1
EXHIBIT 10.11
================================================================================
ALTERRA HEALTHCARE CORPORATION
AS GUARANTOR
WITH
(KEY CORPORATE CAPTIAL LOGO)
KEY CORPORATE CAPITAL INC.,
AS ADMINISTRATIVE AGENT
-----------------------------
GUARANTY
DATED AS OF
AUGUST 31, 1999
-----------------------------
RELATING TO UP TO $75,000,000 AGGREGATE PRINCIPAL AMOUNT OF LOANS
AND CERTAIN OTHER OBLIGATIONS OF THIRD PARTY INVESTORS I, LLC
================================================================================
2
GUARANTY
THIS GUARANTY, dated as of August 31, 1999 (as amended, modified or
supplemented from time to time, "THIS GUARANTY"), made by (i) ALTERRA HEALTHCARE
CORPORATION, a Delaware corporation (herein, together with its successors and
assigns, the "GUARANTOR"), which was formerly known as Alternative Living
Services, Inc., with (ii) KEY CORPORATE CAPITAL INC., a Michigan corporation, as
Administrative Agent (herein, together with its successors and assigns in such
capacity, the "ADMINISTRATIVE AGENT"), for the benefit of the Creditors (as
defined below):
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement (as defined below) shall be used herein as therein
defined. Certain terms used herein are defined in section 1 hereof.
(2) This Guaranty is made pursuant to the Master Construction Line of
Credit Agreement, dated as of the date hereof (herein, as amended or otherwise
modified, restated or replaced from time to time, the "CREDIT AGREEMENT"), among
Third Party Investors I, LLC, a Delaware limited liability company (herein,
together with its successors and assigns, the "BORROWER"), the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "LENDERS"), and the Administrative Agent, providing, among
other things, for loans or advances or other extensions of credit to or for the
benefit of the Borrower of up to $75,000,000, with such loans or advances being
evidenced by promissory notes (the "NOTES", such term to include all notes and
other securities issued in exchange therefor or in replacement thereof).
(3) The Borrower may from time to time be party to one or more
Designated Hedge Agreements (as defined in the Credit Agreement) and other
Designated Hedge Documents (as defined herein). Any institution or other person
that participates, and in each case their successors and assigns, as a
counterparty to the Borrower pursuant to any Designated Hedge Document is
referred to herein individually as a "DESIGNATED HEDGE CREDITOR" and
collectively as the "DESIGNATED HEDGE CREDITORS".
(4) This Guaranty is made for the benefit of the Administrative
Agent, the Collateral Agent, the Lenders and the Designated Hedge Creditors (any
or all of the foregoing, together with their respective successors and assigns,
individually a "CREDITOR" and collectively, the "CREDITORS").
(5) This Guaranty is made to guarantee the payment of the principal
of and interest on the Notes and the payment and performance by the Borrower of
its obligations under the Credit Agreement and the other Credit Documents to
which the Borrower is a party, and the payment and performance by the Borrower
of its obligations under Designated Hedge Documents. This Guaranty is one of the
Credit Documents referred to in the Credit Agreement.
(6) The Guarantor is financially interested in the Borrower as a
result of various direct or indirect management, leasing and other arrangements
with the Borrower relating to the Projects to be financed under the Credit
Agreement.
(7) It is a condition to the making of Loans under the Credit
Agreement that the Guarantor shall have executed and delivered this Guaranty.
(8) The Guarantor will obtain benefits from the incurrence of the
Credit Document Obligations and the Designated Hedge Document Obligations (as
such terms are hereafter defined) and, accordingly, desires to execute this
Guaranty in order to satisfy the condition described in the preceding paragraph
and to induce the Creditors to extend the Credit Document Obligations and the
Designated Hedge Document Obligations.
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby makes the following representations and
warranties to the Administrative Agent and the other Creditors and hereby
covenants and agrees with the Administrative
Agent and each other Creditor as follows:
2
3
1 CERTAIN DEFINITIONS. As noted above, except as otherwise defined
herein, terms used herein and defined in the Credit Agreement shall be used
herein as therein defined. As used in this Guaranty, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"ACQUISITION" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any facility and/or
business operated by any person who is not a Subsidiary of the Guarantor, and
(ii) acquisitions of a majority of the outstanding equity or other similar
interests in any such person (whether by merger, stock purchase or otherwise).
"CAPITAL LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under
Capital Leases of the Guarantor or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities identified as "capital lease
obligations" (or any similar words) on a consolidated balance sheet of the
Guarantor and its Subsidiaries prepared in accordance with GAAP.
"CONSOLIDATED ADJUSTED NET WORTH" shall mean at any time for the
determination thereof the sum of
(i) all amounts which, in conformity with GAAP, would be
included under the caption "total stockholders' equity" (or any like
caption) on a consolidated balance sheet of the Guarantor as at such
date,
(ii) to the extent the Guarantor has guaranteed outstanding
Indebtedness of the Borrower, all amounts which, in conformity with
GAAP, would be included under the caption "total members' equity" (or
any like caption) on a balance sheet of the Borrower as at such date,
to the extent attributable to investments in the Borrower by persons
who are not Affiliates of the Guarantor,
(iii) if and to the extent that the Guarantor has guaranteed
outstanding Indebtedness of Devco or of any limited liability company,
partnership or other joint venture in which Devco participates as an
equity owner, all amounts which, in conformity with GAAP, would be
included under the caption "total members' equity" or "total partners'
equity" (or any like caption) on a balance sheet of Devco or such joint
venture as of such date, to the extent attributable to investments in
or capital contributions to Devco or such joint venture by persons who
are not Affiliates of the Guarantor, and
(iv) if and to the extent that (x) all of the Lenders have
approved in writing the inclusion thereof for purposes of this
definition, and (y) the Guarantor has guaranteed outstanding
Indebtedness of any other person which is not a Subsidiary of the
Guarantor, all amounts which, in conformity with GAAP, would be
included under the caption "total stockholders' equity" (or any like
caption) on a consolidated balance sheet of such person as at such
date, to the extent attributable to investments in such person by
persons who are not Affiliates of the Guarantor,
PROVIDED that in no event shall Consolidated Adjusted Net Worth include any
amounts in respect of Redeemable Stock.
"CONSOLIDATED AMORTIZATION EXPENSE" shall mean, for any period, all
amortization expenses of the Guarantor and its Subsidiaries, all as determined
for the Guarantor and its Subsidiaries on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including in all events amounts expended or capitalized under Capital Leases
and Synthetic Leases but excluding any amount representing capitalized interest)
by the Guarantor and its Subsidiaries during that period that, in conformity
with GAAP, are or are required to be included in the property, plant or
equipment reflected in the consolidated balance sheet of the Guarantor and its
Subsidiaries.
3
4
"CONSOLIDATED DEPRECIATION EXPENSE" shall mean, for any period, all
depreciation expenses of the Guarantor and its Subsidiaries, all as determined
for the Guarantor and its Subsidiaries on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED EBIT" shall mean, for any period, Consolidated Net Income
for such period, PLUS (A) the sum of the amounts for such period included in
determining such Consolidated Net Income of (i) Consolidated Interest Expense,
(ii) Consolidated Income Tax Expense, and (iii) extraordinary and other
non-recurring non-cash losses and charges, LESS (B) gains on sales of assets and
other extraordinary gains and other non-recurring non-cash gains, all as
determined for the Guarantor and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED EBITDAR" shall mean, for any period, Consolidated EBIT
for such period, PLUS the sum for such period of (i) Consolidated Depreciation
Expense, (ii) Consolidated Amortization Expense, and (iii) Consolidated Rental
Expense, all as determined for the Guarantor and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED INCOME TAX EXPENSE" shall mean, for any period, all
provisions for taxes based on the net income of the Guarantor or any of its
Subsidiaries (including, without limitation, any additions to such taxes, and
any penalties and interest with respect thereto), all as determined for the
Guarantor and its Subsidiaries on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, total
interest expense (including that which is attributable to Capital Leases and
Synthetic Leases) of the Guarantor and its Subsidiaries on a consolidated basis
with respect to all outstanding Indebtedness of the Guarantor and its
Subsidiaries, all as determined in accordance with GAAP, but (i) including in
any event net costs under Hedge Agreements, and (ii) excluding in any event (x)
any amortization or write-off of deferred financing costs, and (y) any interest
during construction which is capitalized in accordance with GAAP. If the
Guarantor uses the net interest method of accounting, in which interest expense
is determined net of interest income, in accordance with GAAP, then Consolidated
Interest Expense may be determined on such basis.
"CONSOLIDATED LEASE AND DEBT SERVICE CHARGES" shall mean, for any
period, the sum for such period of (1) Consolidated Interest Expense, (2)
Consolidated Rental Expense, (3) scheduled or mandatory repayments, prepayments
or redemptions of the principal of Indebtedness and the stated or liquidation
value of Redeemable Stock (including required reductions in committed credit
facilities), and (4) without duplication of any amount included under the
preceding clause (3), scheduled payments representing the principal portion of
Capitalized Leases and Synthetic Leases, all as determined for the Guarantor and
its Subsidiaries on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" shall mean for any period, the net income (or
loss) of the Guarantor and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP.
"CONSOLIDATED NET WORTH" shall mean, at any time for the determination
thereof, all amounts which, in conformity with GAAP, would be included under the
caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Guarantor as at such date, PROVIDED that in no event shall
Consolidated Net Worth include any amounts in respect of Redeemable Stock.
"CONSOLIDATED RENTAL EXPENSE" shall mean, for any period, all basic
rental expenses of the Guarantor and its Subsidiaries (exclusive of any thereof
specifically intended to cover taxes, maintenance, insurance or similar
charges), all as determined for the Guarantor and its Subsidiaries on a
consolidated basis in accordance with GAAP, PROVIDED that Consolidated Rental
Expense shall be computed without duplication of any amounts in respect of any
Capital Lease or Synthetic Lease which is included in Consolidated Interest
Expense.
