1
EXHIBIT 10.12
AMENDED AND RESTATED PURCHASE RIGHTS AND FINANCING AGREEMENT
THIS PURCHASE RIGHTS AND FINANCING AGREEMENT ("Agreement") is entered
into as of the 30th day of June, 1999, by and between ALTERRA HEALTHCARE
CORPORATION, a Delaware corporation formerly known as Alternative Living
Services, Inc. ("Alterra"), and THIRD PARTY INVESTORS I, L.L.C., a Delaware
corporation ("Purchaser").
W I T N E S S E T H:
Purchaser has acquired the interest of Alterra (or its subsidiary, as
the case may be) in properties or purchase and sale agreements described in that
certain Agreement of Purchase and Sale between Alterra and Purchaser of December
31, 1998, as the same may be amended from time to time ("First Purchase
Agreement"), and in that certain Agreement of Purchase and Sale between Alterra
and Purchaser of March 31, 1999, as the same may be amended from time to time
("Second Purchase Agreement"), and may acquire the interest of Alterra (or its
subsidiary, as the case may be) in properties or purchase and sale agreements
described in that certain Option Agreement between Alterra and Purchaser of
March 31, 1999, as the same may be amended from time to time (the "Option
Agreement"). The First Purchase Agreement, the Second Purchase Agreement and the
Option Agreement are sometimes hereinafter referred to collectively as the
"Purchase Agreements." The properties which are the subject of the Purchase
Agreements (including those which are the subject of the aforesaid purchase and
sale agreements or option) are hereinafter collectively referred to as "Parcels"
and individually as a "Parcel."
Purchaser and Alterra have agreed that Alterra shall have certain
purchase rights with respect to the Parcels.
Purchaser and Alterra have agreed to certain other matters as more
particularly described herein, all of which agreements were originally embodied
in that certain Purchase Rights And Financing Agreement dated as of March 31,
1999 which the parties wish to amend and restate on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration for TEN AND NO/100 DOLLARS ($10.00) in
hand paid by Alterra to Purchaser and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Alterra and Purchaser
hereby agree as follows:
1. Purchase Rights Notice/Offer/Acceptance. Except as otherwise
provided in Section 3.c, below, and subject to any approval rights of Alterra
prior to the First Sale Date as defined in the Operating Agreement of Third
Party Investors I, L.L.C., as the same may be amended from time to time, in the
event that Purchaser desires to sell a single Parcel (the "Applicable Single
Parcel") or a group of Parcels (the "Applicable Group of Parcels"), Purchaser
shall notify Alterra thereof which notice shall include a copy of the form of
purchase and sale agreement (inclusive of all material terms other than the
purchase price) that Purchaser plans to use in connection with such sale
("Purchase Agreement Form"). Alterra shall have thirty (30)
2
days in which to notify Purchaser in writing whether Alterra desires to purchase
the Applicable Single Parcel or the Applicable Group of Parcels (but only as a
Group). The aforesaid notice shall be in the form of two (2) executed (by either
Alterra or an affiliate or subsidiary thereof) originals of the Purchase
Agreement Form for the Applicable Single Parcel or Applicable Group of Parcels,
as the case may be, which purchase agreement shall have been modified to include
(a) the purchase price and (b) any other modifications that Alterra reasonably
deems appropriate. The effective date of the notice by Alterra to Purchaser of
its election to purchase the Applicable Single Parcel or Applicable Group of
Parcels is hereinafter referred to as the "Election Date." If Alterra elects not
to purchase the Applicable Single Parcel or Applicable Group of Parcels, or
otherwise does not make an election with respect to the Applicable Single Parcel
or Applicable Group of Parcels, Purchaser shall have the right at any time
thereafter to sell the Applicable Single Parcel or the Applicable Group of
Parcels (but only as a group) to a bona fide third party on substantially the
same terms (or other terms which are more favorable to Purchaser) as those set
forth in the Purchase Agreement Form and using a purchase agreement in
substantially the same form as the Purchase Agreement Form. Purchaser shall have
fifteen (15) days from the applicable Election Date for the Applicable Single
Parcel or Applicable Group of Parcels, as the case may be, to execute and return
to Alterra one (1) original of the purchase agreement executed and delivered by
Alterra therefor. If Purchaser executes and delivers an original of the purchase
agreement as aforesaid, the Applicable Single Parcel or Applicable Group of
Parcels (but only as a group) shall thereby be released from this Agreement and
Purchaser and Alterra shall proceed to close the transaction contemplated
thereby in accordance with said purchase agreement. If Purchaser does not
execute and return an original of the applicable purchase agreement to Alterra
