Exhibit: 10.39
GUARANTY
THIS GUARANTY ("GUARANTY") made as of December 31, 2004, by ALTERRA
HEALTHCARE CORPORATION ("GUARANTOR"), a Delaware corporation, to and for the
benefit of XXXXXXX XXXXX CAPITAL, a Division of Xxxxxxx Xxxxx Business Financial
Services Inc., a Delaware corporation, its successors and assigns ("LENDER").
R E C I T A L S
A. On or about the date hereof, AHC Purchaser Holding II, Inc., a
Delaware corporation ("BORROWER") and Lender entered into that certain Mezzanine
Loan Agreement ("LOAN AGREEMENT") whereby Lender agreed to make a loan (the
"LOAN") available to Borrower in the maximum aggregate principal amount at any
time outstanding not to exceed the sum of TEN MILLION and No/100ths Dollars
($10,000,000.00), to allow Owner to refinance the Projects. Capitalized terms
used and not otherwise defined herein shall have the meanings given to them in
the Loan Agreement.
B. In connection with the Loan, Borrower has executed and delivered
that certain Promissory Note (the "NOTE") in favor of Lender of even date
herewith in the maximum aggregate principal amount of the Loan, payment of which
is evidenced and secured by (i) a first priority collateral assignment of the
issued and outstanding stock in Borrower (the "ASSIGNMENT"), and (ii) the other
Loan Documents.
C. Guarantor will derive material financial benefit from the Loan
evidenced and secured by the Note, the Assignment and the other Loan Documents.
D. Lender has relied on the statements and agreements contained
herein in agreeing to make the Loan. The execution and delivery of this Guaranty
by Guarantor is a condition precedent to the making of the Loan by Lender.
AGREEMENTS
NOW, THEREFORE, intending to be legally bound, Guarantor, in
consideration of the matters described in the foregoing Recitals, which Recitals
are incorporated herein and made a part hereof, and for other good and valuable
consideration the receipt and sufficiency of which are acknowledged, hereby
covenants and agrees for the benefit of Lender and its successors, indorsees,
transferees, participants and assigns as follows:
1. Guarantor absolutely, unconditionally and irrevocably guarantees:
(a) the full and prompt payment of the principal of and interest on
the Note when due, whether at stated maturity, upon acceleration or
otherwise, and at all times thereafter, and the full and prompt payment of
all sums which may now be or may hereafter become due and owing under the
Note, the Loan Agreement and the other Loan Documents;
(b) the prompt, full and complete performance of all of Borrower's
obligations under each and every covenant contained in the Loan Documents;
and
(c) the full and prompt payment of any Enforcement Costs (as
hereinafter defined in Section 7 hereof).
All amounts due, debts, liabilities and payment obligations described in
subsections (a), (b) and (c) of this Section 1 shall be hereinafter collectively
referred to as the "INDEBTEDNESS." All payments under this Guaranty must be made
in lawful money of the United States of America and in current funds. Any amount
received by the Lender from any collateral or security for the Loan Documents
may be applied by it towards any sums due under or in respect of the Loan
Documents, in such order of application as is provided for under the applicable
Loan Documents, or if not so provided for, then in such order as the Lender may
from time to time elect in its sole discretion. Subject to the preceding
sentence, the Lender shall have the right to determine how, when and what
application of payments and credits, whether derived from the Borrower or any
other source, shall be made on the amounts due Lender under the Loan Documents.
Without limiting any of the foregoing, Guarantor acknowledges and agrees it is
an Environmental Indemnitor (as defined in the Loan Agreement) and agrees to be
liable under (and in accordance with) the provisions of Article 6 of the Loan
Agreement for all liabilities and performance obligations of an Environmental
Indemnitor thereunder.
2. In the event of any default by Borrower in the payment of the
Indebtedness, after the expiration of any applicable cure or grace period,
Guarantor agrees, on demand by Lender or any holder of the Note (which demand
may be made concurrently with notice to Borrower that Borrower is in default of
its obligations), to pay the Indebtedness regardless of any defense, right of
set-off or claims which Borrower or Guarantor may have against Lender or the
holder of the Note.
