-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U1yg0YW0KP+AbLjoPa5fI00ZkGOqjdFazN5vhJYC4Dz9B2JAP1yUjP6v8rbR+35c xO89EU9uuQqFxz8ZK39V0Q== 0000912057-00-000708.txt : 20000202 0000912057-00-000708.hdr.sgml : 20000202 ACCESSION NUMBER: 0000912057-00-000708 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20000110 GROUP MEMBERS: APOLLO ADVISORS II,L.P. GROUP MEMBERS: APOLLO INVESTMENT FUND III LP GROUP MEMBERS: APOLLO MANAGEMENT,L.P. GROUP MEMBERS: APOLLO OVERSEAS PARTNERS III,L.P. GROUP MEMBERS: APOLLO UK PARTNERS III,L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MARINER POST ACUTE NETWORK INC CENTRAL INDEX KEY: 0000882287 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 742012902 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-43594 FILM NUMBER: 504578 BUSINESS ADDRESS: STREET 1: ONE RAVINA DR STE 1500 STREET 2: STE 800 CITY: ATLANTA STATE: GA ZIP: 30346 BUSINESS PHONE: 6784437000 MAIL ADDRESS: STREET 1: ONE RAVINA DRIVE SUITE 1500 STREET 2: SUITE 800 CITY: ATLANTA STATE: GA ZIP: 30346 FORMER COMPANY: FORMER CONFORMED NAME: PARAGON HEALTH NETWORK INC DATE OF NAME CHANGE: 19971104 FORMER COMPANY: FORMER CONFORMED NAME: LIVING CENTERS OF AMERICA INC DATE OF NAME CHANGE: 19930328 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: APOLLO INVESTMENT FUND III LP CENTRAL INDEX KEY: 0001015567 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: APOLLO ADVISORS II LP STREET 2: 2 MANHATTANVILLE ROAD CITY: NEW YORK STATE: NY ZIP: 10577 BUSINESS PHONE: 9146948000 MAIL ADDRESS: STREET 1: C/O APOLLO ADVISORS LP STREET 2: 2 MANHATTANVILLE RD CITY: PURCHASE STATE: NY ZIP: 10577 SC 13D/A 1 SCHEDULE 13D/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------ SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. 3) (1) MARINER POST-ACUTE NETWORK, INC. (Name of Issuer) COMMON STOCK (Title of Class of Securities) 698940 10 3 (CUSIP Number) ROBERT W. KADLEC SIDLEY & AUSTIN 555 WEST FIFTH STREET LOS ANGELES, CALIFORNIA 90013-1010 (213) 896-6072 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) JANUARY 5, 2000 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box / /. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. SEE Rule 13d-7(b) for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 11 Pages) - -------- (1) The remainder of this cover page shall be filled out for a reporting a person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, SEE the NOTES).
