Exhibit 10.23
HEALTH AND RETIREMENT PROPERTIES TRUST
SECOND AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
DATED AS OF MARCH 15, 1995
This SECOND AMENDED AND RESTATED REVOLVING LOAN
AGREEMENT is dated as of March 15, 1995, among HEALTH AND
RETIREMENT PROPERTIES TRUST, a real estate investment trust
formed under the laws of the State of Maryland ("Borrower"), the
several lenders parties to this Agreement (each, together with
any additional lender or lenders pursuant to Section 2.1(c) or
10.4, a "Lender" and, collectively, the "Lenders"), KLEINWORT
BENSON LIMITED, a bank organized under the laws of England, as
agent for itself and the other Lenders (in such capacity,
together with any successor in such capacity in accordance with
the terms hereof, "Agent"), WELLS FARGO BANK, NATIONAL
ASSOCIATION, a bank organized under the laws of the United States
of America, as administrative agent, and NATWEST BANK N.A.
(formerly National Westminster Bank USA), a national banking
association, as co-agent (in such capacity, "Co-Agent"); and, in
connection with Section 9 and the guaranties given therein,
HOSPITALITY PROPERTIES, INC., a Delaware corporation, and HEALTH
AND RETIREMENT PROPERTIES INTERNATIONAL, INC., a Delaware
corporation, each being a direct wholly-owned Subsidiary (as
defined below) of Borrower.
WHEREAS, Borrower, Kleinwort Benson Limited, as agent,
Wells Fargo Bank, National Association, as administrative agent,
National Westminster Bank USA (the predecessor to NatWest Bank
N.A.), as co-agent, and the lenders described therein are parties
to that certain Amended and Restated Revolving Loan Agreement
dated as of June 15, 1994 (as such agreement may have been
amended, supplemented or modified from time to time prior to the
date hereof, the "Existing Loan Agreement");
WHEREAS, Borrower desires that Lenders increase the
size of their aggregate commitments and extend the maturity date
under the Existing Loan Agreement, provide for borrowings to be
made in either U.S. Dollars or, up to a limit, GBP (both such
terms as defined below), permit Borrower to have Subsidiaries to
which it may advance borrowings hereunder and make certain other
amendments to the Existing Loan Agreement and amend and restate
it in its entirety; and
WHEREAS, Lenders desire to make such increase and
extension, provide for such borrowings, permit such Subsidiaries
and advances and make such amendments and such amendment and
restatement.
NOW, THEREFORE, the parties hereto hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement:
"Acute Care Asset" means, in respect of any Property or
Mortgage Interest, that more than 50% of the licensed beds of the
Property or, in the case of a Mortgage Interest, of the Mortgaged
Property covered thereby, are designated for acute care.
"Administrative Agent" means Wells Fargo Bank, National
Association ("Wells") acting in its capacity as administrative
agent in connection with this Agreement; provided that with
respect to Loans denominated in GBP,"Administrative Agent" shall
mean a Lender (the "GBP Agent") agreed to by Borrower, Agent and
Wells and, in such circumstances, references to "Administrative
Agent" relating to Loans denominated in GBP shall be read as
references to the GBP Agent, while references to "Administrative
Agent" relating to Loans denominated in U.S. Dollars or otherwise
shall be read as references to Wells, and if such circumstances
are applicable the singular term "Administrative Agent" shall be
construed to include both Wells and the GBP Agent where
appropriate (including, without limitation, for purposes of the
indemnifications given in Sections 8 and 10.7); and, in addition,
"Administrative Agent" shall mean any successor to either Wells
or the GBP Agent in their respective capacities in accordance
with the terms hereof; provided further that in no event shall
Wells be or be deemed to be the GBP Agent or have any of its
related duties unless Wells expressly accepts such role.
"Advisor" means HRPT Advisors or such other Person as
shall act as an advisor to Borrower, whether pursuant to the
Advisory Agreement, or an agreement analogous to the Advisory
Agreement, with the prior written consent of Agent.
"Advisory Agreement" means the Advisory Agreement,
dated as of November 20, 1986, between Borrower and HRPT
Advisors, as amended by an Amendment Agreement, dated August 26,
1987, between Borrower and HRPT Advisors and as amended by a
Second Amendment Agreement, dated December 6, 1993, between
Borrower and HRPT Advisors, and as amended, supplemented or
modified from time to time in a manner not inconsistent with the
terms of the Existing Loan Agreement, hereof or of the
Subordination Agreement.
"Affiliate" means, with respect to a particular Person,
(a) any Person which, directly or indirectly, is in Control of,
is Controlled by, or is under common Control with such particular
Person, or (b) any Person who is a director or officer or trustee
(i) of such particular Person, (ii) of any Subsidiary of such
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particular Person or (iii) of any Person described in clause (a)
above.
"Agreement" means this Second Amended and Restated
Revolving Loan Agreement, as amended, supplemented or modified
from time to time in accordance herewith.
"Allowed Value" means, as of any date of determination,
(i) with respect to each Eligible Property or Property (as the
context may require), the lesser of (a) the acquisition cost to
Borrower or to any of its Subsidiaries of such Eligible Property
or Property, (b) the Appraised Value of such Eligible Property or
Property as set forth in the then most recent Appraisal with
respect to such Eligible Property or Property less the value
attributable to any capital improvements made by the Operator of
such Eligible Property or Property financed by such Operator, and
(c) the minimum purchase price (howsoever denominated) that would
be payable to Borrower or such Subsidiary by the Operator of such
Eligible Property or Property or any other Person if it purchased
such Eligible Property or Property on the date of determination
pursuant to the exercise of any right it may have (whether then
or in the future exercisable) to purchase such Eligible Property
or Property (assuming in the case of any such right only
exercisable in the future that such right is exercisable on the
date of determination), and (ii) with respect to each Eligible
Mortgage or Mortgage Interest (as the context may require), the
lesser of (a) the outstanding principal amount due to Borrower or
any of its Subsidiaries from the relevant Mortgagor in respect of
such Eligible Mortgage or Mortgage Interest, and (b) the
Appraised Value of the Mortgaged Property which is covered by the
relevant Eligible Mortgage or Mortgage Interest as set forth in
the most recent Appraisal with respect to such Eligible Mortgage
or Mortgaged Property.
"Alternate GBP Rate" means the interest rate per annum
specified by Administrative Agent from time to time as the cost
to Lenders of funding affected Loans described in Section 2.13 or
2.14 (without reference to the Applicable Margin or the Mandatory
Liquid Asset Costs payable under Section 2.4(a)).
"Alternate GBP Rate Loans" means the portion of Loans
(which are denominated in GBP) the interest on which is computed
by reference to the Alternate GBP Rate.
"Alternate Rate", in respect of any Loan, means the
rate or rates of interest agreed pursuant to Section 2.13 or
2.14, as the case may be, between Borrower and Lenders to be
applicable to such Loan; provided that in the absence of such
agreement under the circumstances specified in Section 2.13 or
2.14, as the case may be, the Alternate Rate shall be equal to
the Base Rate in the case of Loans denominated in U.S. Dollars
and shall be equal to the Alternate GBP Rate in the case of
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Loans denominated in GBP.
"Alternate Rate Loans" means the portion of the Loans
(which may be denominated in U.S. Dollars or in GBP) the interest
on which is computed by reference to the Alternate Rate.
"Applicable Margin" means, in the case of a Base Rate
Loan, a margin of zero and, in the case of a Eurodollar Loan or
an Alternate Rate Loan which is not a Base Rate Loan, a margin of
one and one-quarter percentage points (1.25%) per annum; provided
that if, at any date of determination, Borrower's long-term
unsecured senior debt is not rated BBB - or higher by Standard &
Poor's Corporation or Baa3 or higher by Moody's Investors
Service, Inc. (or similarly rated by any successor to either of
such rating services), then, in the case of all Loans, the
Applicable Margin otherwise applicable (including any increase
under the next proviso) shall be increased by an additional
one-quarter percentage point (0.25%) per annum; provided further
that if, at any date of determination, Loans have been
outstanding in an aggregate principal amount equal to or greater
than 66-2/3% of the Commitments for a period of 12 consecutive
months or longer, then, in the case of all Loans, the Applicable
Margin otherwise applicable (including any increase under the
previous proviso) shall be increased by an additional one-quarter
percentage point (0.25%) per annum, with any additional margin
under this further proviso to remain in effect until the first
Business Day next following the first period of 30 consecutive
days after such increase became effective during which the
aggregate principal amount of Loans outstanding has been less
than 66-2/3% of the Commitments.
"Appraisal" means an appraisal using methodologies
acceptable to Agent and Administrative Agent at the time such
appraisal is or was made and performed by a Recognized Appraiser.
"Appraised Value" of any Facility shall mean (a) in the
case of any Fee Interest, the lesser of (i) the value placed upon
such Facility pursuant to the most recent Appraisal thereof based
on a valuation of the Fee Interest subject to the Lease(s) in
respect of such Fee Interest and (ii) the value placed upon such
Facility pursuant to the most recent Appraisal thereof based on
a valuation of the Fee Interest free and clear of all Leases and
determined by discounting to present value the Facility's future
projected net cash flow, provided that in the case where the most
recent Appraisal only values the Fee Interest under either
subclause (i) or subclause (ii) of this clause (a) but not both,
the Appraised Value shall mean the value so placed on the Fee
Interest under either subclause (i) or subclause (ii) of this
clause (a), whichever is applicable; (b) in the case of a
Leasehold Interest, the lesser of (i) the value placed upon such
Facility pursuant to the most recent Appraisal thereof based on a
valuation of the Leasehold Interest subject to the Lease(s) in
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respect of such Leasehold Interest and (ii) the value placed upon
such Facility pursuant to the most recent Appraisal thereof based
on a valuation of the Leasehold Interest free and clear of all
Leases and determined by discounting to present value the
Facility's future projected net cash flow, provided that in the
case where the most recent Appraisal only values the Leasehold
Interest under either subclause (i) or subclause (ii) of this
clause (b) but not both, the Appraised Value shall mean the value
so placed on the Leasehold Interest under either subclause (i) or
subclause (ii) of this clause (b), whichever is applicable; and
(c) in the case of a Mortgage Interest, the value placed upon the
Mortgaged Property covered by such Mortgage Interest pursuant to
the most recent Appraisal thereof based on a valuation of such
Mortgaged Property free and clear of such Mortgage Interest and
determined by discounting to present value the future projected
net cash flow of such Mortgaged Property.
"Base Rate" means a fluctuating interest rate per annum
as shall be in effect from time to time, which rate per annum
shall at all times be equal to the greater of:
(i) the prime rate of interest announced by
Administrative Agent from time to time, changing
when and as said prime rate changes; and
(ii) the sum of one-half of one percent (0.5%) and the
Federal Funds Rate in effect from time to time,
changing when and as such Federal Funds Rate
changes.
"Base Rate Loans" means the portion of the Loans (which
are denominated in U.S. Dollars) the interest on which is
computed by reference to the Base Rate.
"Borrower" has the meaning set forth in the first
paragraph of this Agreement.
"Borrowing Date" means the Business Day specified in a
Notice of Borrowing as the date on which Borrower requests the
Lenders to make Loans hereunder.
"Business Day" means a day other than a Saturday,
Sunday or other day on which commercial banks in New York City or
London, England are authorized or required by law to remain
closed or on which banks are not open for dealings in U.S. Dollar
and GBP deposits in the London interbank market.
"Capitalized Lease Obligation" means, as to any Person,
any obligation of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use) real
or personal property which obligation is required to be
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classified or accounted for as a capital lease obligation on a
balance sheet of such Person prepared in accordance with GAAP
and, for purposes of this Agreement, the amount of such
obligation at any date shall be the outstanding amount thereof at
such date, determined in accordance with GAAP and Section 1.3(a).
"Cash Flow" means, for any period and any Person in
respect of one or more Properties and/or Mortgaged Properties as
to which such Person is the Operator or Mortgagor thereof, the
sum (without duplication of counting and determined in accordance
with Section 1.3(a)) of (i) Income Before Extraordinary Items,
(ii) Interest Charges payable to Borrower, in the case of a
Mortgaged Property, (iii) depreciation expenses,
(iv) amortization expenses, (v) other non-cash items reducing
Income before Extraordinary Items, (vi) all payments required to
be made to Borrower or any of its Subsidiaries under a Lease,
including without limitation fixed rent, participation rent and
additional rent in respect of (a) operating expenses, (b) taxes
based on the ownership of real property, (c) insurance premiums
and/or (d) any other costs or expenses of the relevant lessor or
sublessor, (vii) subordinated expenses paid to any Affiliate of
such Operator or such Mortgagor relating to management,
accounting or other similar fees, and (viii) to the extent
otherwise included in the calculation of Income Before
Extraordinary Items, any Restricted Payment, less non-cash items
increasing Income Before Extraordinary Items, in each case of
such Person for such period attributable to such Properties
and/or Mortgaged Properties.
"Cash Flow Event" means in respect of a Property or
Mortgaged Property, that the Cash Flow of the Operator or
Mortgagor thereof (as applicable) over its four most recent
financial quarters (or, (i) if financial reporting for such Cash
Flow is provided on an annual basis, over its last reported
financial year, or (ii) where Mariott International, Inc. is the
Operator or Mortgagor (but not in any event for a Courtyard
Lodging) and financial reporting for such Cash Flow is not
otherwise required to be provided to Borrower or its
Subsidiaries, over the last reported financial year as certified
by an officer of Marriott International, Inc. in a certificate
described in Section 5.2(b)(iii)), attributable to that Property
or Mortgaged Property is less than its Fixed Charges over the
same period for such Property or Mortgaged Property; provided
that a Cash Flow Event shall not be deemed to occur in respect of
a Property or a Mortgaged Property that is part of a group of
Cross Guarantied Assets if the Cash Flow of the Operators and
Mortgagors determined on an aggregate basis over their respective
four most recent financial quarters (or last reported financial
year or last certified financial year, as the case may be),
attributable to the relevant group of Cross Guarantied Assets, is
greater than or equal to their Fixed Charges determined on an
aggregate basis over the same period in respect of such group of
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Cross Guarantied Assets.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Commission" means the United States Securities and
Exchange Commission or any successor to the responsibilities of
such commission.
"Commitment" has the meaning set forth in Section
2.1(b).
"Commitment Period" means the period from and including
the date hereof to and including the Final Borrowing Date or such
earlier date as the Commitments shall terminate as provided
herein.
"Common Shares" means Borrower's common shares of
beneficial interest, $0.01 par value.
"Contingent Obligation" means, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations (
"primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary
obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary
obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the payment of, or the ability of the
primary obligor to make payment of, such primary obligation or
(d) otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof; provided
that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent
Obligation shall be determined in accordance with Section 1.3(a)
and shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Contractual Obligation" means, as to any Person, the
Certificate of Incorporation and By-Laws or other organizational
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or governing documents of such Person, and any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any
of its property is bound.
"Control" (including with correlative meanings the
terms "Controlling", "Controlled by" and "under common Control
with"), as applied to any Person, means the possession of the
power, direct or indirect, (i) to vote 5% or more of the
securities having ordinary voting power for the election of
directors or trustees of such Person, or (ii) to direct or cause
the direction of the management and policies of such Person
whether by contract or otherwise.
"Courtyard Lodgings" means the Properties consisting of
21 Courtyard Hotels identified on Schedule 6 to be purchased by
Borrower and leased to HMH HPT Courtyards, Inc., an Affiliate of
Host Marriott Corporation, and managed by Courtyard Management
Corporation, an Affiliate of Marriott International, Inc.
"Credit Support Agreements" means each of the Lease
Guarantees, Mortgage Guarantees, Pledges and Sublease Agreements,
and any other agreements or instruments providing assurances in
any form, in each case in respect of any Person's obligations
under a Lease or Mortgage Interest Agreement.
"Credit Support Obligors" means the obligors in respect
of the Credit Support Agreements, and each of them.
"Cross Guarantied Assets" means a group of Properties
and/or Mortgage Interests as to which the various Operators
and/or Mortgagors have guarantied each other's obligations to
Borrower and/or any of Borrower's Subsidiaries and have agreed to
cross-default such obligations and/or cross-collateralize those
obligations to the extent of any security or credit support that
has been provided for such obligations or a group of Properties
and/or Mortgage Interests operated by a single Operator or
Mortgagor as to which such Operator or Mortgagor has agreed to
cross-default all of its obligations to Borrower and/or any of
Borrower's Subsidiaries and to cross-collateralize those
obligations to the extent of any security or credit support that
has been provided for such obligations.
"Current" means, at any date of determination, in
respect of cash flow information of an Operator or Mortgagor
required in a Real Property Statement, (a) for a fiscal year of
that Operator or Mortgagor, that such information relates to its
fiscal year then current or the fiscal year ended not more than
one hundred and fifty days prior thereto or (b) for a fiscal
quarter of that Operator or Mortgagor, that such information
relates to its fiscal quarter then current or a fiscal quarter
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ended not more than seventy five days prior thereto.
"Declaration of Trust" means the Declaration of Trust
establishing Borrower, dated October 9, 1986, as amended and
restated on July 1, 1994, as such Declaration of Trust may be
further amended, supplemented or modified from time to time.
"Default" means any of the events specified in
Section 7.1, whether or not any requirement for the giving of
notice, the lapse of time, or both, or any other condition, has
been satisfied.
"EBI" means, with respect to Borrower and its
Subsidiaries, for any period of time, without duplication of
counting and determined in accordance with Section 1.3(a), the
sum of (i) the net income on a consolidated basis (determined in
accordance with GAAP for such period), plus (ii) any losses for
such period and reserves for such losses from the sale of real
property assets (on a tax effected basis) plus (iii) any non-cash
extraordinary losses and expenses and reserves for any non-cash
extraordinary losses and expenses for such period, minus (iv) any
gains for such period from the sale of assets (on a tax effected
basis) outside the ordinary course of business, minus (v) any
extraordinary gains from such period, plus (vi) to the extent
deducted from gross income to calculate net income, Interest
Charges of Borrower and its Subsidiaries on a consolidated basis
for such period.
"Effective Date" means the date when the conditions
precedent set forth in Section 4 are first satisfied, or are
waived pursuant to Section 10.6.
"Eligible Mortgage" has the meaning set forth in
Section 2.16.
"Eligible Property" has the meaning set forth in
Section 2.16.
"Environmental Laws" means all statutes, ordinances,
orders, rules and regulations having effect in any domestic or
foreign jurisdiction relating to environmental matters,
including, without limitation, those relating to fines, orders,
injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release or
threatened Release of Hazardous Materials and to the generation,
use, storage, transportation, or disposal of Hazardous Materials,
in any manner applicable to Borrower or any Operator or Mortgagor
or any of their respective Subsidiaries or any of their
respective properties, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability
Act (42 U.S.C. Section 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
9
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.),
the Federal Water Pollution Control Act (33 U.S.C. Section 1251
et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.),
the Occupational Safety and Health Act (29 U.S.C. Section 651 et
seq.) and the Emergency Planning and Community Right-to-Know Act
(42 U.S.C. Section 11001 et seq.), each as amended or
supplemented, and any analogous future or present local,
municipal, state and federal statutes and regulations promulgated
pursuant thereto, each as in effect as of the date of
determination.
"Equivalent Amount" means the amount of a currency
other than U.S. Dollars that can be purchased with U.S. Dollars
calculated on the basis of Administrative Agent's spot rate of
exchange for the purchase of such other currency with U.S.
Dollars on the date such calculation is to be made (such
calculation to be made on the occasions set forth in Section
1.3(b)).
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means (i) any corporation which is an
entity under common control with Borrower within the meaning of
Section 4001 of ERISA or a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code of
which Borrower is a member; (ii) any trade or business (whether
or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of
Section 414(c) of the Code of which Borrower is a member; and
(iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Code of which Borrower,
any corporation described in clause (i) above or any trade or
business described in clause (ii) above is a member.
"Eurodollar Loans" means the portion of the Loans
(which may be denominated in U.S. Dollars or in GBP) the interest
on which is computed by reference to the LIBO Rate.
"Event of Default" means any of the events specified in
Section 7.1, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition, has
been satisfied.
"Existing Loan Agreement" has the meaning set forth in
the introduction to this Agreement.
"Existing Loans" has the meaning set forth in Section
2.1(a).
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"Excluded Taxes" means taxes upon any Lender's overall
net income imposed by the United States of America or any
political subdivision or taxing authority thereof or therein or
by any jurisdiction in which the Lending Office of any Lender is
located or in which any Lender is organized or has its principal
or registered office, except taxes, duties or charges imposed
pursuant to Section 1, 2 and/or 39 of the Massachusetts General
Laws, Chapter 63, as currently in effect or as amended
hereafter or any analogous provisions (or provisions having an
analogous effect) of the laws, rules or regulations (or
interpretations thereof) of Massachusetts or any other
Governmental Authority.
"Facility" means each operating facility, offering
health care or related services, rehabilitation or retirement
services or hotel or other lodging services comprised of the
Courtyard Lodgings, or other income producing real property
interest (including, without limitation, the Fee Interests and/or
Leasehold Interests and/or Mortgage Interests associated with
such Facility) in which Borrower or any of its Subsidiaries has
acquired or will acquire an interest as owner, lessee or
mortgagee, including without limitation each Property and
Mortgaged Property.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such
day (or, if such day is not a day for which such rate is
published, for the next preceding day for which it is published)
by the Federal Reserve Bank of New York.
"Fee Interests" means any land and any buildings,
structures, improvements and fixtures owned beneficially in fee
simple by Borrower or any of its Subsidiaries and equipment
located thereon or used in connection therewith and all
personalty (including, without limitation, franchises) related
thereto and all other real estate interests, owned beneficially
by Borrower or any of its Subsidiaries.
"Final Borrowing Date" means the earlier of (i) March
15, 1997 and (ii) such date as the Commitments shall terminate as
provided herein.
"Fixed Charges" means, for any period and any Person in
respect of one or more Properties and/or Mortgaged Properties as
to which such Person is the Operator or Mortgagor thereof, the
sum (without duplication of counting and determined in accordance
with Section 1.3(a)) of (i) Interest Charges, (ii) all payments
required to be made as lessee or sublessee under the terms of any
Lease or other lease agreement, including without limitation
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fixed rent, participation rent and additional rent in respect of
(a) operating expenses, (b) taxes based on the ownership of real
property, (c) insurance premiums and/or (d) any other costs or
expenses of the relevant lessor or sublessor, and (iii) scheduled
payments of principal of Indebtedness or payments of amounts
equivalent to principal, in each case of such Person, for such
period and attributable to such Properties and/or Mortgaged
Properties.
"GAAP" means, subject to the provisions of Section 1.2,
generally accepted accounting principles set forth in the
Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements by the
Financial Accounting Standards Board or in such other statement
by such other entity as may be approved by a significant segment
of the accounting profession, which are applicable to the
circumstances as of the date in question; and the requirement
that such principles be applied on a consistent basis shall mean
that the accounting principles observed in a current period are
comparable in all material respects to those applied in a
preceding period.
"GBP" shall mean the lawful currency from time to time
of the United Kingdom.
"General Corporate Loans" means Loans, the proceeds of
which are to be applied toward general corporate purposes of
Borrower or its Subsidiaries, as designated by Borrower pursuant
to a Notice of Borrowing.
"Governmental Authority" means any nation or
government, any state or other political subdivision thereof, and
any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or
Controlled (through stock or capital ownership or otherwise) by
any of the foregoing.
"Hazardous Material" means (i) any chemical, material,
substance or waste defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "restricted hazardous
waste," or "toxic substances" or any other formulations intended
to define, list or classify substances by reason of deleterious
properties under any applicable Environmental Laws,
(ii) biomedical waste, (iii) any oil, petroleum or petroleum
derived substance, any drilling fluids, produced waters and other
wastes associated with the exploration, development or production
of crude oil, any flammable substances or explosives, any
radioactive materials, any toxic wastes or substances or any
other materials or pollutants which (a) pose a hazard to any
12
property of Borrower or any Operator or Mortgagor or any of their
respective Subsidiaries or to Persons on or about such property
or (b) cause such property to be in violation of any
Environmental Laws, (iv) asbestos in any form which is or could
become friable, urea formaldehyde foam insulation, electrical
equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty parts per
million, and (v) any other chemical, material, substance or
waste, exposure to which is prohibited, limited or regulated by
any Governmental Authority or may or could pose a hazard to the
health and safety of the owners, occupants or any Persons
surrounding the Facilities.
"HRPT Advisors" means HRPT Advisors, Inc., a Delaware
corporation.
"IDFA Indebtedness" means the Indebtedness, in an
aggregate principal amount not to exceed $17,700,000 plus accrued
interest thereon, existing pursuant to (a) that certain Loan
Agreement dated as of April 15, 1991 between the Illinois
Development Finance Authority and Marriott Retirement
Communities, Inc. and relating to the Illinois Development
Finance Authority Revenue Refunding Bonds Series 1991A, and (b)
that certain Loan Agreement dated as of April 15, 1991 between
the Illinois Development Finance Authority and Marriott
Retirement Communities, Inc. and relating to the Illinois
Development Finance Authority Revenue Refunding Bonds Series
1991B, which Indebtedness was assumed by Borrower's wholly-owned
Subsidiary Church Creek Corporation, a Massachusetts corporation,
pursuant to that certain Purchase Agreement dated March 17, 1994
among HMC Retirement Properties, Inc., HMH Properties, Inc. and
Borrower and (without duplication) the letter of credit
obligations with respect to which such Indebtedness was
guaranteed by Borrower.
"Income Before Extraordinary Items" means, for any
period and any Person in respect of one or more Properties and/or
Mortgaged Properties as to which such Person is the Operator or
Mortgagor thereof, the net income (or loss) of such Person for
such period attributable to such Properties and/or Mortgaged
Properties, excluding any extraordinary items (net of taxes) and
including amounts paid or provided for income taxes or deferred
income taxes by or on behalf of such Person attributable to such
Properties and/or Mortgaged Properties, all as determined in
conformity with GAAP and Section 1.3(a).
"Indebtedness" means, with respect to any Person, and
without duplication and determined in accordance with Section
1.3(a), (i) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person for borrowed money or
13
other extensions of credit or evidenced by bonds, debentures,
notes or similar instruments (whether or not the recourse of the
lender is to the whole of the assets of such Person or to only a
portion thereof), (ii) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect
to letters of credit or bankers' acceptances issued for the
account of such Person or with respect to interest rate
protection agreements or securities repurchase agreements or
currency exchange agreements or similar or analogous hedging or
derivative agreements or instruments, (iii) all obligations and
other liabilities (contingent or otherwise) of such Person with
respect to any conditional sale, installment sale or other title
retention agreement, purchase money mortgage or security
interest, or otherwise to pay the deferred purchase price of
property or services (except trade accounts payable and accrued
expenses arising in the ordinary course of business) or in
respect of any sale and leaseback arrangement, (iv) all
Capitalized Lease Obligations of such Person, (v) all Contingent
Obligations of such Person, (vi) all surety and other bonds and
deposits, and all obligations and other liabilities secured by a
Lien or other encumbrance on any asset of such Person (even
though such Person has not assumed or otherwise become liable for
the payment thereof), and (vii) all obligations to purchase,
redeem or acquire any capital stock of such Person or its
Subsidiaries that, by its terms or by the terms of any security
into which it is convertible or exchangeable, is, or upon the
happening of any event or the passage of time would be, required
to be redeemed or repurchased by such Person or its Subsidiaries,
including at the option of the holder, in whole or in part, or
has, or upon the happening of an event or passage of time would
have, a redemption or similar payment due, on or prior to the
fifth anniversary of the date hereof or, if later, the date which
is two years after the due date for the final repayment of the
Loans as specified in any amendment of this Agreement.
