Exhibit 10.7
Structural Guaranty
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GUARANTY
AND AGREEMENT OF SURETYSHIP
from
GENESIS HEALTH VENTURES, INC.
and its
MATERIAL SUBSIDIARIES
Dated as of July 24, 1996
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GUARANTY AND AGREEMENT OF SURETYSHIP
THIS GUARANTY AND AGREEMENT OF SURETYSHIP, dated as of July 24, 1996,
is made by GENESIS HEALTH VENTURES, INC., a Pennsylvania corporation ("Genesis")
and the Material Subsidiaries set forth on Schedule 1 (the "Material
Subsidiaries") (Genesis and each of the Material Subsidiaries are individually a
"Guarantor" and collectively referred to herein, in their capacity as guarantors
hereunder, as the "Guarantors") in favor of the Beneficiaries (as hereinafter
defined).
W I T N E S S E T H:
WHEREAS, contemporaneously herewith, Genesis Eldercare Properties, Inc.
("Lessee"), as Lessee, Mellon Financial Services Corporation #4 ("Lessor"), as
Lessor, the Persons named on Schedule 2 attached hereto, as Lenders and Mellon
Bank, N.A., as Agent have entered into that certain Participation Agreement, and
Lessee and Lessor have entered into that certain Lease and Agreement, each dated
as of July 24, 1996. The Participation Agreement and the Lease and Agreement, as
they each may be modified, amended or restated from time to time as and to the
extent permitted thereby, are hereinafter referred to as the "Participation
Agreement" and "Lease" respectively. Unless otherwise defined herein or the
context hereof otherwise requires, terms which are defined or defined by
reference in the Participation Agreement or Lease shall have the same meanings
when used herein as such terms have therein; and
WHEREAS, Lessor has entered into a Loan Agreement dated as of even date
herewith (as amended or otherwise modified from time to time, the "Loan
Agreement" by and among Lessor, Lenders and Agent, pursuant to which the Lenders
have agreed to make a loan to Lessor, as evidenced by those certain non-recourse
promissory notes (the "Notes") from Lessor to Agent and secured by those certain
Mortgages and Deeds of Trust (the "Mortgages") made by Lessor to Agent, as agent
for the Lenders and those certain Assignments of Lease from Lessor to Agent, as
agent for the Lenders (the "Assignments of Lease").
WHEREAS, Lessee is a wholly-owned subsidiary of Genesis and each of the
Material Subsidiaries are Subsidiaries of Genesis; and
WHEREAS, it is a covenant in the Participation Agreement that Lessee
shall cause the Guarantors to execute and deliver this Guaranty; and
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WHEREAS, it is in the best interests of Guarantors that the Overall
Transaction and the Document Closing Date occur; and
WHEREAS, this Guaranty, and the execution, delivery and performance
hereof, have been duly authorized by all necessary corporate action of
Guarantors;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Guarantors, Guarantors hereby agree as follows:
SECTION 1. Guarantee and Agreement of Suretyship. Guarantors hereby
jointly and severally, irrevocably and unconditionally guarantee to the
Beneficiaries and agree to act as surety to the Beneficiaries for (a) the full
and prompt payment when due, whether by acceleration or otherwise, and at all
times thereafter, and (b) the full and prompt performance, of all of the
Liabilities (as hereinafter defined), including interest and Yield on any such
Liabilities, whether accruing before or after any bankruptcy or insolvency case
or proceeding involving Lessee or any other Person, and, if interest or Yield on
any portion of such obligations ceases to accrue by operation of law by reason
of the commencement of such case or proceeding, including such interest and
Yield as would have accrued on any such portion of such obligations if such case
or proceeding had not commenced, and further agree to pay all expenses
(including attorneys' fees and legal expenses) paid or incurred by Lessor, Agent
or any of the Lenders (each a "Beneficiary") in endeavoring to collect the
Liabilities, or any part thereof, and in enforcing this Guaranty. The term
"Liabilities", as used herein, shall mean all of the following, in each case
howsoever created, arising or evidenced, whether direct or indirect, joint or
several, absolute or contingent, or now or hereafter existing, or due or to
become due: (i) all of the Equity Amount and Yield accrued thereon; (ii) all
principal of the Notes and any interest accrued thereon; and (iii) all
additional amounts and other sums (other than Basic Rent) at any time due and
owing, and required to be paid, to Lessor and/or the Beneficiaries under the
terms of the Lease, the Participation Agreement or any other Operative Document
(whether or not Lessee or any other Person shall be released or relieved from
any or all liability or obligation under any thereof); provided, however, that
if Lessee duly and timely exercises and consummates the Sale Option pursuant to
Sections 6.3, 6.4 and 6.6 of the Lease, the amount guaranteed under clauses (i)
and (ii) hereof shall not exceed the aggregate amounts required to be paid by
Lessee pursuant to the Lease in connection with such exercise. If Lessee does
not duly and timely exercise and consummate the Sale Option pursuant to
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Section 6.6, then Guarantors shall be liable for the full amounts due under
clauses (i) through (iii) without limitation.
