EXHIBIT 10.77
GUARANTY
THIS GUARANTY dated as of September 21, 1998 (the "Guaranty") is given by
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MARINER HEALTH GROUP, INC., a Delaware corporation ("Mariner"), each of its
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subsidiaries signatory hereto (collectively, the "Mariner Subsidiary
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Guarantors," and together with Mariner, the "Guarantors") in favor of
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NATIONSBANK, N.A., a national banking association organized under the laws of
the United States ("NationsBank"), as Agent (in such capacity, "Agent") for the
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Purchasers, as that term is defined in the LMS Confirmation referred to
hereinbelow (the "Purchasers").
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1. Unconditional Guaranty
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In consideration of and to induce NationsBank to enter into a liability
management swap transaction (the "LMS Transaction") with the Guarantors'
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affiliate, Mariner Post-Acute Network, Inc., a Delaware corporation (formerly
known as Paragon Health Network, Inc. and referred to herein as "Counterparty"),
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pursuant to the ISDA Master Agreement dated as of October 31, 1997 between
Counterparty and NationsBank (the "Master Swap Agreement") and the Confirmation
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for U.S. Dollar Total Return Swap Transaction to be Subject to 1992 Master Swap
Agreement dated September 21, 1998 between Counterparty and NationsBank (the
"LMS Confirmation"), the Guarantors unconditionally guarantee to Agent, its
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successors and assigns, for the benefit of the Purchasers, the prompt payment
when due, whether at maturity, upon acceleration or otherwise, of all present
and future obligations and liabilities of all kinds (including any renewals,
extensions or modifications thereof) arising out of the LMS Confirmation, but
excluding any obligations arising in connection with the Master Swap Agreement
not related solely to the LMS Transaction (the "Obligations"), subject to the
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limitations set forth herein.
Except as specifically set forth herein, this Guaranty is an unconditional
guaranty of payment and not merely of collection and shall not be affected by
the genuineness, validity, regularity or enforceability of the Obligations or
any instrument evidencing any Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor, or by any
circumstance relating to the Obligations which might otherwise constitute a
defense to this Guaranty. Except as specifically set forth herein, this
Guaranty is absolute and unconditional and shall remain in full force and effect
and be binding upon the Guarantors, their successors and assigns until all of
the Obligations have been satisfied in full. In the event that any payment by
the Counterparty in respect of any Obligations is rescinded or must otherwise be
returned for any reason whatsoever, the Guarantors shall remain liable hereunder
in respect of such Obligations as if such payment had not been made.
The Guarantors agree that Agent may resort to the Guarantors for payment of
any of the Obligations whether or not Agent has proceeded against any other
obligor principally or secondarily liable for any Obligations, including the
Counterparty. Agent shall not be obligated to file any claim relating to the
Obligations, including any claim in the event that the Counterparty becomes
subject to a bankruptcy, reorganization or similar proceeding, and the failure
of Agent to file any such claim shall not affect the Guarantors' obligations
hereunder. The Guarantors also specifically waive the presentment to or demand
of payment from anyone whomsoever liable upon any of the Obligations, including
presentment, demand, protest or notice of dishonor, and all other notices
whatsoever (other than any notices expressly required under the Master Swap
Agreement or the LMS Confirmation).
Notwithstanding anything to the contrary contained herein, in the Master
Swap Agreement or the LMS Confirmation, (a) the obligations of each Guarantor
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
any applicable state law; and (b) if the execution or delivery of this Guaranty
by any entity listed on the signature page hereof as a Mariner Subsidiary
Guarantor, or the performance by such entity of its obligations hereunder,
violates its organizational documents as in existence on the date hereof or any
material agreement to which such entity is a party as of the date hereof, or is
otherwise prohibited by any such organizational document or material
agreement, then such entity shall automatically be deemed not to be a Mariner
Subsidiary Guarantor and shall not be obligated hereunder in any way.
2. Consents
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The Guarantors agree that the Agent may at any time extend the time of
payment of or renew any of the Obligations, or make any agreement with the
Counterparty or with any other party or person liable on any of the Obligations,
for the extension, renewal, payment, compromise, discharge or release of the
Obligations (in whole or in part), or for any modification of the terms thereof
or of any agreement between the Agent and Counterparty or any such other party
or person, without in any way impairing or affecting this Guaranty for any
outstanding Obligations.
