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EXHIBIT 10.122
[EXECUTION COPY]
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") made and
entered into as of this 3rd day of February, 2000 between ALTERRA HEALTHCARE
CORPORATION, a Delaware corporation, (the "Company"), and RDVEPCO, L.L.C., a
Michigan limited liability company ("Lender").
Recitals:
The parties entered into a Loan Agreement dated as of December 13, 1999
pursuant to which the Company borrowed from Lender on December 14, 1999 the sum
of Fourteen Million Dollars ($14,000,000.00) (the "Original Loan Agreement").
The parties wish to amend and restate the Original Loan Agreement on the terms
and conditions set forth herein.
NOW, THEREFORE, the parties promise and agree as follows:
ARTICLE I
Definitions
In addition to terms defined elsewhere in this Agreement, the following
definitions shall apply for purposes of this Agreement:
"Additional Collateral Real Estate" means the parcels of
improved real estate owned by the Company identified on Exhibit B to
this Agreement.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Business Day" means a day other than a Saturday, a Sunday or
a day on which banking institutions in the City of Grand Rapids,
Michigan are authorized by law, regulation or executive order to remain
closed. If a payment date is not a Business Day, payment may be made on
the next succeeding day that is a Business Day.
"Contract" means any contract, agreement, undertaking or
commitment (written or oral, formal or informal, firm or contingent) to
which the Company or any of its Subsidiaries is a party or by which the
Company, any of its Subsidiaries, or any of their respective assets are
bound, and which has current operative or executory effect.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
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"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination.
"Governmental Authority" means the United States, any state or
municipality, the government of any foreign country, any subdivision of
any of the foregoing, or any authority, department, commission, board,
bureau, agency, court, or instrumentality of any of the foregoing.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest rate
swap agreements, currency exchange or interest rate cap agreements and
currency exchange or interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in currency exchange or interest rates.
"Holder" means the Lender and any subsequent holder of the
Amended Note.
"Holding" means AHC Purchaser Holding, Inc., a Delaware
corporation.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof) or banker's acceptances or representing obligations in
respect of a lease that would at such time be required to be
capitalized on a balance sheet in accordance with GAAP or the balance
deferred and unpaid of the purchase price of any property (other than
contingent or "earnout" payment obligations) or representing any
Hedging Obligations, except any such balance that constitutes an
accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of
others secured by a Lien on any asset of such Person (whether or not
such indebtedness is assumed by such Person) and, to the extent not
otherwise included, the guarantee, whether or not conditional, by such
Person of any indebtedness of any other Person.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect
of such asset, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or
other agreement to sell or give a security interest in and any filing
of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
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"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness.
"Original Collateral Real Estate" means the parcels of
unimproved real estate owned by the Company identified on Exhibit A to
this Agreement.
"Permitted Liens" means (i) Liens for taxes and assessments
or governmental charges or levies not at the time due, and (ii)
easements that do not impair or restrict the Company's or Subsidiary's
use and enjoyment of the property affected thereby.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency
or political subdivision thereof or any other entity.
"Purchaser" means AHC Purchaser, Inc., a Delaware corporation.
"Subsidiary" means any corporation, partnership, limited
partnership, limited liability company, association or other business
entity of which securities or other ownership interests representing
more than fifty percent (50%) of the ordinary voting power are, at the
time as of which any determination is being made, owned or controlled
by the Company or one or more Subsidiaries of the Company.
"SEC" means the Securities and Exchange Commission.
"1934 Act" means the Securities Exchange Act of 1934, as
amended.
"1933 Act" means the Securities Act of 1933, as amended.
ARTICLE II
Amended Tranche A Loan; Amended Note; Amended Note Closing;
Amended Note Closing Date; Facility Fees
2.1. Amended Tranche A Loan; Amended Note. On December 14, 1999
pursuant to the Original Loan Agreement, Lender disbursed to Company the sum of
Fourteen Million Dollars ($14,000,000.00) in principal amount evidenced by a
promissory note in the form of Exhibit B to the Original Loan Agreement (the
"Original Note"). Under and subject to the terms and conditions of this
Agreement, Company shall borrow from Lender an additional Twenty Million Dollars
($20,000,000.00) (the "Additional Advance"), or a total of Thirty Four Million
Dollars ($34,000,000.00) (the "Amended Tranche A Loan"). At the time of
disbursement of the Additional Advance, the Original Note shall be marked
"Cancelled" by the Lender and returned to Company and Company shall execute and
deliver to Lender a promissory note in the form of
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Exhibit C attached hereto, the terms and conditions of which are incorporated in
and made a part of this Agreement (the "Amended Note"). Fifteen Million Dollars
($15,000,000.00) of the Additional Advance shall be disbursed directly to
Company and Five Million Dollars ($5,000,000.00) thereof shall be paid to Hecht
& Lentz as escrow agent pursuant to the escrow agreement in the form attached
hereto as Exhibit D (the "Escrow Agreement"). This is not a revolving credit
agreement and any part of the principal of the Amended Note which has been
repaid from time to time may not be reborrowed.
