Document:

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                                                                  EXHIBIT 10.32

                               GUARANTY OF LEASES

                  This "Guaranty of Leases" (this "Guaranty") is executed as of
June 27, 2001, by MARINER POST-ACUTE NETWORK, INC., a Delaware corporation
("Guarantor"), in favor of NATIONWIDE HEALTH PROPERTIES, INC., a Maryland
corporation ("Landlord"), but shall be effective only as of and from the
"Effective Date" of the "Settlement Agreement Re NHP Lease Portfolio" dated as
of June 27, 2001 (the "Settlement Agreement"), and is entered into by Guarantor
with reference to the following facts and recitals:

                                   RECITALS

                  A.       GCI Palm Court, Inc., a California corporation,
Evergreen Healthcare Ltd., L.P., an Indiana limited partnership (collectively,
"Tenants") and Guarantor are debtors and debtors in possession in cases pending
under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code")
in the United States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court"), having filed their voluntary petitions on January 18, 2000
(the "Petition Date"). The Tenants' and Guarantor's chapter 11 cases are
jointly administered and consolidated for procedural purposes only under Case
No. 00-00113 (MFW) (the "Bankruptcy Case"). The individual case numbers are:
Guarantor, Case No. 00-00113 (MFW); GCI, Case No. 00-00157 (MFW); and
Evergreen, Case No. 00-00147 (MFW). Tenants and Guarantors continue to operate
their businesses as debtors in possession under sections 1107(a) and 1108 of
the Bankruptcy Code.

                  B.       Landlord and one of the Tenants are parties to each
of those certain leases more particularly described on Exhibit "A" attached
hereto and incorporated herein by this reference (collectively, as amended as
provided by clause (b) below, the "Leases" and individually, a "Lease"). As
part of the Settlement Agreement, if approved and authorized by the Bankruptcy
Court in the Bankruptcy Case, the Tenants, Guarantor and Landlord have agreed
to (a) assume the Leases as provided in the Settlement Agreement, and (b) amend
the Leases as provided in the Settlement Agreement and the "Revised and
Restated Master Addendum To Leases" (the "Revised and Restated Master
Addendum") executed concurrently therewith.

                  C.       As part of Tenants' assumption of the Leases, MPAN
has agreed to support the requirements imposed on Tenants to provide adequate
assurance of future performance under section 365(b)(1)(C) of the Bankruptcy
Code in respect of the assumed Leases by delivering its guaranty of the Leases
as provided for herein.

                  D.       All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in the Leases.

                  E.       This Guaranty of Lease replaces and supersedes any
and all other existing guarantees or obligations of Guarantor or any other
affiliate (as such term is

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defined under section 101(2) of the Bankruptcy Code) of Tenants in respect of
the Leases.

                                   AGREEMENT

                  NOW, THEREFORE, in order to provide adequate assurance of
future performance in respect of the assumed Leases, and for other good and
valuable consideration as provided under the Settlement Agreement, the receipt
and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

                  1.       GUARANTY.

                  Guarantor hereby absolutely and unconditionally guarantees to
Landlord the following (collectively, the "Guaranteed Obligations"):

                           (a)      payment in full by Tenant of all rent
         (including, without limitation, Minimum Rent and Additional Rent) and
         other amounts due under the Leases in the manner and at the time
         prescribed in the Leases;

                           (b)      the full, complete and timely performance
         by Tenant of all covenants, indemnities and other obligations under
         the Leases including, without limitation, any indemnity or other
         obligations of Tenant which survive the expiration or earlier
         termination of the Leases; and

                           (c)      all costs of collection or enforcement
         incurred by Landlord in exercising any remedies provided for in the
         Leases at law or in equity with respect to the matters set forth in
         Paragraphs 1(a) and 1(b), hereof;

provided, however, that Guarantor shall have the full benefit and protection
afforded by Paragraph 10 of the Settlement Agreement.

                  2.       PERFORMANCE BY GUARANTOR.

                  If any Minimum Rent, Additional Rent or other amount due
under the Leases shall not be paid, or any obligation not performed as required
by the Leases, then upon demand by Landlord, Guarantor shall pay within ten
(10) days of demand by Landlord such sums and perform such obligations as are
required by the Leases, without regard to:

                           (a)      any defense, set-off, or counterclaim which
         Guarantor or Tenant may have or assert;

                           (b)      whether or not Landlord shall have
         instituted any suit, action or proceeding, exhausted its remedies or
         taken any steps to enforce any rights against Tenant or any other
         person to collect all or any part of such sums, either pursuant to the
         provisions of the Leases or at law or in equity (it being

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         understood that this is a guaranty of payment and not collection, and
         Guarantor's liability for such payment shall be primary);

                           (c)      any impairment or any diminution or loss of
         value in any security or collateral of the Leases (including, but not
         limited to, the leased premises themselves or any personal property or
         fixtures therein), whether caused by hazardous substances or any other
         cause (except Landlord's gross negligence or willful misconduct) or
         Landlord's failure to perfect a security interest in such security or
         collateral;

                           (d)      any circumstance which may constitute a
         legal or equitable discharge of a guarantor, except as provided under
         this Guaranty; or

                           (e)      any other condition or contingency.