All of the remedies set forth herein and/or provided for in any of
the other Loan Documents or at law or equity shall be equally available to
Lender, and the choice by Lender of one such alternative over another shall not
be subject to question or challenge by Guarantor or any other person, nor shall
any such choice be asserted as a defense, setoff, recoupment or failure to
mitigate damages in any action, proceeding, or counteraction by Lender to
recover or seeking any other remedy under this Guaranty, nor shall such choice
preclude Lender from subsequently electing to exercise a different remedy. The
parties have agreed to the alternative remedies provided herein in part because
they recognize that the choice of remedies in the event of a default hereunder
will necessarily be and should properly be a matter of good faith business
judgment, which the passage of time and events may or may not prove to have been
the best choice to maximize recovery by Lender at the lowest cost to Borrower
and/or Guarantor. It is the intention of the parties that such good faith choice
by Lender be given conclusive effect regardless of such subsequent developments.
All sums payable under this Guaranty shall be payable (i) within
fifteen (15) days after demand thereof if no other date or time period for
payment is specified therein, and (ii) without reduction for any offset, claim,
counterclaim or defense.
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3. Guarantor does hereby (a) waive notice of acceptance of this Guaranty
by Lender and any and all notices and demands of every kind which may be
required to be given by any statute, rule or law, (b) agree to refrain from
asserting, until after repayment in full of the Loan, any defense, right of
set-off, right of recoupment or other claim which Guarantor may have against
Borrower, (c) waive any defense, right of set-off, right of recoupment or other
claim which Guarantor or Borrower may have against Lender or the holder of the
Note, (d) waive any and all rights Guarantor may have under any anti-deficiency
statute or other similar protections, (e) prior to the indefeasible payment in
full of the Indebtedness, waive all rights at law or in equity to seek
subrogation, contribution, indemnification or any other form of reimbursement or
repayment from Borrower or any other person or entity now or hereafter primarily
or secondarily liable for any of the Indebtedness, (f) waive presentment for
payment, demand for payment, notice of nonpayment or dishonor, protest and
notice of protest, diligence in collection and any and all formalities which
otherwise might be legally required to charge Guarantor with liability, (g)
waive the benefit of all appraisement, valuation, marshalling, forbearance,
stay, extension, moratorium laws in effect, (h) waive any defense based on the
incapacity, lack of authority, death or disability of any other person or entity
or the failure of Lender to file or enforce a claim against the estate of any
other person or entity in any administrative, bankruptcy or other proceeding,
(i) waive any defense based on an election of remedies by Lender, whether or not
such election may affect in any way the recourse, subrogation or other rights of
Guarantor against the Borrower, any other guarantor or any other person in
connection with the Indebtedness, (j) waive any failure by Lender to inform
Guarantor of any facts Lender may now or hereafter know about Borrower, the
Projects, the Loan, or the transactions contemplated by the Loan Agreement, it
being understood and agreed that Lender has no duty so to inform and that
Guarantor is fully responsible for being and remaining informed by Borrower of
all circumstances bearing on the risk of nonperformance of Borrower's
obligations, (k) waive any defense based on the failure of the Lender to (i)
provide notice to Guarantor of a sale or other disposition (including any
collateral sale pursuant to the Uniform Commercial Code) of any of the security
for any of the Indebtedness, or (ii) conduct such a sale or disposition in a
commercially reasonable manner, (1) waive any defense based on the negligence of
the Lender in administering the Loan (including, but not limited to, the failure
to perfect any security interest in any collateral for the Loan), or taking or
failing to take any action in connection therewith, or based on the federal
Equal Credit Opportunity Act and applicable regulations or the Equal Credit
Opportunity Act and applicable regulations of any state, (m) waive the defense
of expiration of any statute of limitations affecting the liability of Guarantor
hereunder or the enforcement hereof, (n) waive any right to file any "Claim" (as
defined below) as part of, and any right to request consolidation of any action
or proceeding relating to a Claim with, any action or proceeding filed or
maintained by Lender to collect any indebtedness of Guarantor to Lender
hereunder or to exercise any rights or remedies available to Lender under the
Financing Documents, at law, in equity or otherwise, (o) agree that the Lender
shall have no obligation to obtain, perfect or retain a security interest in any
property to secure any of the Indebtedness or this Guaranty (including any
mortgage or security interest contemplated by the Loan Documents), or to protect
or insure any such property, (p) waive any obligation Lender may have to
disclose to Guarantor any facts the Lender now or hereafter may know or have
reasonably available to it regarding the Borrowers or their financial condition,
whether or not the Lender has a reasonable opportunity to communicate such facts
or has reason to believe that any such facts are unknown to Guarantor or
materially increase the risk to Guarantor beyond the risk Guarantor
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intend to assume hereunder, and (q) agree that the Lender shall not be liable in
any way for any decrease in the value or marketability of any property securing
any of the Indebtedness which may result from any action or omission of the
Lender in enforcing any part of this Guaranty or any portion of the Loan. Credit
may be granted or continued from time to time by Lender to Borrower without
notice to or authorization from Guarantor, regardless of the financial or other
condition of Borrower at the time of any such grant or continuation. Lender
shall have no obligation to disclose or discuss with Guarantor its assessment of
the financial condition of Borrower. Guarantor acknowledges that no
representations of any kind whatsoever have been made by Lender. No modification
or waiver of any of the provisions of this Guaranty shall be binding upon Lender
except as expressly set forth in a writing duly signed and delivered by Lender.
