EXECUTION COPY
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of September 8, 1994
Among
HEALTH CARE REIT, INC.
as Borrower
THE BANKS WHICH ARE SIGNATORIES HERETO,
and
NATIONAL CITY BANK,
as Agent
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms . . . . . . . . . . . . . . . 1
1.02 Computation of Time Periods . . . . . . . . . . . . 28
1.03 Accounting Terms . . . . . . . . . . . . . . . . . 28
1.04 Treatment of Subordinated Convertible Debt. . . . . 28
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.01 The Facility . . . . . . . . . . . . . . . . . . . 29
(a) Summary . . . . . . . . . . . . . . . . . . . . 29
(b) Purpose of the Facility . . . . . . . . . . . . 29
2.02 The Revolving Credit Loans. . . . . . . . . . . . . 29
(a) Revolving Credit Loans. . . . . . . . . . . . . 29
(b) Revolving Credit Borrowings . . . . . . . . . . 29
(c) Credit Requests . . . . . . . . . . . . . . . . 30
(d) Revolving Credit Notes. . . . . . . . . . . . . 30
(e) Banks to Fund Agent . . . . . . . . . . . . . . 30
(f) Availability of Funds . . . . . . . . . . . . . 31
(g) Failure of Bank to Loan . . . . . . . . . . . . 31
(h) Rate Conversion and Rate Continuation of
Revolving Credit Loans. . . . . . . . . . . . . 31
2.03 Reduction of Revolving Credit Commitments . . . . . 33
2.04 Repayments and Prepayments. . . . . . . . . . . . . 33
(a) Repayment . . . . . . . . . . . . . . . . . . . 33
(b) Permitted Prepayments . . . . . . . . . . . . . 33
(c) Mandatory Prepayments . . . . . . . . . . . . . 34
2.05 Fees. . . . . . . . . . . . . . . . . . . . . . . . 36
(a) Revolving Credit Commitment Fee . . . . . . . . 36
(b) Agent's Fee . . . . . . . . . . . . . . . . . . 36
2.06 Interest. . . . . . . . . . . . . . . . . . . . . . 36
(a) Pre-Default Interest. . . . . . . . . . . . . . 36
(b) Default Interest. . . . . . . . . . . . . . . . 37
(c) Additional Interest on LIBOR Rate Loans . . . . 37
(d) Interest Rate Determination . . . . . . . . . . 37
2.07 Payments and Computations . . . . . . . . . . . . . 38
(a) Payments. . . . . . . . . . . . . . . . . . . . 38
(b) Authorization to Charge Account . . . . . . . . 38
(c) Computations of Interest and Fees . . . . . . . 38
(d) Payment not on Business Day . . . . . . . . . . 38
(e) Presumption of Payment in Full by Borrower. . . 38
2.08 Addition and Release of Collateral. . . . . . . . . 39
(a) Addition of Specific Collateral . . . . . . . . 39
(b) Release of Specific Collateral;
Ordinary Course . . . . . . . . . . . . . . . . 39
(c) Release of Collateral; Environmental Harm . . . 40
(d) Release of All Collateral; BBB+ Rating Event. . 40
(e) Release of Collateral; BBB Rating Event . . . . 41
(f) Subsequent Collateralization. . . . . . . . . . 42
(g) Release Agreements and Covenants. . . . . . . . 42
2.09 Addition of Other Assets to Borrowing Base;
Alternative Investment Structure. . . . . . . . . . 43
(a) Addition of Other Assets to Borrowing Base . . 43
(b) Alternative Investment Structures . . . . . . . 44
2.10 Illegality. . . . . . . . . . . . . . . . . . . . . 44
2.11 Unavailability. . . . . . . . . . . . . . . . . . . 45
(a) Inadequate Rate . . . . . . . . . . . . . . . . 45
(b) Unavailable Quotations. . . . . . . . . . . . . 45
(c) Unavailable Deposits. . . . . . . . . . . . . . 45
ARTICLE III
CONDITIONS OF LENDING
3.01 Conditions Precedent to Initial Revolving
Credit Borrowing. . . . . . . . . . . . . . . . . . 45
3.02 Conditions to Eligibility for Initial
Borrowing Base Assets . . . . . . . . . . . . . . . 48
(a) Operator Leases . . . . . . . . . . . . . . . . 48
(b) Eligible Operator Loans . . . . . . . . . . . . 51
(c) Cross Collateralized Loans. . . . . . . . . . . 53
3.03 Addition of Borrowing Base Assets - Deliveries. . . 54
(a) Operator Leases . . . . . . . . . . . . . . . . 54
(b) Operator Loans. . . . . . . . . . . . . . . . . 57
(c) Cross Collateralized Loans. . . . . . . . . . . 59
(d) Filings for Perfection. . . . . . . . . . . . . 60
3.04 Conditions Precedent to all Revolving Credit
Loans . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Existence . . . . . . . . . . . . . . . . . . . . . 61
4.02 Power, Authorization and Consent. . . . . . . . . . 61
4.03 Enforceability. . . . . . . . . . . . . . . . . . . 62
4.04 Litigation; Proceedings . . . . . . . . . . . . . . 63
4.05 Taxes . . . . . . . . . . . . . . . . . . . . . . . 63
4.06 Title . . . . . . . . . . . . . . . . . . . . . . . 63
4.07 ERISA . . . . . . . . . . . . . . . . . . . . . . . 63
4.08 Adverse Obligations; Labor Disputes . . . . . . . . 64
4.09 Financial Statements. . . . . . . . . . . . . . . . 64
4.10 Insurance . . . . . . . . . . . . . . . . . . . . . 64
4.11 Solvency. . . . . . . . . . . . . . . . . . . . . . 64
4.12 Investment Company Act Status . . . . . . . . . . . 64
4.13 Regulation G/Regulation U/Regulation X
Compliance. . . . . . . . . . . . . . . . . . . . . 64
4.14 Environmental Compliance. . . . . . . . . . . . . . 65
4.15 Environmental Laws and Permits. . . . . . . . . . . 66
4.16 Compliance with Laws. . . . . . . . . . . . . . . . 66
4.17 Condemnation Proceedings. . . . . . . . . . . . . . 67
4.18 Locations . . . . . . . . . . . . . . . . . . . . . 67
4.19 Material Contracts. . . . . . . . . . . . . . . . . 67
4.20 Full Disclosure . . . . . . . . . . . . . . . . . . 67
4.21 Liabilities . . . . . . . . . . . . . . . . . . . . 68
4.22 Status of the Borrower. . . . . . . . . . . . . . . 68
4.23 Qualified Investment; Eligibility . . . . . . . . . 68
4.24 Name Changes. . . . . . . . . . . . . . . . . . . . 68
4.25 Borrowing Base Assets . . . . . . . . . . . . . . . 68
4.26 Other Representations . . . . . . . . . . . . . . . 69
ARTICLE V
COVENANTS OF THE BORROWER
5.01 Financial Information . . . . . . . . . . . . . . . 69
(a) Quarterly Financial Statements. . . . . . . . . 69
(b) Annual Consolidated Financial Statements. . . . 69
(c) Annual Consolidating Financial Statements . . . 70
(d) Borrower's Certificates and Reports . . . . . . 70
(e) Publicly Filed Information. . . . . . . . . . . 71
(f) Other Information . . . . . . . . . . . . . . . 71
5.02 Notices . . . . . . . . . . . . . . . . . . . . . . 71
(a) Notice of Default; Misrepresentation. . . . . . 71
(b) Notice of Default under ERISA . . . . . . . . . 72
(c) Notice of Litigation. . . . . . . . . . . . . . 72
(d) Taxes . . . . . . . . . . . . . . . . . . . . . 72
(e) Environmental Reporting . . . . . . . . . . . . 72
(f) Notice of New Subsidiary. . . . . . . . . . . . 72
5.03 Affirmative Covenants . . . . . . . . . . . . . . . 73
(a) Taxes . . . . . . . . . . . . . . . . . . . . . 73
(b) Financial Records . . . . . . . . . . . . . . . 73
(c) Visitation. . . . . . . . . . . . . . . . . . . 73
(d) Insurance . . . . . . . . . . . . . . . . . . . 73
(e) Corporate Existence; REIT Qualification . . . . 74
(f) Compliance with Environmental Laws. . . . . . . 74
(g) Compliance With Law . . . . . . . . . . . . . . 74
(h) Remedial Action . . . . . . . . . . . . . . . . 74
(i) Properties. . . . . . . . . . . . . . . . . . . 75
(j) Compliance with Terms of All Material
Contracts . . . . . . . . . . . . . . . . . . . 75
(k) Qualification to do Business. . . . . . . . . . 75
(l) Liens and Encumbrances . . . . . . . . . . . . 75
(m) Mandatory Reappraisal . . . . . . . . . . . . . 75
(n) Requested Reappraisal . . . . . . . . . . . . . 75
5.04 Negative Covenants. . . . . . . . . . . . . . . . . 76
(a) Equity Transactions . . . . . . . . . . . . . . 76
(b) Restricted Payments . . . . . . . . . . . . . . 78
(c) Credit Extensions; Investments in Notes, Etc. . 79
(d) Indebtedness. . . . . . . . . . . . . . . . . . 80
(e) Liens; Leases . . . . . . . . . . . . . . . . . 81
(f) Name Change; Fictitious Name. . . . . . . . . . 82
(g) Charter Amendments. . . . . . . . . . . . . . . 82
(h) Accounting Changes. . . . . . . . . . . . . . . 82
(i) Amendment; Default of Material Contracts. . . . 82
(j) Senior Note Documents . . . . . . . . . . . . . 83
(k) Use of Proceeds . . . . . . . . . . . . . . . . 83
(l) Adverse Obligations . . . . . . . . . . . . . . 83
(m) Transactions with Affiliates. . . . . . . . . . 83
(n) Maintenance of Borrowing Base . . . . . . . . . 83
(o) Portfolio Concentration Limitation. . . . . . . 84
(p) Other Financing Limitations . . . . . . . . . . 84
(q) Portfolio Diversification Requirement . . . . . 85
(r) Borrowing Base Concentration Limitation . . . . 85
5.05 Financial Covenants . . . . . . . . . . . . . . . . 85
(a) Consolidated Tangible Net Worth . . . . . . . . 85
(b) Consolidated Interest Coverage. . . . . . . . . 86
(c) Consolidated Leverage Ratio . . . . . . . . . . 86
(d) Consolidated Contingent Leverage Ratio. . . . . 86
(e) Borrowing Base Debt Coverage Ratio. . . . . . . 86
ARTICLE VI
EVENTS OF DEFAULT
6.01 Events of Default . . . . . . . . . . . . . . . . . 86
(a) Payments. . . . . . . . . . . . . . . . . . . . 86
(b) Covenants Without Grace . . . . . . . . . . . . 87
(c) Covenants with Grace. . . . . . . . . . . . . . 87
(d) Warranties. . . . . . . . . . . . . . . . . . . 87
(e) Cross Default . . . . . . . . . . . . . . . . . 87
(f) Change in Control . . . . . . . . . . . . . . . 87
(g) Judgments . . . . . . . . . . . . . . . . . . . 87
(h) Subsidiary's Solvency . . . . . . . . . . . . . 88
(i) Borrower's Solvency . . . . . . . . . . . . . . 88
(j) ERISA . . . . . . . . . . . . . . . . . . . . . 88
(k) Enforceability. . . . . . . . . . . . . . . . . 88
6.02 Remedies Upon Event of Default. . . . . . . . . . . 88
(a) Optional Defaults . . . . . . . . . . . . . . . 88
(b) Automatic Defaults. . . . . . . . . . . . . . . 89
(c) Recourse of Banks . . . . . . . . . . . . . . . 89
6.03 Offsets . . . . . . . . . . . . . . . . . . . . . . 89
6.04 Equalization. . . . . . . . . . . . . . . . . . . . 89
6.05 Application of Proceeds of Collateral . . . . . . . 90
ARTICLE VII
THE AGENT
7.01 The Agent . . . . . . . . . . . . . . . . . . . . . 90
7.02 Nature of Appointment . . . . . . . . . . . . . . . 90
7.03 NCB as a Bank; Other Transactions . . . . . . . . . 90
7.04 Instructions from Banks . . . . . . . . . . . . . . 91
7.05 Bank's Diligence. . . . . . . . . . . . . . . . . . 91
7.06 No Implied Representations. . . . . . . . . . . . . 91
7.07 Sub-Agents. . . . . . . . . . . . . . . . . . . . . 91
7.08 Agent's Diligence . . . . . . . . . . . . . . . . . 91
7.09 Notice of Default . . . . . . . . . . . . . . . . . 92
7.10 Agent's Liability . . . . . . . . . . . . . . . . . 92
7.11 Compensation. . . . . . . . . . . . . . . . . . . . 92
7.12 Agent's Indemnity . . . . . . . . . . . . . . . . . 93
7.13 Resignation . . . . . . . . . . . . . . . . . . . . 93
7.14 Bank Purpose. . . . . . . . . . . . . . . . . . . . 93
ARTICLE VIII
TRANSFERS AND ASSIGNMENTS
8.01 Transfer of Commitments . . . . . . . . . . . . . . 94
(a) Prior Consent . . . . . . . . . . . . . . . . . 94
(b) Agreement; Transfer Fee . . . . . . . . . . . . 94
(c) Note. . . . . . . . . . . . . . . . . . . . . . 95
(d) Parties . . . . . . . . . . . . . . . . . . . . 95
8.02 Sale of Participations. . . . . . . . . . . . . . . 95
(a) Benefits of Participant . . . . . . . . . . . . 95
(b) Rights Reserved . . . . . . . . . . . . . . . . 95
(c) No Delegation . . . . . . . . . . . . . . . . . 96
8.03 Confidentiality . . . . . . . . . . . . . . . . . . 96
ARTICLE IX
INDEMNITIES
9.01 Increased Costs . . . . . . . . . . . . . . . . . . 96
9.02 Risk-Based Capital. . . . . . . . . . . . . . . . . 97
9.03 Taxes . . . . . . . . . . . . . . . . . . . . . . . 97
(a) Taxes; Withholding. . . . . . . . . . . . . . . 97
(b) Stamp Taxes . . . . . . . . . . . . . . . . . . 97
(c) Other Taxes . . . . . . . . . . . . . . . . . . 98
(d) Request for Refund. . . . . . . . . . . . . . . 98
(e) Exemption Certificate . . . . . . . . . . . . . 98
(f) Furnishing of Certificate . . . . . . . . . . . 99
(g) Survival of Provision . . . . . . . . . . . . . 99
9.04 Funding Costs . . . . . . . . . . . . . . . . . . . 99
9.05 Losses. . . . . . . . . . . . . . . . . . . . . . . 99
9.06 Indemnification for Requests. . . . . . . . . . . . 99
9.07 Takeovers . . . . . . . . . . . . . . . . . . . . . 100
9.08 Certificate for Indemnification . . . . . . . . . . 100
9.09 Costs and Expenses. . . . . . . . . . . . . . . . . 100
9.10 Duty To Mitigate. . . . . . . . . . . . . . . . . . 101
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. . . . . . . . . . . . . . . 101
10.02 Cumulative Provisions . . . . . . . . . . . . . . . 102
10.03 Binding Effect. . . . . . . . . . . . . . . . . . . 102
10.04 Survival of Provisions. . . . . . . . . . . . . . . 102
10.05 Immediate U.S. Funds. . . . . . . . . . . . . . . . 102
10.06 Captions. . . . . . . . . . . . . . . . . . . . . . 102
10.07 Interest Rate Limitation. . . . . . . . . . . . . . 102
10.08 Illegality. . . . . . . . . . . . . . . . . . . . . 103
10.09 Notices . . . . . . . . . . . . . . . . . . . . . . 103
10.10 Governing Law . . . . . . . . . . . . . . . . . . . 103
10.11 Entire Agreement. . . . . . . . . . . . . . . . . . 103
10.12 Waiver of Jury Trial. . . . . . . . . . . . . . . . 103
10.13 Jurisdiction; Venue . . . . . . . . . . . . . . . . 103
(a) Jurisdiction. . . . . . . . . . . . . . . . . . 103
(b) Venue; Inconvenient Forum . . . . . . . . . . . 104
10.14 Execution in Counterparts . . . . . . . . . . . . . 104
EXHIBITS AND SCHEDULES
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Credit Request
Exhibit C - Form of Rate Conversion/Continuation Request
Exhibit D - Form of Reduction Notice
Exhibit E - Form of Notice of Borrowing Base Addition/Removal
Exhibit F-1 - Form of Opinion of Borrower's Counsel (Borrower Fee
Properties)
Exhibit F-2 - Form of Opinion of Borrower's Counsel (Operator Fee
Properties)
Exhibit F-3 - Form of Opinion of Borrower's Counsel (Other
Corporate Matters)
Exhibit G-1 - Form of Borrower's Officer's Certificate
Exhibit G-2 - Form of Subsidiary Officer's Certificate
Exhibit H-1 - Form of Open-End Mortgage and Security Agreement
Exhibit H-2 - Form of Deed of Trust and Security Agreement
Exhibit I - Form of Collateral Assignment of Operator Loan
Documents
Exhibit J - Form of Subsidiary Guaranty Agreement
Exhibit K - Form of Collateral Assignment of Operator Lease
Documents and Rents
Exhibit L-1 - Form of Security Agreement (General Intangibles)
Exhibit L-2 - Form of Amendment to Security Agreement
Exhibit M-1 - Form of Compliance Certificate
Exhibit M-2 - Form of Borrowing Base Report
Exhibit M-3 - Form of Quarterly Receivable Aging Schedule
Exhibit M-4 - Form of Quarterly Liability Schedule
Exhibit N - Form of Assignment Agreement
Schedule I - Revolving Credit Commitments
Schedule II - Eligible Operator Leases and Eligible Operator Loans
Supplemental Schedule
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of September 8, 1994
HEALTH CARE REIT, INC., a Delaware corporation (the
"Borrower"), the Banks listed on the signature pages hereof, and
NATIONAL CITY BANK ("NCB"), as agent (the "Agent") for the Banks
hereunder, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms. As used in this
Agreement, the following capitalized terms shall have the following
meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Acceptable Marketable Securities" means securities that
are direct obligations of the United States of America or any
agency thereof, or certificates of deposit issued by any Bank or by
any other financial institution organized under the laws of the
United States or any state thereof which is approved in writing by
the Agent, in the Agent's reasonable discretion, or any other
money-market investment if it carries the highest quality rating of
any nationally recognized rating agency; provided, however, that no
such security shall mature more than ninety (90) days after the
date when made.
"Accumulated Funding Deficiency" has the meaning ascribed
thereto in section 302(a)(2) of ERISA.
"Additional Indebtedness" has the meaning ascribed
thereto in Section 5.04(d).
"Advantage" means any payment (whether made voluntarily
or involuntarily, by offset of any deposit or other Indebtedness or
otherwise) received by a Bank in respect of the Obligations if the
payment results in any other Bank's having more than its Ratable
Portion of the Obligations in question.
"Affiliate" means, with respect to a specified Person,
any other Person: (a) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under
common control with such Person, (b) which beneficially owns or
holds with power to vote five percent (5%) or more of any class of
the voting stock of such Person, (c) five percent (5%) or more of
the voting stock of which other Person is beneficially owned or
held by such Person, or (d) who is an officer or director of such
Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agent" means National City Bank in its capacity as
administrative agent or any successor acting in such capacity.
"Agreement" means this Amended and Restated Credit
Agreement, which amends and restates in its entirety that certain
Second Amended and Restated Agreement, dated as of October 1, 1989,
among the Borrower, NCB, as agent and the banks indicated therein,
and includes each amendment, if any, to this Amended and Restated
Credit Agreement.
"Anniversary Date" means each September 8 during the term
of this Agreement.
"Appraised Value" means, as to any asset, the appraised
value of such asset as determined and set forth in writing by an
independent certified M.A.I. appraiser experienced in appraising
Health Care Facilities; provided, however, that, in the event that
such written appraisal in respect of any Borrowing Base Asset is
dated as of a date more than three (3) years prior to the date of
determination and the Agent or any Bank has required that the
Borrower obtain an updated written appraisal pursuant to Section
5.03(m) and such appraisal is not delivered within the time period
required by Section 5.03(m), until such updated appraisal has been
delivered to the Agent and approved by the Bank or Banks requesting
such update, the Asset Value of such Borrowing Base Asset shall be
Zero Dollars ($0).
"Asset Value" means, as at any date of determination, an
amount equal to the least of: (a) the Lease Value of such asset as
at such date, (b) the Carrying Value of such asset as at such date,
(c) the Appraised Value of such asset, (d) as to any Borrowing Base
Asset, such portion of the least of such Lease Value, Carrying
Value or Appraised Value of such asset which, when taken together
with the aggregate of the Asset Values of all other Borrowing Base
Assets operated by the Operator of such asset or any Operator
Affiliate of the Operator, does not exceed seventeen and one-half
percent (17.5%) of the aggregate Asset Value of all Borrowing Base
Assets, (e) as to any Borrowing Base Asset, such portion of the
least of the Lease Value, Carrying Value or Appraised Value of such
asset which does not exceed fifteen percent (15%) of the Asset
Value of all Borrowing Base Assets, (f) as to any Borrowing Base
Asset, Zero Dollars ($0) during the period commencing on the date
upon which the Operator of such asset is in default for ninety (90)
days under Eligible Operator Loan Documents or such Eligible
Operator Lease Documents of such Operator, as the case may be, and
ending on the date on which all such defaults have been waived or
cured, (g) as to any Borrowing Base Asset, Zero Dollars ($0) in the
event that such Borrowing Base Asset no longer meets the
eligibility requirements set forth in the definition of Eligible
Operator Lease or Eligible Operator Loan, as the case may be, (h)
as to any Borrowing Base Asset, Zero Dollars ($0) in the event that
such Borrowing Base Asset is a Cross-Collateralized Operator Loan
or (i) as to any Borrowing Base Asset, Zero Dollars ($0) in the
event that such Borrowing Base Asset relates to a Borrower Fee
Property or Operator Fee Property with respect to which there has
been any noncompliance with any Environmental Law (including
noncompliance with or failure to obtain any Environmental Permit)
or any Environmental Claim or any other environmental condition
which noncompliance, failure or condition, taken singly or together
with all such noncompliances, failures or conditions, has resulted
in or would, more likely than not, result in a Material Impairment
of such Borrowing Base Asset.
"Assigned Title Policy" means any title policy assigned
to the Agent for the benefit of the Banks delivered pursuant to
Section 3.02(b)(vi), Section 3.03(b)(ix) or otherwise delivered to
the Agent for the benefit of the Banks in respect of a Borrowing
Base Asset.
"Banks" means the banks listed on the signature pages
hereof and the successors thereto and assignees thereof.
"Borrow" means to obtain a Revolving Credit Borrowing.
"Borrower" has the meaning ascribed to such term in the
introductory paragraph hereof.
"Borrower Fee Property" means any real property owned by
the Borrower in fee simple.
"Borrower Mortgage" means any mortgage or amendment and
restatement of any such mortgage with respect to a Borrower Fee
Property relating to any Eligible Operator Lease executed and
delivered to the Agent for the benefit of the Banks substantially
in the form of Exhibit H-1 or Exhibit H-2 hereto.
"Borrowing Base" means an amount which shall equal but
not at any time exceed seventy-five percent (75%) of the aggregate
Asset Value of the Borrowing Base Assets.
"Borrowing Base Assets" means all Eligible Operator
Leases and all Eligible Operator Loans of the Borrower identified
as such on any Borrowing Base Report certified by the Borrower.
"Borrowing Base Report" means the report delivered by the
Borrower pursuant to Section 5.01(d).
"Borrower's Balance Sheet Assets" means, as at the date
of any determination, all of the assets of the Borrower and its
Subsidiaries as at such date (excluding treasury shares) on a
consolidated basis, as reflected on the consolidated balance sheet
of the Borrower and its Subsidiaries, as determined in accordance
with generally accepted accounting principles.
"Business Day" means a day of the year on which banks
are not required or authorized to close in Cleveland, Ohio and, if
the applicable Business Day relates to any LIBOR Rate Loans, a day
of the year on which dealings in Dollar deposits are carried on in
the London interbank market and banks are open for business in
London.
"Carrying Value" means, with respect to Eligible Operator
Loans, as at any date of any determination, the principal amount of
such Eligible Operator Loan outstanding at such date.
"Cash Flow" means, for any period, the Borrower's
Consolidated Net Income for such period, excluding extraordinary
items net of tax effect, plus depreciation, plus amortization of
loan expenses, plus (minus) any change in provision for losses,
plus (minus) each of the following: (i) non-refundable loan and
commitment fees received in cash in excess of (less than) amounts
earned; (ii) non-refundable lease income received in cash in excess
of (less than) amounts earned; and (iii) non-refundable interest
income received in cash in excess of (less than) amounts earned.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Sections 9601 et
seq.
"Closing Date" means September 8, 1994.
"Collateral" means all collateral in which a Lien is or
may hereafter be granted to the Agent for the benefit of the Banks
pursuant to the Collateral Documents and all other property that is
subject to any Lien in favor of the Agent for the benefit of the
Banks, including, without limitation, the collateral listed on
Schedule II hereto and any assignable interest in a mortgage
securing any REMIC invested in by the Borrower which has been
assigned to the Agent for the benefit of the Banks.
"Collateral Assignment of Operator Lease Documents" means
a Collateral Assignment of Operator Lease Documents and Rents or an
Amended and Restated Collateral Assignment of Operator Lease
Documents and Rents, substantially in the form of Exhibit K hereto.
"Collateral Assignment of Operator Loan Documents" means
a Collateral Assignment of Operator Loan Documents or an Amended
and Restated Collateral Assignment of Operator Loan Documents,
substantially in the form of Exhibit I hereto.
"Collateral Assignments" means, collectively, each
Collateral Assignment of Operator Lease Documents and each
Collateral Assignment of Operator Loan Documents executed and
delivered to the Agent pursuant to Article III from time to time or
any other assignment document delivered in connection with a
Borrowing Base Asset from time to time.
"Collateral Documents" means the Borrower Mortgages and
the Collateral Assignments, the Security Agreement, and Security
Agreement Amendment or any other document delivered from time to
time in connection with a Borrowing Base Asset for the purpose of
creating a Lien in favor of the Agent for the Benefit of the Banks
in respect of such Borrowing Base Asset.
"Consolidated Contingent Liabilities" means, as at the
date of any determination, any Guaranty, any Credit Enhancement,
any indemnification obligation or any obligation under a letter of
credit.
"Consolidated Funded Indebtedness" means, as at the date
of any determination, Indebtedness of the Borrower and its
Subsidiaries for money borrowed determined on a consolidated basis
in accordance with generally accepted accounting principles,
including, without limitation, all notes payable and drafts
accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments
and all obligations upon which interest charges are customarily
paid or discounted, plus the obligations of the Borrower and its
Subsidiaries as lessee under leases which shall have been or should
be, in accordance with generally accepted accounting principles
recorded as capital leases, plus the obligations of the Borrower to
pay a deferred purchase price for goods or services (other than
ordinary course trade payables).
"Consolidated Interest Coverage Ratio" means, for any
period, the ratio of (a) the sum of Consolidated Net Income plus
interest expense of the Borrower and its Subsidiaries for such
period plus federal, state and local taxes of the Borrower and its
Subsidiaries for such period plus depreciation and amortization
expense for the Borrower and its Subsidiaries for such period to
(b) the interest expense of the Borrower and its Subsidiaries for
such period, in each case as determined on a consolidated basis in
accordance with generally accepted accounting principles.
"Consolidated Net Income" means, for any period, the
aggregate net income of the Borrower and its Subsidiaries for such
period (after taxes and after extraordinary items, but without
giving effect to any gain from any re-appraisal or write-up of any
asset), as determined on a consolidated basis in accordance with
generally accepted accounting principles.
"Consolidated Net Worth" means, as at the date of any
determination, the excess of the net book value (after deducting
all applicable valuation reserves and without consideration to any
reappraisal or write-up of assets) of all of the tangible and
intangible assets of the Borrower and its Subsidiaries as at such
date (including intangible assets such as patents, costs of
businesses over net assets acquired, goodwill and treasury shares)
over Consolidated Total Liabilities as at such date, in each case
as determined on a consolidated basis in accordance with generally
accepted accounting principles.
"Consolidated Tangible Net Worth" means, as of the date
of any determination, the excess of the net book value (after
deducting all applicable valuation reserves and without
consideration to any reappraisal or write-up assets) of all of the
tangible assets of the Borrower and its Subsidiaries as at such
date (i.e., all assets excluding intangibles assets such as
patents, costs of businesses over net assets acquired, goodwill and
treasury shares) over Consolidated Total Liabilities as at such
date, as determined on a consolidated basis in accordance with
generally accepted accounting principles.
"Consolidated Total Liabilities" means, as at the date of
any determination, the aggregate of all liabilities of the Borrower
and its Subsidiaries at such date, as determined on a consolidated
basis in accordance with generally accepted accounting principles.
"Credit Enhancements" means any obligation, direct
orindirect, contingent or otherwise, of the Borrower or any of its
Subsidiaries: (a) to guaranty any Indebtedness or obligation of any
Person, (b) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or any other obligation
of such Person (whether arising by virtue of partnership
arrangements, or securities or services, take-or-pay agreements, or
agreements to maintain financial statement conditions or otherwise)
or (c) entered into for purposes of assuring in any other manner
the obligee of such Indebtedness or other obligation of the payment
thereof or protecting such obligee against loss in respect thereof
(in whole or in part).
"Credit Request" has the meaning specified in Section
2.02(c).
"Cross-Collateralized Operator Loan" means an Operator
Loan with respect to which (a) the Operator of the Health Care
Facility with respect to such Operator Loan is the Operator of a
Health Care Facility in respect of which there is an Operator Loan
which is an Eligible Operator Loan identified as a Borrowing Base
Asset on a Borrowing Base Report which Operator Loan is cross-
collateralized with such Eligible Operator Loan, (b) the criteria
for an Eligible Operator Loan have not been met and (c) which is
assigned to the Agent for the benefit of the Banks as Collateral
for the Loans pursuant to a Collateral Assignment of Operator Loan
Documents and as to which the Agent for the benefit of the Banks
has been granted a security interest pursuant to the Security
Agreement or any Security Agreement Amendment.
"Default under ERISA" means: (a) the occurrence or
existence of a material Accumulated Funding Deficiency in respect
of any Employee Benefit Plan within the scope of Section 302(a) of
ERISA, or (b) any failure by Borrower or any Subsidiary to make a
full and timely payment of premiums required by Section 4001 of
ERISA in respect of any Employee Benefit Plan, or (c) the
occurrence or existence of any material liability under Section
4062, 4063, 4064, 4069, 4201, 4217 or 4243 of ERISA in respect of
any Employee Benefit Plan, or (d) the occurrence or existence of
any material breach of any other law or regulation in respect of
any such Employee Benefit Plan, or (e) the institution or existence
of any action for the forcible termination of any such Employee
Benefit Plan which is within the scope of Section 4001(a)(3) or
(15) or ERISA.
"Default" means an event, condition or thing which
constitutes, or which with the lapse of time, lapse of any
applicable grace period or with the giving of notice or both would
constitute, an Event of Default referred to in Article VI which has
not been appropriately waived in writing in accordance with this
Agreement or fully corrected prior to becoming an actual Event of
Default.
"Dollars" and the sign "$" each means lawful money of the
United States.
"Eligible Operator Lease" means, as of the date of any
Borrowing Base Report including the Initial Borrowing Base Report,
each Operator Lease listed on such Borrowing Base Report, with
respect to which:
(a) the Health Care Facility related thereto constitutes a
Qualified Investment,
(b) in the case of an Operator Lease listed on the Initial
Borrowing Base Report, the Borrower (I) has delivered to the Agent
on or before the Closing Date all documents, filings and
certifications required by Section 3.02, each of which delivered
documents and filings is consistent with the Required Documentation
Standards or (II) where permitted, has set forth on the
Supplemental Schedule such documents or filings which have not been
delivered to the Agent or which are not in compliance with Section
3.02,
(c) in the case of an Operator Lease not listed on the Initial
Borrowing Base Report which is listed on any Borrowing Base Report
after the Closing Date, the Borrower has delivered to the Agent, at
least fifteen (15) Business Days prior to the date of such
Borrowing Base Report, all documents, filings and certifications
required by Section 3.03, each of which documents is consistent
with the Required Documentation Standards,
(d) in the case of (I) an Operator Lease listed on the Initial
Borrowing Base Report, to the best knowledge of Borrower based upon
the financial information provided to Borrower by the Operator, the
aggregate net worth of the Operator and any Guarantor of such
Operator's obligations to Borrower with respect to such related
Health Care Facility is a positive number and (II) an Operator
Lease not listed on the Initial Borrowing Base Report which is
listed on any Borrowing Base Report after the Closing Date, the
aggregate net worth of the Operator and any Guarantor of such
Operator's obligations to the Borrower with respect to such Health
Care Facility is a positive number,
(e) neither the Operator nor any Guarantor of the Operator's
obligations to Borrower (if any) is the subject of an Insolvency
Action and, to the best of Borrower's knowledge, based upon the
financial information provided by the Operator, the Operator and
each such Guarantor is Solvent after giving effect to the Operator
Lease and the Guaranty thereof,
(f) in the case of (I) an Operator Lease listed on a Borrowing
Base Report delivered after the Closing Date which Operator Lease
was not listed on the Initial Borrowing Base Report and (II) solely
to the extent previously received by the Borrower in the case of an
Operator Lease listed on the Initial Borrowing Base Report, the
obligations of the Operator related to any such Operator Lease are
secured to the Borrower by either (x) a stand-by letter of credit
in favor of the Borrower or a perfected pledge of cash collateral
in an amount equal to not less than the sum of two and one-half
percent (2-1/2%) of the aggregate lease payments due under the
Operator Lease Documents of such Operator or (y) a Guaranty in
favor of the Borrower,
(g) to the best of the Borrower's knowledge, the Operator is
not involved in material litigation not adequately reserved for on
the books of such Operator (as determined in a manner consistent
with generally accepted accounting principles),
(h) in case of an Operator Lease listed on any Borrowing Base
Report delivered after the Closing Date, after giving effect to the
addition of such Operator Lease to the Borrowing Base Assets the
aggregate Asset Value of all Borrowing Base Assets comprised of
Health Care Facilities which are psychiatric hospitals is not
greater than twenty percent (20%) of the aggregate Asset Value of
all Borrowing Base Assets,
(i) in the case of an Operator Lease listed on any
Borrowing Base Report the inclusion of such Operator Lease as a
Borrowing Base Asset does not cause the occurrence of a Default or
an Event of Default,
(j) in the case of an Operator Lease listed on the
Initial Borrowing Base Report, each of the statements and each of
the calculations made in the certificate of an officer of the
Borrower delivered pursuant to Section 3.02(a)(xiv) is, to the best
of such officer's knowledge, true and correct and does not fail to
state any material fact,
(k) in the case of an Operator Lease listed on a
Borrowing Base Report delivered after the Closing Date which
Operator Lease was not listed on the Initial Borrowing Base Report,
each of the statements made to the Agent in the summary delivered
pursuant to Section 3.03(a)(xvi) and each of the statements and
each of the calculations made in the certificate of an officer of
the Borrower delivered pursuant to Section 3.03(a)(xvii) are, to
the best of such officer's knowledge, true and correct and do not
fail to state any material fact,
(l) upon the filing of the Borrower Mortgage, the
Collateral Assignment of Operator Lease Documents and the financing
statements required by Section 3.02(c) or 3.03(c), as the case may
be, the Agent for the benefit of the Banks has a first priority
security interest in the Borrower Fee Property and Operator Lease
referenced therein subject only to the Liens permitted by Section
5.04(e),
(m) the Operator Lease Documents in respect of such
Operator Lease (i) are assignable by the Borrower pursuant to their
terms and (ii) are enforceable against the Borrower and the
Operator in accordance with their terms, subject to any applicable
insolvency, bankruptcy, avoidance, reorganization, moratorium and
similar laws of general applicability affecting the rights of
creditors generally, general principles of equity (other than
equitable defenses of the Operator arising by reason of the actions
of the Borrower) and any limitations imposed by standards of
commercial reasonableness, good faith and fair dealing,
(n) each of the Borrower and, to the best of the
Borrower's knowledge, the Operator is in compliance with all
material terms of the Operator Lease Documents with respect to such
Operator Lease and no condition exists which, with or without the
passage of time or the giving of notice or both, would constitute
a default by the Borrower or, to the best of the Borrower's
knowledge, the Operator in any material respect thereunder,
(o) there is no obligation of the Operator to the
Borrower as to which, in whole or in part, the Operator has
asserted any claim of setoff, counterclaim, defense or right of
recoupment, or right to any reduction or disallowance for any
reason or which is currently subject to any asserted dispute,
(p) the Operator Lease and the Borrower Fee Property in
respect thereof, free and clear of all Liens except as expressly
permitted by Section 5.04(e),
(q) the Borrower does not have any reasonable basis to
believe that the Operator will not perform its material obligations
under the Operator Lease Documents.