2.2. Closing; Closing Date. The closing of the Additional Advance (the
"Amended Note Closing") shall occur at 10:00 a.m. at the offices of Company on
or before February 1, 2000 or such other time and place as the parties may agree
in writing (the "Amended Note Closing Date") upon satisfaction of the terms and
conditions to Lender's obligations to make the Additional Advance as set forth
in Article IV, below.
2.3. Fees. In addition to the fees previously paid pursuant to the
Original Loan Agreement, on or before the Amended Note Closing, the Company
agrees to pay to the Lender a facility fee of Eight Hundred Thousand Dollars
($800,000.00). On each monthly anniversary of the Amended Note Closing Date,
starting with the third monthly anniversary, Company shall pay Lender an
additional facility fee equal to Thirteen Thousand Three Hundred Thirty Three
Dollars ($13,333.00), multiplied by a fraction, the numerator of which is the
amount by which the outstanding principal amount of the Amended Note at such
date exceeds Fourteen Million Dollars ($14,000,000.00) and the denominator of
which is One Million Dollars ($1,000,000.00). None of such facility fees shall
be prorated in the event of prepayment of the Amended Note. If not paid prior to
the Amended Note Closing, Company agrees that Lender may deduct the facility fee
due on or before the Amended Note Closing from the proceeds of the Additional
Advance advanced directly to Company. If any facility fee is not paid when due,
interest shall accrue thereon at the Default Interest Rate, as defined in
Section 3.1(a).
ARTICLE III
Terms of Amended Tranche A Loan and Amended Note
3.1. Interest Rate; Payment; Usury.
(a) Provided that no Event of Default has occurred and is
continuing and subject to the other provisions of this Agreement: (i)
during the period from and including December 14, 1999 to, but not
including, the Amended Note Closing Date, the Amended Tranche A Loan
shall bear interest at the rate of eight percent (8%) per annum, (ii)
during the period from and including the Amended Note Closing Date to,
but not including, the date on which all outstanding principal and
accrued and unpaid interest and facility fees on the Amended Tranche A
Loan have been paid in full, principal amount of the Amended Tranche A
Loan outstanding from time to time shall bear interest at the rate of
ten percent (10%) per annum. During any period that an Event of Default
shall have occurred and be continuing, interest on principal amount of
the Amended Tranche A Loan outstanding from time to time shall accrue
at a rate equal to fifteen percent per
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annum (15%) (the "Default Interest Rate"). Notwithstanding anything
contained herein to the contrary, in no event shall the interest rate
on the Amended Tranche A Loan, including the Default Interest Rate,
exceed the highest rate permitted by applicable law. Interest on the
Amended Tranche A Loan, including interest at the Default Interest
Rate, shall be based on a 360 day year and interest shall accrue and be
payable for the actual number of calendar days elapsed. Interest on the
principal amount outstanding from time to time shall be payable monthly
in arrears beginning on March 31, 2000 and on the last day of each
month thereafter until the principal and all accrued interest and
facility fees have been paid in full.
(b) It is the intention of the Company and Lender to conform
strictly to applicable usury laws now or hereafter in force, and any
interest payable under this Agreement or the Amended Note shall be
subject to reduction to an amount not to exceed the maximum
non-usurious amount for commercial loans allowed under such applicable
usury laws as now or hereafter construed by the courts having
jurisdiction over such matters. In the event such interest (whether
designated as interest, service charges, points, or otherwise) does
exceed the maximum legal rate, it shall be (i) canceled automatically
to the extent that such interest exceeds the maximum legal rate; (ii)
if already paid, at the option of the Holder, either be rebated to the
Company or credited on the principal amount of the Amended Tranche A
Loan; or (iii) if the Amended Tranche A Loan has been prepaid in full,
then such excess shall be rebated to the Company. It is further agreed,
without limitation of the foregoing, that all calculations of the rate
of interest contracted for, charged, or received under this Agreement
and the Amended Note that are made for the purpose of determining
whether such rate exceeds the maximum legal rate, shall be made, to the
extent permitted by applicable law, by amortizing, prorating,
allocating, and spreading throughout the full stated term of the
Amended Tranche A Loan (and any extensions of the term thereof that may
be hereafter granted) all such interest at any time contracted for,
charged, or received from the Company or otherwise by the Holder so
that the rate of interest on account of the Amended Tranche A Loan, as
so calculated is uniform throughout the term thereof. If the Company is
exempt or hereafter becomes exempt from applicable usury statutes or
for any other reason the rate of interest to be charged on the Amended
Tranche A Loan is not limited by law, none of the provisions of this
paragraph shall be construed so as to limit or reduce the interest or
other consideration payable under this Agreement or the Amended Note or
under the instrument securing payment thereof. The terms and provisions
of this paragraph shall control and supersede every other provision of
all agreements between the parties hereto.
3.2. Maturity. Unless the same shall become due earlier as a result of
acceleration of the maturity, the Amended Tranche A Loan shall mature on the
first anniversary of the Amended Note Closing Date at which time the outstanding
principal balance of the Amended Tranche A Loan and all accrued and unpaid
interest and facility fees shall become due and payable.
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3.3. Prepayments; Partial Releases.
(a) The Company may from time to time prepay the Amended
Tranche A Loan, in whole or in part, at any time. Any partial
prepayment shall be applied first to interest which is accrued and
unpaid, including interest on any delinquent facility fees, then to the
payment of any facility fees that are due and payable and then to
principal.
