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EXHIBIT 10.16
DEBENTURE PURCHASE AGREEMENT
THIS DEBENTURE PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of August 10, 2000, by and among ALTERRA HEALTHCARE CORPORATION,
a Delaware corporation (the "Company"), and RDVEPCO, L.L.C., a Michigan limited
liability company ("RDVEPCO"), GROUP ONE INVESTORS, L.L.C., a Delaware limited
liability company and HOLIDAY RETIREMENT 2000, LLC, a Washington limited
liability company (each individually an "Original Purchaser" and, collectively,
the "Original Purchasers"), and the ELSA D. PRINCE LIVING TRUST (the "Trust")
and RDV MANOR CARE, L.L.C., a Michigan limited liability company ("RDVMC" and,
together with the Trust and the Original Purchasers, the "May Purchasers") and
THE TORONTO-DOMINION BANK, a Canadian chartered bank ("TD").
R E C I T A L S:
WHEREAS, the Company and the Original Purchasers entered into that
certain Purchase Agreement dated as of April 26, 2000 ("the Original Purchase
Agreement");
WHEREAS, pursuant to that certain First Amendment to Purchase Agreement
("First Amendment") dated as of May 31, 2000 by and among the Company and the
May Purchasers, the Original Purchase Agreement was amended (as so amended, the
"Amended Purchase Agreement");
WHEREAS, the Company and the May Purchasers desire to further modify
and amend the Amended Purchase Agreement in certain respects, as is more
particularly described below; and
WHEREAS, TD wishes to acquire from the Company certain Series B
Debentures issuable pursuant to ss. 2.2(a) of the Amended Purchase Agreement and
wishes to acquire from RDVEPCO, RDVMC and the Trust (each a "Seller" and
collectively, the "Sellers") certain Series B Debentures, all in the manner set
forth herein.
NOW, THEREFORE, the parties hereto promise and agree as follows:
ARTICLE I
Definitions and References
Section 1.1. Terms Defined in the Amended Purchase Agreement. Unless
the context otherwise requires or unless otherwise expressly defined herein, the
terms defined in the Amended Purchase Agreement shall have the same meanings
whenever used in this Agreement.
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Section 1.2. Other Defined Terms. Unless the context otherwise
requires, the following terms when used in this Agreement shall have the
meanings assigned to them in this Section 1.2.:
"Affiliate" means, with respect to any Person, either (i) any
Subsidiary of such Person, or (ii) any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control with")
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agreement" means this Debenture Purchase Agreement.
"Amendment to Registration Rights Agreement" shall mean that
certain Amendment to Registration Rights Agreement in the form attached
as Exhibit A hereto.
"AMEX" means the American Stock Exchange.
"Benefit Plan" is defined in Section 3.1(z) of this Agreement.
"Business Day" means any day except Saturday, Sunday and any
day that is a legal holiday or on which banking institutions in the
State of New York are authorized or required by law or other government
action to close.
"Code" is defined in Section 3.1(z) of this Agreement.
"Common Stock" means the $.01 par value common stock of the
Company.
"Company" has the meaning set forth in the first paragraph of
this Agreement.
"Conversion Securities" means the Series B Stock of the
Company into which the TD Securities are convertible in accordance with
their respective terms or, if any of the TD Securities are exchanged
for Series C Debentures pursuant to Section 7.8 hereof, the Common
Stock of the Company into which such Series C Debentures are
convertible in accordance with their respective terms.
"Current SEC Documents" is defined in Section 3.1(k)(i) of
this Agreement.
"Debentures" means any of the debentures, including the Series
B Debentures, issued or issuable pursuant to the Indenture.
"Environmental Laws" is defined in Section 3.1(w) of this
Agreement.
"ERISA" is defined in Section 3.1(z) of this Agreement.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Hazardous Substances" is defined in Section 3.1(w) of this
Agreement.
"Indenture" means that certain Indenture dated as of May 31,
2000 between the Company and U.S. Trust Company of Texas, N.A., as
amended or supplemented from time to time, setting forth the rights and
privileges of the Debentures and pursuant to which the Debentures have
been and will be issued and authenticated.
"Leased Property" is defined in Section 3.1(y) of this
Agreement.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, encumbrance, charge or security interest of any kind in or on
such asset or the revenues or income thereon or therefrom.
"Losses" with respect to any Person means all claims, actions,
liabilities, obligations, losses, damages, penalties, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever
(including, without limitation, reasonable attorney's fees) actually
suffered or incurred by such Person.
"Managed Property" is defined in Section 3.1(y) of this
Agreement.
"Material Adverse Effect" means any change or effect that,
individually or when taken together with all other such changes or
effects, is or would reasonably be expected to be materially adverse to
the business, operations, prospects, properties or condition (financial
or otherwise) of the Company and its Subsidiaries, taken as a whole, or
the Company's ability to perform its obligations hereunder.
"Maximum Percentage" means a percentage equal to (a) 5% (or
such greater percentage as TD may designate from time to time
consistently with laws, rules and regulations applicable to TD and its
Affiliates (with the interpretation of such laws, rules and regulations
to be made solely by TD) reduced by (b) 0.1% (i.e., 4.9%, if TD has not
made such a designation).
"Owned Property" is defined in Section 3.1(y) of this
Agreement.
"Permitted Encumbrances" is defined in Section 3.1(y) of this
Agreement.
"Permitted Property" is defined in Section 3.1(y) of this
Agreement.
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an
agency or political subdivision thereof) or other entity of any kind.
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"Purchase Agreement" means the Amended Purchase Agreement, as
amended by Article IX of this Agreement.
"Real Property" is defined in Section 3.1(y) of this
Agreement.
"Restated Bylaws" is defined in Section 3.1(a) of this
Agreement.
"Restated Certificate" is defined in Section 3.1(a) of this
Agreement.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" is defined in Section 3.1(k)(i) of this
Agreement.
"Section 2.2 Debentures" is defined in Section 2.2(a) of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Sellers Debentures" is defined in Section 2.2(c) of this
Agreement.
"Series B Debentures" means the Company's Series B 9.75%
Convertible Pay-In-Kind Debentures issued or issuable pursuant to the
Indenture.
"Series B Stock" means the Company's Series B Non-Voting
Participating Preferred Stock, having the rights, preferences and
limitations set forth in the Restated Certificate.
"Series C Debentures" means the Company's Series C 9.75%
Convertible Pay-In-Kind Debentures issued or issuable pursuant to the
Indenture.
"Subsidiary" means, as to any Person, any corporation, limited
partnership, limited liability company or other business entity in
which such Person or one or more of its Subsidiaries or such Person and
one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence
of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership or
joint venture if more than a 50% interest in the profits or capital
thereof is owned by such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries. Unless the context
otherwise clearly requires, any reference herein to a "Subsidiary" is a
reference to a Subsidiary of the Company.
"TD Closing" is defined in Section 2.1(b) of this Agreement.
"TD Closing Date" is defined in Section 2.1(b) of this
Agreement.
"TD Debentures" is defined in Section 2.1(a) of this
Agreement.
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"TD Securities" means the TD Debentures, the Sellers
Debentures, any Series C Debentures issued pursuant to Section 7.8
hereof and any Debentures issued directly or indirectly in payment of
interest thereon.
"Transaction Documents" is defined in Section 3.1(c) of this
Agreement.
"US $", "$" and "Dollars" each mean United States dollars, the
lawful currency of the United States.
ARTICLE II
Purchase of TD Debentures and Section 2.2 Debentures
Section 2.1. Purchase of TD Debentures; the TD Closing.
(a) On the terms and subject to the conditions herein set forth, the
Company agrees to sell to TD and TD agrees to purchase from the Company on the
TD Closing Date an aggregate of US $29,904,000.00 in face amount of the Series B
Debentures for a purchase price equal to the face amount thereof, constituting
the remaining "Additional Debentures" issuable pursuant to Section 2.2(a) of the
Purchase Agreement (the "TD Debentures").
(b) The purchase and sale of the TD Debentures shall take place at a
closing (the "TD Closing") to be held at the offices of the Company, 10000
Innovation Drive, Milwaukee, Wisconsin 53226, at 10:00 a.m. local time, on the
date of this Agreement, provided that all conditions set forth in Article IV,
Article V and Article VI have been satisfied or waived, or at such other time or
place on or before August 31, 2000 as the Company, the Sellers and TD mutually
agree (such date, the "TD Closing Date").
(c) Delivery of the TD Debentures shall be made at the TD Closing by
delivery to TD, against payment by TD of the purchase price therefor provided in
this Section 2.1, of Series B Debentures representing the TD Debentures duly
registered in the name of TD.
(d) Payment of the purchase price to the Company for the TD Debentures
purchased by TD shall be made by wire transfer of same day funds to an account
designated by the Company.
Section 2.2. Purchase of Section 2.2 Debentures.
(a) On the terms and subject to the conditions herein set forth, each
of the Sellers agrees to sell to TD and TD agrees to purchase from each of the
Sellers on the TD Closing Date an aggregate face amount of the Series B
Debentures held by each such Seller in the amount listed on Schedule 2.2 hereof
(collectively, the "Section 2.2 Debentures") for a purchase price equal to the
face amount thereof plus the accrued and unpaid interest thereon to, but
excluding, the TD Closing Date in the amount of $189,583.33.
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(b) The purchase and sale of the Section 2.2 Debentures shall take
place at the TD Closing provided that all conditions set forth in Article IV,
Article V and Article VI have been satisfied or waived.
(c) Delivery of the Section 2.2 Debentures by the Sellers shall be made
at the TD Closing by delivery to the Company, against payment by TD of the
purchase price therefor provided in this Section 2.2, of Series B Debentures
representing the Section 2.2 Debentures, together with the form of "Assignment"
attached thereto (or such separate form of assignment or instruction as are in
form and substance satisfactory to the Company), completed and executed by such
Seller to transfer such Section 2.2 Debentures to TD, in form and substance
satisfactory to the Company and its counsel. Upon receipt at the TD Closing of
the Section 2.2 Debentures, the Company shall issue in the name of TD new
certificates for such Section 2.2 Debentures pursuant to Section 2.7 of the
Indenture, whereupon the Company shall direct the trustee under the Indenture to
authenticate and deliver to TD, such new Series B Debenture certificates in the
aggregate principal amount of the Section 2.2 Debentures (such new Series B
Debenture certificates, the "Sellers Debentures"), whereupon the Company shall
cancel the Section 2.2 Debenture certificates in accordance with Section 2.7 of
the Indenture.
