EXHIBIT 10.32
GUARANTY OF LEASES
This "Guaranty of Leases" (this "Guaranty") is executed as of
June 27, 2001, by MARINER POST-ACUTE NETWORK, INC., a Delaware corporation
("Guarantor"), in favor of NATIONWIDE HEALTH PROPERTIES, INC., a Maryland
corporation ("Landlord"), but shall be effective only as of and from the
"Effective Date" of the "Settlement Agreement Re NHP Lease Portfolio" dated as
of June 27, 2001 (the "Settlement Agreement"), and is entered into by Guarantor
with reference to the following facts and recitals:
RECITALS
A. GCI Palm Court, Inc., a California corporation,
Evergreen Healthcare Ltd., L.P., an Indiana limited partnership (collectively,
"Tenants") and Guarantor are debtors and debtors in possession in cases pending
under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code")
in the United States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court"), having filed their voluntary petitions on January 18, 2000
(the "Petition Date"). The Tenants' and Guarantor's chapter 11 cases are
jointly administered and consolidated for procedural purposes only under Case
No. 00-00113 (MFW) (the "Bankruptcy Case"). The individual case numbers are:
Guarantor, Case No. 00-00113 (MFW); GCI, Case No. 00-00157 (MFW); and
Evergreen, Case No. 00-00147 (MFW). Tenants and Guarantors continue to operate
their businesses as debtors in possession under sections 1107(a) and 1108 of
the Bankruptcy Code.
B. Landlord and one of the Tenants are parties to each
of those certain leases more particularly described on Exhibit "A" attached
hereto and incorporated herein by this reference (collectively, as amended as
provided by clause (b) below, the "Leases" and individually, a "Lease"). As
part of the Settlement Agreement, if approved and authorized by the Bankruptcy
Court in the Bankruptcy Case, the Tenants, Guarantor and Landlord have agreed
to (a) assume the Leases as provided in the Settlement Agreement, and (b) amend
the Leases as provided in the Settlement Agreement and the "Revised and
Restated Master Addendum To Leases" (the "Revised and Restated Master
Addendum") executed concurrently therewith.
C. As part of Tenants' assumption of the Leases, MPAN
has agreed to support the requirements imposed on Tenants to provide adequate
assurance of future performance under section 365(b)(1)(C) of the Bankruptcy
Code in respect of the assumed Leases by delivering its guaranty of the Leases
as provided for herein.
D. All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in the Leases.
E. This Guaranty of Lease replaces and supersedes any
and all other existing guarantees or obligations of Guarantor or any other
affiliate (as such term is
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defined under section 101(2) of the Bankruptcy Code) of Tenants in respect of
the Leases.
AGREEMENT
NOW, THEREFORE, in order to provide adequate assurance of
future performance in respect of the assumed Leases, and for other good and
valuable consideration as provided under the Settlement Agreement, the receipt
and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:
1. GUARANTY.
Guarantor hereby absolutely and unconditionally guarantees to
Landlord the following (collectively, the "Guaranteed Obligations"):
(a) payment in full by Tenant of all rent
(including, without limitation, Minimum Rent and Additional Rent) and
other amounts due under the Leases in the manner and at the time
prescribed in the Leases;
(b) the full, complete and timely performance
by Tenant of all covenants, indemnities and other obligations under
the Leases including, without limitation, any indemnity or other
obligations of Tenant which survive the expiration or earlier
termination of the Leases; and
(c) all costs of collection or enforcement
incurred by Landlord in exercising any remedies provided for in the
Leases at law or in equity with respect to the matters set forth in
Paragraphs 1(a) and 1(b), hereof;
provided, however, that Guarantor shall have the full benefit and protection
afforded by Paragraph 10 of the Settlement Agreement.
