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Exhibit 10.7
THIS GUARANTY AGREEMENT made and entered into as of June 1, 1989 (the
"Guaranty"), by and between National HealthCorp L.P., a limited partnership duly
organized and existing under the laws of the State of Delaware and authorized to
do business in the State of Missouri ("Guarantor"), and The Bank of Tokyo, Ltd.,
New York Agency, New York, New York (the "Bank"), the issuer of a Letter of
Credit in favor of The Merchants Bank, Kansas City, Missouri (the "Trustee") as
security for the Bonds (the "Letter of Credit").
WHEREAS:
A. The Industrial Development Authority of the City of West Plains,
Missouri (the "Issuer") has issued its Variable Rate Industrial Development
Bonds (West Plains Manor Project) 1986 Series in the aggregate principal amount
of $3,200,000 (the "Bonds") under and pursuant to the Indenture of Trust between
the Issuer and the Trustee, dated as of February 1, 1986 (the "Indenture")
for the benefit of West Plains Manor (the "Company"); and
B. the Company and the Guarantor have entered into a Reimbursement and
Letter of Credit Agreement of even date herewith (the "Reimbursement Agreement")
with the Bank; and
C. the Company has entered into a First Amended and Restated Deed of
Trust and Security Agreement With Collateral Assignment-of Rents and Leases
dated as of February 1, 1986 (the "Mortgage") in favor of the Issuer and the
Bank covering the premises constituting the Company's health care facility at
West Plains, Missouri (the "Facilty"); and
D. the Guarantor has contracted with the Company to manage the Facility
pursuant to a Management Agreement dated as of February 1, 1986; and
E. the Guarantor was desirous that the Issuer issue the Bonds and is
willing to enter into this Guaranty in order to enhance the marketability of the
Bonds by causing the issuance of the Letter of Credit and thereby achieve cost
and other savings to the Company and thereby achieve financial benefits for the
Guarantor and as an inducement to the purchase of the Bonds and to secure the
monetary obligations of the Company to the Bank under the Reimbursement
Agreement, the non-recourse obligations of the Company to the Bank under the
Mortgage and the monetary obligations of the Guarantor to the Bank under the
Reimbursement Agreement (such documents being called the "Security Documents"),
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which obligations to the Bank are each herein defined as a Guaranteed
Obligation.
NOW, THEREFORE, in consideration of the premises, the Guarantor,
National Health Corp., L.P., does hereby, subject to the terms hereof, covenant
and agree with the Bank as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
OF THE GUARANTOR
The Guarantor does hereby represent and warrant that it is a limited
partnership duly organized under the laws of the State of Delaware, is qualified
to do business under the laws of the State of Missouri, is not in violation of
any provisions of its Certificate of Limited Partnership or Partnership
Agreement, or the laws of the States of Tennessee, Delaware or Missouri, has
power to enter into this Guaranty, has duly authorized the execution and
delivery of this Guaranty by proper partnership action and neither this Guaranty
nor the agreements herein contained contravene or constitute a default under any
agreement, instrument or indenture, or any provision of its Certificate of
Limited Partnership or Partnership Agreement or any other requirement of law.
The execution by the Guarantor of this Guaranty will result in a direct
financial benefit to it.
ARTICLE II
COVENANTS AND AGREEMENTS
Section 2.1 The Guarantor hereby unconditionally guarantees the payment
to the Bank of the Guaranteed Obligations of the Company under the Security
Documents. All payments by the Guarantor shall be paid in lawful money of the
United States of America. Each and every default in payment of the amounts due
under any Security Document shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of action
arises.