(d) Payment of the purchase price to the Sellers for the Section 2.2
Debentures purchased by TD shall be made by wire transfer of same day funds to
accounts designated by the Sellers therefor.
Section 2.3 Amendment to Registration Rights Agreement. At or prior to
the TD Closing, TD, the Company and the May Purchasers each shall execute and
deliver the Amendment to Registration Rights Agreement.
ARTICLE III
Representations and Warranties
Section 3.1. Representations and Warranties of the Company. In order to
induce TD to enter into this Agreement and to purchase the TD Debentures and the
Section 2.2 Debentures, the Company hereby represents and warrants to, and
agrees with, TD and its successors, endorsees and assigns that, notwithstanding
any independent investigation made or not made, inquiry or knowledge of TD:
(a) Organizational Documents. The Company has delivered to TD an
accurate and complete copy of (a) its Restated Certificate of Incorporation and
all amendments thereto (including, without limitation, all certificates of
designation, rights and preferences relating to the Company's capital stock),
certified by the Secretary of State of the State of Delaware ("Restated
Certificate"), (b) its Amended and Restated Bylaws as presently in effect (the
"Restated Bylaws") and the Amended Purchase Agreement, the Indenture and the
Registration Rights Agreement, each of which has been certified by the Company's
Secretary or Assistant Secretary.
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(b) Existence and Qualification. The Company and each Subsidiary is a
corporation, general partnership, limited partnership or limited liability
company duly organized, validly existing and in good standing under the laws of
the state of its organization and is duly qualified to do business and in good
standing in each other jurisdiction in which its ownership of property or
conduct of business requires it to qualify or, if not so qualified, is not
subject to material liability by reason of its failure to be so qualified.
Schedule 3.1(b) hereto lists all of the Subsidiaries.
(c) Power and Authority. The Company and each Subsidiary have all
applicable statutory power and authority necessary to own, operate or lease
their respective properties and assets and to conduct their respective
businesses as now conducted by them. The Company has all corporate power and
authority necessary to issue the TD Debentures pursuant to the Indenture, and to
execute, deliver, and perform its obligations under this Agreement, the
Indenture, the Registration Rights Agreement and the Amendment to Registration
Rights Agreement (collectively, the "Transaction Documents").
(d) Corporate Action. The Company has taken all corporate action
required to authorize the issuance, in accordance with the terms and conditions
hereof, of the TD Debentures pursuant to the Indenture and the execution,
delivery and performance of the Transaction Documents.
(e) Execution and Delivery. The Company has duly executed and
delivered, or, as applicable, will duly execute and deliver at the TD Closing,
each of the Transaction Documents. The TD Debentures and the Sellers Debentures,
when delivered and authenticated by the trustee under the Indenture, will have
been duly and properly authorized, executed and delivered pursuant to the
Indenture.
(f) Consents; Governmental Approvals. Except as set forth in Schedule
3.1(f), no consent or approval of any Person, firm or corporation, and no
consent, license, approval or authorization of, or registration, filing or
declaration with, any governmental authority is required to be obtained or made
by or on behalf of the Company in connection with the offer, issuance and sale
of the TD Debentures or the Section 2.2 Debentures, the issuance of the
Conversion Securities upon conversion of the TD Securities or, if the Company
elects to issue Common Stock in connection therewith, the issuance of Common
Stock in connection with the redemption of Series B Stock or pursuant to Section
7.6 hereof, the execution, delivery or performance of any of the Transaction
Documents or the completion of the transactions contemplated thereby, except for
filings with the SEC, the American Stock Exchange ("AMEX") and applicable
authorities pursuant to applicable state securities laws that may be required;
each of which shall have been obtained (subject to notice of issuance) or made
with respect to the sale of the TD Debentures and Section 2.2 Debentures prior
to or simultaneously with the closing of the sale of the TD Debentures and the
Section 2.2 Debentures (excluding the filing of a Form D and of such other
required filings reporting the sale of the TD Debentures and the Section 2.2
Debentures pursuant to applicable securities laws, which will be made on a
timely basis following the TD Closing).
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(g) Binding Effect. Each of the Transaction Documents is a legal, valid
and binding obligation of the Company enforceable against the Company 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 or limitations on the availability of
equitable remedies.
(h) Absence of Conflicts. Except as set forth in Schedule 3.1(f), the
issuance of the TD Debentures and the purchase by TD of the Section 2.2
Debentures and the execution, delivery and performance of the Transaction
Documents by the Company do not and will not (i) conflict with or violate any
provision of the Restated Certificate or the Restated Bylaws, or (ii) conflict
with or result in a violation, breach or default by the Company or any of the
Subsidiaries under any provision of any existing statute, law, rule or
regulation binding on it or any order, judgment, award, decree, license or
authorization of any court or governmental instrumentality, authority, bureau or
agency binding on it or any of the Subsidiaries, or (iii) result in the creation
or imposition of any lien, encumbrance or other charge on any of its or any of
the Subsidiaries' properties or assets. Except as set forth in Schedule 3.1(f),
the issuance of the TD Debentures and the purchase by TD of the Section 2.2
Debentures and the execution, delivery and performance of the Transaction
Documents by the Company do not and will not conflict with or result in a
violation, breach or default by the Company or any of the Subsidiaries under any
provision of any mortgage, indenture, lease or other contract, agreement,
instrument or undertaking to which it or any of the Subsidiaries is a party or
will be a party immediately after the TD Closing, or by which or to which it or
any of the Subsidiaries or any of its or any of the Subsidiaries' property or
assets is now or immediately after the TD Closing will be bound or subject,
except for such conflicts, violations, breaches or defaults which would not
have, or reasonably be expected to have, a Material Adverse Effect.
(i) No Defaults. Except as set forth in Schedule 3.1(i), none of the
Company or the Subsidiaries is, or immediately after the TD Closing will be, in
default under or in violation of its certificate of incorporation or bylaws or
comparable organizational documents. Except as set forth in Schedule 3.1(i) and
except for such defaults or violations which would not have, or reasonably be
expected to have, a Material Adverse Effect, none of the Company or the
Subsidiaries is, or immediately after the TD Closing will be, in default under
or in violation of (i) any agreement or instrument to which it is a party
relating to its indebtedness for borrowed money, (ii) any other agreement or
instrument to which it is a party, or (iii) any certification or approval
requirement of any customer, supplier, or other Person (excepting governmental
authorities).
(j) Capitalization and Stockholders. Except as set forth in Schedule
3.1(j), the entire authorized, issued and outstanding capital stock of the
Company is as set forth in the Current SEC Documents. Immediately after the TD
Closing, all outstanding shares of capital stock of the Company will be duly and
validly issued. Except as set forth in Schedule 3.1(j) and except for the TD
Securities, after the TD Closing, there will be no options, warrants or other
rights outstanding or proposed involving the issuance of any additional shares
of capital stock of the Company or any securities outstanding or proposed which
are or will be convertible into or exchangeable for shares of capital stock of
the Company.
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(k) SEC Documents.
(i) The Common Stock of the Company is registered pursuant to
Section 12(b) of the Exchange Act and the Company has filed all
reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of
the Exchange Act, including material filed pursuant to Section 13(a) or
15(d) thereof, in addition to one or more registration statements and
amendments thereto heretofore filed by the Company with the SEC. The
Company has delivered or made available to TD true and complete copies
of (i) its annual reports on Form 10-K and quarterly reports on Form
10-Q for its 1998 and 1999 fiscal years, (ii) proxy statements,
information and solicitation materials filed by the Company with the
SEC since January 1, 1998, and (iii) each other report, registration
statement, proxy statement and other document filed with the SEC since
the filing of its most recent Form 10-K (all of the foregoing,
collectively, the "SEC Documents"; the most recent Form 10-K and the
items referred to in clause (iii) above, collectively, the "Current SEC
Documents"). The Company has not provided to TD any information which,
according to applicable law, rule or regulation, should have been
disclosed publicly by the Company but which has not been so disclosed,
other than with respect to the transactions contemplated by this
Agreement.
(ii) As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act and
other federal, state and local laws, rules and regulations applicable
to such SEC Documents, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(l) Financial Statements. The financial statements of the Company
included in the Current SEC Documents comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
(m) No Material Adverse Effect. Since December 31, 1999, the date
through which the most recent annual report of the Company has been prepared and
filed with the SEC, a copy of which is included in the Current SEC Documents,
there has been no Material Adverse Effect, except as otherwise disclosed or
reflected in Current SEC Documents or other public announcements of the Company,
or otherwise disclosed on Schedule 3.1(m).
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(n) No Undisclosed Events or Circumstances. No event or circumstance
has occurred or exists with respect to the Company or any of the Subsidiaries,
or their respective businesses, properties, operations or financial condition,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company and which has not been so publicly disclosed or
announced, or otherwise disclosed on Schedule 3.1(n).
(o) No General Solicitation. Neither the Company, nor any of its
Affiliates, or, to its knowledge, any Person acting on its or their behalf has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with the offer
or sale of the TD Debentures or the Section 2.2 Debentures.
(p) No Integrated Offering. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the TD
Debentures or the Section 2.2 Debentures under the Securities Act.
(q) Brokers. The Company represents and warrants that it has employed
no brokers, agents or finders in carrying on the negotiations relating to this
Agreement or to the transactions herein contemplated, except as disclosed on
Schedule 3.1(q).
(r) Untrue or Misleading Statements. Neither this Agreement nor any
other Transaction Document or other agreement, certificate, instrument or
written statement furnished by or on behalf of the Company to TD in connection
with the transactions contemplated by this Agreement (including the Current SEC
Documents but excluding any financial forecasts or projections furnished to or
reviewed by TD), when taken together, contains any untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein not misleading in light of the circumstances in which such
statement were made. With respect to financial forecasts, estimates, budgets and
projections the Company has furnished to TD, such materials have been reasonably
prepared on a basis reflecting reasonable estimates and judgments of the
management of the Company as to the future performance of the Company and the
Subsidiaries.
(s) Reservation of Series B Stock and Common Stock . As of the TD
Closing, the Company shall have reserved for issuance, and will at all times
keep available, a sufficient number of shares of Series B Stock and Common Stock
to permit the conversion of all TD Securities into Series B Stock or Common
Stock, as applicable. Such Series B Stock and Common Stock, and any Common Stock
issued by the Company upon any conversion of Conversion Securities or in lieu of
paying cash in redemption thereof, when issued upon such conversion will be duly
authorized, fully paid and nonassessable.