"Independent Trustees" has the meaning set forth in the
Declaration of Trust.
"Insolvency Event", with respect to any Person, means
that (i) such Person shall have suspended or discontinued its
business or commenced any case, proceeding or other action
(A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets,
or such Person shall have made a general assignment for the
benefit of its creditors; or (ii) there shall have been commenced
14
against such Person any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded
for a period of 60 days; or (iii) there shall have been commenced
against such Person any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its
assets, which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed
or bonded pending appeal within 60 days from the entry thereof;
or (iv) such Person shall have taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii) or (iii) above;
or (v) such Person shall generally not be paying, or shall have
been unable to pay, or shall have admitted in writing its
inability to pay, its debts as they become due.
"Interest Charges" of a Person for any period means the
sum of (i) the aggregate interest accrued and payable in cash,
securities or otherwise on all Indebtedness of such Person and
its Subsidiaries, if any, on a consolidated basis for such
period, plus (ii) the aggregate amount of debt discount or other
amounts analogous to interest accruing during or attributable to
such period, whether or not payable during such period, including
without limitation all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under (a)(i) interest rate
swap agreements, interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person and/or
its Subsidiaries against fluctuations in interest rates; and(b)
foreign exchange contracts and other agreements or arrangements
designed to protect such Person and/or its Subsidiaries against
fluctuations in currency values, all amounts calculated above to
be determined in conformity with GAAP and in accordance with
Section 1.3(a).
"Interest Payment Date" means, subject to Section 2.10
hereof, (i) in the case of a Eurodollar Loan, the last day of
each Interest Period (or if any such day is not a Business Day,
the next succeeding Business Day), provided that in the case of
each Interest Period of more than three months duration,
"Interest Payment Date" shall also include each date that is
three months, or an integral multiple thereof, after commencement
of such Interest Period; and (ii) in the case of an Alternate
Rate Loan or Base Rate Loan, the last Business Day of March,
June, September and December of each year and the date such Loan
(or any portion thereof) is converted in accordance with the
terms hereof into a Base Rate Loan or Eurodollar Loan, in the
case of an Alternate Rate Loan, or an Alternate Rate Loan or
Eurodollar Loan, in the case of a Base Rate Loan.
15
"Interest Period" means with respect to each Eurodollar
Loan, and subject to Section 2.10 hereof, a one, two, three or
six month period (or such other period of less than six months as
shall be agreed by all the Lenders) as selected at the option of
Borrower pursuant to a Notice of Borrowing or Notice of
Continuation; provided that:
(i) no Interest Period may be selected which expires
later than the Termination Date;
(ii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day with respect
to which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall,
subject to the foregoing proviso, end on the last Business
Day of a calendar month;
(iii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Loan continued as such
pursuant to a Notice of Continuation, each successive
Interest Period shall commence on the day on which the next
preceding Interest Period expires;
(iv) there shall be no more than eight Interest Periods
outstanding at any one time; and
(v) in the event Borrower fails to specify an Interest
Period for any Loan in the applicable Notice of Borrowing or
Notice of Continuation, Borrower shall be deemed to have
selected an Interest Period of one month.
"Interest Rate Determination Date" means each date for
calculating the LIBO Rate for purposes of determining the
interest rate in respect of an Interest Period. For a Eurodollar
Loan, the Interest Rate Determination Date for such Loans
denominated in U.S. Dollars shall be the second Business Day
prior to the first day of the related Interest Period, while the
Interest Rate Determination Date for such Loans denominated in
GBP shall be the first day of the related Interest Period.
"Kleinwort Benson" means Kleinwort Benson Limited, a
bank organized and existing under the laws of England.
"Lease Guarantees" means each guarantee, letter of
credit or other similar undertaking issued by any Person in
respect of any of the obligations of an Operator under a Lease.
"Lease Guarantors" means the obligors in respect of the
Lease Guarantees, and each of them.
"Leasehold Interests" means any leasehold estate in any
land and/or any buildings, structures, improvements and fixtures
16
owned beneficially by Borrower or any of its Subsidiaries and all
equipment located thereon or used in connection therewith and all
personalty (including, without limitation, franchises) related
thereto, owned beneficially by Borrower or any of its
Subsidiaries.
"Leases" means any leases or subleases relating to the
Properties in respect of which Borrower of any of its
Subsidiaries is the lessor.
"Lender" has the meaning set forth in the first
paragraph of this Agreement.
"Lending Office" means the branch or Affiliate office
or offices of each Lender designated as the Lending Office(s) of
such Lender on Schedule 1 and each other branch or Affiliate
office as such Lender may designate as its Lending Office(s) from
time to time by notice to Agent and Borrower.
"LIBO Rate" means the average (expressed as a
percentage and rounded to the nearest one ten thousandth of one
percent) of the offered rates, if any, quoted by the Reference
Banks to Administrative Agent in the London interbank market for
U.S. Dollar or GBP (as applicable) deposits of amounts comparable
to the principal amount of the Loans for which the LIBO Rate is
being determined with maturities comparable to the Interest
Period for which such LIBO Rate will apply as of approximately
11:00 A.M. (London time) on the Interest Rate Determination Date
for such Interest Period.
"Lien" means, as to any Person, any mortgage, lien
(statutory or otherwise), pledge, adverse claim, charge, security
interest, assignment, deposit agreement or other encumbrance in
or on, or any interest or title of any vendor, lessor, lender or
other secured party to or of such Person under any conditional
sale or other title retention agreement or Capitalized Lease
Obligation with respect to any property or asset of such Person,
or the signing or filing of a financing statement which names
such Person as debtor, or the signing of any security agreement
authorizing any other party as the secured party thereunder to
file any financing statement.
"Loan Agents" has the meaning set forth in Section
8.1(a).
"Loan Documents" means, collectively, this Agreement
(including, without limitation, the guaranties in Section 9), the
Notes and any other agreements, documents or instruments
delivered pursuant to or in connection with any of the foregoing,
as such agreements, documents or instruments may be amended,
17
modified or supplemented from time to time.
"Loans" means the Existing Loans and the revolving
loans made or to be made to Borrower by the Lenders hereunder.
"MAC" means, with respect to any Property or Mortgage
Interest, any material adverse effect on or change in (a) the
business, operations, assets, prospects or financial condition or
other condition of (i) such Property or (ii) such Mortgage
Interest or (iii) any Operator of such Property or (iv) any
Mortgagor of such Mortgage Interest or (v) any Credit Support
Obligor of such Property or Mortgage Interest, (b) Agent's,
Administrative Agent's or any Lender's rights and remedies under
the Loan Documents, or (c) the ability of (i) any Operator of
such Property or (ii) any Mortgagor of such Mortgage Interest or
(iii) any Credit Support Obligor of such Property or Mortgage
Interest to perform its obligations under the Loan Documents or
under the Leases, the Mortgage Interest Agreements or the Credit
Support Agreements in respect of such Property or Mortgage
Interest.
"Majority Lenders" means, at any particular time,
Lenders having more than 66-2/3% of the Commitments, or if the
Commitments have been terminated at such time, Lenders having
more than 66-2/3% of the aggregate principal amount of the Loans
then outstanding.
"Mandatory Liquid Asset Costs" means, in relation to
each Lender which may be subject to such requirements, the
additional cost to such Lender of complying with the relative
reserve asset ratio required by the Bank of England from time to
time (if any), expressed as a percentage per annum and calculated
as set forth in Schedule 5.
"Material Adverse Effect" means a material adverse
effect on or change in (a) the business, operations, assets,
prospects or financial condition or other condition of
(i) Borrower and its Subsidiaries taken as a whole or (ii) the
Advisor or (iii) the Properties and Mortgage Interests taken as a
whole, (b) Agent's, Administrative Agent's or any Lender's rights
and remedies under the Loan Documents, (c) the ability of
(i) Borrower or any of its Subsidiaries or (ii) the Advisor to
perform its respective obligations under the Loan Documents, the
Advisory Agreement, the Leases, the Mortgage Interest Agreements
or the Credit Support Agreements, or (d) the ability of the
Operators, Mortgagors and Credit Support Obligors (taken as a
whole) to perform their obligations under the Leases, the
Mortgage Interest Agreements and the Credit Support Agreements
insofar as they relate to Eligible Properties and Eligible
Mortgages.
"Mortgage Guarantees" means each guarantee, letter of
18
credit or other similar undertaking issued by any Person in
respect of any of the obligations of a Mortgagor under a Mortgage
Interest Agreement.
"Mortgage Guarantors" means the obligors in respect of
the Mortgage Guarantees, and each of them.
"Mortgage Interest" means any interest of Borrower or
any of its Subsidiaries as lender and as mortgagee or
beneficiary, as applicable, in respect of a loan secured in whole
or in part by a Lien on any land or any buildings, structures,
improvements and fixtures (including any leasehold estate with
respect thereto).
"Mortgage Interest Agreement" means any agreement,
note, mortgage, deed of trust and/or other document creating,
evidencing or securing a Mortgage Interest.
"Mortgaged Property" means any land and any building,
structure, improvements and fixtures (including any leasehold
estate with respect thereto) with respect to which Borrower or
any of its Subsidiaries has a Mortgage Interest.
"Mortgagor" means, in the case of a Mortgage Interest,
the obligor or obligors in respect of such Mortgage Interest.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which Borrower or any
ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years
made or accrued an obligation to make contributions.
"Multiple Employer Plan" means an employee benefit
plan, other than a Multiemployer Plan, subject to Title IV of
ERISA to which Borrower or any ERISA Affiliate, and at least one
employer other than Borrower or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event
that any such plan has been terminated, to which Borrower or any
ERISA Affiliate made or accrued an obligation to make
contributions during any of the five plan years preceding the
date of termination of such plan.
"Net Mortgage Proceeds" means (a) any amounts paid,
other than scheduled repayments, by a Mortgagor to Borrower or
any of its Subsidiaries under an agreement, evidencing or
securing any interest of Borrower or such Subsidiary as lender
and as mortgagee or beneficiary, as applicable, in respect of a
loan secured in whole or in part by a Lien on a Facility, in
respect of principal thereunder, plus (b) the gross proceeds
received by or for the account of Borrower or such Subsidiary of
any sale or other disposition of any such agreement, minus (c)
19
the reasonable out-of-pocket fees and expenses (including
attorneys' fees and expenses) incurred by Borrower or such
Subsidiary in connection with such sale or other disposition.
"Net Property Proceeds" means (a) the gross proceeds
received by or for the account of Borrower or any of its
Subsidiaries of any sale, lease or other disposition of any Fee
Interest or Leasehold Interest or termination or substitution of
any lease or sublease with respect to any Fee Interest or
Leasehold Interest of Borrower or any of its Subsidiaries, minus
the reasonable out-of-pocket fees and expenses (including
attorneys' fees and expenses) incurred by Borrower or such
Subsidiary in connection with such sale or other disposition, (b)
all insurance proceeds paid and received by or for the account of
Borrower or such Subsidiary on account of the loss of or damage
of any such Fee Interest or Leasehold Interest, to the extent
such proceeds are not applied to the replacement or restoration
of such assets and (c) all proceeds received by or for the
account of Borrower or such Subsidiary, arising from the taking
by condemnation or eminent domain of any such Fee Interest or
Leasehold Interest, to the extent such proceeds are not applied
to the replacement or restoration of such assets.
"Net Securities Proceeds" with respect to any private
or public offering of securities or any borrowing from one or
more financial institutions means the gross proceeds thereof
received by or for the account of Borrower net of
(a) underwriting discounts and commissions and (b) reasonable
out-of-pocket fees and expenses incurred in connection with such
offering or borrowing; provided that such proceeds shall not
include proceeds from borrowings (or from refinancing of such
borrowings) from financial institutions which are applied
substantially contemporaneously with the borrowing thereof to the
acquisition of one or more Facilities but no later than two
Business Days after such borrowing.
"Notes" has the meaning set forth in Section 2.2.
"Notice of Borrowing" means a notice substantially in
the form of Exhibit B hereto delivered by Borrower to
Administrative Agent (with a copy to Agent to follow) pursuant to
Section 2.3 with respect to a proposed borrowing.
"Notice of Continuation/Conversion" means a notice
substantially in the form of Exhibit C hereto delivered by
Borrower to Administrative Agent (with a copy to Agent to follow)
pursuant to Section 2.5 with respect to a continuation or
conversion of one or more Loans.
"Operators" in respect of a Facility, means the lessee
or sublessee (other than Borrower or any of its Subsidiaries)
thereof.
20
"Outstanding" means, when used with reference to the
Notes as of a particular time, all Notes theretofore issued as
provided in this Agreement, except (i) Notes theretofore reported
as lost, stolen, damaged or destroyed, or surrendered for
transfer, exchange or replacement, in respect of which
replacement Notes have been issued, (ii) Notes theretofore paid
in full, and (iii) Notes theretofore duly cancelled by Borrower;
and except that, for the purpose of determining whether holders
of the requisite principal amount of Notes have made or concurred
in any waiver, consent, approval, notice or other communication
or matter under this Agreement, Notes held or owned by Borrower
or any Affiliate of Borrower, shall not be deemed to be
outstanding.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA, or any
successor to the responsibilities of such corporation.
"Permitted Exceptions" means those exceptions to title
set forth on Schedule 2.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plan" means an employee benefit plan, other than a
Multiemployer Plan, maintained for or covering any employees of
Borrower or any ERISA Affiliate and subject to Title IV of ERISA.
"Pledges" means any pledge or grant of a Lien to secure
any of the obligations of a Mortgagor under a Mortgage Interest
Agreement, an Operator under a Lease, a Mortgage Guarantor under
a Mortgage Guarantee, a Lease Guarantor under a Lease Guarantee
or a Sublessee under a Sublease Agreement, each as amended,
supplemented or modified from time to time.
"Pledgors" means the obligors in respect of the
Pledges, and each of them.
"Preferred Shares" means Borrower's preferred shares of
beneficial interest authorized under the Declaration of Trust.
"Primary Credit Support Obligor" means each Credit
Support Obligor in respect of obligations of a Primary
Operator/Mortgagor.
"Primary Operator/Mortgagor" means any Operator and/or
Mortgagor which is a lessee or sublessee with respect to
Facilities and/or an obligor or mortgagor with respect to
Mortgage Interests or Facilities representing, in aggregate, 10%
or more of the aggregate Allowed Value of the Properties and
21
Mortgage Interests; provided that with respect to property
interests located in the United Kingdom, every Operator and every
Mortgagor shall be deemed to be a "Primary Operator/Mortgagor" .
"Process Agent" has the meaning set forth in
Section 10.2.
"Property" or "Properties" means each of the Facilities
in which Borrower or any of its Subsidiaries has a Fee Interest
or Leasehold Interest.
"Pro Rata Share" means, with respect to each Lender as
of the date of determination, the percentage obtained by dividing
(i) the Commitment of that Lender as of such date by (ii) the
Commitment of all Lenders as of such date; provided that if the
Commitments have been terminated at such time, such Pro Rata
Share shall be the percentage obtained by dividing (i) the
aggregate amount of the Loans outstanding from that Lender as of
such date by (ii) the aggregate amount of the Loans outstanding
from all Lenders as of such date; and provided further that with
respect to Agent and The Daiwa Bank, Limited this definition
shall be subject to the modification described in Section 2.3(c)
with respect to Loans denominated in GBP for the period of time
described therein, but not otherwise.
"Psychiatric Care Asset" means, in respect of any
Property or Mortgage Interest, that more than 50% of the licensed
beds of the Property or, in the case of a Mortgage Interest, of
the Mortgaged Property covered thereby, are designated for
psychiatric treatment.
"Real Property" has the meaning set forth in Section
5.12.
"Real Property Permit" means, in respect of any
Property or Mortgaged Property, all certificates of occupancy,
permits, licenses, franchises, approvals and authorizations from
all Governmental Authorities having jurisdiction over such
Property or Mortgaged Property or any portion thereof, the
absence of which could materially impair the use of such Property
or Mortgaged Property for the purposes for which it is currently
used, and from all insurance companies and fire rating and
similar boards and organizations required to have been issued to
Borrower or any of its Subsidiaries or the Operator (in the case
of a Property) or the Mortgagor (in the case of a Mortgaged
Property) to enable such Property or Mortgaged Property or any
portion thereof to be lawfully occupied and used as currently so
occupied or used.
"Real Property Statement" means a certificate of a
Responsible Officer providing each of the following:
22
(i) a list of all Facilities owned by Borrower and its
Subsidiaries or in which Borrower or any such Subsidiary has
an interest at the date of such certificate, identifying the
nature of such interest and certifying the Appraised Value,
if available, and each of the other costs, values and prices
referred to in the definition of "Allowed Value" relating to
each Facility;
(ii) specification in respect of each Facility of each
of the following:
(a) whether as of the date of such certificate
such Facility is an Eligible Property or a
Mortgaged Property covered by an Eligible
Mortgage;
(b) in respect of each Eligible Property, the
acquisition cost of Borrower or any of its
Subsidiaries in respect of such Eligible Property;
and
(c) in respect of each Eligible Mortgage, the then
outstanding principal amount due to Borrower or
any of its Subsidiaries from the relevant
Mortgagor in respect of such Eligible Mortgage;
(iii) with respect to each such Eligible Property
or Eligible Mortgage, certification as to the ratio of (A)
the Cash Flow of the Operator or Mortgagor thereof (as
applicable) over the four most recent financial quarters
(or, (y) if financial reporting for such Cash Flow is
provided on an annual basis, over its last reported
financial year, or (z) where Marriott International, Inc. is
the Operator or Mortgagor (but not in any event for a
Courtyard Lodging) and financial reporting for such Cash
Flow is not otherwise required to be provided to Borrower or
its Subsidiaries, over the last reported financial year as
certified by an officer of Marriott International, Inc. in a
certificate described in Section 5.2(b)(iii)) attributable
to that Eligible Property or Eligible Mortgage to its (B)
Fixed Charges over the same period for such Eligible
Property or Eligible Mortgage and, further, certification
that, with respect to each Eligible Property or Eligible
Mortgage, the details of cash flows of the Operator or
Mortgagor thereof used by Borrower in its calculations are
Current; provided that if such Eligible Property or Eligible
Mortgage is part of a group of Cross Guarantied Assets, in
addition to the certification required for each individual
Eligible Property or Eligible Mortgage, Borrower also shall
provide certification as to the ratio of (A) the Cash Flow
of the Operators or Mortgagors (as applicable) for such
group determined on an aggregate basis over their respective
23
four most recent financial quarters (or last reported
financial year or last certified financial year, as the case
may be) attributable to the group of Cross Guarantied Assets
to (B) their Fixed Charges over the same period for such
group of Cross Guarantied Assets; and
(iv) certification that there has been no MAC in
any of the circumstances set forth in Section 2.16(c), other
than, in each case, a MAC which has ceased to be in effect.
"Recognized Appraiser" means a qualified and recognized
professional appraiser as may be selected or approved by Agent
and Administrative Agent with the consent of Borrower, which will
not be unreasonably withheld, having at least five years' prior
experience in performing real estate appraisals in the geographic
area where the property being appraised is located, having a
recognized expertise in appraising properties operated as health
care or retirement facilities or hotel or other lodging
facilities; provided that if the property being appraised is
located in the United Kingdom, such appraiser will be selected or
approved by Agent with the consent of Borrower.
"Reference Banks" means Kleinwort Benson Limited and
Wells Fargo Bank, National Association.
"Rehabilitation Treatment Asset" means, in respect of
any Property or Mortgage Interest, that more than 50% of the
licensed beds of the Property or, in the case of a Mortgage
Interest, of the Mortgaged Property covered thereby, are
designated for rehabilitation treatment.
"Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal,
discharge, dispersal, leaching or migration of any Hazardous
Materials into the indoor or outdoor environment (including,
without limitation, the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the
movement of any Hazardous Material through the air, soil, surface
water, groundwater or property.
"Reportable Event" means a "reportable event" within
the meaning of Section 4043 of ERISA (other than a "reportable
event" for which the 30-day notice to PBGC requirement has been
waived by regulation of PBGC).
"Requirement of Law" means, as to any Person, any law,
treaty, rule or regulation, or judgment, order, directive or
other determination of any arbitrator or a court or other
24
Governmental Authority, in each case applicable to or binding
upon such Person or any of its properties or to which such Person
or any of its property is subject.
"Responsible Officer" means, with respect to any matter
(including financial matters), the president, chief executive
officer, chief financial officer, executive vice president or
treasurer of Borrower.
"Restricted Payment" means (a) every dividend or other
distribution of assets, properties, cash, rights, obligations or
securities paid, made, declared or authorized by Borrower or any
of its Subsidiaries (other than to Borrower) or in respect of any
of the Common Shares, the Preferred Shares or other equity
securities of Borrower, or any class of Borrower's equity
securities, or for the benefit of holders of any thereof in their
capacity as such and (b) every payment by or for the account of
Borrower or any of its Subsidiaries in connection with the
redemption, purchase, retirement, defeasance or other acquisition
of any Common Shares, Preferred Shares or other equity securities
of Borrower or options, warrants or other rights to acquire any
of Borrower's equity securities and (c) every payment (i) of
principal, interest, fees or other amounts in respect of any
Indebtedness of Borrower or any of its Subsidiaries to any
Affiliate of Borrower (provided that "Restricted Payment" shall
not include or prohibit any such payment in respect of
intercompany Indebtedness of any of Borrower's Subsidiaries
permitted under Section 6.8(d)), (ii) in respect of the
redemption, purchase, retirement, defeasance, or other
acquisition from an Affiliate of Borrower of any Indebtedness of
Borrower, or (iii) of fees in respect of advisory services
rendered to Borrower or any of its Subsidiaries by the Advisor
and (d) every direct or indirect investment by Borrower (by means
of capital contribution, advance, loan or otherwise) in an
Affiliate or any Person which becomes an Affiliate after or as a
result of such investment (but not including investments by
Borrower in its direct wholly-owned Subsidiaries), and (e) every
payment by or for the account of Borrower or any of its
Subsidiaries in connection with the redemption, purchase,
retirement, defeasance or other acquisition for value, directly
or indirectly, prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, of Indebtedness
which is subordinate in right of payment to the Loans or the
Notes.
"Solvent" means, with respect to any Person on a
particular date, that on such date (i) the fair value of the
property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent
liabilities, of such Person (whether or not required to be
reflected on a balance sheet prepared in accordance with GAAP),
25
(ii) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become
absolute and matured, (iii) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal
course of business, (iv) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and
(v) such Person is not engaged in business or a transaction for
which such Person's property would constitute unreasonably small
capital after giving due consideration to the prevailing practice
in the industry in which such Person is engaged. In computing
the amount of contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount which, in
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become
an actual or matured liability.
"Specified Subordinated Indebtedness" means
Indebtedness of any Person, the terms of which prohibit the
holder or any representative of the holder from exercising any
legal remedies or other creditor's rights (including without
limitation the filing of a petition in respect of such Person
under the U.S. Bankruptcy Code, 11 U.S.C. 101 et seq.) thereunder
until all obligations (contingent or otherwise) of such Person to
Borrower under all Leases, Mortgage Interest Agreements and
Credit Support Agreements to which that Person is a party have
been indefeasibly satisfied in full.
"Sublease Agreement" means any agreement pursuant to
which a Person subleases all, or a material portion, of a
Property from an Operator, as such agreement is amended,
supplemented or modified from time to time.
"Sublessees" means the sublessees in respect of the
Sublease Agreements, and each of them.
"Subordination Agreement" means the amended and
restated subordination agreement, dated as of June 15, 1994,
among Administrative Agent, the Advisor and Borrower an executed
copy of which is annexed hereto as Exhibit D, as amended,
supplemented or modified from time to time in a manner not
inconsistent with the terms of the Existing Loan Agreement or
hereof.
"Subsidiary" means, as to any Person, a corporation,
partnership or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than
stock or other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation,
26
partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or
indirectly, through one or more intermediaries, or both, by such
Person.
"Tangible Net Worth" means, with respect to Borrower
and its Subsidiaries, the excess of total assets over total
liabilities of such Persons on a consolidated basis, such total
assets and total liabilities each to be determined in accordance
with GAAP and Section 1.3(a), consistent with those applied in
the preparation of the financial statements referred to in
Section 3.1; excluding, however, from the determination of total
assets (i) goodwill, organizational expenses, capitalized
software, research and development expenses, trademarks, trade
names, copyrights, patents, patent applications, licenses and
rights in any thereof, and other similar intangibles, (ii) all
prepaid expenses, deferred charges or unamortized debt discount
and expense, (iii) all reserves carried and not deducted from
assets, (iv) treasury stock and shares of beneficial interest and
capital stock, obligations or other securities of, or capital
contributions to, or investments in, any Subsidiary,
(v) securities which are not readily marketable, (vi) cash held
in a sinking or other analogous fund established for the purpose
of redemption, purchase, retirement, defeasance, acquisition or
prepayment of Common Shares, Preferred Shares or other equity
securities, capital stock or Indebtedness, (vii) any write-up in
the book value of any asset resulting from a revaluation thereof
subsequent to December 31, 1987, (viii) leasehold improvements
not recoverable at the expiration of a Lease (to the extent that
the useful life of such improvements is greater than the term of
such Lease), and (ix) any items not included in clauses (i)
through (viii) above which are treated as intangibles in
conformity with GAAP.
"Termination Date" means March 15, 1998.
"Termination Event" means (i) a Reportable Event or an
event described in Section 4062(e) of ERISA, or (ii) the
withdrawal of Borrower or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a "substantial
employer", as such term is defined in Section 4001(a)(2) of
ERISA, or the incurrence of liability by Borrower or any ERISA
Affiliate under Section 4064 of ERISA upon the termination of a
Multiple Employer Plan, (iii) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, (iv) the institution of
proceedings to terminate a Plan by the PBGC under Section 4042 of
ERISA, (v) the withdrawal of Borrower or any ERISA Affiliate from
any Multiemployer Plan, or (vi) any other event or condition
which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to
administer, any Plan.
27
"Total Liabilities" of any Person means and includes,
as of any date as of which the amount thereof is to be
determined, without duplication (i) all items which in accordance
with GAAP would be required to be included on the liabilities
side of a consolidated balance sheet of such Person at such date
and (ii) to the extent not otherwise included in (i) above, all
Indebtedness of such Person as of such date, determined on a
consolidated basis and in accordance with Section 1.3(a).
"Trigger Date" has the meaning set forth in Section
5.14.
"Trigger Amount" has the meaning set forth in Section
5.14.
"United Kingdom" means the United Kingdom of Great
Britain and Northern Ireland.
"U.S. Dollars" or "$" shall mean the lawful currency of
the United States of America.
1.2. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
meanings assigned to them herein when used in the Notes or any
certificate or other document made or delivered pursuant hereto,
unless otherwise defined therein.