"CONSOLIDATED SENIOR INDEBTEDNESS" shall mean Consolidated Total
Indebtedness, exclusive of the portion thereof, if any, which constitutes the
outstanding principal amount of Subordinated Indebtedness of the Guarantor.
"CONSOLIDATED TOTAL CAPITALIZATION" shall mean at any date the sum of
(i) the Consolidated Adjusted Net Worth at such date (or if such date is not the
end of a fiscal quarter, as of the end of the then most recently completed
fiscal quarter), PLUS (ii) the Consolidated Total Indebtedness at such date.
4
5
"CONSOLIDATED TOTAL INDEBTEDNESS" shall mean the sum (without
duplication) of the following:
(i) the principal amount of all Indebtedness which has a
principal amount,
(ii) the amount of all Capitalized Lease Obligations,
(iii) the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all
Synthetic Leases,
(iv) the amount which represents 8 times the annual
Consolidated Rental Expense of all Operating Leases of real property
and/or improvements which have a remaining fixed term of at least one
year (other than any such lease which is a Synthetic Lease),
(v) the stated value, or liquidation value if higher, of all
Redeemable Stock, and
(vi) the amount reasonably determined for any other
Indebtedness, including Contingent Obligations,
all as determined on a consolidated basis for the Guarantor and its
Subsidiaries.
"CONTINGENT OBLIGATIONS" shall mean as to any person (without
duplication) any and all existing obligation of such person:
(i) to purchase any property pursuant to a "put" or similar
option, if such option has been exercised;
(ii) to make any investment in or loan or advance to any other
person, which obligation has been "called" or is otherwise required to
be made at a fixed time or within a determinable period; and/or
(iii) guaranteeing any Indebtedness, leases, dividends or
other obligations ("PRIMARY OBLIGATIONS") of any other person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such person, whether
or not contingent, (1) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (2) to
advance or supply funds (x) for the purchase or payment of any such
primary obligation or (y) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (3) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (4) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect
thereof;
PROVIDED, HOWEVER, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such person is
required to perform thereunder) as determined by such person in good faith.
"CREDIT DOCUMENT OBLIGATIONS" shall mean and include:
(i) the principal of and interest on the Notes issued by, and
the Loans made to, the Borrower under the Credit Agreement, and
(ii) all other obligations and liabilities owing by the
Borrower to the Administrative Agent, the Collateral Agent or any of
the Lenders under the Credit Agreement and the other Credit Documents
(other than any Designated Hedge Agreement) to which the Borrower is
now or may hereafter become a party (including, without limitation,
indemnities, Fees and other amounts payable thereunder),
5
6
in all cases whether now existing, or hereafter incurred under, arising out of,
or in connection with, the Credit Agreement or any of such other Credit
Documents, including any such interest or other amounts which, but for any
automatic stay under section 362(a) of the Bankruptcy Code, would become due.
"DESIGNATED HEDGE AGREEMENT" shall have the meaning provided in the
Credit Agreement.
"DESIGNATED HEDGE DOCUMENT" shall mean and include (i) each Designated
Hedge Agreement to which the Borrower is now or may hereafter become a party,
and (ii) each confirmation, transaction statement or other document executed and
delivered in connection therewith to which the Borrower is now or may hereafter
become a party.
"DESIGNATED HEDGE DOCUMENT OBLIGATIONS" shall mean and include all
obligations and liabilities owing by the Borrower under all existing and future
Designated Hedge Documents, in all cases whether now existing, or hereafter
incurred under, arising out of, or in connection with, any Designated Hedge
Document, including any such amounts which, but for any automatic stay under
section 362(a) of the Bankruptcy Code, would become due.
"DEVCO" shall mean HCR/Alterra Development, LLC, a Delaware limited
liability company, and its successors and assigns.
"EVENT OF DEFAULT" shall mean (i) any Event of Default under, and as
defined in, the Credit Agreement, (ii) any Event of Default under, and as
defined in, any Designated Hedge Document, and (iii) if the term Event of
Default is not defined in any particular Designated Hedge Document, any payment
default by the Borrower thereunder beyond any applicable grace period provided
therein.
"GUARANTEED DOCUMENTS" shall mean and include (i) the Credit Agreement,
the Notes and the other Credit Documents to which the Borrower is now or may
hereafter become a party, and (ii) each Designated Hedge Agreement and other
Designated Hedge Document to which the Borrower is now or may hereafter become a
party.
"GUARANTEED OBLIGATIONS" shall mean and include the Credit Document
Obligations and the Designated Hedge Document Obligations.
"INDEBTEDNESS" of any person shall mean without duplication:
(i) all indebtedness of such person for borrowed money;
(ii) all bonds, notes, debentures and similar debt securities
of such person;
(iii) the deferred purchase price of capital assets or
services which in accordance with GAAP would be shown on the liability
side of the balance sheet of such person;
(iv) the face amount of all letters of credit issued for the
account of such person and, without duplication, all drafts drawn
thereunder;
(v) all obligations, contingent or otherwise, of such person
in respect of bankers' acceptances;
(vi) all Indebtedness of a second person secured by any Lien
on any property owned by such first person, whether or not such
indebtedness has been assumed;
(vii) all Capitalized Lease Obligations of such person;
(viii) the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all
Synthetic Leases of such person;
6
7
(ix) the amount which represents 8 times the annual
Consolidated Rental Expense of all Operating Leases of real property
and/or improvements which have a remaining fixed term of at least one
year (other than any such lease which is a Synthetic Lease);
(x) all obligations of such person to pay a specified purchase
price for goods or services whether or not delivered or accepted, I.E.,
take-or-pay and similar obligations;
(xi) all net obligations of such person under Hedge Agreements;
(xii) the full outstanding balance of trade receivables, notes
or other instruments sold with full recourse (and the portion thereof
subject to potential recourse, if sold with limited recourse), other
than in any such case any thereof sold solely for purposes of
collection of delinquent accounts;
(xiii) the stated value, or liquidation value if higher, of
all Redeemable Stock of such person; and
(xiv) all Contingent Obligations of such person;
PROVIDED that (x) neither trade payables nor other similar accrued expenses, in
each case arising in the ordinary course of business, nor obligations in respect
of insurance policies or performance or surety bonds which themselves are not
guarantees of Indebtedness (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same), shall constitute Indebtedness; and (y) the
Indebtedness of any person shall in any event include (without duplication) the
Indebtedness of any other entity (including any general partnership in which
such person is a general partner) to the extent such person is liable thereon as
a result of such person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide expressly
that such person is not liable thereon.
"OPERATING LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is not accounted for as a Capital Lease on the balance
sheet of that person.
"REDEEMABLE STOCK" shall mean with respect to any person which is a
corporation, any capital stock of such corporation, and with respect to any
person which is not a corporation, any equity interests of such person which are
similar to capital stock, in each case that (i) is by its terms subject to
mandatory redemption, in whole or in part, pursuant to a sinking fund, scheduled
redemption or similar provisions, at any time prior to the latest date when any
Loans could mature under section 2.7 of the Credit Agreement; or (ii) otherwise
is required to be repurchased or retired on a scheduled date or dates, upon the
occurrence of any event or circumstance, at the option of the holder or holders
thereof, or otherwise, at any time prior to the latest date when any Loans could
mature under section 2.7 of the Credit Agreement, other than any such repurchase
or retirement occasioned by a "change of control" or similar event.
"SUBORDINATED INDEBTEDNESS" shall mean
(i) the Guarantor's $143,750,000 aggregate original principal
amount of 5.25% convertible subordinated debentures due December 15,
2002;
(ii) the Guarantor's $50,000,000 aggregate original principal
amount of 7.00% convertible subordinated debentures due June 1, 2004;
(iii) the Guarantor's $35,000,000 aggregate original principal
amount of 6.75% convertible subordinated debentures due June 30, 2006;
(iv) any other Indebtedness which (x) matures on a date later
than the latest maturity date of any Loans which could be made under
the Credit Agreement (assuming the exercise of any extension options
provided in the Credit Agreement), (y) does not provide for a sinking
fund or mandatory prepayment on any specified date or dates prior to
such latest maturity date, and (z) is subject to subordination
provisions no less
7
8
favorable to the Creditors than those contained in any of the
indentures related to the Subordinated Indebtedness described in the
foregoing clauses (i), (ii) and (iii); and
(v) any other Indebtedness which has been subordinated to the
obligations of the Guarantor hereunder in such manner and to such
extent as the Administrative Agent (acting on instructions from the
Required Lenders) may require.
"SUBSIDIARY" of any person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Guarantor.
"SYNTHETIC LEASE" shall mean any lease (i) which is accounted for by
the lessee as an Operating Lease, and (ii) under which the lessee is intended to
be the "owner" of the leased property for Federal income tax purposes.
"TESTING PERIOD" shall mean for any determination a single period
consisting of the four consecutive fiscal quarters of the Guarantor then last
ended (whether or not such quarters are all within the same fiscal year), EXCEPT
that if a particular provision of this Guaranty indicates that a Testing Period
shall be of a different specified duration, such Testing Period shall consist of
the particular fiscal quarter or quarters then last ended which are so indicated
in such provision.
"TOTAL PROJECT COSTS" shall mean the total for all Projects of all
items of costs and expense incurred in connection with the development,
construction and leasing-up of the Projects, including, without limitation, (i)
all items of cost that would normally be capitalized as a component of the cost
of the Projects together with related pre-opening and start-up costs and losses;
(ii) direct cost (including costs of employees of the Guarantor assigned to any
Project) associated with performing market research, development and
construction management services, professional fees paid to third parties, and
amounts paid under construction contracts (including costs related to the
general condition of a construction project); (iii) to the extent the Guarantor
shall advance funds toward the development, construction or leasing-up of any
Project, the Guarantor's imputed construction period interest; (iv) interest,
fees and expenses related to debt financing for such Project; (v) contingency
reserves and (vi) Developer Fees.