(t) Status of TD Debentures and Sellers Debentures. The TD Debentures,
upon issuance by the Company following receipt of the consideration provided for
herein and satisfaction of the other conditions set forth herein, and the
Sellers Debentures issued to TD pursuant to Section 2.2 hereof, will be duly
authorized, fully paid and nonassessable.
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(u) Government Regulations. The Company is not (i) an "investment
company" as defined in or subject to regulation under the Investment Company Act
of 1940, as amended, or controlled by an "investment company", or (ii) subject
to regulation under the Public Utility Holding Company Act of 1935.
(v) Year 2000 Compliance. All computer applications (including to the
knowledge of the Company after due inquiry, those of its suppliers and vendors)
that are material to the conduct of the business of the Company and any of the
Subsidiaries are able to perform properly date sensitive functions for all dates
before and after January 1, 2000 (i.e., "Year 2000 Compliant"), except as
described in the Current SEC Documents.
(w) Environmental Laws. Each of the Company and the Subsidiaries is in
compliance, in all material respects, with and not subject to any material
liability under applicable Environmental Laws (as defined below). Each of the
Company and the Subsidiaries has made all filings and provided all notices
required under any applicable Environmental Laws, and has, and is in compliance,
in all material respects, with, all Permits required under any applicable
Environmental Laws and each of them is in full force and effect. There is no
civil, criminal or administrative action, suit, demand, claim, hearing, notice
of violation, investigation, proceeding, notice or demand letter or request for
information pending or, to the knowledge of the Company or the Subsidiaries,
threatened against the Company or any of the Subsidiaries under any
Environmental Law. No lien, charge, encumbrance or restriction has been recorded
under any Environmental Law with respect to any assets, facility or property
owned, operated, leased or controlled by the Company or the Subsidiaries. None
of the Company or the Subsidiaries has received notice that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERLA"), or any comparable state law. No property or facility of the Company
or any of the Subsidiaries is listed or proposed for listing on the National
Priorities List under CERCLA, or is listed in the Comprehensive Environmental
Response, Compensation, Liability Information System List promulgated pursuant
to CERCLA, or on any comparable list maintained by any state or local
governmental authority.
For purposes of this Agreement, "Environmental Laws" means the (a)
Toxic Substances Control Act, 15 USC 2601 et seq.; (b) National Historic
Preservation Act, 16 USC 470 et seq.; (c) Coastal Zone Management Act of 1972,
16 USC 1451 et seq.; (d) Rivers and Harbors Appropriation Act of 1899, 33 USC
401 et seq.; (e) Clean Water Act, 33 USC 1251 et seq.; (f) Flood Disaster
Protection Act of 1973, 42 USC 4001 et seq.; (g) National Environmental Policy
Act of 1969, 42 USC 4321 et seq.; (h) Resource Conservation and Recovery Act of
1976 (RCRA), 42 USC 6901 et seq.; (i) Clean Air Act, 42 USC 7401 et seq.; (j)
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),
42 USC 9601 et seq.; (k) Hazardous Materials Transportation Act, 49 USC 1801 et
seq.; (l) Safe Drinking Water Act, 42 USC 300f et seq.; (m) Emergency Planning
and Community Right-to-Know Act of 1986, 42 USC 11001 et seq.; (n) Federal
Insecticide, Fungicide, and Rodenticide Act, 7 USC 136 et seq.; (o) Occupational
Safety and Health Act, 29 USC 651 et seq.; and (p) all other federal, state,
county, municipal and local, foreign, and other statutes, laws, regulations, and
ordinances that relate to or deal with pollution or protection of public or
employee health and safety or the environment, including, without limitation,
laws relating to (i) emissions, discharges, releases or
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threatened releases of Hazardous Substances into the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata), (ii) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of hazardous
materials, and (iii) underground and aboveground storage tanks and related
piping, and emissions, discharges, releases or threatened released therefrom,
all as may be amended from time to time.
For purposes of this Agreement, "Hazardous Substance" means (A) any
flammable or combustible substance, explosive, radioactive material, hazardous
waste, toxic substance, pollutant, contaminant, or any related materials or
substances identified in or regulated by any of the Environmental Laws; and (B)
asbestos, polychlorinated biphenyls (PCBs), urea formaldehyde, chemicals and
chemical wastes, explosives, known carcinogens, petroleum products and
by-products (including fractions thereof), and radon.
(x) Insurance. The Company and each of the Subsidiaries maintain, and
continuously since January 1, 1996 have maintained, insurance covering their
properties, operations, personnel and businesses. Such insurance insures against
such losses and risks as are adequate in accordance with customary industry
practice to protect the Company and the Subsidiaries and their respective
businesses. All such insurance is outstanding and in force.
(y) Certain Representations as to Real Estate Matters. The most recent
consolidated balance sheet and any notes thereto included in the financial
statements filed with the SEC by the Company reflect, in accordance with
generally accepted accounting principles, the real property owned (the "Owned
Property"), leased (the "Leased Property") or managed with an option to purchase
(the "Managed Property" and, collectively, with the Real Property and the Leased
Property, the "Real Property") by the Company and the Subsidiaries as of the
date thereof. The Company or a Subsidiary has good and marketable title to the
Owned Property, free and clear of any Liens, except for (i) mortgage liens,
security interests and equipment and vehicle leases securing repayment of
indebtedness of the Company or any of the Subsidiaries, (ii) statutory liens for
current taxes not yet delinquent, (iii) mechanics', carriers', workers',
repairers' and other similar liens imposed by law arising or incurred in the
ordinary course of business for obligations not yet due and payable, (iv) Liens
and other matters that are listed on Schedule 3.1(y) hereto or that will be
satisfied, discharged or removed at or prior to the TD Closing, (v) easements,
rights-of-way, restrictions, minor defects or irregularities in title that do
not individually or in the aggregate interfere in any material respect with the
business of the Company and its Subsidiaries, taken as a whole, (vi) leases
and/or subleases to joint venture entities or partners entered into in the
ordinary course of the Company's business on or before December 31, 1999, and
(vii) leases and/or subleases in the ordinary course of business to operators of
food service, medical, hair care, recreational and other services and amenities
for individual residents of the Real Property (the matters described in clauses
(i) through (vii) are together called the "Permitted Encumbrances").
The Company or a Subsidiary has a valid and binding leasehold interest
in each Leased Property free and clear of any Liens created by, through or under
the Company or a Subsidiary except for Permitted Encumbrances.
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The Company or a Subsidiary has a valid and binding management
agreement for each Managed Property.
There are no eminent domain proceedings pending or threatened against
the Real Property or any material portion thereof which proceedings (if
resulting in a taking) could be expected, individually or in the aggregate, to
have a Material Adverse Effect on the use of such Real Property as currently
used in the operation of the business of the Company and the Subsidiaries. The
Real Property and the improvements thereon (including the roof and structural
portions of each building) are in good operating order and condition, subject to
ordinary wear and tear. There are no structural, mechanical or other defects of
a material nature in any improvements located on the Real Property. All building
systems in respect of the Real Property are in good condition and working order,
subject to ordinary wear and tear. The Real Property is served by all utilities
required or necessary for the present use thereof.
(z) ERISA. The Company and the Subsidiaries have complied in all
material respects with the applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and the Internal Revenue Code
of 1986, as amended (the "Code"), in connection with the Benefit Plans (as
defined below). No reportable event, as defined in Section 4043 of ERISA, has
occurred during the past five years with respect to any Benefit Plan that is
subject to Title IV of ERISA, except where notice for such reportable event is
waived by statutes or regulations. There have been no non-exempt prohibited
transactions under the Code or ERISA with respect to any Benefit Plan which
could result in a material liability to the Company or any Subsidiary. The
present value of all accrued benefits under each Benefit Plan subject to Title
IV of ERISA (based on the current liability, interest rate and other assumptions
used in preparation of the plan's Form 5500 Annual Report) did not, as of the
last annual valuation date, exceed the value of the assets of such plan
allocable to such accrued benefits, as of such date, by $100,000. Neither of the
Company, any Subsidiary, or any Commonly Controlled Entity (as defined below)
has any material liability with respect to any multiemployer plan (as defined in
Section 4001(a)(3) of ERISA). There are no material liabilities of the Company
or any Subsidiary for post-retirement benefits to be provided to their current
and former employees under Benefit Plans which are welfare benefit plans (as
described in Section 3(1) of ERISA), other than with respect to benefits
mandated by applicable law. With respect to each Benefit Plan, no event has
occurred and there exists no condition or set of circumstances in connection
with which the Company or any Subsidiary may, directly or indirectly (through a
Commonly Controlled Entity or otherwise) be subject to material liability under
the Code, ERISA or any other applicable law, except for liability for benefit
claims, funding obligations and administrative expenses payable in the ordinary
course. For purposes of this paragraph, (i) "Commonly Controlled Entity" shall
mean any Person or entity that, together with the Company, any Subsidiary or any
Commonly Controlled Entity, is treated as a single employer under Section 414(b)
or (c), of the Code (or, solely for purposes of Section 302 of ERISA and Section
412 of the Code, Section 414(m) or (o) of ERISA), and (ii) "Benefit Plan" shall
mean any "employee benefit plan," as defined in Section 3(3) of ERISA, which is
maintained or contributed to by the Company, a Subsidiary or Commonly Controlled
Entity to which the Company, a Subsidiary or any Commonly Controlled Entity may
have liability.
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(aa) Labor Relations. Neither the Company nor any of the Subsidiaries
is a party to or bound by any labor agreement or collective bargaining agreement
respecting the employees of the Company or the Subsidiaries, nor is there
pending or, to the knowledge of the Company or any Subsidiary, threatened, any
strike, walkout, slowdown or other work stoppage by the employees of the Company
or any Subsidiary. No petition for certification has been filed and is pending
before the National Labor Relations Board with respect to any employee of the
Company or the Subsidiaries, and the Company and the Subsidiaries are in
compliance, in all material respects, with all applicable laws respecting
employment practices, terms and conditions of employment and wages and hours.
(bb) Licenses. Each of the Company and the Subsidiaries holds all
material licenses, permits, approvals, certificates of inspection, other
authorizations, filings and registrations which are necessary for it to operate
its business as presently conducted (collectively, the "Licenses"). Except as
set forth on Schedule 3.1(bb) and except for instances in which such failure to
maintain good standing or proceedings do not and would not reasonably be
expected to materially and adversely affect the Company's or the Subsidiary's
ability to operate any residence to which such License relates, the Licenses are
in good standing and the Company has no knowledge that any disciplinary
proceeding in respect thereof is pending. Except as set forth on Schedule
3.1(bb), there is no proceeding pending, or to the knowledge of the Company or
any Subsidiary, threatened or probable of assertion to revoke or limit any such
Licenses. Upon obtaining the consents and approvals described on Schedule
3.1(f), none of the transactions contemplated by the Transaction Documents will
terminate, violate or limit the effectiveness of any such Licenses. With respect
to renewal of Licenses, the Company and the Subsidiaries have taken, in a timely
manner, all action known or anticipated to be required to be taken by the
Company and the Subsidiaries reasonably necessary to secure the renewal of the
Licenses prior to the date of their respective expirations. Neither the Company
nor any of the Subsidiaries has any information which would reasonably impact
their ability to secure the renewals of the Licenses prior to the date of their
respective expirations.