- --------------------------------------------------- -------------------------------------------------- CUSIP NO. 698940 10 3 13D Page 2 of 11 Pages - --------------------------------------------------- -------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS APOLLO INVESTMENT FUND III, L.P. - ---------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / - ---------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* - ---------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / - ---------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ---------------------------------------------------------------------------------------------------------------------- NUMBER 7 SOLE VOTING POWER OF 0 SHARES ----------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 2,821 REPORTING ----------------------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 0 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,821 - ---------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,821 - ---------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 0.0% - ---------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - ----------------------------------------------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
- --------------------------------------------------- -------------------------------------------------- CUSIP NO.698940 10 3 13D Page 3 of 11 Pages - --------------------------------------------------- -------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS APOLLO UK PARTNERS III, L.P - ---------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / - ---------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* - ---------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / - ---------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED KINGDOM - ---------------------------------------------------------------------------------------------------------------------- NUMBER 7 SOLE VOTING POWER OF 0 SHARES ------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 2,821 REPORTING ------------------------------------------------------------------ PERSON 9 SOLE DISPOSITIVE POWER WITH 0 ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 2,821 - ---------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,821 - ---------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 0.0% - ---------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - ----------------------------------------------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
- --------------------------------------------------- -------------------------------------------------- CUSIP NO.698940 10 3 13D Page 4 of 11 Pages - --------------------------------------------------- -------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS APOLLO OVERSEAS PARTNERS III, L.P - ---------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / - ---------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* - ---------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / - ---------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ---------------------------------------------------------------------------------------------------------------------- NUMBER 7 SOLE VOTING POWER OF 0 SHARES ------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 2,821 REPORTING ------------------------------------------------------------------ PERSON 9 SOLE DISPOSITIVE POWER WITH 0 ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 2,821 - ---------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,821 - ---------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 0.0% - ---------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - ----------------------------------------------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
- --------------------------------------------------- -------------------------------------------------- CUSIP NO.698940 10 3 13D Page 5 of 11 Pages - --------------------------------------------------- -------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS APOLLO MANAGEMENT, L.P. - ---------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / - ---------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* - ---------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / - ---------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ---------------------------------------------------------------------------------------------------------------------- NUMBER 7 SOLE VOTING POWER OF 0 SHARES ------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 2,821 REPORTING ------------------------------------------------------------------ PERSON 9 SOLE DISPOSITIVE POWER WITH 0 ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 2,821 - ---------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,821 - ---------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 0.0% - ---------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - ----------------------------------------------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