(b) Attached hereto as Schedule 3.3 is a schedule of each
release price (the "Release Prices") applicable to each parcel of
Additional Collateral Real Estate. Upon payment by the Company of the
Release Price applicable to any particular parcel of Additional
Collateral Real Estate and during such time as no Event of Default is
then outstanding, Holder shall cause any and all mortgages, deeds of
trust, assignments of leases and rents, UCCs and other security
documents encumbering such Additional Collateral Real Estate to be
released and marked satisfied of record. No such partial release shall
limit or impair the right of Lender in any other collateral pledged
hereunder.
3.4. Manner of Payment. The Company shall make payments in respect of
the Amended Tranche A Loan (including principal and interest) by wire transfer
of immediately available funds to the account specified by the Holder.
3.5. Events of Default. Each of the following constitutes an "Event of
Default":
(i) default for five (5) days in the payment when due of
interest or any facility fee on the Amended Tranche A Loan;
(ii) default in payment when due of the principal of the
Amended Tranche A Loan;
(iii) failure of the Company to pay on or before the due date
thereof any construction or other costs and expenses with respect to
the Additional Collateral Real Estate required in order for such
properties to receive governmental approval for occupancy as assisted
living facilities, elder care facilities or Alzheimer care units;
(iv) failure by the Company for 15 days after notice from the
Holder to comply with the provisions described under Article VI hereof;
provided, however, if the curing of such failure may not reasonably be
accomplished within such time frame, the Company shall have such
additional time as is necessary to effect such cure (not to exceed 30
days);
(v) failure by the Company for 30 days after notice from the
Holder to comply with any of its other covenants or agreements in this
Agreement or the Amended Note; provided, however, if the curing of such
failure may not reasonably be accomplished within such time frame, the
Company shall have such additional time as is necessary to effect such
cure (not to exceed 60 days);
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(vi) any of the representations or warranties of the Company
set forth in the Original Loan Agreement or this Agreement or
incorporated herein by reference or set forth in any statement or
schedule delivered pursuant to the Original Loan Agreement or this
Agreement was untrue or incorrect in any material respect as of the
date of execution of the Original Loan Agreement or this Agreement,
respectively or as of the Amended Note Closing Date as if made on such
date;
(vii) default by the Company or any of its Subsidiaries under
any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any Indebtedness of the
Company or any of its Subsidiaries, whether such Indebtedness now
exists, or is created after the date hereof, which default results in
the acceleration of such Indebtedness prior to its express maturity and
the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness the maturity of which has been so
accelerated, aggregates $5,000,000 or more;
(viii) failure by the Company or any of its Subsidiaries to
pay final judgments aggregating in excess of $1,000,000, which
judgments are not paid, discharged or stayed for a period of 45 days;
(ix) the Company or any of its Subsidiaries pursuant to or
within the meaning of Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief
against it in an involuntary case,
(c) consents to the appointment of a custodian of it
or for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become
due; or
(x) a court of competent jurisdiction enters an order or
decree in an involuntary case or proceeding under any Bankruptcy Law
that:
(a) is for relief against the Company or any of its
Subsidiaries;
(b) appoints a custodian of the Company or any of its
Subsidiaries or for all or substantially all of the property
of the Company or any of its Subsidiaries; or
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(c) orders the liquidation of the Company or any of
its Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days.
3.6. Acceleration.
(a) Declaration of Acceleration. If any Event of Default
occurs and is continuing, the Holder may, upon notice to the Company,
declare the Amended Tranche A Loan to be due and payable immediately;
and upon any such declaration all principal and interest on the Amended
Tranche A Loan shall become immediately due and payable; provided,
however, in the case of an Event of Default arising from certain events
of bankruptcy or insolvency described in clauses (ix) and (x) of
Section 3.5 hereof, with respect to the Company or any Subsidiary, the
Amended Tranche A Loan shall ipso facto become due and payable without
further action or notice on the part of the Holder.
(b) Rescission. At any time after a declaration of
acceleration with respect to the Amended Tranche A Loan, the Holder
may, in its sole discretion, rescind and cancel such declaration and
its consequences. No such rescission shall affect any subsequent
Default or impair any right with respect thereto.
3.7. Other Remedies. If an Event of Default occurs and is continuing,
the Holder may pursue any available remedy to collect the payment of principal
and interest (including interest at the Default Interest Rate) on the Amended
Tranche A Loan or to enforce the performance of any provision of the Amended
Note or this Agreement. A delay or omission by the Holder in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
3.8. Waiver Of Past Defaults. The Holder may waive any existing Default
or Event of Default and its consequences under this Agreement. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Agreement; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
3.9. Priorities. Any sums collected by the Holder hereunder and under
the Amended Note shall be applied first to all costs and expenses of collection,
including reasonable attorneys' fees, then to accrued and unpaid interest
(including at the Default Interest Rate to the extent applicable) and then to
principal.