"Eligible Operator Loan" means, as of the date of any
Borrowing Base Report including the Initial Borrowing Base Report,
each Operator Loan listed on such Borrowing Base Report with
respect to which:
(a) the Health Care Facility related thereto constitutes a
Qualified Investment,
(b) in the case of an Operator Loan listed on the Initial
Borrowing Base Report, the Borrower (I) has delivered to the Agent
on or before the Closing Date all documents, filings and
certifications required by Section 3.02, each of which delivered
documents and filings is consistent with the Required Documentation
Standards or (II) where permitted, has set forth on the
Supplemental Schedule such documents or filings which have not been
delivered to the Agent or which are not in compliance with Section
3.02,
(c) in the case of an Operator Loan not listed on the Initial
Borrowing Base Report which is listed on any Borrowing Base Report
after the Closing Date, the Borrower has delivered to the Agent, at
least fifteen (15) Business Days prior to the date of such
Borrowing Base Report, all documents, filings and certifications
required by Section 3.03, each of which documents is consistent
with the Required Documentation Standards,
(d) in the case of (I) an Operator Loan listed on the Initial
Borrowing Base Report, to the best knowledge of Borrower, based
upon the financial information provided to Borrower by the
Operator, the aggregate net worth of the Operator and any Guarantor
of the obligations of such Operator to the Borrower with respect to
such related Health Care Facility is a positive number and (II) an
Operator Loan not listed on the Initial Borrowing Base Report which
is listed on any Borrowing Base Report after the Closing Date, the
aggregate net worth of the Operator and any Guarantor of the
obligations of such Operator to the Borrower with respect to such
related Health Care Facility is a positive number and the net worth
of the Operator of such related Health Care Facility is a positive
number,
(e) neither the Operator nor any Guarantor of the Operator's
obligations to Borrower (if any) is the subject of an Insolvency
Action and, to the best of Borrower's knowledge based upon the
financial information provided by the Operator, the Operator and
each such Guarantor is Solvent after giving effect to the Operator
Loan and the Guaranty thereof,
(f) in the case of (I) an Operator Loan listed on a Borrowing
Base Report delivered after the Closing Date which Operator Loan
was not listed on the Initial Borrowing Base Report and (II) solely
to the extent previously received by the Borrower in the case of
any Operator Loan listed on the Initial Borrowing Base Report, the
obligations of the Operator related to any such Operator Loan are
secured to the Borrower by either (x) a stand-by letter of credit
in favor of the Borrower or a perfected pledge of cash collateral
in an amount equal to not less than the sum of two and one-half
percent (2-1/2%) of the aggregate principal and interest payments
due under the Operator Loan Documents of such Operator or (y) a
Guaranty in favor of the Borrower,
(g) to the best of the Borrower's knowledge, the Operator is
not involved in material litigation not adequately reserved for on
the books of such Operator (as determined in a manner consistent
with generally accepted accounting principles),
(h) in case of an Operator Loan listed on any Borrowing Base
Report delivered after the Closing Date, after giving effect to the
addition of such Operator Loan to the Borrowing Base Assets the
aggregate Asset Value of all Borrowing Base Assets comprised of
Health Care Facilities which are psychiatric hospitals is not
greater than twenty percent (20%) of the aggregate Asset Value of
all Borrowing Base Assets,
(i) in the case of an Operator Loan listed on any Borrowing
Base Report, the inclusion of such Operator Loan as a Borrowing
Base Asset does not cause the occurrence of a Default or an Event
of Default,
(j) such Operator Loan is not a construction loan,
(k) in the case of an Operator Loan listed on the Initial
Borrowing Base Report, each of the statements and each of the
calculations made in the certificate of an officer of the Borrower
delivered pursuant to Section 3.02(a)(xiv) is, to the best of such
officer's knowledge, true and correct and does not fail to state
any material fact,
(l) in the case of an Operator Loan listed on a Borrowing Base
Report delivered after the Closing Date and not listed on the
Initial Borrowing Base Report, each of the statements made to the
Agent in the summary delivered pursuant to Section 3.03(b)(xv) and
each of the statements and each of the calculations made in the
certificate of an officer of the Borrower delivered pursuant to
Section 3.03(b)(xvi) are, to the best of such officer's knowledge,
true and correct and do not fail to state any material fact,
(m) upon the filing of the Collateral Assignment of Operator
Loan Documents and the financing statements required by Section
3.02(c) or 3.03(c), as the case may be, the Agent for the benefit
of the Banks has a first priority security interest in the Operator
Loan Documents referenced therein subject only to the Liens
permitted by Section 5.04(e),
(n) each Lien granted to the Borrower in connection with such
Operator Loan is a valid and enforceable first priority Lien except
for the Liens permitted by the related Operator Loan Documents and
Section 5.04(e),
(o) the Assigned Title Policy with respect to such Operator
Loan: (i) is in full force and effect, (ii) is freely assignable
and (subject to the issuance of a separate policy or endorsement
and the recordation of the Collateral Assignment of Operator Loan
Documents) inures to the benefit of the Agent for the benefit of
the Banks and (iii) has not been subject to any claim made under
such Assigned Title Policy since the time of issuance of the
original title policy in favor of the Borrower,
(p) the Borrower has no actual knowledge of any Lien not shown
by the public records, the existence of which would be the basis
for an exclusion from coverage under any such Assigned Title
Policy,
(q) the Operator Loan Documents in respect of such Operator
Loan: (i) are assignable by the Borrower pursuant to their terms,
(ii) are enforceable against the Borrower and the Operator in
accordance with their terms, subject to insolvency, bankruptcy,
avoidance, reorganization, moratorium, or similar laws of general
applicability affecting the rights of creditors generally and
general principles of equity (other than equitable defenses of the
Operator arising by reason of the actions of the Borrower), and any
limitations imposed by standards of commercial reasonableness, good
faith and fair dealing, (iii) contain customary and enforceable
default and remedial provisions such that the holder may timely
enforce the rights and exercise the remedies set forth in such
documents and realize the material benefits thereof and (iv) do not
provide for the cross-collateralization of such Operator Loan with
any other Operator Loan unless each such other Operator Loan is (A)
also an Eligible Operator Loan or (B) if such other Operator Loan
is not an Eligible Loan, such other Operator Loan is a Cross-
Collateralized Operator Loan,
(r) each of the Borrower and, to the Borrower's best
knowledge, the Operator is in compliance with all material terms of
the Operator Loan Documents with respect to such Operator Loan and
no condition exists which, with or without the passage of time or
the giving of notice or both, would constitute a default by the
Borrower or, to the best knowledge of the Borrower, the Operator,
in any material respect thereunder,
(s) there is no obligation of the Operator to the Borrower as
to which, in whole or in part, the Operator has asserted any claim
of setoff, counterclaim, defense or right of recoupment, or right
to any reduction or disallowance for any reason or which is
currently subject to any asserted dispute,
(t) the proceeds of such Operator Loan have been fully
disbursed and there is no requirement for future advances
thereunder,
(u) the Borrower (i) is the sole holder of the Operator Loan
Documents in respect of such Operator Loan and (ii) has full right
and authority to assign such Operator Loan, free and clear of all
Liens except as expressly permitted by Section 5.04(e), and
(v) the Borrower does not have any reasonable basis to believe
that the Operator will not perform its material obligations under
the Operator Loan Documents.
"Eligible Operator Lease Documents" means any and all
documents assigned to the Agent for the benefit of the Banks in
connection with an Eligible Operator Lease, including, without
limitation, any letter of credit issued or Guaranty executed in
favor of the Borrower.
"Eligible Operator Loan Documents" means each note, loan
agreement, mortgage and other document executed and/or delivered to
the Borrower by an Operator in respect of any Eligible Operator
Loan.
"Employee Benefit Plan" means an "employee benefit plan"
as defined in section 3(3) of ERISA of the Borrower, any Subsidiary
of the Borrower or any of their ERISA Affiliates.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters,
claims, complaints, liens, notices of non-compliance, requests for
information, investigations, proceedings, consent orders or consent
agreements relating in any way to any Environmental Law or any
Environmental Permit, instituted by any Person, including, without
limitation, (a) by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions
or damages pursuant to any applicable Environmental Law or (b) by
any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of
injury to health or the environment.
"Environmental Laws" means any federal, state or local
law, regulation, ordinance, or order pertaining to the protection
of the environment and the health and safety of the public,
including (but not limited to) the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 USC Sections 9601
et seq.; the Resource Conservation and Recovery Act ("RCRA"), 42
USC Sections 6901 et seq.; the Hazardous Materials Transportation Act, 49
USC Sections 1801 et seq.; the Federal Water Pollution Control Act (33
USC Sections 1251 et seq.), the Toxic Substances Control Act (15 USC Sections
2601 et seq.) and the Occupational Safety and Health Act (29 USC Sections
651 et seq.), and all similar state, regional or local laws,
treaties, regulations, statutes or ordinances, common law, civil
laws, or any case precedents, rulings, requirements, directives or
requests having the force of law of any foreign or domestic
governmental authority, agency or tribunal, and all foreign
equivalents thereof, as the same have been or hereafter may be
amended, and any and all analogous future laws, treaties,
regulations, statutes or ordinances, common law, civil laws, or any
case precedents, rulings, requirements, directives or requests
having the force of law of any foreign or domestic governmental
authority, agency or tribunal and the regulations promulgated
pursuant thereto, which governs: (i) the existence, cleanup and/or
remedy of contamination on property; (ii) the emission or discharge
of Hazardous Materials into the environment; (iii) the control of
hazardous wastes; (iv) the use, generation, transport, treatment,
storage, disposal, removal or recovery of Hazardous Materials; or
(v) the maintenance and development of wetlands.
"Environmental Permits" means all permits, approvals,
certificates, notifications, identification numbers, licenses and
other authorizations required under any applicable Environmental
Laws or necessary for the conduct of business.
"ERISA" means the Employee Retirement Income Security Act
of 1974 (Public Law 93-406), as amended, and in the event of any
amendment affecting any section thereof referred to in this
Agreement, that reference shall be a reference to that section as
amended, supplemented, replaced or otherwise modified.
"ERISA Affiliate" of any Person means any other Person
that for purposes of Title IV of ERISA is a member of such Person's
controlled group, or under common control with such Person, within
the meaning of Section 414 of the Internal Revenue Code of 1986, as
amended from time to time.
"ERISA Regulator" means any governmental agency (such as
the Department of Labor, the Internal Revenue Service and the
Pension Benefit Guaranty Corporation) having any regulatory
authority over any Employee Benefit Plan.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Eurocurrency Reserve Percentage" of any Bank for the
Interest Period for any LIBOR Rate Loan means the reserve
percentage applicable during such Interest Period (or if more than
one such percentage shall be so applicable, the daily average of
such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for such Bank
with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest
Period.
"Event of Default" has the meaning specified in Section
6.01.
"Federal Funds Rate" shall mean, for any day, the average
of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal
Reserve Bank of Cleveland, or, if such rate is not so published for
any day that is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three (3)
Federal funds brokers of recognized standing selected by it.
"Fee Letter" means the Fee Letter, dated February 23,
1994, between the Borrower and the Agent, as the same may be
amended or modified from time to time.
"Fiscal Quarter" means any of the four consecutive three-
month fiscal accounting periods collectively forming a Fiscal Year
of the Borrower.
"Fiscal Year" means the Borrower's regular annual
accounting period for federal income tax purposes ending December
31.
"Flood Disaster Act" has the meaning specified in Section
3.02(a)(viii).
"Guarantor" means one who pledges his credit or property
in any manner for the payment or other performance of the
Indebtedness, contract or other obligation of another, including,
without limitation, any guarantor (whether of collection or
payment), any obligor in respect of a standby letter of credit or
surety bond issued for the obligor's account, and surety, any co-
maker, any endorser, and anyone who agrees conditionally or
otherwise to make any loan, purchase or investment in order thereby
to enable another to prevent or correct a default of any kind.
"Guaranty" means the obligation of a Guarantor.
"Guaranty Agreement" means a Guaranty Agreement,
substantially in the form of Exhibit J hereto, executed or to be
executed by a Subsidiary of the Borrower.
"Hazardous Material" means and includes (i) any asbestos
or other material composed of or containing asbestos which is, or
may become, even if properly managed, friable, (ii) petroleum and
any petroleum product, including, without limitation, crude oil,
diesel fuel, gasoline, oil, fuel oil and petroleum solvents or any
distillate fraction thereof, and natural gas or synthetic natural
gas liquids or mixtures thereof; (iii) any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for
purposes of) CERCLA or RCRA, any so-called "Superfund" or
"Superlien" law, or any other applicable Environmental Laws, and
(iv) any other substance whose generation, handling, transporta-
tion, treatment or disposal is regulated pursuant to any
Environmental Laws.
"Health Care Facility" means any nursing home, retirement
center, hospital, psychiatric hospital, assisted living facility,
rehabilitation facility, medical facility, other primary care
facility and any other similar facility.
"Indebtedness" means, with respect to any Person, without
duplication, (i) indebtedness for borrowed money, (ii) obligations
to pay the deferred purchase price of property or services, (iii)
obligations as lessee under leases which shall have been or should
be, in accordance with generally accepted accounting principles,
recorded as capital leases, (iv) all obligations of such Person as
an account party in respect of letters of credit or banker's
acceptances, (v) liabilities in respect of unfunded vested benefits
under plans covered by Title IV of ERISA, (vi) obligations secured
by any Lien on the properties or assets of the Person, (vii)
obligations of such Person in respect of currency or interest rate
swap or comparable transactions and (viii) obligations under direct
or indirect Guaranties in respect of, and obligations (contingent
or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i)
through (vii) above.
"Initial Borrowing Base Report" has the meaning ascribed
to such term in Section 3.01(n).
"Insolvency Action" means either (a) a pleading of any
kind filed by a Person to seek relief from such Person's creditors,
or filed by such Person's creditors or any thereof to seek relief
of any kind against such Person, in any court or other tribunal
pursuant to any Law relating generally to the rights of creditors
or the relief of debtors or both or (b) any other action of any
kind commenced by a Person or such Person's creditors or any
thereof for the purpose of marshalling such Person's assets and
liabilities for the benefit of such Person's creditors (an
Insolvency Action includes, without limitation, a petition
commencing a case pursuant to any chapter of the Federal Bankruptcy
Code, any application for the appointment of a receiver, trustee,
liquidator or custodian for a Person or any substantial part of
such Person's assets, and any assignment by a Person for the
general benefit of such Person's creditors).
"Interest Period" means, for each of the LIBOR Rate Loans
comprising a Revolving Credit Borrowing, the period commencing on
the date of such Loans or the date of the Rate Conversion or Rate
Continuation of any Loans into such Loans and ending on the
numerically corresponding day of the period selected by the
Borrower pursuant to the provisions hereof and each subsequent
period commencing on the last day of the immediately preceding
Interest Period in respect of such Loans and ending on the last day
of the period selected by the Borrower pursuant to the provisions
hereof. The duration of each such Interest Period shall be one,
two, three or six months, in each case as the Borrower may select,
upon delivery to the Agent of a Credit Request therefor in
accordance with Section 2.02(c) hereof; provided, however, that:
(a) Interest Periods for Loans comprising part of the same
Revolving Credit Borrowing shall be of the same duration;
(b) with respect to LIBOR Rate Loans comprising any Revolving
Credit Borrowings, no Interest Period may end on a date later than
the Revolving Credit Termination Date;
(c) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day; provided, however, that if such extension
would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period
shall occur on the immediately preceding Business Day;
(d) if the Interest Period commences on a Business Day for
which there is no numerical equivalent in the calendar month in
which the Interest Period is to end, such Interest Period shall end
on the last Business Day of that calendar month; and
(e) the Borrower may not select any Interest Period ending
after the date of any mandatory reduction specified in Section
2.04(c)(iii) unless, after giving effect to such selection, the
aggregate unpaid principal amount of any then outstanding Prime
Rate Loans taken together with the principal amount of any then
outstanding LIBOR Rate Loans having Interest Periods ending on or
prior to the date of such mandatory reduction shall be at least
equal to the principal amount of the Revolving Credit Loans due and
payable on or prior to such date.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended from time to time.
"Law" means any federal, state, local or foreign law,
ordinance or regulation or any order, case precedent, ruling,
directive, judgment, injunction, award or decree or request having
the force of law or any other requirement of any governmental or
regulatory body, court, tribunal or arbitrator.
"Lease Value" means, with respect to any Borrower's
Balance Sheet Asset owned by the Borrower and leased to an
Operator, the contract purchase price with respect to the
acquisition of such property from the Borrower by such Operator as
set forth in the Operator Lease and Operator Lease Documents.
"Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Lending Office" below its
name on the signature pages hereto, or such other office of such
Bank as such Bank may from time to time specify in writing to the
Borrower and the Agent as the office at which Loans are to be made
and maintained.
"LIBOR Rate Loan" means a Loan which bears interest as
provided in Section 2.06(a)(ii).
"LIBOR Rate" means, for any Interest Period for each
LIBOR Rate Loan comprising part of the same Revolving Credit
Borrowing, the rate per annum (rounded upwards, if necessary, to
the next higher 1/16th of 1%) determined by the Agent to be the
average rate at which deposits in Dollars are offered to the Agent
by leading reference banks in the London interbank market at or
about 4 P.M. (London time) two (2) Business days before the first
day of such Interest Period in an amount substantially equal to the
amount of the NCB's LIBOR Rate Loan comprising part of such
Revolving Credit Borrowing, and for a period equal to such Interest
Period.
"Lien" means any lien, security interest or other charge
or encumbrance of any kind, or any other type of preferential
arrangement, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of
way or other encumbrance on title to real property.
"Loan" means a Revolving Credit Loan by a Bank to the
Borrower pursuant to Article II and refers to a Prime Rate Loan or
a LIBOR Rate Loan.
"Majority Banks" means at any time two or more Banks
holding in the aggregate at least 66-2/3% of the then aggregate
unpaid principal amount of the Loans held by the Banks or, if no
such principal amount is then outstanding, two or more Banks having
at least 66-2/3% of the aggregate Revolving Credit Commitments.
"Management Agreement" means, that certain Management
Agreement between the Borrower and First Toledo Corporation, dated,
January 17, 1994, and assigned to the Manager effective June 1,
1994, and as thereafter amended from time to time, subject to the
limitations of Section 5.04(i).
"Manager" means First Toledo Advisory Company, an Ohio
corporation, and its successors and assigns which act as Manager
under the Management Agreement.
"Material Adverse Effect" means (a) a material adverse
effect on the business, results of operations or financial
condition of the Borrower and its Subsidiaries, on a consolidated
basis, (b) a material adverse effect on the ability of the Borrower
to perform its obligations under this Agreement, (c) a material
adverse effect on the legality, validity or enforceability of the
Borrower's obligations under this Agreement, (d) there exists a
Material Impairment of one or more Borrowing Base Assets which in
the aggregate results in a decrease in the aggregate Asset Value of
the Borrowing Base Assets in an amount greater than or equal to ten
percent (10%) of the aggregate Asset Value of the Borrowing Base
Assets and which decrease arises in connection with failure to
comply with any Environmental Law or Environmental Permit, the
assertion of an Environmental Claim or the existence of any other
environmental conditions or (e) there at any time exists a Material
Impairment of five (5) or more Operator Fee Properties or Borrower
Fee Properties; provided, however, that, the parties' agreement
that the existence of conditions identified in clauses (d) and (e)
above shall be considered to be a Material Adverse Effect shall not
preclude an assertion by the Majority Banks that any other
condition relating to environmental matters, whether with respect
to Borrowing Base Assets or otherwise, or any other condition which
exists can be deemed, in the discretion of the Majority Banks, to
be a condition giving rise to a Material Adverse Effect as
described in clauses (a), (b) or (c) of this definition.
"Material Impairment" means (a) a material adverse effect
on the condition, value, ownership, transferability or use of any
Borrowing Base Asset, (b) a decrease in the value of any Borrowing
Base Asset in an amount greater than or equal to ten percent (10%)
of the Asset Value of such asset or (c) a material impairment of
any of the Liens granted by or under the Collateral Documents or
the enforceability or priority thereof.
"Notes" means the Revolving Credit Notes, executed and
delivered by the Borrower to the Banks under this Agreement.
"Notice of Borrowing Base Addition/Removal" means a
Notice of Borrowing Base Addition/Removal in the form of Exhibit E
hereto, delivered pursuant to Sections 2.08 and 3.03.
"Obligations" means, collectively, all principal and
interest on any Loans made hereunder (including, without
limitation, all amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 USC Section 362(a), and the operation of
Section 5.02(b) and 5.06(b) of the United States Bankruptcy Code,
11 USC Section 502(b) and Section 506(b)), all liabilities under any hedge
agreement, swap agreement or similar agreement between the Borrower
and any Bank, all liability of the Borrower under Article VII and
Article IX of this Agreement, and all fees and other liabilities,
payable to the Banks or the Agent or any thereof by the Borrower
pursuant to this Agreement, the Collateral Documents or any Related
Writing.
"Operator" means any Person operating any Health Care
Facility with which the Borrower has a contractual relationship
providing for such Person to enter into an Operator Loan, Operator
Lease or other similar financing relationships with the Borrower.
"Operator Affiliate" means, with respect to a specified
Operator, another Operator (a) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is
under common control with such Operator, (b) which beneficially
owns or holds with power to vote fifty percent (50%) or more of any
class of the voting stock of such Operator, (c) fifty percent (50%)
or more of the voting stock of which other Operator is beneficially
owned or held by such Operator, or (d) who has the power (whether
by contract, by proxy or otherwise) to elect a majority of such
Operator's Board of Directors. The term "control" means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.
"Operator Lease" means any lease entered into between an
Operator and the Borrower with respect to any Borrower Fee
Property.
"Operator Lease Documents" means any and all documents
executed and/or delivered to the Borrower by an Operator in
connection with any Operator Lease, including, without limitation,
any subordination agreement, lessee estoppel, letter of credit
issued or Guaranty executed in favor of the Borrower.
"Operator Loan" means any loan or financing made by the
Borrower to an Operator, secured by the Operator Fee Property of
such Operator.
"Operator Loan Documents" means any and all documents
executed and/or delivered to the Borrower by an Operator in
connection with any Operator Loan, including, without limitation,
any promissory note, mortgage guaranty or letter of credit, title
commitment, title insurance, insurance certificate, environmental
audit, appraisal, survey and any documents delivered in connection
with any of the foregoing.
"Operator Fee Property" means any real property owned by
an Operator in fee simple relating to an Operator Loan.
"Other Taxes" has the meaning specified in Section
9.03(c).
"Payment Office" means such office of the Agent as set
forth under its name on the signature pages hereto or such office
as may be from time to time selected by the Agent and notified in
writing by the Agent to the Borrower and the Banks as the office to
which payments are to be made by the Borrower or the Banks, as the
case may be.
"Permitted Investments" means any investment, ownership
or other interest which a REIT is permitted to make and maintain or
derive income from pursuant to and in accordance with Section 856
of the Internal Revenue Code and the rules and regulations
promulgated thereunder.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prime Rate" means, the fluctuating interest rate per
annum announced publicly by NCB in Cleveland, Ohio, from time to
time, as NCB's base rate or prime rate thereafter in effect (which
rate is not necessarily the lowest rate charged by NCB to its
borrowing customers).
"Prime Rate Loan" means a Loan which bears interest as
provided in Section 2.06(a)(i).
"Purchase Money Security Interest" has the meaning
specified in Section 5.04(e).
"Qualified Investment" means any Operator Loan or
Operator Lease with respect to which Operator Loan or Operator
Lease, the Health Care Facility related thereto or the Operator
thereof the following is true at all relevant times;
(a) the Operator of such related Health Care Facility has (i)
at least five (5) years of experience in operating a Health Care
Facility or similar health care related experience (or one of such
Operator's principals has such experience) and (ii) not defaulted
in payment under any material financing arrangement in the last
five (5) years; provided, however, that this requirement is not
satisfied with respect to the Operator of the Woodmere Health Care
Center in Southington, Connecticut (current Operator [The Mediplex
Group, Inc.] is current on payments),
(b) the Operator of such Health Care Facility has provided to
the Borrower current and historical financial statements, which
financial statements fairly present the business and results of
operations of such Operator and such Health Care Facility,
consistently applied, together with pro forma financial
information, reflecting such Operator's financial ability to repay
the financing and perform the obligations under the financing
documents; provided, however, that, the requirement of the delivery
of financial statements has not been satisfied with respect to the
following Operators of Borrowing Base Assets listed on the Initial
Borrowing Base Report: (i) Citadel Health Care Pavilion located in
St. Joseph, Missouri and (ii) The Mediplex Group, Inc. with respect
to Meridian Health Care Center located in Southington, Connecticut,
(c) such Health Care Facility is of comparable quality and
condition to the Health Care Facilities of a similar type
comprising the Borrower's Balance Sheet Assets, which quality and
condition is evaluated based upon objective standards consistently
applied and consistent with the Borrower's past practices,
(d) the Borrower has received an appraisal of such Health Care
Facility prepared and certified by a qualified M.A.I. appraiser
which appraiser has demonstrated experience in the appraisal of
Health Care Facilities and which appraisal is in substance
consistent with the Required Documentation Standards; provided,
however, that, this requirement is not satisfied with respect to
the following Borrowing Base Assets listed on the Initial Borrowing
Base Report identified in Sections 3.02(a)(xi) and 3.02(b)(vii),
(e) each Operator of such Health Care Facility obtaining
financing from the Borrower for the purchase of a Health Care
Facility has not received loan proceeds from the Borrower which,
when aggregated with all other loans made to such Operator with
respect to such Health Care Facility, exceed ninety percent (90%)
of the Appraised Value (as determined pursuant to the appraisal
meeting the requirements set forth in clause (d) of this
definition) of such Health Care Facility; provided, however, that,
this requirement is not satisfied with respect to the Health Care
Facilities with respect to the following Borrowing Base Assets
listed on the Initial Borrowing Base Report: (i) located at
Austintown, Ohio is subject to reappraisal pursuant to Section
3.02(a)(xi) and (ii) located at Southington, Connecticut has a
"loan to value ratio of 1.06 to 1.0,
(f) at the time of the making of such investment, the
financial statements of the Operator of such Health Care Facility
demonstrate that, after giving effect to a financing by the
Borrower, the ratio of the Operator's net income plus the sum of
its total Indebtedness for borrowed money (principal plus interest
plus fees) and lease expenses (including fees), income taxes and
depreciation (which calculations are reasonably consistent with
generally accepted accounting principles) to its Indebtedness for
borrowed money (principal plus interest plus fees) and lease
expenses (including fees), is not less than 1.25 to 1.0; provided,
however, that, in the event that the Operator's historical
financial statements do not demonstrate such ratio, the Borrower
may consider future increases in cash flow to the extent they are
verifiable based upon objective analysis of future events in
determining that such ratio will be met by the Operator in the
future; provided, further, that, this requirement is not satisfied
with respect to the operators of the following Borrowing Base
Assets listed on the Initial Borrowing Base Report: (i) Hutton III
Nursing Center, Inc. located in Salem, Ohio (.28 to 1.0), (ii)
Meridian Arms Living Center located in Austintown, Ohio (1.10 to
1.0), (iii) West Park Place located in Toledo, Ohio (1.09 to 1.0),
(iv) Bloomington Meadows Hospital located in Bloomington, Indiana
(.49 to 1.0) and (v) Colonial Gardens Nursing Home located in
Tallmadge, Ohio (.98 to 1.0),
(g) the Borrower (i) has completed a study of such Health Care
Facility (or proposed facility), including assessments of site
suitability as to type, geography, marketing demographics,
occupancy and barriers limiting the entry of competing facilities
into the community which study shall be consistent with the
Borrower's past practices and (ii) has confirmed the necessity of
obtaining any regulatory permits or certificates of need and that
there is a reasonable likelihood of the Operator's obtaining such
permits or certificates of need if not already obtained,
(h) the Board of Directors of the Borrower or the Investment
Committee of the Board of Directors of the Borrower has approved
the Borrower's investment in such Health Care Facility and all
other corporate or other approvals necessary for the Borrower to
consummate the transaction have been obtained,
(i) if required by the Borrower pursuant to its evaluation of
the financial stability of the Operator and the Operator's ability
to pay or repay its obligations to the Borrower, which evaluation
shall be consistent with the Borrower's past practice and
reasonable business judgment, the Operator has obtained a standby
or direct pay letter of credit or Guaranty of a financially sound
Guarantor or other third party assurance of payment in favor of the
Borrower in such amount as deemed necessary in the Borrower's
business judgment generally consistent with the Required
Documentation Standards,
(j) the Borrower has obtained such legal documents and third
party assurances in connection with the acquisition or financing of
such Health Care Facility, including, without limitation,
promissory notes, mortgages, subordination agreements, surveys,
title insurance policies, casualty insurance coverage, opinions of
legal counsel to the Operator or the Borrower, environmental audits
and other documents necessary to protect the interests of the
Borrower in transactions of the type entered into, each of which
documents is in form legally sufficient to protect the interests of
the Borrower taking into consideration the type and size of the
investment and is consistent with the form of documentation
required by prudent real estate lenders or lessors, as applicable
except to the extent set forth in the Supplemental Schedule
(Section 3.02(a) and 3.02(b)) as to Borrowing Base Assets listed on
the Initial Borrowing Base Report, and
(k) such investment is in the ordinary course of the
Borrower's business and is generally consistent with the Borrower's
past business practices.
"REIT" means a real estate investment trust.
"REMIC" means a real estate mortgage investment conduit.
"Ratable Portion" means, in respect of any Bank, the
quotient (expressed as a percentage) obtained at any time by
dividing such Bank's Revolving Credit Commitment at such time by
the aggregate amount of the Revolving Credit Commitments of all the
Banks at such time.
"Rate Continuation" means a continuation of LIBOR Rate
Loans having a particular Interest Period as LIBOR Rate Loans
having an Interest Period of the same duration pursuant to Section
2.02(h).
"Rate Conversion" refers to a conversion pursuant to
Section 2.02(h) of Loans of one Type into Loans of another Type
and, with respect to LIBOR Rate Loans, from one permissible
Interest Period to another permissible Interest Period.
"Rate Conversion/Continuation Request" means a request
for Rate Conversion or Rate Continuation in the form of Exhibit C
hereto made pursuant to Section 2.02(h).
"Rating Agency" means Standard & Poor's Corporation
("S&P") or its successor, Moody's Investors Service, Inc.
("Moody's), or its successor or Duff & Phelps ("D&P) or its
successor, or in the event that S&P, Moody's and D&P shall no
longer be nationally recognized securities rating agencies, any
other nationally recognized securities rating agency reasonably
acceptable to the Borrower and the Majority Banks.
"Receivable" means, a claim for money due or to become
due, whether classified as an account, instrument, chattel paper,
general intangible, incorporeal hereditament or otherwise, and any
proceeds of the foregoing.
"Reduction Notice" has the meaning specified in Section
2.03.
"Related Writing" means any note, mortgage, security
agreement, or other lien instrument, reimbursement agreement,
financial statement, audit report, environmental audit, notice,
Credit Request, Rate Conversion/Continuation Request, Reduction
Notice, Notice of Addition to Borrowing Base officer's certificate
or other writing of any kind which is now or hereafter required to
be delivered by or on behalf of the Borrower or any of its
Subsidiaries to the Banks and the Agent or any thereof and which is
relevant in any manner to this Agreement, including, without
limitation, the Notes, the Collateral Assignments, the Borrower
Mortgages and the other writings referred to in Article II, III or
V.
"Reportable Event" means any of the events set forth in
Section 4043 of ERISA.