(cc) Legal Compliance. Each of the Company and Subsidiaries has
complied and is in compliance with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of Federal, state, local and foreign governments (and all
agencies thereof) and of any self-regulatory agencies that regulate the Company
and/or the Subsidiaries, except where failure to so comply would not reasonably
be expected to have a Material Adverse Effect. Except as set forth in Schedule
3.1(cc), neither the Company nor any of the Subsidiaries has received any
notification of any asserted present or past failure by it to comply with such
laws, rules, regulations, codes, plans, injunctions, orders, decrees, rulings or
charges, except where failure to so comply would not, and would not reasonably
be expected to, have a Material Adverse Effect.
(dd) Litigation; Proceedings. Except as set forth in Schedule 3.1(dd),
(i) there are no material actions, suits, proceedings, investigations or claims
(whether or not purportedly on behalf of the Company or any Subsidiary) pending
or, to the knowledge of the Company or any Subsidiary, threatened against the
Company or any Subsidiary, or the assets, business or goodwill of the Company or
any Subsidiary, in any court or before any arbitrator of any kind or before or
by any governmental or regulatory body or agency; and (ii) there is no material
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outstanding order, writ, injunction or decree of or stipulation with any court,
arbitrator or governmental or regulatory body or agency against the Company or
any Subsidiary, or the assets, business or goodwill of the Company or any
Subsidiary.
(ee) Tax Matters.
(i) All Federal, state and local income, and all other
material federal, state and local, tax returns and tax reports required
as of the date hereof to be filed by the Company or any of the
Subsidiaries for taxable periods ending prior to the date hereof and as
of the TD Closing, have been or will be duly and timely filed prior to
the due date (as such date may be lawfully extended) by the Company
with the appropriate governmental agencies, and all such returns and
reports are true, correct and complete in all material respects.
(ii) All Federal, state and local income, and all material
federal, state and local profits, franchise, sales, use, occupation,
property, excise, payroll, withholding, employment, estimated and other
taxes of any nature, including interest, penalties and other additions
to such taxes ("Taxes"), payable by, or due from, the Company or any of
the Subsidiaries for all periods prior to the date hereof and as of the
TD Closing, have been fully paid or adequately reserved for by the
Company or any of the Subsidiaries, as applicable, or, with respect to
Taxes required to be accrued, the Company has properly accrued or will
properly accrue such Taxes in the ordinary course of business
consistent with past practice of the Company.
(iii) (A) Neither the Company nor any of the Subsidiaries has
received any notice of any assessed or proposed material claim or
deficiency against it in respect of, or of any present material dispute
between it and any governmental agency concerning, any Taxes; (B) no
examination or audit of any material tax return or report of the
Company or any of the Subsidiaries by any applicable taxing authority
is currently in progress; and (C) there are no outstanding agreements
or waivers extending the statutory period of limitation applicable to
any material tax return or report of the Company or any of the
Subsidiaries.
(ff) Intellectual Property. Except as set forth in Schedule 3.1(ff)
the Company and the Subsidiaries own or have the right to use pursuant to
license, sublicense, agreement or permission all material trademarks, patents,
copyrights, trade names, service marks, software and know-how ("Intellectual
Property") necessary for the operation of its businesses as presently conducted.
Except as set forth in Schedule 3.1(ff), to the knowledge of the Company and the
Subsidiaries, neither the Company nor the Subsidiaries have interfered with or
otherwise come into conflict with any Intellectual Property rights of third
parties, nor has any third party interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of the Company or the Subsidiaries. Except as set forth in Schedule
3.1(ff), there is no existing claim or, to the knowledge of the Company and the
Subsidiaries, any basis for any claim against the Company or the Subsidiaries
(A) that any of its or the Subsidiaries' operations, activities or products
infringe the Intellectual Property or other property
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rights of others or (B) that the Company or the Subsidiaries are wrongfully or
otherwise using the property rights of others.
(gg) Title to Assets; Related Matters. The Company and the Subsidiaries
have good and marketable title to all of their respective material assets,
rights, interests and other properties, real, personal and mixed, tangible and
intangible, including, without limitation, capital leases and leasehold
interests and all of the assets in the audited consolidated balance sheet of the
Company and the Subsidiaries as of December 31, 1999, except those transferred
in the ordinary course of business since December 31, 1999, are free and clear
of all encumbrances and liens except for Permitted Encumbrances, taxes not yet
due and payable and except as otherwise described in the Current SEC Documents.
(hh) Rights Plan. Upon the acquisition by TD of the TD Debentures and
Section 2.2 Debentures in the manner contemplated hereby (and assuming the
accuracy of TD's representations in Section 3.3(h) hereof), TD shall be an
"Exempt Person," as that term is defined in the Rights Agreement dated as of
December 10, 1998 between the Company and American Stock Transfer & Trust
Company, as amended by each of the Amendments to Rights Agreement dated as of
April 26, 2000 and May 31, 2000 (as so amended, the "Rights Plan").
Section 3.2. Representations and Warranties of the Sellers. Each of the
Sellers represents and warrants to TD, as of the date hereof and as of the TD
Closing Date, as follows:
(a) Title to Section 2.2 Debentures. Such Seller holds of record and
owns beneficially its respective portion of the Section 2.2 Debentures listed on
Schedule 2.2 hereof free and clear of any restriction on transfer (other than
any restrictions under applicable federal and state securities laws), liens,
encumbrances, options, warrants, purchase rights, contracts, commitments,
equities, demands, pledges or other claims of any type. Such Seller is not a
party to any option, warrant, purchase right, or other contract or commitment
that could require it to sell, transfer or otherwise dispose of all or any part
of the Section 2.2 Debentures, and such Seller has not otherwise sold,
transferred or conveyed any interest in or rights to the Section 2.2 Debenture
to any other Person.
(b) Authorization; Execution. The sale of the Section 2.2 Debentures to
be acquired hereunder by TD has been duly and properly authorized by such Seller
by all necessary action and the Transaction Documents to which it is a party
have been duly executed and delivered by it, and neither the sale of the Section
2.2 Debentures nor the execution and performance of the Transaction Documents
conflicts with or violates any law, regulation or court order applicable to it
or any other agreement to which it is subject, including its governing
instruments.
(c) Organization; Organizational Documents. Such Seller is duly
organized, validly existing and in good standing under the laws of the state of
its organization; has all requisite power and authority to own and lease its
properties and to carry on its business as presently conducted except where a
lack of such power would not reasonably be expected to have a material adverse
effect upon the financial condition, business, or results of operations of such
Seller; and such Seller has all the power and authority necessary to execute,
deliver and perform its obligations under the Transaction Documents.
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(d) Consents; Governmental Approvals. No consent or approval of any
Person, firm or corporation, and no consent, license, approval or authorization
of, or registration, filing or declaration with, any governmental authority is
required to be obtained or made by or on behalf of such Seller in connection
with the sale of the Section 2.2 Debentures, the execution, delivery or
performance by such Seller of any of the Transaction Documents or the completion
of the transactions contemplated thereby.
(e) Binding Effect. Each of the Transaction Documents to which it is a
party is a legal, valid and binding obligation of such Seller, enforceable
against such Seller 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 or
limitations on the availability of equitable remedies.
Section 3.3. Representations and Warranties of TD. TD represents and
warrants to the Company and each of the Sellers, as of the date hereof, as
follows:
(a) Investment Intent. The TD Securities to be acquired hereunder, and
the Conversion Securities to be acquired upon conversion of any of the TD
Securities acquired hereunder, by TD are being, or will be, acquired for TD's
own account with no intention of distributing or reselling such TD Securities or
Conversion Securities or any part thereof or interest therein in any transaction
that would be in violation of the securities laws of the United States or any
State. It is understood that the certificates evidencing the TD Securities may
bear one or more legends, including a legend substantially as follows:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE ACT, OR APPLICABLE STATE SECURITIES LAW,
AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED,
OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (I) THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION
INVOLVING SAID SECURITIES, (II) THIS CORPORATION RECEIVES AN
OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO THIS CORPORATION STATING THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION, OR (III) THIS
CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION
IS EXEMPT FROM REGISTRATION.
(b) TD Status. TD is an "accredited investor" as defined in Rule 501(a)
under the Securities Act, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the TD Securities, has so evaluated the
merits and risks of such investment and is able to bear the
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economic risk of such investment and, at the present time, is able to afford a
complete loss of such investment.
(c) Authorization; Execution. The purchase of the TD Securities to be
acquired hereunder by TD has been duly and properly authorized by TD by all
necessary action and the Transaction Documents to which it is a party have been
duly executed and delivered by it, and neither the purchase of the TD Securities
to be acquired hereunder nor the execution and performance of the Transaction
Documents conflicts with or violates any law, regulation or court order
applicable to it or any other agreement to which it is subject, including its
governing instruments.
(d) Organization; Organizational Documents. TD is a chartered bank duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; has all requisite power and authority to own
and lease its properties and to carry on its business as presently conducted
except where a lack of such power would not reasonably be expected to have a
material adverse effect upon the financial condition, business, or results of
operations of TD; and has all the power and authority necessary to execute,
deliver and perform its obligations under the Transaction Documents.
(e) Consents; Governmental Approvals. No consent or approval of any
Person, firm or corporation, and no consent, license, approval or authorization
of, or registration, filing or declaration with, any governmental authority is
required to be obtained or made by or on behalf of TD in connection with the
purchase of the TD Securities, the execution, delivery or performance by TD of
any of the Transaction Documents or the completion of the transactions
contemplated thereby.
(f) Absence of Reliance upon May Purchasers. Except for the
representations and warranties of the Sellers set forth in Section 3.2 hereof
and any express agreement or covenant of any of the May Purchasers set forth in
this Agreement, TD has not relied, and is not relying, upon any representation,
warranty or inducement provided by any of the May Purchasers in connection with
the transactions contemplated by this Agreement.
