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EXHIBIT 10.9
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT dated as of September 30, 1999 (the "Guaranty")
is given by Alterra Healthcare Corporation, a Delaware corporation (the
"Partner" or "Alterra"), in favor of BANK OF AMERICA, N.A., as Administrative
Agent (in such capacity, the "Administrative Agent") for the Lenders under the
Credit Agreement referenced below.
W I T N E S S E T H
WHEREAS, the Borrowers, HCR/Alterra Development, LLC, the Lenders and
the Administrative Agent have entered into that certain Credit Agreement (each
as defined below);
WHEREAS, this Guaranty is a condition precedent to the obligations of
the Lenders to make loans and extensions of credit to the Borrowers under the
Credit Agreement;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Partner hereby agrees as follows:
SECTION 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS.
Unless otherwise defined herein or the context otherwise requires,
terms used in this Guaranty, including its preamble and recitals, have the
meanings provided in the Credit Agreement:
"Acquisition", by any Person, means the acquisition by such
Person of all of the Capital Stock or all or substantially all of the
Property of another Person, whether or not involving a merger or
consolidation with such other Person.
"Affiliate" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the Capital
Stock in such Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Alterra" means Alterra Healthcare Corporation, a Delaware
corporation.
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"Asset Disposition" means the disposition of any or all of the
assets (including without limitation the Capital Stock of a Subsidiary)
of Alterra or any of its Subsidiaries whether by sale, lease, transfer
or otherwise (including pursuant to any casualty or condemnation
event).
"Borrowers" shall have the meaning set forth in the Credit
Agreement.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Stock" shall have the meaning set forth in the Credit
Agreement.
"Change of Control" means, except as a result of a transaction
permitted under Section 5.3, any Person or two or more Persons acting
in concert shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control over,
Voting Stock of Alterra (or other securities convertible into such
Voting Stock) representing 35% or more of the combined voting power of
all Voting Stock of Alterra.
"Closing Date" means the date hereof.
"Consolidated Parties" means a collective reference to Alterra
and its Subsidiaries, and "Consolidated Party" means any one of them.
"Consolidated Net Worth" means, as of any date, shareholders'
equity or net worth of any Person and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Credit Agreement" means that certain Credit Agreement dated
as of September 30, 1999 (as amended, modified, restated or
supplemented from time to time, the "Credit Agreement"), by and among
Borrowers party thereto, the Guarantors party thereto, the Lenders
party thereto and Bank of America, N.A., as Administrative Agent for
the Lenders.
"Credit Documents" means a collective reference to the Credit
Agreement, the Notes, the Alterra Guaranty Agreement, the HCR Guaranty
Agreement, each Joinder Agreement, the Administrative Agent's Fee
Letter, the Collateral Documents and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant
hereto or thereto (in each case as the same may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to
time), and "Credit Document" means any one of them.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
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"EBITDAR" means, for any period, with respect to Alterra and
its Subsidiaries on a consolidated basis, earnings before Interest,
taxes, depreciation, amortization and Rent plus the dollar amount of
Alterra's minority interest in losses of unconsolidated Subsidiaries.
"Event of Default" means any of the events or circumstances
specified in Section 6.
"Existing Credit Agreements" means those certain material
credit agreements of Alterra and/or its Subsidiaries set forth on
Schedule 1.1(a) hereto.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guaranteed Obligations" means, without duplication, (i) all
of the obligations of the Credit Parties to the Lenders and the
Administrative Agent, whenever arising, under the Credit Agreement, the
Notes, the Guaranty Agreements, the Collateral Documents or any of the
other Credit Documents (including, but not limited to, any interest
accruing after the occurrence of a Bankruptcy Event with respect to any
Credit Party, regardless of whether such interest is an allowed claim
under the Bankruptcy Code) and (ii) all liabilities and obligations,
whenever arising, owing from any Operative Party to any Lender, or any
Affiliate of a Lender, arising under any Hedging Agreement.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.
"Guarantors" shall have the meaning set forth in the Credit
Agreement.
"Hedging Agreement" means any interest rate protection
agreement or foreign currency exchange agreement.
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"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c)
all obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person which would appear as liabilities on a balance sheet of such
Person, (e) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on,
or payable out of the proceeds of production from, Property owned or
acquired by such Person, whether or not the obligations secured thereby
have been assumed, (g) all Guaranty Obligations of such Person, (h) the
principal portion of all obligations of such Person under Capital
Leases, (i) all obligations of such Person under Operating Leases, (j)
all obligations of such Person under Hedging Agreements, (k) the
maximum amount of all standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (l) all preferred Capital Stock issued by such Person
and required by the terms thereof to be redeemed, or for which
mandatory sinking fund payments are due, by a fixed date (m) the
principal portion of all obligations of such Person under Synthetic
Leases and (n) the Indebtedness of any partnership or unincorporated
joint venture in which such Person is a general partner or a joint
venturer.
"Interest" means, for any period, the sum of all interest
expense (as defined by GAAP), net of interest income of Alterra and its
Subsidiaries on a consolidated basis for such period.
"Lenders" shall have the meaning set forth in the Credit
Agreement.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Management Agreements" shall have the meaning set forth in
the Credit Agreement.
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets or liabilities of Alterra and its Subsidiaries taken as a whole,
(ii) the ability of any Credit Party to perform any material
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obligation under the Credit Documents to which it is a party or (iii)
the material rights and remedies of the Lenders under the Credit
Documents.
"Material Subsidiaries" means any Subsidiary of Alterra having
5% or more of the consolidated assets of Alterra and its Subsidiaries,
and "Material Subsidiary" means any one of them.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Operative Party" shall have the meaning set forth in the
Credit Agreement.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Rent" means, for any period, the sum of all lease expense (as
defined pursuant to GAAP) of Alterra and its Subsidiaries on a
consolidated basis for such period.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding, and (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding.
"Sale and Leaseback Transaction" means any arrangement
pursuant to which any Consolidated Party, directly or indirectly,
becomes liable as lessee, guarantor or other surety with respect to any
lease, whether an Operating Lease or a Capital Lease, of any Property
(a) which such Consolidated Party has sold or transferred (or is to
sell or transfer) to a Person which is not a Consolidated Party or (b)
which such Consolidated Party intends to use for substantially the same
purpose as any other Property which has been sold or transferred (or is
to be sold or transferred) by such Consolidated Party to another Person
which is not a Consolidated Party in connection with such lease.
"Tangible Net Worth" means, at any time, the sum at such time
of Net Worth (defined as shareholder's equity as defined by GAAP) less
the total of (a) all assets which would be classified as intangible
assets under GAAP, including without limitation, goodwill, trademarks,
trademark applications, trade names, service marks, patent
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applications and licenses, and deferred charges, (b) pre-opening costs,
organizational costs and deferred financing costs and (c) advances or
loans made to or receivables from any unconsolidated Affiliates of
which Alterra owns less than fifty percent (50%) or any stockholder of
Alterra or any Affiliate.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Guaranty shall (except as otherwise expressly provided herein) be made by
application of GAAP applied on a basis consistent with the most recent annual or
quarterly financial statements delivered pursuant to Section 4.1 (or, prior to
the delivery of the first financial statements pursuant to Section 4.1,
consistent with the financial statements as at December 31, 1998); provided,
however, if (a) Alterra shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Administrative
Agent or the Required Lenders shall so object in writing within 60 days after
delivery of such financial statements, then such calculations shall be made on a
basis consistent with the most recent financial statements delivered by Alterra
to the Lenders as to which no such objection shall have been made.