2. PERFORMANCE BY GUARANTOR.
If any Minimum Rent, Additional Rent or other amount due
under the Leases shall not be paid, or any obligation not performed as required
by the Leases, then upon demand by Landlord, Guarantor shall pay within ten
(10) days of demand by Landlord such sums and perform such obligations as are
required by the Leases, without regard to:
(a) any defense, set-off, or counterclaim which
Guarantor or Tenant may have or assert;
(b) whether or not Landlord shall have
instituted any suit, action or proceeding, exhausted its remedies or
taken any steps to enforce any rights against Tenant or any other
person to collect all or any part of such sums, either pursuant to the
provisions of the Leases or at law or in equity (it being
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understood that this is a guaranty of payment and not collection, and
Guarantor's liability for such payment shall be primary);
(c) any impairment or any diminution or loss of
value in any security or collateral of the Leases (including, but not
limited to, the leased premises themselves or any personal property or
fixtures therein), whether caused by hazardous substances or any other
cause (except Landlord's gross negligence or willful misconduct) or
Landlord's failure to perfect a security interest in such security or
collateral;
(d) any circumstance which may constitute a
legal or equitable discharge of a guarantor, except as provided under
this Guaranty; or
(e) any other condition or contingency.
Guarantor waives any right of exoneration and any right to
require Landlord to make an election of remedies. Guarantor covenants and
agrees that it shall not cause any default under the Leases.
3. GUARANTOR'S REPRESENTATIONS AND WARRANTIES.
Guarantor hereby represents and warrants unto Landlord that,
subject to the approval of the Settlement Agreement by the Bankruptcy Court:
(a) this Guaranty constitutes a legal, valid
and binding obligation of Guarantor and is fully enforceable against
Guarantor in accordance with its terms:
(b) Guarantor and Tenant are affiliates, and it
is of material benefit to Guarantor that Landlord enter into the
Settlement Agreement and the Revised and Restated Master Addendum, and
that Tenants assume the Leases as provided for therein;
(c) as of the effective date hereof, each of
the entities comprising Tenant is the current tenant under one or more
of the Leases, and there is no entity which is a current tenant under
any of the Leases which is not included within the definition of
"Tenant" in this Guaranty;
(d) Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to do all things
required of it under this Guaranty; and
(e) this Guaranty is duly authorized, executed
and delivered by and binding upon the Guarantor.
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Any material breach by Guarantor of the representations and
warranties set forth herein shall be a default under this Guaranty.
4. WAIVER.
Guarantor hereby knowingly, voluntarily and unequivocally
waives:
(a) all notice of acceptance hereof, protest,
demand and dishonor, presentment and demand of any kind now or
hereafter provided for by any statute or rule of law;
(b) any and all requirements that Landlord
institute any action or proceeding, or exhaust any or all of
Landlord's rights, remedies or recourses, against Tenant or anyone
else as a condition precedent to bringing an action against Guarantor
under this Guaranty, it being expressly agreed that the liability of
Guarantor hereunder shall be primary and not secondary;
(c) any defense arising by reason of any
disability, insolvency, bankruptcy, lack of authority or power, death,
insanity, minority, dissolution or any other defense of Tenant, its
successors and assigns, Guarantor or, if applicable, any other
guarantor of the Guaranteed Obligations (even though rendering same
void, unenforceable or otherwise collectible), it being agreed that
Guarantor shall remain liable herein regardless or whether Tenant or
any other such person be found not liable thereon for any reason;
(d) any and all benefits and defenses it may
have under California Civil Code ("CC") Section 2819 and agrees that
by doing so Guarantor's liability shall continue even if the Leases or
the Guaranteed Obligations are altered in any respect or Landlord's
remedies or rights against Tenant are impaired or suspended without
Guarantor's consent;
(e) any and all benefits and defenses it may
have under CC Section 2810 and agrees that by doing so Guarantor shall
be liable even if Tenant had no liability at the time of execution of
the Leases or thereafter ceases to be liable;
(f) any and all benefits and defenses it may
have under CC Section 2809 and agrees that by doing so Guarantor's
liability may be larger in amount and more burdensome that that of
Tenant;
(g) any claim Guarantor might otherwise have
against Landlord by virtue of Landlord's invocation of any right,
remedy or recourse permitted it hereunder under the Leases or
otherwise available at law or equity;
(h) any failure, omission, delay or lack on the
part of Landlord or Tenant to enforce, assert or exercise any right,
power or remedy conferred on
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Landlord or Tenant in the Leases or this Guaranty or any action on the
part of Landlord granting a waiver, indulgence or extension to Tenant
or any Guarantor;
(i) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all the
assets of Tenant, marshalling of assets or liabilities, receiverships,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other
similar proceedings affecting Tenant or any of its assets, or the
disaffirmance of the Leases in any such proceeding:
(j) any release or other reduction of the
Guaranteed Obligations arising as a result of the expansion, release,
substitution or replacement (whether or not in accordance with terms
of the Leases) of the Premises or any portion thereof; and
(k) any defense or claim available to Guarantor
as a result of Tenant's exercise of its right to purchase the Premises
(or any portion thereof) pursuant to the Leases.