3. Rights; Expenses
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No failure by the Agent or any Purchaser to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Agent or any Purchaser of
any right, remedy or power hereunder preclude any other or future exercise of
any right, remedy or power. Each and every right, remedy and power hereby
granted to Agent or any Purchaser or allowed by law or other agreement shall be
cumulative and not exclusive of any other right, remedy or power. The Guarantors
agree to pay on demand all out-of-pocket expenses (including the reasonable fees
and expenses of Agent's counsel) actually incurred by the Agent in any way
relating to the enforcement or protection of Agent's rights under this Guaranty.
4. Subrogation
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The Guarantors shall not exercise any rights which they may have or
acquire by way of subrogation until all of the Obligations are paid in full to
the Agent. If any amounts are paid to the Guarantors in violation of the
foregoing limitation, then such amounts shall be held in trust for the benefit
of the Agent and shall forthwith be paid to the Agent to reduce the amount of
outstanding Obligations, whether matured or unmatured. Subject to the
foregoing, upon payment of all of the Obligations to the Agent, the Guarantors
shall be subrogated to the rights of the Agent against the Counterparty, and the
Agent agrees to take at the Guarantors' expense such actions as the Guarantors
may reasonably require to implement such subrogation.
5. Assignment; Termination
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The Guarantors shall not assign their respective rights, interest, duties
or obligations hereunder to any other person without the Agent's prior written
consent; provided, however, that the assignment of the obligations of any
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Mariner Subsidiary Guarantor (including, without limitation, any assignment
thereof by operation of law) shall be permitted in connection with any merger or
consolidation, or sale of all or substantially all of the assets of such Mariner
Subsidiary Guarantor, which is permitted under the terms of (i) that certain
Credit Agreement dated as of May 18, 1994, by and among Mariner, as borrower,
the financial institutions signatory thereto as lenders, and PNC Bank, National
Association, as agent for such lenders, as such Credit Agreement may be amended,
modified, restated, extended, refinanced or replaced from time to time, and (ii)
the Indenture dated as of April 4, 1996 between Mariner and State Street Bank
and Trust Company, as trustee, pursuant to which the Notes were issued, as such
Indenture may be supplemented, amended, refinanced or replaced from time to
time. None of the terms or provisions of this Guaranty may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the party or parties against whom such amendment is to be enforced.
6. Taxes
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All payments by the Guarantors hereunder will be made in full without set-
off or counterclaim and free and clear of and without withholding or deduction
for or on account of any present or future taxes,
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duties or other charges, unless the withholding or deduction of such taxes or
duties is required by law. In any such event, however, the Guarantors shall pay
such additional amounts as may be necessary in order that the net amount
received by the Agent and/or Purchasers after such withholding or deduction
shall equal the full amounts of moneys which would have been received by the
Bank in the absence of such withholding or deduction. The Guarantors will pay
all stamp duties and other documentary taxes payable in connection with this
Guaranty and will keep the Agent and Purchasers indemnified against failure to
pay the same.
7. Payments
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Each Guarantor hereby guarantees that the Obligation will be paid to the
Agent without set-off or counterclaim, in lawful currency of the United States
of America at the offices of the Agent as specified in the LMS Confirmation.
8. Representations
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The Guarantors are duly organized, validly subsisting and in good standing
under the laws of their respective jurisdiction of incorporation or
organization, and each has full corporate power to execute, deliver and perform
this Guaranty. The Guarantors have duly authorized this Guaranty, and the
signatories of this Guaranty have been duly authorized and have full power to
execute and deliver this Guaranty on behalf of each Guarantor. This Guaranty
and the providing thereof to the Agent does not violate Mariner's constitutive
documents, and this Guaranty does not violate any law, regulation or agreement
applicable to Mariner or its assets. This Guaranty constitutes a valid and
binding agreement of the Guarantors in accordance with its terms.
9. Governing Law; Jurisdiction
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This Guaranty shall be governed by and construed in accordance with, the
laws of the State of New York, without reference to its conflicts of laws
principles. With respect to any suit, action or proceeding concerning this
Guaranty, the Agent and the Guarantors submit to the non-exclusive jurisdiction
of the Federal and State courts located in the City, County and State of New
York. The Agent and the Guarantors specifically and irrevocably waive (i) any
objection which it may have at any time to the laying of venue of any suit,
action or proceeding brought in such courts, (ii) any claim that the same has
been brought in an inconvenient forum, and (iii) the right to object that such
courts do not have jurisdiction over it.
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IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered by
the Guarantors to Agent as of the date first above written.
MARINER HEALTH GROUP, INC.
By:
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Name: Xxxx X. Xxxxxx
Title: Vice President
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