SNH Lease Agreement

Exhibit 10.1 GUARANTY AGREEMENT (Landlord Guaranty)


THIS GUARANTY AGREEMENT (this “Agreement”) is made and given as of February 28, 2003 by ALTERRA HEALTHCARE CORPORATION, a Delaware corporation (the "Guarantor"), for the benefit of SNH ALT LEASED PROPERTIES TRUST, a Maryland real estate investment trust (together with its successors and assigns, the “Landlord”).


W I T N E S S E T H :


WHEREAS, pursuant to a Purchase and Sale Agreement, dated as of the date hereof (as amended from time to time, the “Purchase Agreement”), among ALS-Venture II, Inc. and Wynwood of Chapel Hill, LLC (collectively, the “Sellers”) and the Landlord, the Sellers have agreed to sell to the Landlord, and the Landlord has agreed to purchase from the Sellers, certain real property, together with related improvements and certain personal property, as more particularly described in the Purchase Agreement; and


WHEREAS, pursuant to a Lease Agreement, dated as of the date hereof (as amended fro m time to time, the “Lease”), between the Landlord and AHC Trailside, Inc. (the “Tenant”), the Landlord has agreed to Lease to the Tenant, and the Tenant has agreed to lease from the Landlord, certain real property, together with related improvements and certain personal property, as more particularly described in the Lease; and


WHEREAS, the Purchase Agreement and the Lease are cross-defaulted and cross-collateralized; and


WHEREAS, the Sellers and the Tenant are subsidiaries, or limited liability companies, wholly-owned by the Guarantor; and


WHEREAS, it is a condition precedent to the Landlord's entering into the Purchase Agreement and the Lease that the Guarantor guaranty (i) all of the payment and performance obligations of the Sellers with respect to the Purchase Agreement, and (ii) all of the payment and performance obligations of the Tenant with respect to the Lease; and


WHEREAS, the transactions contemplated by the Purchase Agreement and the Lease are of direct material benefit to the Guarantor; and


NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows:


1. Certain Terms. Capitalized terms used and not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Lease.


2. Guaranteed Obligations. For purposes of this Agreement, the term “Guaranteed Obligations” shall mean the payment and performance of each and every obligation of the Tenant and the Sellers to the Landlord under the Lease Documents or relating thereto, whether now existing or hereafter arising, and including, without limitation, the payment of the full amount of the Rent and other charges payable under the Lease.


3. Representations and Covenants. The Guarantor represents, warrants, covenants, and agrees that:


3.1 Incorporation of Representations and Warranties. The representations and warranties of the Tenant, the Sellers and their Affiliated Persons set forth in the Lease Documents are true and correct on and as of the date hereof in all material respects.


3.2 Performance of Covenants and Agreements. The Guarantor hereby agrees to take all lawful action in its power to cause the Tenant and the Sellers duly and punctually to perform all of the covenants and agreements set forth in the Lease Documents.


3.3 Validity of Agreement. The Guarantor has duly and validly executed and delivered this Agreement; this Agreement constitutes the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as the enforceability thereof may be subject to bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and subject to general equitable principles, regardless of whether enforceability is considered in a proceeding at law or in equity; and the execution, delivery and performance of this Agreement have been duly authorized by all requisite action of the Guarantor and such execution, delivery and performance by the Guarantor will not result in any breach of the terms, conditions or provisions of, or conflict with or constitute a default under, or result in the creation of any lien, charge or encumbrance upon any of the property or ass ets of the Guarantor pursuant to the terms of, any indenture, mortgage, deed of trust, note, other evidence of indebtedness, agreement or other instrument to which it may be a party or by which it or any of its property or assets may be bound, or violate any provision of law, or any applicable order, writ, injunction, judgment or decree of any court or any order or other public regulation of any governmental commission, bureau or administrative agency. -2-


3.4 Payment of Expenses. The Guarantor agrees, as principal obligor and not as guarantor only, to pay to the Landlord forthwith, upon demand, in immediately available federal funds, all costs and expenses (including reasonable attorneys' fees and disbursements) incurred or expended by the Landlord in connection with the enforcement of this Agreement, together with interest on amounts recoverable under this Agreement from the time such amounts become due until payment at the Overdue Rate. The Guarantor's covenants and agreements set forth in this Section 3.4 shall survive the termination of this Agreement.


3.5 Notices. The Guarantor shall promptly give notice to the Landlord of any event known to it which might reasonably result in a material adverse change in its financial condition, other than the Chapter 11 case, which has been filed by the Guarantor and is pending in Bankruptcy Court as of the date hereof.


3.6 Reports. The Guarantor shall promptly provide to the Landlord each of the financial reports, certificates and other documents required of it under the Lease Documents.


3.7 Books and Records. The Guarantor shall at all times keep proper books of record and account in which full, true and correct entries shall be made of its transactions in accordance with generally accepted accounting principles and shall set aside on its books from its earnings for each fiscal year all such proper reserves, including reserves for depreciation, depletion, obsolescence and amortization of its properties during such fiscal year, as shall be required in accordance with generally accepted accounting principles, consistently applied, in connection with its business. The Guarantor shall permit access by the Landlord and its agents to the books and records maintained by the Guarantor during normal business hours and upon reasonable notice.


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3.8 Taxes, Etc. The Guarantor shall pay and discharge promptly as they become due and payable all taxes, assessments and other governmental charges or levies imposed upon it or its income or upon any of its property, real, personal or mixed, or upon any part thereof, as well as all claims of any kind (including claims for labor, materials and supplies) which, if unpaid, might by law become a lien or charge upon any property and result in a material adverse change in the financial condition of the Guarantor; provided, however, that the Guarantor shall not be required to pay any such tax, assessment, charge, levy or claim if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings or other appropriate actions promptly initiated and diligently conducted and if the Guarantor shall have set aside on its books such reserves, if any, with respect thereto as are required by generally accepted accounting pr inciples.


3.9 Legal Existence; Change in Control of Guarantor. The Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence. Except as specifically permitted under the Lease, the Guarantor shall cause any Person, as a condition of, and prior to such Person becoming an Acquiring Guarantor, to execute this Agreement in favor of the Landlord pursuant to which the Acquiring Guarantor shall guarantee the payment and performance of the Guaranteed Obligations.


3.10 Compliance. The Guarantor shall use reasonable business efforts to comply in all material respects with all applicable statutes, rules, regulations and orders of, and all applicable restrictions imposed by, all governmental authorities in respect of the conduct of its business and the ownership of its property (including, without limitation, applicable statutes, rules, regulations, orders and restrictions relating to environmental, safety and other similar standards or controls).


3.11 Insurance. The Guarantor shall maintain, with financially sound and reputable insurers, insurance with respect to its properties and business against loss or damage with substantially similar coverages and in substantially similar amounts as are required to be maintained by the Tenant under the Lease (provided the Guarantor and the Tenant's insurance requirements may be satisfied using the same insurance policy).


3.12 Financial Statements, Etc. The financial statements previously delivered to the Landlord by the Guarantor fairly present the financial condition of the Guarantor in accordance with generally accepted accounting principles consistently applied and there has been no material adverse change from the date thereof throug ...