In any action or proceeding involving any state corporate law, or any
state or federal bankruptcy, insolvency, reorganization or any other law
affecting the rights of creditors generally, if the obligations of Guarantor
under this Guaranty would otherwise be held or determined by a final and
non-appealable order of a court of competent jurisdiction to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under this Guaranty, then, notwithstanding any
other provision hereof to the contrary, the amount of such liability shall,
without any further action by 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 pursuant to such final and
non-appealable order.
Guarantors agree that, in the event of the dissolution, bankruptcy or
insolvency of Lessee, or the inability or failure of Lessee to pay debts as they
become due, or an assignment by Lessee for the benefit of creditors, or the
commencement of any case or proceeding in respect of Lessee under any
bankruptcy, insolvency or similar laws, and if such event shall occur at a time
when any of the Liabilities may not then be due and payable, Guarantors will pay
to the Beneficiaries forthwith the full amount which would be payable hereunder
by Guarantors as if all Liabilities were then due and payable.
Guarantors agree that, in the event of the dissolution, bankruptcy or
insolvency of Lessor, or the inability or failure of Lessor to pay debts as they
become due, or an assignment by Lessor for the benefit of creditors, or the
commencement of any case or proceeding in respect of Lessor under any
bankruptcy, insolvency or similar laws, and if such event (a "Lessor Bankruptcy
Event") shall occur at a time when any of the Liabilities may not then be due
and payable, Guarantors will pay to the Beneficiaries from time to time all
Liabilities then or thereafter due under the Operative Documents pursuant to
their terms or if the provisions of the immediately preceding paragraph are
applicable, at the time specified in the immediately preceding paragraph, all as
if such Lessor Bankruptcy Event shall not have occurred.
To secure all obligations of Guarantors hereunder, each Beneficiary
shall have a lien upon and security interest in (and may, without demand or
notice of any kind, at any time and from time to time when any amount shall be
due and payable by Guarantors hereunder, appropriate and apply toward the
payment of
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such amount, in such order of application as the Agent may elect) any and all
balances, credits, deposits, accounts or moneys of or in the name of Guarantors
or any of its Affiliates now or hereafter, for any reason or purpose whatsoever,
in the possession or control of, or in transit to Lessor or any Beneficiary or
any agent or bailee for Lessor or any Beneficiary. Each Beneficiary shall
provide prompt written notice to the Agent of the exercise by such Beneficiary
of its rights under this paragraph, which notice shall set forth in reasonable
detail the amount of such application and shall remit such amount to Agent or as
Agent may direct.
The obligations of the Guarantors hereunder are secured by the Joint
Stock Collateral as set forth in the Amended and Restated Security Agreement
dated as of September 29, 1995, as amended, among Genesis and certain of its
subsidiaries and Mellon Bank, N.A. as Collateral Agent, subject to the terms and
provisions of that certain Amended and Restated Collateral Agency Agreement
dated as of September 29, 1995, as amended, among Genesis, such subsidiaries and
Mellon Bank, N.A., as RCA Agent, ACA Agent and Collateral Agent.
This Agreement shall constitute an agreement of suretyship as well as
of guaranty and shall constitute an absolute and unconditional guaranty of
payment and performance (and not of collection) and an absolute and
unconditional undertaking by each Guarantor with respect to the payment and
performance of the Liabilities. This Guaranty shall remain in full force and
effect (notwithstanding, without limitation, the dissolution of any of the
Guarantors). The liability of the Guarantors hereunder shall be direct, joint
and several, and may be enforced without the Beneficiaries being required to
resort to any other right, remedy or security.
Agent on behalf of itself and the other Beneficiaries, may, from time
to time at its discretion and without notice to Guarantors, but subject to the
provisions of the Participation Agreement, take or cause any of the other
Beneficiaries to take, any or all of the following actions, subject to the terms
of the Credit Agreement as in effect on the date hereof as such Credit Agreement
may be amended under the Participation Agreement with the consent of Agent (on
behalf of the Participants) and subject to the provisions of the Collateral
Agency Agreement with respect to the Joint Stock Collateral: (a) retain or
obtain a lien upon or a security interest in any property to secure any of the
Liabilities or any obligation hereunder; (b) retain or obtain the primary or
secondary obligation of any obligor or obligors, in addition to Guarantors, with
respect to any of the Liabilities; (c) extend or renew for one or more periods
(regardless of
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whether longer than the original period), alter or exchange any of the
Liabilities, or release or compromise any obligation of Guarantors hereunder or
any obligation of any nature of any other obligor with respect to any of the
Liabilities; (d) release or fail to perfect its lien upon or security interest
in, or impair, surrender, release or permit any substitution or exchange for,
all or any part of any property securing any of the Liabilities or any
obligation hereunder, or extend or renew for one or more periods (regardless of
whether longer than the original period) or release, compromise, alter or
exchange any obligations of any nature of any obligor with respect to any such
property; and (e) resort to Guarantors, or any one or more of them, for payment
of any of the Liabilities, regardless of whether Agent or any other Beneficiary
shall have resorted to any other Person any property securing any of the
Liabilities or any obligation hereunder or shall have proceeded against any
other obligor primarily or secondarily obligated with respect to any of the
Liabilities (all of the actions referred to in this paragraph being hereby
expressly waived by Guarantors).