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ARTICLE IV
Conditions to Lender's Obligations
4.1. Conditions. Lender's obligation to make the Additional Advance
shall be subject to the prior satisfaction of the following conditions, except
to the extent waived by Lender in writing:
(a) Company shall have paid to the Lender the facility fee due
on or before the Amended Note Closing Date required pursuant to Section
2.3, above, and shall have reimbursed Lender for the fees and expenses
for which Company is liable pursuant to the terms of Section 7.4,
below, to the extent documented to Company as of the Closing.
(b) With respect to each parcel of the Original Collateral
Real Estate, Company shall have executed and caused to be duly recorded
an amendment to the existing mortgage or deed of trust in favor of
Lender in form reasonably acceptable to Lender securing payment of all
amounts owing under this Agreement and the Amended Note.
(c) With respect to the Additional Collateral Real Estate:
(i) Company shall have provided evidence reasonably
satisfactory to Lender that the purchase price paid by the
Company and costs incurred by the Company to the date of this
Agreement for the Additional Collateral Real Estate aggregated
not less than Nineteen Million Seven Hundred Sixty Eight
Thousand Eight Hundred Six Dollars ($19,768,806.00) and that
not in excess of Three Million Six Hundred Eighty Four
Thousand Dollars ($3,684,000.00) is required to be expended in
order to receive governmental approval for occupancy thereof;
(ii) none of the such properties shall be subject to
any Lien unacceptable to Lender;
(iii) Company shall have provided to Lender surveys,
environmental reports and such other matters as reasonably
required by Lender relating to such properties and Lender
shall be satisfied therewith in its sole discretion;
(iv) Lender shall have received the commitment for
the issuance by Chicago Title Insurance Company of an ALTA
lender's policy of title insurance (without standard
exceptions and with such endorsement as directed by Lender)
with respect to each of such properties (collectively, the
"Additional Title Commitments");
(v) Company shall have executed and caused to be duly
recorded mortgages or deeds of trust and assignments of rent
in favor of Lender in forms reasonably acceptable to Lender
and its counsel encumbering each of such properties and shall
have executed and filed Forms UCC 1 with respect to the
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personal property located at each of such properties in forms
reasonably acceptable to Lender and its counsel and have shall
provided evidence of each of the foregoing requirements to
Lender; and
(vi) Each of the lessees of such properties shall
have executed an estoppel, subordination, non-disturbance and
attornment agreement in form and substance satisfactory to
Lender and its counsel.
(d) Holding shall have guaranteed the Amended Tranche A Loan
in form and substance satisfactory to Lender and its counsel.
(e) Company shall have pledged to Lender as collateral
security for the performance of its obligations pursuant to this
Agreement and the Amended Note all of the issued and outstanding shares
of Holding in form and substance satisfactory to Lender and its
counsel.
(f) Lender shall have received an opinion of Rogers & Hardin,
counsel to Company and Holding, in form and substance acceptable to the
Lender and its counsel and opinions of local counsel reasonably
satisfactory to Lender and its counsel with respect to the validity and
enforceability of each form of mortgage, deed of trust and assignment
of rents referred to in subsections (b) and (c) of this Section 4.1.
(g) Each of the representations and warranties of the Company
set forth in this Agreement or incorporated herein by reference or set
forth in any statement or schedule delivered pursuant to this Agreement
are true and correct in all material respects as of the date of
execution of this Agreement and as of the date of the Amended Note
Closing Date as if made on such date.
(h) The Company shall not be in default with respect to any of
its covenants and agreements set forth in Article VI of this Agreement
or set forth elsewhere in this Agreement; and
(i) No Default or Event of Default shall have occurred and be
continuing.
4.2. Waiver; Termination. Lender may waive in writing any of the
conditions to its obligations set forth in Section 4.1 in its sole discretion.
If the conditions to Lender's obligations set forth in Section 4.1, shall not
have been satisfied or waived by Lender on or before February 4, 2000, Lender
may, in its sole discretion, terminate its obligation to make the Additional
Advance without any liability on the part of the Lender to any other Person, in
which event this Agreement shall be null and void and the provisions of the
Original Loan Agreement and the Original Note shall remain in effect.
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ARTICLE V
Representations and Warranties
5.1. Representations and Warranties of the Company. In order to induce
the Lender to enter into this Agreement, the Company represents and warrants to
the Lender, which representation and warranties shall survive the Closing and be
independent of any investigation or lack of investigation of Company made by or
on behalf of Lender, as follows:
(a) Organization and Standing; Issued and Outstanding Shares.
Each of the Company and Holding is duly incorporated and validly
existing under the laws of the State of Delaware, and has all requisite
corporate power and authority to own or lease its properties and assets
and to conduct its business as it has been and is proposed to be
conducted. Each of the Company and Holding is qualified to do business
and in good standing in each jurisdiction in which the failure to so
qualify could have a material adverse effect upon its assets,
properties, liabilities, financial condition, results of operations or
business. Holding has no Subsidiaries other than Purchaser, all of the
issued and outstanding shares of which are owned by Holding. The
Certificate of Incorporation and amendments thereto of each of Holding
and Purchaser are in the form previously provided to Lender and the
issued and outstanding capital stock of Holding is as set forth in
Schedule 5.1(a).
(b) Indebtedness and Contracts of Holding. Except for such
Contracts or Indebtedness as are contemplated hereby or thereby as set
forth on Schedule 5.1(b), Holding has no Indebtedness and is not a
party to any Contracts (whether formal or informal, written or oral,
firm or contingent), other than the pledge by Holding of the capital
stock of Purchaser delivered in connection with the recent financing
provided by GMAC.