(g) Binding Effect. Each of the Transaction Documents to which it is a
party is a legal, valid and binding obligation of TD, enforceable against TD 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 or limitations on the availability of
equitable remedies.
(h) Ownership of Alterra Securities. As of the date hereof and as of
the TD Closing Date, neither TD, nor any "Affiliate" or "Associate" (as those
two terms are defined in the Rights Plan) of TD, "beneficially owns" (as the
term is used in Section 13(d) of the Exchange Act) any shares of the Common
Stock, any security convertible or exchangeable for Common Stock or any right to
acquire Common Stock, other than the right to acquire the TD Securities pursuant
to this Agreement.
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Section 3.4. Survival of Representations and Warranties. The
representations and warranties of the parties in this Agreement and in any
document or certificate given pursuant to this Agreement shall survive the TD
Closing, for a period of two years from the TD Closing Date, whereupon no
further claim, including, without limitation, a claim for indemnification
pursuant to ARTICLE VIII hereof, for a breach thereof may be asserted.
ARTICLE IV
Conditions to Obligations of TD
In addition to the matters set forth in Article VI hereof, the
obligation of TD to purchase TD Debentures and the Section 2.2 Debentures
hereunder on the TD Closing Date shall be subject to the satisfaction of each of
the following conditions precedent, except to the extent waived in writing by
TD:
Section 4.1. Representations and Warranties True and Performance of
Agreements. Each of the representations and warranties of the Company and the
Sellers made in this Agreement, any other Transaction Document and in any other
agreement, certificate or instrument furnished to TD in connection herewith
shall be true and correct in all material respects with the same force and
effect as though such representations and warranties had been made at the time
of, and immediately after giving effect to, the sale of TD Debentures and the
Section 2.2 Debentures and the issuance of the Sellers Debentures except to the
extent that any such representation or warranty was made as of a specified
earlier date, in which case such representation or warranty shall have been true
and correct in all material respects as of such specified date. The Company and
the Sellers shall have performed and complied, in all material respects, with
each and every agreement, covenant and condition required by this Agreement to
be performed or complied with by it prior to or on the TD Closing Date. TD shall
have received on the TD Closing Date a certificate dated the TD Closing Date
signed by the Chief Executive Officer or Chief Operating Officer and the Chief
Financial Officer of the Company to the effect set forth in this Section 4.1
Section 4.2. No Material Adverse Change. No event, circumstance or
condition shall have occurred subsequent to the date of this Agreement and be
continuing that could reasonably be expected to have a Material Adverse Effect.
Section 4.3. Suspension of Trading. Prior to or on the TD Closing Date,
(i) trading in the Company's Common Stock shall not have been suspended by the
SEC or by the AMEX (except for any suspension of trading of limited duration
agreed to by the Company solely to permit dissemination of material information
regarding the Company), and trading in securities generally as reported by AMEX
shall not have been suspended or limited, and (ii) there shall not have been
declared a banking moratorium either by the United States or New York State
authorities.
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Section 4.4. Amendment to Registration Rights Agreement. On or before
the TD Closing Date, the Company and the May Purchasers shall have executed and
delivered to TD the Amendment to Registration Rights Agreement.
Section 4.5. No Governmental Proceeding or Litigation. At the TD
Closing Date, no order, injunction, decree or judgment of any court or
administrative agency shall be in effect which restrains or prohibits the
transactions contemplated hereby, and no suit, action, investigation, inquiry or
proceeding shall have been instituted, or threatened by any governmental agency
or any Person attacking the validity of this Agreement or seeking to enjoin the
consummation of the transactions contemplated hereby.
Section 4.6 Legal Opinion. TD shall have received on the TD Closing
Date the legal opinion of Rogers & Hardin, counsel to the Company, dated the TD
Closing date, in form and substance reasonably acceptable to TD.
ARTICLE V
Conditions to the Company's and the Seller's Obligations
In addition to the matters set forth in Article VI hereof, the
obligations of the Company and the Sellers under this Agreement to consummate
the sale of the TD Debentures and the Section 2.2 Debentures to be acquired by
TD hereunder and the other transactions contemplated hereby shall be subject to
the satisfaction, on or before each of the TD Closing Date, of the following
conditions except to the extent waived in writing by the Company and the
Sellers:
Section 5.1. Representations and Warranties True. Each of the
representations and warranties of TD made in this Agreement, any other
Transaction Document and in any other agreement, certificate or instrument
furnished by TD to the Company or any of the Sellers in connection herewith
shall be true and correct in all material respects with the same force and
effect as though such representations and warranties had been made at the time
of, and immediately after giving effect to, the sale of TD Debentures and the
Section 2.2 Debentures and the issuance of the Sellers Debentures except to the
extent that any such representation or warranty was made as of a specified
earlier date, in which case such representation or warranty shall have been true
and correct in all material respects as of such specified date. TD shall have
performed and complied, in all material respects, with each and every agreement,
covenant and condition required by this Agreement to be performed or complied
with by it prior to or on the TD Closing Date.
Section 5.2. Performance of Agreements. TD shall have performed and
complied, in all material respects, with each and every agreement and condition
required by this Agreement to be performed or complied with by it prior to or on
the TD Closing Date.
Section 5.3. No Governmental Proceeding or Litigation. At the TD
Closing Date, no order, injunction, decree or judgment of any court or
administrative agency shall be in effect which restrains or prohibits the
transactions contemplated hereby, and no suit, action,
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investigation, inquiry or proceeding by any governmental body, or legal or
administrative proceeding by any governmental body shall have been instituted,
or threatened in writing, which questions the validity or legality of the
transactions contemplated hereby.
ARTICLE VI
Conditions to Each Party's Obligations
In addition to the matters set forth in Articles IV and V hereof, the
respective obligations of the Company, the Sellers and the Purchasers to
consummate the purchase and sale of the TD Debentures and the Section 2.2
Debentures hereunder and the other transactions contemplated hereby shall be
subject to the satisfaction, on or before each of the TD Closing Date, of the
following conditions, except to the extent waived in writing by the Company, the
Sellers and TD:
Section 6.1. Hart-Scott-Rodino Compliance. To the extent applicable,
the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder (the "HSR
Act") shall have expired or been terminated without action by the Justice
Department or the Federal Trade Commission to permit consummation of TD's
acquisition of the TD Debentures and Section 2.2 Debentures and without the
imposition of any condition that would have a Material Adverse Effect after the
TD Closing Date.
ARTICLE VII
Additional Covenants of the Company
In addition to the other covenants and agreements of the Company set
forth in this Agreement, the Company covenants and agrees so long as the TD
Securities remain outstanding, unless expressly stated otherwise that:
Section 7.1. Registration and Listing. The Company will use its best
efforts to cause its Common Stock to continue to be registered under Sections
12(b) or 12(g) of the Exchange Act, will comply in all respects with its
reporting and filing obligations under the Exchange Act, will comply with all
requirements related to any registration statement filed pursuant to this
Agreement and will not take any action or file any document (whether or not
permitted by the Securities Act or the Exchange Act or the rules thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under such Acts. The Company will use its best efforts to
continue the listing or trading of its Common Stock on the AMEX, the New York
Stock Exchange or NASDAQ National Market and comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
such exchange or NASDAQ, as the case may be.
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Section 7.2. Financial Statement and Information. The Company will
furnish or cause to be made available to TD (including, by arranging that TD is
notified of SEC filings by the Company pursuant to an EDGAR watch service) the
following financial statements and information:
(a) All reports and other written communications delivered by the
Company to its stockholders as such, and all registration statements (when
available to the public) and periodic reports filed by the Company with the SEC
or any securities exchange, pursuant to the Securities Act, the Exchange Act, or
the rules of such securities exchange.
(b) The Company will permit TD or its representatives to discuss such
financial statements and reports with such officers of the Company as TD or its
representatives may reasonably designate.
Section 7.3. Public Announcements; Confidentiality. Except as agreed by
the Company and TD and except for such disclosures as may be required by law,
legal process or regulatory authority, no party hereto shall issue any press
release or otherwise make any announcement or disclosure concerning the
transactions herein contemplated unless such information is already in the
public domain.
Section 7.4. Sales and Transfer Taxes. All transfer taxes incurred in
connection with this Agreement and the transactions contemplated hereby shall be
borne by (i) the Company with respect to the TD Debentures and (ii) each of the
Sellers with respect to the Section 2.2 Debentures and the Sellers Debentures.
Section 7.5 Conversion of Series B Stock. If, at any time that the
Company elects to exercise its right to convert the then outstanding shares of
Series B Stock into Common Stock pursuant to Section 5 of Part B of the
Certificate of Designations, Rights and Preferences of the Series A 9.75%
Cumulative Convertible Pay-In-Kind Preferred Stock and the Series B Non-Voting
Participating Preferred Stock (the "Designation") filed with the Secretary of
State of the State of Delaware as of May 31, 2000 and constituting a part of the
Restated Certificate (such conversion, a "Designation Conversion"), the shares
of Series B Stock then held by TD pursuant to its conversion of any or all of
the TD Securities would be converted into, as a result of such Designation
Conversion, shares of Common Stock that, upon such Designation Conversion,
together with any other Common Stock owned by TD or any of its Affiliates, would
constitute greater than the Maximum Percentage of the then outstanding shares of
Common Stock, then the Company shall only elect to exercise its Designation
Conversion right if immediately prior to or simultaneous with the effective time
of such Designation Conversion, the Company offers TD the option to exchange (at
or immediately following such Designation Conversion) a portion of its Series B
Stock (or its Common Stock issuable upon such Designation Conversion) into newly
issued shares of Series B Stock or shares of a non-voting capital stock of the
Company having substantially similar rights as the Series B Stock (such stock,
"Exchange Stock") (in either event such that TD shall continue to hold a
non-voting common or participating preferred stock of the Company having rights,
preferences and limitations substantially similar to the Series B Stock (or
Exchange Stock in the event of a subsequent Designation Conversion in which the
Company shall have made a Section 7.5 Exchange Offer (as hereinafter defined))
held by TD immediately
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prior to such Designation Conversion, including rights substantially similar to
those set forth in Section 7.6) to the extent necessary to allow TD and its
Affiliates, following such Designation Conversion, to hold not more than the
Maximum Percentage of the then outstanding shares of Common Stock (such offer, a
"Section 7.5 Exchange Offer"). To the extent necessary to allow the Company to
either authorize or issue additional shares of Series B Stock or shares of such
Exchange Stock without having to seek the approval of the holders of the Series
B Stock, TD shall agree to structure such Section 7.5 Exchange Offer in a manner
as to permit the issuance of such new shares of Series B Stock or Exchange Stock
immediately following the effective time of such Designation Conversion, such
that at the time of the authorization and/or issuance of such additional shares
of Series B Stock or Exchange Stock there shall be no shares of Series B Stock
outstanding.