- --------------------------------------------------- -------------------------------------------------- CUSIP NO.698940 10 3 13D Page 6 of 11 Pages - --------------------------------------------------- -------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS APOLLO ADVISORS II, L.P. - ---------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / - ---------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ---------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* - ---------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / - ---------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ---------------------------------------------------------------------------------------------------------------------- NUMBER 7 SOLE VOTING POWER OF 0 SHARES ------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 2,821 REPORTING ------------------------------------------------------------------ PERSON 9 SOLE DISPOSITIVE POWER WITH 0 ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 2,821 - ---------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,821 - ---------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES* / / - ---------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 0.0% - ---------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - ----------------------------------------------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT! This Amendment No. 3 (this "Amendment") relates to the Statement on Schedule 13D dated November 4, 1997, as amended on April 24, 1998 and as amended on December 23, 1999 and filed with the Securities and Exchange Commission on behalf of Apollo Investment Fund III, L.P., a Delaware limited partnership ("Fund III"), Apollo UK Partners III, L.P., a limited partnership organized under the laws of the United Kingdom ("UK Partners"), Apollo Overseas Partners III, L.P., a Delaware limited partnership ("Overseas Partners," and together with Fund III and UK Partners, the "Apollo Purchasers"), Apollo Advisors II, L.P., a Delaware limited partnership ("Apollo Advisors") and Apollo Management, L.P., a Delaware limited partnership ("Apollo Management") (collectively, the "Reporting Entities"), with respect to the common stock, par value $0.01 per share (the "Common Stock"), of Mariner Post-Acute Network, Inc., a Delaware corporation (the "Issuer"). Item 3 is hereby amended to add the following: ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS As previously reported, pursuant to the Proxy and Voting Agreement, dated as of November 4, 1997 (the "Voting Agreement"), Apollo Management was granted a three year irrevocable proxy (the "Proxy") to vote the shares of Common Stock (the "Proxy Shares") owned by Chase Equity Associates, L.P., a California limited partnership ("Chase"), Healthcare Equity Partners, L.P., a Delaware limited partnership ("Healthcare"), Healthcare Equity QP Partners, L.P., a Delaware limited partnership ("Healthcare QP"), Key Capital Corporation, a Delaware corporation ("Key"), Key Equity Partners 97, a Delaware limited partnership ("Key Equity"), Drax Holdings, L.P., a Delaware limited partnership ("Drax"), Walnut Growth Partners Limited Partnership, a Delaware limited partnership ("Walnut"), and their respective successors and assigns (collectively, the "Remaining Purchasers" and together with the Apollo Purchasers, the "Purchasers") (including transferees) on matters as to which the Remaining Purchasers are entitled to vote. As previously reported, Apollo Management, the Apollo Purchasers, Chase, Healthcare, Healthcare QP, Key, Key Equity, Drax and Walnut were all of the parties to that certain Stockholders Agreement (the "Stockholders Agreement") dated as of November 4, 1997, amended as of April 13, 1998 and amended and restated as of November 25, 1998. Pursuant to a Termination of Amended and Restated Stockholders Agreement and Proxy and Voting Agreement, dated as of December 20, 1999 and executed by all of the parties thereto on or before January 5, 2000 ("Termination Agreement") by and among the Issuer, Apollo Management, the Apollo Purchasers, Chase, Drax, Walnut, and Patrician Corporation (as the successor to Healthcare, Healthcare QP, Key, Key Equity) (collectively, the "Terminating Parties"), the Terminating Parties (i) terminated the Voting Agreement and, thus, the Proxy and (ii) terminated the Stockholders Agreement. Accordingly, the Reporting Entities no longer are entitled to direct the voting of and are no longer the beneficial owners of the Proxy Shares. Page 7 of 11 As previously reported, the Apollo Purchasers and Chase entered into a Warrant Purchase Agreement, dated as of September 17, 1997, and on November 4, 1997, the Apollo Purchasers (on a pro rata basis) granted to Chase a warrant (the "Warrant") evidencing the right to purchase a total of 592,593 shares of Common Stock (after giving effect to a 3-for-1 stock split effective December 30, 1997) at a price of $0.00033 per share (after giving effect to the stock split). Effective December 20, 1999, Chase exercised the Warrant and, as a result, the Apollo Purchasers transferred 592,593 shares of Common Stock of the Issuer to Chase (the "Chase Transfer"). In connection therewith, Chase transferred 2,821 shares of Common Stock to the Apollo Purchasers in payment of the Warrant exercise price. After giving effect to the Termination Agreement and the Chase Transfer, the