SECTION 2
GUARANTY
2.1 THE GUARANTY.
The Partner hereby guarantees to each Lender, each Affiliate of a
Lender that enters into a Hedging Agreement, and the Administrative Agent as
hereafter provided, as primary obligor and not as surety, (a) the prompt payment
of the Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof and (b) the timely
performance of all other obligations of the Borrowers under the Credit
Documents, including, without limitation, that the Eligible Projects will be
constructed in accordance with the Credit Agreement and applicable law. The
Partner hereby further agrees that if any of the Guaranteed Obligations are not
paid in full when due (whether at stated maturity, as a mandatory prepayment, by
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acceleration, as a mandatory cash collateralization or otherwise), the Partner
will promptly pay the same, without any demand or notice whatsoever, and that in
the case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal. The Partner further agrees to (x) assume all
responsibility for the completion of the Eligible Projects and, at the Partner's
own cost and expense, to cause the Eligible Projects to be fully completed in
accordance with the plans and specifications provided to the Administrative
Agent in accordance with the terms of the Credit Agreement, (y) pay all bills in
connection with the construction of the Eligible Projects and (z) indemnify and
hold the Lenders harmless from any and all loss, cost, liability or expense the
Lenders may suffer by reason of any such failure to meet its obligations under
clauses (x) or (y) above.
The guaranty in this Section 2.1 is a guaranty of payment and not of
collection, is a continuing guaranty, and shall apply to all Guaranteed
Obligations whenever owing.
2.2 GUARANTEED OBLIGATIONS UNCONDITIONAL.
The obligations of the Partner under Section 2.1 are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or Hedging Agreements, or any
other agreement or instrument referred to therein, or any substitution,
compromise, release, impairment or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 2.2 that the
obligations of the Partner hereunder shall be absolute and unconditional under
any and all circumstances. Without limiting the generality of the foregoing, it
is agreed that, to the fullest extent permitted by law, the occurrence of any
one or more of the following shall not alter or impair the liability of the
Partner hereunder which shall remain absolute and unconditional as described
above:
(a) at any time or from time to time, without notice to the
Partner, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any
of the Credit Documents or Hedging Agreements or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents or Hedging Agreements or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released, impaired or
exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative
Agent or any Lender or Lenders as security for any of the Guaranteed
Obligations shall fail to attach or be perfected;
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(e) any addition, substitution, replacement or release of a
Borrower pursuant to the terms of the Credit Agreement, with or without
the consent of the Partner or with or without any notice of such
addition, substitution, replacement or release being provided to the
Partner; or
(f) any of the Guaranteed Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of the Partner) or shall be subordinated to the claims of
any Person (including, without limitation, any creditor of the
Partner).
With respect to its obligations hereunder, the Partner hereby expressly waives
diligence, presentment, demand of payment, protest, notice of acceptance of this
Guaranty and of extensions of credit which may constitute Guaranteed
Obligations, notice of amendments, waivers or supplements to the Credit
Documents or Hedging Agreements or the compromise, release or exchange of
collateral or security and all other notices whatsoever, and any requirement
that the Administrative Agent or any Lender exhaust any right, power or remedy
or proceed against any Person under any of the Credit Documents or Hedging
Agreements or any other agreement or instrument referred to in the Credit
Documents or against any other Person under any other guarantee of, or security
for, any of the Guaranteed Obligations.
2.3 REINSTATEMENT.
Neither the Partner's obligations hereunder nor any remedy for the
enforcement thereof shall be impaired, modified, changed or released in any
manner whatsoever by an impairment, modification, change, release or limitation
of the liability of the Borrowers, by reason of any Borrower's bankruptcy or
insolvency or by reason of the invalidity or unenforceability of all or any
portion of the Guaranteed Obligations. The obligations of the Partner under this
Guaranty shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Person in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and the Partner agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Administrative Agent or such Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
2.4 CERTAIN ADDITIONAL WAIVERS.
The Partner agrees that this Guaranty may be enforced by the
Administrative Agent and the Lenders without the necessity of resorting to or
exhausting any other security or collateral and without the necessity at any
time of having recourse to the Borrowers under the Credit Agreement, any Hedging
Agreement or any collateral securing the Guaranteed Obligations or otherwise,
and the Partner agrees not to assert any right to require the Administrative
Agent and the Lenders to proceed against any Borrower or any other Person
(including any co-guarantor) or
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to require the Administrative Agent and the Lenders to pursue any other remedy
or enforce any other right. The Partner further agrees that it shall have no
right of subrogation, reimbursement or indemnity, nor any right of recourse to
security, if any, for the Guaranteed Obligations so long as any amounts payable
to the Administrative Agent or the Lenders in respect of the Guaranteed
Obligations shall remain outstanding (other than contingent indemnification
obligations) and until all of the Commitments shall have expired or been
terminated. The Partner further acknowledges and agrees that nothing contained
in this Guaranty shall prevent the Administrative Agent or the Lenders from
suing any Borrower in respect of his obligations under the Credit Agreement, any
Hedging Agreement and the other Credit Documents or foreclosing on any security
interest or lien on any collateral securing the Guaranteed Obligations or from
exercising any other rights available to the Administrative Agent and the
Lenders under the Credit Documents or Hedging Agreements if neither the
Borrowers nor the Partner timely perform their obligations, and the exercise of
any of such rights and completion of any such foreclosure proceedings shall not
constitute a discharge of any of the Partner's obligations hereunder unless as a
result thereof the Guaranteed Obligations shall have been paid in full (other
than contingent indemnification obligations) and all of the Commitments shall
have terminated or expired, it being the purpose and intent that the Partner's
obligations hereunder be absolute, irrevocable, independent and unconditional
under all circumstances.
2.5 REMEDIES.
The Partner agrees that, to the fullest extent permitted by law, as
between the Partner, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable (as provided in Section 9.2 of the Credit Agreement)
for purposes of Section 2.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing such Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Guaranteed
Obligations being deemed to have become automatically due and payable), such
Guaranteed Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Partner for purposes of Section
2.1.
2.6 FURTHER REPRESENTATIONS AND WARRANTIES.
The Partner agrees that the Administrative Agent and the Lenders will
have no obligation to investigate the financial condition or affairs of any
Borrower for the benefit of the Partner nor to advise the Partner of any fact
respecting, or any change in, the financial condition or affairs of any Borrower
which might come to the knowledge of the Administrative Agent or any Lender at
any time, whether or not the Administrative Agent or any Lender knows or
believes or has reason to know or believe that any such fact or change is
unknown to the Partner or might (or does) materially increase the risk of the
Partner as Partner or might (or would) affect the willingness of the Partner to
continue as a guarantor with respect to the Guaranteed Obligations.