                  Guarantor waives any right of exoneration and any right to
require Landlord to make an election of remedies. Guarantor covenants and
agrees that it shall not cause any default under the Leases.

                  3.       GUARANTOR'S REPRESENTATIONS AND WARRANTIES.

                  Guarantor hereby represents and warrants unto Landlord that,
subject to the approval of the Settlement Agreement by the Bankruptcy Court:

                           (a)      this Guaranty constitutes a legal, valid
         and binding obligation of Guarantor and is fully enforceable against
         Guarantor in accordance with its terms:

                           (b)      Guarantor and Tenant are affiliates, and it
         is of material benefit to Guarantor that Landlord enter into the
         Settlement Agreement and the Revised and Restated Master Addendum, and
         that Tenants assume the Leases as provided for therein;

                           (c)      as of the effective date hereof, each of
         the entities comprising Tenant is the current tenant under one or more
         of the Leases, and there is no entity which is a current tenant under
         any of the Leases which is not included within the definition of
         "Tenant" in this Guaranty;

                           (d)      Guarantor is a corporation duly organized,
         validly existing and in good standing under the laws of the State of
         Delaware and is duly authorized and qualified to do all things
         required of it under this Guaranty; and

                           (e)      this Guaranty is duly authorized, executed
         and delivered by and binding upon the Guarantor.

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                  Any material breach by Guarantor of the representations and
warranties set forth herein shall be a default under this Guaranty.

                  4.       WAIVER.

                  Guarantor hereby knowingly, voluntarily and unequivocally
waives:

                           (a)      all notice of acceptance hereof, protest,
         demand and dishonor, presentment and demand of any kind now or
         hereafter provided for by any statute or rule of law;

                           (b)      any and all requirements that Landlord
         institute any action or proceeding, or exhaust any or all of
         Landlord's rights, remedies or recourses, against Tenant or anyone
         else as a condition precedent to bringing an action against Guarantor
         under this Guaranty, it being expressly agreed that the liability of
         Guarantor hereunder shall be primary and not secondary;

                           (c)      any defense arising by reason of any
         disability, insolvency, bankruptcy, lack of authority or power, death,
         insanity, minority, dissolution or any other defense of Tenant, its
         successors and assigns, Guarantor or, if applicable, any other
         guarantor of the Guaranteed Obligations (even though rendering same
         void, unenforceable or otherwise collectible), it being agreed that
         Guarantor shall remain liable herein regardless or whether Tenant or
         any other such person be found not liable thereon for any reason;

                           (d)      any and all benefits and defenses it may
         have under California Civil Code ("CC") Section 2819 and agrees that
         by doing so Guarantor's liability shall continue even if the Leases or
         the Guaranteed Obligations are altered in any respect or Landlord's
         remedies or rights against Tenant are impaired or suspended without
         Guarantor's consent;

                           (e)      any and all benefits and defenses it may
         have under CC Section 2810 and agrees that by doing so Guarantor shall
         be liable even if Tenant had no liability at the time of execution of
         the Leases or thereafter ceases to be liable;

                           (f)      any and all benefits and defenses it may
         have under CC Section 2809 and agrees that by doing so Guarantor's
         liability may be larger in amount and more burdensome that that of
         Tenant;

                           (g)      any claim Guarantor might otherwise have
         against Landlord by virtue of Landlord's invocation of any right,
         remedy or recourse permitted it hereunder under the Leases or
         otherwise available at law or equity;

                           (h)      any failure, omission, delay or lack on the
         part of Landlord or Tenant to enforce, assert or exercise any right,
         power or remedy conferred on

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         Landlord or Tenant in the Leases or this Guaranty or any action on the
         part of Landlord granting a waiver, indulgence or extension to Tenant
         or any Guarantor;

                           (i)      the voluntary or involuntary liquidation,
         dissolution, sale or other disposition of all or substantially all the
         assets of Tenant, marshalling of assets or liabilities, receiverships,
         insolvency, bankruptcy, assignment for the benefit of creditors,
         reorganization, arrangement, composition or readjustment of, or other
         similar proceedings affecting Tenant or any of its assets, or the
         disaffirmance of the Leases in any such proceeding:

                           (j)      any release or other reduction of the
         Guaranteed Obligations arising as a result of the expansion, release,
         substitution or replacement (whether or not in accordance with terms
         of the Leases) of the Premises or any portion thereof; and

                           (k)      any defense or claim available to Guarantor
         as a result of Tenant's exercise of its right to purchase the Premises
         (or any portion thereof) pursuant to the Leases.

                  This Guaranty shall apply notwithstanding any extension or
renewal of the Leases, or any holdover following the expiration or termination
of the Term or any renewal or extension of the Term.