"Required Documentation Standards" means the following
standards of documentation in connection with Collateral Documents
executed in favor of the Agent and Operator Leases and Operator
Loans executed in favor of the Borrower for which Eligible Operator
Loan or Eligible Operator Lease status is sought either on the
Initial Borrowing Base Report or on any subsequent Borrowing Base
Reports:
(a) with respect to all Collateral Documents executed or to
be executed in favor of the Agent for the benefit of the Banks, the
form of Borrower Mortgage, Collateral Assignment or financing
statement, shall be substantially in the form of such documents
attached to this Agreement as exhibits hereto or delivered to the
Agent on the Closing Date, with such modifications as are necessary
to (i) cause such form to comply with the filing or other legal
requirements of the jurisdiction in which such documents are to be
filed, (ii) cause such form to grant to the Agent for the benefit
of the Banks, all rights, remedies and privileges (including, any
cognovit, confession of judgment, creditor's right to non-judicial
foreclosure or non-judicial receivership or similar remedial
provisions) of a holder of a mortgage and all provisions necessary
to protect the interest of a revolving credit lender and to grant
such lender a continuing first priority security interest in real
estate and fixtures (subject to the Liens permitted by Section
5.04(d)) and (iii) cause such form to reflect specific
modifications necessary to conform such form to the real estate in
question, so long as any modification pursuant to this clause (iii)
shall not be adverse to the interest of the Agent for the benefit
of the Banks;
(b) with respect to any Operator Loan executed or to be
executed in favor of the Borrower, the form of such Operator Loan
Documents shall be substantially in the form of the Operator Loan
Documents delivered to the Agent by the Borrower and certified by
the Borrower to the Agent and the Banks as provided in Section
3.01(l) as the standard forms of documentation used by the Borrower
in connection with the Operator Loans, as reviewed by the Agent and
its counsel (and made available to the Banks upon request), with
such modifications as are necessary to (i) cause such form to
comply with the filing or other legal requirements of the
jurisdiction in which such documents are to be filed, (ii) cause
such form to grant to the Borrower, all rights, remedies and
privileges of a lender with a first priority security interest in
real estate and fixtures (subject to the Liens permitted by Section
5.04(e) and the Operator Loan Documents so reviewed) and (iii)
cause such form to reflect specific modifications necessary to
conform such form to the transaction in question, so long as any
such modification shall be reasonably necessary to accommodate the
facts applicable to the specific transaction or requested by the
Operator determined in the prudent exercise of the Borrower's
business judgment, and shall not be adverse to the interest of the
Agent for the benefit of the Banks or the security interest of the
Agent evidenced by the Collateral Assignment of Operator Loan
Documents and the Collateral Assignment of Mortgage, as the case
may be,
(c) with respect to any Borrower Fee Property and any Operator
Lease executed or to be executed in favor of the Borrower, the form
of such Operator Lease Documents shall be substantially in the form
of the Operator Loan Documents delivered to the Agent by the
Borrower and certified by the Borrower to the Agent and the Banks
as provided in Section 3.01(l) as the standard forms of
documentation used by the Borrower in connection with the Operator
Leases, as reviewed by the Agent and its counsel (and made
available to the Banks upon request), with such modifications as
are necessary to (i) cause such form to comply with the filing or
other legal requirements of the jurisdiction in which such
documents are to be filed, (ii) cause such form to grant to the
Borrower, all rights, remedies and privileges of a lessor of real
estate and fixtures (subject to the Liens permitted by Section
5.04(d) and the Operator Lease Documents so reviewed) and (iii)
cause such form to reflect specific modifications necessary to
conform such form to the transaction in question, so long as any
such modifications shall be reasonably necessary to accommodate the
facts applicable to the specific transaction or requested by the
Operator determined in the prudent exercise of the Borrower's
business judgment and shall not be adverse to the interest of the
Agent for the benefit of the Banks or the security interest of the
Agent evidenced by the Collateral Assignment of Operator Lease
Documents and the Collateral Assignment of Mortgage, as the case
may be, and
(d) with respect to the appraisals, environmental audits,
surveys, ALTA title insurance policies obtained by the Borrower
with respect to any Operator Fee Property or any Borrower Fee
Property, such documents shall be in substance consistent with the
Borrower's required documentation and due diligence as certified by
the Borrower to the Agent and the Banks as the Borrower's standards
with respect to such matters as provided in Section 3.01(l), and
satisfying any other requirements set forth in Section 3.02 and
3.03 hereof, with such modifications as do not adversely affect the
interests or Lien of the Agent or the Banks.
"Restricted Payments" shall mean (a) any dividend or
distribution in cash, property or obligations (other than in
capital stock of the Borrower or any Subsidiary of the Borrower or
in options, warrants or other securities convertible into the
capital stock of the Borrower or any Subsidiary) paid or declared
by the Borrower or any Subsidiary of the Borrower on any shares of
capital stock (now or hereafter outstanding) of the Borrower or any
Subsidiary of the Borrower or on any warrants, options or other
rights with respect to any class of capital stock (now or hereafter
outstanding) of the Borrower or any Subsidiary of the Borrower, and
(b) any application by the Borrower or any Subsidiary of the
Borrower of its funds, property or assets to the purchase,
redemption, sinking fund, or other retirement of any shares of any
class of capital stock (now or hereafter outstanding) of the
Borrower or any Subsidiary of the Borrower or warrants, options or
other rights with respect to any class of capital stock (now or
hereafter outstanding) of the Borrower or any Subsidiary of the
Borrower, and (c) any agreement by the Borrower or any Subsidiary
of the Borrower to purchase or redeem (or set aside funds to
purchase or redeem) any shares of any class of capital stock (now
or hereafter outstanding) of the Borrower or any Subsidiary of the
Borrower or any warrants, options or other rights with respect to
any class of capital stock (now or hereafter outstanding) of the
Borrower or any Subsidiary of the Borrower, and (d) any cash,
property or other obligations (other than capital stock of the
Borrower or any Subsidiary or options, warrants or other securities
convertible into the capital stock of the Borrower or any
Subsidiary) paid or payable by the Borrower or any Subsidiary of
the Borrower to the Manager or any other Person in connection with
a Special Transaction; provided that any deferred payment
obligations incurred or undertaken in connection with a Special
Transaction shall be subject to the restrictions set forth in
Section 5.04(a)(C) and 5.04(b) of this Agreement at the time such
obligations are paid and not taken at the time such obligations are
incurred or undertaken.
"Revolving Credit Borrowing" means a group of Revolving
Credit Loans of a single Type, made by the Banks on a single date
and as to which a single Interest Period is in effect (i.e. any
group of Revolving Credit Loans made by the Banks having a
different Type, or having a different Interest Period (regardless
of whether such Interest Period commences on the same date as
another Interest Period), or made on a different date shall be
considered to comprise a different Revolving Credit Borrowing).
"Revolving Credit Commitment" means, with respect to each
Bank, the Revolving Credit Commitment of such Bank as set forth
opposite such Bank's name on Schedule I hereto (as such Revolving
Credit Commitment may be reduced pursuant to Section 2.03).
"Revolving Credit Loans" means the revolving credit loans
made by the Banks to the Borrower pursuant to Section 2.02.
"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Bank, in substantially the
form of Exhibit A hereto, evidencing the aggregate indebtedness of
the Borrower to such Bank outstanding under the Revolving Credit
Loans made by such Bank.
"Revolving Credit Termination Date" means March 31, 1997,
or the earlier date of the termination in whole of the aggregate
amount of the Revolving Credit Commitments pursuant to Section 2.03
or 6.02.
"Security Agreement" means the Security Agreement
(General Intangibles) in the form of Exhibit L-1 hereto.
"Security Agreement Amendment" means an Amendment [No.
__] to Security Agreement (General Intangibles) substantially in
the form of Exhibit L-2 hereto.
"Senior Note Documents" means, that certain Note Purchase
Agreement, dated as of April 8, 1993, among the Borrower and
certain purchasers named therein, the Senior Notes and that certain
Collateral Agency Agreement, dated as of April 8, 1993, among the
Borrower, certain purchasers named therein and the Collateral Agent
named therein.
"Senior Notes" means, those certain unsubordinated notes
in the aggregate original principal amount of Fifty-Two Million
Dollars ($52,000,000), issued by the Borrower pursuant to that
certain Note Purchase Agreement, dated as of April 8, 1993, among
the Borrower and certain purchasers named therein, consisting of
the 7.16% Series A Senior Notes due 1998, in the aggregate
principal amount of Twenty-Two Million Dollars ($22,000,000), the
7.71% Series B Senior Notes due 2000, in the aggregate principal
amount of Fifteen Million Dollars ($15,000,000) and the 8.24%
Series C Senior Notes due 2003, in the aggregate principal amount
of Fifteen Million Dollars ($15,000,000).
"Solvent" means, with respect to any Person, that (i) the
present fair saleable value of the Person's assets is, as at the
date of any determination, greater than the amount that will be
required to pay the Person's probable liability on such Person's
debts as they become absolute and matured (as interpreted in
accordance with the Uniform Fraudulent Conveyances Act as enacted
by any State applicable to the Person or the Person's assets), (ii)
the fair valuation of the "assets" (as defined below) of the Person
is, as at the date of any determination, greater than the sum of
the liabilities of the Person on any "claim" (as defined below) (as
interpreted in accordance with Title 11 of the United States Code
or the Uniform Fraudulent Transfer Act as enacted in any State
applicable to the Person or the Person's assets, as the case may
be), (iii) as of the date of any determination, the Person is able
to pay all liabilities of the Person as those liabilities mature,
and (iv) the Person does not have unreasonably small capital for
the business in which it is engaged or for any business or
transaction in which it is about to engage. For the purposes of
this definition the following words have the following meanings:
"assets" means "property" (as defined below) of a Person, but does
not include (x) property to the extent it is encumbered by a valid
Lien, (y) property to the extent it is generally exempt under
applicable nonbankruptcy law or (z) an interest in property held in
the form of a tenancy by the entireties created under applicable
Law to the extent it is not subject to process by a creditor
holding a claim against only one tenant; "claim" means a right to
payment, whether or not the right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured;
"property" means anything that may be the subject of ownership.
"Special Transaction" shall mean a transaction or series
of transactions the purpose of which shall be to restructure the
Borrower as a self-administered REIT as permitted by Section
5.04(a)(C).
"Subsidiary" means a corporation or other business entity
if shares constituting a majority of its outstanding capital stock
(or other form of ownership) or constituting a majority of the
voting power in any election of directors (or shares constituting
both majorities) are (or upon the exercise of any outstanding
warrants, options or other rights would be) owned directly or
indirectly at the time in question by the corporation in question
or another subsidiary of that corporation or any combination of the
foregoing.
"Supplemental Schedule" means the schedule incorporated
into this Agreement as Schedule IV hereto.
"Taxes" has the meaning specified in Section 9.03(a).
"Title Company" means Lawyers Title Insurance Corporation
or such other national title insurance underwriter of similar
financial strength and reputation.
"Type" means, when used in respect of any Loan, the LIBOR
Rate or Prime Rate applicable to such Loan.
"UCC" means the Uniform Commercial Code as adopted by the
State of Ohio, as amended from time to time.
"United States" and "U.S." each means United States of
America.
"Wholly-Owned Subsidiary" means a corporation or other
business entity, organized under the laws of the United States, if
shares constituting one hundred percent (100%) of its outstanding
capital stock (or other form of ownership) are owned directly at
the time in question by the Borrower.
SECTION 1.02 Computation of Time Periods. In this
Agreement, for the purposes of computing periods of time from a
specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means "to
but excluding".
SECTION 1.03 Accounting Terms. All accounting and
financial terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles as in
effect from time to time; provided, however, that, notwithstanding
any change in accounting procedures permitted by Section 5.04(h),
for purposes of determining the Borrower's compliance with any
covenant set forth in Section 5.05, such terms shall be construed
in accordance with generally accepted accounting principles as in
effect on the date of this Agreement and in all cases shall be
applied on a basis consistent with those applied in the preparation
of the audited financial statements referred to in Section 4.09.
SECTION 1.04 Treatment of Subordinated Convertible Debt.
In the event that the Borrower contemplates the issuance of
subordinated convertible debt and delivers to each of the Banks a
written notice requesting that such subordinated convertible debt
not be considered as reducing the Borrower's net worth for the
purposes of Sections 5.05(a), (c) and (d) and including the term
sheet detailing the terms of such debt, the Banks agree as follows:
(i) each Bank shall review such term sheet and respond to such
request within thirty (30) calendar days of the receipt thereof,
(ii) each such Bank shall approve treating such subordinated
convertible debt as not reducing the Borrower's net worth if such
Bank determines, in the exercise of its reasonable credit judgment,
that such debt satisfies the Bank's credit requirements in effect
at the time of such request for treating debt as equity, including,
without limitation, (x) such debt's term expires after the date of
expiration of this Agreement, (y) such debt is fully subordinated
to the rights of the Banks hereunder as to payment and rights of
action and otherwise contains terms and conditions satisfactory to
each of the Banks in the reasonable exercise of its credit judgment
and (z) such debt is fully convertible to common stock of the
Borrower. Except if two (2) or more of the Banks do not approve
the treating of such subordinated convertible debt as not reducing
the Borrower's net worth, then, for the purposes of determining the
Borrower's compliance with Sections 5.05(a), (c) and (d), such
subordinated convertible debt shall be treated as equity and shall
not reduce the Borrower's net worth. Each of the Borrower, the
Banks and the Agent agrees that if any Bank does not respond to a
request complying with the terms of this Section 1.04 within thirty
(30) calendar days of the receipt of such request such Bank shall
be deemed to have denied such request.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01 The Facility.
(a) Summary. Subject to the terms and conditions set forth in
this Agreement, the Banks are hereby establishing a facility
pursuant to which Loans will be available to the Borrower on a
revolving credit basis in the aggregate amount of One Hundred Fifty
Million Dollars ($150,000,000).
(b) Purpose of the Facility. The Borrower shall use the
proceeds of Loans hereunder for (i) the acquisition of fee simple
interests in Health Care Facilities, (ii) the funding or
acquisition of Health Care Facility loans and mortgages and (iii)
the acquisition of interests in health care related REMICs.
SECTION 2.02 The Revolving Credit Loans.
(a) Revolving Credit Loans. Subject to the terms and
conditions set forth in this Agreement, each Bank severally agrees
to make Loans on a revolving credit basis (the "Revolving Credit
Loans") to the Borrower from time to time, from the date hereof to
the Revolving Credit Termination Date, in an aggregate outstanding
amount not to exceed at any time the lesser of (a) an amount equal
to such Bank's Ratable Portion of the Borrowing Base or (b) the
Revolving Credit Commitment of such Bank. Within the limits set
forth herein, the Borrower may borrow, prepay pursuant to Section
2.04(b), and reborrow Revolving Credit Loans.
(b) Revolving Credit Borrowings. Each Revolving Credit
Borrowing shall be (i) with respect to Prime Rate Loans, in an
aggregate amount not less than One Million Dollars ($1,000,000), or
any multiple thereof and (ii) with respect to LIBOR Rate Loans, in
an aggregate amount not less than Three Million Dollars
($3,000,000) or multiples of One Million Dollars ($1,000,000) in
excess thereof. The Borrower shall be entitled to have more than
one Revolving Credit Borrowing outstanding at one time; provided,
however, that the Borrower shall not be entitled to request any
Revolving Credit Borrowing which would result in any Bank's having
an aggregate of more than ten (10) LIBOR Rate Loans outstanding at
any one time.
(c) Credit Requests. Revolving Credit Loans comprising a
Revolving Credit Borrowing shall be made upon request given by the
Borrower to the Agent not later than 12:00 noon (Cleveland time)
(i) on the day which is one (1) Business Day prior to the requested
date of a proposed Revolving Credit Borrowing comprised of Prime
Rate Loans (the initial Loans must consist entirely of Prime Rate
Loans unless, in the event of a request by the Borrower, each of
the Banks shall otherwise agree that such Loans may be LIBOR Rate
Loans) and (ii) not later than four (4) Business Days prior to the
requested date of a proposed Revolving Credit Borrowing comprised
of LIBOR Rate Loans. Each such request (a "Credit Request") for a
Revolving Credit Borrowing shall be transmitted by the Borrower to
the Agent by telecopier, telex or cable (in the case of telex or
cable, confirmed in writing to the Agent prior to the date of the
requested Revolving Credit Borrowing), in substantially the form of
Exhibit B hereto, specifying therein the requested (A) date of the
Revolving Credit Loans comprising such Revolving Credit Borrowing,
(B) Type of Revolving Credit Loans comprising such Revolving Credit
Borrowing, (C) the name of the bank and the account number to which
such funds are to be disbursed, (D) aggregate amount of such
Revolving Credit Loans and (E) in the case of a proposed Revolving
Credit Borrowing comprised of LIBOR Rate Loans, the initial
Interest Period for such LIBOR Rate Loans. Together with each
Credit Request, the Borrower shall deliver to the Agent a copy of
the Borrowing Base Report as of such date. Each Credit Request
shall be irrevocable and binding on the Borrower and subject to the
indemnification provisions of Article IX. The Agent shall give to
each Bank prompt notice on the day received of each such Credit
Request by telecopier, telex or cable.
(d) Revolving Credit Notes. Each Bank's Revolving Credit
Loans shall be evidenced at all times by a Revolving Credit Note
executed and delivered by the Borrower, payable to the order of
such Bank in a principal amount equal to the Dollar amount of such
Bank's Revolving Credit Commitment in effect at the execution and
delivery of such Bank's Revolving Credit Note. Whenever the
Borrower shall obtain a Revolving Credit Borrowing, each Bank shall
endorse an appropriate entry on such Bank's Revolving Credit Note
or make an appropriate entry in a loan account in such Bank's books
and records, or both, to evidence such Bank's Revolving Credit
Loans comprising part of a Revolving Credit Borrowing. Each entry
on such Bank's Revolving Credit Note or in such Bank's books and
records shall be presumptive evidence of the data entered. Such
entries shall not be a condition to the Borrower's obligation to
pay the Obligations as provided herein.
(e) Banks to Fund Agent. Each Bank shall, before 1:00 P.M.
(Cleveland time) on the date of each Revolving Credit Borrowing,
make available to the Agent, in immediately available funds at the
account of the Agent maintained at the Payment Office as shall have
been notified by the Agent to the Banks prior to such date, such
Bank's Ratable Portion of the Revolving Credit Loans comprising
such Revolving Credit Borrowing. On the date requested by the
Borrower for a Revolving Credit Borrowing, after the Agent's
receipt of the funds representing a Bank's Ratable Portion of such
Revolving Credit Borrowing in accordance with this Section or
Section 2.02(f) and upon the Borrower's fulfillment of the
applicable conditions set forth in Article III, the Agent will make
the funds of such Bank available to the Borrower by disbursing such
funds to the credit of the Borrower's account at such bank and to
such account as indicated in the Credit Request.
(f) Availability of Funds. Unless the Agent shall have
received notice from a Bank prior to the date of any Revolving
Credit Borrowing that such Bank will not make available to the
Agent such Bank's Ratable Portion of the Revolving Credit
Borrowing, the Agent may assume that such Bank has made its Ratable
Portion of the Revolving Credit Borrowing available to the Agent on
the date of the Revolving Credit Borrowing in accordance with
Sections 2.02(a) and 2.02(e). In reliance upon such assumption,
the Agent may, but shall not be obligated to, make available to the
Borrower on such date a corresponding portion of the Revolving
Credit Borrowing. If and to the extent that such Bank shall not
have made available to the Agent its Ratable Portion of the Loan to
be made as to the Revolving Credit Borrowing, such Bank and the
Borrower severally agree to repay to the Agent, promptly upon
demand, the corresponding portion of the Revolving Credit
Borrowing, together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date
such amount is repaid to the Agent (i) in the case of the Borrower,
at the interest rate applicable at the time to Revolving Credit
Loans comprising such Revolving Credit Borrowing and (ii) in the
case of any Bank (to the extent the Borrower has not paid interest
pursuant to clause (i)), at the Federal Funds Rate. If such Bank
shall repay to the Agent such corresponding portion of the
Revolving Credit Borrowing, the amount so repaid shall constitute
such Bank's Ratable Portion as part of such Revolving Credit
Borrowing.
(g) Failure of Bank to Loan. The failure of any Bank to make
the Loan to be made by it as its Ratable Portion of any Revolving
Credit Borrowing shall not relieve any other Bank of its obligation
hereunder to make its Loan on the date of such Revolving Credit
Borrowing. No Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on the
date of any Revolving Credit Borrowing.
(h) Rate Conversion and Rate Continuation of Revolving Credit
Loans. The Borrower shall have the right, upon request delivered
by the Borrower to the Agent (i) not later than 12:00 noon
(Cleveland time) on the Business Day that Borrower desires to
convert any LIBOR Rate Loans comprising a Revolving Credit
Borrowing into Prime Rate Loans so as to comprise a Revolving
Credit Borrowing, (ii) not later than 12:00 noon (Cleveland time)
four (4) Business Days prior to a Rate Conversion, to convert any
Prime Rate Loans comprising a Revolving Credit Borrowing into LIBOR
Rate Loans for a given Interest Period so as to comprise a
Revolving Credit Borrowing, (iii) not later than 12:00 noon
(Cleveland time) four (4) Business Days prior to a Rate
Continuation, to continue any LIBOR Rate Loans comprising a given
Revolving Credit Borrowing as LIBOR Rate Loans for an additional
Interest Period of the same duration so as to comprise a Revolving
Credit Borrowing and (iv) not later than 12:00 noon (Cleveland
time) four (4) Business Days prior to a Rate Conversion, to convert
any LIBOR Rate Loans having a particular Interest Period comprising
a Revolving Credit Borrowing into LIBOR Rate Loans having a
different permissible Interest Period so as to comprise a Revolving
Credit Borrowing; provided, however, that each such Rate Conversion
or Rate Continuation shall be subject to the following:
(A) each Rate Conversion or Rate Continuation shall be made
among the Banks based upon each Bank's Ratable Portion of such
converted or continued Revolving Credit Loans comprising a
Revolving Credit Borrowing,
(B) if less than all the outstanding principal amount of the
Revolving Credit Loans comprising a Revolving Credit Borrowing is
converted or continued, the aggregate principal amount of such
Revolving Credit Loans converted or continued shall be, (i) in the
case of LIBOR Rate Loans, not less than Three Million Dollars
($3,000,000), or a multiple of One Million Dollars ($1,000,000) in
excess thereof and (ii) in the case of Prime Rate Loans, not less
than One Million Dollars ($1,000,000) or a multiple thereof,
(C) each Rate Conversion or Rate Continuation shall be
effected by each Bank by applying the proceeds of the Revolving
Credit Loan resulting from such Rate Conversion or Rate
Continuation to the Revolving Credit Loan of such Bank being
converted or continued, as the case may be, and the accrued
interest on any such Revolving Credit Loan (or portion thereof)
being converted or continued shall be paid to the Agent on behalf
of each Bank by the Borrower at the time of such Rate Conversion or
Rate Continuation,
(D) LIBOR Rate Loans shall not be converted or continued at a
time other than the end of an Interest Period applicable thereto
unless the Borrower shall pay, upon demand, any amounts due to the
Banks pursuant to Section 9.05,
(E) Revolving Credit Loans comprising a Revolving Credit
Borrowing may not be converted into or continued as LIBOR Rate
Loans less than one month prior to the Revolving Credit Termination
Date,
(F) Revolving Credit Loans comprising a Revolving Credit
Borrowing that cannot be converted into or continued as LIBOR Rate
Loans by reason of clause (E) shall be automatically converted at
the end of the Interest Period in effect for such LIBOR Rate Loans
into Prime Rate Loans comprising a Revolving Credit Borrowing,
(G) no Interest Period can be selected in connection with any
Rate Conversion or Rate Continuation ending after the date of any
mandatory reduction specified in Section 2.04(c)(iii) unless, after
giving effect to such selection, the aggregate unpaid principal
amount of any then outstanding Prime Rate Loans taken together with
the principal amount of any then outstanding LIBOR Rate Loans
having Interest Periods ending on or prior to the date of such
mandatory reduction shall be at least equal to the principal amount
of the Revolving Credit Loans due and payable on or prior to such
date.
Each such request for a conversion or continuation (a "Rate
Conversion/Continuation Request") in respect of Revolving Credit
Loans comprising a Revolving Credit Borrowing shall be transmitted
by the Borrower to the Agent, by telecopier, telex or cable (in the
case of telex or cable, confirmed in writing prior to the effective
date of the Rate Conversion or Rate Continuation requested), in
substantially the form of Exhibit C hereto, specifying (A) the
identity and amount of the Revolving Credit Loans comprising a
Revolving Credit Borrowing that the Borrower requests be converted
or continued, (B) the Type of Revolving Credit Loans into which
such Revolving Credit Loans are to be converted or continued, (C)
if such notice requests a Rate Conversion, the date of the Rate
Conversion (which shall be a Business Day) and (D) in the case of
Revolving Credit Loans comprising a Revolving Credit Borrowing
being converted into or continued as LIBOR Rate Loans, the Interest
Period for such LIBOR Rate Loans. The Agent shall promptly deliver
on the day received a copy of each such Conversion/Continuation
Request to the Banks.
SECTION 2.03 Reduction of Revolving Credit Commitments.
The Borrower may, at any time and without the payment of a premium,
in whole permanently terminate, or from time to time in part
permanently reduce, the aggregate Revolving Credit Commitments by
delivering to the Agent, not later than 12:00 noon (Cleveland time)
ten (10) Business Days immediately preceding the effective date of
the reduction, a notice of such reduction (a "Reduction Notice"),
in the form of Exhibit D hereto, stating the aggregate amount by
which the Revolving Credit Commitments are to be reduced and the
effective date of such reduction. Each reduction shall be subject
to the following:
(i) Each such reduction shall be in an aggregate principal
amount of not less than Five Million Dollars ($5,000,000) or a
multiple of One Million Dollars ($1,000,000) in excess thereof.
(ii) The Borrower shall not be permitted to reduce the
aggregate Revolving Credit Commitments unless, concurrently with
any reduction, the Borrower shall make a principal payment on each
Bank's then outstanding Revolving Credit Loans in an amount equal
to the excess, if any, of such Revolving Credit Loans over the
Revolving Credit Commitment of such Bank as so reduced.
Each reduction in the aggregate Revolving Credit Commitments
hereunder shall be made among the Banks ratably in accordance with
their Revolving Credit Commitments. On the date of each reduction,
the Borrower shall pay to the Agent for the account of the Banks
(i) the commitment fees and interest accrued through the date of
such reduction in respect of the aggregate Revolving Credit
Commitments and (ii) any amounts required pursuant to the
provisions of Article IX.
SECTION 2.04 Repayments and Prepayments.
(a) Repayment. The Borrower shall repay to the Agent for
account of the Banks the outstanding principal amount of the Loans,
together with all accrued interest and fees with respect thereto
and any other Obligations of the Borrower, on the Revolving Credit
Termination Date.
(b) Permitted Prepayments. The Borrower may, upon at least
three (3) Business Days' notice to the Agent stating the proposed
date and aggregate principal amount of the prepayment, and, upon
such notice, shall prepay the outstanding aggregate principal
amount of the Revolving Credit Loans comprising part of the same
Revolving Credit Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the
principal amount prepaid; provided, however, that (x) each partial
prepayment of Prime Rate Loans shall be in an aggregate principal
amount of One Million Dollars ($1,000,000) or any multiple thereof,
(y) each partial prepayment of LIBOR Rate Loans shall be in an
aggregate principal amount not less than Three Million Dollars
($3,000,000) or any multiple of One Million Dollars ($1,000,000) in
excess thereof and (z) any prepayment of any LIBOR Rate Loans made
on other than the last day of an Interest Period shall obligate the
Borrower to reimburse the Banks in respect thereof pursuant to
Section 9.05.
(c) Mandatory Prepayments.
(i) Revolving Credit Loans in Excess of Revolving Credit
Commitments. If, at any time, the aggregate outstanding amount of
the Revolving Credit Loans exceeds the total dollar amount of the
aggregate Revolving Credit Commitments contrary to the terms of
Section 2.02(a) (and as the same may be reduced from time to time
pursuant to Section 2.03 or amended with the consent of each of the
Banks), the Borrower shall on such day prepay an aggregate
principal amount of such Loans in an amount at least equal to such
excess, together with accrued interest to the date of such
prepayment on the principal amount prepaid to the Banks, together
with any compensation payable pursuant to Section 9.05.
(ii) Excess of Revolving Credit Loans over Borrowing Base.
Within five (5) Business Days following the delivery of a Borrowing
Base Report pursuant to Section 5.01(d), the Borrower shall prepay
the Revolving Credit Loans in the amount, if any, by which the
outstanding principal amount of the aggregate Revolving Credit
Loans exceeds the amount of the Borrowing Base set forth in such
Borrowing Base Report, together with accrued interest to the day of
such prepayment on the amount prepaid to the Banks, together with
any compensation payable pursuant to Section 9.05.
(iii) Temporary Reduction. During each of the fifteen (15)
calendar month periods commencing with the fifteen month period
commencing on the Closing Date and ending October 31, 1995, the
Borrower shall reduce the aggregate outstanding amount of the
Revolving Credit Loans to an amount less than or equal to Fifty
Million Dollars ($50,000,000) and, upon any such reduction, the
Borrower shall not permit such reduced principal amount to exceed
Fifty Million Dollars ($50,000,000) such amount for a period of
thirty (30) consecutive calendar days commencing on the first day
that the aggregate outstanding Revolving Credit Loans are so
reduced, together with any compensation payable pursuant to Section
9.05.
(iv) Prepayment from Proceeds of Equity or Debt Issuance. In
the event that the Borrower shall at any time issue any public or
private offering of debt or equity, the Borrower shall prepay the
aggregate Revolving Credit Loans outstanding on the closing date of
such issues in an amount equal to the lesser of (x) one hundred
percent (100%) of the net cash proceeds from such debt or equity
issuance or (y) the aggregate amount of all Revolving Credit Loans
outstanding on the closing date of such issuance; provided, however
that, in the event that any portion of prepayment required under
this Section 2.04(c)(iv) would cause the Borrower to incur a
compensation obligation to any Bank by reason of the prepayment of
LIBOR Rate Loans on other than the last day of an Interest Period,
so long as no Event of Default has occurred and is continuing, the
Borrower may deposit such amount with the Agent and direct the
Agent to invest such amounts in Acceptable Marketable Securities of
the Agent for such period as is necessary to avoid such obligation
but in no case maturing past the last day of the Interest Period in
question. The Agent shall apply the proceeds of any such
Acceptable Marketable Securities to the repayment of the Revolving
Credit Loans on the last day of such Interest Period. Upon the
occurrence and continuation of an Event of Default, the Agent may,
upon the request of the Majority Banks, cause any amount so
invested to be applied to the Obligations notwithstanding any
penalty arising under this Agreement or by reason of the
liquidation of such Acceptable Marketable Securities.
(v) Prepayment from Proceeds of Released Collateral. In the
event that the Borrower requests the Agent to release Collateral
pursuant to Section 2.08(b) and the aggregate Asset Value of all
Borrowing Base Assets on the Borrowing Base Report delivered
pursuant to Section 2.08(b)(iv) in connection with such release is,
less than one hundred fifty percent (150%) of the aggregate
Revolving Credit Loans outstanding on the date of such Borrowing
Base Report, the Borrower shall prepay the aggregate Revolving
Credit Loans outstanding on the date of such release in an amount
equal to the lesser of (i) the cash proceeds of the transaction
giving rise to such release (net of transaction costs) or (ii) the
amount by which the aggregate Asset Value of the Borrowing Base
Assets after such release is less than one hundred fifty percent
(150%) of the aggregate Revolving Credit Loans then outstanding;
provided, however, that this Section 2.04(c)(v) shall in no way
limit the Borrower's obligations to prepay Revolving Credit Loans
as required by Section 2.04(c)(ii); provided, further that, in the
event that any portion of prepayment required under this Section
2.04(c)(v) would cause the Borrower to incur a compensation
obligation to Bank by reason of the prepayment of LIBOR Rate Loans
on other than the last day of an Interest Period, provided no Event
of Default has occurred and is continuing, the Borrower may deposit
such amount with the Agent and direct the Agent to invest such
amount in Acceptable Marketable Securities of the Agent for such
period as is necessary to avoid such obligation but in no case
maturing past the last day of the Interest Period in question. The
Agent shall apply the proceeds of any such Acceptable Marketable
Securities to the repayment of the Revolving Credit Loans on the
last day of such Interest Period. Upon the occurrence and
continuation of an Event of Default, the Agent may, upon the
request of the Majority Banks, cause any amount so invested to be
applied to the Obligations notwithstanding any compensation arising
under this Agreement or by reason of the liquidation of such
Acceptable Marketable Securities.
The provisions of Article IX shall apply to each prepayment set
forth in this Section 2.04. Each prepayment of the aggregate
Revolving Credit Loans outstanding shall be made among the Banks in
accordance with their Ratable Portion. The Borrower shall pay to
the Agent for the account of the Banks, on the date of each
prepayment, the commitment fees and interest accrued through the
date of such prepayment.
SECTION 2.05 Fees.
(a) Revolving Credit Commitment Fee. The Borrower agrees to
pay to the Agent for the account of each Bank a commitment fee on
the average daily unused portion of such Bank's Revolving Credit
Commitment from the date of execution of this Agreement until the
Revolving Credit Termination Date at the rate of one half of one
percent (1/2 of 1%) per annum, payable quarterly in arrears on the
first day of each January, April, July and October during the term
of such Bank's Revolving Credit Commitment, commencing October 1,
1994, and on the Revolving Credit Termination Date.
(b) Agent's Fee. The Borrower agrees to pay to the Agent for
the sole account of the Agent a one-time syndication fee and an
annual fee as set forth in the Fee Letter. So long as any Bank
shall have a Revolving Credit Commitment hereunder, or any Note or
Loan shall be outstanding, the nonrefundable, nonproratable annual
fee of the Agent shall be payable, in advance for the forthcoming
year on the date of the execution of this Agreement and on each
Anniversary Date thereafter.
SECTION 2.06 Interest.
(a) Pre-Default Interest. The Borrower shall pay interest on
the unpaid principal amount of each Loan made by each Bank from the
date such Loan is advanced to the Borrower until the principal
amount of such Loan shall be paid in full at the following times
and rates per annum:
(i) Prime Rate Loans. During such periods as such Loan is a
Prime Rate Loan, a rate per annum equal at all times to the Prime
Rate, payable monthly, in arrears, on the first day of each
calendar month during such periods and on the date such Prime Rate
Loan shall be converted or paid in full (whether at maturity, by
reason of acceleration or otherwise).
(ii) LIBOR Rate Loans. During such periods as such Loan is a
LIBOR Rate Loan, a rate per annum equal at all times during each
Interest Period for such Loan to the sum of the LIBOR Rate for such
Interest Period for such Loan plus one and one-half percent (1-
1/2%) at the time of the making of such Loan, or the time of the
conversion or continuation of such Loan, as the case may be, in
accordance with Section 2.02(h), payable: (A) on the last day of
such Interest Period and (B) if such Interest Period has a duration
of more than three months, three months after the first day of such
Interest Period.
(b) Default Interest. Upon and during the continuance of an
Event of Default, the Borrower shall pay interest on the unpaid
principal amount of each Loan and on the unpaid amount of all
interest, fees and other amounts payable hereunder, payable on
demand, at a rate per annum equal at all times to two percent (2%)
above the Prime Rate in effect from time to time. The Borrower
acknowledges that this calculation will result in the accrual of
interest on interest and the Borrower expressly consents and agrees
to this provision.
(c) Additional Interest on LIBOR Rate Loans. To the extent
that any Bank shall be required under regulations of the Board of
Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, the Borrower shall pay to each such Bank
additional interest on the unpaid principal amount of each Loan of
such Bank during such periods as such Loan is a LIBOR Rate Loan,
from the date such Loan is advanced to the Borrower until the
principal amount of such Loan is paid in full or converted to a
Prime Rate Loan pursuant to Section 2.02(h), at an interest rate
per annum equal at all times to the remainder obtained by
subtracting (i) the LIBOR Rate for such Interest Period for such
LIBOR Rate Loan from (ii) the rate obtained by dividing such LIBOR
Rate by a percentage equal to one hundred percent (100%) minus the
Eurocurrency Reserve Percentage of such Bank for such Interest
Period, payable on each date on which interest is payable on such
LIBOR Rate Loan. A certificate as to the amount of such additional
interest shall be submitted to the Borrower and the Agent by such
Bank, and shall be conclusive and binding for all purposes, absent
manifest error.
(d) Interest Rate Determination.
(i) Agent Determination; Notice. The Agent shall determine
the LIBOR Rate in accordance with the definition of LIBOR Rate set
forth in Section 1.01. The Agent shall give prompt notice to the
Borrower and the Banks of the applicable interest rate determined
by the Agent for purposes of Section 2.06(a)(i) or (ii).
(ii) Failure of Borrower to Elect. If no Interest Period is
specified in any Credit Request or any Rate Conversion/Continuation
Request for any LIBOR Rate Loans comprising a Revolving Credit
Borrowing, the Borrower shall be deemed to have selected an
Interest Period with a duration of one month. If the Borrower
shall not have given notice in accordance with Section 2.02(h) to
continue any LIBOR Rate Loans comprising a Revolving Credit
Borrowing into a subsequent Interest Period (and shall not have
otherwise delivered a Rate Conversion/Continuation Request in
accordance with this Section 2.02(h) to convert such Loans), such
LIBOR Rate Loans shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof),
automatically convert into Prime Rate Loans.