For purposes of this section, the term "Claim" shall mean any claim, action or
cause of action, defense, counterclaim, set-off or right of recoupment of any
kind or nature against the Lender, its officers, directors, employees, agents,
members, actuaries, accountants, trustees or attorneys, or any affiliate of the
Lender in connection with the making, closing, administration, collection or
enforcement by the Lender of the indebtedness evidenced by the Note or the
obligations evidenced by the Loan Documents (including this Guaranty).
4. Guarantor further agrees that Guarantor's liability as guarantor shall
not be impaired or affected by any renewals or extensions which may be made from
time to time, with or without the knowledge or consent of Guarantor, of the time
for payment of interest or principal under the Note or by any forbearance or
delay in collecting interest or principal under the Note, or by any waiver by
Lender under the Loan Agreement, the Assignment or any other Loan Document, or
by Lender's failure or election not to pursue any other remedies it may have
against Borrower or Guarantor, or by any change or modification in the Note,
Loan Agreement, the Assignment or any other Loan Document, or by the acceptance
by Lender of any additional security or any increase, substitution or change
therein, or by the release by Lender of any security or any withdrawal thereof
or decrease therein, or by the application of payments received from any source
to the payment of any obligation other than the Indebtedness even though Lender
might lawfully have elected to apply such payments to any part or all of the
Indebtedness, it being the intent hereof that, Guarantor shall remain liable for
the payment of the Indebtedness until the Indebtedness has been paid in full,
notwithstanding any act or thing which might otherwise operate as a legal or
equitable discharge of a surety. Guarantor further understands and agrees that
Lender may at any time enter into agreements with Borrower to amend and modify
and/or increase the principal amount of, interest rate applicable to or other
economic and non-economic terms of the Note, Loan Agreement, the Assignment or
other Loan Documents, and may waive or release any provision or provisions of
the Note, Loan Agreement, the Assignment or any other Loan Document, and, with
reference to such instruments, may make and enter into any such agreement or
agreements as Lender and Borrower may deem proper and desirable, without in any
manner impairing or affecting this Guaranty or any of Lender's rights hereunder
or Guarantor's obligations hereunder and Guarantor's obligations hereunder shall
apply to the Note, Loan Agreement, Mortgages and other Loan Documents as so
amended, modified, extended, renewed or increased.
5. This is an absolute, present and continuing guaranty of payment and not
of collection. Guarantor agrees that this Guaranty may be enforced by Lender
without the necessity at any time of resorting to or exhausting any other
security or collateral given in connection herewith or with the Note, Loan
Agreement, the Assignment or any of the other Loan Document
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through foreclosure or sale proceedings, as the case may be, under the
Assignment or otherwise, or resorting to any other guaranties, and Guarantor
hereby waives any right to require Lender to join Borrower in any action brought
hereunder or to commence any action against or obtain any judgment against
Borrower or to pursue any other remedy or enforce any other right. Guarantor
further agrees that nothing contained herein or otherwise shall prevent Lender
from pursuing concurrently or successively all rights and remedies available to
it at law and/or in equity or under the Note, Loan Agreement, the Assignment or
any other Loan Document, and the exercise of any of Lender's rights or the
completion of any of Lender's remedies shall not constitute a discharge of
Guarantor's obligations hereunder, it being the purpose and intent of Guarantor
that the obligations of Guarantor hereunder shall be absolute, independent and
unconditional under any and all circumstances whatsoever. None of Guarantor's
obligations under this Guaranty or any remedy for the enforcement thereof shall
be impaired, modified, changed or released in any manner whatsoever by any
impairment, modification, change, release or limitation of the liability of
Borrower under the Note, Loan Agreement, the Assignment or other Loan Document
or by reason of the bankruptcy of Borrower or by reason of any creditor or
bankruptcy proceeding instituted by or against Borrower. This Guaranty shall
continue to be effective or be reinstated (as the case may be) if at any time
payment of all or any part of any sum payable pursuant to the Note, Loan
Agreement, the Assignment or any other Loan Document is rescinded or otherwise
required to be returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation, or reorganization of Borrower, or upon or as a result of the
appointment of a receiver, intervenor, custodian or conservator of or trustee or
similar officer for, Borrower or any substantial part of its property, or
otherwise, all as though such payment to Lender had not been made, regardless of
whether Lender contested the order requiring the return of such payment. In the
event of the foreclosure of the Assignment and of a deficiency, Guarantor hereby
promises and agrees forthwith to pay the amount of such deficiency
notwithstanding the fact that recovery of said deficiency against Borrower would
not be allowed by applicable law; however, the foregoing shall not be deemed to
require that Lender institute foreclosure proceedings or otherwise resort to or
exhaust any other collateral or security prior to or concurrently with enforcing
this Guaranty.