(b) As used herein and in the Notes and other Loan
Documents, and any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not
defined in Section 1.1, and accounting terms partly defined in
Section 1.1 to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and section, schedule and exhibit references
are to this Agreement unless otherwise specified and, where
appropriate, the singular shall include the plural.
1.3 Certain Calculations: Mark-to Market
(a) Except in the circumstances set forth in Section
1.3(b), for the purposes of determining the amount of outstanding
Indebtedness, Total Liabilities or any other indebtedness,
obligations or liabilities of Borrower or any of its Subsidiaries
or any other Person, or the amount or value of any investments or
assets of or obligations owed to Borrower or any of its
Subsidiaries or any other Person, or the amount of any other item
included in income or cash flow statements of Borrower or any of
28
its Subsidiaries or any other Person (each of the foregoing being
a "Calculation Item"), if such Calculation Item is owed or
otherwise recorded or measured in GBP or any other currency other
than U.S. Dollars, the amount or value of the Calculation Item
shall be calculated in U.S. Dollars and shall be the amount of
U.S. Dollars that can be purchased with GBP or such other
currency calculated on the basis of Administrative Agent's spot
rate of exchange for the purchase of U.S. Dollars with GBP or
such other currency on the date such calculation is to be made;
provided that notwithstanding the continuous nature of certain
representations and covenants in this Agreement, unless requested
to do so by Agent or Administrative Agent or unless Borrower is
aware of any material currency movement or other circumstance
which would be reasonably likely to have an effect on its ability
to satisfy any such representation or covenant, Borrower shall
not be required to make such calculation with respect to such
representations and covenants at any time other than in
connection with the delivery of a Real Property Statement or the
delivery of the certificate of a Responsible Officer under
Section 5.2(b); provided further that even if not required to
make such calculations, nothing in this Section 1.3(a) shall be
construed to in any way limit Borrower's obligations to satisfy
all such representations and covenants in accordance with their
terms.
(b) Administrative Agent shall calculate the
Equivalent Amount of Loans denominated in GBP: (i) after any
Borrowing Date on which Loans are made such that the aggregate
principal amount of Loans outstanding exceeds 75% of the
Commitments and if requested by Agent or if Administrative Agent
in the reasonable exercise of its judgment considers it desirable
to make such calculation to monitor compliance by Borrower with
the limits set forth in Section 2.1, once each Business Day or
otherwise as often as Administrative Agent considers it desirable
or necessary to make such calculation and Administrative Agent
shall notify Borrower and Agent if, based on such calculation,
Borrower is in compliance with the requirements of Section 2.1 as
to the maximum aggregate outstanding principal amount of Loans
denominated in GBP or whether prepayment of the Loans is
necessary as required by Section 2.8(e); (ii) on any proposed
Borrowing Date to determine whether, after giving effect to a
proposed borrowing, Borrower will be in compliance with such
requirements of Section 2.1; (iii) on any proposed
continuation/conversion date under Section 2.5 to determine
whether, after giving effect to such proposed
continuation/conversion, Borrower will be in compliance with such
requirements of Section 2.1 and (iv) if any Loans denominated in
GBP are outstanding, from time to time as necessary for the
purpose of calculating the Commitment fees payable under Section
2.6(a); provided that any failure by Administrative Agent to
make such calculations or provide the information under this
Section 1.3(b) shall not affect the obligations of Borrower to
29
comply with the limits set forth in Section 2.1 or otherwise to
satisfy all representations and covenants made by it in this
Agreement.
SECTION 2. AMOUNT AND TERMS OF REVOLVING LOANS
2.1. Revolving Loans.
(a) Each Lender severally (and not jointly) agrees,
subject to the terms and conditions hereof, to continue the
Existing Loans outstanding on the Effective Date, to make Loans
to Borrower from time to time during the period from the
Effective Date to and including the Final Borrowing Date, and to
maintain its Loans outstanding to Borrower on the Final Borrowing
Date from such date until the Termination Date, up to an
aggregate amount (including, without limitation, the amount of
any Existing Loans) or the Equivalent Amount in GBP at any one
time not exceeding its Pro Rata Share of the aggregate
Commitments (as defined below) to be used for the purposes
identified in Section 2.11 ; provided that in no event shall the
aggregate outstanding principal amount of Loans denominated in
GBP at any time exceed the Equivalent Amount of $100,000,000 (as
determined in accordance with Section 1.3(b)). Each Loan
hereunder shall be made by Lenders in accordance with their
respective Pro Rata Share. Upon satisfaction of the conditions
set forth in Section 4, (i) all loans outstanding under the
Existing Loan Agreement as of, and at the time of, the Effective
Date ("Existing Loans") and all rights relating to the Existing
Loans and all other rights arising under the Existing Loan
Agreement and all documents relating thereto, except to the
extent specifically amended and restated by this Agreement, shall
be assigned (without any further action or authorization being
required) by the lenders under the Existing Loan Agreement to the
Lenders proportionately to their respective Pro Rata Shares of
the Commitments without recourse, representation or warranty
(except for representations and warranties made in this Section
2.1(a)) of any nature, express or implied, by any such lender and
such Existing Loans shall be continued and deemed to be Loans for
all purposes under this Agreement and (ii) each Lender shall pay
to Administrative Agent its Pro Rata Share of the Existing Loans
or, if less, the amount by which such Pro Rata Share exceeds its
outstanding Existing Loans (if any), for distribution to the
lenders under the Existing Loan Agreement that are not Lenders
and to the other Lenders that have funded such Loans, in
accordance with their respective Commitments, and each Lender's
share of the Existing Loans shall be adjusted accordingly. In
connection with such assignment, each Lender shall be deemed to
represent and warrant to each other Lender that (i) it is, and
will be on the Effective Date, prior to the assignment of its
interests pursuant to this Section 2.1(a), the legal and
beneficial owner of the interests being assigned and such
interests are, and will be on the Effective Date, free and clear
30
of any adverse claim and (ii) the total aggregate principal
amount and accrued interest, fees and other amounts due to such
Lender under the Existing Loan Agreement on March 15, 1995 are as
set forth on Schedule 3 annexed hereto. Any amounts of accrued
interest, commitment fees or other amounts (other than principal)
owed (whether or not presently due and payable) by Borrower to
the lenders under or in respect of the Existing Loans shall, as
of the Effective Date, be deemed to be due and payable to the
lenders under the Existing Loan Agreement. The continuation of
the Existing Loans hereunder shall not be deemed to be a
repayment thereof, and Borrower shall not be required to deliver
any notice of prepayment or notice of borrowing or to satisfy any
condition relating to minimum amounts of prepayments or minimum
amounts of borrowings hereunder with respect to such continuance
of the Existing Loans.
(b) Each Lender's commitment to make and maintain
Loans to Borrower pursuant to this Section 2.1 is herein called
its "Commitment" and such commitments of all Lenders in the
aggregate are herein called the "Commitments". The original
amount of each Lender's Commitment is set forth opposite its name
on Schedule 1 annexed hereto and the aggregate original amount of
the Commitments is $200,000,000; provided that up to an
Equivalent Amount of $100,000,000 may be made in Loans
denominated in GBP (as determined in accordance with Section
1.3(b)); provided further that the amount of the Commitments
shall be reduced from time to time by the amount of any
reductions thereto made pursuant to Section 2.7 (with a
proportionate reduction of the amount of the Commitments
otherwise available for the borrowing of Loans denominated in
GBP); provided further that Lenders shall have no obligation to
make or maintain Loans hereunder to the extent any such Loan
would (i) cause the aggregate amount of the Loans then
outstanding to exceed the Commitments or (ii) cause the aggregate
amount of the General Corporate Loans then outstanding to exceed
25% of the Commitments; and provided further that Lenders shall
have no obligation to make or maintain Loans denominated in GBP
hereunder to the extent any such Loan would cause the aggregate
amount of the Loans denominated in GBP then outstanding to exceed
the Equivalent Amount of $100,000,000 (as determined in
accordance with Section 1.3(b)).
(c) The foregoing notwithstanding, if prior to
September 30, 1995 an additional lender satisfactory to Borrower
and Agent shall execute and deliver to Borrower and Agent on
behalf of the parties hereto counterparts substantially in the
form of this Agreement, with the amount of such additional
lender's Commitment hereunder typed immediately below its
signature on such counterpart, upon notification of such
execution and delivery by Agent to the other parties hereto, such
additional lender shall become a Lender and its Commitment shall
31
be added to the aggregate Commitments for all purposes hereunder;
and if an existing Lender shall notify Borrower and Agent of its
agreement to increase its Commitment above its original
Commitment and such agreement is accepted by Borrower and Agent,
then upon notification thereof by Agent to the other parties
hereto (or, if later, upon the effective date for such increase
stated in such notification), in each case not later than
September 30, 1995, such existing Lender's Commitment shall be
increased as set forth in such notification; provided that no
such additional lender shall become a Lender (and no such
increase shall become effective) without the consent of Borrower
and all Lenders if such additional lender's Commitment (or such
increase) would make the aggregate Commitments exceed
$250,000,000. The other terms of this Agreement notwithstanding,
such additional lender or Lender increasing its Commitment shall,
on the first day thereafter which is the last day of an Interest
Period (or on such day if such day is the last day of an Interest
Period), pay to Administrative Agent (i) its Pro Rata Share of
the Loans then outstanding (if any) or, if less, the amount by
which such Pro Rata Share exceeds its outstandings hereunder (if
any), for distribution to the other Lenders that have funded such
Loans, in accordance with their respective Commitments, and all
rights of such other Lenders with respect to the Pro Rata Share
being assumed by such additional lender or the increased portion
thereof of an existing Lender shall be deemed assigned (without
any further action or authorization being required) to such
additional lender or increasing Lender without recourse,
representation or warranty, and each Lender's share of the
outstanding Loans shall be adjusted accordingly; and (ii) any
other amounts due from it on such date as a Lender hereunder.
(d) Each Lender's Commitment shall expire on the
Termination Date and all Loans and all other amounts owed
hereunder with respect to the Loans and the Commitments shall be
paid in full no later than that date.
(e) Subject to the other terms and conditions hereof,
Borrower may borrow under this Section 2.1, repay Loans in
accordance with Section 2.10 or prepay Loans in accordance with
Section 2.8 and reborrow the amounts so repaid under this Section
2.1.
2.2. Notes; Maturity Date. The Loans of each Lender
pursuant hereto shall be evidenced by, and be repayable with
interest in accordance with the terms of, a promissory note of
Borrower substantially in the form of Exhibit A, with appropriate
insertions, payable to the order of such Lender in the principal
amount of the Commitment of such Lender (together with any
replacement, modification, renewal or substitution thereof,
individually a "Note" and collectively, the "Notes"), which shall
be dated the Effective Date and be duly completed, executed and
delivered by Borrower. The Loans of each Lender pursuant hereto
32
shall be made and maintained by such Lender's Lending Office(s)
as designated by such Lender from time to time. All outstanding
Loans and each of the Notes shall mature and Borrower shall repay
the outstanding principal amount of such Loans and the Notes in
full together with all unpaid interest accrued thereon on the
Termination Date (or earlier as hereinafter provided) (or if such
day is not a Business Day, the next preceding Business Day) all
in accordance with Section 2.10(b), and shall be subject to
payment and prepayment as provided in Section 2.8 hereof. Each
Lender is authorized to endorse at any time the date and amount
of each Loan or conversion or continuation thereof, the date and
amount of each payment of principal with respect to its Loans and
whether its Loans are Base Rate Loans, Eurodollar Loans or
Alternate Rate Loans, on the schedule annexed to and constituting
a part of such Lender's Note, which endorsement shall constitute
prima facie evidence of the accuracy of the information endorsed.
2.3. Procedure for Borrowing.
(a) Whenever Borrower desires to borrow under Section
2.1, it shall deliver both a Notice of Borrowing and a Real
Property Statement to Administrative Agent (with a copy of each
to Agent) no later than 11:00 A.M. (New York time) in the case of
Base Rate Loans at least one Business Day and in the case of
Eurodollar Loans at least three Business Days in advance of the
proposed Borrowing Date. The Notice of Borrowing shall specify
(i) the proposed Borrowing Date (which shall be a Business Day),
(ii) whether such Loans are to be denominated in U.S. Dollars or,
subject to the limit in Section 2.1, GBP, (iii) the amount of the
Loans requested (which amount shall be in a minimum aggregate
amount of $1,000,000 and integral multiples of $500,000 in excess
of that amount if the Loans are to be denominated in U.S. Dollars
or a minimum aggregate amount of GBP 1,000,000 and integral
multiples of GBP 500,000 in excess of that amount if the Loans
are to be denominated in GBP), (iv) whether such Loans will be
Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans are
specified, the initial Interest Period requested for such
Eurodollar Loans, (v) Borrower's account at Administrative Agent
to which the net proceeds of the requested Loans are to be
credited, (vi) whether the requested Loans (or any portion
thereof) are to be General Corporate Loans and, if only a portion
thereof are so designated, the amount of such portion, (vii) that
the representations and warranties contained in the Loan
Documents are true, correct and accurate in all material respects
to the same extent as though made on and as of the date of such
Notice of Borrowing unless stated in the relevant Loan Document
to relate to a specific earlier date, in which case such
representations and warranties shall be true, correct and
complete in all material respects as of such earlier date,
(viii) that no event has occurred and is continuing or would
result from the proposed borrowing that would constitute a
Default or Event of Default, (ix) that the amount of the proposed
33
borrowing will not cause (A) the aggregate outstanding principal
amount of the Loans to exceed the Commitments currently in
effect, (B) the aggregate amount of the General Corporate Loans
then outstanding to exceed 25% of the Commitments or (C) the
aggregate amount of the Loans denominated in GBP then outstanding
to exceed the Equivalent Amount of $100,000,000 (as determined in
accordance with Section 1.3(b)), (x) that the proceeds of the
proposed borrowing (other than any proceeds of General Corporate
Loans) shall be used to make payment on the proposed Borrowing
Date for the purchase price and costs of acquiring interests in
one or more Facilities due and payable on such Borrowing Date and
(xi) with respect to the amount of such Loans which will not be
General Corporate Loans, the following:
(x) the name of the proposed Operators and/or
Mortgagors (as applicable) of the Facility or
Facilities to which such borrowing relates and any
Credit Support Obligors in relation thereto;
(y) the name and location of such Facility or
Facilities, the Appraised Value(s) thereof and each of
the other costs, values and prices referred to in the
definition of "Allowed Value" therefor, and a
description of the interests of Borrower or any of its
Subsidiaries therein to be acquired with the proceeds
of such borrowing; and
(z) if the proceeds of such Loan will be used to
acquire an interest in any Facility which interest is
required to be an Eligible Property or Eligible
Mortgage included in the calculation of Indebtedness
permitted under Section 6.8(a) after giving effect to
such Loan, certification to that effect.
In lieu of delivering the above-described Notice of
Borrowing, Borrower may give Administrative Agent telephonic
notice (which telephonic notice shall be followed
immediately with a notice by facsimile telecopy) by the time
specified for a Notice of Borrowing above; provided that
such notice shall be promptly confirmed in writing by
delivery of a Notice of Borrowing and a Real Property
Statement to Administrative Agent and Agent on or before the
applicable Borrowing Date; provided further that in the
event of a discrepancy between a Notice of Borrowing and
such telephonic notice, the telephonic notice shall govern.
Except as otherwise provided in Sections 2.13 and 2.14, a
Notice of Borrowing (or telephonic notice in lieu thereof as
provided above) shall be irrevocable, and Borrower shall be
bound to make the borrowing specified in such Notice of
Borrowing (or telephonic notice in lieu thereof as provided
above) in accordance therewith.
34
None of Agent, Administrative Agent or any Lender shall
incur any liability to any Person (including Borrower or any of
its Subsidiaries) in acting upon any telephonic notice referred
to above that Administrative Agent or Agent believes in good
faith to have been given by a duly authorized officer or other
Person authorized to borrow on behalf of Borrower or otherwise
acting in good faith under this Section 2.3, and upon funding of
Loans by Lenders in accordance with this Agreement pursuant to
any such telephonic notice Borrower shall have effected the
borrowing of such Loans hereunder.
(b) All Loans under this Agreement shall be made by
Lenders simultaneously and proportionately to their respective
Pro Rata Shares of the Commitments, it being understood that no
Lender shall be responsible for any default by any other Lender
in that other Lender's obligation to make Loans requested
hereunder nor shall the Commitment of any Lender to make Loans
requested hereunder be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to
make Loans requested hereunder. Promptly after receipt by
Administrative Agent of a Notice of Borrowing pursuant to Section
2.3(a) (or telephonic notice in lieu thereof followed immediately
with a notice by facsimile telecopy) and in any event not later
than 2:00 p.m. (New York time) on the preceding Business Day (in
the case of Base Rate Loans) or at least three Business Days (in
the case of Eurodollar Loans) in advance of the proposed
Borrowing Date, Administrative Agent shall notify each Lender of
the relevant details of the proposed borrowing. Each Lender
shall make the amount of its Loan available to Administrative
Agent, in immediately available funds, at the account specified
by Administrative Agent to the Lenders, not later than 11:00 A.M.
(New York time) on the Borrowing Date specified in the applicable
Notice of Borrowing. Upon satisfaction or waiver of the
applicable conditions precedent specified in Sections 4.1 and
4.2, Administrative Agent shall make the proceeds of such Loans
available to Borrower on such Borrowing Date by causing an amount
of immediately available funds equal to the proceeds of all such
Loans received by Administrative Agent from Lenders to be
credited to the account at Administrative Agent as specified by
Borrower in the Notice of Borrowing.
Unless Administrative Agent shall have been notified by
any Lender prior to the Borrowing Date for any Loans that such
Lender does not intend to make available to Administrative Agent
the amount of such Lender's Loan requested on such Borrowing Date
(and any such notice shall be without prejudice to any rights of
Borrower against such Lender hereunder), Administrative Agent may
assume that such Lender has made such amount available to
Administrative Agent on such Borrowing Date and Administrative
Agent may, in its sole discretion, but shall not be obligated to,
make available to Borrower a corresponding amount on such
Borrowing Date. If such corresponding amount is not in fact made
35
available to Administrative Agent by such Lender, Administrative
Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each
day from such Borrowing Date until the date such amount is paid
to Administrative Agent, at the Base Rate in the case of Loans
denominated in U.S. Dollars or at the Alternate GBP Rate in the
case of Loans denominated in GBP. If such Lender does not pay
such corresponding amount forthwith upon Administrative Agent's
demand therefor, Administrative Agent shall promptly notify
Borrower and Borrower shall immediately pay such corresponding
amount to Administrative Agent together with interest thereon,
for each day from such Borrowing Date until the date such amount
is paid to Administrative Agent, at the Base Rate in the case of
Loans denominated in U.S. Dollars or at the Alternate GBP Rate in
the case of Loans denominated in GBP. Nothing in this Section
2.3 shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that
Borrower may have against any Lender as a result of any default
by such Lender hereunder.
(c) (i) Notwithstanding the foregoing provisions of
this Section 2.3 and other references in this Agreement to the
obligations of Lenders to fund Loans in proportion to their
respective Pro Rata Shares, for a period of no more than 120 days
after the Effective Date The Daiwa Bank, Limited ("Daiwa") shall
not be required (unless it has notified Agent and Administrative
Agent of its ability to do so) to make Loans denominated in GBP;
provided that Agent shall fund all such Loans which would
otherwise be required to be made by Daiwa; provided further that
Agent shall only be required to make such fundings so long as it
is satisfied as to letter of credit or other guaranty, funding or
support arrangements provided by Daiwa with respect to such
additional fundings by Agent. If Agent is not, or ceases to be,
so satisfied and, in any event, at the end of the 120 day period
described above, Daiwa shall assume its obligations hereunder to
fund its Pro Rata Share of Loans denominated in GBP and shall be
subject to the provisions of Section 2.3(b) and any other
provisions relating to defaulting Lenders.
(ii) Subject to Section 2.3(c)(iii), payments of
principal or interest with respect to any additional fundings
made by Agent under this Section 2.3(c) shall be made to Agent
rather than to Daiwa for distribution between themselves as
separately agreed.
(iii) At the end of the 120 day period described in
Section 2.3(c)(i) (or earlier if Daiwa has notified Agent and
Administrative Agent of its ability to make Loans denominated in
GBP), Agent shall be deemed to have assigned to Daiwa all rights
and obligations with respect to any additional fundings made by
Agent under this Section 2.3 and not previously assumed by Daiwa
without recourse, representation or warranty of any nature,
36
express or implied, by Agent, and Daiwa shall be obliged to pay
to Agent all principal, accrued but unpaid interest and any other
amounts as owed to Agent with respect to such additional
fundings.
2.4. Interest.
(a) Generally. Each Loan shall be a Eurodollar Loan
or a Base Rate Loan as selected by Borrower initially at the time
a Notice of Borrowing is given pursuant to Section 2.3(a) or as
selected pursuant to Section 2.5 (or, in the case of any Existing
Loans, as in effect on the Effective Date), except for any
portion of a Eurodollar Loan which is converted to an Alternate
Rate Loan pursuant to Section 2.13 or 2.14. Loans shall bear
interest on the unpaid principal amount thereof from the date
made (or, in the case of any Existing Loans, from the Effective
Date) to maturity (whether by accelerations or otherwise), at the
interest rates specified as follows:
(i) in the case of a Eurodollar Loan, at an
interest rate per annum for and during each Interest
Period equal to the LIBO Rate for such Interest Period
plus the Applicable Margin in effect from time to time;
(ii) in the case of the Base Rate Loan, at an
interest rate per annum equal to the Base Rate in
effect from time to time plus the Applicable Margin in
effect from time to time; and
(iii) in the case of an Alternate Rate Loan
(including any Alternate GBP Rate Loan), at an interest
rate per annum equal to the Alternate Rate in effect
from time to time plus the Applicable Margin in effect
from time to time,
plus, in the case of any Loan denominated in GBP and made by
a Lender subject to such requirements, Mandatory Liquid Asset
Costs.
Borrower shall pay interest on the unpaid principal amount of the
Loans outstanding from time to time, in arrears, (i) on each
Interest Payment Date, (ii) on the Termination Date, (iii) in the
currency required by Section 2.10(b) and (iv) in accordance with
Section 2.4(b) (where applicable). In addition, Borrower shall
pay accrued interest on the principal amount of any Loans prepaid
in accordance with Section 2.8 on the date of any such
prepayment.
(b) Default Interest. If Borrower shall default in
the payment of the principal of or interest on any portion of a
37
Loan or any other amount becoming due hereunder or under any of
the Loan Documents, Borrower shall on demand from time to time
pay interest (to the extent permitted by law in the case of
interest on overdue interest) on such defaulted amount accruing
from and including the date of such default (without reference to
any period of grace) up to and including the date of actual
payment (after as well as before judgment) at a rate per annum
which is the sum of (i) two percent (2%) plus (ii) the greatest
of the LIBO Rate, the Alternate Rate or the Base Rate plus
(iii) the Applicable Margin. Interest under this Section 2.4(b)
shall be payable upon demand.
(c) Interest Determination. Upon determining the LIBO
Rate for each Interest Period, the Alternate Rate for any period
or the Base Rate in effect from time to time, Administrative
Agent shall promptly notify Borrower and Lenders thereof by
telephone (confirmed promptly in writing) or in writing. Such
determination shall, in the absence of manifest error, be
conclusive and binding upon Borrower and the Lenders.
2.5. Duration of Interest Period; Notice of
Continuation/Conversion.
(a) Borrower may, pursuant to the applicable Notice of
Borrowing or Notice of Continuation/Conversion, as the case may
be, select an Interest Period to be applicable to each Eurodollar
Loan.
(b) Subject to the provisions of Sections 2.13 and
2.14, Borrower shall have the option (i) to convert at any time
all or any part of outstanding Base Rate Loans to Eurodollar
Loans or (ii) upon the expiration of any Interest Period
applicable to Eurodollar Loans, to continue all or any portion of
such Loans as Eurodollar Loans or convert all or any portion of
such Loans to Base Rate Loans, as the case may be, and the
succeeding Interest Period(s) of such continued Loans shall
commence on the most recent Interest Payment Date therefor;
provided that Loans may be continued as, or converted into,
Eurodollar Loans with a particular Interest Period only in an
aggregate amount equal to $1,000,000 and integral multiples of
$500,000 in excess of that amount if the Loans are to be
denominated in U.S. Dollars or a minimum aggregate amount of GBP
1,000,000 and integral multiples of GBP 500,000 in excess of that
amount if the Loans are to be denominated in GBP (but subject
always to the determinations described in Section 1.3(b) and the
limits in Section 2.1 for Loans denominated in GBP); provided
further that Eurodollar Loans or any portion thereof may only be
converted into Base Rate Loans on the expiration date of the
Interest Period(s) applicable thereto; and provided further that
(i) no event has occurred and is continuing or would result from
such Loan continuation/conversion that would constitute a Default
or Event of Default, and (ii) the representations and warranties
38
contained in Section 3 shall be true, correct and complete in all
material respects on and as of the proposed continuation/
conversion date to the same extent as though made on and as of
that date unless stated in such section to relate to a specific
earlier date, in which case such representations and warranties
shall be true, correct and complete in all material respects as
of such earlier date. All conversions and continuations of Loans
shall be made simultaneously and on a pro rata basis by the
Lenders in accordance with their respective Pro Rata Shares.
Borrower shall deliver a Notice of Continuation/
Conversion to Administrative Agent (with a copy to Agent to
follow) no later than 11:00 A.M. (New York City time) at least
three Business Days in advance of the proposed continuation/
conversion date (in the case of a conversion to, or a
continuation of, Eurodollar Loans) or at least three Business
Days in advance of the proposed conversion date (in the case of a
conversion to Base Rate Loans). A Notice of
Continuation/Conversion shall specify (i) the proposed
continuation/conversion date (which shall be a Business Day),
(ii) the amount of the Loans to be continued/ converted,
(iii) the nature of the proposed continuation/ conversion,
(iv) in the case of a continuation of, or conversion to,
Eurodollar Loans, the requested Interest Period, (v) that the
representations and warranties contained in the Loan Documents
are true, correct and accurate in all material respects to the
same extent as though made on and as of the date of such Notice
of Continuation/Conversion unless stated in such Loan Documents
to relate to a specific earlier date, in which case such
representations and warranties shall be true, correct and
complete in all material respects as of such earlier date, and
(vi) that no event has occurred and is continuing or would result
from the proposed continuation/conversion that would constitute a
Default or Event of Default. In lieu of delivering the
above-described Notice of Continuation/Conversion, Borrower may
give Administrative Agent telephonic notice by the time specified
for delivery of a Notice of Continuation/Conversion above (which
telephonic notice shall be followed immediately with a notice by
facsimile telecopy); provided that in the event of a discrepancy
between a Notice of Continuation/Conversion and such telephonic
notice, such telephonic notice shall govern.
Promptly after receipt by Administrative Agent of a
Notice of Continuation/Conversion pursuant to this Section 2.5
(or telephonic notice followed immediately with a notice by
facsimile telecopy), and in any event not later than
2:00 p.m. (New York time) at least three Business Days in advance
of the proposed continuation/conversion date, Administrative
Agent shall notify each Lender of the relevant details of the
proposed continuation/conversion.