(c) Capacity of the Company; Consents; Execution of
Agreements. The Company has the requisite power, authority, and
capacity to enter into this Agreement and the agreements contemplated
hereby and to perform the transactions and obligations to be performed
by the Company hereunder and thereunder. Except as described on
Schedule 5.1(c) hereto, no consent, authorization, approval, license,
permit or order of, or filing with, any Person or Governmental
Authority is required in connection with the execution and delivery of
this Agreement or the performance by the Company of the transactions
and obligations to be performed by it hereunder, except as contemplated
by this Agreement. The failure to obtain any of the consents described
on Schedule 5.1(c) prior to the Amended Note Closing Date will not have
a material adverse effect upon the Company's assets, properties,
liabilities, financial condition, results of operations or business.
The execution and delivery of this Agreement and the performance of the
transactions and obligations contemplated hereby by the Company have
been duly authorized by all requisite action of the Company and
Holding, as applicable. This Agreement has been duly executed and
delivered by a duly authorized officer of the Company and constitutes,
or when executed and delivered will constitute, a valid and legally
binding agreement of the Company, enforceable in accordance with its
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terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws, both
state and federal, affecting the enforcement of creditors' rights or
remedies in general from time to time in effect and the exercise by
courts of equity powers or their application of principles of public
policy.
(d) Status of Amended Note. The Amended Note to be issued
hereunder, when issued by the Company to the Lender pursuant to the
terms of this Agreement, will be duly authorized and validly issued.
(e) Conflicts; Defaults. The execution and delivery of this
Agreement and the execution by Holding of a guaranty of the Amended
Tranche A Loan and the pledge by Company of the shares of Holding to
secure the Company's obligations hereunder and under the Amended Note,
and the performance by the Company and Holding of the transactions and
obligations contemplated hereby and thereby to be performed by each
will not (i) violate, conflict with, or constitute a default under any
of the terms or provisions of its certificate of incorporation or
bylaws, or any provisions of, or result in the acceleration of any
obligation under, any Contract, note, debt instrument, security
agreement, or other instrument to which the Company, Holding or any
other Subsidiary is a party or by which the Company, Holding or any
other Subsidiary or any of their respective assets is bound; (ii)
result in the creation or imposition of any Liens or claims upon the
assets of the Company, Holding or any other Subsidiary or their issued
and outstanding capital stock (except as contemplated by this
Agreement); (iii) constitute a violation of any law, statute, judgment,
decree, order, rule, or regulation of a Governmental Authority
applicable to the Company, Holding or any other Subsidiary; or (iv)
constitute an event which, after notice or lapse of time or both, would
result in any of the foregoing. Neither the Company, Holding or
Purchaser is presently in violation of any provision of its certificate
of incorporation or bylaws. Neither the Company nor any Subsidiary is
presently in default in any material respect under any of the terms or
provisions of any of its material Contracts, notes, debt instruments,
security agreements, or other instruments, or any order, judgment, or
decree relating to it or its business or by which it or any of its
assets is bound.
(f) Periodic Reports. The Company has timely filed with the
SEC all periodic reports heretofore required to be filed by it pursuant
to the 1934 Act and all such periodic reports (including the financial
statements or information forming a part thereof) are complete and
comply, in all material respects, with the requirements of the SEC
applicable to such periodic reports and financial statements.
(g) Compliance with Laws. The Company is not in violation of,
nor do any of its operations violate in any respect, any statute, law,
or regulation of any Governmental Authority applicable to the Company,
any of its assets, or the conduct of its business ("Applicable Laws"),
the violation of which reasonably could be anticipated to have a
material adverse effect upon the Company's assets, properties,
liabilities, financial condition, results of operations or business,
and no material expenditures are or, based on
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present requirements, will be required of the Company in order for it
to comply or remain in compliance with any Applicable Laws.
(h) Litigation. The Company is not a party to any material
legal action, suit, claim, investigation or proceeding which is not
adequately described in a periodic report heretofore filed by the
Company with the SEC and, to the best of the Company's knowledge and
belief after due inquiry, there exist no facts or circumstances which
reasonably could be anticipated to result in any such action, suit,
claim, investigation, or proceeding.
(i) Taxes. The Company has prepared and duly and timely filed
with each appropriate Governmental Authority, all material federal,
state, municipal, local and foreign tax returns, information returns
and other reports required to be filed on or before the date of this
Agreement and has paid all material taxes required to be paid by the
Company prior to the date of this Agreement in respect of the periods
covered by such returns and reports, except such taxes as are being
contested in good faith.
(j) Environmental Compliance. The Company and its Subsidiaries
are in compliance with all applicable federal, state and local laws and
requirements (including permit requirements) relating to the protection
of health or the environment in connection with the ownership,
operation and condition of its properties and business, except where
failure to comply would not have material adverse effect.