6. In the event Lender or any holder of the Note shall assign the Note to
any lender or other entity to secure a loan from such lender or other entity to
Lender or such holder for an amount not in excess of the amount which will be
due, from time to time, from Borrower to Lender under the Note with interest not
in excess of the rate of interest which is payable by Borrower to Lender under
the Note, Guarantor will accord full recognition thereto and agree that all
rights and remedies of Lender or such holder hereunder shall be enforceable
against Guarantor by such lender or other entity with the same force and effect
and to the same extent as would have been enforceable by Lender or such holder
but for such assignment; provided, however, that unless Lender shall otherwise
consent in writing, Lender shall have an unimpaired right, prior and superior to
that of its assignee or transferee, to enforce this Guaranty for Lender's
benefit to the extent any portion of the Indebtedness or any interest therein is
not assigned or transferred.
7. If: (a) this Guaranty is placed in the hands of an attorney for
collection or is collected through any legal proceeding; (b) an attorney is
retained to represent Lender in any bankruptcy, reorganization, receivership, or
other proceedings affecting creditors' rights and involving a claim under this
Guaranty; (c) an attorney is retained to provide advice or other representation
with respect to this Guaranty; or (d) an attorney is retained to represent
Lender in
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any proceedings whatsoever in connection with this Guaranty and Lender
prevails in any such proceedings, then Guarantor shall pay to Lender upon demand
all attorney's fees, costs and expenses incurred in connection therewith (all of
which are referred to herein as "ENFORCEMENT COSTS"), in addition to all other
amounts due hereunder, regardless of whether all or a portion of such
Enforcement Costs are incurred in a single proceeding brought to enforce this
Guaranty as well as the other Loan Documents.
8. The parties hereto intend and believe that each provision in this
Guaranty comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, in this Guaranty is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if such court should
declare such portion, provision or provisions of this Guaranty to be illegal,
invalid, unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision or provisions shall be given
force to the fullest possible extent that they are legal, valid and enforceable,
that the remainder of this Guaranty shall be construed as if such illegal,
invalid, unlawful, void or unenforceable portion, provision or provisions were
not contained therein, and that the rights, obligations and interest of Lender
or the holder of the Note under the remainder of this Guaranty shall continue in
full force and effect.
9. TO THE GREATEST EXTENT PERMITTED BY LAW, GUARANTOR HEREBY WAIVES ANY
AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO ANY
SUIT, ACTION OR PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A "PROCEEDING"),
LENDER (BY ITS ACCEPTANCE HEREOF) AND GUARANTOR IRREVOCABLY (A) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION
IN THE CITY OF CHICAGO, COUNTY OF XXXX AND STATE OF ILLINOIS, AND (B) WAIVES ANY
OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING
BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM AND FURTHER WAIVE THE RIGHT TO OBJECT, WITH RESPECT TO
SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY.
NOTHING IN THIS GUARANTY SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY
OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE
JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION.
LENDER AND GUARANTOR FURTHER AGREE AND CONSENT THAT, IN ADDITION TO ANY METHODS
OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS
IN ANY PROCEEDING IN ANY ILLINOIS STATE OR UNITED STATES COURT SITTING IN THE
CITY OF CHICAGO AND COUNTY OF XXXX MAY BE MADE BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS
INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT
IF SUCH PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE
FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.