Apollo Purchasers are the record owners of 2,821 shares of Common Stock, held as follows: 2,572 shares by Fund III, 95 shares by UK Partners and 154 shares by Overseas Partners. Item 4 is hereby amended to add the following: ITEM 4. PURPOSE OF TRANSACTION As a result of the Termination Agreement, the Apollo Purchasers are no longer entitled to direct the voting of the Proxy Shares. Item 5 is hereby amended to read in its entirety: ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) and (b) The responses to Items 1 through 11 on the cover pages of this Schedule 13D are incorporated herein. The Common Stock owned by the Apollo Purchasers is held as follows: 2,572 shares by Fund III, 95 shares by UK Partners and 154 shares by Overseas Partners. (c) The responses to Items 3 and 4 of this Schedule 13D are incorporated herein. (d) Not applicable. (e) As of January 5, 2000, the Reporting Entities ceased to be the beneficial owners of more than five percent of the Common Stock. Item 6 is hereby amended to add: ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Page 8 of 11 The responses to Items 3 and 4 of this Schedule 13D are incorporated herein. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit A: Termination of Amended and Restated Stockholders Agreement and Proxy and Voting Agreement, dated as of December 20, 1999. Page 9 of 11 SIGNATURE After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete, and correct. Dated as of this __ day of January, 2000. APOLLO INVESTMENT FUND III, L.P. By: Apollo Advisors II, L.P., Its General Partner By: Apollo Capital Management II, Inc., Its General Partner By: /s/ Michael D. Weiner --------------------------------------- Name: Michael D. Weiner Title: Vice President APOLLO OVERSEAS PARTNERS III, L.P. By: Apollo Advisors II, L.P., Its General Partner By: Apollo Capital Management II, Inc., Its General Partner By: /s/ Michael D. Weiner --------------------------------------- Name: Michael D. Weiner Title: Vice President APOLLO UK PARTNERS III, L.P. By: Apollo Advisors II, L.P., Its General Partner By: Apollo Capital Management II, Inc., Its General Partner By: /s/ Michael D. Weiner --------------------------------------- Name: Michael D. Weiner Title: Vice President Page 10 of 11 APOLLO ADVISORS II, L.P. By: Apollo Capital Management II, Inc., Its General Partner By: /s/ Michael D. Weiner --------------------------------------- Name: Michael D. Weiner Title: Vice President APOLLO MANAGEMENT, L.P. By: AIF III Management, Inc., Its General Partner By: /s/ Michael D. Weiner --------------------------------------- Name: Michael D. Weiner Title: Vice President Page 11 of 11 EX-99.A 2 EXHIBIT 99.A TERMINATION OF AMENDED AND RESTATED STOCKHOLDERS AGREEMENT AND PROXY AND VOTING AGREEMENT This TERMINATION OF AMENDED AND RESTATED STOCKHOLDERS AGREEMENT AND PROXY AND VOTING AGREEMENT (the "Termination"), dated as of December 20, 1999, by and among Apollo Management, L.P., a Delaware limited partnership ("Apollo Management" and together with its affiliates and managed investment funds, "Apollo"), Mariner Post-Acute Network, Inc., a Delaware corporation (the "Company") and the stockholders (including Apollo) listed on the signature pages attached hereto (the "Stockholders"). W I T N E S S E T H: WHEREAS, the parties hereto are all of the parties to that certain Stockholders Agreement, dated as of November 4, 1997, amended as of April 13, 1998 and amended and restated as of November 25, 1998 (the "Stockholders Agreement") pursuant to which the parties provided for certain rights and obligations in respect of the Shares (defined in the Stockholders Agreement); WHEREAS, in addition to the Stockholders Agreement, the Stockholders provided for certain voting rights and obligations in respect to Shares pursuant to that certain Proxy and Voting Agreement, dated as November 4, 1997 (the "Proxy Agreement"), by and among Apollo Management and the Other Stockholders (defined in the Stockholders Agreement); WHEREAS, each Stockholder party hereto owns the number of shares of common stock, par value $.01 per share ("Common Stock") set forth under its name on the signature pages attached hereto, and the Stockholders party hereto collectively beneficially own all of the shares of Common Stock currently subject to the Stockholders Agreement and the Proxy Agreement; WHEREAS, in connection with the sale of the shares of Common Stock owned by Apollo to Credit Suisse First Boston Management Corporation ("CSFBMC") pursuant to a Transfer Agreement between CSFBMC and Apollo (the "Sale Transaction"), Apollo, the Stockholders and the Company have agreed to enter into this Termination to become effective (the "Effective Time") (i) with respect to the Stockholders Agreement immediately upon its execution by Apollo, the Company and Stockholders holding the requisite number of shares, and (ii) with respect to the shares of Common Stock owned by each Other Stockholder subject to the Proxy Agreement, immediately upon its execution by Apollo Management and such Other Stockholder; and NOW, THEREFORE, the parties hereto agree as follows: 1. REPRESENTATION AND WARRANTIES. Each party hereto represents and warrants to the other