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EXHIBIT 10.6
LEASE GUARANTY
(Alterra Healthcare Corporation)
This LEASE GUARANTY (the "Guaranty") is given as of June 14, 1999 (the
"Effective Date"), by ALTERRA HEALTHCARE CORPORATION, a Delaware corporation,
whose address is 000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxx
00000 (the "Guarantor"), in favor of OMEGA HEALTHCARE INVESTORS, INC., a
Maryland corporation ("Omega"), and OMEGA (KANSAS), INC., a Kansas corporation
("Omega-Kansas"), whose addresses are 000 Xxxxxxx Xxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxxxx 00000 (together, the "Lessors"), with reference to the following facts:
RECITALS
A. AHC PROPERTIES, INC., a Delaware corporation (the "Lessee"), has
executed and delivered to Omega a Master Lease dated of even date herewith (the
"Master Lease") pursuant to which Lessee leased from Omega certain assisted
living facilities and to Omega-Kansas a Kansas Master Lease dated of even date
herewith (the "Kansas Master Lease") pursuant to which Lessee leased from
Omega-Kansas an assisted living facility located in Kansas. The Master Lease and
the Kansas Master Lease are collectively referred to herein as the "Master
Leases".
B. The Lessee is the Guarantor's wholly-owned subsidiary, and it is to
the advantage of the Guarantor that Lessors enter into the Master Leases.
C. As a material inducement to Lessors to lease the assisted living
facilities pursuant to the Master Leases to the Lessee, the Guarantor has agreed
to guarantee the payment of all amounts due from, and the performance of all
obligations undertaken by the Lessee pursuant to the Master Leases and any
security agreements, letter of credit agreements, guarantees or other documents
which evidence, secure or otherwise relate to the Master Leases (all such
documents, and any and all amendments, modifications, extensions and renewals
thereof, are hereinafter referred to collectively as the "Transaction
Documents"), all as hereinafter set forth.
WHEREFORE, the parties hereby agree as follows:
1. Defined Terms. All capitalized terms used herein and not defined
herein shall have the meaning for such terms set forth in the Master Leases.
2. Guaranty. Guarantor hereby unconditionally and irrevocably
guarantees to Lessors (i) the payment when due of all Rent and all other sums
payable by the Lessee under the Master Leases and (ii) the faithful and prompt
performance when due of each and every one of the terms, conditions and
covenants to be kept and performed by the Lessee under the Transaction
Documents,
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any and all amendments, modifications, extensions and renewals of the
Transaction Documents, including without limitation all indemnification
obligations, insurance obligations, and all obligations to operate, rebuild,
restore or replace any facilities or improvements now or hereafter located on
the Leased Properties covered by the Master Leases. Upon the occurrence of an
Event of Default under the Transaction Documents (whether defined as an "Event
of Default", a "Transaction Event of Default", a "Security Agreement Event of
Default" or otherwise), Guarantor shall forthwith perform or cause to be
performed all provisions of the Transaction Documents to be performed by the
Lessee thereunder, and pay all damages that may result from the non-performance
thereof to the full extent provided under the Transaction Documents
(collectively, the "Obligations"). As to the Obligations, Guarantor's liability
under this Guaranty is without limit.