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10. (a) Any indebtedness of Borrower to Guarantor (including but not
limited to any right of Guarantor to a return of any capital contributed to a
Borrower), whether now or hereafter existing is hereby subordinated to the
payment of the Indebtedness and the Enforcement Costs. Guarantor agrees that,
until the entire Indebtedness has been paid in full, Guarantor will not seek,
accept, or retain for its own account, any payment from Borrower on account of
such subordinated debt. Any payments to Guarantor on account of such
subordinated debt shall be collected and received by Guarantor in trust for
Lender and shall be paid over to Lender on account of the Indebtedness without
impairing or releasing the obligations of Guarantor hereunder.
(b) Guarantor shall promptly file in any bankruptcy or other
proceeding in which the filing of claims is required by law, all claims
and proofs of claims that Guarantor may have against the Borrower or any
other guarantor and does hereby assign to the Lender or its nominee (and
will, upon request of Lender, reconfirm in writing the assignment to
Lender or its nominee of) all rights of Guarantor under such claims. If
Guarantor does not file any such claim, Lender, as attorney-in-fact for
Guarantor, is hereby irrevocably authorized to do so in the name of
Guarantor, or in Lender's discretion, to assign the claim to a designee
and cause proof of claim to be filed in the name of Lender's designee. In
all such cases, whether in administration, bankruptcy or otherwise, the
person or persons authorized to pay such claim shall pay to Lender the
full amount thereof and, to the full extent necessary for that purpose,
Guarantor hereby assigns to the Lender all of Guarantor's rights to any
such payments or distributions to which Guarantor would otherwise be
entitled, such assignment being a present and irrevocable assignment of
all such rights.
(c) In the event (1) any of the Borrower or any other guarantor
shall (i) file voluntarily or be filed against involuntarily for
protection under the U.S. Bankruptcy Code or any other present or future
federal or state act or law relating to bankruptcy, insolvency, or other
relief for debtors, (ii) have sought or consented to or acquiesced in the
appointment of any trustee, receiver, conservator, or liquidator, or (iii)
be the subject of any order, judgment, or decree entered by any court of
competent jurisdiction approving a petition filed against such party for
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or
state act or law relating to bankruptcy, insolvency, or relief for
debtors, and (b) the automatic stay imposed by the applicable provisions
of the U.S. Bankruptcy Code, as amended, or under any other applicable
law, against the exercise of the rights and remedies otherwise available
to creditors of the Borrower or such other guarantor is deemed by the
court having jurisdiction to apply to Guarantor so that Guarantor is not
permitted to pay Lender the Indebtedness and/or Lender may not immediately
enforce the terms of this Guaranty or exercise such other rights and
remedies against Guarantor as would otherwise be provided by law, Lender
shall immediately be entitled, and Guarantor hereby consents, to relief
from such stay, and Guarantor hereby authorizes and directs Lender to
present this Guaranty to the applicable court to evidence this agreement
and consent.
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11. Any amounts received by Lender from any source on account of the Loan
may be utilized by Lender for the payment of the Indebtedness and any other
obligations of Borrower to Lender in such order as Lender may from time to time
elect. Additionally, if the indebtedness guaranteed hereby is less than the full
indebtedness evidenced by the Note, all rents, proceeds and avails of the
Projects, including proceeds of realization of Lender's collateral, shall be
deemed applied on the indebtedness of Borrower to Lender that is not guaranteed
by Guarantor until such unguaranteed indebtedness of Borrower to Lender has been
fully repaid before being applied upon the indebtedness guaranteed by Guarantor.
12. (a) It is expressly agreed that time is of the essence of this
Guaranty and every covenant and provision hereof, and that any of the following
shall be an "EVENT OF DEFAULT" under this Guaranty:
(i) the dissolution of Guarantor;
(ii) any "INSOLVENCY EVENT" (as defined below) with respect to
either Guarantor;
(iii) any failure by Guarantor and/or Borrower to make any payment
when due hereunder or under the Note or any of the other Loan Documents (beyond
any applicable notice and/or grace period, if any), or the occurrence of any
other default with respect to any other obligation of or covenant by Guarantor
and/or Borrower under this Guaranty, the Note or any of the other Loan Documents
(beyond any applicable notice and/or grace period, if any); or
(iv) any material inaccuracy in any representation or warranty made
by Guarantor, or any material omission of Guarantor, in connection with its
financial condition prior or subsequent to the date of this Guaranty, or any
material inaccuracy in any representation or warranty made by Guarantor in this
Guaranty or in any other Loan Document.