2.7 ADDITIONAL LIABILITY OF PARTNER.
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If the Partner is or becomes liable for any indebtedness owing by any
Borrower to the Administrative Agent or any Lender by endorsement or otherwise
other than under this Guaranty, such liability shall not be in any manner
impaired or reduced hereby but shall have all and the same force and effect it
would have had if this Guaranty had not existed and the Partner's liability
hereunder shall not be in any manner impaired or reduced thereby.
SECTION 3
REPRESENTATIONS AND WARRANTIES
Alterra hereby represents to the Administrative Agent and each Lender
that:
3.1 FINANCIAL CONDITION.
The financial statements delivered to the Lenders pursuant to Section
4.1(a) and (b), (i) have been prepared in accordance with GAAP and (ii) present
fairly (on the basis disclosed in the footnotes to such financial statements)
the financial condition, results of operations and cash flows of Alterra and its
Subsidiaries as of such date and for such periods. Since December 31, 1998, (i)
there has been no sale, transfer or other disposition by Alterra or its
Subsidiaries of any material part of the business or material property of
Alterra and its Subsidiaries, and (ii) no purchase or other acquisition by any
of them of any business or property (including any capital stock of any other
Person) material in relation to financial condition of Alterra and its
Subsidiaries, which is not reflected in the foregoing financial statements or in
the notes thereto and has not otherwise been disclosed in writing to the Lenders
on or prior to the Closing Date. As of the Closing Date (other than the
liabilities of Alterra arising from the transactions contemplated by the Credit
Documents), Alterra and its Subsidiaries have no material liabilities
(contingent or otherwise) that are not reflected in the foregoing financial
statements, in the notes thereto or Alterra's report on Form 10-K or Form 10-Q,
as applicable.
3.2 NO MATERIAL CHANGE.
(a) Since December 31, 1998 (a) there has been no development
or event relating to or affecting any Consolidated Party which has had
or could reasonably be expected to have a Material Adverse Effect.
(b) Since the Closing Date, except as otherwise permitted
under this Guaranty, no dividends or other distributions have been
declared, paid or made upon the Capital Stock in an Consolidated Party
nor has any of the Capital Stock in any Consolidated Party been
redeemed, retired, purchased or otherwise acquired for value.
3.3 ORGANIZATION AND GOOD STANDING.
Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and
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(c) is duly qualified as a foreign entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect.
3.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Alterra has the corporate or other necessary power and authority, and
the legal right, to make, deliver and perform the Credit Documents to which it
is a party, and has taken all necessary corporate action to authorize the
execution, delivery and performance of the Credit Documents to which it is a
party. No consent or authorization of, filing with, notice to or other similar
act by or in respect of, any Governmental Authority or any other Person is
required to be obtained or made by or on behalf of Alterra in connection with
the execution, delivery, performance, validity or enforceability of the Credit
Documents to which Alterra is a party. This Guaranty has been, and each other
Credit Document to which Alterra is a party will be, duly executed and delivered
on behalf of Alterra. This Guaranty constitutes, and each other Credit Document
to which Alterra is a party when executed and delivered will constitute, a
legal, valid and binding obligation of Alterra enforceable against it in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
3.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by Alterra will (a) violate or
conflict with any provision of its articles or certificate of incorporation or
bylaws or other organizational or governing documents of such Person, (b)
violate, contravene or materially conflict with any Requirement of Law or any
other law, regulation (including, without limitation, Regulation U or Regulation
X), order, writ, judgment, injunction, decree or permit applicable to it, (c)
violate, contravene or conflict with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage, deed of trust,
contract or other agreement or instrument to which it is a party or by which it
may be bound, the violation of which could reasonably be expected to have a
Material Adverse Effect, or (d) result in or require the creation of any Lien
(other than those contemplated in or created in connection with the Credit
Documents) upon or with respect to its properties.
3.6 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.
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3.7 OWNERSHIP.
Each Consolidated Party is the owner of, and has good and marketable
title to, all of its respective assets.
3.8 LITIGATION.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Consolidated
Party, threatened against a Consolidated Party which might reasonably be
expected to have a Material Adverse Effect.
3.9 TAXES.
Each Consolidated Party has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. No
Consolidated Party is aware of any proposed tax assessments against it or any of
its Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
3.10 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not reasonably be expected to have a Material
Adverse Effect.
3.11 ERISA.
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the best knowledge of Alterra, no event or condition
has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, has
occurred with respect to any Plan; (iii) each Plan has been maintained,
operated, and funded in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other
applicable federal or state laws; and (iv) no lien in favor of the PBGC
or a Plan has arisen or is reasonably likely to arise on account of any
Plan.
(b) The actuarial present value of all "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
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Standards Board Statement 87, utilizing the actuarial assumptions used
in such Plan's most recent actuarial valuation report), did not exceed
as of such valuation date the fair market value of the assets of such
Plan.
(c) Neither any Consolidated Party, nor any ERISA Affiliate
has incurred, or, to the best knowledge of Alterra, could be reasonably
expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither any Consolidated
Party, nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any Consolidated Party or any of its
Subsidiaries or any ERISA Affiliate were to withdraw completely from
all Multiemployer Plans and Multiple Employer Plans as of the valuation
date most closely preceding the date on which this representation is
made or deemed made. Neither any Consolidated Party nor any ERISA
Affiliate has received any notification that any Multiemployer Plan is
in reorganization (within the meaning of Section 4241 of ERISA), is
insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best knowledge of Alterra, reasonably
expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject any Consolidated Party or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any Person against any such
liability.
(e) Neither any Consolidated Party nor any ERISA Affiliates
has any material liability with respect to "expected post-retirement
benefit obligations" within the meaning of the Financial Accounting
Standards Board Statement 106. Each Plan which is a welfare plan (as
defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA
and Section 4980B of the Code apply has been administered in compliance
in all material respects of such sections.
(f) Neither the execution and delivery of this Guaranty nor
the consummation of the financing transactions contemplated thereunder
will involve any transaction which is subject to the prohibitions of
Sections 404, 406 or 407 of ERISA or in connection with which a tax
could be imposed pursuant to Section 4975 of the Code. The
representation by Alterra in the preceding sentence is made in reliance
upon and subject to the accuracy of the Lenders' representation in
Section 11.16 of the Credit Agreement with respect to their source of
funds and is subject, in the event that the source of the funds used by
the Lenders in connection with this transaction is an insurance
company's general asset account, to the application of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995),
compliance with the regulations issued under Section 401(c)(1)(A) of
ERISA, or the issuance of any other prohibited transaction exemption or
similar relief, to the effect that assets in an insurance company's
general asset account do not constitute assets of an
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"employee benefit plan" within the meaning of Section 3(3) of ERISA of
a "plan" within the meaning of Section 4975(e)(1) of the Code.
3.12 SUBSIDIARIES.
Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of Alterra.