SECTION 2. Guarantors' Obligations Unconditional. Guarantors'
obligations hereunder are independent in respect of any other Person, and each
Beneficiary may enforce any of its rights hereunder independently of any other
right or remedy that it may at any time hold with respect to the Liabilities or
any security or other guaranty therefor; provided that no double recovery of the
same amount shall be permitted. Such obligations shall be absolute and
unconditional, shall not be subject to any counterclaim, setoff, deduction,
diminution, abatement, recoupment, suspension, deferment, reduction or defense
(other than full and strict compliance by Guarantors with their obligations
hereunder), whether based upon any claim that Lessor, Lessee, Agent, any
Beneficiary or any other Person may have against any Beneficiary or any other
Person or otherwise, and shall remain in full force and effect without regard
to, and shall not be released, discharged or in any way affected by, any
circumstance or condition whatsoever (whether or not Guarantors or any other
Person shall have any knowledge or notice thereof) including, without
limitation:
(A) any amendment, modification, addition, deletion, supplement or
renewal to or of or other change in the Liabilities or any
Operative Document or any of the agreements referred to in any
thereof, or any other instrument or agreement applicable to
any Operative Document or any of the parties to such
agreements, or to the Sites, or any assignment, mortgage or
transfer thereof or of any interest therein, or any furnishing
or acceptance of additional security for, guaranty of
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or right of offset with respect to, any of the Liabilities; or
the failure of any security or the failure of any Beneficiary
to perfect or insure any interest in any collateral;
(B) any failure, omission or delay on the part of Lessor or any
Beneficiary to conform or comply with any term of any
instrument or agreement referred to in clause (A) above;
(C) any waiver, consent, extension, indulgence, compromise,
release or other action or inaction under or in respect of any
instrument, agreement, guaranty, right of offset or security
referred to in clause (A) above or any obligation or liability
of Lessor or any Beneficiary, or any exercise or non-exercise
by any Beneficiary of any right, remedy, power or privilege
under or in respect of any such instrument, agreement,
guaranty, right of offset or security or any such obligation
or liability;
(D) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding
with respect to Lessor or any Beneficiary or any other Person
or any of their respective properties or creditors, or any
action taken by any trustee, receiver or court in any such
proceeding;
(E) any limitation on the liability or obligations of any Person
under any Operative Document, the Liabilities, any collateral
security for the Liabilities, any other guaranty of the
Liabilities or any discharge, termination, cancellation,
frustration, irregularity, invalidity or unenforceability, in
whole or in part, of any of the foregoing or any other
agreement, instrument, guaranty or security referred to in
clause (A) above or any term of any thereof;
(F) any defect in the title, compliance with specifications,
condition, design, operation or fitness for use of, or any
damage to or loss or destruction of, or any interruption or
cessation in the use of the Sites by Lessee or any other
Person for any reason whatsoever (including, without
limitation, any governmental prohibition or restriction,
condemnation, requisition, seizure or any other act on the
part of any governmental or military authority, or any act of
God or of the public enemy) regardless of the duration
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thereof (even though such duration would otherwise constitute
a frustration of a lease), whether or not resulting from
accident and whether or not without fault on the part of
Lessee or any other Person;
(G) any merger or consolidation of Lessor, Lessee or Guarantors
into or with any other Person, or any sale, lease or transfer
of any of the assets of Lessor, Lessee or Guarantors to any
other Person;
(H) any change in the ownership of any shares of capital stock of
Lessor, Lessee or Guarantors or any corporate change in
Lessor, Lessee or Guarantors;
(I) any loan to or other transaction between the Beneficiaries, or
any of them, and Lessee or Lessor; or
(J) any other occurrence or circumstance whatsoever, whether
similar or dissimilar to the foregoing, and any other
circumstance that might otherwise constitute a legal or
equitable defense or discharge of the liabilities of a
guarantor or surety or that might otherwise limit recourse
against Guarantors.
The obligations of Guarantors set forth herein constitute the full
recourse obligations of Guarantors enforceable against them to the full extent
of all of their assets and properties, notwithstanding any provision in the
Lease or any other Operative Document or any other document or agreement to the
contrary.
Guarantors waive any and all notice of the creation, renewal, extension
or accrual of any of the Liabilities and notice of or proof of reliance by any
Beneficiary upon this Guaranty or acceptance of this Guaranty, and the
Liabilities, and any of them, shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Guaranty. Guarantors
unconditionally waive, to the extent permitted by law: (a) acceptance of this
Guaranty and proof of reliance by any Beneficiary hereon; (b) notice of any of
the matters referred to in clauses A through J above, or any right to consent or
assent to any thereof; (c) all notices that may be required by statute, rule of
law or otherwise, now or hereafter in effect, to preserve intact any rights
against Guarantors, including, without limitation, any demand, presentment,
protest, proof or notice of nonpayment under any Operative Document, and notice
of default or any failure on the part of Lessor to perform and comply with any
covenant, agreement, term or condition of any Operative Document; (d) any right
to the enforcement, assertion or exercise against Lessor of any right, power,
privilege or remedy conferred in any
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Operative Document or otherwise; (e) any requirement of diligence on the part of
any Person; (f) any requirement of any Beneficiary to take any action
whatsoever, to exhaust any remedies or to mitigate the damages resulting from a
default by any Person under any Operative Document; (g) any notice of any sale,
transfer or other disposition by any Person of any right under, title to or
interest in any Operative Document or the Sites; and (h) any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge,
release or defense of a guarantor or surety, or that might otherwise limit
recourse against Guarantors.