3. Survival of Obligations. The obligations of Guarantor under this
Guaranty with respect to the Transaction Documents shall survive and continue in
full force and effect for so long as any Obligations remain outstanding
notwithstanding:
(a) any amendment, modification, or extension of any Transaction
Document;
(b) any compromise, release, consent, extension, indulgence or
other action or inaction in respect of any terms of any
Transaction Document or any other guarantor;
(c) any substitution or release, in whole or in part, of any
security for this Guaranty which Lessors may hold at any time;
(d) any exercise or nonexercise by a Lessor of any right, power or
remedy under or in respect of any Transaction Document or any
security held by a Lessor with respect thereto, or any waiver
of any such right, power or remedy;
(e) any bankruptcy, insolvency, reorganization, arrangement,
adjustment, composition, liquidation, or the like of the
Lessee or any other guarantor;
(f) any limitation of the Lessee's liability under any Transaction
Document or any limitation of the Lessee's liability
thereunder which may now or hereafter be imposed by any
statute, regulation or rule of law, or any illegality,
irregularity, invalidity or unenforceability, in whole or in
part, of any Transaction Document or any term thereof;
(g) any sale, lease, or transfer of all or any part of any
interest in any Leased Property or any or all of the assets of
the Lessee to any other person, firm or entity other than to
Lessor;
(h) any extensions of time for performance under the Transaction
Documents;
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(i) the release of the Lessee from performance or observation of
any of the agreements, covenants, terms or conditions
contained in any Transaction Document by operation of law or
otherwise;
(j) the fact that the Lessee may or may not be personally liable,
in whole or in part, under the terms of any Transaction
Document to pay any money judgment;
(k) the failure to give Guarantor any notice of acceptance,
default or otherwise unless specifically required by the
Transaction Document, if any, pursuant to which such notice is
required to be given;
(l) any other guaranty now or hereafter executed by the Guarantor
or anyone else in connection with any Transaction Document;
(m) any rights, powers or privileges Lessor may now or hereafter
have against any other person, entity or collateral; or
(n) any other circumstances, whether or not the Guarantor had
notice or knowledge thereof.
4. Primary Liability. The liability of Guarantor with respect to the
Transaction Documents shall be primary, direct and immediate, and Lessors may
proceed against Guarantor: (i) prior to or in lieu of proceeding against the
Lessee, its assets, any security deposit, or any other guarantor; and (ii) prior
to or in lieu of pursuing any other rights or remedies available to a Lessor.
All rights and remedies afforded to Lessors by reason of this Guaranty or by law
are separate, independent and cumulative, and the exercise of any rights or
remedies shall not in any way limit, restrict or prejudice the exercise of any
other rights or remedies.
In the event of any Event of Default under any Transaction Document
(whether defined as an "Event of Default", a "Transaction Event of Default", a
"Security Agreement Event of Default" or otherwise), a separate action or
actions may be brought and prosecuted against Guarantor whether or not the
Lessee is joined therein or a separate action or actions are brought against the
Lessee. Lessors may maintain successive actions for other defaults. Lessors'
rights hereunder shall not be exhausted by its exercise of any of its rights or
remedies or by any such action or by any number of successive actions until and
unless all indebtedness and obligations the payment and performance of which are
hereby guaranteed have been paid and fully performed.
5. Obligations Not Affected. In such manner, upon such terms and at
such times as Lessor in its sole discretion deems necessary or expedient, and
without notice to Guarantor, Lessors may: (a) amend, alter, compromise,
accelerate, extend or change the time or manner for the payment or the
performance of any Obligation hereby guaranteed; (b) extend, amend or terminate
the Master Leases, or either of them; or (c) release the Lessee by consent to
any assignment (or otherwise) as
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to all or any portion of the obligations hereby guaranteed. Any exercise or
non-exercise by Lessors of any right hereby given Lessors, dealing by Lessors
with Guarantor or any other guarantor, Lessee or any other person, or change,
impairment, release or suspension of any right or remedy of Lessors against any
person including the Lessee and any other guarantor will not affect any of the
obligations of Guarantor hereunder or give Guarantor any recourse or offset
against Lessors.
