EXHIBIT 10.75
CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP
This Continuing Agreement of Guaranty and Suretyship (the "Guarantee") is
made and entered into as of this 23rd day of December, 1998, by and between the
Guarantors, each a Subsidiary of Mariner Health Group, Inc., a Delaware
corporation, listed on Schedule I hereto (collectively the "Guarantors" and each
individually a "Guarantor") in favor of PNC BANK, NATIONAL ASSOCIATION, a
national banking association, in its capacity as administrative agent ("Agent")
for the benefit of the Banks (as hereinafter defined and hereinafter referred to
collectively as the "Bank" or "Banks").
BACKGROUND
In order to induce the Agent and the Banks to make loans to MARINER HEALTH
GROUP, INC., a Delaware corporation (the "Borrower"), in accordance with that
certain Term Loan Agreement of even date herewith (as it may hereafter from time
to time be amended, restated, modified or supplemented, the "Term Loan
Agreement") by and between the Borrower, the Agent, First Union National Bank,
as syndication agent and the banks party thereto (the "Banks"), each Guarantor
hereby unconditionally and irrevocably guarantees and becomes surety as though
he was a primary obligor for the full and timely payment when due, whether at
maturity, by declaration, acceleration or otherwise, of the principal of and
interest and fees on all Loans (as defined in the Term Loan Agreement), both
those now in existence and those that shall hereafter be made, of the Bank to
the Borrower under the Term Loan Agreement and the Notes issued by the Borrower
in connection therewith and any extensions, renewals, replacements or refundings
thereof, and each and every other obligation or liability (both those now in
existence and those that shall hereafter arise and including, without
limitation, all costs and expenses of enforcement and collection, including
reasonable attorney's fees) of the Borrower to the Bank under the Term Loan
Agreement and the other Loan Documents (as defined in the Term Loan Agreement)
except this Agreement, and any extensions, renewals, replacements or refundings
thereof (hereinafter referred to as the "Guaranteed Indebtedness"), whether or
not such Guaranteed Indebtedness or any portion thereof shall hereafter be
released or discharged or is for any reason invalid or unenforceable.
1. Capitalized terms used herein and not otherwise defined herein shall
have such meanings given to them in the Term Loan Agreement.
2. Each Guarantor agrees to make such full payment forthwith upon demand of
the Bank when the Guaranteed Indebtedness or any portion thereof is due to be
paid by the Borrower to the Agent and the Banks, whether at stated maturity, by
declaration, acceleration or otherwise. Each Guarantor agrees to make such full
payment irrespective of whether or not any one or more of the following events
has occurred: (i) the Agent and the Banks, or any of them, have made any demand
on the Borrower or the other Guarantor; (ii) the Agent and the Banks, or any of
them, have taken any action of any nature against the Borrower or the other
Guarantor; (iii) the Agent and the Banks, or any of them, have pursued any
rights which it has against any other
Person who may be liable for the Guaranteed Indebtedness; (iv) the Agent and the
Banks, or any of them, holds or has resorted to any security for the Guaranteed
Indebtedness; or (v) the Bank has invoked any other remedy or right it has
available with respect to the Guaranteed Indebtedness. Each Guarantor further
agrees to make full payment to the Agent and the Banks even if circumstances
exist which otherwise constitute a legal or equitable discharge of such
Guarantor as surety or guarantor.
3. Each Guarantor warrants to the Agent and the Banks that: (i) no other
agreement, representation or special condition exists between such Guarantor and
the Agent or any of the Banks regarding the liability of such Guarantor
hereunder, nor does any understanding exist between such Guarantor and the Agent
or any of the Banks that the obligations of such Guarantor hereunder are or will
be other than as set forth herein; and (ii) as of the date hereof, such
Guarantor has no defense whatsoever to any action or proceeding that may be
brought to enforce this Guarantee.
4. Each Guarantor waives and agrees not to enforce any of the rights of
such Guarantor against the Borrower or any other Guarantor, including, but not
limited to: (i) any right of such Guarantor to be subrogated in whole or in part
to any right or claim with respect to any Guaranteed Indebtedness or any portion
thereof to the Agent and the Banks or any of them which might otherwise arise
from payment by any Guarantor to the Agent and the Banks, or any of them, on the
account of the Guaranteed Indebtedness or any portion thereof; and (ii) any
right of any Guarantor to require the marshalling of assets of the Borrower or
any other Guarantor which might otherwise arise from payment by any Guarantor to
the Bank on account of the Guaranteed Indebtedness or any portion thereof. If
any amount shall be paid to any Guarantor in violation of the preceding
sentence, such amount shall be deemed to have been paid to such Guarantor for
the benefit of, and held in trust for the benefit of, the Agent and the Banks
and shall forthwith be paid to the Agent to be Term Loaned and applied upon the
Guaranteed Indebtedness, whether matured or unmatured, in accordance with the
terms of the Term Loan Agreement. Each Guarantor acknowledges that such
Guarantor will receive direct and indirect benefits from the financing
arrangements contemplated by the Term Loan Agreement and that the waivers set
forth in this Section are knowingly made in contemplation of such benefits.
