EXHIBIT 10.40
GUARANTY
February 11, 1994
Health and Rehabilitation Properties Trust
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxxx
Re: Leases dated February 11, 1994, with
respect to certain premises located in
Waterbury, Cheshire and New Haven, Connecticut
Ladies and Gentlemen:
The undersigned, Horizon Healthcare Corporation, a Delaware corporation
(the "Guarantor"), hereby agrees with Health and Rehabilitation Properties
Trust, a Maryland real estate investment trust (the "Landlord"), as follows:
1. Reference to Agreements, Etc. Reference is made to the Leases of
even date (the "Leases"), between the Landlord and Connecticut Subacute
Corporation II, a Delaware corporation (the "Tenant"), pursuant to which the
Landlord has agreed to lease certain premises (as more particularly described in
the Leases) to the Tenant. Reference is further made to that certain Management
Agreement of even date (the "Management Agreement"), pursuant to which the
Guarantor will manage the premises demised under the Leases for and on behalf of
the Tenant. Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to such terms in the Leases.
2. Guaranteed Obligations. For purposes of this Agreement, the term
"Guaranteed Obligations" shall mean the payment of each and every monetary
obligation of the Tenant under the Leases accruing prior to the expiration of
the term of the Management Agreement or the sooner termination thereof (unless
such termination results from the occurrence of an Event of Default (as defined
therein) by the Guarantor under the Management Agreement.
3. Representations and Covenants. The Guarantor represents, warrants,
covenants and agrees that:
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3.1. Performance of Covenants and Agreements. The Guarantor
will use best efforts to cause the Tenant duly and punctually to
perform all of the monetary obligations under the Leases.
3.2. Validity of Agreement. The Guarantor has duly and validly
executed and delivered this Agreement; this Agreement constitutes the
legal, valid and binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with its terms; and the execution,
delivery and performance of this Agreement have been duly authorized by
all requisite action of the Guarantor and such execution, delivery and
performance by the Guarantor will not result in any breach of the
terms, conditions or provisions of, or conflict with or constitute a
default under, or result in the creation of any lien, charge or
encumbrance upon any of the property or assets of the Guarantor
pursuant to the terms of, any indenture, mortgage, deed of trust, note,
other evidence of indebtedness, agreement or other instrument to which
the Guarantor may be a party or by which the Guarantor or any property
or assets of the Guarantor may be bound, or violate any provision of
law, or any applicable order, writ, injunction, judgement or decree of
any court or any order or other public regulation of any governmental
commission, bureau or administrative agency.
3.3. Payment of Expenses. The Guarantor agrees, as principal
obligor and not as a guarantor only, to pay to the Landlord forthwith
upon demand, in immediately available Federal funds, all costs and
expenses (including court costs and reasonable legal expenses) incurred
or expended by the Landlord in connection with the enforcement of this
Agreement, together with interest on amounts recoverable under this
Agreement from the time such amounts become due until payment at the
Overdue Rate. The Guarantor's covenants and agreements set forth in
this Section 3.3 shall survive the termination of this Agreement.
3.4. Notices. The Guarantor shall promptly give notice to the
Landlord of any event which might reasonably result in a material
adverse change in the financial condition of the Guarantor.
3.5. Reports. Within one hundred twenty (120) days after the
end of each fiscal year of the Guarantor, the Guarantor shall promptly
provide to the Landlord copies of the audited financial statements of
the Guarantor, prepared in accordance with generally accepted
accounting principles, consistently applied, for the preceding fiscal
year.
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3.6. Legal Existence. The Guarantor shall do or cause to be
done all things necessary to preserve and keep in full force and effect
its corporate existence; provided, however, that nothing in this
subsection shall prevent a consolidation, combination or merger of the
Guarantor with any other person or entity.
3.7. Financial Statements, Etc. The financial statements of
the Guarantor previously delivered to the Landlord fairly present the
financial condition of the Guarantor in accordance with generally
accepted accounting principles consistently applied and there has been
no material adverse change from the date thereof through the date
hereof.
4. Guarantee. The Guarantor hereby unconditionally guarantees that the
Guaranteed Obligations shall be paid in full when due and payable under the
Leases. This guarantee is a guarantee of payment and not of collectibility and
is absolute and in no way conditional or contingent. In case any part of the
Guaranteed Obligations which shall not have been paid when due and payable, the
Guarantor shall, within ten (10) days after receipt of notice from the Landlord,
pay or cause to be paid to the Landlord the amount thereof as is then due and
payable and unpaid (including interest and other charges, if any, due thereon
through the date of payment in accordance with the applicable provisions of the
Leases).