SECTION 2.07 Payments and Computations.
(a) Payments. The Borrower shall make each payment hereunder
and under the Notes with respect to principal of, interest on, and
other amounts relating to Loans, not later than 12:00 noon
(Cleveland time) on the day when due in Dollars to the Agent in
immediately available funds by deposit of such funds to the Agent's
account maintained at the Payment Office. Payments received after
12:00 noon (Cleveland time) shall be deemed to have been received
on the next succeeding Business Day. The Agent will promptly
thereafter cause to be distributed like funds relating to the
payment of principal or interest or commitment fees ratably (other
than amounts payable pursuant to Section 2.05(b) solely to the
Agent) to each of the Banks for the account of its respective
Lending Office, and like funds relating to the payment of any other
amount payable to any Bank to such Bank for the account of its
Lending Office. The funds so distributed to each Bank shall in
each case be applied by such Bank in accordance with the terms of
this Agreement.
(b) Authorization to Charge Account. If and to the extent
payment owed to such Bank is not made when due hereunder or under
the Note held by such Bank, the Borrower hereby authorizes each
Bank to charge from time to time against any or all of the
Borrower's accounts with such Bank any amount so due.
(c) Computations of Interest and Fees. All computations of
interest, commitment fees and all other fees shall be made by the
Agent on the basis of a year of 360 days in each case for the
actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest or fees
are payable. Upon the request of any Bank, the Agent shall deliver
to such Bank the Agent's computation with respect to interest,
commitment fees or other fees payable hereunder. Each
determination by the Agent (or, in the case of Section 2.06(c), by
a Bank) of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Payment not on Business Day. Whenever any payment
hereunder or under the Notes shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next
succeeding Business Day, except, that, if such extension would
cause payment of interest on or principal of LIBOR Rate Loans to be
made in the next following calendar month, such payment shall be
made on the immediately preceding Business Day. Any such extension
or reduction of time shall in such case be included in the
computation of payment of interest or commitment fee, as the case
may be.
(e) Presumption of Payment in Full by Borrower. Unless the
Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume
that the Borrower has made such payment in full to the Agent on
such date. In reliance upon such assumption, the Agent may, but
shall not be obligated to, distribute to each Bank on such due date
the amount then due such Bank. If and to the extent the Borrower
shall not have made such payment in full to the Agent, each Bank
shall repay to the Agent promptly upon demand the amount
distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the
date such Bank repays such amount to the Agent, at the Federal
Funds Rate plus the amount of any costs, expenses, liabilities or
losses incurred by the Agent in connection with its distribution of
such funds.
SECTION 2.08 Addition and Release of Collateral.
Collateral shall be released upon payment in full of the
Obligations and shall also be released as hereinafter set forth:
(a) Addition of Specific Collateral. The Borrower may, from
time to time, add Operator Leases and Operator Loans to the
Borrowing Base Assets which shall be Collateral securing the Loans.
In the event that the Borrower desires to add any Operator Lease or
Operator Loan to the Borrowing Base, as Collateral, the Borrower
shall deliver a Notice of Borrowing Base Addition/Removal pursuant
to Section 3.03(a) or 3.03(b), as the case may be, together with
all documents, certificates and other deliveries required by
Section 3.03(a), 3.03(b) or 3.03(c), not less than fifteen (15)
Business Days prior to the date upon which the Borrower desires
such Operator Lease or Operator Loan to become a Borrowing Base
Asset.
(b) Release of Specific Collateral; Ordinary Course. Upon the
request of the Borrower, the Agent shall release the Collateral in
respect of any Eligible Operator Lease or Eligible Operator Loan;
provided, however, that, prior to the release of such Collateral,
the Borrower shall have:
(i) delivered to the Agent a Notice of Borrowing Base
Addition/Removal (a copy of which the Agent shall forward to the
Banks) with respect to the release of such Eligible Operator Lease
or Eligible Operator Loan,
(ii) certified to the Agent in writing (A) that such release
is either (I) required in connection with the sale of a Borrower
Fee Property in respect of such Eligible Operator Lease by the
Borrower in the ordinary course of the Borrower's business, (II)
required pursuant to the exercise by an Operator of an option to
purchase a Borrower Fee Property in respect of such Eligible
Operator Lease in accordance with the applicable Operator Lease
Documents or (III) required in connection with an Operator's
payment in full to the Borrower (whether by prepayment or
otherwise) of an Eligible Operator Loan in accordance with the
applicable Operator Loan Documents, (B) the amount of cash proceeds
(net of transaction costs) to be realized from such sale or the
exercise of such option or, in the case of the repayment or
prepayment by an Operator of an Operator Loan, the amount of such
repayment or prepayment, (C) that either (I) such amount or a
portion of such amount will be delivered to the Agent for
application to the then outstanding Revolving Credit Loans pursuant
to Section 2.04(c)(v) or (II) such amount is not required to be
delivered to the Agent pursuant to 2.04(c)(v) and (D) that no
Default then exists or would exist upon the release of such
Collateral,
(iii) delivered to the Agent such documents as are required
for the release of the Collateral Documents with respect to such
Operator Lease and the related Borrower Fee Property or such
Operator Loan and Operator Loan Documents, as the case may be, and
(iv) delivered a Borrowing Base Report reflecting the amount
of the Borrowing Base after the release of such Operator Lease or
Operator Loan.
In the event that the Borrower shall be required to deliver the
proceeds or any portion of the proceeds from the disposition of any
Borrower Fee Property or the repayment of an Operator Loan to the
Agent pursuant to Section 2.04(c)(v), (x) upon satisfaction of the
conditions set forth in this Section 2.08(b), the Agent shall
deliver executed release documents to the Title Company to be held
in escrow until the Title Company shall have received the proceeds
from the disposition of the Borrower Fee Property or the repayment
of an Operator Loan and the proceeds shall have been received by
the Agent from the Title Company for the account of the Borrower
and (y) the Agent shall apply such amounts as required by Section
2.04. In the event that the Borrower shall not be required to
deliver the proceeds from the disposition of any Borrower Fee
Property or the repayment of any Operator Loan, upon satisfaction
of the conditions set forth in this Section 2.08(b), the Agent
shall deliver executed release documents to the Borrower.
(c) Release of Collateral; Environmental Harm. In the event
that the Asset Value of any Borrowing Base Asset shall be Zero
Dollars ($0) by reason of a noncompliance with any Environmental
Law (including noncompliance with or failure to obtain any
Environmental Permit) or an Environmental Claim or other
environmental condition which noncompliance, failure or condition,
when taken singly or in the aggregate) has resulted or would, more
likely than not, result in a Material Impairment of such Borrowing
Base Asset, the Agent, with the consent of the Majority Banks, may
release any and all Liens of the Agent for the benefit of the Banks
in respect of such asset and neither the Agent nor any Bank shall
have any obligation to the Borrower by reason of such release.
(d) Release of All Collateral; BBB+ Rating Event. In the event
that D&P shall rate the unsubordinated, senior, unsecured
Indebtedness of the Borrower with a rating of "BBB+" or better (or
any other Rating Agency shall rate such Indebtedness with the
equivalent rating) for a period of at least six (6) consecutive
calendar months (or such shorter period as the holders of the
Senior Notes and the holders of any Additional Indebtedness shall
otherwise agree in writing in respect of the release of the
collateral securing the Senior Notes and such Additional
Indebtedness), the Agent shall release any and all Liens with
respect to the Collateral; provided, however, that no Collateral
shall be released pursuant to this Section 2.08(d) unless:
(i) the amount of the aggregate Indebtedness of the Borrower
secured by Liens on the Borrower's Balance Sheet Assets (other than
the Indebtedness to and Liens in favor of the Banks and the holders
of the Senior Notes) shall not exceed an amount equal to twenty
percent (20%) of the Consolidated Net Worth of the Borrower as of
the last day of the Fiscal Quarter immediately preceding the Fiscal
Quarter during which the Collateral is to be released pursuant to
this Section 2.08(d),
(ii) the Borrower shall deliver to the Agent any and all
documents required for the release of such Collateral, and
(iii) the Title Company shall notify the Agent (which the
Agent shall forward to the Banks) that the documents necessary to
release all collateral securing the Senior Notes and all collateral
securing any Additional Indebtedness have been deposited with the
Title Company and that the Title Company is under irrevocable
instruction to file such releases simultaneously with the filing of
the releases of Liens in favor of the Agent for the benefit of the
Banks.
Upon satisfaction of such conditions, the Agent shall deliver
executed release documents to the Title Company to be filed in
accordance with such notification and under escrow instructions
from the Agent that the releases of the Agents Liens are to be
released only upon the simultaneous filing of the releases of the
Liens in favor of the Senior Notes and any Additional Indebtedness.
(e) Release of Collateral; BBB Rating Event. In the event
that each holder of the Senior Notes and any Additional
Indebtedness agree in writing to release all Liens in favor of the
Senior Notes and Additional Indebtedness simultaneously with the
Release of Liens in favor of the Agent, the Agent shall release any
and all Liens with respect to the Collateral; provided, however,
that, no Collateral shall be released pursuant to this Section
2.08(e) unless:
(i) such release occurs at least one hundred eighty (180)
calendar days since the Closing Date,
(ii) the amount of the aggregate Indebtedness of the Borrower
secured by Liens on the Borrower's Balance Sheet Assets (other than
the Indebtedness to and Liens in favor of the Banks and the holders
of the Senior Notes) shall not exceed an amount equal to twenty
percent (20%) of the Consolidated Net Worth of the Borrower as of
the last day of the Fiscal Quarter immediately preceding the Fiscal
Quarter during which the Collateral is to be released pursuant to
this Section 2.08(e),
(iii) D&P shall rate the unsubordinated, senior, unsecured
Indebtedness of the Borrower with a rating of "BBB" or better (or
any other Rating Agency shall rate such Indebtedness with the
equivalent rating) and, immediately prior to the release of
Collateral pursuant to this Section 2.08(e) such Rating Agency
shall reconfirm the "BBB" rating in writing,
(iv) the Borrower shall deliver to the Agent any and all
documents required for the release of such Collateral, and
(v) the Title Company shall notify the Agent (which the Agent
shall forward to the Banks) that the documents required to release
the collateral securing the Senior Notes and all collateral
securing any Additional Indebtedness have been deposited with such
Title Company and that the Title Company is under irrevocable
instructions to file such releases simultaneously with filing of
the releases of the Liens of the Agent for the benefit of the
Banks.
Upon satisfaction of such conditions, the Agent shall deliver
executed release documents to the Title Company to be filed in
accordance with such notification and under escrow instructions
from the Agent that the releases of the Agent's Liens are to be
released only upon the simultaneous filing of the releases of the
Liens in favor of the Senior Notes and any Additional Indebtedness.
(f) Subsequent Collateralization. In the event that, after the
conditions of Section 2.08(d) or 2.08(e), as the case may be, have
been met and the Collateral has been released, D&P or any other
Rating Agency or Rating Agencies which rated the Borrower BBB+ or
BBB (or the equivalent rating of the Rating Agency or Rating
Agencies in question) and which were relied upon by the Borrower
for the purposes of Section 2.08(d) or 2.08(e) above, shall, at any
time, lower the rating of the Borrower's debt issuances to "BBB-"
or lower (or the equivalent rating of the Rating Agency in
question), the Borrower shall, within thirty (30) Business Days,
take all actions necessary to provide Liens on sufficient
Borrower's Balance Sheet Assets which qualify as Borrowing Base
Assets such that the aggregate outstanding Revolving Credit Loans
shall not exceed seventy-five percent (75%) of the aggregate Asset
Value of such Borrowing Base Assets.
(g) Release Agreements and Covenants. Upon the release of the
Collateral pursuant to Section 2.08(d) or 2.08(e), and until and
unless the Obligations are subsequently secured pursuant to Section
2.08(f):
(i) Section 5.04(e)(G) shall be ineffective and the Borrower
shall not be permitted to suffer any Liens upon its assets other
than as otherwise permitted by Section 5.04(e), except that, the
Borrower may suffer to exist Liens securing Indebtedness (other
than the Indebtedness to the Bank and the holders of the Senior
Notes and the holders of any Additional Indebtedness) so long as
the amount of such Indebtedness (including principal, accrued
interest and fees) does not at any time exceed an amount equal to
twenty percent (20%) of the Consolidated Net Worth of the Borrower,
(ii) The Borrower shall not be required to deliver a Borrowing
Base Report as required by any provision of this Agreement,
(iii) The Borrower shall not be required to comply with
Sections 2.04(c)(ii), 2.04(c)(v), 2.08(a), 2.08(b), 2.09(a),
5.03(m), 5.03(n), 5.04(n) and 5.05(e) and the Borrower shall not be
deemed to have made any representation or warranty in Article IV
relating to "Collateral", "Eligible Operator Loans", "Eligible
Operator Loan Documents", "Eligible Operator Leases" or "Eligible
Operator Lease Documents",
(iv) Upon release of the Liens in favor of the Agent pursuant
to Section 2.08(d), the Borrower shall not at any time permit or
suffer the aggregate Indebtedness of the Borrower to exceed: (A)
sixty-five percent (65%) of the aggregate Asset Value of all
unencumbered Borrower's Balance Sheet Assets or (B) in the event
D&P or any other Rating Agency shall, at any time, lower the rating
of the Borrower's debt issuances to "BBB" (or the equivalent rating
of the Rating Agency in question), sixty-percent (60%) of such
aggregate Asset Value,
(v) Upon release of the Liens in favor of the Agent pursuant
to this Section 2.08(e), the Borrower shall not at any time permit
or suffer the aggregate Indebtedness of the Borrower to exceed
sixty percent (60%) of the aggregate Asset Value of all
unencumbered Borrower's Balance Sheet Assets.
In the event that the Obligations are subsequently secured pursuant
to Section 2.08(f), this clause (g) shall cease to be effective and
the Borrower shall be required to comply with each of the
provisions of this Agreement as if the Liens on the Collateral had
not been released.
SECTION 2.09 Addition of Other Assets to Borrowing Base;
Alternative Investment Structure.
(a) Addition of Other Assets to Borrowing Base. In the event
that the Borrower is unable to add an Operator Loan or Operator
Lease to the Collateral because such Operator Loan or Operator
Lease does not meet the requirements of an Eligible Operator Loan
or an Eligible Operator Lease, the Borrower may request that the
Banks consider such Operator Loan or Operator Lease for addition to
the Collateral; provided, however, that, prior to the Banks'
consideration of such lease or loan, the Borrower shall have:
(i) delivered to each of the Banks a Notice of Borrowing Base
Addition/Removal together with each of the documents required by
Section 3.03(a) or 3.03(b) as the case may be, to the extent
applicable,
(ii) certified to the Agent and each of the Banks (A) the
eligibility, Qualified Investment or the documentation requirements
of 3.03(a) or 3.03(b), as the case may be, which such Operator
Lease or Operator Loan does not satisfy and (B) a statement
describing the Borrower's business reasons for requesting the
Banks' to consider such asset and setting forth the basis for the
Borrower's determination that the Operator Lease's or Operator
Loan's failing to satisfy the criteria set forth in clause (A)
above would not result in a Material Impairment of such Operator
Lease or Operator Loan,
(iii) delivering to each Bank a Borrowing Base Report
reflecting the effect of the addition of such Operator Loan or
Operator Lease, and
(iv) delivering to each Bank a fee in the amount of Two
Thousand Five Hundred Dollars ($2,500) in consideration of such
Bank's considering and analyzing whether to waive the noncompliance
of the Operator Loan or Operator Lease with the Qualified
Investment, eligibility or documentation requirements of this
Agreement; provided, however, that, with respect to the three (3)
Operator Leases and Operator Loans set forth on the Schedule
2.09(a), the Banks shall not require the fee set forth in this
clause (iv) (or any other fee) for the review of such Operator
Leases or Operator Loans subject to the following conditions: on or
before seven (7) Business Days after the Closing Date, the Borrower
shall have delivered to each of the Banks (A) the notice provided
by clause (i) hereof, (B) the certificate required by clause (ii)
hereof, (C) the Borrowing Base Report required by clause (iii)
hereof and (D) the documents required to be delivered pursuant to
Section 3.03(a) or 3.03(b) (except as identified in the certificate
required by clause (iii) above).
Within forty-five (45) days of the receipt by each of the Banks of
each of the above referenced items, each of the Banks agrees to
consider whether such Bank will approve the addition of such
Operator Lease or Operator Loan to the Borrowing Base Assets. Any
Bank not notifying the Borrower and the Agent of its decision
within such forty-five (45) day period shall be deemed to have
denied the Borrower's request to add such Operator Loan or Operator
Lease as a Borrowing Base Asset. Upon the consent of the Majority
Banks, such Operator Loan or Operator Lease shall become an
Eligible Operator Loan or an Eligible Operator Lease, as the case
may be. Each Operator Loan and each Operator Lease which is
permitted by the Majority Banks pursuant to this Section 2.09(a)
shall not be, at any time, determined not to be an Eligible
Operator Loan or Eligible Operator Lease by reason of the items
listed as required by clause (A) of the certificate of the Borrower
delivered pursuant to Section 2.09(a)(ii) above and each
representation and warranty with respect to Borrowing Base Assets
made by the Borrower shall not be a representation or warranty
solely as to the items specified in such certificate.
(b) Alternative Investment Structures. In the event that the
Borrower desires to finance Health Care Facilities using a
financing structure which is substantially different from the
Operator Loan and Operator Lease structures used by the Borrower on
the Closing Date, the Borrower may request that such financing
structure be approved by the Banks upon delivery to each of the
Banks of (a) a description of the proposed structure, (b) drafts of
the proposed documentation to be entered into between the Borrower
and its Operators, (c) a description of the provisions of this
Agreement which would be breached by the Borrower's entering into
such financing transactions and (d) a certification that, in the
Borrower's prudent business judgment, such structure does not
materially change the credit risk of the Borrower or the Banks.
Upon the written consent of each of the Banks, the Agent, the Banks
and the Borrower shall amend this Agreement: (x) to establish
eligibility criteria in order that transactions with such
structures may become Borrowing Base Assets and (y) to document the
investment and documentation standards for such transaction, which
standards must be acceptable to each of the Banks, in its
reasonable discretion.
SECTION 2.10 Illegality. Notwithstanding any other
provision of this Agreement, if any Bank determines that any
applicable Law, or any change therein, or any change in the
interpretation or administration of any Law by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such
Bank (or its Lending Office) with any request or directive (whether
or not having the force of law) of any such authority, central bank
or comparable agency, shall make it unlawful or impossible, or any
such governmental authority, central bank or agency asserts that it
is unlawful, for any Bank or its Lending Office to perform its
obligations hereunder to make LIBOR Rate Loans or to fund or
maintain LIBOR Rate Loans hereunder, then, upon notice to the Agent
and the Borrower by such Bank: (i) the obligation of the Banks to
make, or to convert Loans into, LIBOR Rate Loans shall be suspended
until the Agent shall notify the Borrower and the Banks that the
circumstances causing such suspension no longer exist and (ii) the
Borrower shall immediately, or at such later date, if any, as may
thereafter be permitted by relevant Law, prepay in full the then
outstanding principal amount of all LIBOR Rate Loans of all Banks,
together with interest accrued thereon and any other amounts
payable to the Banks hereunder unless the Borrower, within five
Business Days of notice from the Agent, converts all LIBOR Rate
Loans of all Banks then outstanding into Loans of another Type in
accordance with Section 2.02(h) as to which such circumstances do
not exist. Any such payment or Rate Conversion shall be subject to
the provisions of Article IX.
SECTION 2.11 Unavailability. Notwithstanding any other
provision in this Agreement, if at any time with respect to any
LIBOR Rate Loans:
(a) Inadequate Rate. Any Bank notifies the Agent that the
LIBOR Rate for any Interest Period for such LIBOR Rate Loans will
not adequately reflect the cost to such Bank of making, funding or
maintaining its LIBOR Rate Loans for such Interest Period, the
Agent shall promptly notify the Borrower and the Banks, or
(b) Unavailable Quotations. The Agent determines (which
determination shall be conclusive) that quotations of interest
rates for Dollar deposits are not being provided in the relevant
amounts or for the relevant maturities to, or the circumstances
affecting the London interbank market of deposits in Dollars make
it impracticable to, determine the LIBOR Rate, or
(c) Unavailable Deposits. Any Bank determines that Dollar
deposits of the relevant amount for the relevant Interest Period
are not available in the London interbank market of deposits of
Dollars for the purpose of funding the LIBOR Rate Loans,
then (i) each LIBOR Rate Loan will automatically, on the last day
of the then existing Interest Period therefor, convert into a Prime
Rate Loan and (ii) the obligation of the Banks to make or to
convert Loans into LIBOR Rate Loans shall be suspended until the
Agent shall notify the Borrower and the Banks that the
circumstances causing such suspension no longer exist.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01 Conditions Precedent to Initial Revolving
Credit Borrowing. The effectiveness of this Agreement and the
obligation of each Bank to make the Loans comprising the initial
Revolving Credit Borrowing is subject to the condition precedent
that the Agent shall have received the following on or before the
Closing Date, each of which shall be in form and substance
satisfactory to the Agent and, at the Agent's request, the Banks:
(a) Revolving Credit Notes. Revolving Credit Notes, in favor
of each of the Banks, in the principal amount of such Bank's
Revolving Credit Commitment, each duly executed by the Borrower.
(b) Security Agreement. A Security Agreement executed by the
Borrower as to Eligible Operator Loan Documents, Eligible Operator
Lease Documents and Cross-Collateralized Loans listed on the
Initial Borrowing Base Certificates together with UCC-1 Financing
Statements with respect thereto.
(c) Guaranty Agreement. A Guaranty Agreement executed by HCRI
Pennsylvania Properties, Inc., a Pennsylvania corporation, and a
Wholly-Owned Subsidiary of the Borrower.
(d) Borrowing Base Asset Documents. The conditions set forth
in Section 3.02(a) and 3.02(b) shall have been satisfied.
(e) Good Standing and Foreign Qualification Certificates. A
certificate of good standing from the Secretary of State or other
appropriate official of each state in which qualification is
necessary for the maintenance of good title or the enforcement of
the Borrower Mortgages in favor of the Agent and the enforcement of
the mortgages in favor of the Borrower with respect to the Eligible
Operator Loans set forth on Schedule II.
(f) Certificate of Incorporation and Good Standing. As to the
Borrower, (i) a copy of the Certificate of Incorporation of the
Borrower certified by the Secretary of State of Delaware and dated
not more than ten (10) days prior to the Closing Date and (ii) a
long form certificate of good standing certified by the Secretary
of State of Delaware and dated not more than ten (10) days prior to
the Closing Date. As to HCRI Pennsylvania Properties, Inc., (i)
copy of the Certificate of Incorporation of HCRI Pennsylvania
Properties, Inc. certified by the Secretary of the Commonwealth of
Pennsylvania and dated not more than ten (10) days prior to the
Closing Date and (ii) a long form certificate of good standing
certified by the Secretary of the Commonwealth of Pennsylvania and
dated not more than ten (10) days prior to the Closing Date.
(g) Borrower's Legal Opinion. A favorable opinion of
Shumaker, Loop & Kendrick (i) as counsel to the Borrower,
substantially in the form of Exhibits F-1, F-2 and F-3 attached
hereto, and addressing such matters as reasonably requested by the
Agent and the Banks, including without limitation, the due
execution, delivery and enforceability of the Credit Agreement, the
Revolving Credit Notes and the Collateral Documents in accordance
with its terms (as to matters of Ohio law or other applicable law
to the extent comparable to Ohio law in relevant part), subject to
customary qualifications as to bankruptcy, insolvency, equitable
principles and limitations based on commercial reasonableness, good
faith and fair dealing and (ii) as counsel to HCRI Pennsylvania
Properties, Inc. and any other Subsidiaries, as to the due
execution, delivery and enforceability of the Guaranty Agreement of
such Subsidiary against such Subsidiary in accordance with its
terms, subject to customary qualifications as to bankruptcy,
insolvency, equitable principles and limitations based on
commercial reasonableness, good faith and fair dealing.
(h) Termination Statements. A copy of all documents executed
by any lender, manufacturer, vendor and/or lender effecting a
termination of any financing statement or other document used to
perfect a security interest in any part of the Collateral in proper
form for filing in each jurisdiction wherein such financing
statements or other document shall have been filed.
(i) Lien Searches. Results of searches, in form and scope and
as of such dates as are satisfactory to the Agent, of UCC, tax,
judgment and all other liens which may have been filed against
Borrower or any Subsidiary, with respect to any of the Collateral.
(j) Consents. Evidence satisfactory to the Agent that the
Borrower has obtained, as certified by an officer of Borrower, all
documents and instruments, including all consents, authorizations,
novations and filings required under law or under any material
contractual obligations of Borrower as may be necessary for
consummation of the transactions contemplated by this Agreement and
the Related Writings.
(k) Certificate of the Borrower. A certificate executed by an
authorized officer of the Borrower certifying: (i) the resolutions
of the Board of Directors of the Borrower authorizing the
execution, performance and delivery of (A) this Agreement, (B) the
Revolving Credit Notes, (C) the Collateral Documents to which the
Borrower is a party, (D) all other Related Writings and (E) each
other document executed in connection therewith or in connection
with any of the transactions contemplated herein or therein, (ii)
the names and signatures of the officers of the Borrower executing
or attesting to such documents, (iii) the Certificate of
Incorporation and By-Laws of the Borrower, as true and correct,
(iv) compliance by the Borrower with all representations,
warranties, covenants and conditions under this Agreement and each
of the documents executed in connection herewith, (v) that Bruce G.
Thompson is the Chairman of the Board of Directors and Chief
Executive Officer of the Borrower as of such date, (vi) that
Frederic D. Wolfe is the President of the Borrower as of such date,
(vii) that each Borrower Fee Property which is the subject of a
Borrower Mortgage as of the Closing Date and each Operator Fee
Property which secures an Eligible Loan as of the Closing Date is
undamaged by fire or other casualty and is not subject to any
condemnation proceeding, (viii) the absence of any Default or Event
of Default and (ix) that there is not any material litigation with
respect to this Agreement and the transactions contemplated thereby
and otherwise substantially in the form of Exhibit G-1 attached
hereto.
(l) Certificate of any Subsidiary. A certificate executed by
an authorized officer of each Subsidiary of the Borrower
certifying: (i) the resolutions of the Board of Directors of such
Subsidiary authorizing the execution, performance and delivery of
the Guaranty Agreement to which such Subsidiary is a party and each
other document executed in connection therewith or in connection
with any of the transactions contemplated therein, (ii) the names
and signatures of the officers of the Subsidiary executing or
attesting to such documents, (iii) the Certificate of Incorporation
and By-Laws of the Subsidiary, as true and correct, (iv) compliance
by the Subsidiary with all representations, warranties, covenants
and conditions under this Agreement and each of the documents
executed in connection herewith, (iv) the absence of any Default or
Event of Default in respect of this Agreement or the Guaranty
Agreement executed by such Subsidiary and (v) that there is not any
material litigation with respect to such Guaranty contemplated
thereby and otherwise substantially in the form of Exhibit G-2
attached hereto.
(m) Required Documentation Standard Certificate. A
certificate of the Borrower certifying that, attached to such
certificate are (i) the form documents used by the Borrower and its
counsel in documenting Operator Leases and Operator Loans and (ii)
the general due diligence requirements, title insurance
requirements, insurance requirements, survey requirements and
similar related requirements of the Borrower.
(n) Solvency Certificate. A certificate as to the solvency of
the Borrower in form and substance satisfactory to the Agent and
the Banks executed by the chief financial officer and chief
operating officer of the Borrower.
(o) Borrowing Base Report. A Borrowing Base Report, dated as
of the Closing Date (the "Initial Borrowing Base Report").
(p) Assignment Agreement. The effectiveness of that certain
Assignment and Acceptance Agreement among the Agent, the Banks and
certain other banks and an acknowledgement of such agreement by the
Borrower.
(q) Credit Request and Disbursement Direction Letter. A
Credit Request and a letter from the Borrower directing the Agent
to disburse the proceeds of the initial Revolving Credit Borrowing.
(r) Payment of Syndication and Closing Fee. The Borrower
shall have paid, or directed the Agent to pay to (i) the Agent for
its own account, the syndication fee set forth in the Fee Letter
and (b) each Bank a one-time fee in an amount equal to one-half of
one percent (1/2 of 1%) of such Bank's Revolving Credit Commitment.
(s) Payment of Legal Fees. The Borrower shall pay or shall
direct the Agent to pay to the Agent's legal counsel the legal fees
and expenses of such counsel incurred (and estimated where
necessary) by the Agent through the Closing Date in connection with
the transactions contemplated by this Agreement.
SECTION 3.02 Conditions to Eligibility for Initial
Borrowing Base Assets. With respect to each Operator Lease and
Operator Loan identified on the Initial Borrowing Base Report as
Borrowing Base Assets and each Cross-Collateralized Loan related
thereto, the Agent shall have received on the Closing Date:
(a) Operator Leases. The following documents with respect to
each such Operator Lease:
(i) a copy of each Operator Lease and each Operator Lease
Document related thereto,
(ii) a Collateral Assignment of Operator Lease Documents,
substantially in the form of Exhibit I hereto, executed by the
Borrower in favor of the Agent for the benefit of the Banks which
shall amend, restate and replace any existing collateral assignment
document in respect of such Operator Lease and the related Operator
Lease Document,
(iii) except as set forth in the Supplemental Schedule,
a copy of any lessee's estoppel letter,
(iv) an opinion of Borrower's counsel in favor of the
Agent for the benefit of the Banks (delivered pursuant to Section
3.01(g) above), as to the enforceability of each Borrower Mortgage
and each Collateral Assignment of Operator Lease Documents against
the Borrower and the perfection of the security interest perfected
by the filing of UCC-1 financing statements,
(v) except as set forth in the Supplemental Schedule, a
copy of the opinion of counsel to the Operator, to the extent
received by the Borrower, with respect to each Operator Lease, as
to the enforceability of such Operator Lease against such Operator,
(vi) except as set forth in the Supplemental Schedule, a
copy of any letter of credit, pledge agreement with respect to cash
collateral or Guaranty in favor of the Borrower, in an amount equal
to at least three (3) months lease payment payments or two and one-
half percent (2 -1/2%) of the aggregate lease payments due under
such Operator Lease or such lesser amount as is identified in the
Supplemental Schedule;
(vii) a Borrower Mortgage, substantially in the form of
Exhibit H-1 or H-2 attached hereto, as may be applicable,
(viii) a survey, certified to the Agent (except as set
forth in the Supplemental Schedule), to the Borrower and to the
Title Company, which (A) shall show no easements, encroachments or
other title defects, except those which do not result in a Material
Impairment and in such form as to cause the Title Company to issue
the ALTA title insurance policy required by Section 3.02(a)(ix)
below and to remove the standard survey exception from the title
insurance policy in favor of the Agent, (B) shall be an ALTA survey
(except as set forth in the Supplemental Schedule), and (C) shall
properly certify whether the Borrower Fee Property in respect of
such Operator Lease is located in a "100-year flood plain" as
defined by the Flood Disaster Protection Act of 1973, as amended
from time to time (the "Flood Disaster Act") (except as set forth
in the Supplemental Schedule); provided, however, with respect to
Borrower Fee Properties appearing on the Supplemental Schedule
pursuant to sub-paragraph (C) above, the Borrower shall deliver, on
or before October 10, 1994, evidence satisfactory to each of the
Banks that either (1) each such Borrower Fee Property is not
located in a "100-year flood plain" as defined by the Flood
Disaster Act, or (2) if such Borrower Fee Property is located in a
"100-year flood plain" as defined by the Flood Disaster Act, such
Borrower Fee Property is properly insured with flood insurance made
available under the National Flood Insurance Act of 1968; provided,
further, any non-compliance with the Required Documentation
Standards as to the Borrower Fee Properties appearing on the
Supplemental Schedule pursuant to sub-paragraph (B) or (C) above
shall not cause the Operator Lease in respect of such Borrower Fee
Property to fail to be an Eligible Operator Lease so long as the
other requirements of this clause (viii) have been met,
(ix) an ALTA title insurance policy (or commitment with
the policy to be delivered upon receipt), issued by the Title
Company, in favor of the Agent for the benefit of the Banks,
without the "standard" or presumed exceptions for rights of parties
in possession, mechanic's liens, matters which would be disclosed
by an accurate survey and inspection of the real property in
question, and special taxes and assessments, reflecting no title
defects, survey matters, lack of vehicular access to a dedicated
public street or encumbrances which could result in a Material
Impairment and with the following endorsements: (A) an endorsement
reflecting any assignment of any existing mortgage or Lien
instrument to the Agent for the benefit of the Banks, (B) a
modification endorsement insuring the original mortgage and
reflecting as amended or modified by the Borrower Mortgage in
respect of such Borrower Fee Property as an "insured instrument"
under such policy, (C) a revolving credit endorsement, (D) a "last
dollar endorsement" if required by the Agent to ensure that the
title insurance coverage provided under such policy insures that
the Borrower Mortgage secures the last dollar of the Obligations,
(E) any other affirmative assurances and endorsements contained in
the title insurance policy in favor of the Borrower and (F) in the
event that the survey required pursuant to Section 3.02(a)(viii)
above is not certified to the Agent, an endorsement to the effect
that the Borrower Fee Property subject to the insured mortgage is
the real property shown on such survey,
(x) file-stamped copies of UCC-1 financing statements on
file with respect to such Operator Lease, executed UCC-1 financing
statements or UCC-3 financing statements assigning existing
financing statements, as the case may be, executed by the Borrower
in favor of the Agent for the benefit of the Banks,
(xi) with respect to each Health Care Facility associated
with such Operator Lease, a copy of the most current appraisal
performed by a certified M.A.I. appraiser experienced in appraising
Health Care Facilities certifying the Appraised Value of such
Health Care Facilities and dated no earlier than July 31, 1991 and,
with respect to the Health Care Facilities located at 5026 Faraon
Street, St. Joseph, Missouri and 650 South Meridian Road,
Austintown, Ohio, an appraisal dated as of a current date, by a
certified M.A.I. appraiser experienced in appraising Health Care
Facilities certifying the Appraised Value of such Health Care
Facilities,
(xii) except as set forth in the Supplemental Schedule,
a copy of the most current "phase I" environmental audit of the
Borrower Fee Property related to such Operator Lease, which audit
shall have been performed by a qualified environmental consulting
firm and, except as set forth in the Supplemental Schedule, shall
substantially conform with ASTM E 1527, together with a copy of any
other environmental audits, assessments and information with
respect to any environmental remediation conducted with respect to
such property performed subsequent to the date of such audit,
(xiii) evidence of insurance meeting the requirements of
Section 5.03(d), except for any noncompliance with Section 5.03(d)
identified in the Supplemental Schedule, reflecting the interests
of the Operator, the Borrower and the interest of the Agent, as
applicable,
(xiv) a certificate of an officer of the Borrower (A)
setting forth the calculations necessary to establish compliance
with the concentration limitations set forth in clause (h) of the
definition of Eligible Operator Lease, (B) certifying that each of
the Operator Leases and related Borrower Fee Properties set forth
in the Initial Borrowing Base Report are Eligible Operator Leases,
and (C) certifying that, all of the deliveries made pursuant to
this Section 3.02(a) are consistent with the Required Documentation
Standards.