5. Each Guarantor waives promptness and diligence by the Agent and the
Banks, or any of them, with respect to his rights under the Term Loan Agreement
or any of the other Loan Documents, including, but not limited to, this
Guarantee.
6. Each Guarantor waives any and all notice with respect to: (i) acceptance
by the Agent and the Banks of this Guarantee; (ii) the provisions of any note,
instrument or agreement relating to the Guaranteed Indebtedness; and (iii) any
default in connection with the Guaranteed Indebtedness.
7. Each Guarantor waives any presentment, demand, notice of dishonor or
nonpayment, protest, and notice of protest in connection with the Guaranteed
Indebtedness.
8. Each Guarantor agrees that the Agent and the Banks, or any of them, may
from time to time and as many times as such Agent or any Bank, in its sole
discretion, deems
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appropriate, do any of the following without notice to any Guarantor and without
adversely affecting the validity or enforceability of this Guarantee: (i)
release, surrender, exchange, compromise, or settle the Guaranteed Indebtedness
or any portion thereof; (ii) change, renew, or waive the terms of the Guaranteed
Indebtedness or any portion thereof; (iii) change, renew, or waive the terms,
including without limitation, the rate of interest charged to the Borrower or
any Guarantor, of any note, instrument, or agreement relating to the Guaranteed
Indebtedness or any portion thereof; (iv) grant any extension or indulgence with
respect to the payment to the Agent and the Banks, or any of them, of the
Guaranteed Indebtedness or any portion thereof; (v) enter into any agreement of
forbearance with respect to the Guaranteed Indebtedness or any portion thereof;
(vi) release, surrender, exchange or compromise any security held by the Agent
and the Banks, or any of them, for the Guaranteed Indebtedness; (vii) release
any Person who is a guarantor or surety or who has agreed to purchase the
Guaranteed Indebtedness or any portion thereof; and (viii) release, surrender,
exchange or compromise any security or Lien held by the Agent and the Banks, or
any of them, for the liabilities of any Person who is a guarantor or surety for
the Guaranteed Indebtedness or any portion thereof. Each Guarantor agrees that
the Agent and the Banks may do any of the above as it deems necessary or
advisable, in its sole discretion, without giving any notice to any Guarantor,
and that each Guarantor will remain liable for full payment to the Agent and the
Banks of the Guaranteed Indebtedness.
9. Each Guarantor agrees to be jointly and severally bound by the terms of
this Guarantee and jointly and severally liable under this Guarantee. As a
result of such liability, each Guarantor acknowledges that the Agent and the
Banks may, in their sole discretion, elect to enforce this Guarantee for the
total Guaranteed Indebtedness against any Guarantor without any duty or
responsibility to pursue any other Guarantor and that such an election by the
Agent and the Banks, or any of them, shall not be a defense to any action the
Agent and the Banks, or any of them, may elect to take against any Guarantor.
10. If any amount owing hereunder shall have become due and payable (by
acceleration or otherwise), the Agent or any Bank and any branch, subsidiary or
affiliate of the Agent or any of the Banks anywhere in the world shall each have
the right, at any time and from time to time to the fullest extent permitted by
Law, in addition to all other rights and remedies available to it, without prior
notice to any Guarantor, to set-off against and to appropriate and apply to such
due and payable amounts any debt owing to, and any other funds held in any
manner for the account of any Guarantor by the Agent or any Bank or any such
branch, subsidiary or affiliate including, without limitation, all funds in all
deposit accounts (whether time or demand, general or special, provisionally Term
Loaned or finally Term Loaned, or otherwise) now or hereafter maintained by any
Guarantor with the Agent or any of the Banks or such branch, subsidiary or
affiliate. Such right shall exist whether or not the Agent or any of the Banks
shall have given notice or made any demand hereunder or under any of the Notes
or Loan Documents, whether or not such debt owing to or funds held for the
account of any Guarantor is or are matured or unmatured, and regardless of the
existence or adequacy of any collateral, guarantee or any other security, right
or remedy available to the Bank. Each Guarantor hereby consents to and confirms
the foregoing arrangements, and confirms the Agents and each of the Banks'
rights and each such branch's, subsidiary's and affiliate's rights of banker's
lien and set-off.