Section 7.6 Series B Stock Redemption Option. If: (i) TD holds Series B
Stock and desires to exercise its redemption right with respect thereto pursuant
to Section 6 of Part B of the Designation (a "Redemption Exercise"); (ii) such
Redemption Exercise would, if then effected, result in TD and its Affiliates
holding more than the Maximum Percentage of the then outstanding shares of
Common Stock, if the Company were to elect to pay the "Redemption Price" (as
defined in Section 6 of Part B of the Designation) by issuing Common Stock; and
(iii) within ten (10) days following TD's written request to the Company to make
a form of payment election pursuant hereto, the Company has not committed to TD
in writing (such commitment, a "Cash Payment Commitment") to pay TD in cash the
"Redemption Price" for such portion of the shares of Series B Stock of TD as may
be necessary so as to ensure that the shares of Common Stock held by TD and its
Affiliates (after giving effect to such Redemption Exercise and the payment of
the related Redemption Price) would not be more than the Maximum Percentage of
the then outstanding Common Stock (which Cash Payment Commitment shall remain
irrevocable for at least ten (10) days after such Cash Payment Commitment is
given to TD), then the Company shall permit TD (notwithstanding the provisions
of the Designation requiring such Redemption Exercise to relate to all, but not
less than all, of the Series B Stock held by TD) to effect a redemption of a
portion of its shares of Series B Stock (the "Partial Redemption Shares") in the
manner contemplated by Section 6 of Part B of the Designation in an amount such
that, if the Company were to elect to pay the "Redemption Price" for the Partial
Redemption Shares in shares of Common Stock, then (after giving effect to such
issuance in payment of the applicable Redemption Price) TD and its Affiliates
would own a number of shares of Common Stock that constitute the Maximum
Percentage of the then outstanding shares of Common Stock (rounded down to a
whole number of shares, if such computation would otherwise result in TD or its
Affiliates owning a fractional share). The Company will afford TD similar rights
with respect to any Exchange Stock that it may issue.
Section 7.7 Access to Information. From and after the TD Closing Date
and for so long as TD shall hold TD Securities having a face amount of at least
$10 million (or capital stock of the Company into which such TD Securities were
converted or exchanged), the Company shall permit TD to have reasonable access
to the Company's books, records and personnel, provided that any information
provided to TD hereby shall be subject (as if TD were a party thereto) to the
terms of the Confidentiality Agreement by and between the Company and TD Capital
Group Limited, irrespective or whether such Confidentiality Agreement has
expired or terminated in accordance with its terms.
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Section 7.8 Exchange of TD Securities. The Company hereby agrees that
TD may, from time to time, to the extent that TD determines that it shall not be
subject to any regulatory prohibition with respect thereto, exchange some or all
of its TD Securities that are Series B Debentures (such TD Securities, the "TD-B
Securities") for Series C Debentures in the manner contemplated by Section 3.5
of the Indenture, except that the making of an "Exchange Offer" (as defined in
the Indenture) by the Company shall not be a prerequisite to TD's exercise of
such right of exchange (this Section 7.8 being deemed a continuous "Exchange
Offer" pursuant to Section 3.5 of the Indenture by the Company to TD with
respect to the TD-B Securities). TD may exercise its right to exchange all or a
portion of the TD-B Securities for Series C Debentures by delivering to the
Company notice of its election to exercise this right, specifying the amount of
TD-B Securities to be so exchanged, together with the TD-B Securities to be so
exchanged. Any Series C Debentures so issued (and any Debentures issued directly
or indirectly in payment of interest thereon) will constitute "TD Securities."
Section 7.9 Reimbursement of Expenses; HSR Act Filing. The Company
agrees to reimburse TD for all reasonable out-of-pocket fees and expenses
incurred by TD in connection with the negotiation of the terms and conditions of
this Agreement and related due diligence not otherwise reimbursed by the
Company, including, but not limited to, filing fees under the HSR Act, attorneys
fees, and other professional advisor fees, provided that any such expenses
(exclusive of filing fees under the HSR Act) in excess of $25,000 will be
subject to the Company's approval, which approval shall not be unreasonably
withheld. In the event TD and/or the Company shall be obligated to make a filing
under the HSR Act arising out of TD's or the Company's exercise of redemption,
conversion or exchange rights related to TD Securities or Conversion Securities,
the Company and TD agree to reasonably cooperate with one another in the
preparation of, and promptly to make, such filing(s).
ARTICLE VIII
Indemnification
Section 8.1. Indemnification by the Company.
(a) The Company shall indemnify and hold harmless TD and its members,
partners, directors, officers, employees, agents, advisers (including legal,
accounting and financial advisers), successors and assigns from and against any
and all Losses which may at any time (including, without limitation, at any time
following the repayment or conversion of the Debentures) be imposed on, incurred
by or asserted against them or any of them in whole or in part arising out of or
attributable to:
(i) subject to Section 3.4 hereof, the breach or incorrectness of
any representation and warranty of the Company set forth in
Section 3.1 of this Agreement;
(ii) the failure of the Company to perform any covenant or
agreement of the Company set forth in this Agreement; or
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(iii) third party actions against TD as a result of entering into
this Agreement or consummating the transactions contemplated
hereby.
(b) TD shall promptly notify the Company in writing of the occurrence
of any event, or of its discovery of any facts, which in TD's opinion entitle or
may entitle it to indemnification hereunder. TD's failure to do so shall not
preclude it from seeking indemnification hereunder from the Company unless such
failure has materially prejudiced the Company's ability to defend as provided
herein. With respect to any threatened or asserted claims of third parties, the
Company shall have the right to defend such claims by counsel of its choosing
and to direct or control the defense and settlement thereof. TD shall cooperate
in all reasonable respects with such counsel. In the event that the Company
fails to defend or to elect to defend any claim which may entitle TD to
indemnification hereunder within ten (10) business days after notice from TD of
such claim, TD may, upon written notice to the Company, elect to undertake the
defense, compromise or settlement of such claim on behalf and for the account
and risk of the Company and without any requirement to obtain the consent of the
Company to any such compromise or settlement.
(c) Notwithstanding the Company's election to assume the defense of a
claim, TD shall have the right to employ separate counsel and to participate in
the defense of such claim, and the Company shall bear the reasonable fees, costs
and expenses of such separate counsel, if (i) the use of counsel chosen by the
Company to represent TD would present such counsel with a conflict of interest,
(ii) the Company shall not have employed counsel reasonably satisfactory to TD
to represent TD within a reasonable time after notice of the institution of such
claim, or (iii) the Company shall authorize TD to employ separate counsel at the
Company's expense. If the Company assumes the defense of a claim, no compromise
or settlement thereof may be effected by the Company without TD's written
consent unless (a) there is no finding or admission of any violation of law and
no effect on any other claims that may be made against TD, and (b) the sole
relief provided is monetary damages that are to be paid in full by the Company.
For purposes of this Section 8.1 and 8.2 hereof only, the term "TD" shall
include TD, any of its affiliates, each Person, if any, controlling TD or any of
its affiliates, their respective officers, current and former directors,
employees, partners, members and agents, and the successors and assigns of all
of the foregoing Persons.
(d) The indemnity provided in this Section 8.1 shall be in addition to
any rights that TD may have against the Company under the Securities Act,
Exchange Act or state securities laws, common law, the Indenture, or otherwise
and no representation, warranty, covenant or acknowledgment made herein by TD
shall in any manner be deemed to constitute a waiver of any rights granted to it
under the Securities Act, Exchange Act or state securities laws or in the
Indenture.
Section 8.2. Indemnification by the Sellers.
(a) Subject to Section 3.4 hereof, each of the Sellers shall indemnify
and hold harmless TD and its members, partners, directors, officers, employees,
agents, advisers (including legal, accounting and financial advisers),
successors and assigns from and against any
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and all Losses which may at any time (including, without limitation, at any time
following the repayment or conversion of the Debentures) be imposed on, incurred
by or asserted against them or any of them in whole or in part arising out of or
attributable to the breach or incorrectness of any representation and warranty
of such Seller set forth in Section 3.2 of this Agreement.
(b) TD shall promptly notify such Seller in writing of the occurrence
of any event, or of its discovery of any facts, which in TD's opinion entitle or
may entitle it to indemnification hereunder. TD's failure to do so shall not
preclude it from seeking indemnification hereunder from such Seller unless such
failure has materially prejudiced such Seller's ability to defend as provided
herein. With respect to any threatened or asserted claims of third parties, such
Seller shall have the right to defend such claims by counsel of its choosing and
to direct or control the defense and settlement thereof. TD shall cooperate in
all reasonable respects with such counsel. In the event that such Seller fails
to defend or to elect to defend any claim which may entitle TD to
indemnification hereunder within ten (10) business days after notice from TD of
such claim, TD may, upon written notice to such Seller, elect to undertake the
defense, compromise or settlement of such claim on behalf and for the account
and risk of such Seller and without any requirement to obtain the consent of
such Seller to any such compromise or settlement.
(c) Notwithstanding such Seller's election to assume the defense of a
claim, TD shall have the right to employ separate counsel and to participate in
the defense of such claim, and such Seller shall bear the reasonable fees, costs
and expenses of such separate counsel, if (i) the use of counsel chosen by such
Seller to represent TD would present such counsel with a conflict of interest,
(ii) such Seller shall not have employed counsel reasonably satisfactory to TD
to represent TD within a reasonable time after notice of the institution of such
claim, or (iii) such Seller shall authorize TD to employ separate counsel at the
Seller's expense. If such Seller assumes the defense of a claim, no compromise
or settlement thereof may be effected by such Seller without TD's written
consent unless (a) there is no finding or admission of any violation of law and
no effect on any other claims that may be made against TD, and (b) the sole
relief provided is monetary damages that are to be paid in full by such Seller.
For purposes of this Section 8.2 and 8.1 hereof only, the term "TD" shall
include TD, any of its affiliates, each Person, if any, controlling TD or any of
its affiliates, their respective officers, current and former directors,
employees, partners, members and agents, and the successors and assigns of all
of the foregoing Persons.
(d) The indemnity provided in this Section 8.2 shall be in addition to
any rights that TD may have against the Sellers under the Securities Act,
Exchange Act or state securities laws, common law, or otherwise and no
representation, warranty, covenant or acknowledgment made herein by TD shall in
any manner be deemed to constitute a waiver of any rights granted to it under
the Securities Act, Exchange Act or state securities laws.