3.13 GOVERNMENTAL REGULATIONS, ETC.
(a) No Consolidated Party is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or
the Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as
amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding
company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(b) No director, executive officer or principal shareholder of
any Consolidated Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms
"director", "executive officer" and "principal shareholder" (when used
with reference to any Lender) have the respective meanings assigned
thereto in Regulation O issued by the Board of Governors of the Federal
Reserve System.
(c) Each Consolidated Party has obtained and holds in full
force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of
way and other rights, consents and approvals which are necessary for
the ownership of its respective Property and to the conduct of its
respective businesses as presently conducted.
(d) No Consolidated Party is in violation of any applicable
statute, regulation or ordinance of the United States of America, or of
any state, city, town, municipality, county or any other jurisdiction,
or of any agency thereof (including without limitation, environmental
laws and regulations), which violation could reasonably be expected to
have a Material Adverse Effect.
(e) Each Consolidated Party and each of its Subsidiaries is
current with all material reports and documents, if any, required to be
filed with any state or federal securities commission or similar agency
and is in full compliance in all material respects with all applicable
rules and regulations of such commissions.
3.14 ENVIRONMENTAL MATTERS.
(a) Each of the facilities and properties owned, leased or
operated by the Consolidated Parties (the "Properties") and all
operations at the Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any
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Environmental Law with respect to the Properties or the businesses
operated by the Consolidated Parties (the "Businesses"), and there are
no conditions relating to the Businesses or Properties that could
reasonably be expected to give rise to a material liability under any
applicable Environmental Laws.
(b) None of the Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the
Properties in amounts or concentrations that constitute or constituted
a violation of, or that could reasonably be expected to give rise to a
material liability under, Environmental Laws.
(c) No Consolidated Party has received any written or verbal
notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the
Businesses, nor does any Consolidated Party have knowledge or reason to
believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties, or generated, treated,
stored or disposed of at, on or under any of the Properties, in each
case by or on behalf of any Consolidated Party or any of its
Subsidiaries in violation of, or in a manner that could give rise to
material liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Consolidated Party,
threatened, under any Environmental Law to which any Consolidated Party
or any of its Subsidiaries is or will be named as a party, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Consolidated Parties, any of its Subsidiaries, the
Properties or the Businesses.
(f) There has been no release, or threat of release, of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations (including, without
limitation, disposal) of any Consolidated Party or any of its
Subsidiaries in connection with the Properties or otherwise in
connection with the Businesses, in violation of or in amounts or in a
manner that could reasonably be expected to give rise to material
liability under Environmental Laws.
3.15 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not reasonably be expected to have a Material Adverse Effect.
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3.16 SOLVENCY.
Each Consolidated Party is and, after consummation of the transactions
contemplated by the Credit Agreement and this Guaranty, will be Solvent.
3.17 DISCLOSURE.
Neither this Guaranty, the Credit Agreement nor any financial
statements delivered to the Lenders nor any other document, certificate or
statement furnished to the Lenders by or on behalf of any Consolidated Party in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein or herein not misleading.
3.18 NO BURDENSOME RESTRICTIONS.
No Consolidated Party nor any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
3.19 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of an Consolidated Party or any of its Subsidiaries, and
none of the Consolidated Parties has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years.
3.20 YEAR 2000 COMPLIANCE.
Each Consolidated Party has (i) initiated a review and assessment of
all areas within its and each of its Subsidiaries' business and operations that
could be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by such Consolidated Party or any of 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), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (iii) to date, implemented that plan in accordance with the
timetable. Based on the foregoing, Alterra believes that all computer
applications that are material to its and any of its Subsidiaries' business and
operations are reasonably expected on a timely basis to be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 compliant"), except to the extent that a failure to do
so could not reasonably be expected to have Material Adverse Effect.
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SECTION 4
AFFIRMATIVE COVENANTS
Alterra hereby covenants and agrees that, so long as the Credit
Agreement is in effect or any amounts payable thereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
thereunder shall have terminated:
4.1 INFORMATION COVENANTS.
Alterra will furnish, or cause to be furnished, to the Administrative
Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of each fiscal year of the
Consolidated Parties, a consolidated balance sheet and income statement
of the Consolidated Parties, as of the end of such fiscal year,
together with related statements of operations and retained earnings
and of cash flows for such fiscal year, setting forth in comparative
form figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
audited by independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent and
whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with
which such accountants concur) and shall not be limited as to the scope
of the audit or qualified as to the status of the Consolidated Parties
as a going concern or any other material qualifications or exceptions.
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the close of each fiscal quarter of
the Consolidated Parties (other than the fourth fiscal quarter, in
which case 90 days after the end thereof) a balance sheet and income
statement of the Consolidated Parties, as of the end of such fiscal
quarter, together with related statements of cash flows for such fiscal
quarter, in each case setting forth in comparative form figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Administrative Agent, and accompanied by a
certificate of the chief financial officer of Alterra to the effect
that such quarterly financial statements fairly present in all material
respects the financial condition of the Consolidated Parties and have
been prepared in accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Section 4.1(a) and 4.1(b) above, a
certificate of an Executive Officer of Alterra, (i) demonstrating
compliance with the financial covenants contained in Section 4.9 by
calculation thereof as of the end of each such fiscal period and (ii)
stating that no Default or Event of Default exists, or if any Default
or Event of Default does exist, specifying the nature and extent
thereof and what action the Credit Parties propose to take with respect
thereto.
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(d) Parent Financial Statements. Promptly upon receipt
thereof, a copy of all balance sheets or income statements, as of the
end of any fiscal period, together with related statements of
operations and retained earnings and of cash flows for such fiscal
period or any other financial information with respect to the Parent.
(e) Auditor's Reports. Promptly upon receipt thereof, a copy
of any other report or "management letter" submitted by independent
accountants to any Consolidated Party in connection with any annual,
interim or special audit of the books of such Person.
(f) Reports. Promptly upon transmission or receipt thereof,
copies of any filings and registrations with, and reports to or from,
the Securities and Exchange Commission, or any successor agency, and
copies of all financial statements, proxy statements, notices and
reports as any Consolidated Party or any of its Subsidiaries shall send
to its shareholders or to a holder of any Indebtedness owed by any
Consolidated Party or any of its Subsidiaries in its capacity as such a
holder.
(g) Notices. Upon obtaining knowledge thereof, Alterra will
give written notice to the Administrative Agent immediately of (i) the
occurrence of an event or condition consisting of a Default or Event of
Default, specifying the nature and existence thereof and what action
Alterra proposes to take with respect thereto, (ii) the occurrence of
any of the following with respect to Alterra or any of its Subsidiaries
(A) the pendency or commencement of any litigation, arbitral or
governmental proceeding against such Person which if adversely
determined is likely to have a Material Adverse Effect, (B) the
institution of any proceedings against such Person with respect to, or
the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any federal,
state or local law, rule or regulation, including but not limited to,
Environmental Laws, the violation of which could reasonably be expected
to have a Material Adverse Effect, or (C) any notice or determination
concerning the imposition of any withdrawal liability by a
Multiemployer Plan against such Person or any ERISA Affiliate, the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA or the
termination of any Plan and (iii) the occurrence of an event of default
under any of the Management Agreements.