(b) Upon the occurrence of any Event of Default under this Guaranty,
there shall be deemed to have occurred a default and an "Event of Default"
(as that term is used in any of the other Loan Documents) under each of
the other Loan Documents, regardless of whether or not any portion of the
Indebtedness may then be due and payable.
(c) The term "Insolvency Event" shall mean any of the following:
Guarantor makes an assignment for the benefit of creditors, offers a
composition or extension to creditors, or makes or sends notice of an
intended bulk sale of any business or assets now or hereafter conducted or
owned by Guarantor; Guarantor files a petition in bankruptcy; Guarantor is
adjudicated insolvent or bankrupt, or petitions or applies to any tribunal
for any receiver of or any trustee for itself or any substantial part of
its property; Guarantor commences any proceeding relating to itself under
any reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter
in effect; any such proceeding is commenced against Guarantor and such
proceeding remains undismissed for a period of sixty (60) days; Guarantor
by any act indicates its consent to, approval of, or acquiescence in, any
such proceeding or
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the appointment of any receiver of or any trustee for Guarantor or any
substantial part of its property, or suffers any such receivership or
trusteeship to continue undischarged for a period of sixty (60) days.
(d) All grace periods under the Note, this Guaranty and/or the other
Loan Documents shall run concurrently such that once any grace period has
expired without the curing of the default in question, Lender shall be
entitled to exercise any and all of the rights and remedies granted under
the Note, this Guaranty and the other Loan Documents without the necessity
of issuing any further notice or the granting of any further grace
periods.
13. GUARANTOR AND LENDER (BY ITS ACCEPTANCE HEREOF) EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY CLAIM,
CONTROVERSY, DISPUTE, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS
GUARANTY AND THE OTHER LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION ANY ACTIONS
OR PROCEEDINGS FOR ENFORCEMENT OF THE LOAN DOCUMENTS) AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
GUARANTOR AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH OF THEM HAS RELIED ON THIS WAIVER
IN ENTERING INTO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS AND THAT EACH OF
THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.
GUARANTOR AND LENDER EACH WARRANT AND REPRESENT THAT EACH HAS HAD THE
OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
14. Any notice, demand, request or other communication which any party
hereto may be required or may desire to give hereunder shall be in writing and
shall be deemed to have been properly given (a) if hand delivered, when
delivered; (b) if mailed by United States Certified Mail (postage prepaid,
return receipt requested), three (3) Business Days after mailing (c) if by FedEx
or other reliable overnight courier service, on the next Business Day after
delivered to such courier service or (d) if by facsimile on the day of
transmission, if before 3:00 p.m. (Chicago Time) on a Business Day so long as
copy is sent on the same day by overnight courier as set forth below:
Guarantor: c/o Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to: Xxxxxx & Xxxxxx
2700 International Tower, Peachtree Center
000 Xxxxxxxxx Xxxxxx
0
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Lender: Xxxxxxx Xxxxx Capital, a Division of
Xxxxxxx Xxxxx Business Financial Services Inc.
000 X. XxXxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Vice President, Portfolio Manager
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to: Xxxxxxx Xxxxx Capital, a Division of
Xxxxxxx Xxxxx Business Financial Services Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Vice President, Portfolio Manager
Telephone: 000-000-0000
Facsimile: 000-000-0000
or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice. Any notice or demand delivered to the person or
entity named above to accept notices and demands for such party shall constitute
notice or demand duly delivered to such party, even if delivery is refused.
15. To induce Lender to make the Loan, Guarantor makes the following
representations and warranties to Lender set forth in this Section. Guarantor
acknowledges that but for the truth and accuracy of the matters covered by the
following representations and warranties, Lender would not have agreed to make
the Loan.
(a) Guarantor is duly formed, validly existing, and in good standing
in its state of organization and has qualified to do business and is in
good standing in any state in which it is necessary in the conduct of its
business.
(b) Guarantor maintains an office at the address set forth for such
party in Section 14.