2 GUARANTY BY THE GUARANTOR, ETC. (A) GUARANTY OF PAYMENT. The
Guarantor hereby irrevocably and unconditionally guarantees:
(i) to the Administrative Agent and the Lenders the full and
prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all of the Credit Document Obligations of
the Borrower; and
(ii) to each Designated Hedge Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or
otherwise) of all of the Designated Hedge Document Obligations of the
Borrower.
Such guaranty is an absolute, unconditional, present and continuing guaranty of
payment and not of collectibility and is in no way conditioned or contingent
upon any attempt to collect from the Borrower, or any other action, occurrence
or circumstance whatsoever. If an Event of Default shall occur and be continuing
under the Credit Agreement or any payment default shall occur and be outstanding
under any Designated Hedge Document, the Guarantor will, within ten Business
Days following its receipt of written notice from the Administrative Agent
demanding payment hereunder, pay to the Administrative Agent, for the benefit of
the Creditors, in immediately available funds, at the Payment Office of the
Administrative Agent, such amount of the Guaranteed Obligations as the
Administrative Agent shall specify in such notice.
8
9
(B) GUARANTY OF PERFORMANCE. In addition to the foregoing, the
Guarantor also irrevocably and unconditionally guarantees that each of the
terms, conditions, covenants and agreements of the Borrower under the Credit
Agreement, and of the Borrower under the other Guaranteed Documents, will be
duly and punctually performed and observed strictly in accordance with the terms
thereof and that if for any reason whatsoever the Borrower shall fail to do so,
the Guarantor shall duly and punctually perform and observe, or cause the
Borrower to duly and punctually perform and observe, the same. Such guaranty is
an absolute, unconditional, present and continuing guaranty of performance and
is in no way conditioned or contingent upon any attempt to enforce performance
by the Borrower, or any other act, occurrence or circumstance whatsoever.
(C) INSOLVENCY OF BORROWER, ETC. In addition to the foregoing, the
Guarantor unconditionally and irrevocably guarantees to the Creditors the
payment of any and all Guaranteed Obligations of the Borrower, whether or not
due or payable by the obligor thereon, upon the occurrence in respect of the
Borrower or other applicable obligor of any bankruptcy or insolvency proceeding
or case under the Bankruptcy Code, and unconditionally and irrevocably promises
to pay such Guaranteed Obligations to the Administrative Agent, for the benefit
of the Creditors, on demand, in such currency and otherwise in such manner as is
provided in the Guaranteed Documents governing such Guaranteed Obligations.
(D) IF AMOUNTS OWED BY BORROWER NOT RECOVERABLE, ETC. As a separate,
additional and continuing obligation, the Guarantor unconditionally and
irrevocably undertakes and agrees, for the benefit of the Creditors, that,
should any amounts constituting Guaranteed Obligations not be recoverable from
the Borrower or other applicable obligor for any reason whatsoever (including,
without limitation, by reason of any provision of any Guaranteed Document or any
other agreement or instrument executed in connection therewith being or
becoming, at any time, voidable, void, unenforceable, or otherwise invalid under
any applicable law), then notwithstanding any notice or knowledge thereof by the
Administrative Agent, any other Creditor, any of their respective Affiliates, or
any other person, the Guarantor, as sole, original and independent obligor, upon
demand by the Administrative Agent, will make payment to the Administrative
Agent, for the account of the Creditors, of all such obligations not so
recoverable by way of full indemnity, in such currency and otherwise in such
manner as is provided in the Guaranteed Documents.
(E) FULL DIRECT ENFORCEMENT. The Guarantor understands, agrees and
confirms that the Administrative Agent and the other Creditors may enforce this
Guaranty against the Guarantor up to the full amount of the Guaranteed
Obligations, SUBJECT to the effect of section 5 hereof, and that such
enforcement against the Guarantor may be effected without proceeding against the
Borrower or other person, against any security for all or any portion of the
Guaranteed Obligations, or under any other guaranty covering all or any portion
of the Guaranteed Obligations.
(F) PAYMENTS BY GUARANTOR. All payments by the Guarantor under this
Guaranty shall be made to the Administrative Agent, for the benefit of the
Creditors, in such currency and otherwise in such manner as is provided in the
Guaranteed Documents to which such payments relate.
3 SUBORDINATION. (a) Any Indebtedness or other liabilities or
obligations of the Borrower now or hereafter held by or owed to the Guarantor
(collectively, "SUBORDINATED OBLIGATIONS") is hereby subordinated to the
Indebtedness of the Borrower to any of the Creditors; and such Subordinated
Obligations of the Borrower to the Guarantor, if the Administrative Agent, after
an Event of Default has occurred so requests, shall be collected, enforced and
received by the Guarantor as trustee for the Creditors and be paid over to the
Administrative Agent, for the benefit of the Creditors, on account of the
Indebtedness of the Borrower to the Creditors, but without affecting or
impairing in any manner the liability of the Guarantor under the other
provisions of this Guaranty. Prior to the transfer by the Guarantor of any note
or negotiable instrument evidencing any Subordinated Obligation of the Borrower
to the Guarantor, the Guarantor shall xxxx such note or negotiable instrument
with a legend that the same is subject to this subordination.
(b) If and to the extent that the Guarantor makes any payment to the
Administrative Agent or any other Creditor or to any other person pursuant to or
in respect of this Guaranty, any reimbursement or similar claim which the
Guarantor may have against the Borrower by reason thereof shall be subject and
subordinate to the prior termination of the Total Commitment and indefeasible
payment in full of all Guaranteed Obligations then or thereafter owed to the
Administrative Agent and the other Creditors.
9
10
4 GUARANTOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of the
Guarantor under this Guaranty shall be absolute and unconditional, shall not be
subject to any counterclaim, setoff, deduction or defense based on any claim the
Guarantor may have against the Borrower or any other person, including, without
limitation, the Administrative Agent, any other Creditor, any of their
respective Affiliates, and shall remain in full force and effect without regard
to, and shall not be released, suspended, abated, deferred, reduced, limited,
discharged, terminated or otherwise impaired or adversely affected by any
circumstance or occurrence whatsoever, other than indefeasible payment in full
of, and complete performance of, all of the Guaranteed Obligations, including,
without limitation:
(1) any increase in the amount of the Guaranteed Obligations
outstanding from time to time, SUBJECT to the provisions of section 5;
(2) SUBJECT to the provisions of section 5, any increase in
any interest rate, Fee or other amount applicable to any portion of the
Guaranteed Obligations or otherwise payable under any Guaranteed
Document;
(3) any direction as to the application of any payment by the
Borrower or by any other person;
(4) any incurrence of additional Guaranteed Obligations,
SUBJECT to the provisions of section 5, at any time or under any
circumstances, including, without limitation, (x) during the
continuance of a Default or Event of Default, (y) at any time when all
conditions to such incurrence have not been satisfied, or (z) in excess
of borrowing base, sublimit or other similar or dissimilar limitations
contained in the Credit Agreement or any of the other Guaranteed
Documents;
(5) any renewal or extension of the time for payment or
maturity of any of the Guaranteed Obligations, or any amendment or
modification of, or addition or supplement to, or deletion from, the
Credit Agreement, any other Guaranteed Document, or any other
instrument or agreement applicable to the Borrower or any other person,
or any part thereof, or any assignment, transfer or other disposition
of any thereof;
(6) any failure of the Credit Agreement, any other Guaranteed
Document, or any other instrument or agreement applicable to the
Borrower or any other person, to constitute the legal, valid and
binding agreement or obligation of any party thereto, enforceable in
accordance with its terms, or any irregularity in the form of any
Guaranteed Document;
(7) any failure on the part of the Borrower or any other
person to perform or comply with any term or provision of the Credit
Agreement, any other Guaranteed Document, or any such other instrument
or agreement;
(8) any waiver, consent, extension, indulgence or other action
or inaction (including, without limitation, any lack of diligence, any
failure to mitigate damages or xxxxxxxx assets, or any election of
remedies) under or in respect of (x) the Credit Agreement, any other
Guaranteed Document, or any such other instrument or agreement, or (y)
any obligation or liability of the Borrower or any other person;
(9) any exercise or non-exercise of any right, power or remedy
under or in respect of the Credit Agreement, any other Guaranteed
Document, or any such other instrument or agreement, or any such
obligation or liability, including, without limitation, (x) any failure
of the Administrative Agent or any other Creditor to give notice of any
Default or Event of Default under any Guaranteed Document, or to
advance funds for the protection or preservation of, or provision of
insurance for, or payment of taxes on, any property which is collateral
security for any of the Guaranteed Obligations, and (y) any act or
failure to act on the part of the Administrative Agent or any other
Creditor, in any manner referred to in this Guaranty, or otherwise,
which may deprive the Guarantor of its right to (A) subrogation against
the Borrower to recover full reimbursement or indemnity for any
payments made pursuant to this Guaranty, or (B) contribution from any
other surety for any such payments made by it, or which otherwise may
adversely affect the amount recoverable upon the exercise of any such
right of subrogation or contribution;
10
11
(10) any application of any amounts by whomsoever paid or
howsoever realized to the Guaranteed Obligations or any other
liabilities owed to the Administrative Agent or any other Creditor,
regardless of the order or priority of any such application, and
regardless of what liabilities of the Borrower or any other person
remain unpaid;
(11) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor or guaranty thereof;
(12) any payment made to the Administrative Agent or any other
Creditor on the Guaranteed Obligations which the Administrative Agent
or any other Creditor repays, returns or otherwise restores to the
Borrower or any other applicable obligor pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding;
(13) any subordination of any of the claims of the
Administrative Agent or any other Creditor to any claims of any
creditors of the Borrower or any other person, or any subordination of
any liens or security interests in favor of the Administrative Agent or
any other Creditor to any liens or security interests of any other
person;
(14) any sale, exchange, release, surrender or foreclosure of,
or any realization upon, or other dealing with, in any manner and in
any order, any property, rights or interests by whomsoever at any time