5. Unenforceability of Guaranteed Obligations, Etc. Until the
termination of this Agreement, as provided in Section 10, if the Tenant is for
any reason under no legal obligation to discharge any of the Guaranteed
Obligations, or if any moneys included in the Guaranteed Obligations have become
unrecoverable from the Tenant by operation of law or for any other reason,
(including, without limitation, the invalidity or irregularity in whole or in
part of any Guaranteed Obligation or of the Leases or any limitation on the
liability of the Tenant thereunder or any limitation on the method or terms of
payment thereunder which may now or hereafter be caused or imposed in any manner
whatsoever), the guarantees contained in this Agreement shall nevertheless
remain in full force and effect and shall be binding upon the Guarantor to the
same extent as if the Guarantor at all times had been the Tenant under the
Leases.
6. Additional Guarantees. This Agreement shall be in addition to any
other guarantee or other security for the Guaranteed Obligations, and it shall
not be prejudiced or rendered unenforceable by the invalidity of any such other
guarantee or security or by any waiver, amendment, release or modification
thereof.
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7. Consents and Waivers, Etc. The Guarantor hereby acknowledges receipt
of correct and complete copies of the Leases, and consents to all of the terms
and provisions thereof, as the same may be from time to time hereafter amended
or changed in accordance therewith, and waives (a) presentment, demand for
payment, and protest of nonpayment, of any principal of or interest on any of
the Guaranteed Obligations, (b) notice of acceptance of this Agreement and of
diligence, presentment, demand and protest, (c) notice of any default hereunder
and any default, breach or nonperformance or Event of Default with respect to
any of the Guaranteed Obligations under the Leases, (d) notice of the terms,
time and place of any private or public sale of collateral held as security for
the Guaranteed Obligations, (e) demand for performance or observance of, and any
enforcement of any provision of, or any pursuit or exhaustion of rights or
remedies against the Tenant or any other guarantor of the Guaranteed
Obligations, under or pursuant to the Leases, or any agreement directly or
indirectly relating thereto and any requirements of diligence or promptness on
the part of the holders of the Guaranteed Obligations in connection therewith,
and (f) to the extent the Guarantor lawfully may do so, any and all demands and
notices of every kind and description with respect to the foregoing or which may
be required to be given by any statute or rule of law and any defense of any
kind which it may now or hereafter have with respect to this Agreement, or the
Leases or the Guaranteed Obligations.
8. No Impairment, Etc. The obligations, covenants, agreements and
duties of the Guarantor under this Agreement shall not be affected or impaired
by any assignment or transfer in whole or in part of any of the Guaranteed
Obligations or the Landlord's interest under the Leases without notice to the
Guarantor, or any waiver by the Landlord or any holder of any of the Guaranteed
Obligations or by the holders of all of the Guaranteed Obligations of the
performance or observance by the Tenant or any other guarantor of any of the
agreements, covenants, terms or conditions contained in the Guaranteed
Obligations or the Leases or any indulgence in or the extension of the time for
payment by the Tenant or any other guarantor of any amounts payable under or in
connection with the Guaranteed Obligations or the Leases or any other instrument
or agreement relating to the Guaranteed Obligations or of the time for
performance by the Tenant or any other guarantor of any other obligations under
or arising out of any of the foregoing or the extension or renewal thereof, or
the modification or amendment (whether material or otherwise) of any duty,
agreement or obligation of the Tenant or any other guarantor set forth in any of
the foregoing, or the voluntary or involuntary sale or other disposition of all
or substantially all the assets of the Tenant or any other guarantor or
insolvency, bankruptcy, or other similar proceedings affecting the Tenant or any
other guarantor or any assets of the Tenant or any such other guarantor, or the
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release or discharge of the Tenant or any such other guarantor from the
performance or observance of any agreement, covenant, term or condition
contained in any of the foregoing without the consent of the holders of the
Guaranteed Obligations by operation of law, or any other cause, whether similar
or dissimilar to the foregoing.
9. Reimbursement, Subrogation, Etc. Subject to the applicable
provisions of the Management Agreement, if any, the Guarantor hereby covenants
and agrees that the Guarantor shall not enforce or otherwise exercise any rights
of reimbursement, subrogation, contribution or other similar rights against the
Tenant or any other person with respect to the Guaranteed Obligations prior to
the payment in full of the monetary obligations of the Tenant under the Leases.
Until all monetary obligations of the Tenant under the Leases shall have been
paid in full, the Guarantor shall have no right of subrogation, and the
Guarantor waives any defense it may have based upon any election of remedies by
the Landlord which destroys the Guarantor's subrogation rights or the
Guarantor's rights to proceed against the Tenant for reimbursement, (including,
without limitation, any loss of rights the Guarantor may suffer by reason of any
rights, powers or remedies of the Tenant in connection with any anti-deficiency
laws or any other laws limiting, qualifying or discharging the indebtedness to
the Landlord). Until all monetary obligations of the Tenant pursuant to the
Leases shall have been paid in full, the Guarantor further waives any right to
enforce any remedy which the Landlord now has or may in the future have against
the Tenant, any other guarantor or any other person and any benefit of, or any
right to participate in, any security whatsoever now or in the future held by
the Landlord.