Guarantors agree that this Guaranty shall be automatically reinstated
if and to the extent that for any reason any payment by or on behalf of itself
or Lessor is rescinded or must be otherwise restored by any Beneficiary whether
as a result of any proceedings in bankruptcy or reorganization or otherwise.
Guarantors further agree that, without limiting the generality of this
Guaranty, if an Event of Default shall have occurred and be continuing and any
Beneficiary is prevented by applicable law from exercising its remedies under
the Operative Documents, such Beneficiary shall be entitled to receive hereunder
from Guarantors, upon demand therefor, the sums which would have otherwise been
due from Lessee had such remedies been exercised.
Section 3. Incorporated Financial Covenants. Genesis hereby covenants
and agrees that it shall at all times comply with the Financial Covenants, which
covenants are incorporated herein by this reference, provided that compliance
hereunder with the Financial Covenants shall be waived to the extent that
compliance with such Financial Covenants may be waived from time to time under
and in accordance with the Credit Agreement, exclusive of waivers made in
contemplation of the termination of the Credit Agreement.
Section 4. Waiver of Subrogation. Guarantors hereby irrevocably waive
any claim or other rights which they may now or hereafter acquire against
Lessor.
Section 5. Reasonableness and Effect of Waivers. Guarantors warrant and
agree that each of the waivers set forth in this Guaranty is made with full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any of such waivers are determined to be contrary to any applicable law
or public policy, such waivers shall be effective only to the maximum extent
permitted by law.
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Section 6. Representations and Warranties of Guarantors. As of the date
hereof, each of the Guarantors makes the representations and warranties set
forth in this Section 6 to each of the Beneficiaries.
(A) Due Organization, etc. It is a corporation or partnership
duly organized, validly existing and in good standing under the laws of the
state of its organization and it has full corporate power and authority to
conduct its business as presently and presently proposed to be conducted, to own
or hold under lease its properties, to enter into and perform its obligations
under each of the Operative Documents to which it is or is to be a party and
each other agreement, instrument and document to be executed and delivered by it
on or before the Document Closing Date in connection with or as contemplated by
each such Operative Document to which it is or is to be a party, and it is duly
qualified as a foreign corporation authorized to do business and is in good
standing in every jurisdiction in which its failure to be so qualified would
have a Material Adverse Effect. The information set forth on Schedule 1 hereto
with respect to it is true and correct.
(B) Authorization; No Conflict. The execution and delivery by
it of each of the Operative Documents to which it is or is to be a party, and
the performance by it of its obligations under such Operative Documents, have
been duly authorized by all necessary corporate action (including any necessary
stockholder action) on its part, and do not and will not: (i) contravene any
Applicable Laws and Regulations currently in effect applicable to or binding on
it or the Sites; (ii) violate any provision of its charter or bylaws; (iii)
result in a breach of or constitute a default under any indenture, loan or
credit agreement, or any other agreement or instrument to which it is a party or
by which it or its properties may be bound or affected, which breaches or
defaults would have, individually or in the aggregate, a Material Adverse
Effect; (iv) result in, or require, the creation or imposition of any Lien of
any nature upon or with respect to any of the properties now owned or hereafter
acquired by it (other than the security interests created pursuant to the
Operative Documents); or (v) require any Governmental Action by any Authority,
except for (A) the filings and recordings listed on Schedule 4.1B to the
Participation Agreement to perfect the rights of Lessor, the Lenders and Agent
intended to be created by the Operative Documents, and (B) those Governmental
Actions required with respect to Lessee or any of its Affiliates listed on
Schedule 4.1A to the Participation Agreement, each of which have been duly
effected and are, or on the initial Advance Date will be, in full force and
effect; and it is not in default under or in violation of its charter or bylaws.
Attached as Schedule
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4.1C to the Participation Agreement are correct and complete computations
demonstrating compliance by Genesis with Section 5.9 of the Indenture after
giving effect as Indebtedness under such Indenture to the obligations of Lessee
and Guarantors under or in connection with the Operative Documents.
(C) Enforceability, etc. Each Operative Document to which it
is or is to be a party constitutes its legal, valid and binding obligation,
enforceable against it in accordance with the terms thereof, except as such
enforceability may be limited by applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and by general equitable principles.
(D) Litigation. There is no action, proceeding or
investigation pending or threatened which questions the validity of the
Operative Documents to which it is or is to be a party or any action taken or to
be taken pursuant to the Operative Documents to which it is or is to be a party,
and there is no action, proceeding or investigation pending or threatened which,
if adversely determined, would have a Material Adverse Effect.
(E) Taxes. It has filed or caused to be filed all United
States Federal and all other material tax returns that are required to be filed
by it, and has paid or caused to be paid all taxes shown to be due and payable
on such returns or on any assessment received by it to the extent that such
taxes have become due and payable except to the extent that taxes due, but
unpaid, are being contested in good faith by it by appropriate action or
proceeding and, to the extent (if any) that such taxes are not due and payable,
it has established or caused to be established reserves that are adequate for
the payment thereof in accordance with GAAP.