granted, assigned, pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations, or any other liabilities or
obligations (including any of those hereunder), or any portion of any
thereof;
(15) the existence of any right of setoff, offset or banker's
lien, or any failure to exercise rights in respect thereof, or any
release thereof;
(16) any furnishing of any new or additional security or any
new or additional guaranty to or for the benefit of any Creditor, or
any acceptance thereof;
(17) any release of any security or any guaranty by or at the
direction of the Administrative Agent or any other Creditor, or any
release or discharge of, or limitation of recourse against, any person
furnishing any security or guaranty;
(18) any limitation on any person's liability or obligation
under the Credit Agreement, any other Guaranteed Document, or any such
other instrument or agreement, or any such obligation or liability, or
any termination, cancellation, avoidance, commercial or other
frustration, impracticability, invalidity, unenforceability or
ineffectiveness, in whole or in part, of the Credit Agreement, any
other Guaranteed Document, or any such other instrument or agreement or
any such obligation or liability or any term or provision of any
thereof;
(19) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition, arrangement or other similar
proceeding relating to the Borrower or to any of its properties or
assets, or any such proceeding by, among or on behalf of any of its
creditors, as such, or any proceeding for the voluntary liquidation or
dissolution or other winding up of the Borrower, whether or not
insolvency or bankruptcy proceedings, or any assignment for the benefit
of its creditors, or any other marshaling of its assets, or any action
taken by any trustee or receiver or by any court in any such
proceeding;
(20) any disallowance or limitation of any claim of the
Administrative Agent, any other Creditor, or any other person, in any
such proceeding;
(21) any change in the ownership of all or any part of the
capital stock of, or other equity interests in, the Borrower, any of
its Affiliates, or any other person, or any merger or consolidation
involving the Borrower, any of its Affiliates, or any other person, or
any purchase, acquisition, sale, lease or disposition by the Borrower,
any of its Affiliates, or any other person, of any assets or
properties;
11
12
(22) any breach by the Borrower of any of its representations
or warranties contained in any of the Guaranteed Documents or any other
certificate or document executed and delivered in connection therewith;
(23) any inability of the Borrower to create or incur any
Subordinated Indebtedness or other Indebtedness, or the existence of
any contractual or other restriction upon the ability of the Borrower
to issue and sell shares of its capital stock, to purchase, sell, lease
or otherwise dispose of assets, to incur Subordinated Indebtedness or
other Indebtedness, or to otherwise conduct its business affairs;
(24) any assignment, transfer or other disposition, in whole
or in part, by the Borrower or any other person of its interest in any
of the property, rights or interests constituting security for all or
any portion of the Guaranteed Obligations or any other Indebtedness,
liabilities or obligations;
(25) any failure of any of the Credit Documents, or any other
agreement or instrument securing all or any portion of the Guaranteed
Obligations, to effectively subject any property, rights or interests
to any liens or security interests purported to be granted or created
thereby, or any failure of any such liens or security interests to be
or become perfected or to establish or maintain the priority over other
liens and security interests contemplated thereby;
(26) any condemnation or taking of, or any encumbrance on or
interference with any use of, or any damage to, or any destruction of,
any such property, or any part thereof or interest therein;
(27) any lack of notice to, or knowledge by, the Guarantor of
any of the matters referred to above; and/or
(28) any other circumstance or occurrence, whether similar or
dissimilar to any of the foregoing, which could or might constitute a
defense available to, or a discharge of the obligations of, a guarantor
or other surety.
5 LIMITATION ON OBLIGATIONS OF GUARANTOR. (a) Notwithstanding
anything to the contrary contained in this Guaranty, no Loans which have been
prepaid or repaid and then re-borrowed shall be covered by the Guarantor's
guaranty and other obligations under section 2 of this Guaranty unless such
re-borrowing is consented to in writing by the Guarantor, PROVIDED that this
clause shall not apply to the prepayment or repayment, and contemporaneous
re-borrowing, of any Loans effected solely to accommodate the joinder in the
Credit Agreement of the additional Lender providing the Incremental Commitment,
as contemplated by section 2.1(f) of the Credit Agreement, and no (i) increase
in the maximum aggregate principal amount of the Loans above $75,000,000; (ii)
increases in the interest rate or rates applicable to the Loan, other than
fluctuations in the Prime Rate or Applicable LIBOR Rate or a change to the
Default Rate pursuant to the terms of the Notes or Credit Agreement; or (iii)
changes in the maturity dates of the Loans, unless extended pursuant to Section
2.7 of the Credit Agreement or unless accelerated by the Administrative Agent
pursuant to the terms of the Credit Agreement, shall be binding upon the
Guarantor for purposes of this Guaranty unless such increases or changes are
consented to in writing by the Guarantor.
(b) Notwithstanding anything to the contrary contained in this
Guaranty, the Guarantor's guaranty and other obligations under section 2 of this
Guaranty shall be limited to the sum of:
(i) 100% of the Credit Document Obligations; and
(ii) such portion, not in excess of 100%, of the Designated
Hedge Document Obligations, as the Administrative Agent determines will
not result in the Guarantor's guaranty and other obligations under
section 2 of this Guaranty in respect of all of the Guaranteed
Obligations, exclusive of interest on the Notes issued by the Borrower
under the Credit Agreement, exceeding 85% of the result obtained by
subtracting from the Total Project Costs the sum of (x) the then
outstanding principal balance of all loans made by the Guarantor to the
Borrower the proceeds of which are actually applied to the Total
Project Costs, plus (y) all capital contributions made by the Guarantor
to the Borrower pursuant to the terms of the Company Equity Documents
and Company Capitalization Documents.
12
13
In no event shall the provisions of this section 5 limit, impair or otherwise
affect the ability of the Administrative Agent to apply monies or other proceeds
of enforcement in accordance with section 10.3 of the Credit Agreement.
6 WAIVERS. The Guarantor unconditionally waives, to the maximum
extent permitted under any applicable law now or hereafter in effect, insofar as
its obligations under this Guaranty are concerned, (i) notice of any of the
matters referred to in section 4 unless notice is specifically required under
the Credit Documents, (ii) all notices required by statute, rule of law or
otherwise to preserve any rights against the Guarantor hereunder, including,
without limitation, any demand, presentment, proof or notice of dishonor or
non-payment of any Guaranteed Obligation, notice of acceptance of this Guaranty,
notice of the incurrence of any Guaranteed Obligation, notice of any failure on
the part of the Borrower or any other person to perform or comply with any term
or provision of the Credit Agreement, any other Guaranteed Document or any other
agreement or instrument to which the Borrower or any other person is a party, or
notice of the commencement of any proceeding against any other person or any of
its property or assets unless notice is specifically required under the Credit
Documents, (iii) any right to the enforcement, assertion or exercise against the
Borrower or against any other person or any collateral of any right, power or
remedy under or in respect of the Credit Agreement, the other Guaranteed
Documents or any other agreement or instrument, (iv) any requirement that the
Guarantor be joined as a party to any proceedings against the Borrower or any
other person for the enforcement of any term or provision of the Credit
Agreement, the other Guaranteed Documents or any other agreement or instrument,
and (v) the provisions of Nev. Rev. Stat. 40.430, the "one action rule" and any
amendments or successor statutes thereto, and the Guarantor understands and
acknowledges that demand upon and an action against the Guarantor to pay the
indebtedness, if secured by a mortgage or lien upon real property, may, at the
sole and absolute option of the Collateral Agent, be initiated against the
Guarantor as a separate and independent action apart from the action initiated
to recover the indebtedness or obligation secured by said mortgage or lien upon
real property.
7 SUBROGATION RIGHTS. Until such time as the Guaranteed Obligations
have been paid in full in cash and otherwise fully performed and the Total
Commitment under the Credit Agreement has been terminated, the Guarantor hereby
agrees not to assert any rights of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual, under section
509 of the Bankruptcy Code, or otherwise) to the claims of the Administrative
Agent and/or the other Creditors against the Borrower or any other guarantor of
or surety for the Guaranteed Obligations and all contractual, statutory or
common law rights of reimbursement, contribution or indemnity from the Borrower
or any other guarantor which it may at any time otherwise have as a result of
this Guaranty.
8 SEPARATE ACTIONS. A separate action or actions may be brought and
prosecuted against the Guarantor whether or not action is brought against any
other person, including the Borrower, and whether or not any other person,
including the Borrower be joined in any such action or actions.
9 GUARANTOR FAMILIAR WITH BORROWER'S AFFAIRS, ETC. The Guarantor
confirms that an executed (or conformed) copy of each of the Credit Documents
has been made available to its principal executive officers, that such officers
are familiar with the contents thereof and of this Guaranty, and that it has
executed and delivered this Guaranty after reviewing the terms and conditions of
the Credit Agreement, the other Credit Documents and this Guaranty and such
other information as it has deemed appropriate in order to make its own credit
analysis and decision to execute and deliver this Guaranty. The Guarantor
confirms that it has made its own independent investigation with respect to the
creditworthiness of the Borrower and is not executing and delivering this
Guaranty in reliance on any representation or warranty by the Administrative
Agent or any other Creditor or any other person acting on behalf of the
Administrative Agent or any other Creditor as to such creditworthiness. The
Guarantor expressly assumes all responsibilities to remain informed of the
financial condition of the Borrower and any circumstances affecting (i) the
Borrower's ability to perform its obligations under the Credit Agreement and the
other Guaranteed Documents to which it is a party, or (ii) any collateral
securing, or any other guaranty for, all or any part of the Borrower's payment
and performance obligations thereunder; and the Guarantor further agrees that
the Administrative Agent and the other Creditors shall have no duty to advise
the Guarantor of information known to them regarding such circumstances or the
risks the Guarantor undertakes in this Guaranty.