10. Defeasance. This Agreement shall terminate at such time as the
Guaranteed Obligations have been paid in full and all other obligations of the
Guarantor to the Landlord under Section 3.3 of this Agreement have been
satisfied in full; provided, however, if at any time, all or any part of any
payment applied on account of the Guaranteed Obligations is or must be rescinded
or returned for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Tenant), this Agreement, to the
extent such payment is or must be rescinded or returned, shall be deemed to have
continued in existence notwithstanding any such termination.
11. Notices. Any notice or demand under this Agreement shall be given
in the manner provided in Section 24.10 of the Leases, and shall be addressed to
the party to receive such notice at its address as follows: (a), in the case of
the Guarantor, addressed to the Guarantor, 0000 Xxxxxx Xxxxxx Xxxx, XX, Xx. 0,
Xxxxxxxxxxx, XX 00000, Attn: Xxxx Xxxxxxx, Telecopy No. (000) 000-0000, with a
copy to Horizon Healthcare
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Corporation, 0000 Xxxxxx Xxxxxx Xxxx, XX, Xx. 0, Xxxxxxxxxxx, XX 00000, Attn:
Xxxx Xxxxxx, Esq., Telecopy No. (000) 000-0000, and (b), in the case of the
Landlord, addressed to the Landlord, 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, Attn: Xx. Xxxxx X. Xxxxxxx, Telecopy No. (000) 000-0000, with a copy to
Xxxxxxxx & Worcester, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn:
Xxxx X. Xxxxxxxx, Esq., Telecopy No. (000) 000-0000, or in the case of any
party, to such other address as such party may have furnished by written notice
given as herein provided.
12. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party, including without limitation the holders,
from time to time, of the Guaranteed Obligations; and all representations,
warranties, covenants and agreements by or on behalf of the Guarantor which are
contained in this Agreement shall inure to the benefit of the Landlord's
successors and assigns, including without limitation said holders, whether so
expressed or not.
13. Applicable Law. This Agreement and the Leases and any other
instruments executed and delivered to evidence, complete or perfect the
transactions contemplated hereby and thereby shall be interpreted, construed,
applied and enforced in accordance with the laws of The Commonwealth of
Massachusetts applicable to contracts between residents of Massachusetts which
are to be performed entirely within Massachusetts, regardless of (i) where any
such instrument is executed or delivered; or (ii) where any payment or other
performance required by any such instrument is made or required to be made; or
(iii) where any breach of any provision of any such instrument occurs, or any
cause of action otherwise accrues; or (iv) where any action or other proceeding
is instituted or pending; or (v) the nationality, citizenship, domicile,
principal place of business, or jurisdiction of organization or domestication of
any party; or (vi) whether the laws of the forum jurisdiction otherwise would
apply the laws of a jurisdiction other than The Commonwealth of Massachusetts;
or (vii) any combination of the foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
The Commonwealth of Massachusetts as may be provided by law; and the parties
consent to the jurisdiction of said court or courts located in The Commonwealth
of Massachusetts and to service of process by registered mail, return receipt
requested, or by any other manner provided by law.
14. Modification of Agreement. No modification or waiver of any
provision of this Agreement, nor any consent to any departure by the Guarantor
therefrom, shall in any event be
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effective unless the same shall be in writing and signed by the Landlord, and
such modification, waiver or consent shall be effective only in the specific
instances and for the purpose for which given. No notice to or demand on the
Guarantor in any case shall entitle the Guarantor to any other or further notice
or demand in the same, similar or other circumstances.
15. Waiver of Rights by Landlord. Neither any failure nor any delay on
the Landlord's part in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of any
other right, power or privilege.
16. Severability. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, but this Agreement
shall be reformed and construed and enforced to the maximum extent permitted by
applicable law.
17. Entire Contract. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and shall
supersede and take the place of any other instruments purporting to be an
agreement of the parties hereto relating to the subject matter hereof.
18. Headings; Counterparts. Headings in this Agreement are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument,
and in pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
19. Remedies Cumulative. No remedy herein conferred upon the Landlord
is intended to be exclusive of any other remedy, and each and every remedy shall
be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute or otherwise.
20. Landlord's Liability. THE DECLARATION OF TRUST ESTABLISHING THE
LANDLORD, DATED OCTOBER 9, 1986, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS
THERETO (THE "DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS
AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HEALTH AND
REHABILITATION PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION
COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO
TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE LANDLORD SHALL BE HELD
TO ANY PERSONAL LIABILITY,
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JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE LANDLORD. ALL
PERSONS DEALING WITH THE LANDLORD, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE LANDLORD FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
21. Guarantor Acknowledgements. The Guarantor acknowledges that the
transactions contemplated by the Leases are of material and substantial benefit
to the Guarantor. The Guarantor further acknowledges that the execution and
delivery of this Guaranty is a substantial and material inducement to the
Landlord to enter into the Leases and to consummate certain other transactions
on or about the date hereof with the Guarantor.
WITNESS the execution hereof under seal as of the date above first
written.
HORIZON HEALTHCARE CORPORATION
By: /s/ Xxxx Xxxxxxx
Its President