None of Agent, Administrative Agent or any Lender shall
39
incur any liability to any Person (including Borrower) in acting
upon any telephonic notice referred to above that Administrative
Agent or Agent believes in good faith to have been given by a
duly authorized officer or other person authorized to act on
behalf of Borrower or for otherwise acting in good faith under
this Section 2.5, and upon the continuation and/or conversion (as
applicable) of any Loan in accordance with this Agreement
pursuant to any such telephonic notice, Borrower shall have
effected a continuation and/or conversion (as applicable)
hereunder of such Loan.
Except as otherwise provided in Sections 2.13 and 2.14,
a Notice of Continuation/Conversion (or telephonic notice in lieu
thereof) shall be irrevocable from and after the giving thereof,
and Borrower shall be bound to effect a continuation and/or
conversion (as applicable) in accordance therewith.
2.6. Fees.
(a) Borrower shall pay to Administrative Agent for the
account of each Lender, in accordance with its Pro Rata Share of
the Commitments, a Commitment fee in an amount equal to one
quarter of one percent (0.25%) per annum of the average of the
daily excess of (i) such Lender's Commitment over (ii) the
aggregate amount of the Loans of such Lender outstanding from
time to time during the period from the date hereof to but
excluding the Final Borrowing Date (which aggregate amount of
Loans shall be determined in accordance with Section 1.3(b) when
Loans denominated in GBP are outstanding), payable in arrears on
(x) the last Business Day of March, June, September and December
of each year until the Final Borrowing Date and (y) the Final
Borrowing Date, such Commitment fee to accrue from the Effective
Date to and excluding the Final Borrowing Date and be payable in
U.S. Dollars as required by Section 2.10(b); provided that if, at
any date of determination, Borrower's long-term unsecured senior
debt is not rated BBB- or higher by Standard & Poor's Corporation
or Baa3 or higher by Moody's Investors Service, Inc. (or
similarly rated by any successor to either of such rating
services), then the Commitment fee otherwise payable shall be
increased by an additional one-eighth of one percent (0.125%) per
annum.
(b) Borrower shall on the date this Agreement is
delivered by the parties hereto pay to Administrative Agent for
Administrative Agent's own account and the account of each Lender
such fees in such amount as may have been agreed in writing
between Agent and Borrower.
(c) Borrower shall pay to Administrative Agent for its
account an annual administration fee payable in such amounts and
according to such terms as are set forth in a separate letter
agreement between Administrative Agent and Borrower, the first
40
such payment to be due on the date this Agreement is delivered by
the parties hereto.
2.7. Termination or Reduction of Commitment. Borrower
shall have the right, upon not less than five Business Days'
notice to Administrative Agent, to terminate the Commitments or,
from time to time, to reduce pro rata the amount of the
Commitments, to the extent, in either case, that the Commitments
are undrawn. Any such reduction shall be in an amount of
$1,000,000 or any integral multiple thereof and shall reduce
permanently the aggregate amount of the Commitments then in
effect, with a proportionate reduction of the amount of the
Commitments otherwise available for the borrowing of Loans
denominated in GBP.
2.8. Optional Prepayments; Mandatory Prepayments.
(a) Subject to Sections 2.8(f) and 2.15, Borrower may,
at its option, prepay any Loans on any Business Day in whole or
in part, without premium, upon at least three Business Days', in
the case of Eurodollar Loans, or one Business Day's, in the case
of Base Rate Loans, prior written notice to Administrative Agent,
specifying the amount of prepayment. Each notice of prepayment
pursuant to this clause (a) shall be irrevocable and the payment
amount specified in such notice shall be due and payable on the
date specified in the currency required by Section 2.10(b),
together with accrued interest to such date on the Loans and all
amounts (if any) payable pursuant to Section 2.15. Partial
prepayments of the Loans pursuant to this clause (a) shall be in
an aggregate principal amount of $1,000,000 (or GBP 1,000,000) or
integral multiples of $500,000 (or GBP 500,000) in excess of that
amount.
(b) In the event of any sale or other disposition of
any interest in any Facility, any Lease termination, or any other
event giving rise to Net Property Proceeds or Net Mortgage
Proceeds, within thirty days after the closing of any such sale
or other disposition, Lease termination or other event giving
rise to Net Property Proceeds or Net Mortgage Proceeds, Borrower
shall apply an amount equal to all of such Net Property Proceeds
and Net Mortgage Proceeds (other than any amount thereof required
and used to satisfy Indebtedness secured by a Lien, not
inconsistent with the terms of this Agreement, on the relevant
Properties or Mortgage Interests) to the prepayment of the Loans;
provided that with respect to a particular transaction or a
related series of transactions giving rise to Net Property
Proceeds or Net Mortgage Proceeds, prepayment of the Loans shall
be required from such Net Property Proceeds or Net Mortgage
Proceeds only to the extent that the same exceed $1,000,000.
(c) In the event of any (i) public or private offering
by or on behalf of Borrower of debt or equity securities issued
41
by Borrower or (ii) incurrence by Borrower of Indebtedness to one
or more financial institutions, within thirty days after such
offering or incurrence, Borrower shall apply all Net Securities
Proceeds arising from such offering or incurrence to the
prepayment of the Loans; provided that such Net Securities
Proceeds may, at Borrower's option, first be applied toward any
obligation of Borrower to repay any installment of principal on
any Indebtedness of Borrower at its stated maturity then or at
any time in the next thirty days due and owing.
(d) The Loans shall be subject to certain mandatory
prepayments pursuant to and upon the occurrence of the events
described in the provisions of Sections 2.13 and 2.14.
(e) If at any time the principal balance of the Loans
exceeds the Commitments, Borrower shall promptly (and in any
event no later than two Business Days after becoming aware
thereof) repay Loans to the extent necessary to reduce the
aggregate outstanding principal amount thereof to an amount that
is equal to or less than the Commitments. If at any time the
principal balance of the General Corporate Loans then outstanding
exceeds 25% of the Commitments, Borrower shall promptly (and in
any event no later than two Business Days after becoming aware
thereof) repay General Corporate Loans to the extent necessary to
reduce the aggregate outstanding principal amount thereof to an
amount that is equal to or less than 25% of the Commitments. If
at any time the principal balance of the Loans denominated in GBP
exceeds the Equivalent Amount of $100,000,000 (as determined in
accordance with Section 1.3(b)), Borrower shall promptly (and in
any event no later than two Business Days after becoming aware
thereof) repay Loans denominated in GBP to the extent necessary
to reduce the aggregate outstanding principal amount thereof to
an amount that is equal to or less than the Equivalent Amount in
GBP of $100,000,000; provided that, so long as no Default or
Event of Default has occurred and is continuing, any such
repayment of the Loans denominated in GBP may be made at the end
of the applicable Interest Periods on condition that Borrower
deposits with Administrative Agent cash in an amount equal to the
amount of the required prepayment at the time otherwise required
for prepayment (such amounts to be held as cash collateral by
Administrative Agent pending such repayment on terms satisfactory
to Agent, Administrative Agent and Borrower).
(f) Subject to the application of the payment
provisions of Section 2.10(a), any prepayments of the Loans
pursuant to this Section, Sections 2.13 or 2.14, or any other
provision of any Loan Document shall be applied first to any
amounts payable with respect thereto pursuant to Section 2.15,
second to the payment of accrued and unpaid interest on the
principal amount of outstanding General Corporate Loans up to and
including the date of prepayment, third, to the extent no General
Corporate Loans remain outstanding, to the payment of accrued and
42
unpaid interest on the principal amount of all other outstanding
Loans up to and including the date of prepayment, fourth to the
principal amount of such General Corporate Loans, and fifth to
the principal amount of all other outstanding Loans. Subject to
the requirements of the preceding sentence, Borrower may
designate the application of any prepayments, to be applied to
principal on the Loans, to the Eurodollar Loans, Base Rate Loans
and/or Alternate Rate Loans, as it may select, provided that if
Borrower does not designate such application, such prepayments
shall be applied (x) first to outstanding Base Rate Loans,
(y) second to outstanding Alternate Rate Loans and (z) third to
outstanding Eurodollar Loans.
2.9. Computation of Interest and Fees. Fees and other
amounts other than interest calculated on the basis of a rate per
annum shall be computed on the basis of a 360-day year for the
actual days elapsed. Interest on the Base Rate Loans (other than
any such interest the calculation of which is based on the
Federal Funds Rate) and interest on the Eurodollar Loans
denominated in GBP shall be computed on the basis of a 365-day
year for the actual days elapsed, while interest on the
Eurodollar Loans denominated in U.S. Dollars and interest on the
Alternate Rate Loans which do not bear interest at the Base Rate
shall be computed on the basis of a 360-day year for the actual
days elapsed.
2.10. Payments and Currency. (a) Except as
contemplated by this Agreement, the borrowing by Borrower from
the Lenders, each payment (including each prepayment) by Borrower
on account of principal, interest and fees required under
Sections 2.6(a) and (b), and any reduction of the amount of the
Commitments of the Lenders hereunder, shall be made for the
account of each Lender according to its Pro Rata Share; provided
that payments to the Lenders of interest based upon the Alternate
Rate shall be allocated appropriately to give effect to
differences among the Lenders' respective costs of funds. All
payments (including prepayments) by Borrower on account of
principal, interest, fees, costs, indemnities or other amounts
payable hereunder or under any of the Loan Documents shall be
made to Administrative Agent for the account of the applicable
Lenders (except for fees required under Section 2.6(c) which
shall be only for the account of Administrative Agent and Agent,
respectively) at the account of Administrative Agent specified in
Section 10.3(b) and in immediately available funds in the
currency required by Section 2.10(b). Each payment or prepayment
hereunder and under the Notes and the other Loan Documents shall
be made without set-off or counterclaim and free and clear of,
and without deduction for, any present or future withholding or
other taxes, duties or charges of any nature imposed on or
attributable to such payments or prepayments by or on behalf of
any Governmental Authority, except for any Excluded Taxes. If
any such taxes (other than any Excluded Taxes), duties or charges
43
(including, without limitation, any tax, duty or charge imposed
by Sections 1, 2 and/or 39 of the Massachusetts General Laws,
Chapter 63, as currently in effect or as amended hereafter or any
analogous provisions (or provisions having an analogous effect)
of the laws, rules or regulations (or interpretations thereof) of
Massachusetts or any other Governmental Authority) are so levied
or imposed on or are attributable to any such payment or
prepayment, Borrower will make additional payments in such
amounts as may be necessary so that the net amount received by a
Lender, after withholding or deduction for or on account of all
such taxes, duties or charges, will be equal to the amount
provided for herein or in such Lender's Note or in any of the
other Loan Documents. Whenever any taxes, duties or charges are
payable by Borrower with respect to or attributable to any
payments or prepayments hereunder or under any of the Notes or
any other Loan Document, Borrower agrees to furnish promptly to
Administrative Agent for the account of the applicable Lender
official receipts or copies thereof, if reasonably available,
evidencing payment of any such taxes, duties or charges so
withheld or deducted. If Borrower fails to pay any such taxes,
duties or charges when due to the appropriate taxing authority
after receipt of notice that any such taxes, duties or charges
are due, or fails to remit to Administrative Agent for the
account of the applicable Lender the customary evidence of
payment of any such taxes, duties or charges so withheld or
deducted, Borrower shall indemnify the affected Lender for any
incremental taxes, duties, charges, interest or penalties that
may become payable by such Lender as a result of any such
failure. During the continuance of any Default, Administrative
Agent may, but shall be under no obligation to, apply all
payments received by Administrative Agent from Borrower pursuant
to any of the Loan Documents in the following order of payment
regardless of the application designated by Borrower: first to
any interest owing under Section 2.4(b) or under any of the Loan
Documents other than interest owing on the Loans and the Notes
referred to below, second to any fees then payable to Agent,
Administrative Agent or the Lenders, third to any amounts owing
pursuant to Section 10.7, fourth to any amounts owing pursuant to
Sections 2.13, 2.14 or 2.15, fifth to any other sums (other than
principal on the Loans and the Notes and interest thereon
referred to below) owing under any of the Loan Documents, sixth
to any interest owing on the Loans and Notes and seventh to the
repayment of the principal of the Loans and the Notes as
designated by Administrative Agent; provided that if such
application is other than in accordance with any express
designation by Borrower, Administrative Agent shall promptly
notify Borrower of such application. Administrative Agent will
distribute each payment to the applicable Lenders promptly upon
receipt thereof (and in any event on the same Business Day as the
date when received, if such payment is received at or prior to
12:00 noon (New York time)). Each payment by Administrative
Agent to a Lender shall be made for the account of such Lender's
44
Lending Office as designated by such Lender to Administrative
Agent in writing from time to time. Whenever any payment to be
made hereunder or under any Loan Document, including, without
limitation, any principal of or interest on any Loan, shall
become due and payable, or whenever the last day of any Interest
Period would otherwise occur, on a day which is not a Business
Day, such payment shall be made and the last day of such Interest
Period shall occur on the next succeeding Business Day and such
extension of time shall in such case be included in computing
interest on such payment; provided that if such extension would
cause any such payment to be made in the next succeeding calendar
month, or the last day of such Interest Period to occur in the
next succeeding calendar month, such payment shall be made, and
the last day of such Interest Period shall occur, on the next
preceding Business Day.
(b) A repayment or prepayment of a Loan or any part of
a Loan is payable in the currency in which the Loan was
denominated at the time at which such Loan was made to Borrower
by Lenders. Interest in respect of a Loan is payable in the
currency in which the principal portion of the respective Loan in
respect of which it is payable is denominated. Fees in respect
of Commitments or otherwise hereunder shall be payable in U.S.
Dollars. Amounts payable in respect of costs, expenses and taxes
and the like are payable in the currency in which they are
incurred. Any other amount payable under this Agreement is,
except as otherwise provided in this Agreement, payable in U.S.
Dollars.
2.11. Use of Proceeds. The proceeds of the Loans
hereunder shall be used by Borrower (either directly or
indirectly through intercompany advances of such proceeds as
permitted under Section 6.8(d) to its Subsidiaries; provided
that Church Creek Corporation may not receive any such proceeds)
for (a) the acquisition of Properties; and (b) the acquisition or
funding of Mortgage Interests; provided that the General
Corporate Loans may be used by Borrower and its Subsidiaries for
their respective general corporate purposes; provided further
that the Existing Loans may be continued for the same purposes as
they were made under the Existing Loan Agreement, and shall not
be treated as General Corporate Loans.
2.12. Increased Costs.
(a) If any Requirement of Law or other event or
condition, or any amendment, modification or interpretation
thereof (including, without limitation, any request,
recommendation, guideline or policy, whether or not having the
force of law, of or from any central bank or other Governmental
Authority), in any such case, adopted, effective, made or issued
after the date hereof (but in any event including, without
limitation, Regulation D and Section 1, 2 and/or 39 of the
45
Massachusetts General Laws, Chapter 63 as currently in effect or
as amended hereafter or any analogous provisions (or provisions
having an analogous effect) of the laws, rules or regulations (or
interpretations thereof) of Massachusetts or any other
Governmental Authority) by any authority charged with the
administration or interpretation thereof:
(i) subjects Agent, Administrative Agent or any
Lender or any branch or Affiliate of Agent, Administrative
Agent or such Lender to any tax (except Excluded Taxes),
fee, deduction, duty, withholding, levy, impost or other
charge or reduction of any nature, on or with respect to, or
which Agent, Administrative Agent or such Lender in its sole
discretion deems applicable or attributable to this
Agreement, any Note, any of the other Loan Documents, its
Commitment or its pro rata share of the Loans, or interest,
fees or other amounts attributable thereto or to any of the
foregoing; or
(ii) changes the basis of taxation of payments to
any Lender or any branch or Affiliate of such Lender of
principal of and/or interest on such share of the Loans
and/or other fees and amounts payable hereunder or under any
of the Loan Documents or with respect hereto or thereto
(including in any event imposition of or change in any
withholding taxes, but excluding any Excluded Taxes); or
(iii) imposes upon, modifies, requires, makes or
deems applicable to any Lender, or any of its branches or
Affiliates, any regular, special, supplementary or other
reserve or deposit requirement, insurance assessment or
similar requirement against or affecting any assets held by,
or liabilities of, or deposits with or for the account of,
such Lender or such branch or Affiliate, with respect to or
which Agent or such Lender in its sole discretion deems
applicable or attributable to this Agreement, any Note, any
of the other Loan Documents, its Commitment or its pro rata
share of the Loans, or interest, fees or other amounts
attributable thereto or to any of the foregoing; or
(iv) imposes, modifies or deems applicable any
condition or requirement upon or causes in any manner the
addition of any supplement to, or increase of any kind to,
the capital or cost base of Agent, Administrative Agent or
any Lender or such branch or Affiliate, for extending or
maintaining its Commitment or its pro rata share of the
Loans which results in an increase in the capital
requirement supporting such Commitment or its pro rata share
of the Loans, or imposes upon, modifies, requires, makes or
deems applicable to Agent, Administrative Agent or such
Lender or any such branch or Affiliate any capital
requirement, increased capital requirement or similar
46
requirement, with respect to or which Agent, Administrative
Agent or such Lender in its sole discretion deems applicable
or attributable to this Agreement, any Note, any of the
other Loan Documents, its Commitment or its pro rata share
of the Loans, or interest, fees or other amounts
attributable thereto or to any of the foregoing; or
(v) imposes upon Agent, Administrative Agent or
any Lender or any branch or Affiliate of Agent,
Administrative Agent or such Lender any other conditions
with respect to, or allocable or attributable in good faith
by Agent, Administrative Agent or the Lender to, this
Agreement, any Note, any of the other Loan Documents or such
share of the Loans or its Commitment hereunder or such
interest, fees or other amounts;
and the result of any of the foregoing, based solely upon the
good faith determination and allocation by Agent, Administrative
Agent or any Lender, as the case may be, of costs, decreased
benefits and/or reduced amount of payments, is to increase the
cost or decrease the benefit, in any way, to Agent,
Administrative Agent or such Lender, as the case may be, or any
branch or Affiliate of Agent, Administrative Agent or such
Lender, as the case may be, of funding or maintaining its
Commitment or its share of the Loans hereunder, or to reduce the
amount of any payment (whether of principal, interest, or
otherwise) received or receivable by Agent, Administrative Agent
or such Lender, as the case may be, or any branch or Affiliate of
Agent, Administrative Agent or such Lender, as the case may be,
or to require Agent, Administrative Agent or such Lender, as the
case may be, or any branch or Affiliate of Agent, Administrative
Agent or such Lender, as the case may be, to make any payment,
then and in any such case:
(1) Agent, Administrative Agent or such Lender, as the
case may be, shall promptly notify Borrower and the other
Lenders in writing of the happening of such event;
(2) Agent, Administrative Agent or such Lender, as the
case may be, shall promptly deliver to Borrower and the
other Lenders a certificate stating the change or event
which has occurred or the reserve or capital requirements or
other conditions which have been imposed on Agent,
Administrative Agent or such Lender, as the case may be, or
branch or Affiliate of Agent, Administrative Agent or such
Lender, as the case may be, or the request, recommendation,
guideline or policy with which it has complied, together
with the date thereof, the amount of such increased cost,
decreased benefit or reduction payment; and
(3) Borrower shall pay Agent, Administrative Agent or
such Lender, as the case may be, promptly on demand such an
47
amount or amounts as:
(A) in the case of events referred to in clauses
(i), (ii), (iii) and (v) and, if applicable, clause
(iv) above, shall be sufficient to compensate it or
such branch or Affiliate for all such increased costs
and/or payments and/or decreased benefits, and/or
reduced amount of payment; and/or
(B) in the case of events referred to in clause
(iv) above, shall be an amount equal to the reduction,
as reasonably determined by Agent, Administrative Agent
or such Lender, as the case may be, in the after-tax
rate of return on Agent's, Administrative Agent's or
such Lender's capital resulting from any such capital
or increased capital or similar requirement, all as
certified by Agent, Administrative Agent or such Lender
or Lenders, as the case may be, in said written notice
to Borrower. Such certification shall be conclusive
and binding on Borrower absent manifest error.
The certificate of Agent, Administrative Agent or such
Lender as to the additional amounts payable pursuant to this
Section 2.12 delivered to Borrower shall constitute prima facie
evidence of the amount thereof. Agent, Administrative Agent and
each Lender agree to use reasonable efforts, as determined by
Agent, Administrative Agent or such Lender, as the case may be,
to avoid or minimize the payment by Borrower of any additional
amounts under this Section 2.12. The protection provided by this
Section 2.12 shall be available to Agent, Administrative Agent
and each Lender regardless of any possible contention of
invalidity or inapplicability of the Requirement of Law,
interpretation, recommendation, guideline, policy or event or
condition which has been imposed or has occurred. In the event
that after Borrower shall have paid any additional amount under
this Section 2.12 with respect to the Loans Agent, Administrative
Agent or such Lender shall have successfully contested such
Requirement of Law, interpretation, recommendation, guideline,
policy or event or condition then, to the extent that Agent,
Administrative Agent or such Lender will be placed in the same
position it was in prior to the incurrence of the increased cost
or reduction in amount received or receivable (on an after-tax
basis), but without giving effect to interest which may have been
earned on the additional amount paid by Borrower (but with
interest to the extent actually earned by Agent, Administrative
Agent or such Lender, as the case may be, on such amount as
determined by Agent, Administrative Agent or such Lender, as the
case may be), Agent, Administrative Agent or such Lender, as the
case may be, shall refund to Borrower such additional amount
(with such interest, if any).
48
2.13. Change in Law Rendering Eurodollar Loans or
Alternate Rate Loans Unlawful; Failure to Give Notice of
Continuation.
(a) Notwithstanding anything to the contrary herein
contained, in the event that any Requirement of Law or any change
in any existing Requirement of Law or in the interpretation
thereof by any Governmental Authority charged with the
administration thereof, in any case adopted, issued or effective
after the date hereof, (i) shall make it unlawful for any Lender
to fund any portion of the Eurodollar Loans or to give effect to
its obligations as contemplated hereby with respect to its making
or maintaining its pro rata share of the Eurodollar Loans, or
(ii) shall make it unlawful for any Lender to fund any portion of
the Alternate Rate Loans or to give effect to its obligations as
contemplated hereby with respect to its Commitment or making or
maintaining its pro rata share of the Alternate Rate Loans, such
Lender shall, upon the happening of such event, notify Agent,
Administrative Agent, the other Lenders and Borrower thereof in
writing stating the reason therefor and the effective date of
such event, and (x) upon the effectiveness of any such event
referred to in clause (i) above, the obligation of such Lender to
make or maintain its pro rata share of the Eurodollar Loans to
Borrower shall forthwith be suspended for the duration of such
illegality and during such illegality such Lender shall, upon
payment of any amounts owing under Section 2.15 with respect to
such conversion, convert its share of the Eurodollar Loans to
Alternate Rate Loans or (upon effectiveness of any such event
referred to in clause (ii) and during the continuance of such
event) Base Rate Loans in the case of Loans denominated in U.S.
Dollars or Alternate GBP Rate Loans in the case of Loans
denominated in GBP, and (y) upon the effectiveness of any such
event referred to in clause (ii), the obligation of such Lender
to make or maintain its pro rata share of the Alternate Rate
Loans to Borrower shall forthwith be suspended for the duration
of such illegality and during such illegality such Lender shall,
upon payment of any amounts owing under Section 2.15 with respect
to such conversion, convert its share of the Alternate Rate Loans
to Base Rate Loans in the case of Loans denominated in U.S.
Dollars or Alternate GBP Rate Loans in the case of Loans
denominated in GBP. If and when such illegality with respect
thereto ceases to exist, such suspension shall cease and such
affected Lender shall similarly notify Agent, Administrative
Agent, the other Lenders and Borrower and the Alternate Rate Loan
or Base Rate Loan or Alternate GBP Rate Loan into which such
share of the Eurodollar Loans or Alternate Rate Loans (as
applicable) was converted pursuant to this Section 2.13 shall be
reconverted to a Eurodollar Loan or Alternate Rate Loan,
respectively, on the first day of the next succeeding Interest
Period.
(b) If Borrower fails to give a valid Notice of
49
Continuation/Conversion in respect of any portion of a Eurodollar
Loan which is not repaid in accordance with the terms hereof at
the end of the relevant Interest Period in respect thereto, such
portion shall be converted automatically into Base Rate Loans in
the case of Loans denominated in U.S. Dollars or Alternate GBP
Rate Loans in the case of Loans denominated in GBP; provided that
if Borrower subsequently gives a valid Notice of
Continuation/Conversion in respect of such Base Rate Loans or
Alternate GBP Rate Loans, such Loans shall be converted into
Eurodollar Loans in accordance with the requirements for a
continuation/conversion under Section 2.5.
(c) If any Loan is converted to an Alternate Rate Loan
pursuant to this Section 2.13, Borrower and Lenders, acting
through Administrative Agent, shall enter into negotiations in
good faith with a view to agreeing upon a substitute basis for
determining the rate or rates of interest from time to time
applicable to such Loan, which shall be acceptable to each
Lender, and the rate or rates so determined shall constitute the
Alternate Rate for that Loan from the date of such conversion.
If, however, Borrower and Majority Lenders fail to agree to such
substitute basis within thirty (30) days after such conversion,
such Loan shall be deemed to have been converted to (i) in the
case of Loans denominated in U.S. Dollars, a Base Rate Loan, and
(ii) in the case of Loans denominated in GBP, an Alternate GBP
Rate Loan effective (in the case of clauses (i) and (ii)) from
the date of such conversion.
2.14. Eurodollar Availability. (a) In the event, and
on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for any Eurodollar Loans,
Administrative Agent shall have determined (which determination
shall, in the absence of manifest error, be conclusive and
binding upon Borrower) that U.S. Dollar or GBP (as the case may
be) deposits in the amount of the principal amount of the
Eurodollar Loans which is to have such Interest Period are not
generally available in the London interbank market, or that the
rate at which such U.S. Dollar or GBP (as the case may be)
deposits are being offered will not accurately reflect the cost
to any of the Lenders of making or funding such principal amount
of such Eurodollar Loans during such Interest Period, or that
reasonable means do not exist for ascertaining the LIBO Rate,
Administrative Agent shall, as soon as practicable thereafter,
give written or telephonic notice (which telephonic notice shall
be followed immediately with a notice by facsimile telecopy) of
such determination to Agent, the Lenders and Borrower and
(i) such principal amount of such Eurodollar Loans shall
automatically be converted, as of the last day of the Interest
Period during which such determination is made, to Alternate Rate
Loans subject to the last sentence of this paragraph and (ii) any
request by Borrower for such Eurodollar Loans pursuant to
Section 2.3 hereof shall thereupon, and until the circumstances
50
giving rise to such notice no longer exist (as notified by
Administrative Agent to Borrower and the Lenders), be deemed a
request for the making of Alternate Rate Loans. If at any time
Administrative Agent shall have determined (which determination
shall, in the absence of manifest error, be conclusive and
binding upon Borrower) that any contingency has occurred which
adversely affects the London interbank market or that any
Requirement of Law or any change in any existing Requirement of
Law or in the interpretation thereof or other circumstance
affecting the Lenders or the London interbank market makes the
funding of the Eurodollar Loans impracticable, Administrative
Agent shall, as soon as practicable thereafter, give written or
telephonic notice (which telephonic notice shall be followed
immediately with a notice by facsimile telecopy) of such
determination to Agent, the Lenders and Borrower and (i) the
Eurodollar Loans shall automatically be converted, as of the last
day of each Interest Period during which such determination is
made and in each case in respect of the principal amount of the
Eurodollar Loans having an Interest Period ending on such date,
to Alternate Rate Loans, subject to the last sentence of this
paragraph, and (ii) any request by Borrower for the Eurodollar
Loans pursuant to Section 2.3 hereof shall thereupon, and until
the circumstances giving rise to such notice no longer exist (as
notified by Administrative Agent to Borrower, Agent and the
Lenders), be deemed a request for the making of Alternate Rate
Loans. If, in the circumstances specified in this paragraph or
in Section 2.13, Administrative Agent determines that no
reasonable alternate source of funding for the Eurodollar Loans,
or no reasonable basis for determining the Alternate Rate, is
available or practicable, Administrative Agent shall promptly so
notify the other Lenders, Agent and Borrower thereof and any
notice of borrowing under Section 2.3 shall be deemed rescinded
and each principal amount of the Eurodollar Loans, if
outstanding, having an Interest Period then current, together
with all interest thereon, shall be due and payable by Borrower
on the last day of the Interest Period then applicable to it.