10 COVENANT NOT TO CAUSE EVENTS OF DEFAULT UNDER CREDIT AGREEMENT,
ETC. The Guarantor covenants and agrees that on and after the date hereof and
until this Guaranty is terminated in accordance with section 25 hereof,
13
14
the Guarantor shall take, or will refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in section 8 or 9 of the Credit
Agreement, and so that no Default or Event of Default, is caused by the actions
of the Guarantor or any of its Subsidiaries.
11 REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to the Administrative Agent and each of the other Creditors that:
(a) ORGANIZATION AND CORPORATE POWER AND AUTHORITY. The
Guarantor is a duly organized and validly existing corporation, in good
standing under the laws of the jurisdiction of its formation and has
the corporate power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to
engage. The Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of the Credit Documents
to which it is party and has taken all necessary corporate action to
authorize the execution, delivery and performance of the Credit
Documents to which it is party.
(b) CREDIT DOCUMENTS. The Guarantor has duly executed and
delivered each Credit Document to which it is party and each Credit
Document to which it is party constitutes the legal, valid and binding
agreement or obligation of the Guarantor enforceable in accordance with
its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is
sought in equity or at law).
(c) NO CONFLICTS, ETC. Neither the execution, delivery and
performance by the Guarantor of the Credit Documents to which the
Guarantor is party nor compliance with the terms and provisions thereof
(i) will contravene any provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or
governmental instrumentality applicable to the Guarantor or its
properties and assets, (ii) will conflict with or result in any breach
of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (other than any Lien
created pursuant to the Credit Documents) upon any of the property or
assets of the Guarantor pursuant to the terms of any material
promissory note, bond, debenture, indenture, mortgage, deed of trust,
credit or loan agreement, or any other material agreement or other
instrument, to which the Guarantor is a party or by which it or any of
its property or assets are bound or to which it may be subject, or
(iii) will violate any provision of the certificate or articles of
incorporation, code of regulations or by-laws, or other charter or
organizational documents of the Guarantor.
(d) NO GOVERNMENTAL APPROVALS, ETC. No order, consent,
approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision
thereof, is required to authorize or is required as a condition to (i)
the execution, delivery and performance by the Guarantor of any Credit
Document to which it is a party, or (ii) the legality, validity,
binding effect or enforceability of any Credit Document to which the
Guarantor is a party, other than filings and recordings necessary to
establish or perfect any security interests or other Liens created
pursuant to the Credit Documents.
(e) LITIGATION. There are no actions, suits or proceedings
pending or, to, the knowledge of the Guarantor, threatened with respect
to the Guarantor which question the validity or enforceability of any
of the Credit Documents to which the Guarantor is a party, or of any
action to be taken by the Guarantor pursuant to any of the Credit
Documents to which it is a party.
(f) FINANCIAL STATEMENTS, ETC. The Guarantor has furnished to
the Lenders and the Administrative Agent complete and correct copies of
(1) the audited consolidated balance sheet of the Guarantor and its
consolidated subsidiaries as of December 31, 1997 and December 31,
1998, and the related audited consolidated statements of income,
shareholders' equity, and cash flows for the fiscal years then ended,
accompanied by the unqualified report thereon of the Guarantor's
independent accountants; and (2) the unaudited condensed consolidated
balance sheets of the Guarantor and its consolidated subsidiaries as of
June
15
15
30, 1999, and the related unaudited condensed consolidated
statements of income and of cash flows of the Guarantor and its
consolidated subsidiaries for the fiscal quarter or quarters then
ended, as contained in the Form 10-Q Quarterly Report of the Guarantor
filed with the SEC. All such financial statements have been prepared in
accordance with GAAP, consistently applied (except as stated therein),
and fairly present the financial position of the Guarantor and its
consolidated subsidiaries as of the respective dates indicated and the
consolidated results of their operations and cash flows for the
respective periods indicated, subject in the case of any such financial
statements which are unaudited, to the absence of footnotes and to
normal year-end or audit adjustments which the Guarantor reasonably
believes will not involve a Material Adverse Effect.
(g) NO MATERIAL ADVERSE CHANGE. Since December 31, 1998, there
has been no change in the condition, business or affairs of the
Guarantor and its Subsidiaries taken as a whole, or their properties
and assets considered as an entirety, except for changes, which, in the
aggregate, have not had or could not reasonably be expected to have, a
Material Adverse Effect.
(h) ANNUAL REPORT ON FORM 10-K. The Guarantor has delivered or
caused to be delivered to the Lenders prior to the Effective Date a
copy of the Guarantor's Report on Form 10-K as filed (without Exhibits)
with the SEC for its fiscal year ended December 31, 1998, which
contains a general description of the business and affairs of the
Guarantor and its Subsidiaries.
(i) CONFIDENTIAL INFORMATION MEMORANDUM; FINANCIAL
PROJECTIONS. The Guarantor has delivered or caused to be delivered to
the Lenders prior to the Effective Date (1) a confidential information
brochure dated April 1999, as supplemented by a Summary of Terms and
Conditions distributed May 28, 1999, prepared by the Administrative
Agent (with assistance from the Guarantor) which contains information
with respect to the business, properties and operations of the
Guarantor and its Subsidiaries (the "CONFIDENTIAL INFORMATION
MEMORANDUM"), and (2) financial projections prepared by management of
the Guarantor for (x) the Guarantor and its Subsidiaries for the fiscal
years 1999-2001, and (y) the Borrower, which are included as part of
the Confidential Information Memorandum (the "FINANCIAL PROJECTIONS").
The Financial Projections were prepared on behalf of the Guarantor in
good faith after taking into account historical levels of business
activity of the Guarantor and its Subsidiaries, the particular Projects
to be developed for the Borrower, known trends, including general
economic trends, and all other information, assumptions and estimates
considered by management of the Guarantor and its Subsidiaries to be
pertinent thereto; PROVIDED, that no representation or warranty is made
as to the impact of future general economic conditions or as to whether
the Guarantor's or the Borrower's projected consolidated results as set
forth in the Financial Projections will actually be realized. No facts
are known to the Guarantor at the date hereof which, if reflected in
the Financial Projections, would result in a material adverse change in
the assets, liabilities, results of operations or cash flows reflected
therein.
(j) CONSIDERATION FOR GUARANTY; SOLVENCY. The Guarantor has
received consideration which is the reasonable equivalent value of the
obligations and liabilities that the Guarantor has incurred to the
Administrative Agent and the other Creditors under this Guaranty and
the other Credit Documents to which the Guarantor is a party. The
Guarantor has capital sufficient to carry on its business and
transactions and all business and transactions in which it is about to
engage and is solvent and able to pay its debts as they mature. The
Guarantor owns property having a value, both at fair valuation and at
present fair salable value, greater than the amount required to pay its
debts. The Guarantor is not entering into this Guaranty or any other
Credit Documents to which it is a party with the intent to hinder,
delay or defraud its creditors.
(k) TAX RETURNS AND PAYMENTS. Each of the Guarantor and each
of its Subsidiaries has filed all federal income tax returns and all
other material tax returns, domestic and foreign, required to be filed
by it and has paid all material taxes and assessments payable by it
which have become due, other than those not yet delinquent and except
for those contested in good faith. The Guarantor and each of its
Subsidiaries has established on its books such charges, accruals and
reserves in respect of taxes, assessments, fees and other governmental
charges for all fiscal periods as are required by GAAP. The Guarantor
knows of no proposed assessment for additional federal, foreign or
state taxes for any period, or of any basis therefor, which,
individually or in the aggregate, taking into account such charges,
accruals and reserves in respect thereof as the Guarantor and its
Subsidiaries have made, could reasonably be expected to have a Material
Adverse Effect.
15
16
(l) COMPLIANCE WITH ERISA. Compliance by the Guarantor with
the provisions hereof and the making of the Loans contemplated by the
Credit Documents will not involve any prohibited transaction within the
meaning of ERISA or section 4975 of the Code. The Guarantor and each of
its Subsidiaries, (i) has fulfilled all obligations under minimum
funding standards of ERISA and the Code with respect to each Plan that
is not a Multiemployer Plan or a Multiple Employer Plan, (ii) has
satisfied all respective contribution obligations in respect of each
Multiemployer Plan and each Multiple Employer Plan, (A) is in
compliance in all material respects with all other applicable
provisions of ERISA and the Code with respect to each Plan, each
Multiemployer Plan and each Multiple Employer Plan, and (iii) has not
incurred any liability under the Title IV of ERISA to the PBGC with
respect to any Plan, any Multiemployer Plan, any Multiple Employer
Plan, or any trust established thereunder. No Plan or trust created
thereunder has been terminated, and there have been no Reportable
Events, with respect to any Plan or trust created thereunder or with
respect to any Multiemployer Plan or Multiple Employer Plan, which
termination or Reportable Event will or could result in the termination
of such Plan, Multiemployer Plan or Multiple Employer Plan and give
rise to a material liability of the Guarantor or any ERISA Affiliate in
respect thereof. Neither the Guarantor nor any ERISA Affiliate is at
the date hereof, or has been at any time within the two years preceding
the date hereof, an employer required to contribute to any
Multiemployer Plan or Multiple Employer Plan, or a "contributing
sponsor" (as such term is defined in section 4001 of ERISA) in any
Multiemployer Plan or Multiple Employer Plan. Neither the Guarantor nor
any ERISA Affiliate has any contingent liability with respect to any
post-retirement "welfare benefit plan" (as such term is defined in
ERISA) except as has been disclosed to the Lenders in writing.