(k) Securities Laws. No consent, authorization, approval,
permit, or order of or filing with any Governmental Authority is
required in order for the Company to execute and deliver this Agreement
or to offer, issue, sell, or deliver the Amended Note. Based in part on
the representations of the Lender and under the circumstances
contemplated hereby and under current laws and regulations, the offer,
issuance, sale and delivery of the Amended Note to the Lender is exempt
from the prospectus delivery and registration requirements of the 1933
Act.
(l) Hedging Obligations. Company and its Subsidiaries do not
have any outstanding Hedging Obligations except to the extent entered
into pursuant to and in compliance with any credit agreements to which
they may be a party.
(m) Disclosure. The Company has fully responded to all written
requests for information and has accurately answered, to the best of
the Company's knowledge and belief after due inquiry, all written
questions from the Lender concerning the assets, properties,
liabilities, financial condition, results of operations, business and
prospects of the Company, and has not knowingly withheld any facts
relating thereto which it reasonably believed to be material with
respect to the assets, properties, liabilities, financial condition,
results of operations, business or prospects of the Company. No
information in this Agreement, or in any Schedule or Exhibit attached
to this Agreement or delivered to Lender in connection herewith,
contains any untrue statement of a material fact or when considered
together with all such information delivered to the Lender omits
14
to state any material fact necessary in order to make the statements
made in the light of the circumstances under which they were made, when
taken as a whole, not misleading. The disclosures made in writing by
the Company in connection with this Agreement do not contain any untrue
statement of a material fact nor omit to state a material fact
necessary to make the statements made therein not misleading. There is
no fact or circumstance relating to the Company which materially and
adversely affects or in the future may, in the reasonable business
judgment of the Company, be expected materially and adversely to affect
the same which has not been set forth in this Agreement or the
Schedules hereto.
(n) Changes in Circumstances. Since September 30, 1999, the
Company has not suffered any material adverse change in its assets,
properties, liabilities, financial condition, results of operations,
business or prospects except for (i) the previously announced charge to
be incurred in the fourth quarter of 1999 (the amount of which charge
has not yet been determined or disclosed) and anticipated fourth
quarter loss (ii) the effect on future periods of the Company's
announced reduction in future new development activities (iii) the
effect on future periods of the Company's announced reduction in joint
venture activities and resulting impact on the Company's projected
income and (iv) the possible failure of the Company to comply with
certain financial covenants in effect with respect to existing
lenders/landlords as a result of the foregoing, resulting in the need
for the Company to renegotiate such covenants.
(o) Contracts. Except for this Agreement, the Subscription and
Organizational Agreement and the agreements contemplated hereby and
thereby, the Company has filed all material contracts required to be
filed by Item 601(b)(10) of Regulation S-K under the 1933 Act and the
1934 Act.
(p) Additional Collateral Real Estate. The purchase price paid
by the Company and costs incurred by the Company to the date of this
Agreement for the Additional Collateral Real Estate aggregated not less
than Nineteen Million Seven Hundred Sixty Eight Thousand Eight Hundred
Six Dollars (19,768,806.00) and not in excess of an additional Three
Million Six Hundred Eighty Four Thousand Dollars ($3,684,000.00) is
required to be expended in order to receive governmental approval for
occupancy thereof;
5.2 Representations and Warranties of the Lender. The Lender represents
and warrants to the Company that:
(a) Investment Intent. The Amended Note is being acquired for
its own account and not with the view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of
the 1933 Act. The Lender understands that the Amended Note has not been
registered under the 1933 Act by reason of its issuance in a
transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act pursuant to Section 4(2) thereof. It
further understands that the Amended Note
15
will bear the following legend and agrees that it will hold the Amended
Note subject thereto:
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAW. NEITHER THIS NOTE NOR
ANY PORTION HEREOF OR INTEREST HEREIN MAY BE SOLD, ASSIGNED,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS THE SAME
IS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAW, OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE AND THE COMPANY SHALL HAVE RECEIVED, AT THE
EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF SUCH EXEMPTION
REASONABLY SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE,
AMONG OTHER THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY).
(b) Capacity of the Lender; Execution of Agreement. Lender has
all requisite power, authority, and capacity to enter into this
Agreement, and to perform the transactions and obligations to be
performed by it hereunder. This Agreement has been duly authorized,
executed and delivered by it and constitutes its valid and legally
binding obligation, enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws, both state and
federal, affecting the enforcement of creditors' rights or remedies in
general from time to time in effect and the exercise by courts of
equity powers or their application of principles of public policy.
(c) Accredited Investor. The Lender and each member of Lender
is an "accredited investor" as defined in Rule 501 (a) of Regulation D
promulgated under the 1933 Act.