                  5.       SUBSEQUENT ACTS.

                  Without notice to, consideration to, or the consent of,
Guarantor:

                           (a)      the Leases, and Tenant's rights thereunder,
         may be modified, amended, renewed, assigned or sublet;

                           (b)      any additional parties who are or may
         become liable for the Guaranteed Obligations may hereafter be released
         from their liability hereunder and thereon; and/or

                           (c)      Landlord may take, delay in taking or
         refuse to take, any and all action with reference to the Leases
         (regardless of whether same might vary the risk or alter the rights,
         remedies or recourses of Guarantor), including specifically the
         settlement or compromise of any amount allegedly due thereunder.

                  No such acts shall in any way release, diminish, or affect
the absolute nature of Guarantor's obligations and liabilities hereunder.
Guarantor's obligations and liabilities under this Agreement are primary,
absolute and unconditional under any and all circumstances and until the
Guaranteed Obligations are fully and finally satisfied, such obligations and
liabilities shall not be discharged or released, in whole or in part,

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by any act or occurrence which might, but for this Paragraph 5, be deemed a
legal or equitable discharge or release of a Guarantor.

                  6.       SUCCESSORS AND ASSIGNS.

                  This Guaranty shall inure to the benefit of Landlord (and its
successors and assigns) and shall be binding upon Guarantor, and its successors
and assigns, including any trustee appointed under chapters 11 or 7 of the
Bankruptcy Code and any responsible officer or examiner appointed for the
Guarantor. All references herein to "Landlord" shall mean the above-named
Landlord and any subsequent owner of Landlord's interest in the Leases. No
transfer by Guarantor of its obligations hereunder shall operate to release
Guarantor from such obligations, except as provided in the Settlement
Agreement.

                  7.       REMEDIES CUMULATIVE.

                  All rights, remedies and recourses afforded to Landlord by
reason of this Guaranty, or otherwise, may be enforced as to any one or more
breaches either separately or cumulatively, may be pursued separately,
successively or concurrently, as occasion therefore shall arise, are
non-exclusive and shall in no way limit or prejudice any other legal or
equitable right, remedy or recourse which Landlord may have.

                  8.       SUBORDINATION; NO SUBROGATION.

                  If for any reason whatsoever Tenant now or hereafter becomes
indebted to Guarantor or any affiliate of Guarantor, such indebtedness and all
interest thereon shall at all times be subordinate in all respects to the
Guaranteed Obligations. Notwithstanding anything to the contrary contained in
this Guaranty or any payments made by Guarantor, Guarantor shall not have any
right of subrogation in or under the Leases or to participate in the rights and
benefits accruing to Landlord thereunder, with all such rights of subrogation
and participation, together with all of the contractual, statutory, or common
law rights which Guarantor may have to be reimbursed for any payments Guarantor
may make to or performance by Guarantor of any of the Guaranteed Obligations
for the benefit of, Landlord pursuant to this Guaranty being hereby expressly
waived and released.

                  9.       GOVERNING LAW.

                  This Guaranty and all rights and duties of Guarantor arising
from this Guaranty shall be governed by, construed and enforced in accordance
with the laws of the State of California, without regard to the conflict of law
rules of such State. Any and all disputes involving the validity,
interpretation, effect, or enforcement of this Guaranty shall be determined by
the Bankruptcy Court without a jury trial and in a contested matter as a "core
proceeding" (as such term is defined in 28 U.S.C. ss. 157 or any successor
provision), and the Bankruptcy Court shall be the exclusive forum to hear,
determine and enter appropriate orders and judgments regarding all such
disputes until

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the closing of the Bankruptcy Case. After closing of the Bankruptcy Case, the
waiver of jury trial contained hereinabove shall be of no further force and
effect and any and all disputes arising under or relating to this Guaranty
shall be litigated in either the State Courts of California or the Federal
District Court for the Central District of California, and all related
appellate courts, and the parties hereby consent to jurisdiction of such
courts.

                  10.      SEVERABILITY.

                  If any provision of this Guaranty or the application thereof
to any person or circumstance shall, for any reason and to any extent, be
invalid or unenforceable, neither the remainder of this Guaranty nor the
application of such provision to any other persons or circumstances shall be
affected thereby, but rather the same shall be enforced to the greatest extent
permitted by law.

                  11.      ATTORNEYS' FEES.

                  If Landlord or Guarantor brings any action to interpret or
enforce this Guaranty, or for damages for any alleged breach thereof, the
prevailing party in any such action shall be entitled to reasonable attorneys'
fees and costs as awarded by the court in addition to all other recovery,
damages and costs.

                  12.      CONFIRMATION.

                  At any time, and at the request of Landlord, Guarantor shall
execute and deliver to Landlord a certificate ratifying and confirming all of
Guarantor's obligations and liabilities under this Guaranty.

                  13.      BENEFIT TO GUARANTOR.

                  Guarantor acknowledges that it will benefit from the
execution and continued existence of the Leases, and Guarantor further
acknowledges that Landlord will be relying upon Guarantor's guarantee,
representations, warranties and covenants contained herein.