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11. Each Guarantor recognizes and agrees that the Borrower, after the date
hereof, may incur additional Indebtedness or other obligations, fees and
expenses to the Agent and the Banks under the Term Loan Agreement, refinance
existing Guaranteed Indebtedness or pay existing Guaranteed Indebtedness and
subsequently incur additional Indebtedness to the Agent and the Banks under the
Term Loan Agreement, and that in any such transaction, even if such transaction
is not now contemplated, the Agent and the Banks will rely in any such case upon
this Guarantee and the enforceability thereof against each Guarantor and that
this Guarantee shall remain in full force and effect with respect to such future
Indebtedness of the Borrower to the Agent and the Banks and such Indebtedness
shall for all purposes constitute Guaranteed Indebtedness.
12. Each Guarantor further agrees that, if at any time all or any part of
any payment, from whomever received, theretofore applied by the Agent and the
Banks, or any of them, to any of the Guaranteed Indebtedness is or must be
rescinded or returned by such Agent or Bank for any reason whatsoever including,
without limitation, the insolvency, bankruptcy or reorganization of any
Guarantor, such liability shall, for the purposes of this Guarantee, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by the Agent and the
Banks, or any of them, and this Guarantee shall continue to be effective or be
reinstated, as the case may be, as to such liabilities, all as though such
application by the Agent and the Banks, or any of them, had not been made.
13. Each Guarantor agrees that no failure or delay on the part of the Agent
and the Banks, or any of them, to exercise any of their rights, powers or
privileges under this Guarantee shall be a wavier of such rights, powers or
privileges or a waiver of any default, nor shall any single or partial exercise
of any of the Agent's or any Bank's rights, powers or privileges preclude other
or further exercise thereof or the exercise of any other right, power or
privilege or be construed as a waiver of any default. Each Guarantor further
agrees that no waiver or modification of any rights of the Agent and the Banks
under this Guarantee shall be effective unless in writing and signed by the
Agent and the Banks. Each Guarantor further agrees that each written waiver
shall extend only to the specific instance actually recited in such written
waiver and shall not impair the rights of the Agent and the Banks in any other
respect.
14. Each Guarantor unconditionally agrees to pay all costs and expenses,
including attorney's fees, incurred by the Agent and the Banks, or any of them,
in enforcing this Guarantee against any Guarantor.
15. Each Guarantor agrees that this Guarantee and the rights and
obligations of the parties hereto shall for all purposes be governed by and
construed and enforced in accordance with the substantive law of the
Commonwealth of Pennsylvania without giving effect to its principles of conflict
of laws.
16. Each Guarantor recognizes that this Guarantee when executed constitutes
a sealed instrument and as a result the instrument will be enforceable as such
without regard to any statute of limitations which might otherwise be applicable
and without any consideration.
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17. Each Guarantor acknowledges that in addition to binding itself to this
Guarantee, at the time of execution of this Guarantee the Agent offered to such
Guarantor a copy of this Guarantee in the form in which it was executed and that
by acknowledging this fact such Guarantor may not later be able to claim that a
copy of the Guarantee was not received by it.
18. Each Guarantor agrees that this Guarantee shall be binding upon each
Guarantor, its successors and assigns; provided, however, that no Guarantor may
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assign or transfer any of its rights and obligations hereunder or any interest
herein. Each Guarantor further agrees that (i) this Guarantee is freely
assignable and transferable by the Agent or any Bank in connection with any
assignment or transfer of the Guaranteed Indebtedness and (ii) this Guarantee
shall inure to the benefit of the Agent and the Banks, their successors and
assigns.
19. Each Guarantor hereby acknowledges that it has a received a copy of the
Term Loan Agreement and the other Loan Documents and each Guarantor certifies
that the representations and warranties made therein with respect to such
Guarantor are true and correct. Further, each Guarantor acknowledges and agrees
to perform, comply with and be bound by all of the provisions of the Term Loan
Agreement and the other Loan Documents including, without limitation, those
covenants contained in Sections 8.01 and 8.02 of the Term Loan Agreement.
20. Each Guarantor agrees that if any Guarantor fails to perform any
covenant or agreement hereunder or if there occurs an Event of Default under the
Term Loan Agreement, all or any part of the Guaranteed Indebtedness may be
declared to be forthwith due and payable and, in the case of an Event of Default
described in Sections 9.01(p) and 9.01(q) of the Term Loan Agreement, the
Guaranteed Indebtedness shall be immediately due and payable, in any case
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived.