(c) Any and all balance sheets, net worth statements, and other
financial data with respect to Guarantor which have heretofore been given
to Lender by or on behalf of Guarantor fairly and accurately present the
financial condition of Guarantor in all material respects as of the
respective dates thereof
(d) The execution, delivery, and performance by Guarantor of this
Guaranty does not and will not contravene or conflict with (i) any Laws,
order, rule, regulation, writ, injunction or decree now in effect of any
Government Authority, or court having jurisdiction over Guarantor, (ii)
any contractual
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restriction binding on or affecting Guarantor or Guarantor's property or
assets which may adversely affect Guarantor's ability to fulfill their
obligations under this Guaranty, (iii) the instruments creating any trust
holding title to any assets included in Guarantor's financial statements,
or (iv) the organizational or other documents of Guarantor.
(e) This Guaranty creates legal, valid, and binding obligations of
Guarantor enforceable in accordance with its terms.
(f) Except as disclosed in writing to Lender, there is no action,
proceeding, or investigation pending or, to the knowledge of Guarantor,
threatened or affecting Guarantor, which may adversely affect Guarantor's
ability to fulfill its obligations under this Guaranty. There are no
judgments or orders for the payment of money rendered against Guarantor
for an amount in excess of $100,000.00 that have been undischarged for a
period of ten (10) or more consecutive days and the enforcement of which
is not stayed by reason of a pending appeal or otherwise other than the
payments to be made to unsecured creditors pursuant to Guarantor's Plan of
Reorganization, which payments shall not exceed $5,000,000 in aggregate.
Guarantor is not in default under any agreements which may adversely
affect Guarantor's ability to fulfill its obligations under this Guaranty.
(g) All statements set forth in the Recitals are true and correct.
All of the foregoing representations and warranties shall be deemed
remade on the date of the first disbursement of Loan proceeds, on the date of
each advance of Loan proceeds, and upon any extension of the Loan pursuant to
the Loan Agreement. Guarantor hereby agrees to indemnify, defend and hold Lender
free and harmless from and against all loss, cost, liability, damage, and
expense, including attorney's fees and costs, which Lender may sustain by reason
of the inaccuracy or breach of any of the foregoing representations and
warranties as of the date the foregoing representations and warranties are made
and are remade.
16. Guarantor hereby covenants and agrees as follows that, at all times
while this Guaranty or the Indebtedness remains outstanding:
(a) Guarantor shall not incur any indebtedness to any of its
shareholders or Affiliates (including, without limitation, any obligation
to pay dividends (other than cash dividends paid not more than ten (10)
days following their declaration) or to make payments of any other kind);
provided, Guarantor shall not declare or pay any dividends at any time any
Event of Default is continuing under the Loan Documents.
(b) Guarantor shall maintain unrestricted cash and/or availability
under lines of credit or revolving loan agreements reasonably acceptable
to Lender in the aggregate amount of at least $10,000,000.00 (the
"UNRESTRICTED CASH"); provided, however, that if the Fixed Charge Coverage
Ratio for any two consecutive calendar quarters is equal to or greater
than 1.10:1.0 then the amount
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of Unrestricted Cash Guarantor is required to maintain during the
following calendar quarter pursuant to this paragraph shall be reduced to
$8,000,000.00; and provided further, that such availability under a line
of credit or revolving loan agreement shall only be taken into account in
computing Unrestricted Cash if Guarantor may then borrow such amounts
under such credit facilities without the need for any separate approval or
any waiver of any condition under the terms of such credit facilities. All
Unrestricted Cash shall be maintained in money market or deposit accounts
or certificates of deposit in the name of Guarantor, which accounts or
certificates shall not be subject to control agreements or otherwise be
subject to any liens. Unrestricted Cash shall not include any funds
constituting a security deposit or refundable portion of any move in or
entrance fee with respect to any resident of any assisted living facility
and/or Alzheimer's care facility (each, a "FACILITY"), a reserve or
security for any obligation. For purposes of this Section 16(b), Fixed
Charge Coverage Ratio shall be determined as provided in Section 16(c)
below, except that instead of being determined prospectively (as provided
in Section 16(c)), it shall for this purpose be determined by Lender
quarterly based on a trailing three month basis.