(F) Investment Company Act. It is not an "investment company"
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
(G) Public Utility Holding Company. It is not subject to
regulation as a "holding company," an "affiliate" of a "holding company", or a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(H) Solvency. The consummation by Lessee and the Guarantors of
the transactions contemplated by the Operative Documents does not and will not
render it insolvent, nor was it made in contemplation of its insolvency; the
value of its assets and properties at fair valuation and at their then present
fair
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salable value is and, after such transactions, will be greater than its total
liabilities, including contingent liabilities, as they become due; the property
remaining in its hands was not and will not be an unreasonably small amount of
capital.
Section 7. Covenants of Guarantors.
(A) Consolidation, Merger, Sale, etc. No Guarantor shall
consolidate with any Person, merge with or into any Person or convey, transfer
or lease to any Person all or substantially all of its assets in any single
transaction (or series of related transactions), unless, immediately after
giving effect to such transaction, the conditions set forth in clauses (i)
through (v) shall have been satisfied:
(i) the conditions of Section 7.09 or 7.10, as applicable, of
the Credit Agreement shall have been satisfied with respect to such
transaction; provided, that for purposes of this clause (i), (a) all
references in said Sections 7.09 and 7.10 to an Event of Default or
Potential Default shall include (x) a Lease Event of Default or Lease
Default, respectively, and (y) a default under this Guaranty, (b) all
notices, certificates and other documents required to be delivered
under said Section 7.09 shall also be delivered to Agent, on behalf of
the Participants, (c) all references in said Sections 7.09 and 7.10 to
Lender Party or Agent shall include Agent, on behalf of the
Participants, (d) all references in said Sections 7.09 and 7.10 to
Borrower or Borrowers shall be references to Guarantor or Guarantors,
respectively, and (e) all references in said Sections 7.09 and 7.10 to
Loan Obligations shall be references to the obligations of the
applicable parties under the Operative Documents and (f) all references
in said Sections 7.09 and 7.10 to Loan Documents shall be references to
the Operative Documents;
(ii) (x) the Person formed by such consolidation with or into
which such Guarantor shall be merged or (y) the Person which shall
acquire by conveyance, transfer or lease all or substantially all of
the assets of such Guarantor, if in the case of this clause (y), such
Person is obligated under the terms of the Credit Agreement to become a
party thereto (in the case of clause (x) or clause (y), as applicable,
the "Surviving Company"), if other than such Guarantor immediately
prior to such transaction, shall execute and deliver to each of the
parties hereto an agreement, in form and substance reasonably
satisfactory to Agent, containing the assumption by the Surviving
Company of the due and punctual payment, performance and observation of
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each obligation, covenant and agreement of such Guarantor
under this Guaranty;
(iii) if the applicable Guarantor is Genesis and the Surviving
Company is not Genesis, such Surviving Company shall be a corporation
that is organized under the laws of the United States of America, a
state thereof or the
District of Columbia;
(iv) the title of Lessor to the Sites and Lessor's rights
under this Guaranty and the other Operative Documents and the first and
prior Lien of the Mortgage on the Collateral shall not be adversely
affected; and
(v) Lessee shall have delivered to Agent, on behalf of Lessor
and the Lenders, an Officer's Certificate and an opinion of counsel
reasonably satisfactory to each such Person stating that such
transaction complies with this Section 7, that all conditions to the
consummation of such transaction have been fulfilled and that all
Governmental Actions required in connection with such transaction have
been obtained, given or made.
Upon the consummation of such transaction, the Surviving Company, if
other than the applicable Guarantor immediately prior thereto, shall succeed to,
and be substituted for, and may exercise every right and power of, such
Guarantor immediately prior to such transaction under this Guaranty and each
other Operative Document to which such Guarantor was a party immediately prior
to such transaction, with the same effect as if the Surviving Company had been
named herein and therein. Notwithstanding the foregoing provisions of this
Section 7, no conveyance, transfer or lease of all or substantially all of the
assets of any Guarantor shall release Guarantor from its payment or other
obligations under this Guaranty or any other Operative Document without the
written consent of Lessor and Agent.
(B) Existence. Subject to Section 7(A), each Guarantor shall
at all times maintain its existence as a corporation or partnership in good
standing under the laws of the state of its organization and shall use
commercially reasonable efforts to preserve and keep in full force and effect
its franchises material to its business.
(C) Senior Indebtedness. This Guaranty is an obligation of the
Guarantors under and in respect of the Lease, which lease refunded, refinanced
and replaced that certain Acquisition Credit Agreement, dated as of September
29, 1995, as amended, among Genesis, certain of its Subsidiaries, Mellon Bank,
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N.A. ("Mellon") as Agent, Citibank, N.A. ("Citibank") as Co-Agent and the
Lenders named therein, which agreement supplemented that certain Amended and
Restated Credit Agreement, dated as of September 29, 1995, as amended, among
Genesis, certain of its Subsidiaries, Mellon as Issuer of Letters of Credit,
Mellon as Agent and Citibank as Co-Agent, which agreement refunded, refinanced
and replaced that certain Credit Agreement, dated as of November 22, 1993, among
Genesis, certain of its Subsidiaries, Mellon as Agent and the Lenders named
therein. The obligations hereunder are secured and superior in right of payment
to the obligations under those certain debentures issued pursuant to the 1993
Indenture and the 1995 Indenture (each as hereinafter defined). The obligations
hereunder constitute "Indebtedness" as such term is defined in the 1995
Indenture (as hereinafter defined) and this guarantee is a "Credit Facility",
"Senior Indebtedness" and "Designated Senior Indebtedness" within the meaning of
that certain Indenture, dated as of June 15, 1995, between Genesis and Delaware
Trust Company as Trustee (the "1995 Indenture") and is "Senior Indebtedness"
within the meaning of that certain Indenture, dated as of November 30, 1993,
between Genesis and First Fidelity Bank, N.A., Pennsylvania as Trustee (the
"1993 Indenture").