(b) Eligible Operator Loans. The following documents with
respect to each such Operator Loan:
(i) a copy of each Operator Loan Document executed and/or
delivered to the Borrower by the Operator in connection with such
Operator Loan,
(ii) a Collateral Assignment of Loan Documents in the
form of Exhibit K attached hereto, executed by the Borrower in
favor of the Agent for the benefit of the Banks which shall amend,
restate and replace any existing collateral assignment document in
respect of such Operator Loan and the Operator Loan Documents
related thereto,
(iii) the original promissory note executed by the
Operator in favor of the Borrower,
(iv) a copy of the file-stamped copy of the mortgage
executed by an Operator in favor of the Borrower and any financing
statements or other documents filed in favor of the Borrower in
connection with such Operator Loan,
(v) a survey, certified to the Agent (except as set forth
in the Supplemental Schedule), to the Borrower and to the Title
Company, which (A) shall show no easements, encroachments or other
title defects, except those which do not result in a Material
Impairment and in such form as to cause the Title Company to remove
the standard survey exception from the title insurance policy in
favor of the Borrower and assigned to the Agent for the benefit of
the Banks, (B) shall be an ALTA survey (except as set forth in the
Supplemental Schedule), and (C) shall properly certify whether the
Operator Fee Property in respect of such Operator Loan is located
in a "100-year flood plain" as defined by the Flood Disaster
Protection Act of 1973, as amended from time to time (the "Flood
Disaster Act") (except as set forth in the Supplemental Schedule);
provided, however, with respect to Operator Fee Properties
appearing on the Supplemental Schedule pursuant to sub-paragraph
(C) above, the Borrower shall deliver, on or before October 10,
1994, evidence satisfactory to each of the Banks that either (1)
each such Operator Fee Property is not located in a "100-year flood
plain" as defined by the Flood Disaster Act, or (2) if such
Operator Fee Property is located in a "100-year flood plain" as
defined by the Flood Disaster Act, such Operator Fee Property is
properly insured with flood insurance made available under the
National Flood Insurance Act of 1968; provided, further, any
non-compliance with the Required Documentation Standards as to the
Operator Fee Properties appearing on the Supplemental Schedule
pursuant to sub-paragraph (B) or (C) above shall not cause the
Operator Loan in respect of such Operator Fee Property to fail to
be an Eligible Operator Loan so long as the other requirements of
this clause (v) have been met,
(vi) a copy of each ALTA title policy insuring the Lien
of the mortgage granted in favor of the Borrower in connection with
such Operator Loan, issued by the Title Company, in favor of the
Borrower, reflecting no encumbrances, defects in title or other
matters which could have Material Impairment, together with an
endorsement to such policy reflecting the Collateral Assignment of
Loan Documents and naming the Agent for the benefit of the Banks,
as the insured,
(vii) with respect to each Health Care Facility, within
thirty (30) Business Days after the Closing Date, a copy of the
most current appraisal performed by a certified M.A.I. appraiser
experienced in appraising Health Care Facilities certifying the
Appraised Value of such Health Care Facilities and dated no earlier
than July 31, 1991, and with respect to the Health Care Facilities
located at 3501 Executive Parkway, Toledo, Ohio and 11300 U.S. 19
South, Clearwater, Florida, an appraisal, dated as of a current
date, by a certified M.A.I. appraiser experienced in appraising
Health Care Facilities certifying the Appraised Value of such
Health Care Facilities,
(viii) except as set forth in the Supplemental Schedule,
a copy of the most current "phase I" environmental audit of the
Operator Fee Property related to such Operator Loan, which audit
shall have been performed by a qualified environmental consulting
firm and, except as set forth in the Supplemental Schedule, shall
substantially conform with ASTM E 1527, together with a copy of any
other environmental audits, assessments and information with
respect to any environmental remediation conducted with respect to
such property performed subsequent to the date of such audit,
(ix) except as set forth in the Supplemental Schedule, a
copy of each opinion letter received by the Borrower in connection
with such Eligible Operator Loan,
(x) a certificate of insurance reflecting the Borrower
and the Agent as additional insured and loss payee, each as its
interest may appear and otherwise conforming with Section 5.03(d)
except such nonconformity with Section 5.03(d) as identified in the
Supplemental Schedule,
(xi) except as set forth in the Supplemental Schedule, a
copy of any letter of credit, pledge agreement with respect to cash
collateral or guaranty in favor of the Borrower, in an amount equal
to at least three (3) months principal and interest payments or two
and one-half percent (2 -1/2%) of the aggregate principal amount of
such Operator Loan or such lesser amount as is identified in the
Supplemental Schedule,
(xii) except as set forth in the Supplemental Schedules,
a copy of any borrower's estoppel letter,
(xiii) file-stamped copies of UCC-1 financing statements
on file with respect to such Operator Loan, executed UCC-1
financing statements or UCC-3 assignments of existing financing
statements, as the case may be, executed by the Borrower in favor
of the Agent for the benefit of the Banks,
(xiv) a certificate of an officer of the Borrower (A)
setting forth the calculations necessary to establish compliance
with the concentration limitations set forth in clause (h) of the
definition of Eligible Operator Loans, (B) certifying that each of
the Operator Loans set forth in the Initial Borrowing Base Report
are Eligible Operator Loans and (C) certifying that, all of the
deliveries made pursuant to this Section 3.02(b) are consistent
with the Required Documentation Standards.
(c) Cross Collateralized Loans. With respect to Cross-
Collateralized Loans:
(i) each material Operator Loan Document thereto,
(ii) a Collateral Assignment of Operator Loan Documents,
substantially in the form of Exhibit K hereto, executed by the
Borrower in favor of the Agent for the benefit of the Banks,
(iii) file-stamped copies of UCC-1 financing statements
on file with respect to such Operator Loan, executed UCC-1
financing statements or UCC-3 assignments of existing financing
statements, as the case may be, executed by the Borrower in favor
of the Agent for the benefit of the Banks.
(d) Filings for Perfection. Evidence satisfactory to the
Agent that this Agreement, each of the Borrower Mortgages, each
Collateral Assignment of Operator Loan Documents, each Collateral
Assignment of Operator Lease Documents, each UCC-1 financing
statements (with respect to fixtures), UCC-1 financing statements
(with respect to general intangibles and instruments), each UCC-3
financing statement and any other document required by law or
reasonably requested by the Agent or any Bank to be filed,
registered or recorded in order to create or continue, in favor of
the Agent for the benefit of the Banks, a first perfected Lien
(except to the extent otherwise permitted by this Agreement) on the
Collateral described therein, have been delivered for filing,
registration or recordation in each jurisdiction and with each
governmental authority in which the filing, registration or
recordation thereof is so required or requested and the Agent shall
have received verbal confirmation from the applicable offices of
the Title Company that all such documents have been filed,
registered or recorded; provided, however, that the UCC-3
assignments delivered pursuant to Sections 3.02(a)(x), 3.02(b)(iv)
and 3.02(c)(iii) shall be filed by the Agent and shall become
effective only upon the written request of the Majority Banks.
SECTION 3.03 Addition of Borrowing Base Assets -
Deliveries. With respect to each Operator Lease or Operator Loan
(and any Cross-Collateralized Loan with respect thereto) which the
Borrower intends to add as a Borrowing Base Asset on a Borrowing
Base Report subsequent to the Closing Date, the Agent shall have
received from the Borrower the following items, each of which,
unless otherwise indicated, shall be consistent with the Required
Documentation Standards:
(a) Operator Leases. With respect to Operator Leases:
(i) each Operator Lease and each Operator Lease Documents
related thereto,
(ii) a Notice of Borrowing Base Addition/Removal,
together with a Borrowing Base Report reflecting the effect of the
addition of such Operator Lease as a Borrowing Base Asset (a copy
of which notice and report shall be forwarded to the Banks by the
Agent),
(iii) a Collateral Assignment of Operator Lease Documents
and a Security Agreement Amendment, each executed by the Borrower
in favor of the Agent for the benefit of the Banks,
(iv) to the extent received by the Borrower, a lessee's
estoppel letter executed by such Operator in favor of the Agent for
the benefit of the Banks,
(v) an opinion of Borrower's counsel in favor of the
Agent for the benefit of the Banks as to the due authorization,
execution and enforceability of any Borrower Mortgage and any
Collateral Assignment of Operator Lease Documents against the
Borrower in accordance with its terms (as to matters of Ohio law or
other applicable law to the extent comparable to Ohio law in
relevant part), subject to customary qualifications as to
bankruptcy, insolvency, equitable principles and limitations based
on commercial reasonableness, good faith and fair dealing and the
perfection of the security interest perfected by the filing of UCC-
1 financing statements,
(vi) a copy of the opinion of counsel to the Operator
with respect to each Operator Lease, if any, as to the
enforceability of such Operator Lease against such Operator, which
letter shall permit reliance thereon by assignees of the Borrower
(including the Agent and the Banks) or such counsel shall provide
a reliance letter in favor of the Agent for the benefit of the
Banks entitling the Agent and the Banks to rely on such opinion
letter,
(vii) copy of the letter of credit, pledge agreement
with respect to cash collateral (together with evidence that such
cash collateral has been deposited for the benefit of the Borrower)
or guaranty in favor of the Borrower, in an amount equal to two and
one-half percent (2-1/2%) of the total lease payments due under
such Operator Lease;
(viii) a file-stamped copy of a Borrower Mortgage,
executed by the Borrower in favor of the Agent for the benefit of
the Banks and filed in the appropriate jurisdiction (with the
recording information to be forwarded to the Agent promptly upon
receipt thereof),
(ix) an ALTA survey, certified to the Borrower, to the
Agent and to the Title Company, which shall reflect whether the
Borrower Fee Property in respect of such Operator Lease is located
in a "100-year flood plain" as defined in the Flood Disaster Act
which shall show no easements, encroachments or other title
defects, except those which do not result in a Material Impairment
and in such form as to cause the title insurance company to issue
the ALTA title insurance policy required by Section 3.03(a)(x)
below and to remove the standard survey exception from the title
insurance policy in favor of the Agent,
(x) an ALTA title insurance policy (or commitment with
the policy to be delivered upon receipt), in ALTA Form B-1970
(Revised 10-17-70 but without the 10-17-84 revisions) or, if such
form is not legally available for insurance in the state in which
the Borrower Fee Property with respect to such Operator Lease is
located, such other form and/or such other endorsements as the
Agent shall require, issued by the Title Company in favor of the
Agent for the benefit of the Banks, without the "standard" or
presumed exceptions for rights of parties in possession, mechanic's
liens, matters which would be disclosed by an accurate survey and
inspection of the real property in question, and special taxes and
assessments, reflecting no title defects, survey matters or
encumbrances which could result in a Material Impairment and with
the following endorsements: (A) a revolving credit endorsement, (B)
a "last dollar" endorsement if necessary to ensure that the title
insurance coverage provided under such policy insures that the
Borrower Mortgage secures the last dollar of the Obligations, (if
necessary), (C) an ALTA Form 9 "comprehensive" endorsement, (D) an
endorsement to the effect that the Borrower Fee Property subject to
the insured mortgage is the real property shown on the survey
(required pursuant to Section 3.03(a)(ix) above, (E) affirmative
assurance that such real property has vehicle access to a dedicated
public street and (F) any other affirmative assurances and
endorsements contained in the Title Policy in favor of the
Borrower,
(xi) file-stamped copies of UCC-1 financing statements
(fixtures and general intangibles) executed by the Borrower in
favor of the Agent for the benefit of the Banks, and filed in the
appropriate jurisdiction (with recording information to be
forwarded to the Agent promptly upon receipt thereof) and UCC-3
financing statements (assigning any UCC-1 financing statements
filed by the Borrower in respect of such Operator Lease) executed
by the Borrower in favor of the Agent for the benefit of the Banks,
(xii) a copy of the appraisal performed by a certified
M.A.I. appraiser experienced in appraising Health Care Facilities
certifying the Appraised Value of such property,
(xiii) a copy of a "phase I" environmental audit of the
Borrower Fee Property related to such Operator Lease, which audit
shall have been performed by a qualified environmental consulting
firm and shall substantially conform with ASTM E 1527 and shall be
the most current "phase I" environmental audit conducted on the
property, together with a copy of any other environmental audits,
assessments and information with respect to any environmental
remediation conducted with respect to such property performed
subsequent to the date of such audit,
(xiv) financial statements for the current fiscal year of
the Operator and of each Guarantor of the Operator with respect to
such fiscal year, and historical financial statements for at least
the immediately preceding two (2) fiscal years of the Operator and
each Guarantor of the Operator, each such financial statements
shall fairly present the business and results of operations of the
Operator and the Health Care Facility in question,
(xv) evidence of insurance meeting the requirements of
Section 5.03(d) reflecting the interests of the Operator, the
Borrower and the interest of the Agent, as applicable,
(xvi) a summary in respect of such Operator Lease, the
Health Care Facility with respect to such Operator Lease, the
related Operator Fee Property and Operator: (A) describing the
facility, (B) describing and summarizing the terms of the Operator
Lease, (C) itemizing any other Operator Loans or other Operator
Leases with respect to such Operator, (D) containing current and
historical financial information and any projected financial
information provided by the Operator and such Guarantor, (E)
summarizing the Borrower's financial analysis of the Operator and
any Guarantors based upon the Operator's and any Guarantor's
financial statements, as the case may be, (F) summarizing the
appraisal and attaching the summary pages thereof, (G) summarizing
each environmental audit with respect to the site and attaching the
summary pages thereof, (H) analyzing the suitability of the
facility and evidencing that the requirements of paragraph (g) of
the requirements for a Qualified Investment have been met and (I)
summarizing the Borrower's reasonable business conclusions based
upon the recommendations and conclusions of a qualified
environmental consultant as to the effect of any noncompliance with
Environmental Laws set forth in the environmental audit delivered
to the Agent and reasonably demonstrating why any such
noncompliance will not result in a Material Impairment,
(xvii) a certificate of an officer of the Borrower: (A)
setting forth and certifying the accuracy of the calculations
necessary to establish compliance with the concentration
limitations set forth in clause (h) of the definition of Eligible
Operator Lease, (B) certifying that such Operator Lease is an
Eligible Operator Lease and (C) certifying that, to the best of
such officer's knowledge, all statements made in the summary
referenced in clause (xvi) above are true and correct and that such
summary does not fail to state any material fact.
(b) Operator Loans. With respect to each such Operator Loan:
(i) a Notice of Borrowing Base Addition/Removal, together
with a Borrowing Base Report reflecting the effect of the addition
of such Operator Loan as a Borrowing Base Asset (a copy of which
notice and report shall be forwarded to the Agent by the Banks),
(ii) a file-stamped copy of the Collateral Assignment of
Operator Loan Documents executed by the Borrower in favor of the
Agent for the benefit of the Banks and filed in the appropriate
jurisdiction (with recording information to be forwarded to the
Agent promptly upon the receipt thereof) and a Security Agreement
Amendment, executed by the Borrower in favor of the Agent for the
benefit of the Banks together with file-stamped copies of UCC-1
financing statements (general intangibles) with respect to such
Operator Loan Documents,
(iii) the original promissory note executed by the
Operator in favor of the Borrower,
(iv) a file-stamped copy of the mortgage and any
financing statements filed in favor of the Borrower in connection
with such Operator Loan together with UCC-3 assignments with
respect to such financing statements executed (but not filed) by
the Borrower in favor of the Agent for the benefit of the Banks,
(v) a copy of each other Eligible Operator Loan Document
executed and/or delivered to the Borrower by the Operator in
connection such Eligible Operator Loan,
(vi) a copy of each opinion letter received by the
Borrower in connection with such Eligible Operator Loan stating
that the Operator Loan Documents are enforceable obligations of the
Operator, which opinion letter shall permit assignees of the
Borrower to rely thereon or such counsel shall deliver a separate
a reliance letter in favor of the Agent for the benefit of the
Banks entitling the Agent and the Banks to rely on such opinion
letter,
(vii) a copy of the letter of credit, pledge agreement
with respect to cash collateral (together with evidence that such
cash collateral has been deposited for the benefit of the Borrower)
or guaranty for the account of the Borrower, in an amount equal to
two and one-half percent (2-1/2%) of the aggregate principal amount
due with respect to the Operator Loan;
(viii) an ALTA survey, certified to the Borrower, to the
Agent and to the Title Company, which shall reflect whether the
Operator Fee in respect of such Operator Loan is located in a "100-
year flood plain" as defined in the Flood Disaster Act and which
shall show no easements, encroachments or other title defects,
except those which do not result in a Material Impairment and in
such form as to cause the title insurance company to issue the ALTA
title insurance policy required by Section 3.03(a)(ix) below and to
remove the standard survey exception from the title insurance
policy in favor of the Agent,
(ix) a copy of each ALTA title policy insuring the Lien
of the mortgage granted in favor of the Borrower in connection with
such Operator Loan, in ALTA Form B-1970 (revised 10-17-90 but
without the 10-17-84 revisions), or, if such form is not legally
available in the state in which the Operator Fee Property is
located, on such other Form as is customarily issued in such state,
issued by the Title Company, in favor of the Borrower reflecting no
encumbrances, defects in title or other matters which could have
Material Impairment, together with a separate endorsement to such
policy reflecting the Collateral Assignment of Loan Documents and
naming the Agent for the benefit of the Banks, as the insured,
(x) a copy of the appraisal performed by a certified
M.A.I. appraiser experienced in appraising Health Care Facilities
certifying the Appraised Value of such property,
(xi) a copy of a "phase I" environmental audit of the
Operator Fee Property related to such Operator Loan, which audit
shall have been performed by a qualified environmental consulting
firm and shall substantially conform with ASTM E 1527 and shall be
the most current "phase I" environmental audit conducted on the
property, together with a copy of any other environmental audits,
assessments and information with respect to any environmental
remediation conducted with respect to such property performed
subsequent to the date of such audit,
(xii) a certificate of insurance reflecting the Borrower
and the Agent as additional insured and loss payee, each as its
interests of the Borrower and the Agent, each as its interest may
appear and otherwise conforming with Section 5.03(d),
(xiii) financial statements for the current fiscal year
of the Operator and of each Guarantor of the Operator with respect
to such fiscal year, and historical financial statements for at
least the immediately preceding two (2) fiscal years of the
Operator and each Guarantor of the Operator, each of which shall
fairly present the business and results of operations of the
Operator and such Health Care Facility,
(xiv) to the extent received by the Borrower, a
borrower's estoppel letter, executed by the Operator,
(xv) a summary in respect of such Operator Loan, the
Health Care Facility with respect to such Operator Loan and the
related Operator Fee Property and Operator: (A) describing the
facility, (B) describing and summarizing the terms of the Operator
Loan, (C) itemizing any other Operator Loans or other Operator
Leases with respect to such Operator, (D) containing current and
historical financial information and any projected financial
information provided by the Operator and such Guarantor, (E)
summarizing the Borrower's financial analysis of the Operator and
any Guarantors based upon the Operator's or any Guarantor's
financial statements, as the case may be, (F) summarizing the
appraisal and attaching the summary pages thereof, (G) summarizing
each environmental audit with respect to the site and attaching the
summary pages thereof, (H) analyzing the suitability of the
facility and evidencing that the requirements of paragraph (g) of
the requirements for a Qualified Investment have been met and (I)
summarizing the Borrower's reasonable business conclusions based
upon the recommendations and conclusions of a qualified
environmental consultant as to the effect of any noncompliance with
Environmental Laws set forth in the environmental audit delivered
to the Agent and reasonably demonstrating why any such
noncompliance will not result in a Material Impairment,
(xvi) a certificate of an officer of the Borrower: (A)
setting forth and certifying the accuracy of the calculations
necessary to establish compliance with the concentration
limitations set forth in clause (h) of the definition of Eligible
Operator Loans, (B) certifying that each of the Operator Loans set
forth in the Borrowing Base Report are Eligible Operator Loans and
(C) certifying that, to the best of such officer's knowledge, all
statements made in the summary referenced in clause (xv) above are
true and correct and that such summary does not fail to state any
material fact.
(c) Cross Collateralized Loans. With respect to Cross-
Collateralized Loans:
(i) each material Operator Loan Document with respect
thereto,
(ii) a Collateral Assignment of Operator Loan Documents,
substantially in the form of Exhibit K hereto and a Security
Agreement Amendment, each executed by the Borrower in favor of the
Agent for the benefit of the Banks,
(iii) file-stamped copies of UCC-1 financing statements
on file with respect to such Operator Loan, file-stamped copies of
UCC-1 (general intangibles) executed by the Borrower with respect
to such Operator Loan Documents and or UCC-3 financing statements
assignment assigning existing financing statements executed (but
not filed) by the Borrower in favor of the Agent for the benefit of
the Banks.
(d) Filings for Perfection. Evidence that the Collateral
Assignments, Borrower Mortgages and UCC-1 financing statements
(with respect to fixtures), UCC-1 financing statements (general
intangibles), each UCC-3 financing statement, if any, and any other
document required by law or reasonably requested by the Agent or
any Bank to be filed, registered or recorded in order to create or
continue, in favor of the Agent for the benefit of the Banks, a
first perfected Lien (except to the extent otherwise permitted by
this Agreement) on the Collateral described therein, have been
delivered for filing, registration or recordation in each
jurisdiction and with each governmental authority in which the
filing, registration or recordation thereof is so required or
requested and the Agent has received written evidence that all such
filings, registrations or recordations have been made; provided,
however that, the UCC-3 Assignments delivered pursuant to Sections
3.03(a)(xi), 3.03(b)(iv) and 3.03(c)(iii) shall be filed by the
Agent and shall become effective only upon the request of the
Majority Banks.
SECTION 3.04 Conditions Precedent to all Revolving Credit
Loans.
(a) Bringdown of Representations and Warranties. The
obligation of each Bank to make a Loan on the occasion of (i) each
Revolving Credit Borrowing and (ii) each Rate Conversion or Rate
Continuation shall be subject to the further conditions precedent
that on the date of such Revolving Credit Borrowing the following
statements shall be true (and each of the giving of the applicable
Credit Request or Rate Conversion/Continuation Request and the
acceptance by the Borrower of the proceeds of such Revolving Credit
Borrowing, Rate Conversion or Rate Continuation shall constitute a
representation and warranty by the Borrower that on the date of
such Revolving Credit Borrowing, Rate Conversion or Rate
Continuation such statements are true):
(i) The representations and warranties contained in
Article IV are correct on and as of the date of such Revolving
Credit Borrowing, Rate Conversion or Rate Continuation, as the case
may be, before and after giving effect to such Revolving Credit
Borrowing, Rate Conversion or Rate Continuation, as the case may
be, and to the application of the proceeds therefrom, as though
made on and as of such date, and
(ii) No event has occurred and is continuing, or would
result from such Revolving Credit Borrowing or from the application
of the proceeds therefrom or from such Rate Continuation or Rate
Conversion, as the case may be, which constitutes a Default or an
Event of Default, and
(iii) Each then existing Subsidiary of the Borrower has
delivered to the Agent (i) a Guaranty Agreement, duly executed by
an authorized officer of such Subsidiary, (ii) a certificate in the
form of Exhibit G-2, (iii) certified copies of its organizational
documents and (iv) an opinion of counsel to such Subsidiary as to
the matters set forth in Section 3.01(g)(ii), and
(iv) In the case of a Revolving Credit Borrowing, the
proceeds of such Revolving Credit Borrowing will be used for the
purposes specified in Section 2.01(b), and
(v) There has been no event which has resulted or would,
more likely than not, result in a Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Banks
as follows:
SECTION 4.01 Existence. The Borrower and each of its
Subsidiaries is duly organized, validly existing and in good
standing under the laws of the state of its incorporation. The
Supplemental Schedule sets forth the name and address of each of
the Borrower's Subsidiaries existing as of the Closing Date, the
chief executive office of each such Subsidiary and the jurisdiction
in which each such Subsidiary is incorporated. All of the
outstanding stock of each such Subsidiary and any other Subsidiary
of the Borrower created after the Closing Date is owned by the
Borrower and is fully paid and non-assessable and owned by the
Borrower free from any security interest, option, equity or other
right of any kind. The Borrower and each of its Subsidiaries is
duly qualified to transact business in each state or other
jurisdiction in which it owns or leases any real property or in
which the nature of the business conducted makes such qualification
necessary or, if not so qualified, such failure to qualify has
neither resulted nor would, more likely than not, result in a
Material Impairment or a Material Adverse Effect. Each Subsidiary
of the Borrower is a Wholly-Owned Subsidiary.
SECTION 4.02 Power, Authorization and Consent. The
execution, delivery and performance by the Borrower of this
Agreement and by the Borrower of all Related Writings to which it
is party and the creation of all liens and security interests
provided for herein or therein (a) are within the Borrower's legal
power and authority, (b) have been duly authorized by all necessary
or proper action of the Borrower, (c) do not require the consent or
approval of any governmental body, agency, authority or any other
Person which has not been obtained and a copy thereof furnished to
the Agent and (d) will not violate (i) any provision of Law
applicable to the Borrower, (ii) any provision of the Borrower's
Certificate of Incorporation or By-laws, or (iii) any material
agreement or material indenture by which the Borrower or any
Subsidiary of the Borrower or the property of the Borrower or any
such Subsidiary is bound, except where such violation specified in
this clause (iii) has neither resulted nor would, more likely than
not, result in a Material Adverse Effect or Material Impairment,
(e) will not result in the creation or imposition of any lien or
encumbrance on any property or assets of the Borrower or any
Subsidiary of the Borrower except such Liens as are provided herein
or (f) will not result in the disqualification of the Borrower as
a REIT under Section 856 of the Internal Revenue Code. At the time
of execution of any Guaranty Agreement by any Subsidiary, the
execution, delivery and performance by such Subsidiary of such
Guaranty Agreement and of all Related Writings to which it is party
(A) are within the Subsidiary's legal power and authority, (b) have
been duly authorized by all necessary or proper action of such
Subsidiary, (c) do not require the consent or approval of any
governmental body, agency, authority or any other Person which has
not been obtained and a copy thereof furnished to the Agent and (d)
will not violate (i) any provision of Law applicable to the
Subsidiary, (ii) any provision of the Subsidiaries's Certificate or
Articles of Incorporation or By-laws or Regulations, or (iii) any
material agreement or material indenture by which the Subsidiary or
the property of such Subsidiary is bound, except where such
violation specified in this clause (iii) has neither resulted nor
would, more likely than not, result in a Materially Adverse Effect
or Material Impairment, (e) will not result in the creation or
imposition of any lien or encumbrance on any property or assets of
the Subsidiary such Liens as are provided herein or (f) will not
result in the disqualification of the Borrower as a REIT under
Section 856 of the Internal Revenue Code. No filing or registration
with or payment to any Person is required to be obtained or made on
or prior to the Closing Date in connection with the execution,
delivery and performance by the Borrower of this Agreement, the
Collateral Documents or any other Related Writing or the
transactions contemplated hereby or thereby or as a condition to
the legality, validity or enforceability of the Borrower's
obligations under this Agreement, the Collateral Documents or any
Related Writing or compliance with the terms and provisions of this
Agreement, Collateral Documents or any Related Writing executed and
delivered prior to, on or after the Closing Date, except for (i)
the recording of the Borrower Mortgages, the Collateral Assignment
of Operator Loan Documents and the filing of UCC financing
statements perfecting the interest of the Agent in and to the
Collateral or assigning to the Agent the interest of the Borrower
in and to the Collateral and (ii) such additional filings,
recordings, payment of filing fees and the like as may be necessary
(x) to continue any assignment or Lien created in respect of the
Collateral or (y) to perfect any Lien in respect of any Borrower
Fee Property, Operator Lease or Operator Loan which becomes a
Borrowing Base Asset after the Closing Date. No filing or
registration with or payment to any Person is required to be
obtained or made on or prior to the date upon which any Guaranty
Agreement is executed by a Subsidiary of the Borrower in connection
with the execution, delivery and performance by such Subsidiary of
such Guaranty Agreement or any other Related Writing or the
transactions contemplated thereby or as a condition to the
legality, validity or enforceability of such Subsidiary's
obligations under such Guaranty Agreement or compliance with the
terms and provisions thereof.
SECTION 4.03 Enforceability. This Agreement constitutes
and the Collateral Documents when duly executed will constitute,
the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower, in accordance with its respective
terms subject to any applicable insolvency or bankruptcy law of
general applicability and general principles of equity and any
limitations imposed by standards of commercial reasonableness, good
faith and fair dealing. Each Guaranty Agreement, upon the
execution and delivery thereof, constitutes the legal, valid and
binding obligations of Subsidiary which is a party thereto,
enforceable against such Subsidiary, in accordance with its
respective terms subject to any applicable insolvency or bankruptcy
law of general applicability and general principles of equity and
any limitations imposed by standards of commercial reasonableness,
good faith and fair dealing.
SECTION 4.04 Litigation; Proceedings. No action, suit,
investigation or proceeding is now pending or, to the knowledge of
Borrower, threatened against the Borrower or any of its
Subsidiaries at law, in equity or otherwise, or with respect to
this Agreement or any Related Writing, before any court, board,
commission, agency or instrumentality of any federal, state, local
or foreign government or of any agency or subdivision thereof, or
before any arbitrator or panel of arbitrators which has resulted or
would, more likely than not, result in a Material Adverse Effect.
SECTION 4.05 Taxes. As of the Closing Date, the Borrower
and each of its Subsidiaries has filed all federal, state and local
tax returns which are required to be filed by it and paid all taxes
due as shown thereon, including interest and penalties (except to
the extent, if any, permitted by Section 5.03(a)). The charges,
accruals and reserves on the books of the Borrower in respect of
taxes or other governmental charges, if any, are adequate. No tax
Liens have been filed with respect to the Borrower or any of its
Subsidiaries and no claims material to the Borrower or any of its
Subsidiaries are being asserted against the Borrower with respect
to any taxes or governmental charges, except for Liens for taxes,
assessments and governmental charges which are not yet due and
payable. With respect to each federal income tax return of the
Borrower, the statute of limitations for the assessment of such
taxes has expired through the taxable year ended December 31, 1990
and no audit is in progress and no extension of time is in force
with respect to any date on which any such return was or is to be
filed and no waiver or agreement is in force for the extension of
time for the assessment or payment of any tax.
SECTION 4.06 Title. The Borrower (a) has good and
marketable fee title to each item of real property constituting a
Borrower Fee Property, (b) has good and marketable title to each
item of Collateral and (c) has good and marketable title to all of
its other respective material properties and assets of any nature
whatsoever (including patents, trademarks, trade names, service
marks and copyrights) free and clear, in each case, of all Liens
(including infringement claims with respect to patents, trademarks,
trade names, service marks and copyrights) except Liens that are
expressly permitted by Section 5.04(e) and except that the "Health
Care REIT" and "Health Care Fund" trade names are owned by the
Manager.
SECTION 4.07 ERISA. The Supplemental Schedule sets forth
all of the Employee Benefit Plans of the Borrower and its ERISA
Affiliates. No Accumulated Funding Deficiency exists in respect of
any Employee Benefit Plan of Borrower or any of its ERISA
Affiliates which exceeds One Hundred Thousand Dollars ($100,000).
No Reportable Event has occurred in respect of any Employee Benefit
Plan which is continuing and which (i) constitutes grounds either
for termination of the plan or for court appointment of a trustee
for the administration thereof or (ii) has resulted or would, more
likely than not, result in a Material Adverse Effect. No
"prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended), has
occurred nor has the Borrower nor any of its ERISA Affiliates
incurred a liability that has resulted or would, more likely than
not, result in Material Adverse Effect. None of the Borrower or any
of its ERISA Affiliates has (i) had an obligation to contribute to
any Multiemployer Plan, as defined in Section 4001(a)(3) of ERISA,
since 1987 or (ii) incurred or reasonably expects to incur any
liability for the withdrawal from such a Multiemployer Plan which
liability has resulted or would, more likely than not, result in
Material Adverse Effect.
SECTION 4.08 Adverse Obligations; Labor Disputes.
Neither the Borrower nor any of its Subsidiaries is subject to any
contract, agreement, corporate restriction, judgment, decree or
order materially and adversely affecting its business, property,
assets, operations or condition, financial or otherwise, is a party
to any labor dispute, and, there are no strikes, slow downs,
walkouts or other concerted interruptions of operations by
employees whether or not relating to any labor contracts which have
resulted or would, more likely than not, result in a Material
Adverse Effect.
SECTION 4.09 Financial Statements. The Borrower's
audited financial statements for the Fiscal Years ended December
31, 1990, 1991, 1992 and 1993, certified by Ernst & Young, and the
Borrower's unaudited interim financial statements prepared as at
March 31, 1994, each of which has been heretofore furnished by the
Borrower to each Bank (i) have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis with those used by it during the immediately preceding fiscal
year except to the extent, if any, specifically noted therein and
(ii) fairly present in all material respects (subject to routine
year-end audit adjustments in the case of the unaudited financial
statements) the consolidating and consolidated financial condition
of the Borrower and its Subsidiaries as of the respective dates
thereof (including a full disclosure of material liabilities, if
any) and the consolidating and consolidated results of their
operations, if any, for the respective fiscal periods then ending.
As of the Closing Date, there has been no material adverse change
in the financial condition, properties or business of the Borrower
or any of its Subsidiaries since the December 31, 1993 financial
statements nor any change in the Borrower's accounting procedures
since the end of the Borrower's latest full fiscal year.
SECTION 4.10 Insurance. As of the Closing Date, the
insurance coverage of the Operators consists of those insurance
policies disclosed on the Supplemental Schedule as required by and
set forth in Section 5.03(d) hereto and in the Collateral
Documents.
SECTION 4.11 Solvency. The Borrower and each of its
Subsidiaries is Solvent.
SECTION 4.12 Investment Company Act Status. Neither the
Borrower nor any of its Subsidiaries is an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (15 U.S.C. Section 80(a)(1), et
seq.).
SECTION 4.13 Regulation G/Regulation U/Regulation X
Compliance. Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying "margin stock" (as defined by Regulation U of the Board of
Governors of the Federal Reserve System of the United States (as
amended from time to time) and all official rulings and
interpretations thereunder or thereof. No part of the proceeds of
any Revolving Credit Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately,
(i) to purchase or to extend credit to others for the purpose of
purchasing "margin stock", or to carry or to extend credit to
others for the purpose of carrying stock which will be "margin
stock" after giving effect to the Revolving Credit Loans or (ii)
for any purpose that entails a violation of, or is inconsistent
with, the provisions of the Regulations of the Board of Governors
of the Federal Reserve System of the United States, including
Regulation G, U or X.
SECTION 4.14 Environmental Compliance. Each Health Care
Facility or other real property in which the Borrower or any
Subsidiary of the Borrower has a real property interest (whether as
fee owner, operator, lessor, lessee, mortgagee or otherwise) is in
material compliance with Environmental Laws except where such
noncompliance, taken singly or taken together with all other
noncompliance with Environmental Laws, has neither resulted nor
would, more likely than not, result in a Material Adverse Effect.
There is no noncompliance with any Environmental Law or existence
of any environmental condition which, when taken singly or in the
aggregate, has resulted or would, more likely than not, result in
a Material Adverse Effect. With respect to each Borrower Fee
Property in respect of an Eligible Operator Lease (a) there are no
pending or threatened Environmental Claims against the Borrower or
against any Operator under any Operator Lease or any other
environmental condition with respect to any Borrower Fee Property
or Operator Fee Property which, taken singly or taken together with
all pending or threatened Environmental Claims, has resulted or
would, more likely than not, result in a Material Adverse Effect,
(b) the Borrower and each Operator under an Operator Lease has been
issued and is in compliance with all Environmental Permits except
where noncompliance, whether taken singly or taken together with
all other noncompliance with Environmental Permits, has resulted or
would, more likely than not, result in a Material Adverse Effect,
(c) Hazardous Materials have not been released or disposed of on
any such Borrower Fee Property or, to the best knowledge of the
Borrower, any property adjoining any such properties which, in
either case, whether taken singly or taken together with all other
releases or dispositions of Hazardous Materials, has resulted or
would, more likely than not, result in a Material Adverse Effect.