(m) INVESTMENT COMPANY ACT, ETC. Neither the Guarantor nor any
of its Subsidiaries is subject to regulation with respect to the
creation or incurrence of Indebtedness under the Investment Company Act
of 1940, as amended, the Interstate Commerce Act, as amended, the
Federal Power Act, as amended, the Public Utility Holding Company Act
of 1935, as amended, or any applicable state public utility law.
(n) YEAR 2000 COMPUTER MATTERS. (i) The Guarantor and its
Subsidiaries have (A) conducted a comprehensive review and assessment
of all areas of their business that could be adversely affected by the
"Y2K ISSUE" (that is, the risk that computer applications used by the
Guarantor and its Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999), which review and assessment has
included, without limitation written inquiry of each of the Guarantor's
and its Subsidiaries' key suppliers, vendors and customers with whom
there is regular electronic communication via access to computer
networks or systems, (B) developed a detailed plan and timeline for
addressing the Y2K issue, including linkages with, and programming
changes to be made by, key suppliers, vendors and customers, on a
timely basis, and (C) to date, implemented that plan in accordance with
that timetable.
(ii) Based on such review and program, (A) the Guarantor
reasonably believes that the Y2K issue is not reasonably likely to have
a Material Adverse Effect, (B) the Guarantor reasonably anticipates
that all computer applications that are material to its business and
the business of its Subsidiaries will on a timely basis be able to
perform properly date-sensitive functions for all dates before and
after January 1, 2000 (i.e., be "Y2K COMPLIANT"), and (C) the Guarantor
reasonably believes that each of such key suppliers, vendors and
customers will on a timely basis be Y2K compliant in all material
respects which affect the Guarantor or any of its Subsidiaries.
(o) TRUE AND COMPLETE DISCLOSURE. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on
behalf of the Guarantor or any of its Subsidiaries in writing to the
Administrative Agent or any Lender for purposes of or in connection
with this Guaranty or any transaction contemplated herein, other than
the Financial Projections (as to which representations are made only as
provided in section 11(i) hereof), is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of
such person in writing to any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact
necessary to make such information (taken as a whole) not misleading at
such time in light of the circumstances under which such information
was provided, except that any such future information consisting of
financial projections
16
17
prepared by management of the Guarantor is only represented herein as
being based on good faith estimates and assumptions believed by such
persons to be reasonable at the time made, it being recognized by the
Lenders that such projections as to future events are not to be viewed
as facts and that actual results during the period or periods covered
by any such projections may differ materially from the projected
results. As of the date hereof, there is no fact known to the Guarantor
or any of its Subsidiaries which has, or could reasonably be expected
to have, a Material Adverse Effect which has not theretofore been
disclosed in writing to the Lenders.
12. AFFIRMATIVE COVENANTS. The Guarantor covenants and agrees that on
and after the date hereof and until this Guaranty is terminated in accordance
with section 25 hereof:
(a) REPORTING REQUIREMENTS. The Guarantor will furnish to each
Lender and the Administrative Agent:
(i) ANNUAL CONSOLIDATED FINANCIAL STATEMENTS. As soon
as available and in any event within 90 days after the close
of each fiscal year of the Guarantor, the consolidated balance
sheets of the Guarantor and its consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated
statements of income, of stockholder's equity and of cash
flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year, all in
reasonable detail and accompanied by the opinion with respect
to such consolidated financial statements of independent
public accountants of recognized national standing selected by
the Guarantor, which opinion shall be unqualified and shall
(A) state that such accountants audited such consolidated
financial statements in accordance with generally accepted
auditing standards, that such accountants believe that such
audit provides a reasonable basis for their opinion, and that
in their opinion such consolidated financial statements
present fairly, in all material respects, the consolidated
financial position of the Guarantor and its consolidated
subsidiaries as at the end of such fiscal year and the
consolidated results of their operations and cash flows for
such fiscal year in conformity with generally accepted
accounting principles, or (B) contain such statements as are
customarily included in unqualified reports of independent
accountants in conformity with the recommendations and
requirements of the American Institute of Certified Public
Accountants (or any successor organization).
(ii) QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS. As
soon as available and in any event within 45 days after the
close of each of the first three quarterly accounting periods
in each fiscal year of the Guarantor and within 90 days after
the close of the last quarterly accounting period in each
fiscal year of the Guarantor, the unaudited condensed
consolidated balance sheets of the Guarantor and its
consolidated Subsidiaries as at the end of such quarterly
period and the related unaudited condensed consolidated and
consolidating statements of income and of cash flows for such
quarterly period and for the fiscal year to date, and setting
forth, in the case of such unaudited consolidated statements
of income and of cash flows, comparative figures for the
related periods in the prior fiscal year, and which
consolidated financial statements shall be certified on behalf
of the Guarantor by the Chief Financial Officer or other
Authorized Officer of the Guarantor, subject to changes
resulting from normal year-end or audit adjustments.
(iii) OFFICER'S COMPLIANCE CERTIFICATES. At the time
of the delivery of the financial statements provided for in
sections 12(a)(i) and (ii), a certificate on behalf of the
Guarantor of the Chief Financial Officer or other Authorized
Officer of the Guarantor to the effect that, to the best
knowledge of the Guarantor, no Default or Event of Default
(including, without limitation pursuant to section 10.1 of the
Credit Agreement) exists or, if any Default or Event of
Default does exist, specifying the nature and extent thereof,
and which certificate shall set forth the calculations
required to establish compliance with the provisions of
sections 13(b), (c), (d) and (e) of this Guaranty.
(iv) NOTICE OF DEFAULT OR LITIGATION, ETC. Promptly,
and in any event within three Business Days, in the case of
clause (A) below, or five Business Days, in the case of clause
(B) below, after the Guarantor or any of its Subsidiaries
obtains knowledge thereof, notice of
17
18
(a) the occurrence of any event which
constitutes a Default or Event of Default, which notice
shall specify the nature thereof, the period of existence
thereof and what action the Guarantor proposes to take with
respect thereto, and
(b) any litigation or governmental or
regulatory proceeding pending against the Guarantor, or any
of its Subsidiaries, or the Borrower, which is likely to
have a Material Adverse Effect, or a material adverse effect
on the ability of the Guarantor or the Borrower to perform
its obligations hereunder or under any other Credit
Document.
(v) AUDITORS' INTERNAL CONTROL COMMENT LETTERS, ETC.
Promptly upon receipt thereof, a copy of each letter or
memorandum commenting on internal accounting controls or
financial reporting practices or policies which is submitted
to the Guarantor by its independent accountants in connection
with any annual audit made by them of the books of the
Guarantor.
(vi) SEC REPORTS AND REGISTRATION STATEMENTS. Promptly
upon transmission thereof or other filing with the SEC, copies
of all annual, quarterly or current reports that the Guarantor
or any of its Subsidiaries files with the SEC. In addition,
the Guarantor shall cause LiveEdgar(TM) or another third party
service bureau regularly offering such "watch" services to
promptly notify via e-mail a representative designated by the
Administrative Agent of all registration statements filed with
the SEC by the Guarantor or any of its Subsidiaries.
(vii) OTHER INFORMATION. With reasonable promptness, such
other information or documents (financial or otherwise) relating
to the Guarantor or any of its Subsidiaries as any Creditor may
reasonably request from time to time.
(b) BOOKS, RECORDS AND INSPECTIONS. The Guarantor will, and will
cause each of its Subsidiaries to, (i) keep proper books of record
and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Guarantor or
such Subsidiaries, as the case may be, in accordance with GAAP; and
(ii) permit, upon at least five Business Days' notice to the Chief
Financial Officer or any other Authorized Officer of the Guarantor,
officers and designated representatives of the Administrative Agent or
any of the other Creditors to visit and inspect any of the properties
or assets of the Guarantor and any of its Subsidiaries in whomsoever's
possession (but only to the extent the Guarantor or such Subsidiary has
the right to do so to the extent in the possession of another person),
to examine the books of account of the Guarantor and any of its
Subsidiaries and to make copies thereof and take extracts therefrom,
and to discuss the affairs, finances and accounts of the Guarantor and
of any of its Subsidiaries with, and be advised as to the same by, its
and their officers and independent accountants and independent
actuaries, if any, all at such reasonable times and intervals and to
such reasonable extent as the Administrative Agent or any of the other
Creditors may request.
(c) INSURANCE. The Guarantor will, and will cause each of its
Subsidiaries to, (i) maintain insurance coverage by such insurers and
in such forms and amounts and against such risks as are generally
consistent with the insurance coverage maintained by the Guarantor and
its Subsidiaries at the date hereof, and (ii) forthwith upon any
Creditor's written request, furnish to such Creditor such information
about such insurance as such Creditor may from time to time reasonably
request, which information shall be prepared in form and detail
satisfactory to such Creditor and certified by an Authorized Officer of
the Guarantor.
(d) PAYMENT OF TAXES AND CLAIMS. The Guarantor will pay and
discharge, and will cause each of its Subsidiaries to pay and
discharge, all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any properties
belonging to it, prior to the date on which penalties attach thereto,
and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Guarantor or any of its Subsidiaries;
PROVIDED that neither the Guarantor nor any of its Subsidiaries shall
be required to pay any such tax, assessment, charge, levy or claim
which is being contested in good faith and by proper proceedings if it
has maintained adequate reserves with respect thereto in accordance
with GAAP; and PROVIDED, FURTHER, that the Guarantor will not be
considered to be in default of any of the provisions of this
18
19
sentence if the Guarantor or any Subsidiary fails to pay any such
amount which, individually or in the aggregate, is immaterial to the
Guarantor and its Subsidiaries considered as an entirety.