(c) If any Loan is converted to an Alternate Rate Loan
pursuant to this Section 2.14, Borrower and Lenders, acting
through Administrative Agent, shall enter into negotiations in
good faith with a view to agreeing upon a substitute basis for
determining the rate or rates of interest from time to time
applicable to such Loan, which shall be acceptable to each
Lender, and the rate or rates so determined shall constitute the
Alternate Rate for that Loan from the date of such conversion.
If, however, Borrower and Majority Lenders fail to agree to such
substitute basis within thirty (30) days after such conversion,
such Loan shall be deemed to have been converted to (i) in the
case of Loans denominated in U.S. Dollars, a Base Rate Loan, and
(ii) in the case of Loans denominated in GBP, an Alternate GBP
Rate Loan, effective (in the case of clauses (i) and (ii)) from
the date of such conversion.
51
2.15. Indemnities. Borrower shall indemnify each
Lender on demand for, from and against any actual loss
(including, without limitation, any loss of anticipated profits)
or expense (including but not limited to any loss or expense
sustained or incurred in liquidating or employing or redeploying
deposits from third parties acquired to effect or maintain any
Loan or any portion thereof) which such Lender or its branch or
Affiliate may sustain or incur as a consequence of (i) any
default in payment or prepayment of the principal amount of any
Loan or any portion thereof or interest accrued thereon, as and
when due and payable (at the due date thereof, by irrevocable
notice of payment or prepayment, or otherwise), (ii) the effect
of the occurrence of any Event of Default upon any Loan,
(iii) the payment or prepayment of any principal amount of any
Loan or the conversion of any portion of any Eurodollar Loan to
Alternate Rate Loans or Base Rate Loans on any day other than the
last day of an Interest Period or the payment of any interest on
such Loan, or portion thereof, on a day other than an Interest
Payment Date for the Loan or (iv) any failure of Borrower to
accept or make a borrowing of the Loans or continue or convert a
Loan after delivery of a notice requesting a Loan under Section
2.3 or, as the case may be, a notice requesting a continuation or
conversion under Section 2.5 or any failure by Borrower to
satisfy any of the conditions precedent to the making of Loans
hereunder after it has requested the borrowing thereof (other
than any such conditions that are waived in accordance with the
provisions hereof). The determination of each Lender of any
amount payable under this Section 2.15 shall, in the absence of
manifest error, be conclusive and binding upon Borrower.
2.16 Eligible Mortgages and Eligible Properties.
(a) "Eligible Mortgage" means each Mortgage Interest
where (i) the requirements of Section 2.16(c) in respect of such
Mortgage Interest are met, (ii) the Mortgagor in respect of such
Mortgage Interest is not in default under any payment obligation
or in any material respect under any other Contractual Obligation
between such Mortgagor and Borrower or any of its Subsidiaries,
including without limitation any Mortgage Interest Agreement, any
note payable by such Mortgagor to Borrower or any of its
Subsidiaries or any Lease, (iii) there has been no Cash Flow
Event with respect to such Mortgaged Property, (iv) no Credit
Support Obligor in respect of such Mortgage Interest is in
default under any payment obligation or in any material respect
under any other Contractual Obligation of such Credit Support
Obligor to Borrower or any of its Subsidiaries, including without
limitation any Lease, Mortgage Interest Agreement or Credit
Support Agreement, and (v) such Mortgage Interest is not subject
to a Lien otherwise permitted pursuant to Section 6.9(i) or 6.9
(iv).
(b) "Eligible Property" means each Property which is
52
leased to an Operator pursuant to a Lease approved in all
respects by Agent, provided (i) the requirements of Section
2.16(c) in respect of such Property are met, (ii) it is not a
Property the Operator of which has failed to exercise any renewal
option under the Lease thereof prior to the expiration of that
option (and no replacement Lease with that or another Operator
has been signed), (iii) such Operator is not in default under any
payment obligation or in any material respect under any other
Contractual Obligation between such Operator and Borrower or any
of its Subsidiaries, including without limitation such Lease, any
other Lease or any Mortgage Interest Agreement, (iv) there has
been no Cash Flow Event with respect to such Property, (v) no
Credit Support Obligor for the Lease of such Property is in
default under any payment obligation or in any material respect
under any other Contractual Obligation of such Credit Support
Obligor to Borrower or any of its Subsidiaries, including without
limitation any Lease, Mortgage Interest Agreement or Credit
Support Agreement, (vi) such Property is not subject to a Lien
otherwise permitted pursuant to Section 6.9(i) or 6.9 (iv), and
(vii) in the case of any Property which is a Courtyard Lodging,
either (y) the ratio of the Cash Flow of its Operator
attributable to that Property for the last period certified in a
Real Property Statement delivered pursuant to Section 5.2(b)(ii)
to its Fixed Charges over the same period for such Property is
equal to or greater than 1.25 to 1.00 or (z) such Property is
part of a group of Cross Guarantied Assets, and the ratio of the
Cash Flow attributable to all such Cross Guarantied Assets to
Fixed Charges for all such Cross Guarantied Assets is equal to or
greater than 1.25 to 1.00.
(c) No Mortgage Interest shall be an Eligible Mortgage
and no Property shall be an Eligible Property unless, on any
relevant date, there has been no MAC in respect of such (i)
Property (or any Operator or Credit Support Obligor for the Lease
thereof), or (ii) Mortgaged Property (or any Mortgagor or Credit
Support Obligor for the Mortgage Interest Agreements in respect
thereof), in each case since December 31, 1993 or, if later, the
date on which Borrower or any of its Subsidiaries acquired an
interest in such Property or Mortgaged Property other than, in
each case, a MAC which has ceased to be in effect; provided that
for the purposes of this Section 2.16, failure to comply with
clause (ii) of Section 5.5(a) in connection with an Eligible
Property or an Eligible Mortgage shall be deemed to constitute a
MAC in respect of such Eligible Property or Eligible Mortgage.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this
Agreement and to make the Loans herein provided for, Borrower
hereby covenants, represents and warrants to Agent,
Administrative Agent and each Lender that:
53
3.1. Financial Condition. The balance sheet of
Borrower and its Subsidiaries (if any) as at December 31, 1991,
December 31, 1992 and December 31, 1993 and the related
consolidated statements of income, stockholders' equity and cash
flows for the fiscal years ended on such dates, certified by
Ernst & Young, copies of which have heretofore been furnished to
Agent, are complete and correct and present fairly the financial
condition of Borrower and its Subsidiaries (if any) on a
consolidated basis as at such dates, and stockholders' equity and
cash flows for the fiscal years then ended. All such financial
statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as
disclosed therein). Borrower and its Subsidiaries have no
material Contingent Obligation, contingent liabilities or
liability for taxes, long-term lease or unusual forward or
long-term commitment, which is not reflected in the foregoing
statements or in the notes thereto.
3.2. No Material Adverse Effect. Since December 31,
1993 (a) there has been no Material Adverse Effect, and no event
has occurred and no condition exists which could reasonably be
expected to have a Material Adverse Effect and (b) no dividends
or other distributions have been declared the payment of which
could result in a Default or Event of Default nor have any Common
Shares, Preferred Shares or other equity securities of Borrower
been redeemed, retired, purchased or otherwise acquired for value
by Borrower or any of its Subsidiaries.
3.3. Existence; Compliance with Law. Borrower and
each of its Subsidiaries (a) is, in the case of Borrower, a real
estate investment trust duly organized, validly existing and in
good standing under the laws of the State of Maryland and, in the
case of each such Subsidiary, a corporation duly organized,
validly and existing and in good standing under the laws of its
respective jurisdiction of incorporation, (b) has full power and
authority and the legal right to own its property, to lease (as
lessee) the property that it leases as lessee, to lease (as
lessor) or sublease the property it owns and/or leases (as
lessee) and to conduct the business in which it is currently
engaged, (c) is duly qualified or licensed and is in good
standing under the laws of each jurisdiction where its ownership
or lease of property or the conduct of its business require such
qualification, and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith is
not reasonably likely to have, in the aggregate, a Material
Adverse Effect.
54
3.4. Operator, Advisor, Credit Support Obligors;
Compliance with Law.
(a) To the best knowledge of Borrower, each Operator
and Mortgagor (i) has full power and authority and the legal
right to own, lease (or sublease) and operate (as applicable) the
properties it operates and to conduct the business in which it is
currently engaged with respect to any Facility, (ii) is duly
qualified or licensed and is in good standing under the laws of
each jurisdiction where its ownership, lease (or sublease) or
operation of any Facility requires such qualification, and
(iii) is in compliance with all Requirements of Law applicable to
the Facilities operated by it, or applicable to the operation
thereof except to the extent that the failure to comply therewith
is not reasonably likely to have, in the aggregate, a Material
Adverse Effect.
(b) To the best knowledge of Borrower, the Advisor
(i) has full power and authority and legal right to conduct the
business in which it is presently engaged and to perform its
obligations under the Advisory Agreement, (ii) is duly qualified
or licensed and is in good standing under the laws of each
jurisdiction where the conduct of its business requires such
qualification, and (iii) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith
is not reasonably likely to have, in the aggregate, a Material
Adverse Effect.
(c) To the best knowledge of Borrower, the Credit
Support Obligors (i) have full power and authority and legal
right to conduct the business in which they are presently engaged
and to perform their obligations under the Credit Support
Agreements to which they are parties, and (ii) are in compliance
with all Requirements of Law, except, in the case of clauses (i)
and (ii), to the extent that the failure to comply therewith is
not reasonably likely to have, in the aggregate, a Material
Adverse Effect.
3.5. Power; Authorization; Enforceable Obligations.
Borrower and each of its Subsidiaries has the power and authority
and the legal right to make, deliver and perform each of the Loan
Documents to which it is a party and, in the case of Borrower, to
borrow hereunder; and Borrower has taken all necessary action to
authorize the borrowings hereunder, on the terms and conditions
of the Loan Documents, and Borrower and each of its Subsidiaries
has taken all necessary action to authorize the execution,
delivery and performance of each of the Loan Documents to which
it is a party. No consent or authorization of, filing with, or
other act by or in respect of any Governmental Authority is
required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of
the Loan Documents. This Agreement has been, and each other Loan
55
Document will be, duly executed and delivered on behalf of
Borrower and each of its Subsidiaries which is a party thereto
and this Agreement constitutes, and each other Loan Document when
executed and delivered will constitute, a legal, valid and
binding obligation of Borrower and each of its Subsidiaries which
is a party thereto enforceable against Borrower and each of its
Subsidiaries which is a party thereto in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally.
3.6. No Legal Bar. The execution, delivery and
performance of this Agreement and the other Loan Documents, the
borrowings hereunder and the use of the proceeds thereof, will
not violate any Requirement of Law or any Contractual Obligation
of Borrower or any of its Subsidiaries, and will not result in,
or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation.
3.7. No Material Litigation. No litigation,
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the best knowledge and
belief of Borrower, threatened by or against Borrower or any of
its Subsidiaries or against any of their respective properties or
revenues or, to the best knowledge and belief of Borrower, by or
against any of the Operators and Mortgagors or against any of
their respective properties (a) with respect to this Agreement or
the other Loan Documents, the Leases, the Mortgage Interest
Agreements, or any of the transactions contemplated hereby or
thereby, or (b) relating to the Properties, the Mortgaged
Properties or the ownership or the operation thereof or the
conduct of business thereon as presently conducted, which, in the
case of (a) or (b), is reasonably likely to have, in the
aggregate, a Material Adverse Effect.
3.8. No Default. Neither Borrower nor any of its
Subsidiaries is in default under or with respect to any
Contractual Obligation in any respect which could have a Material
Adverse Effect. No Default or Event of Default has occurred and
is continuing.
3.9. Ownership of Mortgage Interests and Property;
Liens.
(a) In the case of a Mortgage Interest, Borrower or
one of its Subsidiaries has good record, marketable and
indefeasible title to such Mortgage Interest. In the case of a
Property which is a Fee Interest, Borrower or one of its
Subsidiaries has good record, marketable and indefeasible fee
simple absolute title to such Fee Interest. In the case of a
Property which is a Leasehold Interest, Borrower or one of its
56
Subsidiaries has good record and marketable title to such
Leasehold Interest. In the case of a Mortgage Interest in
respect of which all or any part of the Mortgaged Property is a
fee interest in land and/or buildings, structures, improvements
and fixtures, the Mortgagor with respect to such Mortgaged
Property has good record, marketable and indefeasible fee simple
absolute title to such Mortgaged Property. In the case of a
Mortgage Interest in respect of which all or any part of the
Mortgaged Property is a leasehold estate, the Mortgagor with
respect to such Mortgaged Property has good record and marketable
title to such leasehold estate. In each of the cases described
in this Section 3.9, such title shall be free and clear of all
Liens and other matters affecting title except for such other
matters not reasonably likely to have, in the aggregate, a
Material Adverse Effect.
(b) The buildings, structures, and other improvements
located on each Facility are in good operating condition and
repair (ordinary wear and tear which are not such as to
materially and adversely affect the operations of the business
conducted thereon, excepted), free of any material structural or
engineering defects known to Borrower or any of its Subsidiaries
on the date hereof and are suitable for their present uses,
subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect.
(c) All water, sewer, gas, electricity, telephone and
other utilities serving each Facility are supplied directly to
such Facility by public utilities and enter such Facility through
adjoining public streets or, if they pass through adjoining
private land, do so in accordance with valid public easements
which inure to the benefit of Borrower or one of its Subsidiaries
(in the case of a Facility in which Borrower or such Subsidiary
has a Fee Interest) or a mortgagor's or beneficiary's benefit (in
the case of a Facility in which Borrower or such Subsidiary is a
mortgagor or beneficiary, as applicable, of a loan secured in
whole or in part by a Lien on a Facility), subject to such
exceptions which are not reasonably likely to have, in the
aggregate, a Material Adverse Effect. All of such utilities are
presently installed and operating and are in good and safe
condition, subject to such exceptions which are not reasonably
likely to have, in the aggregate, a Material Adverse Effect. All
material assessments for public improvements that have been made
against the Facilities have been paid or provided for, except
that in the case of any assessments that are payable in
installments, all installments due as of the date hereof have
been paid or provided for, subject to such exceptions which are
not reasonably likely to have, in the aggregate, a Material
Adverse Effect.
(d) None of Borrower or any of its Subsidiaries or to
57
the best knowledge and belief of Borrower, the Operators and
Mortgagors, has received notice of any pending, threatened or
contemplated condemnation proceeding or similar taking affecting
the Facilities, or any portion thereof, or any sale or other
disposition of the Facilities or any portion thereof in lieu of
condemnation or similar taking, in each case, subject to such
exceptions which are not reasonably likely to have, in the
aggregate, a Material Adverse Effect.
(e) All Real Property Permits from all Governmental
Authorities having jurisdiction over the Facilities or any
portion thereof, the absence of which could materially impair the
use of any Facility for the purposes for which it is currently
used, and from all insurance companies and fire rating and
similar boards and organizations required to have been issued to
Borrower or any of its Subsidiaries or any Operators and
Mortgagors of such Facility, as the case may be, to enable such
Facility or any portion thereof to be lawfully occupied and used
as currently so occupied or used have been issued and are in full
force and effect, subject to such exceptions which are not
reasonably likely to have, in the aggregate, a Material Adverse
Effect. Neither Borrower nor any of its Subsidiaries has
received or been informed by a third party, including the
Operators and Mortgagors of the Facilities, of the receipt by it
of any notice from any Governmental Authority having jurisdiction
over the Facilities or any portion thereof or from any insurance
company or fire rating or similar board or organization
threatening a suspension, revocation, modification or
cancellation of any Real Property Permit, subject to such
exceptions which are not reasonably likely to have, in the
aggregate, a Material Adverse Effect.
(f) Each of the Leases, Mortgage Interest Agreements
and Credit Support Agreements relating to Properties and Mortgage
Interests (including Properties which are not Eligible Properties
and Mortgage Interests which are not Eligible Mortgages) is in
full force and effect and is a legally valid and binding
obligation of Borrower or its Subsidiaries and the other parties
thereto, subject to such exceptions which are not reasonably
likely to have, in the aggregate, a Material Adverse Effect.
Neither Borrower nor any of its Subsidiaries has mortgaged,
pledged or otherwise encumbered any of the Leases or Mortgage
Interest Agreements or its right to obtain rental, interest or
other payments thereunder except for the Liens permitted by
Section 6.9. Neither Borrower nor any of its Subsidiaries has
collected any rents becoming due under any Lease more than 30
days in advance (except (i) an amount equal to one month's
instalment of rent under a Lease or (ii) in the case of a lease
acquired from Host Marriott Corporation and its Affiliates
pursuant to the transaction (or one on substantially similar
terms) described in the Form S-3 Registration Statement of
Borrower filed with the Commission on March 29, 1994, an amount
58
equal to no more than three months' instalment of rent under such
lease). All rent and other sums and charges payable by any
Operator under each Lease to which it is a party are current, no
notice of default or termination under any such Lease is
outstanding, no termination event or condition or uncured default
on the part of an Operator exists under any Lease, and no event
of default has occurred which, with the giving of notice or the
lapse of time or both, would constitute such a default or
termination event or condition or uncured default on the part of
Borrower or its Subsidiaries or the Operators (as the case may
be), subject to such exceptions which are not reasonably likely
to have, in the aggregate, a Material Adverse Effect. All
payments required from any Mortgagor under any Mortgage Interest
Agreement to which it is a party are current, no notice of
default or acceleration under any such Mortgage Interest
Agreement is outstanding, no default or condition or uncured
default on the part of the Mortgagor exists under any Mortgage
Interest Agreement, and no event of default has occurred which,
with the giving of notice or the lapse of time or both, would
constitute such a default or termination event or condition or
uncured default on the part of the Mortgagor, subject to such
exceptions which are not reasonably likely to have, in the
aggregate, a Material Adverse Effect. All payments required from
any Credit Support Obligor in respect of any Credit Support
Agreement for the Lease of a Property or for a Mortgage Interest
are current, no notice of default or acceleration under any such
Credit Support Agreement is outstanding, and no default or
condition or uncured default on the part of such Credit Support
Obligor exists under any such Credit Support Agreement, subject
to such exceptions which are not reasonably likely to have, in
the aggregate, a Material Adverse Effect. As to all of the
Leases, Borrower and each of its Subsidiaries has performed all
of its repair and maintenance obligations (if any) and, to the
best knowledge and belief of Borrower, each Operator and
Mortgagor under each Lease and Mortgage to which it is a party
has performed all of its repair and maintenance obligations,
subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect.
(g) Borrower and each of its Subsidiaries has good
record and marketable title in fee simple to or valid mortgage
interests in all its real property, other than the Properties and
Mortgaged Properties, as to which Borrower has made the
representation set forth in subsection (a) of this Section 3.9,
and good title to all its other property other than the
Properties, and none of such property is subject to any Lien for
borrowed money as of the date hereof, except for Liens permitted
by Section 6.9.
3.10. No Burdensome Restrictions. No Contractual
Obligation of Borrower or any of its Subsidiaries or, to
Borrower's best knowledge and belief, of any of the Operators and
59
Mortgagors and no Requirement of Law currently has a Material
Adverse Effect, or insofar as Borrower may reasonably foresee may
have a Material Adverse Effect.
3.11. Taxes. Borrower and each of its Subsidiaries
has filed or caused to be filed all tax returns which to the best
knowledge and belief of Borrower are required to be filed, and
has paid or caused to be paid all taxes shown to be due and
payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental
Authority (other than those the amount or validity of which is
currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Borrower or such
Subsidiary); and no tax Liens have been filed and, to the
knowledge of Borrower, no claims are being asserted with respect
to any such taxes, fees or other charges.
3.12. Federal Regulations. Neither Borrower nor any
of its Subsidiaries is engaged and nor will it engage,
principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to
time hereafter in effect. No part of the proceeds of the Loans
hereunder will be used for "purchasing" or "carrying" "margin
stock" as so defined or for any purpose which violates, or which
would be inconsistent with, the provisions of the Regulations of
such Board of Governors. If requested by Agent, Borrower will
furnish to Agent and each Lender a statement in conformity with
the requirements of Federal Reserve Form U-1 referred to in said
Regulation U to the foregoing effect.
3.13. Employees. Neither Borrower nor any of its
Subsidiaries has any employees and none of them has ever engaged
any employees.
3.14. ERISA. No ERISA Affiliate has been, since July
1, 1974, an "employer", as defined in Section 3(5) of ERISA, in
respect of any Plan or making contributions to any Multiemployer
Plan.
3.15. Status as REIT. Borrower is organized in
conformity with the requirements for qualification as a real
estate investment trust under the Code. Borrower's failure to
elect to be treated as a real estate investment trust under the
Code for its fiscal year ended December 31, 1986 has not had and
will not have any Material Adverse Effect. Borrower has met all
of the requirements for qualification as a real estate investment
trust under the Code for its fiscal years ended December 31,
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1991, 1992, 1993 and 1994. Borrower is in a position to qualify
for its current fiscal year as a real estate investment trust
under the Code and its proposed methods of operation will enable
it to so qualify.
3.16. Restrictions on Incurring Indebtedness. Neither
Borrower nor any of its Subsidiaries is (a) an "investment
company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as
amended, or (b) a "holding company" as defined in, or otherwise
subject to, regulation under the Public Utility Holding Company
Act of 1935. Neither Borrower nor any of its Subsidiaries is
subject to regulation under any federal or state statute or
regulation which limits its ability to incur the indebtedness or
give the guaranties described in this Agreement.
3.17. Subsidiaries. Set forth on Schedule 4 annexed
hereto is a complete and accurate list of all of Borrower's
Subsidiaries showing as of the date hereof (as to each
Subsidiary) the jurisdiction of its incorporation, the number of
shares of each class of capital stock authorized, and the number
outstanding, and the percentage of each class of capital stock
owned by Borrower, all of which capital stock is owned free and
clear of all Liens; all of the issued and outstanding shares of
capital stock of such Subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable.
3.18. Compliance with Environmental Laws. Borrower
and each of its Subsidiaries and, to the best knowledge of
Borrower, each Operator and each Mortgagor of the Facilities is
in compliance with all applicable statutes, laws, rules,
regulations and orders of all Governmental Authorities relating
to environmental protection, pollution control and Hazardous
Materials and with respect to the conduct of its business and the
ownership of its properties, except for such noncompliance which
would not result in imposition of Liens, fines, penalties,
injunctive relief or other civil or criminal liabilities and
which, in the aggregate, could not have a Material Adverse
Effect.
3.19. Pollution; Hazardous Materials. In connection
with the acquisition and ownership of its interests in the
Properties and Mortgage Interests, Borrower and each of its
Subsidiaries has made and will continue to make such inquiries,
and has and will continue to cause such testing, surveying,
inspection or other action, with respect to each Facility as is
necessary or desirable in connection with Hazardous Materials
which might be present in the air, soil, surface water or
groundwater at such Facility. Except for such exceptions which
are not reasonably likely to have, in the aggregate, a Material
Adverse Effect, there are not, and, to the knowledge of Borrower
after diligent inquiry, were not previously, any Hazardous
61
Materials present in the air, soil, surface water or groundwater
at any Facility and no Hazardous Materials (except Hazardous
Materials maintained in accordance with all Requirements of Law
and necessary for the business operations of any such Facility as
a health care facility, including, without limitation, petroleum
used for heating oil and certain medications) are used in the
operation of any Facility. Borrower is not aware of any claim or
notice of violation, alleged violation, noncompliance, liability
or potential liability relating to any Facility nor any judicial
proceedings or governmental or administrative actions pending or,
to the knowledge of Borrower, threatened, to which Borrower or
any of its Subsidiaries would be named a party in connection with
any Facility which, if adversely determined, would be reasonably
likely to result in a Material Adverse Effect.
3.20. Securities Laws. None of the Common Shares,
Preferred Shares or other equity securities of Borrower has been
issued in violation of the Securities Act of 1933, as amended, or
the securities or "blue sky" or other applicable laws or
regulations of any applicable jurisdiction.
3.21. Declaration of Trust, By-Laws, Advisory
Contract, etc. The copies of the Declaration of Trust and
by-laws of Borrower and the Advisory Agreement which have been
furnished to Agent are true, correct and complete copies thereof
as in effect on the date of this Agreement.
3.22. Disclosures. The financial statements referred
to in Section 3.1 do not, nor does this Agreement, the other Loan
Documents, or any other written statement furnished by or on
behalf of Borrower to any Lender in connection with the
transactions contemplated hereby or thereby, contain any untrue
statement of a material fact or omit a material fact necessary to
make the statement contained therein or herein not misleading.
3.23. Medicare and Medicaid Certification. Subject to
such exceptions which, in the aggregate, are not reasonably
likely to have a Material Adverse Effect, to the best knowledge
of Borrower after reasonable investigation, each Operator with
respect to each of the Properties that it operates, and each
Mortgagor with respect to each of the Mortgaged Properties that
it owns, (a) is validly licensed under applicable law to operate
such Property or Mortgaged Property and to conduct the business
in which it is currently engaged, (b) has received any applicable
certificate of need, determination of need or similar approval,
and any amendments or supplements, and such approvals are in full
force and effect, (c) (except in the case of non-healthcare
Properties and Mortgaged Properties, United Kingdom located
Properties or Mortgaged Properties or otherwise where
participation in Medicare or Medicaid is deemed undesirable in
the reasonable business judgment of the Operator or Mortgagor) is
validly certified or approved for participation in Medicare and
62
Medicaid by the applicable federal and state authorities and is a
party to provider agreements with respect to its participation in
Medicare and Medicaid, which provider agreements are in full
force and effect, in each case only to the extent that such
Property or Mortgaged Property is of a character eligible for
participation in Medicare or Medicaid, and (d) no proceedings
have been initiated or notices issued to suspend or revoke any
such license, approval, certification or provider agreement,
except for notices of deficiency which are issued and corrected
in the ordinary course of business.
3.24. Offering, Etc., of Securities. Neither Borrower
nor any agent with the authority of Borrower has offered any
securities similar to the Notes, nor solicited any offer to buy
any such securities, in a manner which would render the offering,
sale or issuance of the Notes subject to the registration
requirements of the Securities Act of 1933, as amended.