This Guaranty shall apply notwithstanding any extension or
renewal of the Leases, or any holdover following the expiration or termination
of the Term or any renewal or extension of the Term.
5. SUBSEQUENT ACTS.
Without notice to, consideration to, or the consent of,
Guarantor:
(a) the Leases, and Tenant's rights thereunder,
may be modified, amended, renewed, assigned or sublet;
(b) any additional parties who are or may
become liable for the Guaranteed Obligations may hereafter be released
from their liability hereunder and thereon; and/or
(c) Landlord may take, delay in taking or
refuse to take, any and all action with reference to the Leases
(regardless of whether same might vary the risk or alter the rights,
remedies or recourses of Guarantor), including specifically the
settlement or compromise of any amount allegedly due thereunder.
No such acts shall in any way release, diminish, or affect
the absolute nature of Guarantor's obligations and liabilities hereunder.
Guarantor's obligations and liabilities under this Agreement are primary,
absolute and unconditional under any and all circumstances and until the
Guaranteed Obligations are fully and finally satisfied, such obligations and
liabilities shall not be discharged or released, in whole or in part,
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by any act or occurrence which might, but for this Paragraph 5, be deemed a
legal or equitable discharge or release of a Guarantor.
6. SUCCESSORS AND ASSIGNS.
This Guaranty shall inure to the benefit of Landlord (and its
successors and assigns) and shall be binding upon Guarantor, and its successors
and assigns, including any trustee appointed under chapters 11 or 7 of the
Bankruptcy Code and any responsible officer or examiner appointed for the
Guarantor. All references herein to "Landlord" shall mean the above-named
Landlord and any subsequent owner of Landlord's interest in the Leases. No
transfer by Guarantor of its obligations hereunder shall operate to release
Guarantor from such obligations, except as provided in the Settlement
Agreement.
7. REMEDIES CUMULATIVE.
All rights, remedies and recourses afforded to Landlord by
reason of this Guaranty, or otherwise, may be enforced as to any one or more
breaches either separately or cumulatively, may be pursued separately,
successively or concurrently, as occasion therefore shall arise, are
non-exclusive and shall in no way limit or prejudice any other legal or
equitable right, remedy or recourse which Landlord may have.
8. SUBORDINATION; NO SUBROGATION.
If for any reason whatsoever Tenant now or hereafter becomes
indebted to Guarantor or any affiliate of Guarantor, such indebtedness and all
interest thereon shall at all times be subordinate in all respects to the
Guaranteed Obligations. Notwithstanding anything to the contrary contained in
this Guaranty or any payments made by Guarantor, Guarantor shall not have any
right of subrogation in or under the Leases or to participate in the rights and
benefits accruing to Landlord thereunder, with all such rights of subrogation
and participation, together with all of the contractual, statutory, or common
law rights which Guarantor may have to be reimbursed for any payments Guarantor
may make to or performance by Guarantor of any of the Guaranteed Obligations
for the benefit of, Landlord pursuant to this Guaranty being hereby expressly
waived and released.
9. GOVERNING LAW.
This Guaranty and all rights and duties of Guarantor arising
from this Guaranty shall be governed by, construed and enforced in accordance
with the laws of the State of California, without regard to the conflict of law
rules of such State. Any and all disputes involving the validity,
interpretation, effect, or enforcement of this Guaranty shall be determined by
the Bankruptcy Court without a jury trial and in a contested matter as a "core
proceeding" (as such term is defined in 28 U.S.C. ss. 157 or any successor
provision), and the Bankruptcy Court shall be the exclusive forum to hear,
determine and enter appropriate orders and judgments regarding all such
disputes until
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the closing of the Bankruptcy Case. After closing of the Bankruptcy Case, the
waiver of jury trial contained hereinabove shall be of no further force and
effect and any and all disputes arising under or relating to this Guaranty
shall be litigated in either the State Courts of California or the Federal
District Court for the Central District of California, and all related
appellate courts, and the parties hereby consent to jurisdiction of such
courts.
