Subsidiary Guarantors, the full and prompt payment of the principal of and interest and
Additional Interest, if any, on the Securities on a senior basis; and

          WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee and the Company are
authorized to execute and deliver this Supplemental Indenture to amend the Indenture, without the
consent of any Securityholder, to add to the covenants of the Company for the benefit of the
Holders and to add Guarantees with respect to the Securities;

          NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guarantor, the Company, the other
Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit
of the Holders of the Securities as follows:

ARTICLE I

Definitions

               SECTION
1.1. Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture
or in the preamble or recital hereto are used herein as therein defined, except that the term
“Holders” in this Guarantee shall refer to the term “Holders” as defined in the Indenture and the
Trustee acting on behalf or for the benefit of such Holders. The words “herein,” “hereof” and
“hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental
Indenture as a whole and not to any particular section hereof.

 

 

ARTICLE II

Amendments to Indenture

               SECTION
2.1. Agreement to be Bound. The Guarantor hereby becomes a party to the Indenture as a
Subsidiary Guarantor and as such will have all of the rights and be subject to all of the
obligations and agreements of a Subsidiary Guarantor under the Indenture. The Guarantor agrees to
be bound by all of the provisions of the Indenture applicable to a Subsidiary Guarantor and to
perform all of the obligations and agreements of a Subsidiary Guarantor under the Indenture.

               SECTION
2.2. Guarantee. The Guarantor fully, unconditionally and irrevocably Guarantees to each
Holder of the Securities and the Trustee the Obligations pursuant to Article X of the
Indenture on a senior basis.

               SECTION 2.3. Amendment. Section 12.2(f) of the Indenture is hereby amended by
inserting the phrase “(but without giving effect to the Fundamental Change 105% Exception)”
immediately following the word “Change” in the third line thereof.

ARTICLE III

Miscellaneous

               SECTION
3.1. Notices. All notices and other communications to the Guarantor shall be given as
provided in the Indenture to the Guarantor, at its address set forth below, with a copy to the
Company as provided in the Indenture for notices to the Company.

               SECTION
3.2. Parties. Nothing expressed or mentioned herein is intended or shall be construed to
give any Person, firm or corporation, other than the Holders and the Trustee, any legal or
equitable right, remedy or claim under or in respect of this Supplemental Indenture or the
Indenture or any provision herein or therein contained.

               SECTION
3.3. Governing Law. This Supplemental Indenture shall be governed by, and construed in
accordance with, the laws of the State of New York.

               SECTION
3.4. Severability Clause In case any provision in this Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and such provision shall be ineffective only to the extent
of such invalidity, illegality or unenforceability.

               SECTION
3.5. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as
expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the
terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental
Indenture shall form a part of the Indenture for all purposes, and every Holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee makes no
representation or warranty as to the validity or sufficiency of this Supplemental Indenture.

 

 

               SECTION
3.6. Counterparts. The parties hereto may sign one or more copies of this Supplemental
Indenture in counterparts, all of which together shall constitute one and the same agreement.

               SECTION
3.7. Headings. The headings of the Articles and the sections in this Guarantee are for
convenience of reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.

               IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.

	 	 	 	 	 	 	 
	 	 	AMERICAN REHABILITATION GROUP, INC.
	 	 	COMMONWEALTH PHYSICAL THERAPY AND 
    REHABILITATION, INC.
	 	 	MANOR CARE OF FLORIDA, INC.,

	 	 	as Guarantors
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	MANOR CARE, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Richard A. Parr	 	 
	 

	 	 	 	Title: Vice President and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	Each SUBSIDIARY GUARANTOR named in Annex B hereto
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Richard A. Parr	 	 
	 

	 	 	 	Title: Attorney-in-Fact	 	 

 

 

ANNEX A

AMERICAN REHABILITATION GROUP, INC.

COMMONWEALTH PHYSICAL THERAPY AND REHABILITATION, INC.

MANOR CARE OF FLORIDA, INC.