SECTION 4. CONDITIONS PRECEDENT
4.1. Conditions to Effectiveness. This Agreement
shall become effective only upon satisfaction of all of the
following conditions precedent:
(a) Note. Agent shall have received for the account
of each Lender a Note conforming to the requirements hereof and
executed by a duly authorized officer of Borrower.
(b) Legal Opinion. Agent shall have received, with a
counterpart for each Lender, a favorable opinion of Sullivan &
Worcester, as counsel to Borrower and its Subsidiaries and the
Advisor, addressed to Agent and the Lenders and dated the
Effective Date, and in form and substance satisfactory to Agent.
(c) Organizational Documents. Agent shall have
received certified copies of the Declaration of Trust for
Borrower and Articles of Organization or a Certificate of
Incorporation for each Subsidiary of Borrower, by-laws of
Borrower and each of its Subsidiaries and all resolutions of the
Board of Trustees of Borrower and the board of directors of each
of its Subsidiaries approving this Agreement and the other Loan
Documents to which each is a party and the transactions
contemplated hereby and thereby, and of all documents evidencing
other necessary corporate action and approvals, if any, of
Governmental Authorities with respect to this Agreement and the
other Loan Documents and the transactions contemplated hereby and
thereby.
(d) Good Standing and Existence. Agent shall have
received certificates of the appropriate governmental officials
of the State of Maryland and of any other State where Borrower
conducts business and the State of incorporation of each of
63
Borrower's Subsidiaries and of any other State where such
Subsidiary conducts business, each dated a recent date prior to
the Effective Date, to the effect that Borrower or such
Subsidiary (as the case may be) is validly existing and is in
good standing with respect to payment of franchise and similar
taxes and is duly qualified to transact business therein.
(e) Advisory Agreement and Subordination Agreement.
Agent shall have received copies of the Advisory Agreement and
the Subordination Agreement each certified by a Responsible
Officer.
(f) Debt Rating. Agent shall have received evidence
that Borrower's long-term unsecured senior debt is rated BBB- or
higher by Standard & Poor's Corporation or Baa3 or higher by
Moody's Investors Service, Inc.
(g) Existing Loan Agreement
(i) Borrower shall have paid all accrued
interest, fees, commissions and other amounts
(other than principal) accrued or owed under the
Existing Loan Agreement, whether or not presently
due and payable.
(ii) No Default or Event of Default (both such
terms being used as defined in the Existing Loan
Agreement) shall have occurred and be continuing
under the Existing Loan Agreement.
(h) No Material Adverse Effect. No Material Adverse
Effect specified in clause (a)(i), (b), (c)(i) or (d) of the
definition thereof shall have occurred since December 31,
1993.
(i) Compensation. All obligations of Borrower to pay
fees and provide compensation and reimbursement of costs and
expenses to Agent, Administrative Agent and the Lenders or their
designees as of the Effective Date hereunder or otherwise in
connection with the financing contemplated hereby shall have been
satisfied.
(j) Real Property Statement. Agent shall have
received a Real Property Statement dated the Effective Date.
(k) Additional Matters. Agent shall have received
such other approvals, opinions or documents as it may reasonably
request and all documents and legal matters in connection with
the transactions contemplated by this Agreement and the other
Loan Documents shall be satisfactory in form and substance to
Agent and its counsel.
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4.2. Conditions Precedent to Loans. The obligations
of Lenders to make Loans on each Borrowing Date and to continue
any Existing Loans on the Effective Date (which, for purposes of
this Section 4.2 shall be deemed to be a Borrowing Date) are
subject to the following further conditions precedent:
(a) Representations and Warranties. The
representations and warranties made by Borrower herein or made by
any Person in the other Loan Documents or which are contained in
any certificate, document or financial or other statement
furnished at any time under or in connection with any of the Loan
Documents, shall be true, correct and accurate in all material
respects on and as of the Borrowing Date for the Loan as if made
on and as of such date unless stated to relate to a specific
earlier date, in which case such representations and warranties
shall be true, correct and complete in all material respects as
of such earlier dates.
(b) No Default or Event of Default. No Default or
Event of Default shall have occurred and be continuing on such
date either before or after giving effect to the Loan to be made
on the Borrowing Date.
(c) Legality of Loans. The making of the Loans
hereunder by the Lenders and the acquisition of the Notes shall
be permitted as of the Borrowing Date by all applicable
Requirements of Law and shall not subject any Lender to any
penalty or other onerous condition in or pursuant to any such
Requirement of Law or result in a Material Adverse Effect.
(d) No Material Adverse Effect. No Material Adverse
Effect specified in clause (a)(i), (b), (c)(i) or (d) of the
definition thereof shall have occurred since December 31, 1993.
(e) Solvency. Both after and immediately before the
making of any Loans on the Borrowing Date, Borrower and each of
its Subsidiaries shall be Solvent.
(f) Borrowing Certificate. Administrative Agent shall
have received, with a counterpart for each Lender, a Notice of
Borrowing, dated the Borrowing Date, substantially in the form of
Exhibit B, with appropriate insertions and attachments
satisfactory in form and substance to Agent and its counsel,
executed by a Responsible Officer; provided that while no Notice
of Borrowing shall be required with respect to any Existing Loans
continued on the Effective Date, on the Effective Date Agent
shall have received a certificate of a Responsible Officer
certifying as to the matters set forth in clauses (vi)-(viii) of
the Notice of Borrowing with respect to such Existing Loans.
(g) Borrowing Limits. After the making of the Loans
on any Borrowing Date, the aggregate principal amount of all
65
Loans outstanding shall not exceed the Commitments, the aggregate
principal amount of all General Corporate Loans outstanding shall
not exceed 25% of the Commitments and the aggregate principal
amount of all Loans outstanding denominated in GBP shall not
exceed the Equivalent Amount of $100,000,000 (as determined in
accordance with Section 1.3(b)) and Agent and Administrative
Agent shall have received a certificate dated as of a date not
more than five (5) Business Days prior to the relevant Borrowing
Date to such effect.
(h) Real Property Statement. Administrative Agent
shall have received a Real Property Statement dated, or dated as
of, the Borrowing Date.
SECTION 5. AFFIRMATIVE COVENANTS.
Borrower hereby agrees that, so long as the Commitments
remain in effect, any Note remains Outstanding and unpaid or any
other amount is owing to any Lender, Agent or Administrative
Agent hereunder or under any other Loan Document, Borrower shall
(and shall cause each of its Subsidiaries to):
5.1. Financial Statements. Furnish to Administrative
Agent, with sufficient copies for each Lender:
(a) as soon as available, but in any event within
ninety days after the end of each fiscal year of Borrower and
within one hundred thirty-five days after the end of each fiscal
year of each Primary Operator/Mortgagor and Primary Credit
Support Obligor, a copy of each of the following (except for any
thereof to the extent none of the related Leases, Mortgage
Interest Agreements or Credit Support Agreements requires the
provision of any of the following to Borrower or one of its
Subsidiaries within such period, in respect of which Borrower's
obligation to furnish copies to each Lender shall be satisfied by
furnishing copies as soon as practicable after Borrower or such
Subsidiary receives one or more copies thereof): the audited
balance sheet prepared on a consolidated basis (and, if ever
prepared on a consolidating basis, on a consolidating basis) for
Borrower and its Subsidiaries and on a consolidated basis for
each Primary Operator/Mortgagor and Primary Credit Support
Obligor, each as at the end of such year and the related
statements or income, stockholders' equity and cash flows for
such year (on a consolidated basis (and,if ever prepared on a
consolidating basis, on a consolidating basis) for Borrower and
its Subsidiaries and on a consolidated basis for each Primary
Operator/Mortgagor and Primary Credit Support Obligor), setting
forth in each case in comparative form the figures for the
previous year, certified without a "going concern" or like
qualification or exception, or qualification arising out of the
scope of the audit, by independent certified public accountants
of nationally recognized standing; and
66
(b) as soon as available, but in any event not later
than forty-five days after the end of each of the first three
quarterly periods of each fiscal year of Borrower and not later
than seventy-five days after the end of each of the first three
quarterly periods of each fiscal year of each Primary Operator/
Mortgagor and Primary Credit Support Obligor, copies of each of
the following (except for any thereof to the extent none of the
related Leases, Mortgage Interest Agreements or Credit Support
Agreements requires the provision of any of the following to
Borrower or one of its Subsidiaries within such period, in
respect of which Borrower's obligation to furnish copies to each
Lender shall be satisfied by furnishing copies as soon as
practicable after Borrower or such Subsidiary receives one or
more copies thereof): the unaudited balance sheet prepared on a
consolidated basis (and, if ever prepared on a consolidating
basis, on a consolidating basis) for Borrower and its
Subsidiaries and on a consolidated basis for each Primary
Operator/Mortgagor and Primary Credit Support Obligor, each as at
the end of each such quarter and the related unaudited statements
of income, stockholders' equity and cash flows for such quarterly
period and the portion of the fiscal year through such date (on a
consolidated basis (and, if ever prepared on a consolidating
basis, on a consolidating basis) for Borrower and its
Subsidiaries and on a consolidated basis for each Primary
Operator/Mortgagor and Primary Credit Support Obligor), setting
forth in each case in comparative form the figures for the
previous year, certified by a responsible officer of such entity
as being fairly stated and complete and correct in all material
respects (subject to normal year-end audit adjustments); all such
financial statements referred to in clauses (a) and (b) above to
be complete and correct in all material respects and be prepared
in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except as
approved by such accountants or officer, as the case may be, and
disclosed therein).
5.2. Certificates; Other Information. Furnish to
Administrative Agent, with sufficient copies for each Lender:
(a) concurrently with the delivery of the financial
statements of Borrower and its Subsidiaries referred to in
Section 5.1(a) above, a certificate of Borrower's independent
certified public accountants certifying such financial statements
of Borrower and its Subsidiaries stating that in making the
examination necessary therefor, no knowledge was obtained of any
Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial
statements of Borrower and its Subsidiaries referred to in
Sections 5.1(a) and (b) above, (i) a certificate of a Responsible
Officer (A) stating that, to the best of such officer's
67
knowledge, Borrower and each of its Subsidiaries during such
period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in the Loan
Documents to be observed, performed or satisfied by it, and that
such officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate, and (B) showing
in detail the calculations supporting such statement in respect
of Sections 6.1(a), 6.1(b) and 6.1(c) and 6.8 (including,
without limitation, certification and details as to all
Indebtedness of Borrower and its Subsidiaries, if any), (ii) a
Real Property Statement and (iii) with respect to each Property
or Mortgaged Property (but in no event for a Courtyard Lodging,
for which the reporting information required will be as set forth
in Sections 5.1(a) and (b)) for which Marriott International,
Inc. is the Operator or Mortgagor, a certificate of a senior
officer of Marriott International, Inc. as to the Cash Flow and
Fixed Charges of Marriott International, Inc. attributable to
that Property or Mortgaged Property for the last reported
financial year of Marriott International, Inc.;
(c) within forty-five days after the end of each
calendar quarter following the Effective Date, a written report
signed by a Responsible Officer describing in reasonable detail
any acquisitions or dispositions of any Fee Interests or Mortgage
Interests by Borrower and its Subsidiaries or any other material
property of Borrower and its Subsidiaries which shall include,
without limitation (i) in the case of acquisitions of property, a
description of (A) the geographic area and type of property, (B)
the current and anticipated cash flow from the property, (C) the
operators of such property and (D) financing of the acquisition,
(ii) with respect to dispositions of property, a description of
(A) the amount and use of proceeds from such disposition and (B)
the reasons for the disposition, and (iii) a copy of any
appraisals of the property acquired or disposed of;
(d) within 30 days prior to the first day of each
fiscal year of Borrower, a copy of the projections by Borrower of
the operating budget and cash flow of Borrower and its
Subsidiaries for such fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer to the
effect that such projections have been prepared on the same basis
as the financial statements of Borrower and its Subsidiaries then
current and that such officer has no reason to believe they are
incorrect or misleading in any material respect;
(e) promptly after the same are sent, copies of all
financial statements and reports which Borrower sends to its
holders of Common Shares, Preferred Shares or other equity
securities, and promptly after the same are filed by Borrower
copies of all financial statements and reports which Borrower or
any of its Subsidiaries may make to, or file with, the Commission
or any successor or analogous Governmental Authority; and
68
(f) promptly, such additional financial and other
information respecting the financial or other condition of the
Primary Operators/Mortgagors, the Primary Credit Support
Obligors, the Advisor or Borrower or any of its Subsidiaries or
the status or condition of the Facilities or the operation
thereof which Borrower is entitled to or can otherwise reasonably
obtain as Agent may from time to time reasonably request.
5.3. Payment of Obligations. Pay, discharge or
otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its Indebtedness and other
obligations of whatever nature, except, in the case of
Indebtedness other than that described in Section 7.1(e), when
the amount or validity thereof is currently being contested in
good faith by appropriate proceedings, and reserves in conformity
with GAAP with respect thereto have been provided on the books of
Borrower and its Subsidiaries.
5.4. Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by it (except that Borrower and its Subsidiaries may
acquire the Courtyard Lodgings but will not own, operate or
finance Psychiatric Care Assets other than those owned, operated
or financed as of the date hereof and will not own, operate or
finance hotels or other lodging facilities other than the
Courtyard Lodgings), and preserve, renew and keep in full force
and effect its existence and take all reasonable action to
maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business; and comply with
all Contractual Obligations and Requirements of Law except to the
extent that the failure to comply therewith could not, in the
aggregate, have a Material Adverse Effect.
5.5. Leases and Mortgage Interests; Credit Support
Agreements. (a) (i) Maintain the Leases, Mortgage Interests and
Credit Support Agreements in full force and effect and enforce
the obligations of the Operators under the Leases, the Mortgagors
under the Mortgage Interests and the Credit Support Obligors
under the Credit Support Agreements in a timely manner and (ii)
obtain the consent of Agent in connection with any materially
adverse change in or waiver of any obligation of any Operator,
Mortgagor or Credit Support Obligor contained in, or any right or
remedy of Borrower or any of its Subsidiaries under, any Lease,
Mortgage Interest Agreement or Credit Support Agreement,
including, without limitation, any renewal, amendment,
modification or termination thereof, except to the extent that
the failure to comply with this Section 5.5(a) could not, in the
aggregate, have a Material Adverse Effect; and (b) give notice to
Agent of each waiver, renewal, amendment, modification or
termination of the Leases, Mortgage Interests and Credit Support
Agreements in respect of any Eligible Property or Eligible
Mortgage, together with a copy of such waiver, renewal,
69
amendment, modification or termination.
5.6. Maintenance of Property, Insurance. Keep all
property useful and necessary in its business in good working
order and condition; maintain or cause the Operators of its
Properties to maintain with financially sound and reputable
insurance companies insurance with respect to its property and
business of such a nature, with such terms and in such amounts,
as is customary in the case of business entities of established
reputation engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the amounts
customarily insured against and for by such business entities,
and to cause the Mortgagors of each of its Mortgaged Properties
to maintain comparable insurance. Borrower shall furnish to each
Lender, upon written request, full information as to the
insurance carried.
5.7. Inspection of Property; Books and Records;
Discussions. Keep proper books of record and account in which
full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities; and
permit representatives of Agent and/or Administrative Agent and,
after the occurrence of a Default, any Lender, to visit and
inspect any of its properties and examine and make abstracts from
any of its books and records at any reasonable time and as often
as may reasonably be desired, and to discuss the business,
operations, properties, prospects and financial and other
condition of Borrower and its Subsidiaries with officers and
employees of Borrower or such Subsidiaries and the Advisor and
with its independent certified public accountants.
5.8. Notices. Promptly, and in any event within ten
Business Days after an officer of Borrower obtains knowledge
thereof, give notice to Agent, Administrative Agent and each
Lender:
(a) of the occurrence of any Default or Event of
Default;
(b) of (i) any default or event of default or
termination under any Lease, Credit Support Agreement, Mortgage
Interest Agreement or any other Contractual Obligation of or in
favor of Borrower or any of its Subsidiaries which could have a
Material Adverse Effect and (ii) any litigation, investigation or
proceeding which may exist at any time between Borrower or any of
its Subsidiaries or any Operator, Mortgagor or Credit Support
Obligor and any Governmental Authority or other Person, which if
adversely determined could have a Material Adverse Effect;
(c) of any litigation or proceeding affecting Borrower
or any of its Subsidiaries, any Primary Operator/Mortgagor or
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any Primary Credit Support Obligor in which the amount involved
is $100,000 or more and is not fully covered by insurance or in
which injunctive or similar relief is sought;
(d) of the following events, as soon as possible and
in any event within 30 days after Borrower knows or has reason to
know thereof (provided that with respect to any Multiemployer
Plan in which neither Borrower nor any ERISA Affiliate is a
substantial employer Borrower shall only be deemed to have
knowledge of facts concerning which it has actual knowledge):
(i) the occurrence or expected occurrence of any Reportable Event
with respect to any Plan, or (ii) the institution of proceedings
or the taking or expected taking of any other action by PBGC or
Borrower or any ERISA Affiliate to terminate or withdraw from any
Plan, and in addition to such notice, deliver to each Lender
whichever of the following may be applicable: (A) a certificate
of the chief financial officer or treasurer of Borrower setting
forth details as to such Reportable Event and the action that
Borrower or ERISA Affiliate proposes to take with respect
thereto, together with a copy of any notice of such Reportable
Event that may be required to be filed with PBGC, or (B) any
notice delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be
terminated, as the case may be;
(e) of the adoption by Borrower or any ERISA Affiliate
of any Plan or of any Plans maintained by any Person that becomes
an ERISA Affiliate after the date hereof;
(f) of any proposed transaction or event which may
give rise to Net Property Proceeds, Net Mortgage Proceeds or Net
Securities Proceeds;
(g) of the occurrence or existence of any event or
condition which could reasonably be expected to have, or which
has had, a Material Adverse Effect; and
(h) of the occurrence or existence of any event or
condition which would cause any of the representations and
warranties set forth in Section 3.9 to be untrue if repeated
after the occurrence, or during the existence, of such event or
condition.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action Borrower
proposes to take with respect thereto. For all purposes of
clause (d) of this Section, Borrower shall be deemed to have all
knowledge or knowledge of all facts attributable to the
administrator of such Plan.
5.9. Appraisals and Other Valuations. (a) From time
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to time during the term of this Agreement, Agent may, in its sole
discretion, order an Appraisal of one or more of the Eligible
Properties and/or Mortgaged Properties covered by Eligible
Mortgages. Any such Appraisal shall be at Borrower's cost if
(i) Agent shall have obtained a letter from an expert appraiser
or evaluator of real property, health care or retirement
facilities or hotel or other lodging facilities to the effect
that, or Agent shall otherwise in good faith have determined
that, facts or circumstances exist, or changes in market
conditions have occurred, as a result of which there exists a
reasonable possibility that Appraisals of the Eligible Properties
and Mortgaged Properties covered by Eligible Mortgages, might
result in an aggregate valuation thereof reflecting a material
loss of value as compared to the value thereof indicated in the
certificate of a Responsible Officer delivered to Agent pursuant
to Section 4.1(j), or (ii) an Event of Default has occurred.
(b) In addition to the Appraisals referred to in
Section 5.9(a), from time to time during the term of this
Agreement, if so requested by Agent, in its sole discretion,
Borrower shall furnish to Administrative Agent, with sufficient
copies for each Lender, a certificate of a Responsible Officer
certifying as to the value of one or more of the Eligible
Properties and/or Mortgaged Properties covered by Eligible
Mortgages.
5.10. Meetings. Within one hundred days after the end
of each fiscal year of Borrower, one or more Responsible Officers
of Borrower shall attend an annual informational meeting with the
Lenders, for the purpose of answering reasonable questions of any
Lender, Agent and/or Administrative Agent relating to the
Facilities and/or the Loan Documents, to be held at Borrower's
cost and at such time and place to be determined by Agent as is
reasonably requested by Agent; provided that each Lender shall
bear the costs of transportation and accommodation for any of its
representatives attending such meeting.
5.11. REIT Requirements. Operate its business at all
times so as to satisfy or be deemed to have satisfied all
requirements necessary to qualify as a real estate investment
trust under Section 856 through 860 of the Code. Borrower will
maintain adequate records so as to comply with all record-keeping
requirements relating to the qualification of Borrower as a real
estate investment trust as required by the Code and applicable
regulations of the Department of the Treasury promulgated
thereunder and will properly prepare and timely file with the
Internal Revenue Service all returns and reports required
thereby. Borrower will request from its shareholders all
shareholder information required by the Code and applicable
regulations of the Department of Treasury promulgated thereunder.
5.12. Indemnification. Borrower agrees to indemnify,
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defend (with counsel selected by Agent) and hold Agent,
Administrative Agent, Lenders and the directors, officers,
shareholders, employees and agents of each of them harmless for,
from and against any claims (including without limitation third
party claims for personal injury or real or personal property
damage), actions, administrative proceedings, judgments, damages,
punitive damages, penalties, fines, costs, expenses
disbursements, liabilities (including sums paid in settlements of
claims), obligations, interest or losses, including attorneys'
fees, consultant fees and expert fees, that arise at any time
(including, without limitation, at any time after the payment of
the Notes) directly or indirectly from or in connection with the
presence, suspected presence, release or suspected release of any
Hazardous Material in the air, soil, surface water or groundwater
at or from the real property or any portion thereof with respect
to a Facility, or any other real property in which Borrower or
any of its Subsidiaries has any interest (all of the foregoing
real property shall be referred to collectively as the "Real
Property"). Without limiting the generality of the foregoing,
the indemnification provided by this Section shall specifically
cover (i) costs, including capital, operating and maintenance
costs, incurred in connection with any investigation or
monitoring of site conditions or any clean-up, remedial, removal
or restoration work required or performed by any federal, state
or local governmental agency or political subdivision or
performed by any non-governmental Person, including any Operator
or Mortgagor of a Facility, because of the presence, suspected
presence, release or suspected release of Hazardous Material in
the air, soil, surface water or groundwater at or from the Real
Property; and (ii) costs incurred in connection with (A)
Hazardous Material present or suspected to be present in the air,
soil, surface water or groundwater at the Real Property before
the date of this Agreement, or (B) Hazardous Material that
migrates, flows, percolates, diffuses or in any way moves onto or
under or from the Real Property after the date of this Agreement,
or (C) Hazardous Material present at the Real Property as a
result of any release, discharge, disposal, dumping, spilling or
leaking (accidental or otherwise) onto or from the Property
before or after the date of this Agreement by any Person.
5.13. Changes in GAAP. Borrower and the Lenders
hereby agree that in the event of a change in GAAP which would
cause the financial covenants set forth herein to provide less
protection to the Lenders than presently provided for hereunder,
such financial covenants shall be reset, in good faith, by the
Majority Lenders to maintain the protection to the Lenders
equivalent to that in place prior to such change and Borrower
agrees to execute one or more amendments to this Agreement to
effect such reset.
5.14. Refinancing of Loans. If at any date of
determination (the "Trigger Date"), Loans are outstanding in an
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aggregate principal amount equal to or greater than 66-2/3% of
the Commitments (the "Trigger Amount"), Borrower shall promptly
(but in no event later than 12 months after the Trigger Date)
take action to obtain financing in an amount at least equal to
the Trigger Amount or, if at the date of consummation of any such
financing less than the Trigger Amount aggregate principal amount
of Loans are outstanding, such lesser amount. Borrower shall
have completed such financing transaction within 15 months of the
Trigger Date and the proceeds thereof shall be used to prepay the
Loans in an amount equal to that required by the first sentence
of this Section 5.14. Any such financing shall be in the form of
either equity or of Indebtedness which shall not have any
instalment of principal due earlier than three months after the
Termination Date.
5.15. Further Assurances; Restrictions on Negative
Pledges.
(a) At any time upon the request of Agent,
Borrower will, promptly and at its expense, execute, acknowledge
and deliver such further documents and do such other acts and
things as Agent may reasonably request to provide for payment of
the Loans made hereunder and interest thereon in accordance with
the terms of this Agreement.
(b) If Borrower or any of its Subsidiaries
shall agree to any "negative pledge" or like agreement more
restrictive (or otherwise more generous to its beneficiaries) in
its scope than Section 6.9, then, without any further action
being required, the provisions of such agreement relating to the
prohibition on Liens shall be deemed incorporated by reference
(with appropriate modifications as may be necessary) into this
Agreement for the benefit of Lenders.
5.16. Currency Arrangements. (a) Borrower shall at
all times maintain agreements or other arrangements, practices or
procedures in form and substance satisfactory to Agent which will
protect Borrower and its Subsidiaries against fluctuations in
foreign currency values against the U.S. Dollar.
(b) Borrower shall only enter into interest rate and
currency exchange or similar or analogous arrangements as are (in
Borrower's reasonable judgment) necessary for the hedging or
other protection to exposure of Borrower and its Subsidiaries,
and not those which are of a purely speculative nature.
SECTION 6. NEGATIVE COVENANTS.
Borrower hereby agrees that, so long as the Commitments
remain in effect or any Note remains Outstanding and unpaid or
any other amount is owing to any Lender, Agent or Administrative
74
Agent hereunder or under any other Loan Document, Borrower shall
not (and shall not permit any of its Subsidiaries to) directly or
indirectly:
6.1. Financial Covenants.
(a) Tangible Net Worth. Suffer or permit Tangible Net
Worth at any time to be less than the aggregate of
(i) $525,000,000, plus (ii) 75% of the Net Securities Proceeds of
all issues of any Common Shares, Preferred Shares or other equity
securities by Borrower in one or more transactions received after
the date hereof.
(b) Interest Coverage. Suffer or permit the ratio of
EBI for any fiscal quarter to the Interest Charges of Borrower
and its Subsidiaries for such quarter to be less than 3 to 1.
(c) Debt to Net Worth. Suffer or permit the ratio of
the Total Liabilities of Borrower and its Subsidiaries to
Tangible Net Worth to be greater than 1 to 1 at any time.
6.2. Restricted Payments.
(a) Declare, make or pay any Restricted Payment except
where (i) no Default or Event of Default is continuing either
before or after giving effect to such Restricted Payment,
(ii) Borrower has sufficient funds or availability under its
credit facilities (including this Agreement) to pay the next
installment of interest payable in respect of the Loans and
(iii) immediately upon declaring, making or paying any such
Restricted Payment a Responsible Officer shall certify to
Administrative Agent in writing that Borrower is in compliance
with each condition hereof with respect to the declaration,
making or payment, as the case may be, of such Restricted
Payment; or
(b) directly or indirectly make any payment of
Indebtedness of Borrower or any of its Subsidiaries in
contravention of the terms of any agreement or instrument
subordinating or purporting to subordinate any rights to receive
payments in respect of any Indebtedness of Borrower or such
Subsidiary to any rights to receive payments under this
Agreement.