as aforesaid, Purchaser shall be deemed to have rejected the offer of Alterra
and such offer shall terminate. For a period of six (6) months after such
rejection, the rights of Alterra hereunder shall be suspended such that
Purchaser shall have the right to enter into an agreement to sell the Applicable
Single Parcel or Applicable Group of Parcels (but only as a group) to a bona
fide third party for a purchase price in excess of the purchase price offered by
Alterra therefor and otherwise on substantially the same terms as those set
forth in the Purchase Agreement Form and using a purchase agreement in
substantially the same form as the Purchase Agreement Form. The sale
contemplated by said purchase agreement shall close within a reasonable time
after the date thereof. Upon the consummation of such sale, the Applicable
Single Parcel or each Parcel included within the Applicable Group of Parcels
shall thereby be released from this Agreement. Upon the later to occur of (a)
the expiration of the suspension period without Purchaser entering into a
permitted purchase agreement as described above or (b) the termination of a
permitted purchase agreement as described above without the consummation of the
transaction contemplated thereby, the rights of Alterra shall be reinstated such
that Purchaser shall be required to comply with the terms hereof prior to the
sale of the Applicable Single Parcel and of each Parcel included in the
Applicable Group of Parcels. To the extent that Alterra shall purchase any
Parcel pursuant to the provisions of this Section 1, Alterra shall assume any
and all obligations of Purchaser with respect to any applicable interest rate
lock, swap or similar agreement or refinancing fees payable in connection with
the Permanent Financing (as defined in Xxxxxxx 0.x, xxxxx) with respect to such
Parcel provided that such obligations or fees were reasonable in relation to the
Permanent Financing. The aggregate amount of such obligations and fees which
Alterra would be obligated to assume and pay shall be considered as part of the
2
3
purchase price offered by Alterra in determining whether the offer of any third
party is at a price in excess of the amount offered by Alterra.
2. General Terms of Purchase Rights.
a. Recorded Instrument. Within thirty (30) days after the date
hereof, Purchaser and Alterra shall execute a recordable memorandum of this
Agreement for each Parcel. Alterra shall be permitted to record a memorandum of
this Agreement in the real estate records where each Parcel is located. In
connection with any sale to a third party with respect to which Alterra no
longer has a purchase right pursuant to Section 1, Alterra shall promptly
provide evidence in writing of such fact as requested by Purchaser.
b. Substitution of Parcels. In the event that a Parcel is re-conveyed
to Alterra (or an affiliate thereof) and a substitution parcel conveyed to
Purchaser in accordance with the terms of this Agreement or the Purchase
Agreements, this Agreement shall be automatically released as to the Parcel
reconveyed to Alterra or its affiliate. Further, upon the conveyance of the
substitution parcel to Purchaser, this Agreement shall automatically govern said
substitution parcel and said substitution parcel shall constitute a Parcel for
the purposes of this Agreement. Contemporaneously with the conveyance of the
substitution parcel, Alterra and Purchaser shall execute a recordable memorandum
of this Agreement in accordance with Section 2(a) hereof. Alterra shall have the
right to record such memorandum as contemplated by Section 2(a) hereof.
3. Financing/Guaranty.
a. Permanent Financing; Alterra Guaranties. Purchaser and Alterra
agree that it is their mutual intent that Purchaser obtain financing from an
unrelated party or parties (collectively, the "Senior Lender"), as soon as
practicable after the date hereof, for each of the Parcels which have or may
hereafter be acquired by Purchaser pursuant to the Purchase Agreements
(including the construction and development thereof) on terms and conditions
reasonably acceptable to Purchaser ("Permanent Financing") for not less than
seventy five percent (75%) (the "Target Percentage") of Total Costs of each
Parcel. Purchaser agrees that terms substantially consistent with those set
forth in the Key Bank Financing Proposal attached hereto as Exhibit A (the "Key
Bank Financing Proposal") would be acceptable to Purchaser. Proceeds of the
Permanent Financing shall be used, in part, to discharge Purchaser's liability
to Alterra under (a) the Amended Bridge Loan Agreement between Alterra and
Purchaser of even date and (b) the other documents evidencing and securing the
loan contemplated by the Amended Bridge Loan Agreement. Purchaser agrees to use
its best efforts to obtain Permanent Financing with respect to each of the
Parcels. The parties also contemplate that Purchaser from time to time may
desire, or be required, to obtain refinancing from a Senior Lender ("Replacement
Permanent Financing") for Parcels which are subject to Permanent Financing.