(h) ERISA. Upon obtaining knowledge thereof, Alterra will give
written notice to the Administrative Agent promptly (and in any event
within five business days) of: (i) of any event or condition,
including, but not limited to, any Reportable Event, that constitutes,
or might reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Consolidated
Parties or any ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any Consolidated Party or any of its Subsidiaries or any ERISA
Affiliate is required to contribute to each Plan pursuant to its terms
and as required to meet the minimum funding standard set forth in ERISA
and the Code with respect thereto; or (iv) any change in the funding
status of any Plan that could reasonably be expected to have a Material
Adverse Effect, together with a description of
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any such event or condition or a copy of any such notice and a
statement by an Executive Officer of Alterra, as appropriate, briefly
setting forth the details regarding such event, condition, or notice,
and the action, if any, which has been or is being taken or is proposed
to be taken by the Consolidated Parties with respect thereto. Promptly
upon request, the Consolidated Parties shall furnish the Administrative
Agent and the Lenders with such additional information concerning any
Plan as may be reasonably requested, including, but not limited to,
copies of each annual report/return (Form 5500 series), as well as all
schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(i) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of the Consolidated Parties as the
Administrative Agent or any Lender (through the Administrative Agent)
may reasonably request.
4.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a transaction permitted
under Section 5.3, Alterra and each of its Material Subsidiaries will, and will
cause each of its Subsidiaries to, do all things necessary to preserve and keep
in full force and effect its existence, rights, franchises and authority.
4.3 BOOKS AND RECORDS.
Each Consolidated Party will, and will cause each of its Subsidiaries
to, keep complete and accurate books and records of its transactions in
accordance with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves).
4.4 COMPLIANCE WITH LAW.
Each Consolidated Party will, and will cause each of its Subsidiaries
to, comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
property if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect.
4.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each Consolidated Party will, and will cause each of its Subsidiaries
to, pay and discharge (a) all taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that an Consolidated Party or any of its Subsidiaries shall not be
required to pay any such tax, assessment, charge, levy, claim or Indebtedness
which is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) could
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give rise to an immediate right to foreclose on a Lien securing such amounts or
(ii) could reasonably be expected to have a Material Adverse Effect.
4.6 INSURANCE.
Each Consolidated Party will, and will cause each of its Subsidiaries
to, at all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice and furnish to the Administrative Agent, upon written
request, full information as to the insurance carried.
4.7 MAINTENANCE OF PROPERTY.
Each Consolidated Party will, and will cause each of its Subsidiaries
to, maintain and preserve its properties and equipment material to the conduct
of its business in good repair, working order and condition, normal wear and
tear and casualty and condemnation excepted, and will make, or cause to be made,
to such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
4.8 PERFORMANCE OF OBLIGATIONS.
Each Consolidated Party will, and will cause each of its Subsidiaries
to, perform in all material respects all of its obligations under the terms of
all material agreements, indentures, mortgages, security agreements or other
debt instruments to which it is a party or by which it is bound.
4.9 FINANCIAL COVENANTS.
(a) Tangible Net Worth. The Tangible Net Worth of the
Consolidated Parties on a consolidated basis shall, at all times during
the term of the Credit Agreement (measured quarterly) be not less than
the sum of $125,000,000 as of June 30, 1999 plus fifty percent (50%) of
Alterra's net income (if positive) for each subsequent quarter plus
seventy-five (75%) of the net proceeds to Alterra of any equity capital
(or equity equivalent) securities offering received during such
quarter.
(b) Ratio of EBITDAR to Interest and Rent. The ratio of
EBITDAR to the sum of Interest plus Rent, measured quarterly as of the
last day of each fiscal quarter of the Consolidated Parties during each
of the fiscal years noted as follows shall be greater than or equal to:
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Fiscal Year Ratio
----------- -----
1999 1.40 to 1.0
2000 1.40 to 1.0
2001 1.50 to 1.0
2002 1.50 to 1.0
4.10 YEAR 2000 COMPLIANCE.
Alterra will promptly notify the Administrative Agent in the event it
discovers or determines that any computer application that is material to its or
any of its Subsidiaries' business and operations will not be Year 2000
compliant, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
SECTION 5
NEGATIVE COVENANTS
Alterra hereby covenants and agrees that, so long as the Credit
Agreement is in effect or any amounts payable thereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
5.1 INDEBTEDNESS.
Alterra will not, nor will it permit any Consolidated Party to,
contract, create, incur, assume or permit to exist any Indebtedness if (a) the
creation, incurrence, assumption or existence of such Indebtedness would
directly or indirectly cause a Default or Event of Default or (b) such
Indebtedness is not created, incurred, assumed or permitted to exist in the
ordinary course of business on terms and conditions substantially similar as
would be obtainable in a comparable arms-length transaction (considered in the
context of the applicable transaction taken as a whole).
5.2 NATURE OF BUSINESS.
Alterra and each of its Material Subsidiaries will remain substantially
engaged in the lines of business conducted by them on the Closing Date and
related businesses thereto.
5.3 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
Alterra will not, nor will it permit any Consolidated Party to,
contract, create, incur, assume or permit to, enter into any transaction of
merger or consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), provided that, notwithstanding the foregoing
provisions of this Section 5.3:
(a) Alterra may merge or consolidated with or into any
Person, provided that:
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(i) the Consolidated Net Worth of the surviving
corporation after giving effect to such merger or
consolidation is at least equal to the Consolidated Net Worth
of Alterra immediately prior to such merger or consolidation;
(ii) the surviving corporation is a publicly held
corporation immediately after giving effect to such merger or
consolidation;
(iii) such Person is either (A) a company in the
healthcare business or hospitality business with experience
operating and/or managing healthcare facilities or (B) a
company with a minimum senior unsecured debt rating of at
least "BBB" from S&P or "Baa2" from Xxxxx'x;
(iv) at least two of the four persons serving Alterra
immediately prior to such merger or consolidation in the
capacities of Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer and Alterra's officer with
primary responsibility for new residences development and
construction will serve in comparable or enhanced positions
with the surviving corporation following such merger or
consolidation;
(v) the Administrative Agent, in its sole reasonable
discretion, shall determine the Person or Persons that shall
be required to assume the obligations of Alterra under this
Guaranty following such merger or consolidation, including
without limitation, Alterra's past, current and future
obligations and liabilities under this Guaranty and each other
Credit Document to which Alterra is a party pursuant to an
assumption agreement in form and substance satisfactory to the
Administrative Agent;
(vi) the Administrative Agent shall have received
such other documents, agreements, certificates, legal opinions
and information (in form and substance satisfactory to the
Administrative Agent) which may be reasonably requested by the
Administrative Agent; and
(vii) no Default or Event of Default has occurred and
is continuing or would result therefrom.