Section 8.3. Indemnification by TD.
(a) Subject to Section 3.4 hereof, TD shall indemnify and hold harmless
the Company and each of the Sellers from and against any and all Losses suffered
or incurred by the Company or any of the Sellers as a result of the breach or
incorrectness of any representation and warranty of TD set forth in Section 3.3
of this Agreement.
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(b) The Company or such Seller, as applicable shall promptly notify TD
in writing of the occurrence of any event, or of its discovery of any facts,
which in the Company's or such Seller's opinion entitles or may entitle it to
indemnification hereunder. The Company's or such Seller's failure to do so shall
not preclude it from seeking indemnification hereunder from TD unless such
failure has materially prejudiced TD's ability to defend as provided herein.
With respect to any threatened or asserted claims of third parties, TD shall
have the right to defend such claims by counsel of its choosing and to direct or
control the defense and settlement thereof. In the event that TD fails to defend
or to elect to defend any claim which may entitle the Company or such Seller, as
applicable to indemnification hereunder within ten (10) business days after
notice from the Company or such Seller of such claim, the Company or such
Seller, as applicable may, upon written notice to TD, elect to undertake the
defense, compromise or settlement of such claim on behalf and for the account
and risk of TD and without any requirement to obtain the consent of TD to any
such compromise or settlement.
(c) Notwithstanding TD's election to assume the defense of a claim,
each of the Company and each of the Sellers (as applicable), if entitled to be
indemnified hereunder, shall have the right to employ separate counsel and to
participate in the defense of such claim, and TD shall bear the reasonable fees,
costs and expenses of such separate counsel, if (i) the use of counsel chosen by
TD to represent the Company or such Seller would present such counsel with a
conflict of interest, (ii) TD shall not have employed counsel reasonably
satisfactory to the Company or such Seller to represent TD within a reasonable
time after notice of the institution of such claim, or (iii) TD shall authorize
the Company or such Seller to employ separate counsel at TD's expense. If TD
assumes the defense of a claim, no compromise or settlement thereof may be
effected by TD without the Company's or such Seller's written consent unless (a)
there is no finding or admission of any violation of law and no effect on any
other claims that may be made against the Company or such Seller (as applicable)
and (b) the sole relief provided is monetary damages that are to be paid in full
by TD. For purposes of this Section 8.3, the term "Company" shall include the
Company, any of its affiliates, each Person, if any, controlling the Company or
any of its affiliates, their respective officers, current and former directors,
employees, partners, members and agents, and the successors and assigns of all
of the foregoing Persons. For purposes of this Section 8.3, the term the
"Seller" shall include each of the Sellers, any of its affiliates, each Person,
if any, controlling such Seller or any of its affiliates, its respective
officers, current and former directors, employees, partners, members and agents,
and the successors and assigns of all of the foregoing Persons.
(d) The indemnity provided in this Section 8.3 shall be in addition to
any rights that the Company and the Sellers may have against TD under common law
or otherwise.
ARTICLE IX
Amendments to Amended Purchase Agreement
Section 9.1. Additional Debentures.
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(a) Section 2.2(a) of the Amended Purchase Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"(a) On the terms and subject to the conditions herein set
forth, at any time after the Initial Closing Date and not later than
one hundred and eighty (180) days after the Initial Closing Date (the
"Option Period"), each Purchaser shall have the right from time to time
to purchase at the face amount thereof from the Company a pro rata
portion of Series B Debentures having an aggregate face amount of
$65,000,000 (said amount to be reduced by the face amount of any
Debentures issued by the Company pursuant to this Section 2.2(a)) as
set forth opposite the name of each Purchaser on Schedule 2.1(a) by
tendering payment therefor to the Company; provided, however, that no
Purchaser may exercise its right to purchase Debentures pursuant hereto
more than twice without the prior consent of the Company. During the
Option Period, the Company shall have the concurrent right to issue
Series B Debentures and/or Series C Debentures to parties approved in
advance by the Acting Purchasers, such consent not to be unreasonably
withheld, delayed or conditioned, in an aggregate face amount of
$65,000,000 (said amount to be reduced by the face amount of Debentures
acquired by Purchasers upon the exercise of their option pursuant to
this Section 2.2(a)). Any Debentures issued pursuant to this Section
2.2(a) are referred to herein as "Additional Debentures." The Series B
Debentures to be acquired by The Toronto-Dominion Bank or its permitted
assigns thereunder (collectively, "TD") pursuant to that certain
Debenture Purchase Agreement dated as of August 10, 2000 between the
parties hereto and TD (as amended from time to time, the "Debenture
Purchase Agreement"), and any Debentures or shares of capital stock of
the Company subsequently acquired by TD pursuant to the exercise by TD
or the Company of any exchange, conversion, redemption, put or similar
right or feature pursuant to the Debenture Purchase Agreement, shall be
deemed purchased by TD from the Company and certain of the Purchasers
pursuant to this Section 2.2(a) of the Agreement. The Additional
Debentures acquired by TD pursuant to the Debenture Purchase Agreement
shall also be deemed to have been acquired by TD as the assignee of
each Purchaser's pro-rata rights under this Section 2.2(a) to acquire
such Additional Debentures."
(b) The May Purchasers hereby approve (in the manner required by
Section 2.2(a) of the Purchase Agreement) the issuance by the Company of the TD
Debentures to TD.
(c) The Company, TD and the May Purchasers hereby agree that, upon the
consummation of the transactions contemplated by this Agreement, all "Additional
Debentures" (as defined in the Amended Purchase Agreement) will be issued and,
accordingly, the May Purchasers shall have no further right to acquire, and the
Company shall have no further right to issue, Additional Debentures pursuant to
Section 2.2(a) of the Amended Purchase Agreement. The parties hereto, being all
parties to the Amended Purchase Agreement and TD, hereby agree that the TD
Securities to be purchased by or issued to TD pursuant to this Agreement,
together with any Debentures or shares of capital stock of the Company
subsequently acquired by TD pursuant to the exercise by TD or the Company of any
exchange, conversion, redemption, put or similar right or feature pursuant to
this Agreement (such Debentures and capital stock referred to herein as
"Derivative Securities") are also being purchased by TD pursuant to the Purchase
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Agreement (and, to the extent necessary to effect that result, the Amended
Purchase Agreement is amended accordingly), it being the intent of all parties
hereto that TD be a "First Tier Owner" and that the TD Securities and any
Derivative Securities be "Purchased Securities," as those respective terms are
defined in the Rights Plan, upon the consummation of the purchase and sale of
the TD Debentures and the Section 2.2 Debentures and the issuance of the Sellers
Debentures as contemplated by this Agreement.
Section 9.2. TPI-HCR. Section 8.2 of the Amended Purchase Agreement is
hereby deleted in its entirety and the following substituted in lieu thereof:
Section 8.2 Offer to Remaining Holders of TPI-HCR Membership
Interests. During the one hundred eighty (180) day period following the
Initial Closing Date, the Company shall offer, to all holders of
TPI-HCR Membership Interests other than the Company and its
Subsidiaries (such holders, the "Remaining Members"), to exchange for
any or all of the TPI-HCR Membership Interests not then owned by the
Company and its Subsidiaries, either (at the election of each such
holder of TPI-HCR Membership Interests): (i) Series C Debentures (in
the manner outlined below) that, together with the accrued interest
thereon, have an aggregate principal amount equal to the TPI-HCR
Membership Interests Value of the TPI-HCR Membership Interests so
exchanged through the date of closing of such exchange (such amount,
the "Exchange Amount" and such Debentures, the "Exchange Debentures")
or (ii) a cash payment in an amount equal to the original capital
contribution to TPI-HCR made in respect of such TPI-HCR Membership
Interests, plus an amount computed to provide a per annum return
thereon of ten percent (10%) compounded annually using a year of 360
days through the date of closing of such exchange (such amount, the
"Payment Amount"). To facilitate this Section 8.2 in the event any
Remaining Member elects to exchange its TPI-HCR Membership Interests
for Exchange Debentures, (a) RDVEPCO, L.L.C. ("RDVEPCO") hereby agrees,
promptly upon the request of the Company, to transfer to the Company,
for the benefit of such Remaining Member, Series B Debentures having a
face amount, plus accrued interest thereon as of the date of transfer,
equal to the Exchange Amount therefor (such Series B Debentures, the
"Transfer Debentures"), such Transfer Debentures to be delivered to the
Company in order to facilitate the exchange described in clause (c)
hereof, (b) the Company shall pay RDVEPCO in cash an amount equal to
such Exchange Amount and (c) upon transfer to the Company by such
Remaining Holder of good and marketable title to its TPI-HCR Member
Interests, the Transfer Debentures shall be transferred to such
Remaining Holder on the books of the Company and immediately thereafter
exchanged by the Company for the Exchange Debentures of like amount and
terms pursuant to ss. 3.5 of the Indenture, which Exchange Debentures
shall be, when so issued, delivered to such Remaining Member. If
requested by the Company, RDVEPCO shall transfer sufficient Series B
Debentures to the Company, in trust, to be held for the purposes of
allowing the Company to make the exchange offer to the Remaining
Members contemplated hereby, in advance of the Company making such
offer. Upon the completion of such offer, all such Series B Debentures
that do not become Transfer Debentures pursuant hereto shall be
promptly returned to RDVEPCO. Notwithstanding anything in this
Agreement to the contrary, this Section
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8.2 may be further amended, modified or terminated by written agreement
executed by the Company and RDVEPCO only.
Section 9.3 Ratification of Purchase Agreement. The Amended Purchase
Agreement, as amended by this Article IX, is hereby ratified and confirmed in
all respects.
ARTICLE X
Miscellaneous
Section 10.1. No Waiver; Modifications in Writing. (a) No failure or
delay on the part of the Company, any of the Sellers or TD in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided for herein are cumulative and are not exclusive of
any remedies that may be available to the Company, any of the Sellers or TD at
law or in equity. No waiver of or consent to any departure by the Company, any
of the Sellers or TD from any provision of this Agreement shall be effective
unless in writing and signed by the party entitled to the benefit thereof. No
amendment, modification or termination of any provision of this Agreement shall
be effective unless in writing and signed by or on behalf of the Company, the
May Purchasers and TD except that the provisions of Section 8.2 of the Purchase
Agreement may be amended, modified or terminated by written agreement of the
Company and each of the Sellers provided that such amendment, modification or
termination shall not be binding upon, or impose any obligations on, TD. Any
amendment, supplement or modification of or to any of this Agreement, any waiver
of any provision of this Agreement, and any consent to any departure from the
terms of any provision of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which made or given.