Alterra, promptly upon the demand of Purchaser, shall execute unconditional
guaranties of the Purchaser's obligations (limited to eighty percent (80%) of
the "Total Costs," as hereinafter defined) pursuant to the Permanent Financing
or Replacement Permanent Financing for each Parcel in the form reasonably
required by the lender or lenders and reasonably acceptable to Alterra (each an
"Alterra Guaranty" and, collectively, the "Alterra Guaranties"). The Alterra
Guaranties shall be
3
4
for a period ending not later than December 31, 2010. Alterra agrees that terms
and conditions of the Alterra Guaranties may include, but not be limited to, the
financial covenants and other terms and conditions applicable to Alterra as
described in the Key Bank Financing Proposal. "Total Costs" means with respect
to each Parcel as of any given time the amount paid by Purchaser for the
acquisition of the Parcel and the aggregate "Project Costs" as of such time for
such Parcel (incurred after the date of closing of the acquisition of such
Parcel by Purchaser) as the term "Project Costs" is defined in Section 2.5 of
the Development Agreement between Purchaser and Alterra relative thereto dated
either (i) as of December 31, 1998, (ii) of even date herewith or (iii) with
respect to Parcels acquired under the Option Agreement, the closing date of such
acquisition, as the case may be, as such agreements described in clauses (i),
(ii) or (iii) may be amended from time to time.
b. Supplementary Financing. If after reasonable efforts by Purchaser,
Purchaser is unable to obtain Permanent Financing with Alterra Guaranties for
the Target Percentage of the Total Costs of all of the Parcels on an aggregate
basis, Alterra shall make all reasonable efforts to allocate to the Purchaser a
portion of its total financing commitments in order to permit Purchaser to be
able to obtain the Permanent Financing for the Target Percentage of Total Costs
with respect to all of the Parcels on an aggregate basis. In addition, from time
to time on or before each Closing of Pending Financing (as hereinafter defined),
Alterra shall lend to the Purchaser on the terms and conditions hereinafter set
forth (each a "Supplementary Financing") the percentage of the Total Costs with
respect to each such Parcel equal to the amount by which the percentage of Total
Costs of each such Parcel which will be a Permanently Financed Parcel (as
hereinafter defined) upon such Closing of Pending Financing is less than the
Target Percentage, provided that Alterra shall not be required to lend to
Purchaser with respect to any Parcel an amount in excess of twenty-five percent
(25%) of the Total Costs of such Parcel nor in an amount which would cause the
aggregate principal amount of all Supplementary Financings which will be
outstanding upon any Closing of Pending Financing to exceed Ten Million Dollars
($10,000,000.00). If at any time, Purchaser obtains Permanent Financing and/or
Replacement Placement Financing which causes the aggregate of all Permanent
Financing and/or Replacement Permanent Financing and Supplementary Financing to
exceed the Target Percentage of the Total Costs of all Parcels covered by such
financings, Purchaser shall pay the amount of such excess to Alterra as a
prepayment on Supplementary Financings. Each Supplementary Financing shall be at
an interest rate of eleven percent (11%) per annum, and interest shall be
payable quarterly except to the extent prohibited by any intercreditor or
subordination agreement entered into by Alterra with the Senior Lender. The
maturity date of the Supplementary Financing with respect to any Parcel shall be
the same as the scheduled maturity date of the Permanent Financing or
Replacement Permanent Financing with respect to such Parcel. The Supplementary
Financing with respect to any Parcel shall be evidenced by a promissory note of
Purchaser in form reasonably acceptable to Purchaser, Alterra and the Senior
Lender and, if permitted by the Senior Lender, will be secured by a mortgage and
other security interests (including a security interest in all the outstanding
limited liability company member interests in Purchaser other than that held by
Alterra), subordinate to the mortgage and other security instruments securing
the Permanent Financing or Replacement Permanent Financing, and otherwise on
terms and conditions reasonably acceptable to Purchaser, Alterra and the Senior
Lender. The Senior Lender must enter into an intercreditor agreement with
Alterra which provides, without limitation, that Alterra shall
4
5
have the right, but not the obligation, to acquire the interest of the Senior
Lender or cure the default of Purchaser (in either case, within 10 days after
written notice from the Senior Lender) prior to any foreclosure, deed in lieu of
foreclosure or similar action with respect to the collateral securing the
Permanent Financing or Replacement Permanent Financing. Subject to the
foregoing, the terms of said intercreditor agreement shall be reasonably
acceptable to Purchaser and Alterra. "Closing of Pending Financing" means the
closing of Permanent Financing or Replacement Permanent Financing. "Permanently
Financed Parcels" means all Parcels with respect to which Permanent Financing or
Replacement Permanent Financing is in effect, except any Parcels which are
Financing In Process Parcels. "Financing In Process Parcels" means all Parcels
which are in process of being financed with Permanent Financing or refinanced
with Replacement Permanent Financing.