With respect to each Operator Fee Property in respect of any
Eligible Operator Loan (a) there are no pending or threatened
Environmental Claims against the Operator which, when taken singly
or taken together with all other pending or threatened
Environmental Claims, have resulted or would, more likely than not,
result in a Material Adverse Effect, (b) the Operator has been
issued and is in compliance with all Environmental Permits except
to the extent such noncompliance, when taken singly or in the
aggregate with all other such noncompliance, has neither resulted
nor would, more likely than not, result in a Material Adverse
Effect, (c) Hazardous Materials have not been released or disposed
of on any such Operator Fee Property or, to the best knowledge of
the Borrower, any property adjoining any such properties which, in
either case, when taken singly or taken with all other releases or
dispositions of Hazardous Materials, has resulted or would, more
likely than not, result in a Material Adverse Effect. No property
now owned, operated, or leased, directly or indirectly, by the
Borrower and no Operator Fee Property in respect of any Eligible
Operator Loan is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar federal or state list of sites requiring investigation or
clean-up. There are no underground storage tanks, active or
abandoned, including petroleum storage tanks, landfills, lagoons,
surface impoundments, disposal areas or disposal ponds, on or under
any property now owned, operated or leased, directly or indirectly,
by the Borrower or any of its Subsidiaries, or on or under any
Operator Fee Property in respect of any Eligible Operator Loan that
are in violation of any applicable Environmental Law except where
such violation, taken singly or taken together with all other such
violations of Environmental Laws, has neither resulted nor would,
more likely than not, result in a Material Adverse Effect. The
Borrower has not and each of its Subsidiaries has not directly
transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar federal or state list or which is the
subject of any federal, state or local enforcement actions or other
investigations which may lead to claims against the Borrower or any
of its Subsidiaries for any remedial work, damage to natural
resources or personal injury, including claims under CERCLA except
where such actions, taken singly or in the aggregate, have neither
resulted nor would, more likely than not, result in a Material
Adverse Effect. There are no polychlorinated biphenyls or friable
asbestos present at any property now owned, operated or leased,
directly or indirectly, by the Borrower or any of its Subsidiaries,
or at any Operator Fee Property in respect of any Eligible Operator
Loan in violation of any applicable Environmental Law where such
violation, taken singly or taken together with all such violations,
has resulted or would, more likely than not, result in a Material
Adverse Effect. No conditions exist at, on or under any property
now owned, operated, or leased, directly or indirectly, by the
Borrower or any of its Subsidiaries, or at, on or under any
Operator Fee Property in respect of an Eligible Operator Loan,
which, with the passage of time, or the giving of notice or both,
would give rise to liability under any Environmental Law which
liability, taken singly or together with all other such
liabilities, has resulted or would, more likely than not, result in
a Material Adverse Effect. No generation, manufacture, storage,
treatment, transportation or disposal of Hazardous Material has
occurred or is occurring on or from any property owned, operated,
or leased by the Borrower or any of its Subsidiaries, or on or from
any Operator Fee Property in respect of an Eligible Operator Loan
which, when taken singly or taken together with all such
generation, manufacture, storage, treatment, transportation or
disposal, has resulted or would, more likely than not, result in a
Material Adverse Effect.
SECTION 4.15 Environmental Laws and Permits. Without
limiting the representations made in Section 4.14, to the best
knowledge of the Borrower, there are no circumstances with respect
to any Borrower Fee Property or Operator Fee Property or the
operations of the Borrower or any of its Subsidiaries that could
reasonably be anticipated (i) to form the basis of an Environmental
Claim against the Borrower or any of its Subsidiaries or any
Borrower Fee Property or any Operator Fee Property that, taken
singly or together with all such circumstances, has resulted or
would, more likely than not, result in a Material Adverse Effect or
(ii) to cause any Health Care Facility owned, leased or funded by
the Borrower or any of its Subsidiaries or any Borrower Fee
Property or Operator Fee Property to be subject to any restrictions
on ownership, occupancy, use or transferability under any
applicable Environmental Law which have resulted or would, more
likely than not, result in a Material Adverse Effect.
SECTION 4.16 Compliance with Laws. Without limiting the
representations made in Sections 4.14 and 4.15, neither the
Borrower, nor any Subsidiary of the Borrower, nor, to the best
knowledge of the Borrower, any Operator of a Borrower Fee Property
or any owner or operator of any Operator Fee Property, is in
violation of any Law applicable to the business or properties of
the Borrower or any Subsidiary of the Borrower, except for such
minor and isolated violations when taken singly or in the aggregate
have neither resulted nor would, more likely than not, result in a
Material Adverse Effect.
SECTION 4.17 Condemnation Proceedings. There is no
condemnation proceeding pending or, to the best knowledge of the
Borrower, threatened against any Borrower Fee Property or any real
property of any Subsidiary of the Borrower. There is no
condemnation proceeding pending or, to the best knowledge of the
Borrower, threatened against any Operator Fee Property. The
improvements located on each Borrower Fee Property, each parcel of
real property owned by a Subsidiary of the Borrower and each
Operator Fee Property are in good condition and repair. No such
improvement is in material violation of any applicable zoning law
or ordinance.
SECTION 4.18 Locations. With respect to each Operator
Lease and Operator Loan which is to be listed on the Initial
Borrowing Base Report as a Borrowing Base Asset on the Closing
Date, Schedule II sets forth, the full name and address of each
Operator, each fee owner of any Operator Fee Property and the
appropriate location for the filing of Collateral Documents with
respect thereto. With respect to each Operator Lease and Operator
Loan which are not listed on the Initial Borrowing Base Report
which are listed on a Borrowing Base Report after the Closing Date,
the Borrower has informed the Agent and the Banks in writing of the
full name and address of the Operator, the name of each fee owner
of Operator Fee Property and the appropriate location for the
filing of the Collateral Documents with respect to such Operator
Lease or Operator Loan.
SECTION 4.19 Material Contracts. As of the Closing Date,
each material contract of the Borrower or any Subsidiary of the
Borrower, including, without limitation, the Senior Note Documents,
the Management Agreement, each Eligible Operator Lease Document,
each Eligible Operator Loan Document, has been duly authorized,
executed and delivered by all parties thereto, has not been amended
or otherwise modified, is in full force and effect and is binding
upon and enforceable against all parties thereto in accordance with
its terms (subject to limitations imposed by general principles of
equity (regardless whether such enforceability is considered in a
proceeding at law or in equity) and the effect of applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws
of general application relating to or affecting creditors' rights)
subject to customary qualifications as to bankruptcy, insolvency,
equitable principles and limitations based on commercial
reasonableness, good faith and fair dealing. As of the Closing
Date, the Borrower is not in default under the Senior Note
Documents and no condition exists which, with the giving of notice
or the passage of time or both, would constitute a default
thereunder.
SECTION 4.20 Full Disclosure. No information, exhibits or
reports furnished by the Borrower or any of its Subsidiaries to the
Agent or any Bank, including, without limitation, the 1993 annual
report of the Borrower, omits to state any fact necessary to make
the statements contained therein not materially misleading in light
of the circumstances and purposes for which such information was
provided. The Borrower and each of its Subsidiaries has provided
all information requested by the Agent or any Bank and all such
information is complete and accurate in all material respects.
SECTION 4.21 Liabilities. As of the Closing Date, except
for trade payables, payroll not yet due and payable, and real
estate, personal property and other similar taxes not yet due and
payable arising in the ordinary course of the business of the
Borrower and each of its Subsidiaries, neither the Borrower nor any
of its Subsidiaries has liabilities, direct or contingent, not
disclosed in the Borrower's financial statements referred to in
Section 4.09 or in the Supplemental Schedule.
SECTION 4.22 Status of the Borrower. The Borrower is
validly qualified as a REIT under Section 856 of the Internal
Revenue Code. The Borrower, its Subsidiaries, and, to the extent
necessary, the Manager, each own or hold all such licenses and
permits as are necessary or desirable in the conduct of its
business.
SECTION 4.23 Qualified Investment; Eligibility. Each of
the Borrower's Balance Sheet Assets which is not a Borrowing Base
Asset is a Qualified Investment except for any variance of any such
asset from any of the criteria set forth in the definition of
Qualified Investment which (i) was approved by the Borrower in the
exercise of the Borrower's reasonably prudent business judgment
consistent with the Borrower's past practices, (ii) was approved by
the Borrower's Board of Directors or Investment Committee of the
Borrower's Board of Directors and (iii) has neither resulted nor
would, more likely than not, result in a Material Adverse Effect or
to materially and adversely affect the condition, value, ownership,
transferability or use of any such asset. Except to the extent
itemized in the Supplemental Schedule (which itemization identifies
each clause of Section 3.02 referring to the Supplemental Schedule
with which the Borrower is not in compliance), each of the Operator
Loans and each of the Operator Leases identified on the Initial
Borrowing Base Report is, as of the Closing Date, an Eligible
Operator Lease or an Eligible Operator Loan, as the case may be.
Each of the Operator Leases which is a Borrowing Base Asset
identified on any Borrowing Base Report (other than the Initial
Borrowing Base Report) is an Eligible Operator Lease. Each of the
Operator Loans which is a Borrowing Base Asset identified on any
Borrowing Base Report (other than the Initial Borrowing Base
Report) is an Eligible Operator Loan. As to each Borrowing Base
Asset, the Borrower has no conscious awareness, after reasonable
inquiry, of any failure of the Borrower or any Operator to comply
with any Environmental Law or Environmental Permit, or the
existence of any Environmental Claim or other environmental
condition which has resulted or would, more likely than not, result
in a Material Impairment of such Borrowing Base Asset.
SECTION 4.24 Name Changes. The Borrower has not, within
the six (6) year period immediately preceding the Closing Date,
changed its name, been the surviving entity of a merger or
consolidation, or acquired all or substantially all of the assets
of any entity.
SECTION 4.25 Borrowing Base Assets. The Borrowing Base
Assets and the other Collateral securing the Obligations (other
than the Cross-Collateralized Loans) are substantially similar to
the collateral securing the Senior Notes and any Additional
Indebtedness, if secured. The quality of, and the perfection of
the security interest of the Collateral securing the Obligations
shall be of no lower quality than the collateral securing the
Senior Notes or the Additional Indebtedness, if secured.
SECTION 4.26 Other Representations. Each of the
representations and warranties made or to be made by the Borrower
or any Subsidiary in the Collateral Documents or any other Related
Writing or any Guaranty Agreement are incorporated herein by
reference on the Closing Date and on each other date on which the
representations set forth in this Article IV are required to be
made, as if set forth herein in their entirety and shall be true
and correct as of each such date.
ARTICLE V
COVENANTS OF THE BORROWER
So long as any of the Obligations shall remain unpaid, or
any Bank shall have any Revolving Credit Commitment hereunder or
any Loan shall remain outstanding, the Borrower will comply with
the following provisions unless the Majority Banks shall otherwise
consent in writing:
SECTION 5.01 Financial Information.
(a) Quarterly Financial Statements. The Borrower will furnish
to each Bank as soon as available (and in any event within forty-
five (45) days after the end of each of the first three Fiscal
Quarters of each of the Borrower's Fiscal Years), balance sheets of
the Borrower and its Subsidiaries as at the end of that Fiscal
Quarter and their statements of income, statements of shareholder's
equity and statements of cash flow for the year to the end of that
period, all prepared (but unaudited) on a consolidated and
consolidating basis, on a comparative basis with the prior year and
in accordance with generally accepted accounting principles except
as disclosed therein,
(b) Annual Consolidated Financial Statements. The Borrower
will furnish to each Bank as soon as available (and in any event
within ninety (90) days after the end of each of the Borrower's
Fiscal Years), a complete copy of the consolidated annual audit
report of the Borrower and its Subsidiaries (including, without
limitation, all consolidated financial statements of the Borrower
and its Subsidiaries therein and notes thereto) for that Fiscal
Year which shall be:
(i) prepared on a consolidated basis, on a comparative
basis with the prior year and in accordance with generally accepted
accounting principles except as disclosed therein,
(ii) audited and certified (without qualification as to
generally accepted accounting principles), by Ernst & Young or by
other independent public accountants selected by the Borrower and
meeting the reasonable satisfaction of the Majority Banks and
(iii) accompanied by the accountants' management report,
if applicable, relating thereto,
(c) Annual Consolidating Financial Statements. The Borrower
will furnish to each Bank as soon as available (and in any event
within ninety (90) days after the end of each of the Borrower's
Fiscal Years) a complete copy of the unaudited consolidating
financial statements of the Borrower and its Subsidiaries
(including any notes thereto) for that Fiscal Year.
(d) Borrower's Certificates and Reports. The Borrower will
furnish to each Bank:
(i) concurrently with the financial statements delivered
in connection with clause (a), (b) and (c) above, a certificate of
the Borrower by the chief financial officer of the Borrower,
certifying that: (A) those financial statements fairly present in
all material respects the financial condition and results of
operations of the Borrower and its Subsidiaries subject (in the
case of interim financial statements) to routine year-end audit
adjustments and (B) no Default then exists or, if any does, a brief
description thereof and of the Borrower's intentions in respect
thereof,
(ii) within forty-five (45) days after the end of any
Fiscal Quarter and with the financial statements delivered in
connection with clause (b) above, a certificate of the Borrower by
the chief financial officer of the Borrower, in the form of Exhibit
M-1 hereto, setting forth: (A) the calculations necessary to
determine whether or not the Borrower and its Subsidiaries are in
compliance with the concentration limitations set forth in Sections
5.04(p), (q) and (r) and the general financial standards set forth
in Section 5.05 and (B) certifying that no Default then exists or
if any does, a brief description thereof and of the Borrower's
intention in respect thereof,
(iii) within forty-five (45) days after the end of any
Fiscal Quarter, a Borrowing Base Report in the form of Exhibit M-2
hereto, (A) setting forth the Borrower's Borrowing Base Assets as
at the end of that Fiscal Quarter, (B) specifying the date such
asset became a Borrowing Base Asset, (C) specifying the Appraised
Value, Carrying Value, Lease Value or such lesser value
attributable to any Borrowing Base Asset and Operator's name with
respect to each Borrowing Base Asset, (D) setting forth the results
with respect to such Operator which are necessary to calculate the
Borrower's compliance with Section 5.05(e) and (E) stating that
each of the certifications with respect to the Borrowing Base
Assets made on the Closing Date or on the date such asset became a
Borrowing Base Asset remain true and correct in all material
respects each as certified by the chief financial officer of the
Borrower as being true and complete to the best of such officer's
knowledge and belief,
(iv) within fifteen (15) days after the Agent has
notified the Borrower that the amount of the then outstanding
Revolving Credit Loans exceeds the amount of the Borrowing Base or
the Borrower becomes aware of an event which, in its good faith
judgment, would reduce the Asset Value of any Eligible Operator
Lease or Eligible Operator Loan by more than ten percent (10%), a
Borrowing Base Report certified by the chief financial officer of
the Borrower to be true and complete to the best of such officer's
knowledge and belief,
(v) within thirty (30) days after the end of any Fiscal
Quarter, a schedule in the form of Exhibit M-3 reflecting the aging
of delinquent lease and mortgage Receivables for all of Borrower's
Operator Leases and Operator Loans and in each case where a
Receivable is past due over sixty (60) days, a report on the status
of such Receivable,
(vi) within forty-five (45) days after the end of any
Fiscal Quarter, a schedule in the form of Exhibit M-4 reflecting
the Borrower's recorded liabilities, unfunded commitments,
Consolidated Contingent Liabilities and other material items and
(vii) promptly after the Borrower's receipt thereof, a
copy of any special audits of the Borrower's properties, assets or
operations conducted by the Borrower's auditors and a copy of any
letters to the Borrower from the Borrower's auditors in connection
with the preparation of the Borrower's annual audited report.
(e) Publicly Filed Information. The Borrower will furnish to
each Bank promptly when filed (in final form) or sent, a copy of:
(i) each registration statement, Form 10-K annual report,
Form 10-Q quarterly report, Form 8-K current report or similar
document filed by the Borrower with the Securities and Exchange
Commission (or any similar federal agency having regulatory
jurisdiction over the Borrower's securities) and
(ii) each proxy statement, annual report, certificate,
notice or other document sent by the Borrower to the holders of any
of its securities (or any trustee under any indenture which secures
any of its securities or pursuant to which such securities are
issued),
(f) Other Information. The Borrower will furnish to each
Bank, promptly upon any Bank's written request, such other
information about the financial condition, properties and
operations of the Borrower or any of its Subsidiaries and their
Employee Benefit Plans as that Bank may from time to time
reasonably request.
SECTION 5.02 Notices.
(a) Notice of Default; Misrepresentation. The Borrower shall
give each Bank (i) prompt written notice as soon as possible, and
in any event within five (5) Business Days, after an executive
officer of the Borrower or of any Subsidiary (A) knows of the
occurrence of any Default or Event of Default or of any development
which in such executive officer's reasonable belief would
materially and adversely affect the properties, business prospects,
profits or financial or other condition of the Borrower or any of
its Subsidiaries or (B) reasonably believes that any representation
or warranty made in this Agreement or any Related Writing shall for
any reasons have ceased in any material respect to be true and
complete and (ii) a statement on behalf of the Borrower executed by
the chief financial officer of the Borrower or such Subsidiary
setting forth the details of such Default or Event of Default or
such development and the action that the Borrower has taken or
proposes to take with respect thereto.
(b) Notice of Default under ERISA. If Borrower shall receive
notice from any ERISA Regulator or otherwise have actual knowledge
that a Default under ERISA exists with respect to any Employee
Benefit Plan, Borrower shall notify each Bank of the occurrence of
such Default under ERISA, within five (5) days after receiving such
notice or obtaining such knowledge and shall: (i) so long as the
Default under ERISA has not been corrected to the satisfaction of,
or waived in writing by the party giving notice, the Borrower shall
thereafter treat as a current liability (if not otherwise so
treated) all liability of Borrower or its Subsidiary that would
arise by reason of the termination of or withdrawal from such
Employee Benefit Plan if such plan was then terminated, and (ii)
within fifteen (15) days of the receipt of such notice or obtaining
such knowledge, furnish to each Bank a current consolidated balance
sheet of Borrower with the amount of the current liability referred
to above certified by the independent public accountant set forth
in Section 5.01(b)(ii).
(c) Notice of Litigation. The Borrower shall give each Bank
prompt, and in any event within five (5) Business Days of the date
the Borrower or any of its Subsidiaries becomes aware or should
become aware of, notice of (i) any suit at law or in equity filed
or threatened to be filed against the Borrower or any of its
Subsidiaries involving money or property valued in excess of Five
Million Dollars ($5,000,000), except where the same is fully
covered by insurance and the insurer has accepted liability
therefor, and (ii) any litigation, investigation or proceeding
before or by any administrative or governmental agency, department,
bureau, commission or board the effect of which would be to limit,
prohibit or restrict materially the manner in which the Borrower or
any of its Subsidiaries presently conducts its business.
(d) Taxes. The Borrower shall give each Bank prompt, and in
any event within ten (10) days, notice of the receipt by the
Borrower or any of its Subsidiaries from the Internal Revenue
Service or any other federal, state, local, domestic or foreign
taxing authority any allegation of any default by the Borrower or
any of its Subsidiaries in the payment of any tax material in
amount or notice of any assessment with respect thereto.
(e) Environmental Reporting. The Borrower shall give each
Bank prompt, and in any event within ten (10) days of the date the
Borrower or any of its Subsidiaries receives or transmits, as the
case may be, copies of all material communications with any
government or governmental agency relating to Environmental Laws
and all material communications with any other Person relating to
Environmental Claims.
(f) Notice of New Subsidiary. The Borrower shall give the
Agent and each Bank prompt, and in any event thirty (30) days prior
to the creation of any Subsidiary, notice of the Borrower's intent
to create such Subsidiary, together with a summary of the name,
location of such Subsidiary and the initial assets to be owned by
such Subsidiary.
SECTION 5.03 Affirmative Covenants.
(a) Taxes. The Borrower shall pay, and cause each of its
Subsidiaries to pay, in full: (i) prior in each case to the date
when penalties for the nonpayment thereof would attach, all taxes,
assessments and governmental charges and levies for which it may be
or become subject and (ii) prior in each case to the date the claim
would become delinquent for non-payment, all other lawful claims
(whatever their kind or nature) which, if unpaid, might become a
Lien on the property of the Borrower; provided, however, that no
item (other than wage or social security withholding tax
obligations) need be paid so long as and to the extent that it is
contested in good faith and by timely and appropriate proceedings
which are effective to stay enforcement thereof.
(b) Financial Records. The Borrower shall maintain, and cause
each of its Subsidiaries to maintain, at all times, true and
complete financial records in accordance with generally accepted
accounting principles, consistently applied, and, without limiting
the generality of the foregoing, make appropriate accruals to
reserves for estimated and contingent losses and liabilities.
(c) Visitation. The Borrower shall permit, and cause each of
its Subsidiaries and Operators to permit, upon receipt of not less
than two (2) Business Days' prior written notice, each of the Banks
during normal business hours: (i) to examine the Borrower's, such
Subsidiary's or such Operator's, properties, as the case may be,
with the guidance and supervision of the Borrower or such
Subsidiary, and to examine the Borrower's or such Subsidiary's
financial records and to make copies of and extracts from such
records; and (ii) to consult with the Borrower's or such
Subsidiary's officers, directors, accountants, actuaries, trustees
and plan administrators, as the case may be, in respect of the
Borrower's or such Subsidiary's respective financial condition,
properties and operations and the financial condition of the
Borrower's or such Subsidiary's respective Employee Benefit Plans,
each of which parties is hereby authorized to make such information
available to each of the Banks to the same extent that it would to
the Borrower or such Subsidiary, as the case may be; provided,
however, that, all information obtained shall be subject to the
provisions of Section 8.03.
(d) Insurance. The Borrower shall cause each of its Operators
to (i) keep itself and all of its and their respective insurable
properties insured at all times to such extent, with such
deductibles, by fiscally sound and reputable insurers accorded a
rating of "A VIII" or better by A.M. Best Company, Inc. (or a
comparable rating by any comparable rating agency) against such
hazards and liabilities as is generally and prudently done by other
business enterprises (including, without limitation, with respect
to any Health Care Facility located, in whole or in part, in a
designated 100-year flood plain area, flood insurance as required
by the Flood Disaster Act for the improvements in such amounts as
may be customary for comparable properties in the area)
respectively similar to the Borrower or such Subsidiary and as
required pursuant to any Borrower Mortgage, (ii) forthwith upon the
written request of any of the Banks, cause an appropriate officer
to deliver to each of the Banks a certificate setting forth, in
form and detail satisfactory to each of the Banks, such information
about that insurance, all as any of the Banks may from time to time
reasonably request, (iii) furnish certificates of insurance to the
Agent containing a provision for thirty (30) days notice to the
Agent for the benefit of the Banks prior to any cancellation
thereof, and (iv) with respect to Borrowing Base Assets, furnish
insurance policies insuring such assets reflecting an endorsement
requiring thirty (30) days notice to the Agent prior to the
modification or cancellation of such policy and reflecting the name
of the Agent for the benefit of the Banks as an additional insured
and/or a "mortgagee loss payee" as its interests may appear.
(e) Corporate Existence; REIT Qualification. The Borrower
shall at all times maintain, and cause each of its Subsidiaries to
maintain, its respective corporate existence, rights and
franchises, the failure to maintain any of which would have a
Material Adverse Effect; provided, however, that this Section
5.03(e) shall not prevent any action permitted by Section 5.04(a).
The Borrower shall at all times maintain its status as a REIT
qualified under Section 856 of the Internal Revenue Code.
(f) Compliance with Environmental Laws. The Borrower will and
will cause each of its Subsidiaries and Operators to use and
operate all of its respective facilities and properties in material
compliance with all Environmental Laws except where non-compliance,
taken singly or with all other instances of noncompliance, has
neither resulted nor would, more likely than not, result in a
Material Adverse Effect. The Borrower will and will cause each of
its Subsidiaries and Operators to keep all necessary Environmental
Permits in effect and remain in material compliance therewith, and
handle all Hazardous Materials in compliance with all applicable
Environmental Laws except where non-compliance, when taken singly
or with all other instances of noncompliance, has neither resulted
nor would, more likely than not, result in a Material Adverse
Effect. The Borrower shall not, and shall not permit any of its
Subsidiaries or Operators, to suffer to exist an environmental
condition which, when taken singly or with all other such
conditions, has resulted or would, more likely than not, result in
a Material Adverse Effect. The Borrower shall promptly resolve any
non-compliance with Environmental Laws and keep its property free
of any Lien imposed by any Environmental Law which individually or
in the aggregate has resulted or would, more likely than not,
result in a Material Adverse Effect.
(g) Compliance With Laws. The Borrower shall comply, and
shall cause each of its Subsidiaries to comply, in all respects
with its Certificate of Incorporation or Articles of Incorporation,
as the case may be, and its By-laws or Regulations, as the case may
be, and all applicable Laws if non-compliance, when taken singly or
with all other instances of non-compliance, with such Law or order
has neither resulted nor would, more likely than not, result in a
Material Adverse Effect.
(h) Remedial Action. The Borrower shall conduct, or cause its
Subsidiaries and Operators under Operator Leases to conduct, such
investigation, study, sampling and testing, and undertake, or cause
its Subsidiaries and such Operators to undertake, such cleanup,
removal, remedial or other action as may be necessary to comply
with all applicable Environmental Laws and any final orders or
directives of all governmental authorities;provided however, that,
this section shall not apply to any noncompliance with any such
orders or directives if and to the extent that the same shall be
contested in good faith by timely and appropriate proceedings which
are effective to stay enforcement thereof and against which
appropriate reserves have been established.
(i) Properties. The Borrower shall maintain, and shall
cause each Subsidiary and each Operator under a Operator Lease to
maintain, all assets necessary to its continuing operations in good
working order and condition, ordinary wear and tear excepted,
refrain from wasting or destroying any such necessary assets or any
part thereof, and refrain from being negligent in the care or use
thereof.
(j) Compliance with Terms of All Material Contracts. The
Borrower shall perform and observe, and cause each of its
Subsidiaries to perform and observe, all the material terms and
provisions of each material contract to be performed or observed by
it, including, without limitation, the Management Agreement, the
Senior Note Documents, all Eligible Operator Loan Documents,
Eligible Operator Lease Documents and maintain each such material
contracts in full force and effect, and enforce, to the extent that
the Borrower, in its reasonable judgment, determines to be
appropriate, each such material contract in accordance with its
terms if the failure of the Borrower to perform, observe or enforce
any one or more of such contracts has neither resulted nor would,
more likely than not, result in a Material Adverse Effect. The
Borrower shall not permit any Operator under any Eligible Operator
Loan or Eligible Operator Lease to remain in material default
thereof if such default has resulted or would, more likely than
not, result in a Material Adverse Effect.
(k) Qualification to do Business. The Borrower shall remain,
and shall cause each of its Subsidiaries to remain, qualified to do
business in each jurisdiction in which such qualification is
required by law and in which the consequences of a failure to
qualify has resulted or would, more likely than not, result in a
Material Adverse Effect.
(l) Liens and Encumbrances. The Borrower shall keep, and
shall cause each of its Subsidiaries to keep, the Collateral and
its respective assets and property, as the same is constituted from
time to time, free and clear of all Liens, except those held by
Agent for the benefit of the Banks and those liens as specifically
permitted under Section 5.04(e) hereof.
(m) Mandatory Reappraisal. Upon the request of the Agent or
any Bank, the Borrower shall obtain within thirty (30) Business
Days of such request, at Borrower's sole expense, a new appraisal
by a certified M.A.I. appraiser for any Borrowing Base Asset with
respect to which the date of such appraisal is more than three (3)
calendar years old, which appraisal shall be prepared in accordance
with the minimum standards required of national banks as the Agent
deems appropriate and shall state the income, market and cost
approach value and the Appraised Value of such property.
(n) Requested Reappraisal. The Borrower shall, upon the
request of the Majority Banks, obtain a new appraisal by a
certified M.A.I. appraiser for any Borrowing Base Asset specified
by such Banks, which appraisal shall be prepared in accordance with
the minimum standards required of national banks as the Agent deems
appropriate, and shall state the income, market and cost approach
value of such property. Notwithstanding anything set forth in
Section 9.09, fifty percent (50%) of the cost of any appraisal
requested under this Section 5.03(n) shall be borne by the Borrower
and fifty percent (50%) shall be borne by the Banks proportion to
such Bank's Ratable Portion.
SECTION 5.04 Negative Covenants.
(a) Equity Transactions. The Borrower shall not, and shall
not permit any of its Subsidiaries to, (i) be a party to any merger
or consolidation, (ii) purchase all or substantially all of the
assets and business of another Person, (iii) make or keep any
investment in any stocks or other equity securities of any kind,
(iv) lease as lessor, sell, sell-leaseback or otherwise transfer
(whether in one transaction or a series of transactions) all or any
substantial part of its fixed assets, including, without
limitation, all or substantially all of the assets of a division,
branch or other unit operation, (v) lease as lessor, sell or
otherwise transfer any Collateral, (vi) make or keep any investment
in any Subsidiary, or (vii) sell or otherwise transfer (or, in the
case of a Subsidiary of the Borrower, issue) any shares of stock or
other equity securities of any Subsidiary to anyone other than the
Borrower; provided, however, that, if no Default or Event of
Default shall then exist and none would thereupon begin to exist,
this Section shall not apply to
(A) any acquisition by the Borrower or any Wholly-Owned
Subsidiary of the Borrower of all or substantially all of the
assets or stock of another Person or the merger or consolidation of
another Person with or into the Borrower or such Wholly-Owned
Subsidiary where the Borrower or such Wholly-Owned Subsidiary is
the surviving corporation, so long as:
(I) the Person acquired by or merged into or consolidated with
the Borrower or such Wholly-Owned Subsidiary is in the same line of
business as the Borrower; and
(II) immediately after giving effect to such transaction the
management of the Borrower or such Wholly-Owned Subsidiary shall
not have materially changed; and
(III) immediately after giving effect to such transaction the
Consolidated Net Worth of the Borrower shall be no less than the
Consolidated Net Worth of the Borrower immediately prior to giving
effect to such transaction; and
(IV) immediately after giving effect to such transaction (and
after giving pro forma effect to such transaction for the purposes
of determining compliance with Section 5.05 of this Agreement) no
Default or Event of Default would exist; and
(V) on the date that the consummation of such transaction is
to become effective, the assets reflected on the balance sheet of
such Person so acquired, merged or consolidated shall not exceed
the lesser of (x) Fifty Million Dollars ($50,000,000) or (y)
twenty-five percent (25%) of the Borrower's Consolidated Tangible
Net Worth as at the end of the immediately preceding Fiscal
Quarter;
(B) any sale, lease or transfer of Collateral by the Borrower
otherwise prohibited by this Section 5.04(a) so long as such sale,
lease or transfer is a sale of Borrower Fee Property in the
ordinary course of the Borrower's business or any other sale, lease
or transfer made in accordance with the terms and conditions of
Borrower's Operator Leases and Operator Loans which permit an
Operator to purchase Borrower Fee Property or prepay and Operator
Loan, as the case may be.
(C) any transaction entered into for the purpose of causing
the Borrower to be internally self-administered to the extent that:
(I) such transaction consists of: (1) a merger or
consolidation of the Manager and the Borrower in which the Borrower
is the surviving corporation, (2) the creation of a Wholly-Owned
Subsidiary for the purpose of acquiring the assets of the Manager
or merging or consolidating with the Manager, (3) the acquisition
of all or substantially all of the assets of the Manager by the
Borrower or such Wholly-Owned Subsidiary, (4) the merger or
consolidation of the Manager with such Wholly-Owned Subsidiary, (5)
any merger or consolidation of such Wholly-Owned Subsidiary with
the Borrower in which the Borrower is the surviving corporation, or
(6) any other transaction entered into for purposes consistent with
causing the Borrower to be internally self-administered and
consented to by the Majority Banks which consent shall not be
unreasonably withheld (any Bank shall be deemed to be reasonable in
the withholding of consent to the extent the Bank believes, in its
sole discretion based on internal credit and underwriting policies,
that the proposed transaction may be adverse or potentially adverse
to such Bank or the Banks or the repayment of the Obligations); and
(II) immediately after giving effect to such transaction (and
after giving pro forma effect to such transaction for the purposes
of determining compliance with Section 5.05 of this Agreement) no
Default or Event of Default would exist; and
(III) the Rating Agencies which immediately prior to such
transaction have rated the unsubordinated, unsecured debt of the
Borrower shall have confirmed that after giving effect to such
transaction such debt of the Borrower shall not be rated lower than
the rating for such debt prior to the consummation of such
transaction; and
(IV) after giving effect to such transaction, the Borrower
will continue to qualify as a REIT under the Internal Revenue Code;
and
(V) the Borrower has delivered to the Agent a certificate
executed by two executive officers of the Borrower certifying that
the conditions specified in clauses (I) through (IV) of this
Section 5.04(a)(C) have been satisfied,
(D) any investment by the Borrower or any Wholly-Owned
Subsidiary in any stocks or any other equity securities of any kind
which constitute a Permitted Investment; provided, however, that
(I) such investment shall be subject to the limitations set forth
in Section 5.04(p)(iv) or 5.04(p)(v) and (II) to the extent such
investment consists of investments specified in clause (E) below,
such investment is subject to the limitations set forth in clause
(E),
(E) any investment by the Borrower in the capital stock
(whether by the transfer of cash or any other asset of the
Borrower) of any Subsidiary of the Borrower that is a Wholly-Owned
Subsidiary, to the extent that any such investment when taken
together with all other investments in Wholly-Owned Subsidiaries
and all loans to or Guaranties by the Borrower of the obligations
of Wholly-Owned Subsidiaries shall not exceed at any time an amount
equal to the greater of Twenty Million Dollars ($20,000,000) or
twenty-five percent (25%) of the Borrower's Balance Sheet Assets at
such time.
(b) Restricted Payments. Neither the Borrower nor any
Subsidiary of the Borrower will declare, pay or make any Restricted
Payments: provided, however, that, so long as the Borrower remains
a qualified REIT:
(i) any Subsidiary of the Borrower may make a Restricted
Payment to the Borrower;
(ii) this Section 5.04(b) shall not apply to any
Restricted Payment made in connection with and pursuant to that
certain Rights Agreement, dated as of July 19, 1994 between the
Borrower and Chemical Bank, as Rights Agent (a copy of which has
been delivered to the Agent);
(iii) the Borrower or any Subsidiary may declare and make
Restricted Payments (including Restricted Payments made in
connection with a Special Transaction) if but only to the extent
that:
(A) no Default or Event of Default shall have occurred and be
continuing at the time of declaration or payment of any such
Restricted Payment or immediately after giving effect thereto and
(B) immediately after giving effect to the making of such
Restricted Payment, the sum of all Restricted Payments made
subsequent to December 31, 1993 would not exceed the sum of (1)
$10,000,000, (2) 100% of Cash Flow accumulated subsequent to
December 31, 1993, and (3) the net proceeds to the Borrower since
December 31, 1993 from the issuance of any shares of its capital
stock or any warrants, options or other rights with respect thereto
less the proceeds required to be paid to the Banks in reduction of
outstanding Obligations in accordance with Section 2.04(c)(iv) and
Section 5.05(a)hereof;
provided however, that the Borrower may make a Restricted
Payment (excluding a Restricted Payment in connection with a
Special Transaction) if a Default (but not an Event of Default)
shall have occurred and be continuing if such Restricted Payment
was declared prior to the occurrence of such Default and the making
of such Restricted Payment would be otherwise permitted under
clause (B) of this Section 5.04(b).