                  14.      NOTICES.

                  All notices, requests and demands to be made hereunder to the
Guarantor or the Landlord shall be made in writing to the addresses set forth
below and shall be given by any of the following means: (a) personal service;
(b) electronic communication, whether by telex, telegram or telecopying; (c)
certified or registered mail, postage prepaid, return receipt requested; or (d)
nationally recognized courier or delivery service. Such addresses may be
changed by notice given in the same manner as provided above. Any notice,
demand or request sent pursuant to either clause (a), (b) or (d) above shall be
deemed received upon the actual delivery thereof, and, if sent pursuant to
clause (c) above, shall be deemed received five (5) days following deposit

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in the mail. Refusal to accept delivery of any notice, request or demand shall
be deemed to be delivery thereof. In the event Landlord notifies Guarantor of
the name and address of Landlord's lender, Guarantor shall cause a copy of all
notices delivered to Landlord by Guarantor to be concurrently therewith
delivered to such lender.

If to Guarantor:                    Mariner Post Acute Network, Inc.
                                    One Ravinia Drive, Suite 1500
                                    Atlanta, Georgia  30346
                                    Attn:  General Counsel
                                    Facsimile No.:   (770) 698-8199

With a copy to:                     Powell, Goldstein, Frazer & Murphy LLP
                                    919 Peachtree Street
                                    16th Floor
                                    Atlanta, Georgia 30303
                                    Attention: Michael J. Delaney, Esq.
                                    Facsimile No.:   (404) 572-6999

If to Landlord                      Nationwide Health Properties, Inc.
                                    610 Newport Center Drive, Suite 1150
                                    Newport Beach, California  92660
                                    Attention:  General Counsel
                                    Facsimile No.:   (949) 759-6887

With a copy to:                     O'Melveny & Myers
                                    610 Newport Center Drive, Suite 1700
                                    Newport Beach, California 92660
                                    Attn:  Chairman, Real Estate Department
                                    Facsimile No.:   (949) 823-6994

                  15.      INCORPORATION OF RECITALS. The Recitals set forth
above are hereby incorporated by this reference and made a part of this
Guaranty. Guarantor hereby represents and warrants that the Recitals are true
and correct.

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                  EXECUTED as of the date first set forth above.

                                    "GUARANTOR"

                                    MARINER POST-ACUTE NETWORK, INC.
                                    A Delaware corporation

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

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                                   EXHIBIT A

                             DESCRIPTION OF LEASES

1.       Lease and Security Agreement dated September 26, 1991 insofar as it
         relates to Driftwood Manor (Hayward), Driftwood San Jose (Almaden
         Health and Rehabilitation Center), and Driftwood Santa Cruz, as
         amended ("California Driftwood Lease");

2.       Lease dated April 20, 1994 with respect to Monterey Palms Health Care
         Center, Palm Desert, California, as amended (the "California Monterey
         Palms Lease" and with the California Driftwood Lease, the "California
         Leases");

3.       Lease dated May 1, 1989 with respect to Care Inn Convalescent Center,
         LaSalle, Illinois, as amended (the "Illinois LaSalle Lease"); and

4.       Lease dated May 1, 1989 with respect to Litchfield Convalescent
         Center, Litchfield, Illinois, as amended (the "Illinois Litchfield
         Lease" and with the Illinois LaSalle Lease, the "Illinois Leases").

                                      10<PAGE>
                                                                  EXHIBIT 10.80

                            THIRTEENTH AMENDMENT TO
                     DEBTOR-IN-POSSESSION CREDIT AGREEMENT

                               November 15, 2001

                  Reference is made to that certain Debtor-In-Possession Credit
Agreement dated as of January 20, 2000 (as heretofore amended, the "DIP CREDIT
AGREEMENT"), by and among Mariner Health Group, Inc., a Delaware corporation
("MHG"), as debtor and debtor-in-possession, and each of MHG's subsidiaries
listed on the signature pages thereof, each as debtor and debtor-in-possession
(each such subsidiary and MHG individually referred to herein as a "BORROWER"
and, collectively, on a joint and several basis, as the "BORROWERS"); the
Lenders listed on the signature pages thereof; First Union National Bank, as
syndication agent; PNC Capital Markets, Inc. and First Union Securities, Inc.,
as co-arrangers; and PNC Bank, National Association, as collateral agent and
administrative agent (in such capacity, "ADMINISTRATIVE AGENT"), and as an
issuing bank for Letters of Credit thereunder. Capitalized terms used herein
without definition herein shall have the meanings assigned to such terms in the
DIP Credit Agreement and the Borrowing Order.

                  Borrowers and Lenders desire to amend the DIP Credit
Agreement to (i) extend the maturity date of the DIP Credit Agreement, (ii)
make certain amendments to Section 5.01 with respect to the financial reporting
obligations of the MHG Companies, and (iii) make certain amendments to Section
7.07 with respect to the amount of Overhead Payments payable to MPAN each
month. The Lenders are prepared to do so solely on the terms and conditions
herein.