(e) CORPORATE FRANCHISES. The Guarantor will do, and will
cause each of its Subsidiaries to do, or cause to be done, all things
necessary to preserve and keep in full force and effect its corporate
or other organizational existence, rights, authority and franchises,
PROVIDED that nothing in this section 12(e) shall be deemed to prohibit
(i) any transaction permitted by section 13(a); (ii) the termination of
existence of any Subsidiary if (1) the Guarantor determines that such
termination is in its best interest and (2) such termination is not
adverse in any material respect to the Lenders; or (iii) the loss of
any rights, authorities or franchises if the loss thereof, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(f) GOOD REPAIR. The Guarantor will, and will cause each of
its Subsidiaries to, ensure that its material properties and equipment
used or useful in its business in whomsoever's possession they may be,
are kept in good repair, working order and condition, normal wear and
tear excepted, and that from time to time there are made in such
properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements,
thereto, to the extent and in the manner customary for companies in
similar businesses.
(g) COMPLIANCE WITH STATUTES, ETC. The Guarantor will, and
will cause each of its Subsidiaries to, comply, in all material
respects, with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including, without limitation, all
Environmental Laws), other than those (i) being contested in good faith
by appropriate proceedings, as to which adequate reserves are
established to the extent required under GAAP, and (ii) the
noncompliance with which would not have, and which would not be
reasonably expected to have, a Material Adverse Effect on the
Guarantor.
(h) INFORMATION CONCERNING DEVCO. The Guarantor will furnish
to the Lenders, promptly after the same become available, copies of all
quarterly and annual financial statements of Devco, together with a
certificate on behalf of the Guarantor of the Chief Financial Officer
or other authorized officer of the Guarantor dated as of the date of
any such financial statements, certifying to the best knowledge of the
Guarantor, the extent of the equity interests in Devco and each joint
venture arrangement in which Devco participates held by persons who are
not Affiliates of the Guarantor and the outstanding amount of
Indebtedness of Devco or such joint venture which has been guaranteed
by the Guarantor, together with such information as may be reasonably
requested by the Collateral Agent related to such financial statements.
(i) SENIOR DEBT. The Guarantor will at all times ensure that
(i) the claims of the Creditors hereunder will not be subordinate to,
and will in all respects rank prior to the claims of every senior
unsecured creditor of the Guarantor, and (ii) any Indebtedness
subordinated in any manner to the claims of any other senior secured or
unsecured creditor of the Guarantor will be subordinated in like manner
to such claims of the Creditors.
13. NEGATIVE COVENANTS. The Guarantor covenants and agrees that on
and after the date hereof and until this Guaranty is terminated in accordance
with section 25 hereof:
(a) CONSOLIDATION, MERGER, OR SALE OF ASSETS, ETC. Without the
prior written consent of the Administrative Agent (acting on the
instruction of the Required Lenders), the Guarantor shall not
consolidate with or merge into or with any other person, or convey,
transfer or lease substantially all of its assets in a single
transaction or series of transactions to any person, or permit any
person or persons acting in concert, together with any Affiliates
thereof, to in the aggregate, directly or indirectly, control or own
(beneficially or otherwise) more than 50% (by number of shares) of the
issued and outstanding stock of the Guarantor (any such transaction a
"CHANGE OF CONTROL"); provided that a Change of Control of the
Guarantor resulting from (A) a sale, issuance or transfer of any stock
in the Guarantor, of (B) a merger, consolidation, reorganization or
other business combination involving the Guarantor shall be permitted
(any such transaction a "PERMITTED TRANSACTION") PROVIDED that
19
20
(1) after the Permitted Transaction the Consolidated
Net Worth of the Guarantor or its successor entity, on a
consolidated basis, is at least equal to the Consolidated Net
Worth of the Guarantor immediately prior to such Permitted
Transaction, and after the Permitted Transaction all other
financial covenants contained herein shall remain satisfied;
(2) the Guarantor or its successor entity (or the
Guarantor's or such successor entity's parent corporation) is, at
the time of or immediately after such transaction, a publicly
held corporation;
(3) the successor entity (if other than the Guarantor)
expressly assumes in writing all of the Guarantor's past, current
and future obligations and liabilities under this Guaranty, the
Environmental Indemnity Agreement and each other Credit Document
to which the Guarantor is a party pursuant to an assumption
agreement in form and substance reasonably satisfactory to the
Administrative Agent and provides reasonable assurance to the
Lenders of the intent of such successor entity to maintain
continuity of the Guarantor's management following such Change
of Control and provides such persons such certificates and legal
opinions with respect to matters related to the Permitted
Transaction, and the assumption of such obligations, as such
persons shall reasonably require;
(4) either of the following items (i) or (ii) is
complied with:
(i) the Permitted Transaction involves a
company in the healthcare or hospitality business; or
(ii) the Permitted Transaction involves a company
with a minimum senior unsecured debt rating of at least "BBB"
from S&P or Baa2 from Xxxxx'x; and
(5) no Event of Default has occurred and is continuing
or would result therefrom.
(b) MINIMUM CONSOLIDATED NET WORTH. The Guarantor will not
permit its Consolidated Net Worth at any time to be less than
$150,000,000, EXCEPT that
(i) effective as of the end of the Guarantor's fiscal
quarter ended June 30, 1999, the foregoing amount (as it may
from time to time be increased as herein provided), shall be
increased by 50% of the Consolidated Net Income of the
Guarantor for the two fiscal quarters ended on such date, if
any (there being no reduction in the case of any such
Consolidated Net Income which reflects a deficit);
(ii) effective as of the end of the Guarantor's fiscal
quarter ended September 30, 1999, and as of the end of each
fiscal quarter thereafter, the foregoing amount (as it may from
time to time be increased as herein provided), shall be increased
by 50% of the Consolidated Net Income of the Guarantor for the
fiscal quarter ended on such date, if any (there being no
reduction in the case of any such Consolidated Net Income which
reflects a deficit);
(iii) the foregoing amount (as it may from time to time
be increased as herein provided), shall be increased by an amount
equal to 75% of the cash proceeds (net of underwriting discounts
and commissions and other customary fees and costs associated
therewith) from any sale or issuance of equity by the Guarantor
after December 31, 1998 (other than any sale or issuance to any
Subsidiary or to management or employees pursuant to employee
benefit plans of general application);
(iv) the foregoing amount (as it may from time to time
be increased as herein provided), shall be increased by an
amount equal to 75% of (x) the principal amount of
Indebtedness or (y) the higher of stated value or liquidation
value of Redeemable Stock, as the case may be, which
Indebtedness
20
21
or Redeemable Stock is converted or exchanged after December 31,
1998 into common stock of the Guarantor or any of its
Subsidiaries; and
(v) he foregoing amount (as it may from time to time be
increased as herein provided), shall be increased by an amount
equal to 75% of the increase in Consolidated Net Worth
attributable to the issuance of common stock or other equity
interests subsequent to December 31, 1998 as consideration in any
Acquisition.
(c) RATIO OF CONSOLIDATED SENIOR INDEBTEDNESS TO CONSOLIDATED
TOTAL CAPITALIZATION. The Guarantor will not at any time permit the
ratio of (i) its Consolidated Senior Indebtedness at such time, to (ii)
its Consolidated Total Capitalization at such time, expressed as a
percentage, to exceed 80.00%.
(d) INTEREST COVERAGE RATIO. The Guarantor will not permit the
ratio of (i) its Consolidated EBIT for any Testing Period, to (ii) its
Consolidated Interest Expense for such Testing Period, to be less than
1.85 to 1.00 for any Testing Period ending on or prior to June 30,
2000, or thereafter, less than 1.95 to 1.00 for any Testing Period
ending on or before December 31, 2000, or thereafter, less than 2.10 to
1.00 for any Testing Period ending on or before June 30, 2001, or less
than 2.25 to 1.00 for any Testing Period ending thereafter.
(e) LEASE AND DEBT SERVICE COVERAGE RATIO. The Guarantor will
not permit the ratio of (i) its Consolidated EBITDAR for any Testing
Period, to (ii) its Consolidated Lease and Debt Service Charges for
such Testing Period, to be less than 1.25 to 1.00.
(f) INTENTIONALLY OMITTED.
(g) TRANSACTIONS WITH AFFILIATES. The Guarantor will not, and
will not permit any Subsidiary to, enter into any transaction or series
of transactions with any Affiliate (other than, in the case of the
Guarantor, any Subsidiary, and in the case of a Subsidiary, the
Guarantor or another Subsidiary) other than in the ordinary course of
business of and pursuant to the reasonable requirements of the
Guarantor's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Guarantor or such Subsidiary than would
obtain in a comparable arm's-length transaction with a person other
than an Affiliate, EXCEPT agreements and transactions with and payments
to officers, directors and shareholders and other Affiliates which are
either (i) entered into in the ordinary course of business and not
prohibited by any of the provisions of this Guaranty, or (ii) entered
into outside the ordinary course of business, approved by the directors
or shareholders of the Guarantor, and not prohibited by any of the
provisions of this Guaranty.
14. CONTINUING GUARANTY; REMEDIES CUMULATIVE, ETC. This Guaranty is a
continuing guaranty, all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon, and this Guaranty shall remain in full force and effect until terminated
as provided in section 25 hereof. No failure or delay on the part of the
Administrative Agent or any other Creditor in exercising any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly specified are cumulative and
not exclusive of any rights or remedies which the Administrative Agent or any
other Creditor would otherwise have. No notice to or demand on the Guarantor in
any case shall entitle the Guarantor to any other further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or any other Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for the
Administrative Agent or any other Creditor to inquire into the capacity or
powers of the Borrower or any of its Subsidiaries or Affiliates or the officers,
directors, partners or agents acting or purporting to act on its or their
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
15. ENFORCEMENT EXPENSES. The Guarantor hereby agrees to pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent and each
Creditor in connection with the enforcement of this Guaranty and any amendment,
waiver or consent relating hereto (including, without limitation, the reasonable
fees and disbursements of counsel employed by the Administrative Agent or any of
the other Creditors).