(b) any Consolidated Party (other than Alterra) may merge or
consolidate with any other Consolidated Party (including Alterra) so
long as (i) no Event of Default has occurred and is continuing or would
result therefrom and (ii) if the merger or consolidation involves
Alterra, Alterra is the surviving corporation,
(c) any Subsidiary of Alterra may merge with any Person in
connection with an Asset Disposition permitted under Section 5.4;
(d) any Subsidiary of Alterra may dissolve , liquidate or wind
up its affairs at any time provided that such disposition, liquidation
or winding up, as applicable, could not reasonably be expected to have
a Material Adverse Effect; and
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(e) any Subsidiary of Alterra may merge or consolidate with or
into any Person, provided that:
(i) the Consolidated Net Worth of Alterra after
giving effect to such merger or consolidation is at least
equal to the Consolidated Net Worth of Alterra immediately
prior to such merger or consolidation;
(ii) The surviving corporation continues to be a
Subsidiary of Alterra immediately after giving effect to such
merger or consolidation;
(iii) such Person is either (A) a company in the
healthcare business or hospitality business with experience
operating and/or managing healthcare facilities or (B) a
company with a minimum senior unsecured debt rating of at
least "BBB" from S&P or "Baa2" from Xxxxx'x;
(iv) at least two of the four persons serving Alterra
immediately prior to such merger or consolidation in the
capacities of Chief Financial Officer, Chief Operating
Officer, Chief Financial Officer and Alterra's officer with
primary responsibility for new residences development and
construction will serve in comparable or enhanced positions
with Alterra following such merger or consolidation;
(v) the Administrative Agent, in its sole discretion,
shall determine the Person or Persons that shall be required
to join in the obligations of Alterra under this Guaranty
following such merger or consolidation, including without
limitation, Alterra's past, current and future obligations and
liabilities under this Guaranty and each other Credit Document
to which Alterra is a party pursuant to a joinder agreement in
form and substance satisfactory to the Administrative Agent;
(vi) the Administrative Agent shall have received
such other documents, agreements, certificates, legal opinions
and information (in form and substance satisfactory to the
Administrative Agent); and
(vii) no Default or Event of Default has occurred and
is continuing or would result therefrom.
5.4 ASSET DISPOSITIONS.
Alterra will not, nor will it permit any Consolidated Party to,
contract, create, incur, assume or permit to, make any Asset Disposition
(including, without limitation, any Sale and Leaseback Transaction) if (a) a
Default or Event of Default would be directly or indirectly caused as a result
thereof or (b) such Asset Disposition is not in the ordinary course of business
and does not contain terms and conditions substantially similar as would be
obtainable in a comparable arms-length transaction (considered in the context of
the applicable business taken as a whole).
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5.5 RESTRICTED PAYMENTS.
Alterra will not, nor will it permit any Consolidated Party to,
contract, create, incur, assume or permit to, directly or indirectly, declare,
order, make or set apart any sum for or pay any Restricted Payment, except (a)
to make dividends payable solely in the same class of Capital Stock of such
Person,(b) to make cash dividends or other cash distributions payable from any
Consolidated Party (directly or indirectly through Subsidiaries) to Alterra, (c)
to make payments to acquire the Capital Stock of any Person holding any equity
interest in any Subsidiary of Alterra pursuant to the exercise of put or call
options contained in the organizational documents (as the same may be amended
from time to time) of such Subsidiary, (d) any Subsidiary of Alterra may make
dividends or distributions to any shareholders of such Subsidiary so long as
such dividends or distributions are made with cash flow generated by the assets
of such Subsidiary, (e) to make payments or distributions in connection with any
merger or consolidation permitted by Section 5.3, (f) to make payments to redeem
rights issued pursuant to Alterra's rights plan, (g) to retire any convertible
securities of Alterra which may become due and (h) to refinance or replace
existing convertible securities of Alterra with another issuance of convertible
securities or Capital Stock of equivalent amount.
5.6 TRANSACTIONS WITH AFFILIATES.
Except for the Management Agreements and any payments permitted by
Section 5.5, Alterra will not, nor will it permit any Consolidated Party to,
contract, create, incur, assume or permit to, enter into or permit to exist any
transaction or series of transactions with any officer, director, shareholder,
Subsidiary or Affiliate of such Person other than (i) normal compensation and
reimbursement of expenses of officers and directors, (ii) except as otherwise
specifically limited in this Guaranty Agreement, other transactions which are
entered into in the ordinary course of such Person's business on terms and
conditions substantially as favorable to such Person as would be obtainable by
it in a comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate(considered in the context of the
applicable transaction taken as a whole) and (iii) inter-company transfers by
and among Alterra and its wholly-owned Subsidiaries.
5.7 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
Alterra will not, nor will it permit any Consolidated Party to,
contract, create, incur, assume or permit to, (a) change its fiscal year without
the prior written consent of the Required Lenders or (b) amend, modify or change
its articles of incorporation (or corporate charter or other similar
organizational document) or bylaws (or other similar document) in any manner
that would reasonably be likely to adversely affect the Lenders.
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SECTION 6
EVENTS OF DEFAULT
6.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Guaranty. The guaranty given by Alterra hereunder shall
cease to be in full force and effect, or Alterra or any Person acting
by or on behalf of Alterra shall deny or disaffirm Alterra's
obligations under this Guaranty, or Alterra shall default in the due
performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to this Guaranty; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made by Alterra herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to
be delivered pursuant hereto or thereto shall prove untrue in any
material respect on the date as of which it was deemed to have been
made; or
(c) Covenants. Alterra shall
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 4.2, 4.4
or 5.1 through 5.7, inclusive;
(ii) default in the due performance or observance of
any term, covenant or agreement contained in Sections 4.1(a)
or (b) and such default shall continue unremedied for a period
of at least 5 days after the earlier of a responsible officer
of Alterra becoming aware of such default or notice thereof by
the Administrative Agent;
(iii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) of this Section
6.1) contained in this Guaranty and such default shall
continue unremedied for a period of at least 30 days after the
earlier of a responsible officer of Alterra becoming aware of
such default or notice thereof by the Administrative Agent; or
(d) Other Credit Documents. (i) Alterra shall default in the
due performance or observance of any term, covenant or agreement in any
of the other Credit Documents (subject to applicable grace or cure
periods, if any), or (ii) any Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and/or the Lenders
the Liens, rights, powers and privileges purported to be created
thereby, or Alterra shall so state in writing; or
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(e) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to Alterra or with respect to any Subsidiary or Subsidiaries of
Alterra having 5% of more of the consolidated assets of the
Consolidated Parties; or
(f) Defaults under Other Agreements.
(i) The occurrence of an "Event of Default" under the
Credit Agreement;
(ii) The occurrence of an "Event of Default" under
the HCR Guaranty Agreement;
(iii) Alterra or any of its Subsidiaries shall
default in the performance or observance (beyond the
applicable grace period with respect thereto, if any) of any
material obligation or condition or any contract or lease; or
(iv) With respect to any Indebtedness of Alterra or
any of its Subsidiaries in an aggregate principal amount in
excess of $25,000,000 (including, without limitation, any
Indebtedness under the Existing Credit Agreements) (A) Alterra
or one of its Subsidiaries shall default in any payment
(beyond the applicable grace period with respect thereto, if
any) with respect to any such Indebtedness or (B)(i) the
occurrence and continuance of a default in the observance or
performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such
holders) to cause (determined without regard to whether any
notice or lapse of time is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any such
Indebtedness shall be declared due and payable, or required to
be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof.