Section 10.2. 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
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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 the May Purchasers:
RDV Manor Care, L.L.C.
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
and
Group One Investors, 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
and
Holiday Retirement 2000, LLC
c/o Emeritus Corporation
3131 Elliott Avenue
Suite 500
Seattle, Washington 98121
Attention: Dan Baty
Fax: (206) 378-4205
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and
Elsa D. Prince Living Trust
c/o EDP Management Company, LLC
P.O. Box 1649
190 River Ave., Suite 300
Holland, MI 49423
With a copy to:
Hecht & Lentz
333 Bridge, N.W., Suite 330
Grand Rapids, MI 49504
Attention: David M. Hecht, Esq.
Fax: (616) 776-7203
If to the Sellers:
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
and
RDV Manor Care, L.L.C.
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
and
Elsa D. Prince Living Trust
c/o EDP Management Company, LLC
P.O. Box 1649
190 River Ave., Suite 300
Holland, MI 49423
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If to TD:
The Toronto-Dominion Bank
55 King Street West
Toronto Dominion Bank Tower
Toronto, Ontario M5K-1A2
Attention: Natalie Townsend
Fax: (416) 982-5045
With a copy (which will not constitute notice) to:
Kirkland & Ellis
153 E. 53rd Street
New York, NY 10022
Attention: John L. Kuehn, Esq.
Fax: (212) 446-4900
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.
Section 10.3. Facsimile Signature; Execution in Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission) in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 10.4. Binding Effect; Assignment. The rights of TD under this
Agreement may not be assigned to any other Person (other than to an Affiliate of
TD acquiring all or a portion of the TD Securities, in which event no consent by
the Company shall be required) except with the prior written consent of the
Company, which consent shall not be unreasonably withheld (provided, however,
the Company may withhold in its sole discretion, reasonably or unreasonably, its
consent to TD's assignment of its rights pursuant to Sections 7.5, 7.6, 7.7,
7.8, and 7.9 hereof other than to an Affiliate of TD). The rights of the other
parties under this Agreement may not be assigned. This Agreement shall be
binding upon the parties hereto, and their respective successors and permitted
assigns. This Agreement shall not be construed so as to confer any right or
benefit upon any Person other than the parties to this Agreement, and their
respective successors and permitted assigns.
Section 10.5. Governing Law. This Agreement shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of said state, without regard to
its principles of conflicts of laws.
Section 10.6. Submission to Jurisdiction; Venue.
(a) Any legal action or proceeding with respect to this Agreement may
be brought in the courts of the State of New York or of the United States for
the Southern District of New
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York and, by execution and delivery of this Agreement, each of the parties
hereto hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts. Each of the parties hereto 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 the address of such party set forth in Section 10.2, such
service to become effective 30 days after such mailing. Nothing herein shall
affect the right of any party to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed any party hereto in
any other jurisdiction.
(b) Each party hereto hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement brought in
the courts referred to in clause (a) above and 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.
Section 10.7. Severability of Provisions. Any provision of this
Agreement that 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.
Section 10.8 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (d) all references herein to Sections,
Schedules and Exhibits shall be construed to refer to Sections of, and Schedules
and Exhibits to, this Agreement.
Section 10.9. Headings. The Article and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
Section 10.10. No Reliance. Each party hereto acknowledges that it has
obtained separate advice with respect to the legal, tax and accounting
consequences of the transactions contemplated by this Agreement, and that it has
neither sought nor relied upon any such advice from any other party hereto or
its Affiliates.
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Section 10.11. Entire Agreement. This Agreement and the other
Transaction Documents constitute the entire agreement among the parties with
respect to the purchase and sale of the TD Debentures and Section 2.2 Debentures
to be acquired by TD hereunder, and, as of the date hereof, there are no
promises or undertakings with respect thereto relative to the subject matter
hereof not expressly set forth or referred to herein or therein.
Section 10.12. Further Assurances. The parties hereto each will execute
and deliver or cause to be executed and delivered such further instruments and
do or cause to be done such further acts as may be reasonably necessary to carry
out their respective obligations under this Agreement.
[SIGNATURES FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
ALTERRA HEALTHCARE CORPORATION
By: /s/ Mark w. Ohlendorf
----------------------------------------
Name: Mark W. Ohlendorf
Title: Senior Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary
RDVEPCO, L.L.C.
By: RDV Altco, L.L.C., a member
By: RDV Corporation, a member
By: /s/ Robert H. Schierbeek
----------------------------------------
Name: Robert H. Schierbeek
Title: Authorized Signatory
By: EDP Assisted Living Properties, L.L.C.,
a member
By: Elsa D. Prince Living Trust u/a dated
January 24, 1976
By: /s/ Elsa D. Prince
----------------------------------------
Name: Elsa D. Prince
Title: Trustee
ELSA D.PRINCE LIVING TRUST u/a dated
January 24, 1976
By: /s/ Elsa D. Prince
----------------------------------------
Elsa D. Prince, as Trustee
RDV MANOR CARE, L.L.C.
By: RDV Corporation, its manager
By: /s/ Robert H. Schierbeek
----------------------------------------
Title: Robert H. Schierbeek, Treasurer
[SIGNATURES FOLLOW ON NEXT PAGE]
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GROUP ONE INVESTORS, L.L.C.
By: RDV Corporation, its manager
By: /s/ Robert H. Schierbeek
----------------------------------------
Name: Robert H. Schierbeek
Title: Authorized Signatory
HOLIDAY RETIREMENT 2000, LLC
By: /s/ Daniel R. Baty
----------------------------------------
Name: Daniel R. Baty
Title: a member
THE TORONTO-DOMINION BANK
By: /s/ John Dryden
------------------------------------
Its: Officer
-----------------------------------
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EXHIBIT A
AMENDMENT TO THE REGISTRATION RIGHTS AGREEMENT
This AMENDMENT TO THE REGISTRATION RIGHTS AGREEMENT (the "Amendment")
is entered into as of August 10, 2000, by and between ALTERRA HEALTHCARE
CORPORATION, a Delaware corporation (the "Company"); RDVEPCO, L.L.C., a Michigan
limited liability company, GROUP ONE INVESTORS, L.L.C., a Delaware limited
liability company, HOLIDAY RETIREMENT 2000, L.L.C., A Washington limited
liability company, the ELSA D. PRINCE LIVING TRUST and RDV MANOR CARE, L.L.C., a
Michigan limited liability company (collectively, the "May Purchasers"); HBK
MASTER FUND L.P. ("HBK") and THE TORONTO-DOMINION BANK, a Canadian chartered
bank ("TD").
RECITALS:
A. The Company, the May Purchasers and HBK have entered into that
certain Registration Rights Agreement dated as of May 31, 2000, (the
"Registration Rights Agreement") wherein the Company granted the May Purchasers
and HBK certain registration rights for certain securities of the Company.
B. The Company, TD and the May Purchasers have entered into that
certain Debenture Purchase Agreement dated as of August 10, 2000 (the "Debenture
Purchase Agreement") providing, among other things, for the purchase by TD from
the Company and certain of the May Purchasers of certain of the Company's Series
B 9.75% Convertible Pay-In-Kind Debentures (such debentures to be acquired by TD
pursuant to the Debenture Purchase Agreement, together with any debenture issued
in exchange for such debenture pursuant to Section 7.8 of the Debenture Purchase
Agreement and any debentures issued as a pay-in-kind interest payment on any of
such debentures, are referred to herein as the "TD Debentures").
C. The Company desires to grant to TD registration rights with respect
to the TD Debentures, and TD desires to receive such registration rights, all in
accordance with the terms of this Amendment.
D. This Amendment is the Amendment to the Registration Rights Agreement
referred to in the Debenture Purchase Agreement. The execution and delivery of
this Amendment by the Company, the May Purchasers, HBK and TD is a condition to
the TD Closing.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
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1. TD as Investor. TD shall be a party to the Registration Rights
Agreement as an "Investor" and as one of the "Investors" under the Registration
Rights Agreement as those terms are defined in the Registration Rights
Agreement.
2. TD Debentures as Debentures. The TD Debentures shall be included as
"Debentures" under the Registration Rights Agreement as that term is defined in
the Registration Rights Agreement.
3. Amendment and Ratification of Agreement. The Registration Rights
Agreement is hereby amended in all respects necessary to give effect to the
foregoing and, as hereby amended, is hereby ratified and confirmed in all
respects.
4. Governing Law. This Amendment shall be governed by and construed in
accordance the laws of the State of Delaware without giving effect to any
conflict of law or choice of law provision or rule that would cause the
application of the laws of any jurisdiction other than the state of Delaware.
5. Counterparts; Fax. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment. This Amendment may be validly executed by facsimile or other
electronic transmission.
IN WITNESS WHEREOF, this Amendment to the Registration Rights Agreement
has been executed by the parties hereto as of the date first written above.
ALTERRA HEALTHCARE CORPORATION
By:
---------------------------------------------------
Name: Mark W. Ohlendorf
Title: Senior Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary
[SIGNATURES FOLLOW ON NEXT PAGE]
A-2
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RDVEPCO, L.L.C.
By: RDV Altco, L.L.C., a member
By: RDV Corporation, a member
By:
-------------------------------------------
Name: Jerry L. Tubergen
Title: President
By: EDP Assisted Living Properties, L.L.C.,
a member
By: Elsa D. Prince Living Trust u/a dated
January 24, 1976
By:
-------------------------------------------
Name: Elsa D. Prince
Title: Trustee
GROUP ONE INVESTORS, L.L.C.
By: RDV Corporation, its manager
By:
-------------------------------------------
Name: Jerry L. Tubergen
Title: President
HOLIDAY RETIREMENT 2000, L.L.C.
By:
-------------------------------------------
Name: Daniel R. Baty
Title: a member
HBK MASTER FUND L.P.
By: HBK Investments L.P., its investment manager
By:
-------------------------------------------
Name: Kevin A. O'Neal
Title: Authorized Signatory
[SIGNATURES FOLLOW ON NEXT PAGE]
A-3
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ELSA D. PRINCE LIVING TRUST, u/a dated
January 24, 1976
By:
-----------------------------------------
Elsa D. Prince, as Trustee
RDV MANOR CARE, L.L.C.
By: RDV Corporation, its manager
By:
-----------------------------------------
Its:
----------------------------------------
THE TORONTO-DOMINION BANK
By:
-----------------------------------------
Name:
Title:
A-4