6. Waiver. With respect to the Transaction Documents, Guarantor hereby
waives and relinquishes all rights and remedies accorded by applicable law to
guarantors or any other accommodation parties, under any statutory provisions,
common law or any other provision of law, custom or practice, and agrees not to
assert or take advantage of any such rights or remedies including, but not
limited to:
(a) any right to require Lessors to proceed against the Lessee or
any other person or to proceed against or exhaust any security
held by Lessors at any time or to pursue any other remedy in
Lessors' power before proceeding against Guarantor or to
require that Lessors cause a marshaling of the Lessee's assets
or the assets, if any, given as collateral for this Guaranty
or to proceed against the Lessee and/or any collateral,
including collateral, if any, given to secure Guarantor's
obligation under this Guaranty, held by a Lessor at any time
or in any particular order;
(b) any defense that may arise by reason of the incapacity or lack
of authority of any other person or persons;
(c) notice of the existence, creation or incurring of any new or
additional obligation or of any action or non-action on the
part of the Lessee, Lessors, any creditor of the Lessee or
Guarantor or on the part of any other person whomsoever under
this or any other instrument in connection with any obligation
held by a Lessor or in connection with any obligation hereby
guaranteed;
(d) any defense based upon an election of remedies by Lessors
which destroys or otherwise impairs the subrogation rights of
Guarantor or the right of Guarantor to proceed against the
Lessee for reimbursement, or both;
(e) any duty on the part of Lessors to disclose to Guarantor any
facts Lessors may now or hereafter know about the Lessee,
regardless of whether Lessors have reason to believe that any
such facts materially increase the risk beyond that which
Guarantor intends to assume or have reason to believe that
such facts are unknown to Guarantor or have a reasonable
opportunity to communicate such facts to Guarantor, it being
understood and agreed that the Guarantor is fully responsible
for being and keeping informed of the financial condition of
the Lessee and of all circumstances bearing on the risk of
non-payment or non-performance of any obligations hereby
guaranteed;
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(f) any defense arising because of Lessors' election, in any
proceeding instituted under the federal Bankruptcy Code, of
the application of Section 1111 (b)(2) of the federal
Bankruptcy Code;
(g) any defense based on any borrowing or grant of a security
interest under Section 364 of the federal Bankruptcy Code; and
(h) all rights and remedies accorded by applicable law to
guarantors, including without limitation, any extension of
time conferred by any law now or hereafter in effect and any
requirement or notice of acceptance of this Guaranty or any
other notice to which the undersigned may now or hereafter be
entitled to the extent such waiver of notice is permitted by
applicable law.
7. Warranties. With respect to the Transaction Documents, Guarantor
warrants that: (a) this Guaranty is executed at the Lessee's request; and (b)
Guarantor has established adequate means of obtaining from the Lessee on a
continuing basis financial and other information pertaining to the Lessee's
financial condition. Guarantor agrees to keep adequately informed from such
means of any facts, events or circumstances which might in any way affect
Guarantor's risks hereunder, and Guarantor further agrees that Lessor shall have
no obligation to disclose to Guarantor information or material acquired in the
course of Lessor's relationship with Lessee.
8. No-Subrogation. Until all obligations of the Lessee under the
Transaction Documents have been satisfied and discharged in full for one (1)
year, Guarantor shall have no right of subrogation and waives any right to
enforce any remedy which a Lessor now has or may hereafter have against the
Lessee and any benefit of, and any right to participate in, any security now or
hereafter held by Lessors with respect to the Master Leases.
9. Subordination. Upon the occurrence of an Event of Default under any
Transaction Document, which is not cured by the Guarantor, the indebtedness or
obligations of Lessee to Guarantor shall not be paid in whole or in part nor
will Guarantor accept any payment of or on account of any amounts owing, without
the prior written consent of Lessors and at Lessors' request, Guarantor shall
cause the Lessee to pay to Lessors all or any part of the subordinated
indebtedness until the obligations under the Master Leases and the other
Transaction Documents have been paid in full. Any payment by the Lessee in
violation of this Guaranty shall be received by Guarantor in trust for Lessors,
and Guarantor shall cause the same to be paid to Lessors immediately on account
of the amounts owing from the Lessee to Lessors. No such payment will reduce or
affect in any manner the liability of Guarantor under this Guaranty.
10. No Delay. Any payments required to be made by Guarantor hereunder
shall become due on demand in accordance with the terms hereof immediately upon
the happening of an Event of Default under any Transaction Document.