(g) Judgments. One or more judgments or decrees shall be
entered against one or more of the Consolidated Parties and its
Subsidiaries involving a liability of $25,000,000 or more in the
aggregate (to the extent not paid or fully covered by insurance
provided by a carrier who has acknowledged coverage and has the ability
to perform) and any such judgments or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 30 days
from the entry thereof; or
(h) ERISA. Any of the following events or conditions, if such
event or condition could reasonably be expected to have a Material
Adverse Effect: (i) any "accumulated funding deficiency," as such term
is defined in Section 302 of ERISA and Section 412 of the Code, whether
or not waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of any Consolidated Party, any of its Subsidiaries
or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA
Event shall occur with respect to a Single Employer Plan, which is, in
the reasonable opinion of the Administrative
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Agent, likely to result in the termination of such Plan for purposes of
Title IV of ERISA; (iii) an ERISA Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the
reasonable opinion of the Administrative Agent, likely to result in (A)
the termination of such Plan for purposes of Title IV of ERISA, or (B)
any Consolidated Party, any of its Subsidiaries or any ERISA Affiliate
incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency or (within the meaning of Section 4245 of ERISA) such Plan;
or (iv) any prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject any Consolidated Party,
any of its Subsidiaries or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the
Code, or under any agreement or other instrument pursuant to which any
Consolidated Party, any of its Subsidiaries or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability; or
(i) Ownership. There shall occur a Change of Control; or
(j) Management Agreements. (a) There shall occur a default or
event of default under any Management Agreement, or (b) any Management
Agreement shall be terminated without the prior written consent of the
Required Lenders.
6.2 REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6 of the Credit Agreement) or
cured to the satisfaction of the requisite Lenders (pursuant to the voting
procedures in Section 11.6 of the Credit Agreement), the Administrative Agent
may, or shall, upon the request and direction of the Required Lenders, by
written notice to the Credit Parties, enforce any and all rights and interests
created and existing under the Credit Documents including, without limitation,
all rights and remedies existing under the Collateral Documents (including,
without limitation, this Guaranty), all rights and remedies against the Partner
and all rights of set-off.
SECTION 7
MISCELLANEOUS
7.1 CUMULATIVE RIGHTS.
All rights of the Administrative Agent and the Lenders hereunder or
otherwise arising under any documents executed in connection with or as security
for the Guaranteed Obligations are separate and cumulative and may be pursued
separately, successively or concurrently, or not pursued, without affecting or
limiting any other right of the Administrative Agent or any Lender and without
affecting or impairing the liability of Alterra.
7.2 USURY.
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Notwithstanding any other provisions herein contained, no provision of
this Guaranty shall require or permit the collection from Alterra of interest in
excess of the maximum rate or amount that Alterra may be required or permitted
to pay pursuant to any applicable law. In the event any such interest is
collected, it shall be applied in reduction of Alterra's obligations hereunder,
and the remainder of such excess collected shall be returned to Alterra once
such obligations have been fully satisfied.
7.3 EXPENSES; INDEMNIFICATION.
(a) Alterra agrees to pay on demand all costs and expenses of
the Administrative Agent in connection with the syndication,
preparation, execution, delivery, administration, modification, and
amendment of the Credit Agreement, the other Credit Documents
(including, without limitation, this Guaranty), and the other documents
to be delivered thereunder, including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent
with respect hereto and thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities under the
Credit Documents. Alterra further agrees to pay on demand all costs and
expenses of the Administrative Agent and the Lenders, if any
(including, without limitation, reasonable attorneys' fees and
expenses), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents
(including, without limitation, this Guaranty) and the other documents
to be delivered pursuant thereto.
(b) Alterra agrees to indemnify and hold harmless the
Administrative Agent and each Lender and each of their Affiliates and
their respective officers, directors, employees, agents, and advisors
(each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or
proceeding or preparation of defense in connection therewith) the
Credit Documents (including, without limitation, this Guaranty), any of
the transactions contemplated herein or the actual or proposed use of
the proceeds of the Loans (including any of the foregoing arising from
the negligence of the Indemnified Party), except to the extent such
claim, damage, loss, liability, cost, or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 4.3 applies, such
indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any of the Credit Parties, their
respective directors, shareholders or creditors or an Indemnified Party
or any other Person or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are
consummated. Alterra agrees not to assert any claim against the
Administrative Agent, any Lender, any of their Affiliates, or any of
their respective directors, officers, employees, attorneys, agents, and
advisers, on any theory of liability, for special, indirect,
consequential, or punitive
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damages arising out of or otherwise relating to the Credit Documents
(including, without limitation, this Guaranty), any of the transactions
contemplated herein or the actual or proposed use of the proceeds of
the Loans.
(c) Without prejudice to the survival of any other agreement
of Alterra hereunder, the agreements and obligations of Alterra
contained in this Section 7.3 shall survive the repayment of the
Guaranteed Obligations.
7.4 ENVIRONMENTAL INDEMNITY.
The Partner agrees that its will reimburse the Lenders for and hereby
hold the Lenders harmless from all fines or penalties made or levied against any
of the Lenders by any Governmental Authority as a result of or in connection
with (i) the use of Materials of Environmental Concern at any of the Real
Properties, (ii) the use of Materials of Environmental Concern at the Facilities
thereon, or (iii) the use, generation, storage, transportation, discharge,
release or handling of any Materials of Environmental Concern at any of the Real
Properties, or as a result of any release of any Materials of Environmental
Concern onto the ground or into the water or air from or upon any of the Real
Properties at any time. The Partner also agrees that it will reimburse the
Lenders for and indemnify and hold the Lenders harmless from any and all costs
and expenses (including reasonable attorneys' fees) and for all civil judgments
or penalties incurred, entered, assessed, or levied against any of the Lenders
as a result of any Borrower's use of Materials of Environmental Concern at any
of the Real Properties or as a result of any release of any Materials of
Environmental Concern on the ground or into the water or air by any Borrower
from or upon any of the Real Properties. Such reimbursement or indemnification
shall include but not be limited to any and all judgments or penalties to
recover the costs of cleanup of any such release by any Borrower from or upon
any of the Real Properties and all reasonable expenses incurred by the Lenders
as a result of such a civil action, including but not limited to reasonable
attorneys' fees. The Partner's obligations under this Section 7.4 shall survive
the repayment of the Loans and any deed in lieu of foreclosure or any
foreclosure of a Mortgage on a any of the Real Properties.
7.5 RIGHT OF SET-OFF.
After the occurrence of an Event of Default under the Credit Agreement,
any Lender may set-off any matured obligation owed by Alterra under this
Guaranty (to the extent beneficially owned or held by such Lender) against any
obligation (whether or not matured) owed by such Lender to Alterra, regardless
of the place of payment. If any obligation is unliquidated or unascertained,
such Lender may set-off in any amount estimated by it in good faith to be the
amount of that obligation.