Section 8. Transfers by Beneficiaries. Each Beneficiary may, from time
to time, whether before or after any discontinuance of this Guaranty, at its
sole discretion (subject to the requirements of the Participation Agreement) and
without notice to or consent of Guarantors, assign or transfer any or all of its
portion of the Liabilities or any interest therein; and, notwithstanding any
such assignment or transfer or any subsequent assignment or transfer thereof,
such Liabilities shall be and remain Liabilities for the purposes of this
Guaranty, and each and every immediate and successive assignee or transferee of
any of the Liabilities or of any interest therein shall, to the extent of such
assignee's or transferee's interest in the Liabilities, be entitled to the
benefits of this Guaranty to the same extent as if such assignee or transferee
were such Beneficiary.
Section 9. No Waiver by Beneficiaries. No delay in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise of any right or remedy shall preclude other or further exercise thereof
or the exercise of any other right or remedy; nor shall any modification or
waiver of any of the provisions of this Guaranty be binding upon any Beneficiary
except as expressly set forth in a writing duly signed and delivered on its
behalf. No action permitted hereunder shall in any way affect or impair any
Beneficiary's rights or Guarantors' obligations under this Guaranty. For the
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purposes of this Guaranty, Liabilities shall include all of the obligations
described in the definition thereof, notwithstanding any right or power of
Guarantors or anyone else to assert any claim or defense as to the invalidity or
unenforceability of any such obligation, and no such claim or defense shall
affect or impair the obligations of Guarantors hereunder. Guarantors'
obligations under this Guaranty shall be absolute and unconditional irrespective
of any circumstance whatsoever which might constitute a legal or equitable
discharge or defense of Guarantors. Guarantors hereby acknowledge that there are
no conditions to the effectiveness of this Guaranty.
Section 10. Joint and Several Obligations; Successors and Assigns. All
obligations under this Guaranty are joint and several to each of the Guarantors
and any other party which hereafter guarantees any portion of the Liabilities,
and shall be binding upon them and upon their successors and assigns. All
references herein to Guarantors shall be deemed to include any successor or
successors, whether immediate or remote, to such Person.
Section 11. Severability. Wherever possible, each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
Applicable Laws and Regulations, but if any provision of this Guaranty shall be
prohibited by or invalid thereunder, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Guaranty.
Section 12. Submission to Jurisdiction; Waivers. EACH PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY:
(A) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT OR
ANY STATEMENT, COURSE OF CONDUCT, ACT OR OMISSION, OR EVENT OCCURRING IN
CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN
ALLEGHENY COUNTY OR PHILADELPHIA COUNTY, PENNSYLVANIA, SUBMITS TO THE
JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW AGREES
THAT, TO THE EXTENT THAT ANY SUCH COURT HAS OR IS ABLE TO OBTAIN PERSONAL
JURISDICTION OVER THE PARTY AGAINST WHICH SUCH PARTY IS SEEKING TO BRING RELATED
LITIGATION, IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER FORUM (BUT
NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY LENDER TO BRING ANY ACTION, SUIT OR
PROCEEDING IN ANY OTHER FORUM);
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(B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY
CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY RELATED LITIGATION
BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH
PARTY;
(C) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S.
MAIL, POSTAGE PREPAID, TO SUCH PARTY'S ADDRESS FOR NOTICES DESCRIBED IN SCHEDULE
II HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY
RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE
VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY
LAW); AND
(D) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
Section 13. Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by this Guaranty shall be in writing and shall be deemed to have
been duly given when addressed to the appropriate Person and delivered in the
manner specified in Section 21.3 of the Lease. The initial address for notices
to each of the Guarantors is set forth on Schedule 3 hereto.
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SECTION 14. GOVERNING LAW. THIS GUARANTY HAS BEEN DELIVERED TO AGENT AT
PENNSYLVANIA AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CONFLICT OF LAW
PRINCIPLES.
Section 15. Joinder; Release. Genesis covenants that upon each and
every addition or deletion of a Subsidiary as a party to the Credit Agreement,
it will (i) promptly notify Agent thereof and (ii) cause to be executed and
delivered to Agent, on behalf of the Beneficiaries, a joinder or release in the
form of Exhibit A-1 or Exhibit A-2, respectively, attached hereto evidencing
such addition or deletion of a Material Subsidiary hereunder. Each Guaranty and
each Beneficiary hereby agree that no such joinder shall require the consent of
Agent, any other Beneficiary or any Guarantor. Each of the Beneficiaries hereby
authorizes Agent to execute and deliver any such release from time to time, but
no such release shall require the consent of any other Beneficiary or any
Guarantor. Each Guarantor agrees that no such joinder or release shall affect
the obligations of any Guarantor (other than the Guarantor which shall have
executed and delivered such joinder or release).