Section 2.2 The several obligations of the Guarantor under this
Guaranty shall be absolute and unconditional and shall remain in full force and
effect until all amounts due under each and every Security Document shall have
been paid and such obligations shall not be affected, modified or impaired upon
the happening from time to time of any event other than such payment or deposit,
including without limitation any of the following, whether or not with notice
to, or the consent of, the Guarantor:
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(a) the compromise, settlement, release or termination of any or all of
the obligations, covenants or agreements of the Bank under any Security
Document;
(b) the failure to give notice to the Guarantor of the occurrence of an
event of default under the terms and provisions of any Security Document;
(c) the assignment or mortgaging or the purported assignment or
mortgaging of all or any part of the interest of the Bank or the Company in the
Facility or any failure of title with respect to the interests of the Bank or
the Company in the Facility;
(d) the waiver of the payment, performance or observance by any
beneficiary or the Company of any of the obligations, covenants or agreements of
any of them contained in any Security Document or in this Guaranty;
(e) the extension of the time for payment of any Guaranteed Obligation
or under this Guaranty or of the time for performance of any other obligations,
covenants or agreements under or arising out of the Security Documents or this
Guaranty or the extension or renewal of any thereof;
(f) the modification or amendment (whether material or otherwise) of
any Guaranteed Obligation or Security Document provided that, the obligations of
the Guarantor are not thereby increased or expanded without its prior written
consent;
(g) the taking, suffering or omitting to take, or the omission of any
of the actions referred to in the Security Documents and any actions under this
Guaranty;
(h) any failure, omission, delay or lack on the part of the Bank to
enforce, assert or exercise any right, power or remedy conferred on the Bank in
this Guaranty or by any Security Document;
(i) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets, marshalling of assets
and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition with creditors or
readjustment of, or other similar proceedings affecting the Guarantor, the
Company, the Bank, the Trustee or the Issuer or any of the assets of any of them
or any allegation or contest of the validity of this Guaranty, or any of the
Security Documents in any such proceeding;
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(j) to the extent permitted by law, the release or discharge of the
Guarantor from the performance or observance of any obligation, covenant or
agreement contained in this Guaranty by operation of law; or
(k) the default or failure of the Guarantor fully to perform any of its
obligations as set forth in this Guaranty; or
(1) the assignment of any right, title or interest of the Issuer to
Trustee, its successors or assigns; or
(m) the invalidity of any of the Security Documents;
(n) transfer of the Facility or changes in the beneficial or actual
owners of the Company; or
(o) foreclosure of the Mortgage; or
(p) any other circumstance, occurrence or condition, whether similar or
dissimilar to any of the foregoing, that might be raised in avoidance of or in
defense against any action to enforce the obligations of the Guarantor under the
provisions hereof.
Section 2.3 The rights of the Bank to enforce the obligations of the
Guarantor under this Guaranty by any proceedings, whether by action at law, suit
in equity, or otherwise, shall not be impaired by any right, counterclaim or
defense of any character whatsoever, including without limitation any right,
claim or defense or rescission, recoupment, reduction, limitation, set-off,
counterclaim, waiver, frustration, surrender, alteration or compromise. This
Guaranty and the several obligations of the Guarantor hereunder are separate and
independent of the Company's and the Issuer's obligations under the Security
Documents, and it is specifically understood and agreed by the Guarantor that
any payment now or hereafter made by or on behalf of the Company or the Issuer
under or pursuant to the Security Documents shall not, except to the extent paid
to the owners of the bonds directly by the Trustee, affect, impair or diminish,
in any manner whatsoever, the joint and several obligations of the Guarantor
from asserting any separate or related claim against the Bank in a separate
proceeding, which proceeding shall in no way delay the prompt performance by the
Guarantor of its obligations hereunder. In the event that the Company or any
successor or assignee under the Security Documents should fail to perform any
such agreement on its part, the Guarantor may institute such action as it deems
necessary to compel performance so long as such action does not abrogate the
Guarantor's obligations herein.
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Section 2.4 In the event of a default in the payment of a Guaranteed
Obligation, the Bank shall have the right to proceed first and directly against
the Guarantor under this Guaranty to the extent of its respective obligations
hereunder without proceeding against or exhausting any other remedies which it
may have and without resorting to any other security held by the Bank.
Section 2.5 The Guarantor hereby expressly waives notice from the Bank
of its acceptance and reliance on this Guaranty. The Guarantor agrees to pay all
costs, expenses and fees, including all reasonable attorneys' fees, which may be
incurred by the Primary Beneficiary in enforcing or attempting to enforce this
Guaranty following any default hereunder, whether the same be enforced by suit
or otherwise.
Section 2.6 No remedy herein conferred upon or reserved to the Bank is
intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Guaranty or now or hereafter existing at law or in
equity. No delay or omission to exercise any right or power accruing upon any
default, omission or failure of performance hereunder shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Bank to exercise any remedy reserved to it in
this Guaranty, it shall not be necessary to give any notice, other than such
notice as may be herein expressly required. In the event any provision contained
in this Guaranty should be breached by the Guarantor and thereafter duly waived
by the Bank, such waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other breach hereunder. No waiver, amendment,
release or modification of this Guaranty shall be established by conduct, custom
or course of dealing, but solely by an instrument in writing duly executed by
the Bank.
Section 2.7 The Guarantor agrees that it will maintain its partnership
existence throughout the term of years that the Bonds will remain outstanding
and unpaid, and during such period the Guarantor will remain qualified to engage
in business and be subject to service of process in the States of Tennessee and
Missouri. The Guarantor further agrees that it will not dispose of all or
substantially all of its assets except to a corporation incorporated and
existing under the laws of one of the States of the United States of America and
qualified to do business in Missouri; provided, in all cases, that such other
corporation shall have a net worth not less than that of the
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Guarantor and shall assume in writing all of the obligations of the Guarantor
herein.