ARTICLE VI
Covenants and Agreements
6.1. Affirmative Covenants. So long as any Indebtedness remains
outstanding under this Agreement and the Amended Note, the Company covenants and
agrees that it will and will cause each Subsidiary to:
(a) Certain Information and SEC Reports. Furnish to Lender in
form and substance satisfactory to Lender:
(i) within five (5) days after the Company learns of
the commencement or overtly threatened commencement of any
material claim or suit, legal or equitable, or of any
administrative, arbitration, or other similar proceeding
against the Company or any of its Subsidiaries, or any of
their
16
respective businesses, assets, or properties which claim or
proceeding, if determined adversely to the Company or such
Subsidiary, would be likely to have a material adverse effect
on the Company and its Subsidiaries, taken as a whole, written
notice of the nature and extent of such suit or proceeding;
(ii) within five (5) days after the Company learns of
any circumstance or event which reasonably can be expected to
have a material adverse effect on the assets, properties,
liabilities, financial condition, results of operations,
business, or prospects of the Company, written notice of the
nature and extent of such circumstance or event;
(iii) simultaneous with the transmission thereof to
Company's shareholders, copies of (or notice from an EDGAR
watch service of) all financial statements, proxy statements,
reports and any other general written communications which the
Company sends to its shareholders and copies (or notice from
an EDGAR watch service of) of all registration statements and
all regular, special or periodic reports which it files with
the SEC or with any securities exchange on which any of its
securities are then listed, and copies of all press releases
and other statements made available generally by the Company
to the public concerning material developments in the
Company's businesses; and
(vii) within ten (10) days after the Holder makes a
reasonable request therefor, such other data relating to the
business, affairs and financial condition of the Company or
any of its Subsidiaries.
(b) Taxes. Pay and discharge all taxes and other governmental
charges before the same shall become overdue, unless and to the extent
only that such payment is being contested in good faith.
(c) Insurance. Maintain insurance coverage on its physical
assets and against other business risks in such amounts and of such
types as are customarily carried by companies similar in size and
nature, and in the event of acquisition of additional property, real or
personal, or of incurrence of additional risks of any nature, increase
such insurance coverage in such manner and to such extent as prudent
business judgment and present practice would dictate.
(d) Examination of Books. Permit the Lender, through its
authorized attorneys, accountants and representatives, to examine the
Company's books, accounts, records, ledgers and assets of every kind
and description at all reasonable times upon oral or written request of
the Lender, at the Company's cost and expense (provided that so long as
the Company shall not be in default, the Company shall be obligated to
pay for no more than one (1) such examination per year).
(e) Notification of Events of Default, Acceleration or
Material Adverse Effect. Promptly notify the Lender of any condition or
event which constitutes, or with the
17
passage of time and/or the giving of notice would constitute, an Event
of Default under this Agreement or of any acceleration of the maturity
of any Indebtedness aggregating $5 million or more of the Company, and
promptly inform Lender of the existence or occurrence of any condition
or event (other than conditions having an effect on the economy in
general) which could reasonably be anticipated to have a material
adverse effect upon the Company's financial condition.
(f) Maintenance of Licenses. Maintain in good standing all
licenses required by any Governmental Authority that may be necessary
or required for the Company and its Subsidiaries to carry on their
respective businesses, where the failure to maintain such licenses
would have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
(g) ERISA Compliance. Comply with all material requirements
imposed by ERISA as presently in effect or hereafter promulgated,
including but not limited to, the minimum funding requirements of any
defined contribution employee benefit plan ("Pension Plan").
(h) Compliance with Law. Comply in all material respects with
all applicable laws, rules, regulations and orders of any Governmental
Authority, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments, and
governmental charges imposed upon it or upon its property, including
without limitation the Collateral Real Estate, except to the extent
that compliance with any of the foregoing is then being contested in
good faith by appropriate legal proceedings and with respect to which
adequate financial reserves have been established on the books and
records of the Company and except where the failure to comply would not
have a material adverse effect on the Company and its Subsidiaries,
taken as a whole.
(i) Right of Co-Investment. Prior to issuing any equity
securities (otherwise than upon the exercise of currently outstanding
stock options or upon the conversion of currently outstanding
convertible debentures) for aggregate proceeds of in excess of $25
million at any time prior to December 31, 2000 (an "Alterra Equity
Transaction"), the Company shall use reasonable efforts to afford
Lender the opportunity to co-invest in the Alterra Equity Transaction
by converting the outstanding Indebtedness under this Agreement and the
Amended Note into an equity investment in the Company on the terms of
the Alterra Equity Investment; provided, however, that (i) such
co-investment right must be exercised by Lender at the time of
execution of the definitive purchase agreement for the Alterra Equity
Transaction, and (ii) as a minority participant in such Alterra Equity
Transaction, Lender acknowledges that its control and voting rights may
be substantially limited (in the manner required by the principal
investor in such Alterra Equity Investment).
(j) Title Insurance. At the request of Lender, the Company
shall purchase mortgagee title insurance for the Lender pursuant to the
Additional Title Commitments
18
furnished pursuant to this Agreement and to the Title Commitments
furnished pursuant to the Original Loan Agreement.
6.2. Negative Covenants. The Company covenants and agrees that so long
as any Indebtedness remains outstanding under this Agreement and the Amended
Note, without the prior written consent of Lender, Company will not:
(a) No Mergers, Etc. Enter into any merger or consolidation or
sell, lease, transfer or dispose of all, substantially all, or any
material part of its assets, except in the ordinary course of its
business.
(b) Limitations on Indebtedness. Become or remain obligated,
or suffer or permit any Subsidiary to become or remain obligated, for
any Indebtedness, except:
(i) Indebtedness arising pursuant to this Agreement;
and
(ii) other Indebtedness, whether now outstanding or
hereafter incurred, provided that the sum of all of the
Indebtedness of the Company and the Subsidiaries at any time
outstanding on a consolidated basis (excluding, however, any
Indebtedness arising as a result of acquisitions or business
combinations effected after the date of this Agreement) does
not exceed $1,850,000,000.00.