21. Each Guarantor agrees that the enumeration of the Agents and the Banks'
rights and remedies set forth in this Guarantee is not intended to be exhaustive
and the exercise by the Agent and the Banks, or any of them, of any right or
remedy shall not preclude the exercise of any other rights or remedies, all of
which shall be cumulative and shall be in addition to any other right or remedy
given hereunder or under any other agreement among the parties to the Loan
Documents or which may now or hereafter exist at law or in equity or by suit or
otherwise.
22. Each Guarantor agrees that all notices, statements, requests, demands
and other communications under this Guarantee shall be given to each of the
Guarantors at its Chief Executive Office at c/o Mariner Health Group, Inc., Xxx
Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, or at such other office or
offices as the Guarantors may advise, in writing, the Agent.
23. (a) Each Guarantor agrees that the provisions of this Guarantee are
severable, and in an action or proceeding involving any state or federal
bankruptcy, insolvency or other law affecting the rights of Term Loanors
generally:
(i) if any clause or provision shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction and shall not in any manner affect such clause or
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provision in any other jurisdiction, or any other clause or provision in this
Guarantee in any jurisdiction.
(ii) if this Guarantee would be held or determined to be void, invalid
or unenforceable on account of the amount of a Guarantor's aggregate liability
under this Guarantee, then, notwithstanding any other provision of this
Guarantee to the contrary, the aggregate amount of such liability shall, without
any further action by the Agent or any of the Banks, such Guarantor or any other
Person, be automatically limited and reduced to the highest amount which is
valid and enforceable as determined in such action or proceeding, which (without
limiting the generality of the foregoing) may be an amount which is not greater
than the greater of:
(A) the fair consideration actually received by such Guarantor under
the terms of and as a result of the Loan Documents, including, without
limiting the generality of the foregoing, and to the extent not
inconsistent with applicable federal and state laws affecting the
enforceability of guarantees, distributions or advances made to such
Guarantor with the proceeds of any Term Loan extended under the Loan
Documents in exchange for its guaranty of the Guaranteed Indebtedness, or
(B) the excess of (1) the amount of the fair saleable value of the
assets of such Guarantor as of the date of this Guarantee as determined in
accordance with applicable federal and state laws governing determinations
of the insolvency of debtors as in effect on the date thereof over (2) the
amount of all liabilities of such Guarantor as of the date of this
Guarantee, also as determined on the basis of applicable federal and state
laws governing the insolvency of debtors as in effect on the date thereof.
(b) If the guarantee by any one or more Guarantors of the Guaranteed
Indebtedness is held or determined to be void, invalid or unenforceable, in
whole or in part, such holding or determination shall not impair or affect:
(i) the validity and enforceability of the guarantee hereunder by any
other Guarantor, which shall continue in full force and effect in accordance
with its terms; or
(ii) the validity and enforceability of any clause or provision not
so held to be void, invalid or unenforceable.
24. EACH GUARANTOR AGREES UPON THE OCCURRENCE OF AN EVENT OF DEFAULT (AS
DEFINED IN THE TERM LOAN AGREEMENT) OR A DEFAULT HEREUNDER, ANY ATTORNEY OF ANY
COURT OF RECORD IS EMPOWERED WITHIN THE UNITED STATES OF AMERICA, OR ELSEWHERE,
TO APPEAR FOR EACH GUARANTOR AND, WITH OR WITHOUT A DECLARATION FILED, TO
CONFESS JUDGMENT OR A SERIES OF JUDGMENTS AGAINST EACH GUARANTOR IN FAVOR OF THE
AGENT AND THE BANKS, OR ANY OF THEM, AS OF ANY TERM OR TERMS, FOR ANY AND ALL
SUMS THEN PAYABLE UNDER THE TERMS OF THE LOAN DOCUMENTS FOR WHICH JUDGMENT HAS
NOT THERETOFORE BEEN ENTERED, TOGETHER WITH COSTS OF SUIT AND A REASONABLE
ATTORNEY'S COMMISSION FOR COLLECTION, AND EACH
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GUARANTOR HEREBY FOREVER WAIVES AND RELEASES ANY AND ALL ERRORS IN SAID
PROCEEDINGS, WAIVES STAY OF EXECUTION, STAY, CONTINUANCE OR ADJOURNMENT OF SALE
ON EXECUTION, THE RIGHT TO PETITION TO SET ASIDE SALE OR ORDER A RESALE, THE
RIGHT TO EXCEPT TO THE SHERIFF'S SCHEDULE OF PROPOSED DISTRIBUTION, THE RIGHT OF
INQUISITION AND EXTENSION OF TIME OF PAYMENT, AND AGREES TO CONDEMNATION OF ANY
PROPERTY LEVIED UPON BY VIRTUE OF ANY EXECUTION ISSUED ON ANY SUCH JUDGMENT, AND
EACH GUARANTOR SPECIFICALLY WAIVES ALL EXEMPTIONS FROM LEVY AND SALE OF ANY
PROPERTY THAT NOW IS OR MAY HEREAFTER BE EXEMPT UNDER THE EXISTING OR FUTURE
LAWS OF THE UNITED STATES OF AMERICA, OR OF THE COMMONWEALTH OF PENNSYLVANIA OR
OF ANY OTHER JURISDICTION.