Section 2.8 The Guarantor covenants and agrees that so long as the
Bonds remain outstanding and unpaid, it will furnish to the Bank, as soon as
available and, in any event, within 125 days after the end of each fiscal year,
copies of a certified balance sheet of the Guarantor and its consolidated
subsidiaries as of the end of each fiscal year. The Guarantor shall also furnish
to the Bank copies of its financial statements for all fiscal years accompanied
by the auditor's report thereon, as well as copies of all interim quarterly
reports sent to the Guarantor's stockholders.
Section 2.9 This Guaranty is entered into by the Guarantor for the
benefit of the Bank and may be amended or supplemented only with the prior
written consent of the Bank.
Section 2.10 The Guarantor shall be discharged of its obligations
hereunder upon the payment of all Guaranteed Obligations; provided that, in the
event the Bank is required by order of a court or administrative body having
jurisdiction at any time to refund or repay to any person or entity any sums
collected by it on account of the obligations subject to this Guaranty, the
Guarantor agrees that all such sums shall remain subject to the terms of this
Guaranty and the Bank shall be entitled to recover such sums from the Guarantor
notwithstanding the fact that the Guarantor shall have been otherwise discharged
from further liability under this Guaranty, but only on the condition precedent
that the Bank shall have given the Guarantor written notice of such court or
administrative proceeding and shall have afforded the Guarantor a reasonable
opportunity to contest any demand for a refund or repayment. The Guarantor shall
have an opportunity to make such a contest only within the time requirements of
the court or administrative body having jurisdiction and must proceed with
diligence to completion of the contest or the condition precedent described in
the preceding sentence shall be deemed to have been waived by the Guarantor.
ARTICLE III
JURISDICTION
Section 3.1 Jurisdiction. The Guarantor agrees that any legal action or
proceeding with respect to this Guaranty or to enforce any judgment obtained
against the Guarantor in connection with this Agreement may be brought by the
Bank in the courts of the State of New York or in the United States District
Court for the Southern District of New York, or any other court
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to the jurisdiction of which the Guarantor or any of its property is or may be
subject. The Guarantor irrevocably submits to the jurisdiction of the courts of
the State of New York or of the United States District Court for the Southern
District of New York, and irrevocably waives any present or future objection to
venue in any such court, and any present or future claim that any such court is
an inconvenient forum, in connection with any action or proceeding related to
this Guaranty.
ARTICLE IV
MISCELLANEOUS
Section 4.1 The several obligations of the Guarantor hereunder shall
arise absolutely and unconditionally when the Bonds shall have been issued, sold
and delivered by the Issuer.
Section 4.2 No delay or omission to exercise any right or power
accruing upon any default, omission or failure of performance hereunder shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle the Bank to exercise any remedy
reserved to it in this Guaranty, it shall not be necessary to give any notice,
other than such notice as may be herein expressly required. In the event any
provision contained in this Guaranty should be breached by the Guarantor and
thereafter duly waived by the Bank, such waiver shall be limited to the
particular breach so waive and shall not be deemed to waive any other breach
hereunder. No waiver, amendment, release or modification of this Guaranty shall
be established by conduct, custom or course of dealing, but solely by an
instrument in writing duly executed by the Bank.
Section 4.3 This Guaranty constitutes the entire agreement, and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and may be
executed simultaneously in several counterparts, each of which shall be deemed
an original, and all of which together shall constitute one and the same
instrument.
Section 4.4 The invalidity or unenforceability of any one or more
phrases, sentences, clauses or Sections in this Guaranty shall not affect the
validity or enforceability of the remaining portions of this Guaranty, or any
part thereof.
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Section 4.5 This Guaranty shall be governed by and construed
interpreted in accordance with the laws of the State of New York.
Section 4.6 The Guarantor covenants that it will not make any capital
expenditures which will cause the interest on the Bonds to become subject to
Federal income taxes pursuant to the provisions of Section 103(b) of the
Internal Revenue Code of 1954, as amended ( the "Code"), so long as any of the
Bonds are outstanding under the Indenture. The Guarantor further covenants that
it will not take or omit to take any action (other than making the aforesaid
expenditures) nor permit any action to be taken or omitted which would cause the
interest on the Bonds to become subject to Federal income taxes, provided that
the Guarantor shall not have violated this covenant if the interest on any of
the Bonds becomes taxable to a person who is a substantial user of the Facility
or a related person pursuant to the provisions of Section 103(b)(13) of the
Code.
Section 4.7 The agreements contained herein on the part of the
Guarantor shall inure to and be binding upon its successors and assigns,
including without limitation, any successor or assign in any transaction
expressly permitted by Section 2.7 hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be
executed in their respective corporate names by their respective officers,
thereunto duly authorized and their respective corporate seals to be hereto
affixed as of the date first above written.
NATIONAL HEALTHCORP L.P.
as Guarantor
By NHC, INC.
Managing Partner
By /s/
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Title: Senior Vice President
Accepted:
THE BANK OF TOKYO, LTD.
NEW YORK AGENCY
By /s/
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Title: Attorney-in-fact
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