c. Financing Default by Alterra. In the event that after the closing of
Permanent Financing or Replacement Permanent Financing, Alterra or Purchaser are
notified by the Senior Lender that Alterra has defaulted on any covenant
applicable to Alterra in the Alterra Guaranties and as a result thereof the
obligation of Alterra with respect to the Alterra Guaranties or of Purchaser
with respect to the Permanent Financing or Replacement Permanent Financing for
any one or more Parcels is due and payable, then unless and until such default
and the effect thereof have been cured to the satisfaction of or otherwise
waived by the Senior Lender, (a) subject to Section 1 hereof as modified by this
subsection, Purchaser may, at its option, enter into an agreement of sale with
respect to any or all of such Parcels to a third party on such terms and
conditions as determined by Purchaser provided, however, as to the Alterra
purchase right in Section 1 hereof, the thirty (30) day period in which Alterra
has the right to notify Purchaser whether it desires to purchase a Parcel shall
be reduced to ten (10) days and within two business days after Purchaser
notifies Alterra of the acceptance of Alterra's offer, Alterra shall be required
to deposit an amount equal to 10% of the amount of its offer in escrow with a
bank or other party reasonably acceptable to Purchaser to secure Alterra's
obligations under the purchase agreement under reasonable terms for a deposit
intended to secure the obligation of a purchaser to complete a real estate
purchase and if Alterra defaults in its obligation to make such deposit, all of
Alterra's rights under Section 1 with respect to such Parcels shall be
extinguished and (b) in connection with the sale of any Parcel pursuant to the
provisions of clause (a) of this sentence, Purchaser may, at its option,
terminate the Assisted Living Consultant and Management Services Agreement and
Development Agreement between Alterra and Purchaser with respect to any such
Parcel effective with the date of sale thereof, provided that Purchaser shall
first repay, to the extent incurred in connection with such Parcel, all amounts
of principal and interest outstanding pursuant to (i) any Supplementary
Financing, (ii) those two (2) certain Management Fee Loan Notes dated December
31, 1998 and March 31, 1999, respectively, and (iii) those two (2) certain
Working Capital Loan Notes also dated as of December 31, 1998 and March 31,
1999, respectively. Alterra, in its capacity as a member of Third Party
Investors I, L.L.C. hereby consents to the sale of any Parcel pursuant to the
provisions of this Section 3.c which may occur prior to the First Sale Date as
defined in the Operating Agreement of Third Party Investors I, L.L.C., as
amended from time to time.
4. Miscellaneous
5
6
a. Agreement Binding. This Agreement shall be binding upon each party
hereto and such party's successors and assigns and shall inure to the benefit of
each party hereto and such party's successors and assigns. Alterra may assign
this Agreement and the rights of Alterra hereunder (in whole or in part) without
the prior written consent of Purchaser.
b. Entire Agreement. This Agreement contains the entire agreement of
the parties hereto with respect to the matters contained herein, and no prior
agreement or understanding pertaining to any of the matters connected with this
transaction shall be effective for any purpose. Except as may be otherwise
provided herein, the agreements embodied herein may not be amended except by an
agreement in writing signed by the parties hereto.
c. Facsimile Execution. In the event of delivery by facsimile, such
delivery shall be binding as if an original had been delivered and the
delivering party covenants and agrees that originals will be sent that same day
by overnight delivery.
d. Time is of the Essence. Time is of the essence of the transaction
contemplated by this Agreement.
e. Governing Law. With respect to matters pertaining to the
individual Parcels, this Agreement shall be governed by and construed in
accordance with the laws of the state in which such Parcel is located. Except as
set forth in the immediately preceding sentence, this Agreement shall be
governed by the laws of the state of Wisconsin.
f. Interpretation; Date of Agreement. The titles, captions and
paragraph headings are inserted for convenience only and are in no way intended
to interpret, define, limit or expand the scope or content of this Agreement or
any provision hereof. If any time period under this Agreement ends on a day
other than a Business Day (as hereinafter defined), then the time period shall
be extended until the next business day. The term "Business Day" shall mean
Monday through Friday excluding holidays recognized by the state government of
the State of Wisconsin. All references in this Agreement to "the date of this
Agreement" shall be deemed to refer to the last date appearing on the signature
page hereof.