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, Guarantors have caused this Guaranty and Agreement
of Suretyship to be executed and delivered as of the date first above written.
GENESIS HEALTH VENTURES, INC.,
a Pennsylvania corporation
By:________________________________
Name: Ira C. Gubernick
Title: Secretary
BREVARD MERIDIAN LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Meridian Healthcare, Inc., a
Pennsylvania corporation, its
sole general partner
CATONSVILLE MERIDIAN LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Meridian Health, Inc., a
Pennsylvania corporation, one of its
sole general partners
EASTON MERIDIAN LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Meridian Healthcare, Inc., a
Pennsylvania corporation, its
sole general partner
EDELLA STREET ASSOCIATES, a Pennsylvania
limited partnership
By: Genesis Health Ventures of
Clarks Summit, Inc., its sole
general partner
GENESIS HEALTH VENTURES OF ARLINGTON, INC.,
a Pennsylvania corporation
GENESIS HEALTH VENTURES OF BLOOMFIELD, INC.,
a Pennsylvania corporation
GENESIS HEALTH VENTURES OF CLARKS SUMMIT, INC.,
a Pennsylvania corporation
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GENESIS HEALTH VENTURES OF INDIANA, INC.,
a Pennsylvania corporation
GENESIS HEALTH VENTURES OF MASSACHUSETTS, INC.,
a Pennsylvania corporation
GENESIS HEALTH VENTURES OF NAUGATUCK, INC.,
a Pennsylvania corporation
GENESIS HEALTH VENTURES OF SALISBURY, INC.,
a Pennsylvania corporation
GENESIS HEALTH VENTURES OF WAYNE, INC.,
a Pennsylvania corporation
GENESIS HEALTH VENTURES OF WEST VIRGINIA, INC.,
a Pennsylvania corporation
GENESIS HEALTH VENTURES OF WINDSOR, INC.,
a Pennsylvania corporation
GENESIS IMMEDIATE MED CENTER, INC.,
a Pennsylvania corporation
GENESIS ELDERCARE NETWORK SERVICES, INC.
f/k/a GENESIS MANAGEMENT RESOURCES, INC.,
a Pennsylvania corporation
GENESIS ELDERCARE PHYSICAL SERVICES, INC.
f/k/a GENESIS PHYSICIAN SERVICES, INC.,
a Pennsylvania corporation
GENESIS PROPERTIES LIMITED PARTNERSHIP,
a Pennsylvania limited partnership
By: Genesis Health Ventures of
Arlington, Inc., its sole
general partner
GREENSPRING MERIDIAN LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Meridian Healthcare, Inc., a
Pennsylvania corporation, its
sole general partner
HALLMARK HEALTHCARE LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Pharmacy Equities, Inc., a
Pennsylvania corporation, its
sole general partner
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HAMMONDS LANE MERIDIAN LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Meridian Health, Inc., a
Pennsylvania corporation, one of
its general partner
HEALTHCARE RESOURCES CORP.,
a Pennsylvania corporation
HEALTHCARE SERVICES NETWORK, INC.,
a Pennsylvania corporation
KNOLLWOOD MANOR, INC.,
a Pennsylvania corporation
MERIDIAN HEALTH, INC.
a Pennsylvania corporation
MERIDIAN HEALTHCARE, INC.
a Pennsylvania corporation
MILLVILLE MERIDIAN LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Meridian Healthcare, Inc., a
Pennsylvania corporation,
its sole general partner
PHARMACY EQUITIES, INC.,
a Pennsylvania corporation
PHILADELPHIA AVENUE ASSOCIATES,
a Pennsylvania limited partnership
By: Philadelphia Avenue Corp.,
its sole general partner
PHILADELPHIA AVENUE CORPORATION,
a Pennsylvania corporation
RIVER STREET ASSOCIATES, a
Pennsylvania limited partnership
By: Genesis Health Ventures of
Wilkes-Barre, Inc., its
sole general partner
SEMINOLE MERIDIAN LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Meridian Health, Inc., a
Pennsylvania corporation,
its sole general partner
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STAFF REPLACEMENT SERVICES, INC.,
a Pennsylvania corporation
STATE STREET ASSOCIATES, L.P., a
Pennsylvania limited partnership
By: Genesis Health Ventures, Inc.,
its sole general partner
STATE STREET ASSOCIATES, INC.,
a Pennsylvania corporation
SUBURBAN MEDICAL SERVICES, INC.
a Pennsylvania corporation
GENESIS ELDERCARE REHABILITATION SERVICES, INC.
f/k/a TEAM REHABILITATION, INC.