                  NOW, THEREFORE, for and in consideration of the foregoing
premises, the mutual covenants and agreements hereinafter set forth and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrowers and the Lenders hereby agree as follows:

                  First, the Borrowers and the undersigned Lenders hereby agree
that the definition of "Stated Maturity Date" is hereby amended by deleting the
reference to "December 31, 2001" contained therein and substituting therefor
"April 1, 2002"

                  Second, Section 1.01 of the Agreement is hereby amended by
adding the following new definition in its appropriate alphabetical order:

                           "YEAR 2002 OPERATING BUDGET" has the meaning set
                  forth in Section 7.07.

                  Third, Section 5.01 of the Agreement is hereby amended by
deleting subsection (c) thereof in its entirety and by substituting the
following new subsection (c) in lieu thereof:

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                           (c)      as soon as available and in any event
                  within 90 days after the end of each Fiscal Year (including
                  the Fiscal Year ended December 31, 1999), (i) the
                  consolidated balance sheet of MHG and its Consolidated
                  Subsidiaries as at the end of such Fiscal Year and the
                  related consolidated statements of income, stockholders'
                  equity and cash flows of MHG and its Consolidated
                  Subsidiaries for such Fiscal Year, all in reasonable detail
                  and certified by a Financial Officer of MHG that they fairly
                  present the financial condition of MHG and its Consolidated
                  Subsidiaries as at the dates indicated and the results of
                  their operations and their cash flows for the periods
                  indicated and (ii) except for such financial statements
                  relating to Fiscal Years ending on or after December 31, 2001
                  (for which no such report shall be required unless the
                  Administrative Agent, by written notice to MHG, requests an
                  auditor's report for such Fiscal Year, in which event such
                  auditor's report shall be provided on or before the later of
                  (i) the 90th day after MHG's receipt of such request and (ii)
                  the 90th day after the end of the Fiscal Year in question), a
                  report thereon of Ernst & Young, LLP or other nationally
                  recognized firm of independent public accountants, which
                  report shall state that such consolidated financial
                  statements fairly present the consolidated financial position
                  of MHG and its Consolidated Subsidiaries as at the dates
                  indicated and the results of their operations and their cash
                  flows for the periods indicated in conformity with GAAP
                  (except as otherwise disclosed in such financial statements)
                  and that the examination by such accountants in connection
                  with such consolidated financial statements has been made in
                  accordance with generally accepted auditing standards;

                  Fourth, the Borrowers and the undersigned Lenders hereby
agree that Section 7.07 is hereby amended by deleting such section in its
entirety and by substituting the following paragraph as a new Section 7.07:

                  "No MHG Company will declare or make any Restricted Payment
         on or after the Closing Date other than (i) as permitted by Section
         7.15 and clauses (a), (b) and (c) of the proviso to Section 7.05; and
         (ii) as long as no Specified Default has occurred and is continuing or
         would result therefrom, MHG may make weekly payments to MPAN on the
         last Business Day of each of the first four weeks of each month after
         the Closing Date, in an amount in each such week not to exceed 1.25%
         of "Revenues" projected in the Fiscal Year 2002 operating budget for
         MHG and its Consolidated Subsidiaries (a copy of which has been
         provided to the Agents and the Lenders) (the "YEAR 2002 OPERATING
         BUDGET") for the month in which such week occurs, provided, however,
         that beginning on November 1, 2001 through and including August 31,
         2002 (the "REDUCTION PERIOD"), each such weekly payment shall be
         reduced by $250,000, such that the total amount of weekly payments
         made in any full calendar month during the Reduction Period shall be
         equivalent to 5% of "Revenues" projected in the Year 2002 Operating
         Budget less $1,000,000 (the amount so payable in each such week being
         the "OVERHEAD PAYMENT" payable for such week); provided, however, that
         (a) in the event 5% of "net inpatient revenues" of the Borrowers for
         any month, as reflected in the inpatient income statement delivered
         pursuant to Section 5.01(a)(ii)(A), exceeds the aggregate amount of
         Overhead Payments (prior to giving effect to the weekly reductions
         made during the Reduction Period described above) payable during such
         month, the Borrowers shall pay