(c) Guarantor shall not enter into or permit a Fixed Charge Coverage
Event to occur, unless on a prospective basis taking into account the
prospective Fixed Charge Coverage Event, Lender reasonably determines that
Guarantor's Fixed Charge Coverage Ratio will be equal to or greater than
1:1. As used herein, "FIXED CHARGE COVERAGE RATIO" shall mean the ratio,
as reasonably calculated by Lender on a prospective basis to take into
account the proposed Fixed Charge Coverage Event and otherwise as
reasonably determined by Lender, of (x) Guarantor's annual net income
before interest, income taxes, depreciation, amortization and rent
calculated on a consolidated basis in accordance with GAAP, but after
deducting applicable management fees and capital expenditures ("ADJUSTED
EBITDAR") to (y) all lease payments (including payments under capitalized
leases) coming due, interest expense and scheduled principal amortization
for a one-year period. As used herein, "FIXED CHARGE COVERAGE EVENT" shall
mean any (i) dividend or other distribution of any kind by Guarantor to
Guarantor's shareholders (except only dividends of approximately
$75,000,000 (as adjusted as described in clause (i)(z) below) necessary
for FEBC-ALT Investors LLC to repay (x) the loan made by the class A
member of FEBC-ALT Investors LLC (the "CLASS A MEMBER") to FEBC-ALT
Investors LLC, (y) the capital investment of the Class A Member in
FEBC-ALT Investors LLC and (z) the interest on such loan and the preferred
return on such capital investment to the Class A Member), (ii) asset
acquisition (or series of related asset acquisitions which, in aggregate
for all such related acquisitions, is) of $10,000,000 or more (provided,
construction of expansion space at existing facilities will not be
considered an asset acquisition for this purpose), (iii) any
sale-leaseback transaction (or series of related sale-leaseback
transactions) where the sale price (or aggregate sale price for all such
related sale-leaseback transactions) is $10,000,000 or more, (iv)
incurrence of any debt for borrowed money (other than refinancing existing
debt) or (v) incurrence of any lease obligations (other than (A) renewals
or extensions of existing leases pursuant to options to do so in the
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existing leases, (B) intercompany leases among Guarantor and its direct or
indirect subsidiaries and (C) leases necessary for governmental
compliance), whether or not such leases are capitalized. For all purposes
of this Section 16(c), only payments actually due under leases shall be
taken into account, and not so-called "straight-lined" lease payments for
GAAP purposes.
17. Guarantor shall deliver or cause to be delivered to Lender all of the
Guarantor financial statements to be delivered in accordance with the terms of
the Loan Agreement. If Guarantor shall become insolvent or seek protection under
insolvency laws or proceedings, or any application shall be made to have
Guarantor declared bankrupt or insolvent, or a receiver or trustee shall be
appointed for Guarantor or for all or a substantial part of the property of
Guarantor, or Guarantor shall make an assignment for the benefit of creditors,
notice of such occurrence or event shall be promptly furnished to the Lender by
Guarantor.
18. This Guaranty shall be binding upon the heirs, executors, legal and
personal representatives, successors and assigns of Guarantor and shall not be
discharged in whole or in part by dissolution of Guarantor.
19. THIS GUARANTY, THE NOTE, AND ALL OTHER INSTRUMENTS EVIDENCING AND
SECURING THE LOAN SECURED HEREBY WERE NEGOTIATED IN THE STATE OF ILLINOIS, AND
DELIVERED BY GUARANTOR OR BORROWER, AS APPLICABLE, AND ACCEPTED BY LENDER IN THE
STATE OF ILLINOIS, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP
TO THE PARTIES AND THE UNDERLYING TRANSACTIONS EMBODIED HEREBY. IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITATION, MATTERS OF CONSTRUCTION OF THE IMPROVEMENTS AND
PERFORMANCE OF THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER, THIS
GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
IN SUCH STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
20. Lender shall be entitled to honor any request for Loan proceeds made
by Borrower and shall have no obligation to see to the proper disposition of
such advances. Guarantor agrees that its obligations hereunder shall not be
released or affected by reason of any improper disposition by Borrower of such
Loan proceeds.
21. This Guaranty may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument.
22. The obligations under the Guaranty shall be the joint and several
obligations and liabilities of all Guarantor, if more than one. Hence, each
Guarantor, if more than one, shall be primarily and directly liable for all
obligations under this Guaranty.
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IN WITNESS WHEREOF, Guarantor has delivered this Guaranty in the
State of Illinois as of the date first written above.
GUARANTOR:
ALTERRA HEALTHCARE CORPORATION, a
Delaware corporation
By: /s/ Xxxx Xxxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxxx
Title: President
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