party as follows: (a) AUTHORITY RELATIVE TO THIS TERMINATION. Each party hereto has the requisite 1 power and authority to execute and deliver this Termination and to consummate the transactions contemplated hereby. The execution and delivery of this Termination and the consummation of the transactions contemplated hereby have been duly and validly authorized by such party and no other proceedings on the part of such party are necessary to authorize this Termination or to consummate the transactions so contemplated. This Termination has been duly and validly executed and delivered by such party, and assuming that this Termination has been duly and validly authorized, executed and delivered by the other parties hereto, this Termination constitutes a valid and binding obligation of such party, enforceable against such party in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency and similar laws affecting creditor's rights generally and to general principles of equity (whether considered in a proceeding in equity or at law). (b) NO CONFLICTS. Neither the execution and delivery of this Termination nor the consummation of the transactions contemplated hereby will conflict with or constitute a violation of or default under any contract, commitment, agreement, arrangement or restriction of any kind to which such party is a party or by which such party is bound. Other than the Stockholders Agreement and the Proxy Agreement there are no other agreements or understandings with respect to the voting of the Shares. 2. TERMINATION OF RIGHTS AND OBLIGATIONS. As of the applicable Effective Time, the rights and obligations of (i) Apollo, the Company and the Stockholders under the Stockholders Agreement and (ii) Apollo Management and each of the Other Stockholders under the Proxy Agreement (including, without limitation, the irrevocable proxy granted by each of the Other Stockholders to Apollo Management), shall be deemed to be terminated and of no further effect with respect to any shares of Common Stock beneficially owned by any of Apollo, the Stockholders, or the Other Stockholders, as the case may be. Notwithstanding anything herein to the contrary, this Section 2 shall not terminate or interfere with any Other Stockholder's right to exercise its "tag-along rights" pursuant to Section 6.2 of the Stockholders Agreement with respect to the Sale Transaction. 3. GOVERNING LAW. This Termination shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of Delaware (without giving effect to the provisions thereof relating to conflicts of law). 4. COUNTERPARTS. This Termination may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. 5. DESCRIPTIVE HEADINGS. The headings herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Termination. 2 IN WITNESS WHEREOF, the parties hereto have executed this Termination as of the date first above written. MARINER POST-ACUTE NETWORK, INC. By: /s/ Francis W. Cash ---------------------------------- Name: Francis W. Cash Title: Date: January 5, 2000 APOLLO MANAGEMENT, L.P., on behalf of one or more managed investment funds By: AIF III Management, Inc. Its General Partner By: /s/ Michael D. Weiner ------------------------------------ Name: Michael D. Weiner Title: Vice President Date: December 20, 1999 APOLLO INVESTMENT FUND III, L.P. By: Apollo Advisors II, L.P. Its General Partner By: Apollo Capital Management II, Inc. Its General Partner By: /s/ Michael D. Weiner ------------------------------------ Name: Michael D. Weiner Title: Vice President 13,100,370 Shares of Common Stock Date: December 20, 1999 3 APOLLO UK PARTNERS III, L.P. By: Apollo Advisors II, L.P. Its General Partner By: Apollo Capital Management II, Inc. Its General Partner By: /s/ Michael D. Weiner ------------------------------------ Name: Michael D. Weiner Title: Vice President 484,188 Shares of Common Stock Date: December 20, 1999 APOLLO OVERSEAS PARTNERS III, L.P. By: Apollo Advisors II, L.P. Its General Partner By: Apollo Capital Management II, Inc. Its General Partner By: /s/ Michael D. Weiner ------------------------------------ Name: Michael D. Weiner Title: Vice President 783,033 Shares of Common Stock Date: December 20, 1999 4 CHASE EQUITY ASSOCIATES, L.P. By: Chase Capital Partners Its General Partner By: /s/ Christopher C. Behrens ------------------------------------- Partner 2,592,594 Shares of Common Stock Date: December 30, 1999 5 DRAX HOLDINGS L.P. By: Inman Corporation Its General Partner By: /s/ Linda Hamilton ------------------------------------ Name: Linda Hamilton Title: Executive Vice President 75,000 Shares of Common Stock Date: December 30, 1999 6 WALNUT GROWTH PARTNERS LIMITED PARTNERSHIP By: Walnut GP, L.L.C. Its General Partner By: Walnut Funds, Inc. By: /s/ Joel Kanter --------------------------------- Name: Joel Kanter Title: President 74,073 Shares of Common Stock Date: December 28, 1999 7 PATRICIAN CORPORATION (as successor to Healthcare Equity Partners, L.P., Healthcare Equity QP Partners, L.P., Key Capital Corporation, and Key Equity Partners 97) By: /s/ John Power ----------------------------------- Its: President 1,111,113 Shares of Common Stock Date: January 5, 2000 8 -----END PRIVACY-ENHANCED MESSAGE-----