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<PAGE>

         the amount of such excess to MPAN at the time of the next Overhead
         Payment, and (b) in the event 5% of "net inpatient revenues" of the
         Borrowers for any month, as reflected in the inpatient income
         statement delivered pursuant to Section 5.01(a)(ii)(A), is less than
         the aggregate amount of Overhead Payments (prior to giving effect to
         the weekly reductions made during the Reduction Period described
         above) payable during such month, the Borrowers shall deduct the
         amount of the difference from the payments of the next succeeding
         Overhead Payment or Overhead Payments payable to the full extent
         thereof; provided, further, that if the Borrowers fail to deliver the
         inpatient income statement required at the time required pursuant to
         Section 5.01(a)(ii)(A), no further payment of Overhead Payments shall
         be made until such statement is delivered; provided, further, that if
         payment of Overhead Payments shall be prohibited hereunder solely
         pursuant to the preceding proviso or due to the occurrence and the
         continuation of a Specified Default, the amount of such prohibited
         payments may accrue at the rate set forth above and may be deemed
         owing and may be paid only at any subsequent time that no Specified
         Default shall have occurred and be continuing or the statement
         referred to in the preceding proviso is delivered, as the case may be;
         and provided, further, that the calculation of the total Overhead
         Payments payable in any given month for purposes of the first proviso
         to this Section shall not give effect to any payment pursuant to
         clause (a) of such proviso made in such month or any deduction
         pursuant to clause (b) of such proviso made in such month, or any
         payment of Overhead Payments accrued in respect of a prior month
         pursuant to the third proviso to this Section but paid during the
         given month; and (iii) payment to MPAN of any management fees from the
         Oakwood Facilities as and when received by the Borrowers, net of any
         costs of the Borrowers incurred with respect to the Oakwood
         Facilities. In the event of a sale of or other termination of MPAN's
         supervisory services with respect to any Healthcare Facility in any
         month, the aggregate amount of any Overhead Payments payable with
         respect to such month shall be adjusted to reflect the exclusion of
         the "Revenues" attributable to such Healthcare Facility from the
         amount of "Revenues" on which Overhead Payments are calculated.
         Anything contained herein or in any other Financing Document to the
         contrary notwithstanding, the provisions of this Section 7.07
         restricting payment of Overhead Payments by the Borrowers during the
         continuance of Specified Defaults and permitting payment of Overhead
         Payments by the Borrowers during the continuance of other Events of
         Default shall not be deemed or construed as in any way limiting the
         rights and remedies otherwise available to the Agents and the Lenders
         under the Financing Documents and under Applicable Law upon and after
         the occurrence of any Default or Event of Default. Nothing in this
         Agreement or any of the other Financing Documents shall be construed
         as or deemed a waiver, release or discharge by any party hereto of any
         right to modify, assume or assign the management agreement of the
         Borrowers with respect to the Oakwood Facilities. The Borrowers shall
         not make any Investments (including any working capital investments)
         in the Oakwood Facilities after the Closing Date."

                  On and after the Thirteenth Amendment Effective Date (as
defined below), each reference in the DIP Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to the DIP
Credit Agreement, and each reference in the other Financing Documents to the
"DIP Credit Agreement", "thereunder", "thereof" or words of like import
referring to the DIP Credit

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<PAGE>

Agreement, shall mean and be a reference to the DIP Credit Agreement as amended
through the date thereof, including by this Thirteenth Amendment to
Debtor-In-Possession Credit Agreement (this "THIRTEENTH AMENDMENT"; the DIP
Credit Agreement, as so amended, being the "AMENDED AGREEMENT").

                  Without limiting the generality of the provisions of Section
11.05 of the DIP Credit Agreement, the amendment set forth above shall be
limited precisely as written, and nothing in this Thirteenth Amendment shall be
deemed to prejudice any right or remedy that the Administrative Agent or any
Lender may now have or may have in the future under or in connection with the
DIP Credit Agreement or any of such other Financing Documents. Except as
specifically amended by this Thirteenth Amendment, the DIP Credit Agreement and
such other Financing Documents shall remain in full force and effect and are
hereby ratified and confirmed.

                  In order to induce Lenders to enter into this Thirteenth
Amendment, each Borrower, by its execution of a counterpart of this Thirteenth
Amendment, represents and warrants that, subject to obtaining the approval of
the Court to the execution, delivery and performance of this Thirteenth
Amendment, (a) such Borrower has the corporate or other power and authority and
all material Governmental Approvals required to enter into this Thirteenth
Amendment and to carry out the transactions contemplated by, and perform its
obligations under, the Amended Agreement, (b) the execution and delivery of
this Thirteenth Amendment and the performance of the Amended Agreement have
been duly authorized by all necessary corporate or other action on the part of
such Borrower, (c) the execution and delivery by such Borrower of this
Thirteenth Amendment and the performance by such Borrower of the Amended
Agreement do not and will not contravene, or violate, any Applicable Laws
(including an applicable order of the Court) or any provision of its
Organizational Documents, or constitute a default under any agreement or other
instrument binding upon it (which default, in the case of such instruments or
agreements, would give rise to rights enforceable on a post-Petition Date
basis) or result in or require the imposition of any Liens (other than the
Liens created by the Collateral Documents) on any of its assets, (d) the
execution and delivery by such Borrower of this Thirteenth Amendment and the
performance by such Borrower of the Amended Agreement do not and will not
require any action by or in respect of, or filing with, any governmental body,
agency or official, (e) this Thirteenth Amendment and the Amended Agreement
have been duly executed and delivered by such Borrower and constitute the valid
and binding obligations of such Borrower, enforceable in accordance with their
respective terms, except as may be limited by general principles of equity, and
(f) after giving effect to this Thirteenth Amendment, no event has occurred and
is continuing or will result from the consummation of the transactions
contemplated by this Thirteenth Amendment that would constitute a Default.