 

 

ANNEX B

AMERICAN HOSPITAL BUILDING CORPORATION

AMERICANA HEALTHCARE CENTER OF PALOS TOWNSHIP, INC.

AMERICANA HEALTHCARE CORPORATION OF GEORGIA

ANCILLARY SERVICES MANAGEMENT, INC.

ANCILLARY SERVICES, LLC

ANNANDALE ARDEN, LLC

BAILY NURSING HOME, INC.

BAINBRIDGE ARDEN, LLC

BATH ARDEN, LLC

BINGHAM FARMS ARDEN, LLC

BIRCHWOOD MANOR, INC.

BOOTH LIMITED PARTNERSHIP

CANTERBURY VILLAGE, INC.

CHARLES MANOR, INC.

CHESAPEAKE MANOR, INC.

CLAIRE BRIDGE OF ANDERSON, LLC

CLAIRE BRIDGE OF AUSTIN, LLC

CLAIRE BRIDGE OF KENWOOD, LLC

CLAIRE BRIDGE OF SAN ANTONIO, LLC

CLAIRE BRIDGE OF SUSQUEHANNA, LLC

CLAIRE BRIDGE OF WARMINSTER, LLC

COLEWOOD LIMITED PARTNERSHIP

COLONIE ARDEN, LLC

CRESTVIEW HILLS ARDEN, LLC

DEKALB HEALTHCARE CORPORATION

DEVON MANOR CORPORATION

DISTCO, INC.

DIVERSIFIED REHABILITATION SERVICES, INC.

DONAHOE MANOR, INC.

EAST MICHIGAN CARE CORPORATION

EXECUTIVE ADVERTISING, INC.

EYE-Q NETWORK, INC.

FIRST LOUISVILLE ARDEN, LLC

FOUR SEASONS NURSING CENTERS, INC.

FRESNO ARDEN, LLC

GENEVA ARDEN, LLC

GEORGIAN BLOOMFIELD, INC.

GREENVIEW MANOR, INC.

HANOVER ARDEN, LLC

HCR HOME HEALTH CARE AND HOSPICE, INC.

HCR INFORMATION CORPORATION

HCR MANOR CARE SERVICES, INC. (f/k/a Heartland Care Partners, Inc.)

HCR MANORCARE MEDICAL SERVICES OF FLORIDA, INC.

HCR PHYSICIAN MANAGEMENT SERVICES, INC.

HCR REHABILITATION CORP.

 

 

HCRA OF TEXAS, INC.

HCRC INC.

HEALTH CARE AND RETIREMENT CORPORATION OF AMERICA

HEARTLAND CARE, LLC

HEARTLAND EMPLOYMENT SERVICES, LLC

HEARTLAND HOME CARE, INC.

HEARTLAND HOME HEALTH CARE SERVICES, INC.

HEARTLAND HOSPICE SERVICES, INC.

HEARTLAND INFORMATION SERVICES, INC. (f/k/a Heartland Medical Information Services, Inc.)

HEARTLAND MANAGEMENT SERVICES, INC.

HEARTLAND REHABILITATION SERVICES OF FLORIDA, INC.

HEARTLAND REHABILITATION SERVICES OF NEW JERSEY, INC.

HEARTLAND REHABILITATION SERVICES OF VIRGINIA, INC.

HEARTLAND REHABILITATION SERVICES, INC.

HEARTLAND SERVICES CORP.

HEARTLAND THERAPY PROVIDER NETWORK, INC.

HGCC OF ALLENTOWN, INC.

IN HOME HEALTH, INC.

INDUSTRIAL WASTES, INC.

IONIA MANOR, INC.

JACKSONVILLE HEALTHCARE CORPORATION

JEFFERSON ARDEN, LLC

KENWOOD ARDEN, LLC

KNOLLVIEW MANOR, INC.

LEADER NURSING AND REHABILITATION CENTER OF BETHEL PARK, INC.

LEADER NURSING AND REHABILITATION CENTER OF GLOUCESTER, INC.