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11. Application of Payments. With respect to the Transaction Documents,
and with or without notice to Guarantor, Lessors, in Lessors' sole discretion
and at any time and from time to time and in such manner and upon such terms as
Lessors deems appropriate, may (a) apply any or all payments or recoveries from
the Lessee or from any other guarantor under any other instrument or realized
from any security, in such manner and order of priority as Lessors may
determine, to any obligation of the Lessee with respect to the Master Leases or
any other Transaction Document and whether or not such obligation is guaranteed
hereby or is otherwise secured or is due at the time of such application, and
(b) refund to the Lessee any payment received by Lessors under the Master
Leases.
12. Guaranty Default.
(a) As used herein, the term Guaranty Default shall mean one or more
of the following events (subject to applicable cure periods):
(i) the failure of Guarantor to pay the amounts required
to be paid hereunder at the times specified herein.
(ii) the failure of Guarantor to observe and perform any
covenants condition or agreement on its part to be
observed or performed, other than as referred to in
Subsection (i) above, for a period of thirty (30)
days after written notice of such failure has been
given to Guarantor by Lessors, unless Lessors agree
in writing to an extension of such time prior to its
expiration;
(iii) the occurrence of a default under any other guaranty
between a Lessor and Guarantor.
(b) Upon the occurrence of a Guaranty Default, Lessors shall have the
right to bring such actions at law or in equity, including appropriate
injunctive relief, as it deems appropriate to compel compliance, payment or
deposit, and among other remedies to recover its attorneys' fees in any
proceeding, including any appeal therefrom and any post-judgement proceedings.
13. Financial Covenants. At all times while any Obligations guaranteed
by Guarantor remain outstanding (the "Term of this Guaranty"), Guarantor shall
comply with the affirmative financial covenants of the Master Leases, as the
same may be amended, modified or restated from time to time during the Term of
this Guaranty.
14. Financial Statements. At the times specified in the Master Leases,
Guarantor shall deliver to Lessors a copy of its Financial Statements, prepared
in the manner required by the Master Leases. Together with the Guarantor's
Financial Statements furnished in accordance with the preceding sentence,
Guarantor shall deliver (a) a Certificate of Guarantor stating that Guarantor is
not in default in the performance or observance of any of the terms of this
Guaranty, or if Guarantor
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is in default, specifying all such defaults, the nature thereof, and the steps
being taken to remedy the same, and (b) a certificate acceptable to Lessors from
a certified public accounting firm approved by Lessors that nothing came to
their attention during the course of their audit of Guarantor's Financial
Statements that would cause them to believe that there was any default under
this Guaranty.
15. Miscellaneous.
(a) No term, condition or provision of this Guaranty may be waived
except by an express written instrument to that effect signed by Lessors. No
waiver of any term, condition or provision of this Guaranty will be deemed a
waiver of any other term, condition or provision, irrespective of similarity, or
constitute a continuing waiver of the same term, condition or provision, unless
otherwise expressly provided.
(b) If any one or more of the terms, conditions or provisions contained
in this Guaranty is found in a final award or judgment rendered by any court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining terms, conditions and
provisions of this Guaranty shall not in any way be affected or impaired
thereby, and this Guaranty shall be interpreted and construed as if the invalid,
illegal, or unenforceable term, condition or provision had never been contained
in this Guaranty.
(c) THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF MICHIGAN, EXCEPT THAT THE LAWS OF THE STATES IN WHICH
THE FACILITIES ARE LOCATED SHALL GOVERN THIS AGREEMENT TO THE EXTENT NECESSARY
(i) TO OBTAIN THE BENEFIT OF THE- RIGHTS AND REMEDIES SET FORTH HEREIN WITH
RESPECT TO THE FACILITIES LOCATED IN EACH SUCH STATE AND (ii) FOR PROCEDURAL
REQUIREMENTS WHICH MUST BE GOVERNED BY THE LAWS OF EACH STATE IN WHICH SUCH
FACILITIES ARE LOCATED. GUARANTOR CONSENTS TO IN PERSONAM JURISDICTION BEFORE
THE STATE OR STATES AND FEDERAL COURTS OF MICHIGAN AND AGREES THAT ALL DISPUTES
CONCERNING THIS GUARANTY BE HEARD IN THE STATE AND FEDERAL COURTS LOCATED IN THE
STATE OR STATES IN WHICH THE FACILITY OR FACILITIES ARE LOCATED OR IN MICHIGAN.
GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE EFFECTED UPON IT UNDER ANY
METHOD PERMISSIBLE UNDER THE LAWS OF THE STATE OR STATES IN WHICH THE FACILITY
OR FACILITIES ARE LOCATED OR MICHIGAN AND IRREVOCABLY WAIVES ANY OBJECTION TO
VENUE IN THE STATE AND FEDERAL COURTS OF THE STATE OR STATES IN WHICH THE
FACILITY OR FACILITIES ARE LOCATED AND OF MICHIGAN.
(d) GUARANTOR AND LESSOR HEREBY WAIVE TRIAL BY JURY AND THE RIGHT
THERETO IN ANY ACTION OR PROCEEDING OF ANY KIND ARISING ON,
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UNDER, OUT OF, BY REASON OF OR RELATING IN ANY WAY TO THIS GUARANTY OR THE
INTERPRETATION, BREACH OR ENFORCEMENT THEREOF.
(e) In the event of any suit, action, arbitration or other proceeding
to interpret this Guaranty, or to determine or enforce any right or obligation
created hereby, the prevailing party in the action shall recover such party's
actual costs and expenses reasonably incurred in connection therewith,
including, but not limited to, attorneys' fees and costs of appeal, post
judgment enforcement proceedings (if any) and bankruptcy proceedings (if any).
Any court, arbitrator or panel of arbitrators shall, in entering any judgment or
making any award in any such suit, action, arbitration or other proceeding, in
addition to any and all other relief awarded to such prevailing party, include
in such-judgment or award such party's costs and expenses as provided in this
paragraph.
(f) Guarantor (i) represents that it has been represented and advised
by counsel in connection with the execution of this Guaranty; (ii) acknowledges
receipt of a copy of the Master Leases and the other Transaction Documents; and
(iii) further represents that Guarantor has been advised by counsel with respect
thereto. This Guaranty shall be construed and interpreted in accordance with the
plain meaning of its language, and not for or against Guarantor or Lessor, and
as a whole, giving effect to all of the terms, conditions and provisions hereof.
(g) Except as provided in any other written agreement now or at any
time hereafter in force between Lessors and Guarantor, this Guaranty and the
Transaction Documents shall constitute the entire agreement of Guarantor with
Lessors with respect to the subject matter hereof, and no representation,
understanding, promise or condition concerning the subject matter hereof will be
binding upon Lessors or Guarantor unless expressed herein.
(h) All stipulations, obligations, liabilities and undertakings under
this Guaranty shall be binding upon Guarantor and its respective successors and
assigns and shall inure to the benefit of Lessors and to the benefit of Lessors'
successors and assigns.
(i) Whenever the singular shall be used hereunder, it shall be deemed
to include the plural (and vice-versa) and reference to one gender shall be
construed to include all other genders, including neuter, whenever the context
of this Guaranty so requires. Section captions or headings used in the Guaranty
are for convenience and reference only, and shall not affect the construction
thereof.
Signature on following page.
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IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of
the date first written above.
GUARANTOR:
ALTERRA HEALTHCARE CORPORATION,
a Delaware corporation
June ____, 1999 By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
Senior Vice President
STATE OF WISCONSIN )
) ss:
COUNTY OF ________ )
The foregoing instrument was acknowledged before me on June ____, 1999,
by Xxxx X. Xxxxxxxxx who is the Senior Vice President of Alterra Healthcare
Corporation, a Delaware corporation, on behalf of the corporation, who
acknowledged the same to be his free act and deed and the free act and deed of
the corporation.
________________________________________
Notary Public, _______ County, Wisconsin
My commission expires:__________________
Signature Page to Lease Guaranty