(iv) the Borrower may declare and make Restricted Payments
(excluding Restricted Payments made in connection with a Special
Transaction) despite the occurrence and continuance of a Default or
Event of Default at the time that any such Restricted Payment was
declared or made, if but only to the extent that:
(A) the declaration and payment of such Restricted Payment is
required in order for the Borrower to continue to qualify as a REIT
under the Code; and
(B) the Default or Event of Default existing at the time of
such declaration did not result from (1) a breach of this Section
5.04(b), (2) a failure to make any payment or prepayment of
principal or interest on the Obligations when due pursuant to
Section 2.04 or Section 2.06, or (3) the occurrence of any event
specified in Section 6.01(a) or 6.01(h) through 6.01(k).
(c) Credit Extensions; Investments in Notes, Etc. The
Borrower shall not and shall not permit any of its Subsidiaries to
(i) make or keep any investment in any notes, bonds or other
obligations of any kind for the payment of money or make or have
outstanding at any time any advance or loan to any Person or (ii)
be or become a Guarantor of any kind; provided, however, that this
subsection shall not apply to:
(A) any existing or future investment by the Borrower or any
Wholly-Owned Subsidiary in any such notes, bonds or other
obligations consisting of Acceptable Marketable Securities
constituting Permitted Investments,
(B) any Guaranty Agreement,
(C) any such investment in any notes, bonds or other
obligations, any such loan or advance or any such Guaranty by the
Borrower or any Wholly-Owned Subsidiary to the extent constituting
a Permitted Investment; provided, however, that (I) such investment
shall be subject to the limitations set forth in Sections 5.04(a),
5.04(p), 5.04(q) or 5.04(r), ((II) such investment is permitted to
be made so long as no Default or Event of Default has occurred or
would occur upon the making thereof, (III) to the extent such
investment consists of an Operator Lease or an Operator Loan, such
investment is a Qualified Investment, (IV) to the extent consisting
of advances, loans or Guarantees specified in clause (E) below,
such investment is subject to the limitations set forth in clause
(E) and (V) to the extent such investment consists of loans or
Guarantees specified in clause (F) below, such investment is
subject to the limitations set forth in clause (F),
(D) any existing investment, advance, loan or Guaranty by the
Borrower or any Wholly-Owned Subsidiary (other than investments,
advance or loans provided for under subsections (E) or (F) below)
fully disclosed in the Borrower's December 31, 1993 audited
financial statements or in the Supplemental Schedule,
(E) any existing or future advances, loans or Guarantees by
the Borrower of the Indebtedness of West Part Place, Limited
Partnership, Independence Village Associates, Ltd., Landver
Properties, Ltd, Independence Village of Rockford Limited
Partnership or Ponce de Leon Limited Partnership, so long as the
aggregate amount of all such advances, loans or Guarantees does not
at any time exceed Forty Million Dollars ($40,000,000) and which
otherwise constitute a Permitted Investment,
(F) any loan to or Guaranty by the Borrower of any obligations
of any Subsidiary of the Borrower which is a Wholly-Owned
Subsidiary, to the extent that the amount of any such loan or
Guaranty when taken together with all other loans to and Guaranties
of the obligations of Wholly-Owned Subsidiaries and all investments
in the capital stock of Wholly-Owned Subsidiaries shall not exceed
at any time an amount equal to the greater of Twenty Million
Dollars ($20,000,000) or twenty-five percent (25%) of the
Borrower's Balance Sheet Assets at such time,
(G) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the normal
course of business, or
(H) trade accounts arising and outstanding in the ordinary
course of business.
(d) Indebtedness. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, assume, incur, suffer to
exist or have outstanding at any time any Indebtedness or other
debt of any kind; provided, however, that this Section shall not
apply to (i) the Obligations, (ii) the Indebtedness evidenced by
the Senior Notes, (iii) ordinary course trade payables, (iv) any
existing or future Indebtedness of the Borrower or any Wholly-Owned
Subsidiary (not otherwise permitted by clause (vi) below) secured
by a Purchase Money Security Interest permitted by Section 5.04(e),
(v) unsecured Indebtedness of the Borrower, (vi) any future
Indebtedness incurred by the Borrower by reason of the public
offering or private placement of debt instruments or securities
having terms reasonably consistent with the Senior Note Documents
(the "Additional Indebtedness") and which are secured by a Lien
permitted by Section 5.04(e) below, (vii) any existing Indebtedness
that is fully disclosed in the Borrower's December 31, 1993 audited
financial statements or in the Supplemental Schedule, or any
renewal or extension thereof in whole or in part, (viii) any
deferred payment obligations incurred or undertaken in connection
with a Special Transaction which shall be subject to the
restrictions set forth in Section 5.04(a)(C) and 5.04(b) of this
Agreement at the time such obligations are paid (and not at the
time such obligations are incurred or undertaken) or (ix) so long
as no Default or Event of Default shall then exist or would
thereupon occur, any Indebtedness of the Borrower or any Wholly-
Owned Subsidiary for the acquisition or financing of Health Care
Facilities which are Qualified Investments.
(e) Liens; Leases. The Borrower shall not and shall not
permit any of its Subsidiaries to (i) lease any property as lessee
or acquire or hold any property subject to any land contract,
inventory consignment or other title retention contract, (ii) sell
or otherwise transfer any receivables with recourse, or (iii)
suffer or permit any property now owned or hereafter acquired by it
to be or become encumbered by any mortgage, security interest, Lien
or financing statement; provided, however, that, with respect to
the Borrower and any Wholly-Owned Subsidiary, this subsection shall
not apply to:
(A) any unperfected, inchoate tax lien, or any lien securing
workers' compensation or unemployment insurance obligations, or any
mechanic's, materialmen's, laborer's, carrier's or landlord's lien,
or any unperfected, inchoate lien arising under ERISA, or any
security interest arising under article four (bank deposits and
collections) or five (letters of credit) of the Uniform Commercial
Code, or any similar security interest or other Lien, provided that
this clause (A) shall apply only to security interests and other
Liens arising by operation of Law (whether statutory, civil or
common Law) and in the ordinary course of business and shall not
apply to any security interest or other Lien that secures any
Indebtedness, any Guaranty of any Indebtedness or any obligation
that is in material default in any manner (other than any default
contested in good faith by timely and appropriate proceedings
effective to stay enforcement of the security interest or other
lien in question),
(B) zoning or deed restrictions, public utility easements,
minor title irregularities and similar matters having no adverse
effect as a practical matter on the ownership or use of any of the
property in question, including, without limitation (I) any Lien
reflected on any title policy delivered pursuant to Section 3.03 in
respect of any Borrower Fee Property in respect of an Eligible
Operator Lease, so long as such Lien is not prior to the Lien of
the Agent created by the Borrower Mortgage with respect thereto
(other than Liens for taxes assessed but not yet due and payable)
and could not result in a Material Impairment or (II) any Lien
reflected on any Assigned Title Policy delivered pursuant to
Section 3.03 so long as such Lien could not result in a Material
Impairment,
(C) other than any Lien on any Collateral, any lien securing
or given in lieu of surety, stay, appeal or performance bonds, or
securing performance of contracts or bids (other than contracts for
the payment of money borrowed), or deposits required by Law or as
a condition to the transaction of business or the exercise of any
right, privilege or license,
(D) other than any Lien on any Collateral, any mortgage,
security interest, capitalized lease (it being agreed that a
capitalized lease is a lien rather than a lease for the purposes of
this Agreement) or other lien (each, a "Purchase Money Security
Interest") which is created or assumed in purchasing, constructing
or improving any property or to which any property is subject when
purchased; provided, however, that (x) the Purchase Money Security
Interest shall be confined to the aforesaid property and (y) the
Indebtedness secured thereby does not exceed the total cost of the
purchase, construction or improvement,
(E) other than any Lien on any Collateral, any mortgage,
security interest or other lien which (together with the
Indebtedness secured thereby) is fully disclosed in the Borrower's
December 31, 1993, audited financial statements or in the
Supplemental Schedule,
(F) any lease not prohibited by Section 5.04(a),
(G) other than any Lien on any Collateral, any mortgage,
security interest or other Lien securing the Senior Notes or the
Additional Indebtedness, or
(H) any financing statement perfecting a security interest
that would be permissible under this subsection.
(f) Name Change; Fictitious Name. The Borrower shall not, and
shall not permit any Subsidiary to, change its name, use or permit
any Subsidiary to use, any other corporate or fictitious name,
except for the names disclosed on the Supplemental Schedule, unless
the Borrower gives the Agent written notice thereof at least thirty
(30) days prior thereto.
(g) Charter Amendments. The Borrower shall not amend, or
permit any of its Subsidiaries to amend, its certificate or
articles of incorporation or bylaws or regulation or other similar
organizational document; provided, however, that, this provision
shall not prohibit any amendment as to which the Borrower has
delivered to the Agent a written notice describing such amendment
at least thirty (30) day prior to the effectiveness thereof and (i)
is an amendment required by applicable law or in connection with a
transaction permitted by Section 5.04(a) or (ii) is an amendment
which increases the authorized shares of the stock of the Borrower
or (iii) is an amendment which does not adversely affect the
enforceability by the Agent and the Banks of the Borrower's
obligations under this Agreement or any Collateral Document or any
Subsidiary's obligations under any Guaranty Agreement.
(h) Accounting Changes. The Borrower shall not make or
permit, or permit any of its Subsidiaries to make or permit, any
change in accounting policies or reporting practices, except as
required by law or as required or permitted by generally accepted
accounting principles applicable to the Borrower or such
Subsidiary, as the case may be, from time to time.
(i) Amendment; Default of Material Contracts. The
Borrower shall not, and shall not permit any of its Subsidiaries to
take any action to amend, cancel, terminate, waive any provision
of, consent to the noncompliance with any term of any material
contract (material contracts being deemed to include, without
limitation, the Management Agreement, each Eligible Operator Loan
Document, each Eligible Operator Lease Document but to exclude the
Senior Notes and Senior Note Documents and any other documents
executed in connection with any Additional Indebtedness); provided,
however, that the Borrower may take any such action so long as such
action (i) does not relate to a material financial provision of any
agreement which is the subject of a Collateral Assignment, (ii)
does not relate to any provision in any agreement which is the
subject of a Collateral Assignment and which provision is expressly
for the benefit of the mortgagee or assignee with respect thereto,
(iii) is taken in the ordinary course of the Borrower's or such
Subsidiary's business, (iv) is consistent with the Borrower's past
practices, (v) which would not, more likely than not, result in a
Material Adverse Effect, (vi) will not have an adverse effect on
the interest (including the perfection and priority of any security
interest or Lien in favor of the Borrower or the Agent for the
benefit of the Banks) of the Banks in such agreement or the assets
with respect thereto or otherwise result in a Material Impairment,
and (vii) with respect to the Management Agreement, does not
materially increase any fee or release any party thereto of any
material obligation thereunder other than any release in connection
with the Special Transaction.
(j) Senior Note Documents. The Borrower shall not, and shall
not permit any of its Subsidiaries to take any action to amend,
cancel, terminate, waive any provision of, consent to the
noncompliance with any term of the Senior Notes or the Senior Note
Documents or any documents executed or delivered in connection with
any Additional Indebtedness.
(k) Use of Proceeds. The Borrower shall not use the proceeds
of any Loan for any purpose other than those set forth in Section
2.01(b).
(l) Adverse Obligations. The Borrower shall not be subject
to, and shall not permit any of its Subsidiaries to be subject to,
any contract, agreement, corporate restriction, judgment, decree or
order which has resulted or would, more likely than not, result in
a Material Adverse Effect.
(m) Transactions with Affiliates. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into or suffer
or permit any arrangement or contract with any of its Affiliates;
provided, however, that, this provision shall not apply so long as
(i) such arrangement or contract is in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's or a
Wholly-Owned Subsidiary's business and (ii) the terms of such
arrangement or contract are fair and equitable to the Borrower or
such Subsidiary, as the case may be, and are no less favorable to
the Borrower or such Wholly-Owned Subsidiary than would be obtained
in an arms-length transaction with a Person which is not an
Affiliate; provided, further, that, this provision shall not apply
to any transaction with any Wholly-Owned Subsidiary, the Manager or
any Affiliate of the Manager in connection with any Special
Transaction otherwise permitted by this Agreement.
(n) Maintenance of Borrowing Base. The Borrower shall not
permit the aggregate Revolving Credit Loans at any time outstanding
to be greater than seventy-five percent (75%) of the aggregate
Asset Value of the Borrowing Base Assets. The Borrower shall not
permit or suffer any Borrowing Base Asset to fail to be at all
times a Qualified Investment.
(o) Portfolio Concentration Limitation. The Borrower shall
not permit or suffer, at the end of any three (3) consecutive
Fiscal Quarters:
(i) the sum of the outstanding principal amount, accrued
interest and fees in respect of all financing of construction loans
made by the Borrower to exceed the greater of Thirty-Five Million
Dollars ($35,000,000) or ten percent (10%) of the Borrower's
Balance Sheet Assets as at the end of each such Fiscal Quarter,
(ii) the sum of all Credit Enhancements, including
principal, accrued interest (estimated in good faith to the extent
not known) and fees, executed or entered into by the Borrower on
behalf of Operators to exceed twenty percent (20%) of the
Borrower's Consolidated Net Worth as at the end of each such Fiscal
Quarter, or
(iii) the sum of the outstanding principal amount,
accrued interest and fees in respect of all financing to
psychiatric hospitals to exceed twenty percent (20%) of the
Borrower's Balance Sheet Assets as at the end of each such Fiscal
Quarter.
(p) Other Financing Limitations. The Borrower shall not, and
shall not suffer any Subsidiary to, make or commit to make:
(i) any construction financing to any Person if, after
giving effect thereto, the aggregate amount (including principal,
accrued interest and fees) of all outstanding construction
financing on the Borrower's balance sheet would exceed the greater
of Thirty-Five Million Dollars ($35,000,000) or ten percent (10%)
of the Borrower's Balance Sheet Assets as at the end of the
immediately preceding Fiscal Quarter,
(ii) any Credit Enhancement to any Person if, after
giving effect thereto, the aggregate amount (including principal,
accrued interest (estimated in good faith to the extent not known)
and fees) of all outstanding Credit Enhancements executed or
entered into by the Borrower on behalf of Operators would exceed
twenty percent (20%) of the Consolidated Net Worth of the Borrower
as at the end of the immediately preceding Fiscal Quarter,
(iii) any financing of any psychiatric hospital if, after
giving effect thereto, the aggregate amount (including principal,
accrued interest and fees) of all outstanding financing of
psychiatric hospitals would exceed twenty percent (20%) of the
Borrower's Balance Sheet Assets as at the end of the immediately
preceding Fiscal Quarter,
(iv) any investment in any REMIC if, after giving effect
thereto, the aggregate amount of all outstanding investments in
REMICs together with all outstanding investments in Permitted
Investments (other than REMICs and other than Permitted Investments
described in Internal Revenue Code Section 856(c)(5)(A) which are
not REMICs) would exceed twenty-five percent (25%) of the
Borrower's Balance Sheet Assets as at the end of the immediately
preceding Fiscal Quarter; provided, however, that any such
investment shall be subject to the limitations set forth in
Sections 5.04(a), 5.04(c), 5.04(o) and the other clauses of this
Section 5.04(p); or
(v) any investment in any Permitted Investment (other than
REMICs) if, after giving effect thereto, the aggregate amount of
all outstanding other Permitted Investments (other than those
described in Internal Revenue Code Section 856(c)(5)(A)) would
exceed ten percent (10%) of the Borrower's Balance Sheet Assets as
at the end of the immediately preceding Fiscal Quarter; provided,
however, that any such investment shall be subject to the
limitations set forth in Sections 5.04(a), 5.04(c), 5.04(o) and the
other clauses of this Section 5.04(p).
(q) Portfolio Diversification Requirement. The Borrower shall
not permit for each of any three (3) consecutive Fiscal Quarters:
(i) more than seventeen and one-half percent (17-1/2%) of
the Borrower's Balance Sheet Assets as at the end of each of such
three (3) consecutive Fiscal Quarters to be operated directly or
indirectly by, any single Operator, lessee or borrower (including
any affiliate of any such Operator, lessee or borrower) of the
Borrower or any Subsidiary of the Borrower on a consolidated basis,
or
(ii) more than seventeen and one-half percent (17-1/2%)
of the Borrower's consolidated gross revenues, as reflected on the
Borrower's statement of income for each of such three (3)
consecutive Fiscal Quarters, to be generated directly or indirectly
from, any single Operator, lessee or borrower (including any
affiliate of any such Operator, lessee or borrower) of the Borrower
or any Subsidiary of the Borrower on a consolidated basis.
(r) Borrowing Base Concentration Limitation. The Borrower
shall not permit the aggregate Asset Value of all Borrowing Base
Assets constituting Health Care Facilities which are psychiatric
hospitals to be greater than twenty percent (20%) of the aggregate
Asset Value of all Borrowing Base Assets at such time.
SECTION 5.05 Financial Covenants.
(a) Consolidated Tangible Net Worth. The Borrower will not
suffer or permit, at any time, the Consolidated Tangible Net Worth
to be less than the "Required Minimum" in effect at such time. The
"Required Minimum" shall be One Hundred Eighty Million Dollars
($180,000,000) and, thereafter, shall be permanently increased by
an amount equal to eighty percent (80%) of the net cash proceeds of
any issuance of equity by the Borrower effective as of date upon
which the Borrower receive such proceeds.
(b) Consolidated Interest Coverage. The Borrower will not
suffer or permit the Consolidated Interest Coverage Ratio for any
Fiscal Quarter to be less than 2.0 to 1.0.
(c) Consolidated Leverage Ratio. The Borrower will not suffer
or permit, as at the end of any Fiscal Quarter, the ratio of its
Consolidated Funded Indebtedness to its Consolidated Net Worth to
exceed 1.30 to 1.0.
(d) Consolidated Contingent Leverage Ratio. The Borrower will
not suffer or permit, as at the end of any Fiscal Quarter, the
ratio of the sum of its Consolidated Funded Indebtedness plus its
Consolidated Contingent Liabilities to its Consolidated Net Worth
to exceed 1.55 to 1.0.
(e) Borrowing Base Debt Coverage Ratio. The Borrower shall
not permit, for any Fiscal Quarter, the ratio of (a) the sum of the
aggregate net income of each Operator during such Fiscal Quarter
attributable to each Borrowing Base Asset plus the aggregate amount
of amortization and depreciation expense of such Operators
attributable to each such Borrowing Base Asset plus the aggregate
federal, state and local taxes of such Operators attributable to
each such Borrowing Base Asset plus the aggregate of all fees,
interest, principal and lease payments owed by such Operators to
the Borrower for such period attributable to each such Borrowing
Base Asset to (b) the sum the aggregate of all fees, interest,
principal and lease payments owed by such Operators to the Borrower
for such period attributable to all such Borrowing Base Assets to
be less than 1.25 to 1.0; provided, however, that, in calculating
the amounts set forth in clauses (a) and (b) above attributable to
any Borrowing Base Asset, such amounts shall be adjusted (prior to
the aggregation of such amounts with the amounts of all other
Borrowing Base Assets) by multiplying such amounts by a fraction,
the numerator of which is the sum of the Asset Values attributable
to such Borrowing Base Assets and the denominator of which is the
aggregate of the Asset Values of all Borrowing Base Assets.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default. Each of the following
shall constitute an Event of Default hereunder:
(a) Payments. (i) If the principal amount of any of the
Obligations or any other Indebtedness of the Borrower and its
Subsidiaries or any thereof to the Agent and the Banks or any
thereof (except any Indebtedness or Obligations to the Agent or any
Bank payable on demand) shall not be paid in full promptly when the
same becomes payable, whether at maturity, by acceleration or
otherwise, or (ii) if any interest on any of the Obligations or any
other Indebtedness of the Borrower or its Subsidiaries to the Agent
and the Banks or any thereof shall remain unpaid for three (3)
consecutive days thereafter; or (iii) if such of the Indebtedness
or Obligations of the Borrower and its Subsidiaries or any thereof
to the Agent and the Banks or any thereof, as may be payable on
demand shall not be paid in full immediately after any actual
demand for payment.
(b) Covenants Without Grace. If the Borrower shall fail or
omit to perform or observe any provision in Section 5.02, 5.03(e),
5.03(l), 5.04 or 5.05.
(c) Covenants with Grace. If the Borrower or any of its
Subsidiaries (i) shall fail or omit to perform and observe any
agreement set forth in Sections 5.03(a), 5.03(d) or 5.03(f) hereof
and the same shall remain unremedied for ten (10) Business Days or
(ii) shall fail or omit to perform and observe any agreement herein
or in any Related Writing (other than those referred to in clause
(i) of this subsection (c) or in subsections (a) or (b) hereof)
within thirty (30) Business Days after the giving of written notice
to the Borrower by any Bank that it is to be remedied.
(d) Warranties. If any representation, warranty or statement
(other than any made by any Bank or the Agent pursuant to this
Agreement or in any Related Writing) made in this Agreement or in
any Related Writing shall be false or erroneous in any respect when
made or deemed made, as the case may be.
(e) Cross Default. If, in respect of (i) any existing or
future Indebtedness (regardless of maturity), including, without
limitation, any indebtedness evidenced by the Senior Notes, (ii)
other Indebtedness (other than the Obligations) now owing or
hereafter incurred by the Borrower or any of its Subsidiaries,
including without limitation, any Additional Indebtedness or (iii)
any convertible subordinated indebtedness (whether or not
considered to be "Indebtedness" for the purposes of Section 5.05),
there should occur or exist under its original provisions
(including any amendment made prior to the date of this Agreement
but without giving effect to any amendment, consent or waiver after
the date of this Agreement unless consented to in writing by the
Majority Banks) any event, condition or other thing which
constitutes, or which with the giving of notice or the lapse of any
applicable grace period or both would constitute, a default which
accelerates (or permits any creditor or creditors or representative
of creditors to accelerate) the maturity of any such Indebtedness;
or if any such Indebtedness (other than any payable on demand)
shall not be paid in full at its stated maturity; or if any such
Indebtedness payable on demand shall not be paid in full within ten
(10) days after any actual demand for payment.
(f) Change in Control. If any "person" or "group" shall
become the "beneficial owner" (as those terms are respectively used
in the Securities and Exchange Act of 1934, as amended, and the
rules and regulations thereunder) of more than twenty percent (20%)
of the outstanding voting stock of the Borrower or shall otherwise
acquire the power (whether by contract, by proxy or otherwise) to
elect a majority of the Borrower's Board of Directors; provided,
however, that this subsection shall not apply to any person who is
a director of the Borrower on the Closing Date or any other
transaction receiving the prior approval by a majority of the then
members of the Borrower's board of directors.
(g) Judgments. If one or more judgments for the payment of
money in an aggregate amount in excess of One Million Dollars
($1,000,000) (unless such judgment (i) shall have been reserved by
the Borrower or the applicable Subsidiary on the date thereof or
(ii) shall be insured and the insurance carrier shall have
acknowledged in writing liability in respect of the full amount
thereof or shall have been ordered by a court of competent
jurisdiction to pay such judgment) shall be rendered and remain
undischarged against the Borrower or any of its Subsidiaries or any
combination thereof and as to which either (x) execution shall not
be effectively stayed within a period of thirty (30) consecutive
days following the issuance of said judgment or (y) any action
shall be legally taken by a judgment creditor to levy upon assets
or properties of the Borrower or any of its Subsidiaries to enforce
any such judgment.
(h) Subsidiary's Solvency. If (a) any Subsidiary of the
Borrower shall commence any Insolvency Action of any kind or admit
(by answer, default or otherwise) the material allegations of, or
consent to any relief requested in, any Insolvency Action of any
kind commenced against that Subsidiary by its creditors or any
thereof, or (b) any creditor or creditors of any Subsidiary of the
Borrower shall commence against that Subsidiary any Insolvency
Action of any kind which shall remain in effect (neither dismissed
nor stayed) for sixty (60) consecutive days.
(i) Borrower's Solvency. If (a) the Borrower shall
discontinue operations, or (b) the Borrower shall commence any
Insolvency Action of any kind or admit (by answer, default or
otherwise) the material allegations of, or consent to any relief
requested in, any Insolvency Action of any kind commenced against
the Borrower by its creditors or any thereof, or (c) any creditor
or creditors shall commence against the Borrower any Insolvency
Action of any kind which shall remain in effect (neither dismissed
nor stayed) for sixty (60) consecutive days.
(j) ERISA. If (x) the Borrower, any ERISA Affiliate of the
Borrower or any other Person institutes any steps to terminate an
Employee Benefit Plan and, as a result of such termination, the
Borrower or any such ERISA Affiliate could be required to make a
contribution to such Employee Benefit Plan, or could reasonably
expect to incur a liability or obligation to such plan, in excess
of One Hundred Thousand Dollars ($100,000) or (y) the Borrower or
any ERISA Affiliate fails to make a contribution to any Employee
Benefit Plan which failure would be sufficient to give rise to a
Lien under Section 302(f) of ERISA.
(k) Enforceability. If any Guaranty Agreement shall be
revoked by or otherwise cease to be enforceable against any
Guarantor thereunder.
SECTION 6.02 Remedies Upon Event of Default.
Notwithstanding any contrary provision or inference in this
Agreement or in any Related Writing:
(a) Optional Defaults. If any Event of Default referred to in
Section 6.01(a) through 6.01(g), inclusive, or 6.01(j) or 6.01(k)
shall occur and be continuing, the Agent shall at the request of,
or may with the consent of, the Majority Banks (each in its sole
discretion) have the right, by giving written notice to the
Borrower, (A) to terminate each Bank's outstanding Revolving Credit
Commitment whereupon no Bank shall have any obligation thereafter
to make any Loan and (B) to accelerate the maturity of all of the
Loans and all other Indebtedness or Obligations then owing to any
of the Banks and or Agent, as the case may be, or any thereof
(other than Indebtedness, if any, already due and payable), and all
such Indebtedness shall thereupon become and thereafter be
immediately due and payable in full without any presentment or
demand and without any further or other notice of any kind, all of
which are hereby waived by the Borrower; provided, however, that,
notwithstanding the termination of the Revolving Credit
Commitments, the Agent may accrue expenses in accordance with this
Agreement and such expenses shall be deemed to be Revolving Credit
Loans made by each Bank in accordance with its Ratable Portion.
(b) Automatic Defaults. If any Event of Default referred to
in Sections 6.01(h) or 6.01(i) shall occur, (i) the Revolving
Credit Commitments shall automatically and immediately terminate
(if not already expired or reduced to zero pursuant to Article II
or terminated pursuant to this Section) whereupon no Bank shall
have any obligation thereafter to make any Loan and (ii) all of the
Obligations and all other Indebtedness, if any, then owing to the
Banks and the Agent or any thereof (other than Indebtedness, if
any, already due and payable) shall thereupon become and thereafter
be immediately due and payable in full, all without any
presentment, demand or notice of any kind, which are hereby waived
by the Borrower; provided, however, that, notwithstanding the
termination of the Revolving Credit Commitments, the Agent may
accrue expenses in accordance with this Agreement and such expenses
shall be deemed to be Revolving Credit Loans made by each Bank in
accordance with its Ratable Portion.
(c) Recourse of Banks. Each of the Banks acknowledges and
agrees that: (i) it shall only have recourse to the Collateral
through the Agent and that it shall have no independent recourse to
the Collateral and (ii) the Agent shall have no obligation to, and
shall not (except as specifically provided herein) take any action
in respect of enforcing remedies against the Collateral, except
upon the instructions from the Majority Banks. Nothing in this
paragraph shall restrict (A) the rights of any Bank to pursue
remedies, by proceedings in law and equity, to collect any of the
Obligations or to enforce the performance of any provisions of this
Agreement or the Related Writings, to the extent in either case
that such remedies are not related to the Collateral or interfere
with the Agent's ability to take action hereunder or under the
Collateral Documents or (B) the rights of any Bank to initiate any
Insolvency Action in its individual capacity and to appear or be
heard on any matter before the bankruptcy or other applicable court
in any such proceeding, including, without limitation, with respect
to questions concerning the post-petition usage of Collateral and
post-petition financing arrangements.
SECTION 6.03 Offsets. If there shall occur or exist any
Default referred to in Section 6.01(h) or 6.01(i), each Bank shall,
so long as that Default exists, have the right (in addition to such
other rights as it may have by operation of Law or otherwise) at
any time to set off against and to appropriate and apply toward the
payment of the Obligations and all other Indebtedness then owing to
it (and any participation purchased or to be purchased pursuant to
Section 6.04) whether or not the same shall then have matured, any
and all deposit balances then owing by that Bank to or for the
credit or account of the Borrower and its Subsidiaries or any
thereof, all without notice to or demand upon the Borrower or any
Subsidiary or any other Person, all such notices and demands being
hereby expressly waived.
SECTION 6.04 Equalization. Each Bank agrees with the
other Banks that if at any time it shall obtain any Advantage over
the other Banks or any thereof in respect of the Loans it will
purchase from such other Bank or Banks, for cash and at par, such
additional participation in the Loans owing to the other or others
as shall be necessary to nullify the Advantage. If any such
Advantage resulting in the purchase of an additional participation
as aforesaid shall be recovered in whole or in part from the Bank
receiving the Advantage, each such purchase shall be rescinded, and
the purchase price restored (with interest and other charges if and
to the extent actually incurred by the Bank receiving the
Advantage) ratably to the extent of the recovery. During the
existence of any Default, any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other indebtedness or
otherwise) of any Indebtedness owing by the Borrower to any Bank
shall be applied to the Obligations owing to that Bank until the
same shall have been paid in full before any thereof shall be
applied to other Indebtedness owing to that Bank.
SECTION 6.05 Application of Proceeds of Collateral. The
Agent shall apply any and all proceeds received by the Agent in
connection with the Agent's realization upon any of the Collateral
for the benefit of the Banks first to Obligations of the Borrower
to the Banks under this Agreement other than any Obligations of the
Borrower to any Bank under any hedge agreement, swap agreement or
similar agreement between the Borrower and any individual Bank (in
accordance with each Bank's Ratable Portion of such Obligations and
in such order and manner as the Majority Banks shall instruct the
Agent) and then to any other Obligations of the Borrower to the
Banks, or any thereof (in accordance with each Bank's pro rata
portion of such other Obligations based upon the aggregate amount
of such other Obligations and in such order and manner as the
Majority Banks shall instruct the Agent).
ARTICLE VII
THE AGENT
SECTION 7.01 The Agent. Each Bank irrevocably appoints
NCB to be its Agent with full authority to take such actions, and
to exercise such powers, on behalf of the Banks in respect of this
Agreement and the Related Writings as are therein respectively
delegated to the Agent or as are reasonably incidental to those
delegated powers. NCB in such capacity shall be deemed to be an
independent contractor of the Banks.
SECTION 7.02 Nature of Appointment. The Agent shall have
no fiduciary relationship with any Bank by reason of this Agreement
and the Related Writings. The Agent shall not have any duty or
responsibility whatever to any Bank except those expressly set
forth in this Agreement and the Related Writings. Without limiting
the generality of the foregoing, each Bank acknowledges that the
Agent is acting as such solely as a convenience to the Banks and
not as a manager of the Revolving Credit Commitments or the
Indebtedness evidenced by the Notes. This Article VII does not
confer any rights upon the Borrower or anyone else (except the
Banks), whether as a third party beneficiary or otherwise.
SECTION 7.03 NCB as a Bank; Other Transactions. NCB's
rights as a Bank under this Agreement and the Related Writings
shall not be affected by its serving as the Agent. NCB and its
affiliates may generally transact any banking, financial, trust,
advisory or other business with the Borrower or its Subsidiaries
(including, without limitation, the acceptance of deposits, the
extension of credit and the acceptance of fiduciary appointments)
without notice to the Banks, without accounting to the Banks, and
without prejudice to NCB's rights as a Bank under this Agreement
and the Related Writings except as may be expressly required under
this Agreement.
SECTION 7.04 Instructions from Banks. The Agent shall
not be required to exercise any discretion or take any action as to
matters not expressly provided for by this Agreement and the
Related Writings (including, without limitation, collection and
enforcement actions in respect of any Obligations under the Notes
or this Agreement and any collateral therefor) except that the
Agent shall take such action (or omit to take such action) other
than actions referred to in Section 10.01, as may be reasonably
requested of it in writing by the Majority Banks with instructions
and which actions and omissions shall be binding upon all the
Banks; provided, however, that the Agent shall not be required to
act (or omit any act) if, in its judgment, any such action or
omission might expose the Agent to personal liability or might be
contrary to this Agreement, any Related Writing or any applicable
Law. The Agent may, without consent from the Banks, pursuant to
the provisions of Section 2.08, execute termination statements,
mortgage releases, releases of collateral assignment or other
documents evidencing the release of the Liens of the Banks with
respect to any Collateral.
SECTION 7.05 Bank's Diligence. Each Bank (a) represents
and warrants that it has made its decision to enter into this
Agreement and the Related Writings and (b) agrees that it will make
its own decision as to taking or not taking future actions in
respect of this Agreement and the Related Writings; in each case
without reliance on the Agent or any other Bank and on the basis of
its independent credit analysis and its independent examination of
and inquiry into such documents and other matters as it deems
relevant and material.
SECTION 7.06 No Implied Representations. The Agent shall
not be liable for any representation, warranty, agreement or
obligation of any kind of any other party to this Agreement or
anyone else, whether made or implied by the Borrower or any
Subsidiary in this Agreement or any Related Writing or by a Bank in
any notice or other communication or by anyone else or otherwise.
SECTION 7.07 Sub-Agents. The Agent may employ agents and
shall not be liable (except as to money or property received by it
or its agents) for any negligence or misconduct of any such agent
selected by it with reasonable care. The Agent may consult with
legal counsel, certified public accountants and other experts of
its choosing (including, without limitation, NCB's salaried
employees or any otherwise not independent) and shall not be liable
for any action or inaction taken or suffered in good faith by it in
accordance with the advice of any such counsel, accountants or
other experts which shall have been selected by it with reasonable
care.
SECTION 7.08 Agent's Diligence. The Agent shall not be
required (a) to keep itself informed as to anyone's compliance with
any provision of this Agreement or any Related Writing, (b) to make
any inquiry into the properties, financial condition or operation
of the Borrower or any of its Subsidiaries or any other matter
relating to this Agreement or any Related Writing, (c) to report to
any Bank any information (other than which this Agreement or any
Related Writing expressly requires to be so reported) that the
Agent or any of its affiliates may have or acquire in respect of
the properties, business or financial condition of the Borrower or
any of its Subsidiaries or any other matter relating to this
Agreement or any Related Writing or (d) to inquire into the
validity, effectiveness or genuineness of this Agreement or any
Related Writing.