6.3. Merger; Sale of Assets; Termination and Other
Actions.(a) Cause to be organized or assist in organizing any
Person under the laws of any jurisdiction to acquire all or
substantially all of its assets, terminate, wind up, liquidate or
dissolve its affairs or enter into any reorganization, merger or
consolidation or, in the case of Borrower, take any other action
whatsoever under or pursuant to Articles 6.15, 8.1, 8.2 and 8.5
of the Declaration of Trust or agree to do any of the foregoing
75
at any future time, except that Borrower or any Subsidiary of
Borrower other than Church Creek Corporation may acquire all or
substantially all of the assets of a Subsidiary of Borrower and
any Subsidiary of Borrower may reorganize, merge or consolidate
with Borrower (so long as Borrower is the surviving entity) or
any other Subsidiary of Borrower other than Church Creek
Corporation, or (b) convey, sell, lease or otherwise dispose of
(i) any of the Properties, the Mortgage Interests or its other
interests in Facilities or (ii) any substantial part of its
property or assets (other than the Properties) or (iii) any
shares of stock in any of its Subsidiaries; except that the
foregoing will be permitted in the case of sub-clauses (i) and
(ii) of this clause (b), but only if (A) the consideration
therefor shall be equal to the fair market value thereof (or, in
the case of a Mortgage Interest where the consideration is less
than fair market value, the Board of Trustees of Borrower or the
board of directors of the relevant Subsidiary of Borrower shall
have determined that the consideration received or to be received
is in an amount consistent with the best financial interests of
Borrower or such Subsidiary, as the case may be) and no default
under any other provision hereof results therefrom or (B) such
conveyance, sale, lease or other disposition is pursuant to the
exercise of an option contained in a Lease, and, in either case,
the proceeds of such disposition (whether received by Borrower or
one of its Subsidiaries) are used to prepay the Loans to the
extent required by Section 2.8(b).
6.4. Transactions with Affiliates. Enter into or be a
party to any transaction directly or indirectly with or for the
benefit of any Affiliate of Borrower, other than (i) in the
ordinary course of business and (ii) for fair consideration and
on terms no less favorable to Borrower or any of its Subsidiaries
than are available in an arm's-length transaction from
unaffiliated third parties and (iii) if the Independent Trustees
determine in their reasonable good faith judgment that such
transaction is in the best interests of Borrower or such
Subsidiary based on full disclosure of all relevant facts and
circumstances.
6.5. Subsidiaries. (a) Create, or permit to exist,
any Subsidiary other than those named on Schedule 4 without the
prior written consent of Agent and Borrower shall not sell or
otherwise dispose of any of the capital stock owned by Borrower
in any such Subsidiary or (b) permit any Subsidiary to issue any
shares of capital stock to any Person other than Borrower.
6.6. Accounting Changes. Make any significant change
in accounting treatment and reporting practices, except as
required by GAAP or with which Borrower's independent certified
public accountants have agreed. Borrower will advise Agent
sufficiently in advance of any proposed change to permit
representatives of Agent to discuss the proposed change with the
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officers of Borrower.
6.7. Change in Nature of Business. Make any material
change in the nature of its business as presently conducted
(where a "material change" shall mean any change in the type of
industry then invested in in accordance with this Section 6.7,
regardless of the amount or size of such new investment); the
business of Borrower and its Subsidiaries as presently conducted
being the business of acquiring and operating, and acquiring or
funding Mortgage Interests in, income producing real property
interests and facilities which are hotels or other lodging
facilities being Courtyard Lodgings or which offer health care or
related services or rehabilitation or retirement services, and
activities incidental to any of the foregoing, but which shall
not include any acquisition, operating or funding either of
Psychiatric Care Assets other than those owned, operated or
financed as of the date hereof or of hotels or other lodging
facilities other than the Courtyard Lodgings; provided that (i)
such property interests and facilities shall be located in either
the United States of America or the United Kingdom, (ii) the
aggregate Allowed Value of all Properties and Mortgage Interests
located in the United Kingdom shall not exceed 10% of the
aggregate Allowed Value of all Properties and Mortgage Interests
and (iii) Church Creek Corporation shall not engage in any
business or activities other than those engaged in by it on the
Effective Date, and activities incidental thereto.
6.8. Indebtedness. (a) Suffer or permit the total
Indebtedness (determined without duplication) of Borrower and its
Subsidiaries (other than the IDFA Indebtedness, Indebtedness in
the nature of bridge financings described in the exception to
Section 6.8(b) and Indebtedness described in Section 6.8(c)), at
any time to be greater than the aggregate of (i) 50% of the
aggregate Allowed Value of all Eligible Properties and all
Eligible Mortgages other than Eligible Properties which are
Courtyard Lodgings plus (ii) 25% of the aggregate Allowed Value
of all Eligible Properties which are Courtyard Lodgings.
(b) Suffer or permit to exist any Indebtedness unless,
in the case of Borrower, the earliest date for any payment of
principal or other settlement thereof is at least three months
after the Termination Date, except for (i) Borrower's guaranty of
the IDFA Indebtedness, the terms of which Indebtedness provide
for mandatory redemption prior to the Termination Date upon the
occurrence of certain extraordinary events, and (ii)
Indebtedness of Borrower in the nature of bridge financings to
effect acquisitions of Fee Interests or Mortgage Interests by
Borrower so long as the final date for payment or other
settlement of all such bridge financing Indebtedness is less than
one year from the date of its incurrence or issuance and Borrower
promptly commences (and diligently pursues) the refinancing
thereof; provided that, at any time either after total
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Indebtedness in the nature of bridge financings exceeds
$100,000,000 or would as a result of any proposed further bridge
financing exceed $100,000,000, not less than thirty days prior to
the incurrence or issuance of any additional bridge financing,
Borrower shall provide Lenders with such details of the terms and
conditions thereof as Lenders (acting through Agent) may
reasonably request (and Borrower shall promptly advise Agent of
any subsequent material changes to such details), and if after a
review of such details Majority Lenders (each in its respective
absolute discretion) determine that no further Loans may be made
and the Termination Date shall be brought forward to a date which
is the earlier of the maturity date for such additional bridge
Indebtedness and a date eleven months after the incurrence or
issuance thereof, then, effective upon the incurrence or issuance
of such Indebtedness and without any further action being
required, no further Loans shall be made and the definition of
"Termination Date" shall be so amended; provided that if Majority
Lenders (acting through Agent) have not advised Borrower of such
a determination within fifteen days of receipt of all such
details as they may have requested, then, subject to the
opportunity to review any subsequent material changes to the
details provided and to make a contrary determination based
thereon, Majority Lenders shall be deemed not to have made such a
determination and no change to this Agreement shall be effected
pursuant to this Section 6.8(b).
(c) Suffer or permit the aggregate of Indebtedness
which is (i) secured by a Lien covering property or assets
acquired by Borrower or any of its Subsidiaries, (ii)
Indebtedness of a Person acquired by Borrower or any of its
Subsidiaries or (iii) Indebtedness to which the assets of a
Person acquired by Borrower or any of its Subsidiaries are
subject, which in the case of any of clause (i), (ii) or (iii) is
outstanding at the time of the relevant acquisition and remains
outstanding following such acquisition, to exceed $50,000,000 at
any time; provided that, in addition to Indebtedness otherwise
permitted under this Section 6.8(c), Borrower and Church Creek
Corporation may suffer or permit to exist the IDFA Indebtedness.
(d) In the case of Subsidiaries of Borrower, suffer or
permit to exist any Indebtedness, except for (i) intercompany
Indebtedness owed to Borrower which is incurred as the result of
the direct or indirect advance by Borrower of the proceeds of
Loans and used for purposes described in Section 2.11 and (ii) in
the case of Subsidiaries other than Church Creek Corporation, the
Contingent Obligations arising from the guarantees given under
Section 9 and (iii) in the case of Church Creek Corporation, the
IDFA Indebtedness.
6.9. No Liens. Suffer or permit after the date hereof
any Lien on any Facility, Lease, Mortgage Interest, or Credit
Support Agreement, except (i) in the case of Borrower, Liens
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granted to secure Indebtedness in the nature of bridge financings
(but not any subsequent refinancing or any other restructuring
of such bridge financing) permitted under Section 6.8(b), so long
as such Liens are granted only on the properties or interests
acquired with such Indebtedness; provided that any such property
or interest which is the subject of such a Lien shall not be an
Eligible Property or an Eligible Mortgage, (ii) Permitted
Exceptions, (iii) with respect to either (A) Properties that are
not Eligible Properties or (B) Mortgaged Properties that are
subject to Mortgage Interest Agreements which are not Eligible
Mortgages only, Liens that are not created or granted by Borrower
or any of its Subsidiaries, which Liens, in the aggregate, would
not be reasonably likely to cause or create a Material Adverse
Effect and (iv) (A) Liens securing Indebtedness permitted by
Section 6.8(c) (other than the IDFA Indebtedness) so long as
neither such Indebtedness nor such Liens were incurred or granted
in contemplation of such acquisition and such Liens are granted
only on the related properties or interests acquired by Borrower
or its Subsidiaries and (B) Liens existing on the Effective Date
securing the IDFA Indebtedness and any Liens in continuation
thereof or replacement or substitution therefor so long as the
Allowed Value of the subject property or interest is not greater
than the Allowed Value on the Effective Date of the property or
interest then the subject of such permitted Liens; provided that
any property or interest which is the subject of a Lien permitted
under this clause (iv) shall not be an Eligible Property or an
Eligible Mortgage.
6.10. Fiscal Year. Change the fiscal year end of
Borrower or any of its Subsidiaries from December 31 to any other
date without the prior written consent of Agent.
6.11. Chief Executive Office. Change the name of
Borrower or the chief executive office of Borrower unless
Borrower has given Administrative Agent at least 15 Business
Days' prior written notice of any such change.
6.12. Amendment of Certain Agreements. Amend,
supplement or otherwise modify (a) the Advisory Agreement, or (b)
the Declaration of Trust in a manner which would be reasonably
likely to cause a Material Adverse Effect, in either case without
the prior written consent of Agent.
6.13. Payments Not to Exceed Appraised Value. Pay
consideration in an amount greater than the Appraised Value for
the acquisition of any Facility.
SECTION 7. EVENTS OF DEFAULT
7.1. Events of Default. Upon the occurrence of any of
the following events (each an "Event of Default"):
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(a) Payments. Borrower shall fail to pay any
principal of or interest on any Note, or Borrower or any of its
Subsidiaries shall fail to pay any other amount payable
hereunder, when due in accordance with the terms thereof or
hereof; or
(b) Representations and Warranties. Any
representation or warranty made or deemed made by Borrower or any
of its Subsidiaries herein or by any Person in any other Loan
Document or which is contained in any certificate, document or
financial or other statement furnished at any time under or in
connection with this Agreement or any other Loan Document shall
prove to have been incorrect in any material respect on or as of
the date made or deemed made; or
(c) Certain Covenant Defaults. Borrower shall default
in the observance or performance of any agreement contained in
Section 6 of this Agreement, or the Advisor shall default in the
observance or performance of any material provision of the
Subordination Agreement; or
(d) Certain Other Covenant Defaults. Borrower or any
other party to any of the Loan Documents (other than Agent,
Administrative Agent and the Lenders hereunder) shall default in
the observance or performance of any other provision of this
Agreement or any of the other Loan Documents, and such default
shall continue unremedied for a period of 20 days; or
(e) Cross-Default. Borrower or any of its
Subsidiaries shall (i) default in any payment of principal of or
interest on any Indebtedness (other than the Notes) in respect of
money borrowed or Capitalized Lease Obligations or incurred for
the deferred purchase price of property or services or evidenced
by a note, debenture or other similar written obligation to pay
money, or in the payment of any Contingent Obligation (other than
the guarantees of Subsidiaries of Borrower given in Section 9,
which shall be subject to Section 7.1(d)), beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument
or agreement under which such Indebtedness or Contingent
Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any
such Indebtedness or Contingent Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur, the effect of which default or
other event is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or such Contingent Obligation to
become payable; or
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(f) Qualification as REIT. Either Agent or the
Majority Lenders shall have determined in good faith, and shall
have so given notice to Borrower, that Borrower has at any time
ceased to be in a position to qualify, or has not qualified, as a
real estate investment trust for any of the purposes of the
provisions of the Code applicable to real estate investment
trusts; provided that no Event of Default under this Section
7.1(f) shall be deemed to have occurred and be continuing if,
within 10 days after notice of any such determination is given to
Borrower, Borrower shall have furnished each Lender with an
opinion of Borrower's tax counsel (who shall be satisfactory to
the Majority Lenders provided that the Majority Lenders may not
unreasonably withhold their approval) to the effect that Borrower
is then in a position to so qualify, or has so qualified, as the
case may be, which opinion shall not contain any material
qualification unsatisfactory to the Majority Lenders; or
(g) Insolvency, Etc. There shall be an Insolvency
Event with respect to Borrower or any of its Subsidiaries or the
Advisor; or
(h) ERISA. (i) Any Person shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Termination Event shall occur or (iv) any other
event or condition shall occur or exist with respect to a Plan or
a Multiemployer Plan; and in each case in clauses (i) through
(iv) above, such event or condition, together with all other such
events or conditions, if any, could subject Borrower or any of
its Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations,
property or financial or other condition of Borrower and its
Subsidiaries, taken as a whole; or
(i) Certain Judgments. One or more judgments or
decrees shall be entered against Borrower or any of its
Subsidiaries involving in the aggregate a liability (not paid or
fully covered by insurance) of $250,000 or more and all such
judgments or decrees shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry
thereof; or
(j) Certain Ownership of Borrower. Barry M. Portnoy
and Gerard M. Martin (or any Person in respect of which either or
both of them own more than 50% of the securities having ordinary
voting power for the election of directors) shall cease at any
time to hold beneficially and of record, in the aggregate, at
least 750,000 shares of the issued and outstanding Common Shares
and each other class of equity securities of Borrower (adjusted
for any division, reclassification or stock dividend in respect
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of Common Shares) or such lesser amount as shall be approved by
Agent; or
(k) Change of Control of Advisor. Barry M. Portnoy
and Mr. Gerard M. Martin shall cease at any time to have the
power to direct the management and policies of HRPT Advisors; or
(l) Investment Grade Operators and Mortgagors. More
than 50% of the aggregate Allowed Value of the Properties and
Mortgage Interests shall be attributable to Properties and
Mortgage Interests having the same "investment grade Person" (or
any of that Person's Affiliates; provided that for the purposes
of this Section 7.1(l), so long as there is no material change in
their practices and procedures in place at the Effective Date to
provide for arm's-length dealings, Marriott International, Inc.
and its Affiliates and Host Marriott Corporation and its
Affiliates will not be treated as Affiliates of each other) as
Mortgagor or Operator thereof (with an "investment grade Person"
being one whose long-term senior debt is rated BBB- or higher by
Standard & Poor's Corporation or Baa3 or higher by Moody's
Investors Service, Inc. (or similarly rated by any successor to
either of such rating agencies)); or
(m) Operators and Mortgagors Generally. Except in the
case of Mortgagors or Operators which are "investment grade
Persons" (as defined in Section 7.1(l)), more than 40% of the
aggregate Allowed Value of the Properties and Mortgage Interests
shall be attributable to Properties and Mortgage Interests having
the same Person (or any of that Person's Affiliates; provided
that for the purposes of this Section 7.1(m) so long as there is
no material change in their practices and procedures in place at
the Effective Date to provide for arm's-length dealings, Marriott
International, Inc. and its Affiliates and Host Marriott
Corporation and its Affiliates will not be treated as Affiliates
of each other) as Mortgagor or Operator thereof; or
(n) Rehabilitation Treatment Assets. More than 40%
of the aggregate Allowed Value of the Properties and Mortgage
Interests shall be attributable to Properties and Mortgages
consisting of Rehabilitation Treatment Assets; or
(o) Acute Care Assets. More than 15% of the
aggregate Allowed Value of the Properties and Mortgage Interests
shall be attributable to Properties and Mortgages consisting of
Acute Care Assets; or
(p) Psychiatric Care Assets. Any of the aggregate
Allowed Value of the Properties and Mortgage Interests shall be
attributable to Properties or Mortgages consisting of Psychiatric
Care Assets other than Psychiatric Care Assets owned, operated or
financed by Borrower and its Subsidiaries as of the date hereof;
or
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(q) Hotels and Lodging Facilities. Any of the
aggregate Allowed Value of the Properties and Mortgage Interests
shall be attributable to Properties and Mortgages consisting of
hotels or other lodging facilities other than the Courtyard
Lodgings; or
(r) Advisor. HRPT Advisors shall cease to be the
sole Advisor to Borrower pursuant to and in accordance with the
Advisory Agreement, without Agent's prior written consent or the
Advisory Agreement shall be materially amended, supplemented or
modified without Agent's prior written consent; or
(s) Loan Documents. From and after the Effective
Date, any guarantee given by a Subsidiary of Borrower in Section
9 or any Loan Document shall be terminated or otherwise shall
cease to be in full force and effect or shall cease to give the
Lenders the rights, powers and privileges purported to be created
thereby or any party thereto other than Agent and the Lenders
shall cease to be, or shall assert that it is not, bound thereby
in accordance with its terms;
then, and in any such event, (a) if such event is an Event of
Default specified in paragraph (g) above, automatically the
Commitments shall immediately terminate and the Loans hereunder
(with accrued interest thereon) and all other amounts owing under
this Agreement, the Notes and any other Loan Document shall
immediately become due and payable, and (b) if such event is any
other Event of Default, either or both of the following actions
may be taken: (i) Agent may, or upon the request of the Majority
Lenders, Agent shall, by notice to Borrower, declare the
Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) Agent may, or upon the
request of the Majority Lenders, Agent shall, by notice of
default to Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this
Agreement, the Notes and any other Loan Document to be due and
payable forthwith, whereupon the same shall immediately become
due and payable. Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived.
7.2. Annulment of Acceleration. If payment on the
Loans and the Notes is accelerated in accordance with Section 7.1
of this Agreement, then and in every such case, the Majority
Lenders may, by an instrument delivered to Borrower (and to Agent
and/or Administrative Agent, as applicable, to the extent it is
or they are not participating in the giving of notice) annul such
acceleration and the consequences thereof; provided that at the
time such acceleration is annulled:
(a) all arrears or interest on the Loans and the Notes
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and all other sums payable in respect of the Loans and pursuant
to this Agreement, the Notes and each other Loan Document (except
any principal of or interest or premium on the Loans and the
Notes and other sums which have become due and payable only by
reason of such acceleration) shall have been duly paid; and
(b) every other Default or Event of Default shall have
been duly waived or otherwise cured;
provided, further, that no such annulment shall extend to or
affect any subsequent Default or Event of Default or impair any
right consequent thereon.
7.3. Cooperation by Borrower. To the extent that it
lawfully may, Borrower agrees that it will not (and that it will
cause its Subsidiaries not to) at any time insist upon or plead,
or in any manner whatever claim or take any benefit or advantage
of any applicable present or future stay, extension or moratorium
law, which may affect observance or performance of the provisions
of this Agreement or of any Note or any other Loan Document.
SECTION 8. THE AGENTS
8.1. Appointment of Agent and Administrative Agent.
(a) Each Lender hereby irrevocably designates and
appoints Kleinwort Benson as Agent of such Lender and each of
Wells Fargo Bank, National Association and the GBP Agent (as
defined in the definition of "Administrative Agent"), as
Administrative Agent of such Lender (with their respective
functions as set forth in the definition of "Administrative
Agent") (the Agent and Administrative Agent collectively being
the "Loan Agents", and, for the purposes of Sections 8.1(c),
8.1(g), 8.1(h) and 8.1(l), Co-Agent shall also be deemed to be a
"Loan Agent") under this Agreement and the Loan Documents and the
other documents or instruments delivered pursuant to or in
connection herewith or therewith and each such Lender hereby
irrevocably authorizes each Loan Agent, for such Lender, to take
such action on behalf of each Lender under the provisions of the
Loan Documents and to exercise such powers and perform such
duties as are expressly delegated to such Loan Agent by the terms
of the Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in the Loan Documents, no Loan Agent shall
have any duties or responsibilities other than those expressly
set forth in the Loan Documents, nor any fiduciary relationship
with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be
read into the Loan Documents or otherwise exist against either
Loan Agent.
(b) Each Loan Agent may execute any of its duties
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under the Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Loan Agent
shall be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
(c) None of the Loan Agents nor any of their
respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it under or in
connection with the Loan Documents (except for its gross
negligence or willful misconduct), or (ii) responsible in any
manner to any Lender for any recitals, statements,
representations or warranties made by Borrower or any of its
Subsidiaries or any other Person contained in the Loan Documents
or in any certificate, report, statement or other document
referred to or provided for in, or received by either Loan Agent
under or in connection with, the Loan Documents (including,
without limitation, any Appraisal or valuation or any certificate
or other report relating to the value of any Property or any
Mortgage Interest), or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of the Loan Documents
or otherwise or for any failure of Borrower or any of its
Subsidiaries or any other Person to perform its obligations under
the Loan Documents. The Loan Agents shall not be under any
obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in,
or conditions of, the Loan Documents, or to inspect the
properties, books or records of Borrower or any of its
Subsidiaries or any other Person or to insure, protect or
preserve any of the property of Borrower or any of its
Subsidiaries or any other Person.
(d) Each Loan Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation reasonably
believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation,
counsel to Borrower or its Subsidiaries), independent accountants
and other experts selected by such or the other Loan Agent. Each
Loan Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with such
Loan Agent.
(e) Each Loan Agent shall be fully justified in
failing or refusing to take any action under the Loan Documents
unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate or it shall first be
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indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Each Loan Agent
shall in all cases be fully protected in acting, or in refraining
from acting, under the Loan Documents in accordance with a
request of the Majority Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
(f) No Loan Agent shall be deemed to have knowledge or
notice of the occurrence of any Event of Default or event, act or
condition which with notice or lapse of time, or both, would
constitute an Event of Default hereunder unless such Loan Agent
shall have received notice from the other Loan Agent, a Lender or
Borrower referring to this Agreement, describing such event, act
or condition or Event of Default and stating that such notice is
a "notice of default". In the event that a Loan Agent receives
such a notice, such Loan Agent shall give prompt notice thereof
to the Lenders and (provided such notice is not received from the
other Loan Agent) to the other Loan Agent. Each Loan Agent shall
take such action with respect to the rights and remedies given to
such Loan Agent pursuant to the terms of the Loan Documents as
shall be reasonably directed by the Majority Lenders; provided
that, unless and until such Loan Agent shall have received such
directions, such Loan Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, as it shall
deem advisable in the best interests of the Lenders.
(g) Each Lender expressly acknowledges that none of
the Loan Agents nor any of their officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by either
Loan Agent hereinafter taken or hereinbefore taken in connection
with the Existing Loan Agreement, including any review of the
affairs of Borrower or any of its Subsidiaries, shall be deemed
to constitute any representation or warranty by that Loan Agent
to any Lender. Each Lender represents to the Loan Agents that it
has, independently and without reliance upon either Loan Agent or
any other Lender, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial
and other condition and creditworthiness of Borrower and its
Subsidiaries, each Operator, each Mortgagor and each Credit
Support Obligor, and made its own decision to make its loans
hereunder and enter into this Agreement, and that it has
satisfied itself independently, without reliance on either of the
Loan Agents or any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates, as to the
compliance of the transactions contemplated hereby with all legal
and regulatory requirements applicable to such Lender. Each
Lender expressly acknowledges that its representation in the
previous sentence shall not be restricted or construed in any way
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to import any reliance on either Loan Agent or any other Lender
as a result of any duties or other actions which may have been
undertaken by that Loan Agent or other Lender in connection with
the Existing Loan Agreement, and, where such Lender is itself
also a party to the Existing Loan Agreement, that such Lender's
decision to make its Loans hereunder and enter into this
Agreement is made independently of its decisions to enter into
the Existing Loan Agreement and to make any loans thereunder.
Each Lender also represents that it will, independently and
without reliance upon either Loan Agent or any other Lender, and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of
Borrower and its Subsidiaries, any Operator, any Mortgagor or any
Credit Support Obligor. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by
that Loan Agent hereunder, neither Loan Agent shall have any duty
or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property,
financial and other condition or credit-worthiness of Borrower
and its Subsidiaries which may come into its possession or the
possession of any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
(h) Each Lender agrees to indemnify, defend (with
counsel selected by each Loan Agent) and hold each Loan Agent in
its capacity as such (to the extent not reimbursed by Borrower
and without limiting the obligation of Borrower to do so), and
such Loan Agent's respective officers, directors, shareholders,
employees and agents, ratably according to the aggregate loan
percentages set forth opposite its name on Schedule 1 hereto,
harmless for, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including without limitation at any time
following the payment of the Notes) be imposed on, incurred by or
asserted against such Loan Agent in any way relating to or
arising out of the Loan Documents or the transactions
contemplated thereby or any action taken or omitted by such Loan
Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgements, suits, costs, expenses or disbursements
resulting primarily from such Loan Agent's willful misconduct or
gross negligence. The agreements in this Section shall survive
the payment of the Notes.
(i) Each Loan Agent and its affiliates may make loans
to and generally engage in any kind of business with Borrower or
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any of its Subsidiaries as though such Loan Agent were not a Loan
Agent hereunder. With respect to its pro rata share of the Loan
made or extended by it and any Note issued to it, each Loan Agent
shall have the same rights and powers under this Agreement as any
Lender and may exercise the same as though it were not a Loan
Agent. The terms "Lender" and "Lenders" shall include each Loan
Agent in its individual capacity.
(j) A Loan Agent may resign as Loan Agent upon 30
days' written notice to the Lenders. In the event that a Loan
Agent shall enter receivership, then the Lenders (other than the
Lender which is acting as such Loan Agent, if applicable) may, by
unanimous consent, remove such Loan Agent as Loan Agent under
this Agreement. If a Loan Agent shall resign as such Loan Agent
under this Agreement or a Loan Agent shall be removed, then the
Majority Lenders shall within 30 days of such resignation or
removal or, in the absence of such appointment, the resigning or
removed Loan Agent shall, appoint a successor agent for the
Lenders, whereupon such successor agent shall succeed to the
rights, powers and duties of such Loan Agent, and the term
"Agent" or "Administrative Agent", as applicable, shall mean such
successor agent effective upon its appointment, and the former
Loan Agent's rights, powers and duties as Loan Agent shall be
terminated, without any other or further act or deed on the part
of such former Loan Agent or any of the parties to this Agreement
or any holders of the Notes. After any retiring Loan Agent's
resignation hereunder as Loan Agent or any Loan Agent's removal,
the provisions of this Section 8.1 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was a
Loan Agent under this Agreement.
(k) Each Lender agrees to use its best efforts
promptly upon an officer responsible for the administration of
this Agreement becoming aware of any development or other
information which may have a Material Adverse Effect or MAC to
notify the other Lenders of the same. Each Loan Agent agrees
that it shall promptly deliver to each Lender copies of all
notices, demands, statements and communications which such Loan
Agent gives to Borrower, except for routine notices of payment
due under the Loan Documents and other miscellaneous notices,
demands, statements and communications, the failure of delivery
of which to each Lender shall not have a material adverse effect
on any Lender. The foregoing notwithstanding, no Loan Agent
shall have any liability to any Lender, nor shall a cause of
action arise against any Loan Agent, as a result of the failure
of such Loan Agent to deliver to any Lender any notice, demand,
statement or communication required to be delivered by it under
this Section 8.1(k), except to the extent such failure is due to
the gross negligence or wilful misconduct of such Loan Agent.
(l) Each Loan Agent shall endeavor to exercise the
same care in administering the Loan Documents as it exercises
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with respect to similar transactions in which it is involved and
where no other co-lenders or participants are involved; provided
that the liability of such Loan Agent for failing to do so shall
be limited as provided in the preceding paragraphs of this
Section 8.1.