LEADER NURSING AND REHABILITATION CENTER OF SCOTT TOWNSHIP, INC.

LEADER NURSING AND REHABILITATION CENTER OF VIRGINIA INC.

LINCOLN HEALTH CARE, INC.

LIVONIA ARDEN, LLC

MANOR CARE AVIATION, INC.

MANOR CARE OF AKRON, INC.

MANOR CARE OF AMERICA, INC

MANOR CARE OF ARIZONA, INC.

MANOR CARE OF ARLINGTON, INC.

MANOR CARE OF CANTON, INC.

MANOR CARE OF CHARLESTON, INC.

MANOR CARE OF CINCINNATI, INC.

MANOR CARE OF COLUMBIA, INC.

MANOR CARE OF DARIEN, INC.

MANOR CARE OF DELAWARE COUNTY, INC.

MANOR CARE OF HINSDALE, INC.

MANOR CARE OF KANSAS, INC.

MANOR CARE OF KINGSTON COURT, INC.

MANOR CARE OF LARGO, INC.

 

 

MANOR CARE OF LEXINGTON, INC.

MANOR CARE OF MEADOW PARK, INC.

MANOR CARE OF MIAMISBURG, INC

MANOR CARE OF NORTH OLMSTED, INC.

MANOR CARE OF PINEHURST, INC.

MANOR CARE OF ROLLING MEADOWS, INC.

MANOR CARE OF ROSSVILLE, INC.

MANOR CARE OF WILLOUGHBY, INC.

MANOR CARE OF WILMINGTON, INC.

MANOR CARE OF YORK (NORTH), INC.

MANOR CARE OF YORK (SOUTH), INC.

MANOR CARE SUPPLY COMPANY

MANORCARE HEALTH SERVICES OF NORTHHAMPTON COUNTY, INC.

MANORCARE HEALTH SERVICES OF OKLAHOMA, INC.

MANORCARE HEALTH SERVICES OF VIRGINIA, INC.

MANORCARE HEALTH SERVICES, INC.

MARINA VIEW MANOR, INC.

MEDI-SPEECH SERVICE, INC.

MEMPHIS ARDEN, LLC

MILESTONE HEALTH SYSTEMS, INC.

MILESTONE HEALTHCARE, INC.

MILESTONE REHABILITATION SERVICES, INC.

MILESTONE STAFFING SERVICES, INC.

MILESTONE THERAPY SERVICES, INC.

MNR FINANCE CORP.

NAPA ARDEN, LLC

PEAK REHABILITATION, INC.

PERRYSBURG PHYSICAL THERAPY, INC

PNEUMATIC CONCRETE, INC.

PORTFOLIO ONE, INC.

REHABILITATION ADMINISTRATION CORPORATION

REINBOLT & BURKAM, INC.

RICHARDS HEALTHCARE, INC.

RIDGEVIEW MANOR, INC.

ROANOKE ARDEN, LLC

ROLAND PARK NURSING CENTER, INC.

RVA MANAGEMENT SERVICES, INC.

SAN ANTONIO ARDEN, LLC

SILVER SPRING — WHEATON NURSING HOME, INC.

SILVER SPRING ARDEN, LLC

SPRINGHILL MANOR, INC.

STEWALL CORPORATION

STRATFORD MANOR, INC.

STUTEX CORP.

SUN VALLEY MANOR, INC.

SUSQUEHANNA ARDEN LLC

 

 

TAMPA ARDEN, LLC

THE NIGHTINGALE NURSING HOME, INC.

THERASPORT PHYSICAL THERAPY, INC.

THREE RIVERS MANOR, INC.

TOTALCARE CLINICAL LABORATORIES, INC.

TUSCAWILLA ARDEN, LLC

WALL ARDEN, LLC

WARMINSTER ARDEN LLC

WASHTENAW HILLS MANOR, INC.

WHITEHALL MANOR, INC.

WILLIAMSVILLE ARDEN, LLC

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