SECTION 7.09 Notice of Default. The Agent shall not be
deemed to have knowledge of any Default unless and until it shall
have received a written notice describing it and citing the
relevant provision of this Agreement or any Related Writing. The
Agent shall give each Bank reasonably prompt notice of any such
written notice except, of course, to any Bank that shall have given
the written notice.
SECTION 7.10 Agent's Liability. Neither the Agent nor
any of its directors, officers, employees, attorneys, and other
agents shall be liable for any action or omission on their
respective parts except for gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent:
(i) may treat the payee of any Revolving Credit Note as the holder
thereof until the Agent receives a fully executed copy of the
Assignment Agreement required by Section 8.01(b) signed by such
payee and in form satisfactory to the Agent; (ii) may consult with
legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the
advice or such counsel, accountants or experts which have been
selected by the Agent with reasonable care; (iii) makes no warranty
or representation to any Bank and shall not be responsible to any
Bank for any statements, warranties or representations made in or
in connection with this Agreement, any Collateral Document or any
other Related Writing, including, without limitation, the truth of
the statements made in any certificate delivered by the Borrower
under Article III, the Agent being entitled for the purposes of
determining fulfillment of the conditions set forth therein to rely
conclusively upon such certificates; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement, any
Collateral Document or any other Related Writing or to inspect the
property (including the books and records) of the Borrower or its
Subsidiaries; (v) shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any Collateral Document or
collateral covered thereby or any other Related Writing and (vi)
shall incur no liability under or in respect of this Agreement or
any Collateral Document or other Related Writing by acting upon any
notice, consent, certificate or other instrument or writing (which
may be by telegram, telecopy, cable or telex) believed by it in
good faith to be genuine and correct and signed or sent by the
proper party or parties.
Neither the Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrower
on account of the failure of or delay in performance or breach by
any Bank of any of its obligations hereunder or to any Bank on
account of the failure of or delay in performance or breach by any
other Bank or the Borrower of any of their respective obligations
hereunder or under any Related Writing or in connection herewith or
therewith.
The Banks each hereby acknowledge that the Agent shall be
under no duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement or any
Collateral Document or any other Related Writing unless it shall be
requested in writing to do so by the Majority Banks.
SECTION 7.11 Compensation. Except for the fee set forth
in Section 2.05(b), the Agent shall receive no other compensation
for its services as agent of the Banks in respect of this Agreement
and the Related Writings, except any expressly referred to in this
Agreement, but the Borrower shall reimburse the Agent periodically
on its demand for out-of-pocket expenses, if any, reasonably
incurred by it as such.
SECTION 7.12 Agent's Indemnity. The Banks shall
indemnify the Agent (to the extent the Agent is not reimbursed by
the Borrower) from and against (a) any loss or liability (other
than any caused by the Agent's gross negligence or willful
misconduct and other than any loss to the Agent resulting from the
Borrower's non-payment of agency fees owed solely to the Agent)
incurred by the Agent as such in respect of this Agreement or any
Related Writing (as the Agent) and (b) any out-of-pocket expenses
incurred in defending itself or otherwise related to this
Agreement, the Collateral Documents or any Related Writing (other
than any caused by the Agent's gross negligence or willful
misconduct) including, without limitation, reasonable fees and
disbursements of legal counsel of its own selection (including,
without limitation, the reasonable interdepartmental charges of its
salaried attorneys) in the defense of any claim against it or in
the prosecution of its rights and remedies as the Agent (other than
the loss, liability or costs incurred by the Agent in the defense
of any claim against it by the Banks arising in connection with its
actions in its capacity as Agent); provided, however, that each
Bank shall be liable for only its Ratable Portion of the whole loss
or liability.
SECTION 7.13 Resignation. The Agent (or any successor)
may at any time resign as such by giving ten (10) days' prior
written notice to the Borrower and to each Bank; and the Majority
Banks may remove the Agent at any time with or without cause by
giving written notice to the Agent and the Borrower. In any such
case, the Majority Banks may appoint a successor to the resigned or
removed agent (the "Former Agent"), provided that the Majority
Banks obtain the Borrower's prior written consent to the successor
(which consent shall not be unreasonably withheld), by giving
written notice to the Borrower, the Former Agent and each Bank not
participating in the appointment; provided, however, that, if at
the time of the proposed resignation or removal of an Agent, the
Borrower is the subject of an Insolvency Action or an Event of
Default shall have occurred and be continuing the Borrower's
consent shall not be required. In the absence of a timely
appointment, the Former Agent shall have the right (but not the
duty) to make a temporary appointment of any Bank (but only with
that Bank's consent) to act as its successor pending an appointment
pursuant to the immediately preceding sentence. In either case,
the successor Agent shall deliver its written acceptance of
appointment to the Borrower, to each Bank and to the Former Agent,
whereupon (a) the Former Agent shall execute and deliver such
assignments and other writings as the successor Agent may
reasonably require to facilitate its being and acting as the Agent,
(b) the successor Agent shall in any event automatically acquire
and assume all the rights and duties as those prescribed for the
Agent by this Article VII and (c) the Former Agent shall be
discharged from its duties and obligations under this Agreement and
the Related Writings.
SECTION 7.14 Bank Purpose. Each Bank represents and
warrants to the Agent, the other Banks and the Borrower that such
Bank is familiar with the Securities Act of 1933, as amended, and
the rules and regulations thereunder and is not entering into this
Agreement with any intention to violate such Act or any rule or
regulation thereunder. Subject to the provisions of Sections 8.01
and 8.02, each Bank shall at all times retain full control over the
disposition of its assets subject only to this Agreement and to all
applicable Law.
SECTION 7.15 Bank Indemnification. Each Bank providing
cash management or similar services to the Borrower agrees to
indemnify each of the other Banks (the "Other Banks") from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against any Other Bank in any way
relating to or arising out of the cash management or similar
services provided by such Bank to the Borrower or any of its
Subsidiaries or any action or inaction of such Bank in connection
therewith.
ARTICLE VIII
TRANSFERS AND ASSIGNMENTS
SECTION 8.01 Transfer of Commitments. Each Bank shall
have the right at any time or times to transfer to another
financial institution, without recourse, all or any part of (a)
that Bank's Revolving Credit Commitment, (b) any Revolving Credit
Loan made by that Bank, (c) any Revolving Credit Note delivered to
that Bank pursuant to this Agreement, and (d) that Bank's
participations, if any, purchased pursuant to Section 6.04;
provided, however, in each such case, that the transferor and the
transferee shall have complied with the following requirements:
(a) Prior Consent. No transfer may be consummated pursuant to
this Article VIII without the prior written consent of the Borrower
and the Agent, which consent of the Borrower shall not be
unreasonably withheld; provided, however, that, neither the
Borrower nor the Agent shall be deemed to be unreasonable in
withholding its respective consent if, (i) after giving effect to
such transfer, any Bank's (including any assignee becoming a Bank
pursuant to this Section 8.01) Ratable Portion of the aggregate
Revolving Credit Commitments would be less than Ten Million Dollars
($10,000,000), (ii) the proposed transferee is a financial
institution not organized under the laws of a state or of the
United States (unless such institution is an affiliate of the
transferring Bank) or (iii) if the proposed transferee's long-term
certificates of deposit shall be rated A or below by any Rating
Agency or the equivalent rating by Thompson's Bank Watch; provided,
further, that, if at the time of the proposed transfer the Borrower
is the subject of an Insolvency Action, the Borrower's consent
shall not be required. Notwithstanding anything to the contrary,
any Bank may at any time assign all or any portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank, and
no such assignment shall release such assigning Bank from its
obligations hereunder.
(b) Agreement; Transfer Fee. The transferor (i) shall remit
to the Agent an administrative fee of Two Thousand Five Hundred
Dollars ($2,500) and (ii) shall cause the transferee to execute and
deliver to the Borrower, the Agent and each Bank (A) an Assignment
Agreement, in the form of Exhibit N hereto together with the
consents and releases referenced therein and (B) such additional
amendments, assurances and other writings as the Agent may
reasonably require.
(c) Note. The Borrower shall execute and deliver (i) to the
Agent, the transferor and the transferee, any consent or release
(of all or a portion of the obligations of the transferor) to be
delivered in connection with the Assignment Agreement, (ii) if a
Bank's entire interest in its Revolving Credit Commitment and in
all of its Loans have been transferred, to the transferee an
appropriate Note against return of the Note (marked "replaced")
held by the transferor and (iii) if only a portion of a Bank's
interest in its Revolving Credit Commitment and its Loans has been
transferred, a new Note to each of the transferor and the
transferee against return of the original Note of the transferor
(marked "replaced") held by the transferor.
(d) Parties. Upon satisfaction of the requirements of this
Section 8.01, including the payment of the fee and the delivery of
the documents set forth in Section 8.01(b), (i) the transferee
shall become and thereafter be deemed to be a "Bank" for the
purposes of this Agreement and (ii) the transferor (A) shall
continue to be a "Bank" for the purposes of this Agreement only if
and to the extent that the transfer shall not have been a transfer
of its entire interest in its Revolving Credit Commitment and its
Loans, (B) shall cease to be and thereafter shall no longer be
deemed to be a "Bank" in the case of any transfer of its entire
interest in its Revolving Credit Commitments and its Loans and (C)
the signature pages hereto and Schedule I hereto shall be
automatically amended, without further action, to reflect the
result of any such transfer.
SECTION 8.02 Sale of Participations. Each Bank shall
have the right at any time or times to sell one or more
participations or subparticipations to a financial institution, as
the case may be, in all or any part of (a) that Bank's Revolving
Credit Commitment, (b) any Revolving Credit Loan made by that Bank,
(c) any Note delivered to that Bank pursuant to this Agreement, and
(d) that Bank's participations, if any, purchased pursuant to
Section 6.04 or this Section 8.02.
(a) Benefits of Participant. The provisions of Article IX
shall inure to the benefit of each purchaser of a participation or
subparticipation (provided that each such participant shall look
solely to the seller of its participation for those benefits and
the Borrower's liabilities, if any, under any of those sections
shall not be increased as a result of the sale of any such
participation) and Agent shall continue to distribute payments
pursuant to this Agreement as if no participation has been sold.
(b) Rights Reserved. In the event any Bank shall sell any
participation or subparticipation, that Bank shall, as between
itself and the purchaser, retain all of its rights (including,
without limitation, rights to enforce against the Borrower this
Agreement and the Related Writings) and duties pursuant to this
Agreement and the Related Writings, including, without limitation,
that Bank's right to approve any waiver, consent or amendment
pursuant to Section 10.01, except if and to the extent that any
such waiver, consent or amendment would
(i) reduce any fee or commission allocated to the
participation or subparticipation, as the case may be,
(ii) reduce the amount of any principal payment on any
Revolving Credit Loan allocated to the participation or
subparticipation, as the case may be, or reduce the principal
amount of any Revolving Credit Loan so allocated or the rate of
interest payable thereon, or
(iii) extend the time for payment of any amount allocated
to the participation or subparticipation, as the case may be.
(c) No Delegation. No participation or subparticipation shall
operate as a delegation of any duty of the seller thereof. Under
no circumstance shall any participation or subparticipation be
deemed a novation in respect of all or any part of the seller's
obligations pursuant to this Agreement.
SECTION 8.03 Confidentiality. Each Bank hereby (a)
acknowledges that the Borrower and each of its Subsidiaries have
many trade secrets and much financial, environmental and other data
and information the confidentiality of which is important to their
business and (b) agrees to keep confidential any such trade secret,
data or information designated by the Borrower or any of its
Subsidiaries as confidential, except that this Section shall not
preclude any Bank from furnishing any such secret, data or
information: (i) as may be required by order of any court of
competent jurisdiction or requested by any governmental agency
having any regulatory authority over that Bank or its securities or
in response to legal process, (ii) to any other party to this
Agreement, (iii) or to any actual or prospective transferee,
participant or subparticipant (so long as such prospective
transferee, participant or subparticipant is a financial
institution) of all or part of that Bank's rights arising out of or
in connection with the Related Writings and this Agreement or any
thereof so long as such prospective transferee, participant or
subparticipant to whom disclosure is made agrees to be bound by the
provisions of this Section 8.03, (iv) to anyone if it shall have
been already publicly disclosed (other than by that Bank in
contravention of this Section 8.03), (v) to the extent reasonably
required in connection with the exercise of any right or remedy
under this Agreement or any Related Writing, (vi) to that Bank's
legal counsel, auditors and accountants and (vii) in connection
with any legal proceedings instituted by or against the Agent or
any Bank.
ARTICLE IX
INDEMNITIES
SECTION 9.01 Increased Costs. If, due to either (i) the
introduction of or any change (other than any change by way of
imposition or increase of reserve requirements in respect of LIBOR
Rate Loans otherwise included in the Eurocurrency Reserve
Percentage) in or in the interpretation of any Law or regulation or
(ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the
force of Law), there shall be any increase in the cost to any Bank
of agreeing to make or making, funding or maintaining Revolving
Credit Loans, then the Borrower shall from time to time, upon
demand by such Bank (with a copy of such demand to the Agent), pay
to the Agent for the account of such Bank additional amounts
sufficient to indemnify such Bank for such increased cost.
SECTION 9.02 Risk-Based Capital. If any Bank determines
that (i) compliance with any Law or regulation or any
interpretation thereof or (ii) compliance with any guideline or
request from any central bank or other governmental authority
(whether or not having the force of Law) affects or would affect
the amount of capital required or expected to be maintained by such
Bank or any corporation controlling such Bank and that the amount
of such capital required to be so maintained is increased by or
based upon the existence of such Bank's Revolving Credit Commitment
to lend hereunder and other commitments of this type, then, upon
demand by such Bank (with a copy of such demand to the Agent), the
Borrower shall immediately pay to the Agent for the account of such
Bank, from time to time as specified by such Bank, additional
amounts sufficient to indemnify such Bank or such corporation, to
the extent that such Bank reasonably determines such increase in
capital to be allocable to the existence of such Bank's Revolving
Credit Commitment to lend hereunder.
SECTION 9.03 Taxes.
(a) Taxes; Withholding. Any and all payments by the Borrower
hereunder, under the Notes or the other Related Writings shall be
made, in accordance with the provisions of Article II, free and
clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of
each Bank, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the Laws of which such Bank is
organized or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by Law to deduct any
Taxes from or in respect of any sum payable hereunder or under any
Note to any Bank or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section 9.03) such Bank (as the case may be)
receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable Law. All such Taxes shall be paid by
the Borrower prior to the date on which penalties attach thereto or
interest accrues thereon; provided, however, that, if any such
penalties or interest become due, the Borrower shall make prompt
payment thereof to the appropriate governmental authority. The
Borrower shall indemnify each Bank for the full amount of such
Taxes (including any Taxes on amounts payable under this Section
9.03 paid by the Bank and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted. Any
indemnification payment shall be made within thirty (30) days from
the date the Bank makes written demand therefor.
(b) Stamp Taxes. The Borrower agrees to pay, and will
indemnify each Bank and the Agent for, any present or future stamp
or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or
under the Notes or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or the Notes
(hereinafter referred to as "Other Taxes").
(c) Other Taxes. The Borrower will indemnify each Bank and the
Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this section 9.03) paid by
such Bank or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Any indemnification payment shall
be made within 30 days from the date such Bank or the Agent (as the
case may be) makes written demand therefor.
(d) Request for Refund. At the reasonable request of the
Borrower, a Bank or the Agent shall apply at the Borrower's expense
for a refund in respect of Taxes or Other Taxes previously paid by
the Borrower pursuant to this Section 9.03 if in the opinion of
such Bank or the Agent there is a reasonable basis for such refund.
Notwithstanding the foregoing, none of the Banks or the Agent shall
be obligated to pursue such refund if, in its sole good faith
judgment, such action would be disadvantageous to it. If any Bank
subsequently receives from a taxing authority a refund of any Tax
previously paid by the Borrower and for which the Borrower has
indemnified the Bank pursuant to this Section 9.03, such Bank shall
within thirty (30) days after receipt of such refund, and to the
extent permitted by applicable law, pay to the Borrower the net
amount of any such recovery after deducting taxes and expenses
attributable thereto.
(e) Exemption Certificate. Not later than the Closing Date
or, in the case of any bank or financial institution that becomes
a Bank after the Closing Date, pursuant to Article VIII, the date
of the instrument of assignment pursuant to which such bank or
financial institution became a Bank, and annually on each
Anniversary Date thereafter or at such other times as the Agent or
the Borrower may request, (i) each Bank organized under the laws of
a jurisdiction outside the United States shall provide the Agent
and the Borrower with duly completed copies of Form 1001 or Form
4224 or any successor form prescribed by the Internal Revenue
Service of the United States certifying that such Bank is exempt
from United States withholding taxes with respect to all payments
to be made to such Bank hereunder or other document satisfactory to
the Borrower and the Agent indicating that all payments to be made
to such Bank hereunder are not subject to such taxes and (ii) each
other Bank shall provide the Agent and the Borrower with a written
statement that it is not a non-resident alien or foreign
corporation and which otherwise satisfies Treasury Regulation Section
1.1441-5(b) or any successor regulation under the Internal Revenue
Code (each such certificate or statement, an "Exemption
Certificate"). Unless the Agent and the Borrower have received an
Exemption Certificate from such Bank, the Borrower, or the Agent if
the Borrower has not withheld, may withhold taxes from such
payments at the applicable statutory rate (subject, in the case of
the Borrower to the requirements of Section 9.03(a)); provided,
however, that if the Borrower has withheld it shall so notify the
Agent. If the Borrower is required to pay additional amounts to
any Bank pursuant to this Section 9.03, such Bank shall use
reasonable efforts to designate a different Lending office if such
designation will thereafter avoid the need for any additional
payments under this Section 9.03 and will not, in the sole judgment
of such Bank, be otherwise disadvantageous to such Bank. A Bank
which ceases to be exempt from United States withholding taxes
shall notify the Agent and the Borrower promptly thereof.
(f) Furnishing of Certificate. Within 30 days after the date
of any payment of Taxes, the Borrower will furnish to the Agent, at
its address referred to in Section 10.09, the original or a
certified copy of a receipt evidencing payment thereof. The
Borrower hereby represents and warrants to the Agent and each of
the Banks that no Taxes are payable in respect of any payment made
hereunder. If Taxes ever become payable in respect of any payment
hereunder or under the Notes made during a Fiscal Quarter,
thereafter the Borrower will furnish to the Agent, within 30 days
after the end of such Fiscal Quarter, at such address, a
certificate from the Borrower stating that any payments made during
such Fiscal Quarter are exempt from or not subject to Taxes.
(g) Survival of Provision. Without prejudice to the survival
of any other agreement of the Borrower hereunder, the agreements
and liabilities of the Borrower contained in this Section 9.03
shall survive the payment in full of the Obligations.
SECTION 9.04 Funding Costs. The Borrower agrees to
indemnify each Bank against any loss relating in any way to its
funding of any LIBOR Rate Loan paid before its stated maturity
(whether a prepayment or a payment following any acceleration of
maturity or otherwise) and to pay that Bank, as liquidated damages
for any such loss, an amount (discounted to the present value in
accordance with standard financial practice at a rate equal to the
treasury yield) equal to interest computed on the principal payment
from the payment date to the respective stated maturities thereof
at a rate equal to the difference of the contract rate less the
treasury yield, all as determined by that Bank in its reasonable
discretion. Treasury yield means the annual yield on direct
obligations of the United States having a principal amount and
maturity similar to that of the principal being paid.
SECTION 9.05 Losses. If any payment of principal of or
Rate Conversion or Rate Continuation of, any LIBOR Rate Loan is
made other than on the last day of an Interest Period relating to
such Loan, as a result of a payment or Rate Conversion or Rate
Continuation pursuant to the provisions of Article II or
acceleration of the maturity of the Notes pursuant to Section 6.02
or for any other reason, the Borrower shall, upon demand by any
Bank (with a copy of such demand to the Agent), pay to the Agent
for the account of such Bank any amounts (discounted to the present
value in accordance with standard financial practice at a rate
equal to the treasury yield) required to compensate such Bank for
any additional losses, costs or expenses which it may reasonably
incur as a result of such payment or Rate Conversion or Rate
Continuation, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired
by such Bank to fund or maintain such Loan.
SECTION 9.06 Indemnification for Requests. Whenever the
Borrower (a) shall revoke any Credit Request, any Rate
Conversion/Continuation Request involving any LIBOR Rate Loan, (b)
shall for any other reason fail to borrow pursuant to any such
Request or otherwise comply therewith, (c) shall fail to fulfill,
on or before the date specified in any such request, the applicable
conditions set forth in Article III of this Agreement or (d) shall
fail to honor any prepayment notice, then, in each case on any
Bank's demand, the Borrower shall indemnify each Bank and the Agent
against any loss, cost or expense incurred by such Bank or the
Agent as a result of any such failure by the Borrower, including,
without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank or
the Agent to fund the LIBOR Rate Loan to be made by such Bank or
the Agent in connection with such request when such LIBOR Rate
Loan, as a result of such failure by the Borrower, is not made on
such date.
SECTION 9.07 Takeovers. The Borrower agrees to indemnify
each Bank and Agent and hold each Bank and the Agent harmless from
and against any and all liabilities, losses, damages, costs and
expenses of any kind (including, without limitation, the reasonable
fees and disbursements of counsel for each Bank and the Agent) in
connection with any investigative, administrative or judicial
proceeding which may be incurred by any Bank or the Agent relating
to or arising out of any actual or proposed use of proceeds of the
extensions of credit hereunder in connection with the financing of
an acquisition or proposed acquisition of all or substantially all
of the assets or the stock of any corporation or other business
entity, except that no Bank or the Agent shall have the right to be
indemnified hereunder for its own gross negligence or willful
misconduct.
SECTION 9.08 Certificate for Indemnification. Each demand
by Agent or a Bank for payment pursuant to Article IX shall be
accompanied by a certificate setting forth the reason for the
payment, the amount to be paid, and the computations and
assumptions in determining the amount, which certificate shall be
presumed to be correct. In determining the amount of any such
payment thereunder, each Bank may use reasonable averaging and
attribution methods.
SECTION 9.09 Costs and Expenses. The Borrower agrees to
pay on demand all reasonable costs and expenses of the Agent in
connection with the preparation, execution, delivery, modification,
administration and amendment of this Agreement (including, without
limitation, any amendment), the Notes, the Collateral Documents,
the Relating Writings and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent with respect
thereto (including any reasonable interdepartmental charges) and
with respect to advising the Agent as to its rights and
responsibilities under this Agreement. Without limiting the
generality of the foregoing, such costs and expenses shall include:
(a) reasonable attorneys' and paralegal's costs, expenses and
disbursements of counsel to the Agent; (b) costs and expenses
(including reasonable attorneys and paralegal costs, expenses and
disbursements) for any amendment, supplement, waiver, consent, or
subsequent closing in connection with the Credit Agreement, the
Collateral Documents or any other Related Writing and the
transactions contemplated thereby; (c) costs and expenses of lien
and title searches and title insurance; (d) taxes, costs, expenses
and other charges for recording the Borrower Mortgages, recording
the Collateral Assignments, filing financing statements and
continuations, and other actions to perfect, protect, and continue
the Liens in favor of the Agent for the benefit of the Banks; (e)
sums paid or incurred to pay any amount or take any action required
of the Borrower under this Agreement, the Collateral Documents or
any other Related Writing that the Borrower fails to pay or take;
(f) costs of appraisals pursuant to Section 5.03(m), the Borrower's
portion of any appraisal required under Section 5.03(n) and the
cost of any appraisal, survey, environmental audit or the retention
of any other professional service or consultant commenced after the
occurrence and continuation of an Event of Default and deemed
reasonably necessary by the Agent; (g) costs of inspections, and
verifications of the Collateral, including, without limitation,
travel, lodging, and meals for inspections of the Collateral and
the Borrower's operations by the Agent up to one time per year and
at any time after the occurrence and continuation of an Event of
Default; (h) costs and expenses of forwarding loan proceeds and
payments to the Banks; (i) costs and expenses of preserving and
protecting the Collateral; and (j) costs and expenses (including,
without limitation, attorneys' fees) paid or incurred to obtain
payment of the Obligations (including the Obligations arising under
this Section 9.09), enforce the security interest, sell or
otherwise realize upon the Collateral, and otherwise enforce the
provisions of the Loan Documents, or to defend any claims made or
threatened against the Agent arising out of the transactions
contemplated hereby (including without limitation, preparations for
and consultations concerning any such matters). The Borrower
further agrees to pay on demand all costs and expenses of each
Bank, if any (including reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with
the enforcement of rights under this Section 9.09. The foregoing
shall not be construed to limit any other provisions of this
Agreement, the Collateral Documents or any related writing
regarding costs and expenses to be paid by the Borrower. All of
the foregoing costs and expenses may be charged, in the Agent's
sole discretion, to the Borrower's loan account as Revolving Credit
Advances.
SECTION 9.10 Duty To Mitigate. Each Bank seeking payment
pursuant to Article IX, other than pursuant to Section 9.09, shall
use reasonable efforts and take all reasonable actions to avoid the
cause of the payment and to minimize the amount thereof.
ARTICLE X
MISCELLANEOUS
This Agreement and the Related Writings shall be governed
by the following provisions:
SECTION 10.01 Amendments and Waivers. No amendment or
waiver of any provision of this Agreement or the Notes, nor consent
to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Majority Banks, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for
which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by all the Banks, do
any of the following: (a) waive any of the conditions specified in
Article III except in compliance with Section 2.09(a) or add any
asset as a Borrowing Base Asset which is not an Eligible Operator
Loan or an Eligible Operator Lease except in compliance with
Section 2.09(a), (b) increase the Revolving Credit Commitments of
the Banks or subject the Banks to any additional obligations, (c)
reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, (d) change the method of computing
of interest or any fee or extend or shorten any Interest Period,
(e) postpone any date fixed for any payment in respect of principal
of, or interest on, the Notes or any fees or other amounts payable
hereunder, (f) except as specifically provided by Section 8.01,
change the percentage of the Revolving Credit Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of
Banks, which shall be required for the Banks or any of them to take
any action hereunder, (g) release any Collateral other than as
provided in Section 2.08, (h) amend this Section 10.01, (i) amend,
modify or waive Sections 1.04, 5.03(m), 5.03(n), 2.09(a) or 8.01 or
amend, modify or waive any provision of this Agreement where such
provision requires consent or waiver by all Banks or any amendment
of such a provision which would amend such requirement of consent
by all Banks; and provided, further, that no amendment, waiver or
consent shall, unless in writing and signed by the Agent in
addition to the Banks required above to take such action, affect
the rights or duties of the Agent under this Agreement or any Note.
SECTION 10.02 Cumulative Provisions. Each right, power
or privilege specified or referred to in this Agreement is in
addition to and not in limitation of any other rights, powers and
privileges that the Banks and the Agent may respectively otherwise
have or acquire by operation of Law, by other contract or
otherwise.
SECTION 10.03 Binding Effect. This Agreement shall
become effective when it shall have been executed by the Borrower
and the Agent and when the Agent shall have been notified by each
Bank that such Bank has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Agent and each
Bank and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or
any interest herein without the prior written consent of all of the
Banks.
SECTION 10.04 Survival of Provisions. All
representations and warranties made in or pursuant to this
Agreement shall survive the execution and delivery of this
Agreement and of the Notes. The provisions of Article IX and the
indemnification provisions set forth in Article II and Article VII
shall survive the payment of the Obligations and any other
Indebtedness owed by the Borrower hereunder.
SECTION 10.05 Immediate U.S. Funds. Unless specifically
designated otherwise, any reference to money is a reference to
lawful money of the United States of America which, if in the form
of credits, shall be in immediately available funds.
SECTION 10.06 Captions. The several captions to
different Articles and to different sections and the respective
subsections thereof are inserted for convenience only and shall be
ignored in interpreting the provisions of this Agreement.
SECTION 10.07 Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the applicable
interest rate, together with all fees and charges that are treated
as interest under applicable law as provided for herein or in any
other document executed in connection herewith, or otherwise
contracted for, charged, taken, received or reserved by any Bank,
shall exceed the maximum lawful rate that may be contracted for,
charged, taken, received or reserved by such Bank in accordance
with applicable law, the rate of interest and all such charges
payable, contracted for, charged, taken, received or reserved to or
by such Bank in respect of the Revolving Credit Loans of such Bank
shall be limited to the maximum rate permitted by applicable Law.
SECTION 10.08 Illegality. If any provision in this
Agreement or any Related Writing shall for any reason be or become
illegal, void or unenforceable, that illegality, voidness or
unenforceability shall not affect any other provision.
SECTION 10.09 Notices. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic, telex or cable communication)
and mailed, telecopied, telegraphed, telexed, cabled or delivered,
to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof; or, as to any party,
at such other address as shall be designated by such party in a
written notice to each of the other parties. All such notices and
communications shall, when mailed, telecopied, telegraphed, telexed
or cabled, be effective when deposited in the mails, telecopied,
delivered to the telegraph company, confirmed by telex answerback
or delivered to the cable company, respectively, except that
notices and communications to the Agent pursuant to Article II or
VI shall not be effective until received by the Agent.
SECTION 10.10 Governing Law. This Agreement and the
Related Writings and the respective rights and obligations of the
parties hereto shall be governed by and construed in accordance
with the internal laws of the State of Ohio (without giving effect
to the conflict of laws rules thereof).
SECTION 10.11 Entire Agreement. This Agreement and the
Related Writings referred to in or otherwise contemplated by this
Agreement set forth the entire agreement of the parties as to the
transactions contemplated by this Agreement.
SECTION 10.12 Waiver of Jury Trial. THE PARTIES
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY THAT MAY ARISE UNDER
THIS AGREEMENT, THE NOTES, THE COLLATERAL DOCUMENTS OR THE RELATED
WRITINGS WOULD INVOLVE DIFFICULT AND COMPLEX ISSUES AND THEREFORE
AGREE THAT ANY LAW SUIT GROWING OUT OF OR INCIDENTAL TO ANY SUCH
CONTROVERSY WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY
A JUDGE SITTING WITHOUT A JURY. THE BORROWER CONFIRMS THAT THE
FOREGOING WAIVER IS INFORMED AND FREELY MADE.
SECTION 10.13 Jurisdiction; Venue; Inconvenient Forum.
(a) Jurisdiction. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY OHIO STATE COURT
OR FEDERAL COURT OF THE UNITED STATED OF AMERICA SITTING IN
CUYAHOGA COUNTY, OHIO, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES, THE COLLATERAL DOCUMENTS OR ANY RELATED
WRITING, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH OHIO STATE OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT
THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT, ANY COLLATERAL DOCUMENT OR ANY RELATED
WRITING IN THE COURTS OF ANY JURISDICTION.
(b) Venue; Inconvenient Forum. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
ANY COLLATERAL DOCUMENT OR ANY OTHER RELATED WRITING IN ANY OHIO
STATE OR FEDERAL COURT SITTING IN OHIO. EACH OF THE PARTIES HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT. THE BORROWER CONFIRMS THAT THE
FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.
SECTION 10.14 Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement. This
Agreement shall be deemed to be fully executed upon the receipt by
the Agent of executed counterparts (original or facsimile) from
each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers or agents
thereunto duly authorized, as of the date first above written.
HEALTH CARE REIT, INC.
___________________________________
By: ________________________________
Title: _____________________________
Address for Notices:
Health Care REIT, Inc.
One SeaGate, Suite 1950
Toledo, Ohio 43603
Telecopy Number: (419) 247-2826
NATIONAL CITY BANK, as Agent
_______________________________
By: Terri R. Cable
Title: Assistant Vice President
Address for Notices:
National City Bank
National City Center
1900 East Ninth Street
Metro Division
Cleveland, Ohio 44114
Telecopy: (216) 575-9396
Lending Office for all Loans:
National City Bank
National City Center
1900 East Ninth Street
Metro Division
Cleveland, Ohio 44114
Payment Office:
National City Bank
National City Center
1900 East Ninth Street
Metro Division
Cleveland, Ohio 44114
BANKS
NATIONAL CITY BANK
__________________________________
By: Terri R. Cable
Title: Assistant Vice President
Address for Notices:
National City Bank
National City Center
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Metro Division
Telecopy: (216) 575-9396
Lending Office:
National City Bank
National City Center
1900 East Ninth Street
Metro Division
Cleveland, Ohio 44114
BANK ONE, N.A., Dayton
__________________________________
By:
Title: ___________________________
Address for Notices:
Bank One, Dayton, N.A.
Kettering Tower
40 North Main
Commercial Lending, 3rd floor
Dayton, Ohio 45423
Attention: _______________________
Telecopy: _______________________
Lending Office for Loans:
Bank One, Dayton, N.A.
Kettering Tower
40 North Main
Commercial Lending, 3rd floor
Dayton, Ohio 45423
COMERICA BANK
__________________________________
By:
Title: ___________________________
Address for Notices:
Comerica Bank
One Detroit Center
500 Woodward Avenue
Detroit, Michigan 48226
Attention: _______________________
Telecopy: _______________________
Lending Office:
Comerica Bank
One Detroit Center
500 Woodward Avenue
Detroit, Michigan 48226
THE DAIWA BANK, LIMITED
__________________________________
By:
Title: ___________________________
__________________________________
By:
Title: ___________________________
Address for Notices:
The Daiwa Bank, Limited
2450 CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222
Attention: Branch Manager
Telecopy: _______________________
Lending Office:
The Daiwa Bank Limited
233 South Wacker Drive
Suite 5400
Chicago, Illinois 60606
HARRIS TRUST AND SAVINGS BANK
__________________________________
By:
Title: ___________________________
Address for Notices:
Harris Trust and Savings Bank
111 West Monroe
Chicago, Illinois 60690
Attention: Lori Reilly (or Arlett
Hall for Credit Requests)
Telecopy: (312) 461-2591
Lending Office:
Harris Trust and Saving Bank
111 West Monroe
Chicago, Illinois 60690
MANUFACTURERS AND TRADERS TRUST COMPANY
_________________________________
By:
Title: __________________________
Address for Notices:
Manufacturers and Traders Trust Company
One Fountain Plaza
Buffalo, New York 14203
Attention: ____________________________
Telecopy: ____________________________
Lending Office:
Manufacturers and Traders Trust Co.
One Fountain Plaza
Buffalo, New York 14203
SOCIETY NATIONAL BANK
__________________________________
By:
Title: ___________________________
Address for Notices:
Society National Bank
Three SeaGate
Commercial Lending, Floor 2
Toledo, Ohio 43603
Attention: _______________________
Telecopy: _______________________
Lending Office:
Society National Bank
Three SeaGate
Commercial Lending, Floor 2
Toledo, Ohio 43603
NBD BANK, N.A.
__________________________________
By:
Title: ___________________________
Address for Notices:
NBD Bank, N.A.
Midwest Banking Division
611 Woodward
Detroit, Michigan 48226
Attention: _______________________
Telecopy: _______________________
Lending Office:
NBD Bank, N.A.
Midwest Banking Division
611 Woodward
Detroit, Michigan 48226
SCHEDULE I
NAME OF BANK COMMITMENT
National City Bank $35,000,000
Society National Bank $20,000,000
The Daiwa Bank, Limited $20,000,000
Bank One, Dayton, N.A. $25,000,000
Manufacturers and Traders
Trust Company $15,000,000
Harris Trust and Savings Bank $15,000,000
NBD Bank, N.A. $10,000,000
Comerica Bank $10,000,000