21
22
16. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
Guarantor and its successors and assigns, and shall inure to the benefit of the
Administrative Agent and the other Creditors and their successors and assigns.
17. AMENDMENTS AND WAIVERS. Neither this Guaranty nor any provision
hereof may be amended, waived or otherwise modified except with the written
consent of (i) the Administrative Agent, acting with the written consent of the
Required Lenders (or to the extent required by section 12.13 of the Credit
Agreement, with the written consent of each Lender); and (ii) the Guarantor;
PROVIDED, HOWEVER, that no such amendment, waiver or modification shall be made
to the definitions of the terms "Credit Document Obligations", "Designated Hedge
Document Obligations" or "Guaranteed Obligations", or to section 2, section 3,
this section 17 or section 25, without the consent of each Creditor adversely
affected thereby, and PROVIDED FURTHER that any amendment, waiver or other
modification affecting the rights and benefits of a single Class of Creditors
(and not all Creditors in a like or similar manner) shall require the written
consent of the Requisite Creditors of such Class of Creditors. For the purpose
of this Guaranty, the term "CLASS" shall mean each class of Creditors, I.E.,
whether (x) the Administrative Agent and the Lenders as holders of the Credit
Document Obligations or (y) the Designated Hedge Creditors as holders of the
Designated Hedge Document Obligations. For the purpose of this Guaranty, the
term "REQUISITE CREDITORS" of any Class shall mean (x) with respect to the
Credit Document Obligations, the Required Lenders and (y) with respect to the
Designated Hedge Document Obligations, the holders of at least 51% of all
Designated Hedge Document Obligations outstanding from time to time under the
Designated Hedge Documents.
18. HEADINGS DESCRIPTIVE. The headings of the several sections of
this Guaranty are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Guaranty.
19. SEVERABILITY. Any provision of this Guaranty which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
20. RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of an Event of Default, each
Creditor is hereby authorized at any time or from time to time, without notice
to the Guarantor or to any other person, any such notice being expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Creditor
to or for the credit or the account of the Guarantor, against and on account of
the obligations and liabilities of the Guarantor to such Creditor under this
Guaranty, irrespective of whether or not the Administrative Agent or such
Creditor shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or
unmatured. Each Creditor agrees to promptly notify the Guarantor after any such
set off and application, PROVIDED, HOWEVER, that the failure to give such notice
shall not affect the validity of such set off and application.
21. NOTICES. All notices requests, demands or other communications
pursuant hereto shall be made in writing (including telegraphic, telex,
facsimile transmission or cable communication) and mailed, telegraphed, telexed,
transmitted, cabled or delivered, if to the Guarantor, at 000 Xxxxx Xxxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxx 00000, attention Xxxx Xxxxxxxxx, Senior
Vice President, Finance (telephone: (000) 000-0000; facsimile: (000) 000-0000),
with a courtesy copy to the Borrower at its address provided in or pursuant to
the Credit Agreement; if to the Administrative Agent or any Lender, at its
address provided in or pursuant to the Credit Agreement; if to any Designated
Hedge Creditor, at its address provided in or pursuant to the Designated Hedge
Agreement to which it is a party; or in any case at such other address as any of
the persons listed above may hereafter notify the others in writing. All such
notices and communication shall be mailed, telegraphed, telexed, facsimile
transmitted, or cabled or sent by overnight courier, and shall be effective when
received.
22. REINSTATEMENT. If claim is ever made upon the Administrative
Agent or any other Creditor for recission, repayment, recovery or restoration of
any amount or amounts received by the Administrative Agent or any other Creditor
in payment or on account of any of the Guaranteed Obligations and any of the
aforesaid payees repays all or part of said amount by reason of (x) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property, or (y) any settlement or
compromise of any such claim effected by such payee with any
22
23
such claimant (including the Borrower), THEN and in such event (i) any such
judgment, decree, order, settlement or compromise shall be binding upon the
Guarantor, notwithstanding any revocation hereof or other instrument evidencing
any liability of the Borrower, (ii) the Guarantor shall be and remain liable to
the aforesaid payees hereunder for the amount so repaid or otherwise recovered
or restored to the same extent as if such amount had never originally been
received by any such payee, and (iii) this Guaranty shall continue to be
effective or be reinstated, as the case may be, all as if such repayment or
other recovery had not occurred.
23. GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. (a) THIS GUARANTY AND
THE RIGHTS AND OBLIGATIONS OF THE ADMINISTRATIVE AGENT, THE CREDITORS AND OF THE
UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF OHIO. Any legal action or proceeding with respect to this
Guaranty may be brought in the Courts of the State of Ohio, or of the United
States of America for the Northern District of Ohio, and, by execution and
delivery of this Guaranty, the Guarantor hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The Guarantor hereby irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered mail, return receipt
requested, to the Guarantor at its address provided herein, such service to
become effective 30 days after such mailing, or such earlier time as may be
provided by applicable law. Nothing herein shall affect the right of the
Administrative Agent or any of the other Creditors to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Guarantor in any other jurisdiction.
(b) The Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty or any other
Credit Document or Guaranteed Document brought in the courts referred to in
section 23(a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that such action or proceeding brought in any
such court has been brought in an inconvenient forum.
(c) THE GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH OTHER CREDITOR
HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE
OTHER CREDIT DOCUMENTS, ANY OTHER GUARANTEED DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
24. FULL RECOURSE OBLIGATIONS; EFFECT OF FRAUDULENT TRANSFER LAWS,
ETC. It is the desire and intent of the Guarantor, the Administrative Agent and
the other Creditors that this Guaranty shall be enforced as a full recourse
obligation of the Guarantor to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought. If
and to the extent that the obligations of the Guarantor under this Guaranty
would, in the absence of this sentence, be adjudicated to be invalid or
unenforceable because of any applicable state or federal law relating to
fraudulent conveyances or transfers, then the amount of the Guarantor's
liability hereunder in respect of the Guaranteed Obligations shall be deemed to
be reduced AB INITIO to that maximum amount which would be permitted without
causing the Guarantor's obligations hereunder to be so invalidated.
25. TERMINATION. This Guaranty will terminate when (i) the Total
Commitment has terminated and all Loans and other Guaranteed Obligations (other
than unasserted indemnity obligations) have been paid in full; or (ii) following
any request or demand by the Administrative Agent, the Guarantor shall have paid
to the Administrative Agent in full the maximum amount which the Administrative
Agent shall be entitled to recover from the Guarantor under sections 2 and 15
hereof, SUBJECT to the effect of section 5 hereof. Upon or following termination
of this Guaranty, the Administrative Agent, at the request and expense of the
Borrower and/or the Guarantor, will execute and deliver to the Guarantor a
proper instrument or instruments acknowledging the satisfaction and termination
of this Guaranty.
26. ENFORCEMENT ONLY BY ADMINISTRATIVE AGENT. The Creditors agree
that this Guaranty may be enforced only by the action of the Administrative
Agent, acting upon the instructions of the Required Lenders, and that no
Creditor shall have any right individually to seek to enforce or to enforce this
Guaranty, it being understood and agreed that such rights and remedies may be
exercised by the Administrative Agent, for the benefit of the Creditors, upon
the terms of this
23
24
Guaranty. The Administrative Agent and the other Creditors further agree that
this Guaranty may not be enforced against any director, officer or employee of
the Guarantor, as such.
27. GENERAL LIMITATION ON CLAIMS BY GUARANTOR. No claim may be made
by the Guarantor against the Administrative Agent or any other Creditor, or the
Affiliates, directors, officers, employees, attorneys or agents of any of them,
for any damages other than actual compensatory damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Guaranty or any of the other
Guaranteed Documents, or any act, omission or event occurring in connection
therewith; and the Guarantor hereby, to the fullest extent permitted under
applicable law, waives, releases and agrees not to xxx or counterclaim upon any
such claim for any special, consequential or punitive damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
28. ATTORNEYS, ACCOUNTANTS, ETC. OF CREDITORS HAVE NO DUTY TO
GUARANTOR. All attorneys, accountants, appraisers, consultants and other
professional persons (including the firms or other entities on behalf of which
any such person may act) retained by the Administrative Agent or any other
Creditor with respect to the transactions contemplated by the Guaranteed
Documents shall have the right to act exclusively in the interest of the
Administrative Agent or such other Creditor, as the case may be, and shall have
no duty of disclosure, duty of loyalty, duty of care, or other duty or
obligation of any type or nature whatsoever to the Guarantor, to any of its
Affiliates, or to any other person, with respect to any matters within the scope
of such representation or related to their activities in connection with such
representation. The Guarantor agrees, on behalf of itself and its Affiliates,
not to assert any claim or counterclaim against any such persons with regard to
such matters, all such claims and counterclaims, now existing or hereafter
arising, whether known or unknown, foreseen or unforeseeable, being hereby
waived, released and forever discharged.
29. CREDITORS NOT FIDUCIARY TO GUARANTOR, ETC. The relationship among
the Guarantor and its Affiliates, on the one hand, and the Administrative Agent
and the other Creditors, on the other hand, is solely that of debtor and
creditor, and the Administrative Agent and the other Creditors have no fiduciary
or other special relationship with the Guarantor or any of its Affiliates, and
no term or provision of any Guaranteed Document, no course of dealing, no
written or oral communication, or other action, shall be construed so as to deem
such relationship to be other than that of debtor and creditor.
30. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Guarantor and the
Administrative Agent.
24
25
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
ALTERRA HEALTHCARE CORPORATION,
AS GUARANTOR
BY: /s/XXXXXX X. XXXXXX
----------------------------
SENIOR VICE PRESIDENT
KEY CORPORATE CAPITAL INC.,
AS ADMINISTRATIVE AGENT
BY: /s/XXXXX X. XXXXXXXX
----------------------------
VICE PRESIDENT
25