7.6 TERM OF GUARANTEE.
This Guaranty shall continue in full force and effect until the
Guaranteed Obligations are fully and indefeasibly paid, performed and discharged
and all Commitments have expired or been terminated. This Guaranty covers the
Guaranteed Obligations whether presently
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outstanding or arising subsequent to the date hereof including all amounts
advanced by the Administrative Agent or any Lender in stages or installments.
7.7 THE ADMINISTRATIVE AGENT.
In acting under or by virtue of this Guaranty, the Administrative Agent
shall be entitled to all the rights, authority, privileges and immunities
provided in the Credit Agreement, all of which provisions are incorporated by
reference herein with the same force and effect as if set forth herein.
7.8 SUCCESSORS AND ASSIGNS.
This Guaranty shall be binding on and enforceable against Alterra and
its successors and assigns; provided that, Alterra may not assign or transfer
any of its obligations hereunder without prior written consent of the requisite
Lenders as provided in the Credit Agreement. This Guaranty is intended for and
shall inure to the benefit of the Administrative Agent and each Lender and each
and every person who shall from time to time be or become the owner or holder of
any of the Guaranteed Obligations, and each and every reference herein to
"Administrative Agent" or "Lender" shall include and refer to each and every
successor or assignee of the Administrative Agent or any Lender at any time
holding or owning any part of or interest in any part of the Guaranteed
Obligations. This Guaranty shall be transferable and negotiable with the same
force and effect, and to the same extent, that the Guaranteed Obligations are
transferable and negotiable, it being understood and stipulated that upon
assignment or transfer by the Administrative Agent or any Lender of any of the
Guaranteed Obligations the legal holder or owner of the Guaranteed Obligations
(or a part thereof or interest therein thus transferred or assigned by the
Administrative Agent or any Lender) shall (except as otherwise stipulated by the
Administrative Agent or any such Lender in its assignment) have and may exercise
all of the rights granted to the Administrative Agent or such Lender under this
Guaranty to the extent of that part of or interest in the Guaranteed Obligations
thus assigned or transferred to said person. Alterra expressly waives notice of
transfer or assignment by the Lenders of the Guaranteed Obligations, or any part
thereof, or of the rights of the Administrative Agent or any Lender hereunder.
Failure to give notice will not affect the liabilities of Alterra hereunder.
7.9 APPLICATION OF PAYMENTS.
Each of the Administrative Agent and the Lenders may apply any payments
received by it from any source against that portion of the Guaranteed
Obligations (principal, interest, court costs, attorneys' fees or other) in such
priority and fashion as it may deem appropriate.
7.10 MODIFICATIONS.
Subject to the terms of the Credit Agreement, this Guaranty and the
provisions hereof may be changed, discharged or terminated only by an instrument
in writing signed by Alterra and the Administrative Agent.
7.11 NOTICES.
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Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address set forth below or at such other address as such party may specify
by written notice to the other parties hereto:
if to Alterra:
Alterra Healthcare Corporation
000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Administrative Agent:
Bank of America, N. A.
Agency Management
CA5-701-12-09
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Bank of America, N. A.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
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Telecopy: (000) 000-0000
7.12 TAXES.
All payments made by the Partner under this Guaranty and any other
Credit Documents shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any court, or
governmental body, agency or other official, excluding taxes measured by or
imposed upon the overall net income of any Lender or its applicable lending
office, or any branch or affiliate thereof, and all franchise taxes, branch
taxes, taxes on doing business or taxes on the overall capital or net worth of
any Lender or its applicable lending office, or any branch or affiliate thereof,
in each case imposed in lieu of net income taxes, imposed: (i) by the
jurisdiction under the laws of which such Lender, applicable lending office,
branch or affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such jurisdiction is
located or any political subdivision thereof; or (ii) by reason of any
connection between the jurisdiction imposing such tax and such Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Guaranty or any other Credit
Document. If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Administrative Agent or any Lender
under this Guaranty or under any other Credit Document, (A) the amounts so
payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Guaranty and any
other Credit Document, and (B) as promptly as possible thereafter the Partner
shall send to the Administrative Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original official
receipt received by the Partner showing payment thereof. If the Partner fails to
pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails
to remit to the Administrative Agent the required receipts or other required
documentary evidence, the Partner shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the termination of this
Guaranty and the other Credit Documents.
7.13 SEVERABILITY.
If any provision of this Guaranty is determined to be illegal, invalid
or unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect and shall be construed without
giving effect to the illegal, invalid or unenforceable provisions.
7.14 GOVERNING LAW.
This Guaranty and the rights and obligations of the parties hereto
shall be construed in accordance with and governed by the laws of the State of
New York.
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7.15 WAIVER OF JURY TRIAL.
To the extent permitted by law, each of the Administrative Agent and
the Partner hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Guaranty or the
transactions contemplated hereby.
7.16 CONSENT TO JURISDICTION.
(a) Any legal action or proceeding with respect to this
Guaranty may be brought in the courts of the State of New York, or of
the United States for the Southern District of New York, and, by
execution and delivery of this Guaranty, each of the Partner, the
Administrative Agent and the Lenders hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally,
the nonexclusive jurisdiction of such courts. Each of the Partner, the
Administrative Agent and the Lenders further 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 or certified mail, postage prepaid, to it at the address set
out for notices pursuant to Section 7.11, such service to become
effective three (3) days after such mailing. Nothing herein shall
affect the right of the Administrative Agent or any Lender to (i) serve
process or to commence legal proceedings in any other manner permitted
by law or (ii) commence legal proceedings, exercise rights or otherwise
proceed against the Collateral in any other jurisdictions as permitted
by law or as deemed necessary or appropriate by the Administrative
Agent or any Lender. Nothing herein shall affect the rights of Alterra
to serve process or to commence legal proceedings in any other manner
permitted by law.
(b) The Partner hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this
Guaranty in the courts referred to in Section 7.16(a). Each of the
parties hereto hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
(c) Each party to this Guaranty irrevocably consents to
service of process in the manner provided for notices in Section 7.11.
Nothing in this Guaranty will affect the right of any party to this
Guaranty to serve process in any other manner permitted by law.
7.17 HEADINGS.
The headings in this instrument are for convenience of reference only
and shall not limit or otherwise affect the meaning of any provisions hereof.
7.18 COUNTERPARTS.
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This Guaranty may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each constituting an
original, but all together one and the same instrument.
7.19 RIGHTS OF THE REQUIRED LENDERS.
All rights of the Administrative Agent hereunder, if not exercised by
the Administrative Agent, may be exercised by the Required Lenders.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Partner has caused this Guaranty to be duly
executed and delivered as of the day and year first above written.
PARTNER: Alterra Healthcare Corporation
a Delaware corporation
By: /s/Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
------------------------------
Title: Senior Vice President
-----------------------------
ACCEPTED:
BANK OF AMERICA, N.A.,
as Administrative Agent, on behalf of the Lenders
By: /s/J. Xxxxxxx Xxxxxx
--------------------------------
Name: J. Xxxxxxx Xxxxxx
------------------------------
Title: Managing Director
-----------------------------