g. Waiver. Purchaser or Alterra, as the case may be, reserves the
right to waive, in whole or in part, any provision hereof which is for the
benefit of the party so waiving.
h. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and all of which, taken
as a whole, shall be deemed to be one (1) original. This Agreement shall be
deemed fully executed when each party whose signature is required has signed at
least one (1) counterpart even though no one (1) counterpart contains the
signatures of all of the parties to this Agreement.
i. Non-Waiver. Unless otherwise expressly provided herein, no waiver
by Alterra or Purchaser of any provision hereof shall be deemed to have been
made unless expressed in writing and signed by such party. No delay or omission
in the exercise of any right or remedy accruing to Alterra or Purchaser upon any
breach under this Agreement shall impair such right or remedy
6
7
or be construed as a waiver of any such breach theretofore or thereafter
occurring. The waiver by Alterra or Purchaser of any breach of any term,
covenant or condition herein stated shall not be deemed to be a waiver of any
other breach, or of a subsequent breach of the same or any other term, covenant
or condition herein contained. Each party hereby reserves the right to waive any
provision hereof made or intended for the benefit of the waiving party.
j. Rights Cumulative. All rights, powers, options or remedies
afforded to Alterra or Purchaser either hereunder or by law shall be cumulative
and not alternative, and the exercise of one right, power, option or remedy
shall not bar other rights, powers, options or remedies allowed herein or by
law, unless expressly provided to the contrary herein.
k. Notices. All notices, consents, approvals and other communications
which may be or are required to be given by either Alterra or Purchaser under
this Agreement shall be properly given if made in writing and sent by (a) hand
delivery, or (b) certified mail, return receipt requested, or (c) facsimile or
telecopier, provided a confirming copy thereof is thereafter sent in accordance
with (a), (b) or (d), or (d) nationally recognized overnight delivery service
for next business day delivery (such as Express Mail, Federal Express or
Airborne Express), with all postage, delivery and other charges paid by the
sender and addressed to Purchaser or Alterra, as applicable, as follows, or at
such other address as each may request in advance in writing. Such notices
delivered (i) by hand shall be deemed received upon actual delivery, (ii) by
overnight delivery service shall be deemed received on the next business day,
(iii) by facsimile or telecopier, on the date the sender receives either
electronic or verbal or other acknowledgment of receipt (without regard to the
date, if any, that the confirming copy is actually received) and (iv) if mailed,
shall be deemed received upon the earlier of actual receipt or two (2) business
days after mailing. Refusal of delivery shall be deemed effective delivery on
the date said delivery was attempted. Impossibility of delivery by a particular
means shall be deemed effective delivery on the date said delivery was attempted
provided that the delivering party thereafter diligently pursues actual delivery
by the same or other means. Said notice addresses are as follows:
If to Purchaser:
Twin Oaks Capital, L.L.C.
0000 Xxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Telephone: 630/000 0000
Fax: 630/000-0000
7
8
With a copy to:
Xxxxx & Xxxxx
000 Xxxxxx, X.X., Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone: 616/000-0000
Facsimile: 616/776-7203
If to Alterra
Alternative Living Services, Inc.
000 X. Xxxxxxxxxx Xxxx, Xxx. 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Telephone: 414/000-0000
Facsimile: 414/789-6182
with a copy to:
Xxxxxx & Xxxxxx
2700 International Tower
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Telephone: 404/000-0000
Facsimile: 404/522-2224
l. Prior Agreement. This Agreement supersedes the Purchase Rights and
Financing Agreement between the parties dated as of December 31, 1998, which
upon execution of this Agreement shall be null and void and of no further force
and effect.
******************************************************************
8
9
IN WITNESS WHEREOF, Alterra and Purchaser have caused this Agreement to
be duly executed as of this 30th day of June, 1999.
ALTERRA HEALTHCARE CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-----------------------------------
Its: Senior Vice President
----------------------------------
Execution Date: June 30, 1999
-----------------------
THIRD PARTY INVESTOR I, L.L.C., a Delaware
Corporation
By: Twin Oaks Capital, LLC, its Manager
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Its: President
----------------------------------
Execution Date: June 30, 1999
-----------------------
9
10
With respect only to the pledge of member interests referenced in Section 3.b
hereof:
TWIN OAKS CAPITAL, LLC
By: /s/Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx, President
Execution Date: June 30, 1999
-----------------------
GROUP ONE INVESTORS, L.L.C.
By: RDV Corporation, Manager
By: /s/Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Its: Treasurer
----------------------------------
Execution Date: June 30, 1999
-----------------------
10