25. EACH GUARANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS GUARANTEE. EACH GUARANTOR (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE AGENT AND THE BANKS, OR ANY OF THEM, HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER, AND EXECUTION AND DELIVERY HEREOF BY EACH
GUARANTOR, AND (II) ACKNOWLEDGES THAT THE ENTERING INTO OF THE TERM LOAN
AGREEMENT BY THE AGENT AND THE BANKS HAS BEEN INDUCED BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION.
26. Each Guarantor (i) hereby irrevocably submits to the nonexclusive
jurisdiction of the Court of Common Pleas of Allegheny County, Commonwealth of
Pennsylvania, or any successor to said court, and to the nonexclusive
jurisdiction of the United States District Court for the Western District of
Pennsylvania, or any successor to said court (hereinafter referred to as the
"Pennsylvania Courts") for purposes of any suit, action or other proceeding
which relates to this Guarantee or any other Loan Document, (ii) to the extent
permitted by applicable Law, hereby waives and agrees not to assert by way of
motion, as a defense or otherwise in any such suit, action or proceeding, any
claim that such Guarantor is not personally subject to the jurisdiction of the
Pennsylvania Courts; that such suit, action or proceeding is brought in an
inconvenient forum; that the venue of such suit, action or proceeding is
improper; or that this Guarantee or any Loan Document may not be enforced in or
by the Pennsylvania Courts, (iii) hereby agrees not to seek, and hereby waives,
any collateral review by any other court, which may be called upon to enforce
the judgment of any of the Pennsylvania Courts, of the merits of any such suit,
action or proceeding or the jurisdiction of the Pennsylvania Courts, and (iv)
waives personal service of any and all process upon it and consents that all
such service of process by made by certified or registered mail addressed as
provided in Section 22 hereof and service so made shall be deemed to be
completed upon actual receipt thereof. Nothing herein
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shall limit the Agent or any Banks' right to bring any suit, action or other
proceeding against any Guarantor or any of Guarantor's assets or to serve
process on any Guarantor by any means authorized by Law.
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[SIGNATURE PAGE 1 OF 1 TO GUARANTY AND SURETYSHIP AGREEMENT]
IN WITNESS WHEREOF, each Guarantor intending to be legally bound, has
executed this Guarantee as of the date first above written with the intention
that this Guarantee shall constitute a sealed instrument.
GUARANTORS:
ATTEST: EACH SUBSIDIARY OF MARINER HEALTH GROUP, INC.
WHICH IS A CORPORATION AND WHICH IS LISTED AS
A "COMPANY" ON SCHEDULE 6.01(c) OF THE CREDIT
AGREEMENT BOTH FOR ITSELF AND, IF APPLICABLE:
(i) AS GENERAL PARTNER OF EACH OTHER
SUBSIDIARY OF MARINER HEALTH GROUP, INC. WHICH
IS A PARTNERSHIP AND WHICH IS LISTED AS A
"COMPANY" ON SCHEDULE 6.01(c) OF THE CREDIT
AGREEMENT, AND (ii) AS A MEMBER OF EACH OTHER
SUBSIDIARY OF MARINER HEALTH GROUP, INC. WHICH
IS A LIMITED LIABILITY COMPANY AND WHICH IS
LISTED AS A "COMPANY" ON SCHEDULE 6.01(c) OF
THE CREDIT AGREEMENT.
By:____________________________ By: _____________________________
Name: Xxxxxxx X. Xxxxx Name: Xxxx X. Xxxxxx
Title: Secretary of each of the Title: Vice President/Treasurer of
foregoing corporations each of the foregoing corporations
[SEAL]
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SCHEDULE I
List of Guarantors: See Schedule 6.01(c) to the Credit Agreement
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