(c) Limitations on Mortgages. Create or permit to exist any
Lien on the Original Collateral Real Estate or Additional Collateral
Real Estate, other than Permitted Liens and mortgages in favor of
Lender.
ARTICLE VII
Miscellaneous
7.1. Waiver and Amendments. No failure or delay on the part of Lender
in the exercise of any power or right, and no course of dealing between Company
and Lender, shall operate as a waiver of such power or right, nor shall any
single or partial exercise of any power or right preclude other or further
exercise thereof or the exercise of any other power or right. Remedies provided
for herein are cumulative and not exclusive of any remedies which may be
available to the Lender at law or in equity. No notice to or demand on the
Company required hereunder or under the Amended Note shall in any event entitle
Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of Lender to any other or
further action and any circumstances without notice or demand. No amendment,
modification or waiver of, or consent with respect to, any provision of this
Agreement or the Amended Note shall in any event be effective unless the same
shall be in writing and signed and delivered by Lender. Any waiver of any
provision of this Agreement or the Amended Note, and any consent to any
departure by Company from the terms of any provision of this Agreement or the
Amended Note, shall be effective only in the specific instance and for the
specific purpose for which given.
19
7.2. Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and, if mailed by prepaid
registered or certified mail, return receipt requested, shall be deemed to have
been received on the earlier of the date shown on the receipt or three (3)
Business Days after the post-mark date thereof. Notices may be given by
recognized overnight courier services and shall be deemed to have been received
as of the regularly scheduled time for delivery established by such courier
service. In addition, notices hereunder may be delivered by hand in which event
the notice shall be deemed effective when delivered or by telecopy in which case
it shall be deemed effective upon confirmation of transmission. All notices and
other communications under this Agreement shall be given to the parties hereto
at the following addresses:
If to Company:
Alterra Healthcare Corporation
10000 Innovation Drive
Milwaukee, Wisconsin 53226
Attention: President
Fax: (414) 918-5055
With a copy to:
Rogers & Hardin
2700 International Tower
229 Peachtree Street, N.E.
Atlanta, Georgia, 30303
Attn: Alan Leet, Esq.
Fax: (404) 525-2224
If to Lender:
RDVEPCO, L.L.C.
c/o RDV Corporation
126 Ottawa Avenue, N.W.
500 Grand Bank Building
Grand Rapids, Michigan 49503
Attention: Robert H. Schierbeek, Treasurer
Fax: (616) 454-4654
With a copy to:
EDP Management Company
190 River Avenue
Suite 300
Holland, Michigan 49423
Fax: (616) 494-8110
20
and
Hecht & Lentz
333 Bridge, N.W., Suite 330
Grand Rapids, MI 49504
Attention: David M. Hecht, Esq.
Fax: (616) 776-7203
Any party hereto may change the address to which notices shall be directed under
this Section by giving written notice of such change to the other parties.
7.3. Restriction on Transfer. The Lender acknowledges that the Amended
Note has not been registered under the Securities Act of 1933, as amended, (the
"1933 Act") or the securities laws of any state. Accordingly, the Amended Note
may not be sold or otherwise disposed of or transferred, unless such sale,
disposition or transfer is registered under the 1933 Act and applicable state
securities laws or unless the Company has received an opinion of counsel
reasonably acceptable to the Company that such sale, disposition or transfer is
exempt from such registration. The Amended Note shall bear a restrictive legend
to the foregoing effect.
7.4. Expenses. Company shall reimburse Lender for all of its reasonable
out-of-pocket expenses incurred in the negotiation, preparation, execution and
delivery of this Agreement, the Amended Note and other documents contemplated
hereby and all related due diligence, including, without limitation, the
expenses of legal counsel and accountants. Company shall also reimburse Holder
for all of its out-of-pocket expenses incurred in the administration, waiver,
modification and enforcement of any of its rights under this Agreement and the
Amended Note, including, without limitation, the reasonable expenses of legal
counsel and accountants. In addition, Company shall be responsible for any
documentary taxes incurred in connection with the transactions contemplated by
this Agreement and the Amended Note.
7.5. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction, shall as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
7.6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan without giving effect to
any choice or conflict of law provision or rule (whether of the State of
Michigan or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Michigan.
7.7. Successors and Assigns. This Agreement shall be binding upon
Company and Lender and their respective successors and assigns, and shall inure
to the benefit of Company and Lender and their successors and assigns.
21
7.8. Headings. Headings used in this Agreement are for convenience only
and shall not be used in connection with the interpretation of any provision
hereof.
7.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute one and the same instrument.
* * * * * * * * * * * * *
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned thereunto duly authorized as of the date first
written above.
THE COMPANY:
ALTERRA HEALTHCARE CORPORATION
By: /s/ Mark W. Ohlendorf
-------------------------------
Name: Mark W. Ohlendorf
Title: Senior Vice President
23
LENDER:
RDVEPCO, L.L.C.
By: RDV Altco, L.L.C.,
a member
By: RDV Corporation
By: /s/ Robert Schierbeek
-------------------------------
Its: Treasurer
-------------------------------