                  This Thirteenth Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. This
Thirteenth Amendment shall become effective (the date of such effectiveness
being the "THIRTEENTH AMENDMENT EFFECTIVE DATE") as of November 1, 2001
provided the following conditions shall have been met: (a) the Borrowers and
each of the Lenders shall have executed counterparts of this Thirteenth
Amendment and the Borrowers and the Administrative Agent shall have received
written or telephonic notification of such execution and authorization of
delivery thereof, (b) the Administrative Agent shall have received from the

                                       4
<PAGE>

Borrowers, for distribution to the undersigned Lenders in accordance with their
respective Percentages, an amendment fee of 1% of the aggregate Tranche A
Commitments of such Lenders after giving effect to this Thirteenth Amendment,
(c) PNC Bank, National Association, as administrative agent under the Existing
Credit Facilities (the "PREPETITION AGENT"), shall have received an adequate
protection payment from the Borrower in the amount of seven million five
hundred thousand dollars ($7,500,000), for the ratable benefit of each of the
Existing Lenders, in partial satisfaction of the Prepetition Indebtedness due
under the Existing Credit Facilities (to be applied by the Prepetition Agent in
accordance with the terms of the Existing Credit Facilities), (d) the Court
shall have entered an order, in form and substance satisfactory to the Lenders,
approving this Thirteenth Amendment, the amendment fee and the adequate
protection payment referenced above, and (e) the Administrative Agent shall
have received evidence satisfactory to it that all outstanding statements of
O'Melveny & Myers LLP, Houlihan Lokey Howard & Zukin, and Deloitte Consulting,
L.L.C. that are received by MHG prior to 12:00 Noon (New York City time) on
November 2, 2001 have been paid in full.

                  THIS THIRTEENTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

                  [Remainder of page intentionally left blank]

                                       5
<PAGE>

BORROWERS:                 MARINER HEALTH GROUP, INC.
                           AID & ASSISTANCE, INC.
                           BEECHWOOD HERITAGE RETIREMENT COMMUNITY, INC.
                           BRIDE BROOK NURSING & REHABILITATION CENTER,
                                INC.
                           COMPASS PHARMACY SERVICES, INC.
                           COMPASS PHARMACY SERVICES OF MARYLAND, INC.
                           COMPASS PHARMACY SERVICES OF TEXAS, INC.
                           CYPRESS NURSING FACILITY, INC.
                           LONG RIDGE NURSING AND REHABILITATION CENTER,
                                INC.
                           LONGWOOD REHABILITATION CENTER, INC.
                           MARINER HEALTH AT BONIFAY, INC.
                           MARINER HEALTH CARE, INC.
                           MARINER HEALTH CARE OF ATLANTIC SHORES, INC.
                           MARINER HEALTH CARE OF DELAND, INC.
                           MARINER HEALTH CARE OF FORT WAYNE, INC.
                           MARINER HEALTH CARE OF GREATER LAUREL, INC.
                           MARINER HEALTH CARE OF INVERNESS, INC.
                           MARINER HEALTH CARE OF LAKE WORTH, INC.
                           MARINER HEALTH CARE OF MACCLENNY, INC.
                           MARINER HEALTH CARE OF METROWEST, INC.
                           MARINER HEALTH CARE OF NASHVILLE, INC.
                           MARINER HEALTH CARE OF NORTH HILLS, INC.
                           MARINER HEALTH CARE OF ORANGE CITY, INC.
                           MARINER HEALTH CARE OF PALM CITY, INC.
                           MARINER HEALTH CARE OF PINELLAS POINT, INC.
                           MARINER HEALTH CARE OF PORT ORANGE, INC.
                           MARINER HEALTH CARE OF SOUTHERN CONNECTICUT,
                                INC.
                           MARINER HEALTH CARE OF TOLEDO, INC.
                           MARINER HEALTH CARE OF TUSKAWILLA, INC.
                           MARINER HEALTH CARE OF WEST HILLS, INC.
                           MARINER HEALTH CENTRAL, INC.
                           MARINER HEALTH HOME CARE, INC.
                           MARINER HEALTH OF FLORIDA, INC.
                           MARINER HEALTH OF JACKSONVILLE, INC.
                           MARINER HEALTH OF MARYLAND, INC.
                           MARINER HEALTH OF ORLANDO, INC.
                           MARINER HEALTH OF PALMETTO, INC.
                           MARINER HEALTH OF SEMINOLE COUNTY, INC.
                           MARINER HEALTH OF TAMPA, INC.
                           MARINER HEALTH RESOURCES, INC.
                           MARINER PHYSICIAN SERVICES, INC.
                           MARINER PRACTICE CORPORATION
                           MARINER - REGENCY HEALTH PARTNERS, INC.
                           MARINERSELECT STAFFING SOLUTIONS, INC.
                           MARINER SUPPLY SERVICES, INC.
                           MEDREHAB, INC.