10. SEVERABILITY.
If any provision of this Guaranty or the application thereof
to any person or circumstance shall, for any reason and to any extent, be
invalid or unenforceable, neither the remainder of this Guaranty nor the
application of such provision to any other persons or circumstances shall be
affected thereby, but rather the same shall be enforced to the greatest extent
permitted by law.
11. ATTORNEYS' FEES.
If Landlord or Guarantor brings any action to interpret or
enforce this Guaranty, or for damages for any alleged breach thereof, the
prevailing party in any such action shall be entitled to reasonable attorneys'
fees and costs as awarded by the court in addition to all other recovery,
damages and costs.
12. CONFIRMATION.
At any time, and at the request of Landlord, Guarantor shall
execute and deliver to Landlord a certificate ratifying and confirming all of
Guarantor's obligations and liabilities under this Guaranty.
13. BENEFIT TO GUARANTOR.
Guarantor acknowledges that it will benefit from the
execution and continued existence of the Leases, and Guarantor further
acknowledges that Landlord will be relying upon Guarantor's guarantee,
representations, warranties and covenants contained herein.
14. NOTICES.
All notices, requests and demands to be made hereunder to the
Guarantor or the Landlord shall be made in writing to the addresses set forth
below and shall be given by any of the following means: (a) personal service;
(b) electronic communication, whether by telex, telegram or telecopying; (c)
certified or registered mail, postage prepaid, return receipt requested; or (d)
nationally recognized courier or delivery service. Such addresses may be
changed by notice given in the same manner as provided above. Any notice,
demand or request sent pursuant to either clause (a), (b) or (d) above shall be
deemed received upon the actual delivery thereof, and, if sent pursuant to
clause (c) above, shall be deemed received five (5) days following deposit
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in the mail. Refusal to accept delivery of any notice, request or demand shall
be deemed to be delivery thereof. In the event Landlord notifies Guarantor of
the name and address of Landlord's lender, Guarantor shall cause a copy of all
notices delivered to Landlord by Guarantor to be concurrently therewith
delivered to such lender.
If to Guarantor: Mariner Post Acute Network, Inc.
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: General Counsel
Facsimile No.: (000) 000-0000
With a copy to: Powell, Goldstein, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Landlord Nationwide Health Properties, Inc.
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
With a copy to: O'Melveny & Xxxxx
610 Newport Center Drive, Suite 1700
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chairman, Real Estate Department
Facsimile No.: (000) 000-0000
15. INCORPORATION OF RECITALS. The Recitals set forth
above are hereby incorporated by this reference and made a part of this
Guaranty. Guarantor hereby represents and warrants that the Recitals are true
and correct.
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EXECUTED as of the date first set forth above.
"GUARANTOR"
MARINER POST-ACUTE NETWORK, INC.
A Delaware corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
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EXHIBIT A
DESCRIPTION OF LEASES
1. Lease and Security Agreement dated September 26, 1991 insofar as it
relates to Driftwood Manor (Hayward), Driftwood San Xxxx (Almaden
Health and Rehabilitation Center), and Driftwood Santa Xxxx, as
amended ("California Driftwood Lease");
2. Lease dated April 20, 1994 with respect to Monterey Palms Health Care
Center, Palm Desert, California, as amended (the "California Monterey
Palms Lease" and with the California Driftwood Lease, the "California
Leases");
3. Lease dated May 1, 1989 with respect to Care Inn Convalescent Center,
LaSalle, Illinois, as amended (the "Illinois LaSalle Lease"); and
4. Lease dated May 1, 1989 with respect to Litchfield Convalescent
Center, Litchfield, Illinois, as amended (the "Illinois Litchfield
Lease" and with the Illinois LaSalle Lease, the "Illinois Leases").
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