a Pennsylvania corporation
THERAPY CARE SYSTEMS, L.P., a
Pennsylvania limited partnership
By: Team Rehabilitation, Inc., its
sole general partner
THE TIDEWATER HEALTHCARE SHARED
SERVICES GROUP, INC., a
Pennsylvania corporation
VOLUSIA MERIDIAN LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Meridian Health, Inc., a
Pennsylvania corporation,
its sole general partner
WYNCOTE HEALTHCARE CORP., a
Pennsylvania corporation
By:_______________________
Name: Ira C. Gubernick
Title: Secretary
ASCO HEALTHCARE, INC., a
Maryland corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
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BRINTON MANOR, INC., a Delaware
corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
CONCORD HEALTHCARE CORPORATION,
a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
CRYSTAL CITY NURSING CENTER, INC.,
a Maryland corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
EASTERN MEDICAL SUPPLIES, INC.,
a Maryland corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
EASTERN REHAB SERVICES, INC.,
a Maryland corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
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GENESIS HEALTH SERVICES CORPORATION,
a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
GENESIS HEALTHCARE CENTERS HOLDINGS, INC.,
a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
GENESIS HOLDINGS, INC.
a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
GENESIS PROPERTIES OF DELAWARE
CORPORATION, a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
GENESIS PROPERTIES OF DELAWARE
LTD PARTNERSHIP, L.P., a Delaware
limited partnership
By: Genesis Properties of Delaware
Corporation, a general partner
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
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GOVERNOR'S HOUSE NURSING HOME, INC.,
a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Seretary
HEALTH CONCEPTS AND SERVICES, INC.,
a Maryland corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
HILLTOP HEALTH CARE CENTER, INC.,
a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
KEYSTONE NURSING HOME, INC.,
a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
LINCOLN NURSING HOME, INC.,
a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
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WAYSIDE NURSING HOME, INC.,
a Delaware corporation
By:______________________________
Name: Ira C. Gubernick
Title: Secretary
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SCHEDULE 1
Material Subsidiaries
State of
Name Type of Entity Organization
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SCHEDULE 2
Lenders
Mellon Bank, N.A.
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SCHEDULE 3
Addresses for Notices
Suite 100
148 West State Street
Kennett Square, PA 19348
Attention: Senior Vice President and
Chief Financial Officer
Telephone: 610-444-6350
Facsimile: 610-444-3365
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EXHIBIT A-1
FORM OF JOINDER
JOINDER AGREEMENT
THIS JOINDER AGREEMENT, dated as of July 25, 1996 (this "Joinder"), is
executed by National Health Care Affiliates, Inc., a Florida corporation (the
"Additional Guarantor"), with its principal place of business located at 651
Delaware Avenue, Buffalo, New York 14202.
BACKGROUND
1. Genesis Eldercare Properties, Inc. ("Lessee"), Mellon Financial
Services Corporation #4 ("Lessor"), the Lenders party thereto, and Mellon Bank,
N.A., as Agent, entered into a Participation Agreement, dated as of July 24,
1996 (as heretofore amended, the "Participation Agreement") pursuant to which
Lessee has made a covenant that it shall cause the Guarantors to execute and
deliver the Guaranty and Agreement of Suretyship (the "Guaranty").
2. The Guaranty and Agreement of Suretyship provides that upon each and
every addition of a Subsidiary as a party to the Credit Agreement, Genesis will
cause this Joinder to be executed and delivered by such Subsidiary to Agent.
2. The Additional Guarantor desires to become a Guarantor pursuant to
Section 15 of the Guaranty.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Additional Guarantor hereby agrees as follows:
Section 1. Definitions.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned thereto in the Participation Agreement.
Section 2. Operative Documents.
The Additional Guarantor hereby agrees that it shall be bound by all
the terms and provisions of, and shall be deemed to be a party to (as if it were
an original signatory to), the Guaranty; from and after the date hereof, the
Additional Guarantor shall be a Guarantor of the Liabilities (as defined in the
Guaranty). The Additional Guarantor
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hereby acknowledges that it has received copies of the Participation Agreement,
the Guaranty and the other Operative Documents.
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Section 3. Miscellaneous.
This Joinder shall be governed by, and construed in accordance with,
the internal laws of the Commonwealth of Pennsylvania. This Joinder is hereby
executed by the Additional Guarantor for the benefit of Lessor, the Agent and
the Lenders, and each of the foregoing parties may rely hereon. This Joinder
shall be binding upon, and shall inure to the benefit of, the Additional
Guarantor and its successors and permitted assigns.
IN WITNESS WHEREOF, the undersigned has caused this Joinder to be
executed by its duly authorized officer as of the date and year first above
written.
NATIONAL HEALTH CARE AFFILIATES, INC.
By:___________________________
Name: Ira C. Gubernick
Its: Secretary
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EXHIBIT A-2
Form of Release
RELEASE OF GUARANTY
Reference is made to the Guaranty and Agreement of Suretyship (the
"Guaranty") dated as of July 24, 1996 made by Genesis Health Ventures, Inc. and
its Material Subsidiaries for the benefit of the Beneficiaries. Unless otherwise
defined herein, terms used herein have the meanings assigned to them in Appendix
1 to the Participation Agreement.
_____________________________ is no longer a party to the Credit
Agreement and thus, pursuant to Section 15 of the Guaranty, Agent hereby
releases _____________________ as a Guarantor under the Guaranty.
Dated: _______ __, ____
MELLON BANK N.A., as Agent
By:_______________________________
Title:____________________________