                                      S-1
<PAGE>

                           MEDREHAB OF INDIANA, INC.
                           MEDREHAB OF LOUISIANA, INC.
                           MEDREHAB OF MISSOURI, INC.
                           MERRIMACK VALLEY NURSING & REHABILITATION
                                CENTER, INC.
                           METHUEN NURSING & REHABILITATION CENTER, INC.
                           MHC REHAB. CORP.
                           MHC TRANSPORTATION, INC.
                           MYSTIC NURSING & REHABILITATION CENTER, INC.
                           NATIONAL HEALTH STRATEGIES, INC.
                           PARK TERRACE NURSING & REHABILITATION CENTER,
                                INC.
                           PENDLETON NURSING & REHABILITATION CENTER, INC.
                           PINNACLE CARE CORPORATION
                           PINNACLE CARE CORPORATION OF HUNTINGTON
                           PINNACLE CARE CORPORATION OF NASHVILLE
                           PINNACLE CARE CORPORATION OF SENECA
                           PINNACLE CARE CORPORATION OF SUMTER
                           PINNACLE CARE CORPORATION OF WILLIAMS BAY
                           PINNACLE CARE CORPORATION OF WILMINGTON
                           PINNACLE CARE MANAGEMENT CORPORATION
                           PINNACLE PHARMACEUTICALS, INC.
                           PINNACLE PHARMACEUTICAL SERVICES, INC.
                           PINNACLE REHABILITATION, INC.
                           PINNACLE REHABILITATION OF MISSOURI, INC.
                           PRISM CARE CENTERS, INC.
                           PRISM HEALTH GROUP, INC.
                           PRISM HOME CARE COMPANY, INC.
                           PRISM HOME CARE, INC.
                           PRISM HOME HEALTH SERVICES, INC.
                           PRISM HOSPITAL VENTURES, INC.
                           PRISM REHAB SYSTEMS, INC.
                           REGENCY HEALTH CARE CENTER OF SEMINOLE COUNTY,
                                INC.
                           SASSAQUIN NURSING & REHABILITATION CENTER, INC.
                           TAMPA MEDICAL ASSOCIATES, INC.
                           THE OCEAN PHARMACY, INC.
                           TRI-STATE HEALTH CARE, INC.
                           WINDWARD HEALTH CARE, INC.

                           BY: /s/ Boyd P. Gentry
                              -------------------------------------------------
                              Boyd P. Gentry
                              Vice President for each of the
                              foregoing Borrowers

                                      S-2
<PAGE>

                           IHS REHAB PARTNERSHIP, LTD.

                           BY: MARINER HEALTH CARE OF NASHVILLE, INC.,
                               its General Partner

                               By: /s/ Boyd P. Gentry
                                  ---------------------------------------------
                               Name: Boyd P. Gentry
                               Title:  Senior VP and Treasurer

                           MARINER HEALTH PROPERTIES IV, LTD.

                           BY: MARINER HEALTH OF FLORIDA, INC.,
                               its General Partner

                               By: /s/ Boyd P. Gentry
                                  ---------------------------------------------
                               Name: Boyd P. Gentry
                               Title:  Senior VP and Treasurer

                           MARINER HEALTH PROPERTIES VI, LTD.

                           BY: MARINER HEALTH OF FLORIDA, INC.,
                               its General Partner

                               By: /s/ Boyd P. Gentry
                                  ---------------------------------------------
                               Name: Boyd P. Gentry
                               Title:  Senior VP and Treasurer

                           SEVENTEENTH STREET ASSOCIATES LIMITED PARTNERSHIP

                           BY: TRI-STATE HEALTH CARE, INC.,
                               its General Partner

                               By: /s/ Boyd P. Gentry
                                  ---------------------------------------------
                               Name: Boyd P. Gentry
                               Title:  Senior VP and Treasurer

                                      S-3
<PAGE>

                           ALLEGIS HEALTH AND LIVING CENTER AT HERITAGE
                                HARBOUR, L.L.C.

                           BY: MARINER HEALTH OF MARYLAND, INC.,
                               its General Partner

                               By: /s/ Boyd P. Gentry
                                  ---------------------------------------------
                               Name: Boyd P. Gentry
                               Title:  Senior VP and Treasurer

                                      S-4
<PAGE>

AGENTS AND LENDERS:        PNC BANK, NATIONAL ASSOCIATION,
                           Individually as a Continuing Lender and as
                           Administrative Agent, Collateral Agent and
                           LC Issuing Bank

                           By:
                              -------------------------------------------------
                           Name:
                           Title:

<PAGE>

                           FIRST UNION NATIONAL BANK,
                           individually as a Continuing Lender and
                           as Syndication Agent

                           By:
                              -------------------------------------------------
                           Name:
                           Title:

                                      S-2
<PAGE>

                           CREDIT LYONNAIS NEW YORK BRANCH,
                           individually as a Continuing Lender

                           By:
                              -------------------------------------------------
                           Name:
                           Title:

                                      S-3
<PAGE>

                           BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
                           individually as a Continuing Lender

                           By:
                              -------------------------------------------------
                           Name:
                           Title:

                           By:
                              -------------------------------------------------
                           Name:
                           Title:

                                      S-4

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