(m) Each Lender agrees that, as between it and any
Loan Agent, any Loan Document or Appraisal, or other report or
document with respect to which the approval of such Lender is
required hereunder, sent to it for review shall be deemed
consented to by it for purposes of any approval thereof by any
Loan Agent if such Lender does not give to such Loan Agent
written notice of its objection thereto within five Business Days
of its receipt thereof. The foregoing shall be for the benefit
of such Loan Agent only and shall not be deemed a consent under
any other provision of this Agreement or to confer any rights on
Borrower or any of its Subsidiaries under this Agreement in any
manner whatsoever.
SECTION 9. SUBSIDIARY GUARANTIES
9.1 Guaranties.
In order to induce the Lenders to enter into this
Agreement and to make the Loans to Borrower hereunder, each
Subsidiary of Borrower other than Church Creek Corporation agrees
as follows:
(a) Each such Subsidiary of Borrower hereby
unconditionally (subject to the next paragraph) and irrevocably
guarantees, as primary obligor and not merely as surety, the full
and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal and interest
(including, without limitation, interest which, but for the
filing of a petition in bankruptcy with respect to Borrower would
accrue hereunder) on all Loans made to Borrower, and the full and
punctual payment of all other amounts payable by Borrower under
this Agreement (including amounts that would become due but for
the operation of the automatic stay under Section 362(a) of the
United States Bankruptcy Code). Upon failure by Borrower to pay
punctually any such amount, each such Subsidiary shall forthwith
on demand pay the amount not so paid as if that Subsidiary
instead of Borrower were expressed to be the principal obligor.
The obligations of each Subsidiary of Borrower
under this Section 9 shall be limited to a maximum aggregate
amount equal to the largest amount that would not render its
obligations subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of the United States Bankruptcy Code
or any applicable provisions of comparable state law, in each
case after giving effect to all other liabilities of the relevant
Subsidiary (contingent or otherwise) that are relevant under
89
those laws.
In order to provide for just and equitable
contribution among the Subsidiaries of Borrower, each such
Subsidiary agrees that if any other Subsidiary makes payments
under this Section 9 in an aggregate amount in excess of the net
value of the benefits received by such other Subsidiary and its
own Subsidiaries from extensions of credit under this Agreement,
then the Subsidiary which has made such excess payments shall
have a right of contribution against the other Subsidiaries of
Borrower for such excess. However, this right of contribution
shall be subject to Section 9.1(e) in all respects.
Each Subsidiary of Borrower acknowledges that the
giving by it of this guarantee is a condition precedent to the
making or maintenance of the Loans to Borrower and also
acknowledges that a portion of the proceeds of the Loans may be
advanced to it by Borrower, and accordingly the obligations
guaranteed are being incurred for, and will inure to, its
benefit.
(b) The obligations of each Subsidiary of Borrower
hereunder shall be unconditional, irrevocable, direct and
absolute and, without limiting the generality of the foregoing,
shall not be released, discharged or otherwise affected by (and,
to the fullest extent permitted by law, each such Subsidiary
waives its rights in connection with):
(i) any extension, increase, renewal, settlement,
compromise, waiver or release in respect of any obligation
of Borrower hereunder, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to
this Agreement;
(iii) any release, impairment, non-perfection or
invalidity of any direct or indirect security (if any) for
any obligation of Borrower under this Agreement;
(iv) any change in the trust existence, structure or
ownership of Borrower, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting
Borrower or its assets or any resulting release or discharge
of any obligation of Borrower contained in the Agreement;
(v) the existence of any claim, set-off or other
rights which such Subsidiary may have at any time against
Borrower, any Lender or any other Person, whether in
connection herewith or any unrelated transactions; provided
that nothing herein shall prevent the assertion of any such
claim by separate suit or compulsory counterclaim;
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(vi) any invalidity or unenforceability relating to or
against Borrower for any reason of this Agreement, or any
provision of applicable law or regulation purporting to
prohibit the payment by Borrower of the principal or
interest on any Loan or any other amount payable by Borrower
under this Agreement; or
(vii) any other act or omission to act or delay of
any kind by Borrower, any Lender or any other Person or any
other circumstance whatsoever which might, but for the
provisions of this Section 9, constitute a legal or
equitable discharge of or defense to such Subsidiary's
obligations hereunder.
(c) Each such Subsidiary's obligations hereunder shall
remain in full force and effect until this Agreement shall have
terminated and the principal and interest on all Loans and all
other amounts payable by Borrower hereunder shall have been paid
in full. Each such Subsidiary further agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the
case may be, if at any time payments, or any part thereof, of
principal of or interest on any obligation of Borrower is
rescinded or must otherwise be restored by Agent or any Lender
upon the bankruptcy or reorganization of Borrower or otherwise.
(d) Each such Subsidiary irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not provided
for herein, as well as any requirement that at any time any
action be taken by any Person against Borrower or any other
Person.
(e) Each Subsidiary irrevocably waives any and all
rights to which it may be entitled, by operation of law or
otherwise, upon making any payment hereunder to be subrogated to
the rights of the payee against Borrower with respect to such
payment or against any direct or indirect security therefor, or
otherwise to be reimbursed, indemnified or exonerated by or for
the account of Borrower in respect thereof.
SECTION 10. GENERAL
10.1 CHOICE OF LAW. THIS AGREEMENT AND THE NOTES
SHALL BE CONTRACTS UNDER AND SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
10.2 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
ETC. NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT, THE
NOTES OR ANY OTHER LOAN DOCUMENT, EACH OF BORROWER AND EACH OF
ITS SUBSIDIARIES HEREBY IRREVOCABLY (a) SUBMITS TO THE
NON-EXCLUSIVE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT
IN THE STATE OF NEW YORK IN ANY SUIT, ACTION OR OTHER LEGAL
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PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OF THE
OTHER LOAN DOCUMENTS; (b) AGREES THAT ALL CLAIMS IN RESPECT OF
ANY SUCH SUIT, ACTION OR OTHER LEGAL PROCEEDING MAY BE HEARD AND
DETERMINED IN, AND ENFORCED IN AND BY, ANY SUCH COURT; (c) WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO VENUE IN ANY
SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM; (d)
AGREES TO SERVICE OF PROCESS IN ANY SUCH PROCEEDING BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, OR IN ANY OTHER MANNER
PERMITTED BY LAW, TO ANY THEN ACTIVE AGENT FOR SERVICE OF PROCESS
("PROCESS AGENT") AT ANY SPECIFIED ADDRESS OR TO BORROWER AT ITS
ADDRESS SET FORTH HEREIN OR TO SUCH OTHER ADDRESS OF WHICH
ADMINISTRATIVE AGENT (WITH A COPY TO AGENT TO FOLLOW) SHALL HAVE
BEEN NOTIFIED IN WRITING (SUCH SERVICE TO BE EFFECTIVE ON THE
EARLIER OF RECEIPT THEREOF OR, IN THE CASE OF SERVICE BY MAIL,
THE 5TH DAY AFTER DEPOSIT OF SUCH SERVICE IN THE MAILS AS
AFORESAID), AND HEREBY WAIVES ANY CLAIM OF ERROR ARISING OUT OF
SERVICE OF PROCESS BY ANY METHOD PROVIDED FOR HEREIN OR ANY CLAIM
THAT SUCH SERVICE WAS NOT EFFECTIVELY MADE; (e) AGREES THAT THE
FAILURE OF ITS PROCESS AGENT TO GIVE ANY NOTICE OF ANY SUCH
SERVICE OF PROCESS TO IT SHALL NOT IMPAIR OR AFFECT THE VALIDITY
OF SUCH SERVICE OR ANY JUDGMENT BASED THEREON; (f) TO THE EXTENT
THAT BORROWER OR ANY SUCH SUBSIDIARY HAS ACQUIRED, OR HEREAFTER
MAY ACQUIRE, ANY IMMUNITY FROM JURISDICTION OF ANY SUCH COURT OR
FROM LEGAL PROCESS THEREIN, WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, SUCH IMMUNITY; (g) WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN CONNECTION WITH,
OR WITH RESPECT TO, ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING
RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS, (i) ANY CLAIM THAT IT IS IMMUNE FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH
RESPECT TO IT OR ANY OF ITS PROPERTY, (ii) ANY CLAIM THAT IT IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, AND
(iii) ANY RIGHT TO A JURY TRIAL; AND (h) AGREES THAT AGENT AND
EACH LENDER SHALL HAVE THE RIGHT TO BRING ANY LEGAL PROCEEDINGS
(INCLUDING A PROCEEDING FOR ENFORCEMENT OF A JUDGMENT ENTERED BY
ANY OF THE AFOREMENTIONED COURTS) AGAINST BORROWER OR SUCH
SUBSIDIARY IN ANY OTHER COURT OR JURISDICTION IN ACCORDANCE WITH
APPLICABLE LAW. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS
SECTION SHALL AFFECT THE RIGHT OF AGENT AND EACH LENDER TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES
OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY OTHER
JURISDICTION OR THE RIGHT, IN CONNECTION WITH ANY LEGAL ACTION OR
PROCEEDING WHATSOEVER, TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW. EACH OF BORROWER AND EACH OF ITS SUBSIDIARIES
HEREBY IRREVOCABLY DESIGNATES THE FIRM OF SULLIVAN & WORCESTER,
WITH OFFICES AT 767 THIRD AVENUE, NEW YORK, NEW YORK 10017,
ATTENTION: CHARLES M. DUBROFF, AS ITS PROCESS AGENT TO RECEIVE
SERVICE OF ANY AND ALL PROCESS AND DOCUMENTS ON ITS BEHALF IN ANY
LEGAL PROCEEDING IN THE STATE OF NEW YORK AND SUCH PROCESS AGENT,
BY ITS ACKNOWLEDGEMENT BELOW, IRREVOCABLY AGREES TO SO ACT AS
PROCESS AGENT FOR SERVICE OF PROCESS. IF SUCH PROCESS AGENT
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SHALL FOR ANY REASON FAIL TO ACT, OR BE PREVENTED FROM ACTING, AS
PROCESS AGENT, NOTICE THEREOF SHALL IMMEDIATELY BE GIVEN TO AGENT
BY REGISTERED OR CERTIFIED MAIL AND BORROWER AGREES (FOR ITSELF
AND ITS SUBSIDIARIES) PROMPTLY TO DESIGNATE ANOTHER PROCESS AGENT
IN THE CITY OF NEW YORK, SATISFACTORY TO AGENT UNDER THIS
AGREEMENT, TO SERVE IN PLACE OF SUCH PROCESS AGENT AND DELIVER TO
AGENT WRITTEN EVIDENCE OF SUCH SUBSTITUTE PROCESS AGENT'S
ACCEPTANCE OF SUCH DESIGNATION. SUCH ACTING PROCESS AGENT SHALL
NEVERTHELESS CONTINUE TO SERVE AS PROCESS AGENT UNTIL ITS
SUCCESSOR IS DULY APPOINTED.
10.3 Notices; Certain Payments. (a) All notices,
consents and other communications to Borrower or any of its
Subsidiaries, Agent, Administrative Agent or any Lender relating
hereto to be effective shall be in writing and shall be deemed
made (i) if by certified mail, return receipt requested, or
facsimile, when received, (ii) if by telex, when sent answerback
received, and (iii) if by courier, when receipted for, in each
case addressed to them as follows or at such other address as
either of them may designate by written notice to the other: (w)
Borrower and its Subsidiaries: Health and Retirement Properties
Trust, 400 Centre Street, Newton, Massachusetts 02158, Attention:
President and Treasurer (telecopier no. (617) 332-2261) with a
copy to Sullivan & Worcester, One Post Office Square, Boston,
Massachusetts 02109, Attention: Lena G. Goldberg, Esq.
(telecopier no. (617) 338-2880); (x) Agent: Kleinwort Benson
Limited, P.O. Box 560, 20 Fenchurch Street, London, EC3P 3DB,
England, Attention: Robin Tilbury, Loans Administration
(telecopier no. 011-44-171-956-6105) with a copy to Kleinwort
Benson (North America), Incorporated, 200 Park Avenue, 25th
Floor, New York, New York 10166, Attention: David Watanabe and
Peter Kettle (telecopier no. 1-212-983-5981); (y) Administrative
Agent: Wells Fargo Bank, National Association, Corporate Banking,
420 Montgomery Street, San Francisco, California 94163,
Attention: (in the case of a Notice of Borrowing) Lupe Barajas
(telecopier no. 1-415-989-4319) or (in all other cases) Richard
Clapp (telecopier no. 1-415-421-1352); and (z) the Lenders : to
the addresses specified opposite such Lenders' respective names
on Schedule 1 hereto, with a copy to O'Melveny & Myers, 153 East
53rd Street, New York, New York 10022, Attention: Christopher D.
Hall, Esq. (telecopier no. (212) 326-2061).
(b) All payments on account of the Loans and the
related Notes pursuant hereto or pursuant to the other Loan
Documents shall be made to the Borrower's account with
Administrative Agent at:
Wells Fargo Bank, N.A.
San Francisco, California
ABA No. 121000248
Account Name: Health and Retirement
Properties Trust
93
Account No. 4518073184
together with irrevocable instructions to Administrative Agent to
apply such payments under this Agreement. Administrative Agent
may by written notice to Borrower specify or change its account
and address for payment instructions hereunder.
10.4 No Waivers; Cumulative Remedies; Entire
Agreement; Headings; Successors and Assigns; Counterparts;
Severability. No action, failure, delay or omission by Agent,
Administrative Agent or any Lender in exercising any rights,
powers, privileges and remedies under this Agreement, the Notes
or any other Loan Document, or otherwise, shall constitute a
waiver of, or impair, any of the rights, powers, privileges or
remedies of Agent, Administrative Agent or any Lender hereunder
or thereunder. No single or partial exercise of any such right,
power, privilege or remedy shall preclude any other or further
exercise thereof or the exercise of any other right, power,
privilege or remedy. Such rights, powers, privileges and
remedies are cumulative and not exclusive of any rights, powers,
privileges and remedies provided by law or otherwise available,
including, but not limited to, rights to specific performance (to
the extent permitted by law) or any covenant or agreement
contained in this Agreement or any of the Loan Documents. No
waiver of any such right, power, privilege or remedy shall be
effective unless given in writing by the Majority Lenders or as
otherwise provided in Section 10.6. No waiver of any such right,
power, privilege or remedy shall be deemed a waiver of any other
right, power, privilege or remedy hereunder or thereunder. Every
right, power, privilege and remedy given by this Agreement or by
applicable law to Agent, Administrative Agent or any Lender may
be exercised from time to time and as often as may be deemed
expedient by Agent, Administrative Agent or any Lender. This
Agreement, the Notes and the other Loan Documents constitute the
entire agreement of the parties relating to the subject matter
hereof and thereof and there are no verbal agreements relating
hereto or thereto. Section headings herein shall have no legal
effect. This Agreement, the Notes and the other Loan Documents
(including all covenants, representations, warranties, rights,
powers, privileges and remedies made or granted herein or
therein) shall inure to the benefit of, and be enforceable by,
Agent, Administrative Agent and each Lender and their respective
successors and assigns, except as otherwise expressly provided in
this Agreement. Neither Borrower nor any of its Subsidiaries may
directly or indirectly assign or transfer (whether by agreement,
by operation of law or otherwise) any of its rights or
obligations and liabilities hereunder without the prior written
consent of each Lender. Each of the Lenders may make, carry or
transfer its pro rata share of the Loans at, to or for the
account of, any of its branch offices or the office of one or
more of its Affiliates. Further, each Lender may sell
participations in all or any part of its pro rata share of the
94
Loans or its Commitments or any other interest herein or in its
Notes to another bank or Person, or with the prior written
consent of Agent and Borrower (not to be unreasonably withheld;
provided that Borrower's consent shall not be required if an
Event of Default has occurred and is continuing) each Lender may
assign its rights and delegate its obligations under this
Agreement and any of the other Loan Documents and with the prior
written consent of Agent and Borrower (not to be unreasonably
withheld; provided that Borrower's consent shall not be required
if an Event of Default has occurred and is continuing) may assign
all or any part of its pro rata share of the Loans or its
Commitment or any other interest herein or in its Notes to
another bank or other Person in amounts not less than $5,000,000
(or any lesser amount in the case of an assignment by one Lender
to another Lender) to any one assignee, in which event (i) in the
case of an assignment, upon notice thereof by such Lender to
Borrower, Agent and Administrative Agent, the assignee shall
have, to the extent of such assignment (unless otherwise provided
therein), the same rights and benefits as it would have if it
were such Lender hereunder and the holder of a Note and to such
extent shall be deemed a "Lender" for all purposes of this
Agreement and the other Loan Documents, and (ii) in the case of a
participation, the participant shall not have any rights under
this Agreement or any Note or any other Loan Document (the
participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by
such Lender in favor of the participant relating thereto). In
the case of such a participation, the terms of the agreement or
agreements pursuant to which any such participation is created
shall not confer upon the participant any right to vote its
interest as a participant in respect of any matter relating to
the Loans other than (w) the extension of the maturity of any
Note or the time of payment of interest thereon, (x) the
reduction of the rate of interest payable hereunder, (y) the
reduction of any other amount payable hereunder or (z) the
increase of such participant's share of the relevant Lender's
Commitment hereunder. Each Lender may furnish any information
concerning Borrower and its Subsidiaries, the Advisor, any
Operator, any Mortgagor and any Credit Support Obligor in the
possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants).
In the event that any Lender shall assign or sell any of its
Notes, such Lender shall at the time of such assignment or sale
give written notice to Agent, Administrative Agent and Borrower
of the name and address of the assignee (including the name of
the account officer if applicable). Each Lender agrees that such
Lender shall not assign or offer to assign interests in its Notes
in such a manner which would require that the Notes be registered
under applicable securities laws. Each Lender represents that it
is acquiring its respective Note for investment and not with a
view to or for sale in connection with any distribution thereof
within the meaning of the Securities Act of 1933, as amended;
95
provided that the disposition of the Notes in accordance with the
other provisions of this Section 10.4 shall at all times remain
within the Lenders' control. This Agreement may be executed in
any number of separate counterparts, each of which shall be
deemed an original and all of which taken together shall be
deemed to constitute one and the same instrument. In the event
any one or more of the provisions contained in this Agreement or
any Notes or any other Loan Documents should be held invalid,
illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein
or therein shall not in any way be affected or impaired thereby.
The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as
possible to that of the invalid, illegal, or unenforceable
provisions.
10.5 Survival. The obligations of Borrower under
Sections 2.6, 2.10, 2.12, 2.13, 2.14, 2.15, 5.12 and 10.7 (and
all other indemnification and expense reimbursement obligations
of Borrower under this Agreement) shall survive the repayment of
the Loans and the cancellation of the Notes and the termination
of the other obligations of Borrower hereunder and under the
other Loan Documents. All representations and warranties made
hereunder and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the Notes and the
funding of the Loans.
10.6 Amendments and Waivers. With the written consent
of the Majority Lenders, Agent and Borrower may, from time to
time, enter into written amendments, supplements or modifications
hereto or to any of the other Loan Documents and with the written
consent of the Majority Lenders, Agent on behalf of the Lenders
may execute and deliver to Borrower a written instrument waiving,
on such terms and conditions as Agent may specify in such
instrument, any of the requirements of this Agreement or the
Notes or any Default or Event of Default and its consequences;
provided that no such waiver and no such amendment, supplement or
modification shall (a) extend the maturity of any Note, or reduce
the rate or extend the time of payment of interest thereon, or
reduce or postpone the due date for the principal amount thereof
or any other amount payable in connection herewith, or change the
amount or terms of any Lender's Commitment or amend, modify or
waive any provision of this Section or reduce the percentage
specified in the definition of Majority Lenders, or consent to
the assignment or transfer by Borrower or any of its
Subsidiaries of any of its rights and obligations under this
Agreement, in each case without the written consent of all the
Lenders, (b) amend, modify or waive any provision of Section 8 or
otherwise change any of the rights or obligations of either or
both of the Loan Agents under any of the Loan Documents without
96
the written consent of the affected Loan Agent or Loan Agents (as
applicable) at the time, (c) with respect to Section 6.7, amend,
modify or waive (y) any provision thereof in a manner which
permits Borrower or any of its Subsidiaries to own, operate,
acquire or fund income producing real property interests or
facilities which are not Courtyard Lodgings or which do not offer
health care or related services or rehabilitation or retirement
services, or incidental activities to any of the foregoing, or
(z) the proviso to Section 6.7, without, in the case of both
clauses (y) and (z) of this clause (c), the written consent of
the Majority Lenders, Agent, Co-Agent and Borrower (provided that
any other type of amendment, modification or waiver of Section
6.7 shall only require the written consent of the Majority
Lenders, Agent and Borrower) or (d) amend, modify or waive any
provision of this Section 10.6 without the written consent of all
Lenders. In the case of any waiver, Borrower, Agent,
Administrative Agent and the Lenders shall be restored to their
former position and rights hereunder and under the Outstanding
Notes, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair
any right consequent thereon.
10.7 Payment of Expenses and Taxes. Borrower agrees
(a) to pay or reimburse each of Agent and Administrative Agent on
demand for all its out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of,
and any amendment, supplement or modification to, this Agreement,
the Notes and any other Loan Documents or other documents
prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of counsel to
Agent and Administrative Agent, (b) to pay or reimburse each
Lender, Agent and Administrative Agent on demand for all its
costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes, the
other Loan Documents and any such other documents, or the
satisfaction or review of conditions precedent to any borrowing
other than that occurring on the Effective Date, including,
without limitation, reasonable fees and disbursements of counsel
to Agent and Administrative Agent and, in the case of enforcement
or preservation of any rights under this Agreement, counsel to
the several Lenders, and (c) to pay, indemnify, and to hold each
Lender, Agent and Administrative Agent and their respective
officers, directors, employees and agents harmless for, from and
against, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be
payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of
any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or
97
in respect of, this Agreement, the Notes, the other Loan
Documents and any such other documents, and (d) to pay,
indemnify, and hold each Lender, Agent and Administrative Agent
and their respective officers, directors, employees and agents
harmless for, from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement,
performance and administration of, or in any other way arising
out of or relating to, this Agreement, the Notes, the other Loan
Documents and any such other documents, including, without
limitation, any claim resulting or arising out of the presence of
Hazardous Materials in any of the Properties (all the foregoing,
collectively, the "indemnified liabilities"), provided that
Borrower shall have no obligation hereunder with respect to
indemnified liabilities arising from (i) the willful misconduct
of any such Lender or (ii) legal proceedings commenced against
any such Lender by any security holder or creditor thereof
arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such.
10.8 Adjustments; Setoff.
(a) If any Lender (a "benefitted Lender") shall at any
time receive any payment of all or part of its Loan, or interest
thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in clause (g) of Section
7.1, or otherwise) in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in respect
of such other Lenders' Loan, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lenders such
portion of each such other Lender's Loan, or shall provide such
other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such benefitted
Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided that if
all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. Borrower
expressly consents to the foregoing arrangements and agrees that
each Lender so purchasing a portion of another Lender's Loan may
exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if
such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right,
without prior notice to Borrower, any such notice being expressly
waived by Borrower to the extent permitted by applicable law,
upon
98
(i) the filing of a petition under any of the
provisions of the federal bankruptcy act or amendments
thereto, by or against;
(ii) the making of an assignment for the benefit of
creditors by;
(iii) the application for the appointment, or the
appointment, of any receiver of, or of any of the property
of;
(iv) the issuance of any execution against any of the
property of;
(v) the issuance of a subpoena or order, in
supplementary proceedings, against or with respect to any of
the property of; and/or
(vi) or the issuance of a warrant of attachment against
any of the property of;
Borrower to set off and apply against any indebtedness, whether
matured or unmatured, of Borrower to such Lender, any amount
owing from such Lender to Borrower, at or at any time after, the
happening of any of the above-mentioned events, and the aforesaid
right of set off may be exercised by such Lender against Borrower
or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor of Borrower, or against anyone
else claiming through or against Borrower or such trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment
creditor, notwithstanding the fact that such right of set off
shall not have been exercised by such Lender prior to the making,
filing or issuance, or service upon such Lender of, or of notice
of, any such petition; assignment for the benefit of creditors;
appointment or application for the appointment of a receiver; or
issuance of execution, subpoena or order of warrant. Each Lender
agrees promptly to notify Borrower, Agent and Administrative
Agent after any such set off and application made by such Lender,
provided that the failure to give such notice shall not affect
the validity of such set off and application. The proceeds of
any set off or application pursuant to this subsection (b) of
Section 10.8 shall be distributed in accordance with the
preceding subsection (a).
10.9 NONLIABILITY OF TRUSTEES. THE DECLARATION OF
TRUST ESTABLISHING BORROWER, DATED OCTOBER 9, 1986, A COPY OF
WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"),
IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HEALTH AND
RETIREMENT PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE
99
DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR
PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE
OR AGENT OF BORROWER SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST,
BORROWER. ALL PERSONS DEALING WITH BORROWER, IN ANY WAY, SHALL
LOOK ONLY TO THE ASSETS OF BORROWER FOR THE PAYMENT OF ANY SUM OR
THE PERFORMANCE OF ANY OBLIGATION.
[Remainder of page left blank intentionally]
100
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in New York, New York
by their proper and duly authorized officers as of the day and
year first above written.
HEALTH AND RETIREMENT PROPERTIES TRUST
By: /s/ David J. Hegarty
Name: David J. Hegarty
Title: Executive Vice President
KLEINWORT BENSON LIMITED,
as Agent and as a Lender
By: /s/ Patrick F. Donelan
Name: Patrick F. Donelan
Title: Director
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ Lenny Mason
Name: Lenny Mason
Title: Assistant Vice President
NATWEST BANK N.A. (formerly National
Westminster Bank, USA), as Co-Agent and
as a Lender
By: /s/ Paul Chau
Name: Paul Chau
Title: Vice President
By: ___________________________________
Name:_________________________________
Title:________________________________
S-1
FLEET BANK OF MASSACHUSETTS, as a Lender
By: /s/ Ginger Stolzenthaler
Name: Ginger Stolzenthaler
Title: Vice President
THE DAIWA BANK, LIMITED, as a Lender
By: /s/ Daniel Eastman
Name: Daniel Eastman
Title: Executive Vice President
By: /s/ Stephen F. O'Sullivan
Name: Stephen F. O'Sullivan
Title: Executive Officer
MITSUI LEASING (USA) INC., as a Lender
By: /s/ Toshiaki Nagano
Name: Toshiaki Nagano
Title: Executive Vice President
BANK HAPOALIM B.M., as a Lender
By: /s/ Nancy J. Lushan
Name: Nancy J. Lushan
Title: Vice President
By: /s/ Paul J. Bresler
Name: Paul J. Bresler
Title: Vice President
DRESDNER BANK AG, New York Branch and
Grand Cayman Branch, as a Lender
By: /s/ Andrew P. Nesi
Name: Andrew P. Nesi
Title: Vice President
By: /s/ Andrew K. Mittag
Name: Andrew K. Mittag
Title: Vice President
CREDIT LYONNAIS, Cayman Island Branch,
as a Lender
By: /s/ Xavier Ratouis
Name: Xavier Ratouis
Title: Authorized Signature
S-2
For the purposes of Section 9 and the guaranties given therein:
HOSPITALITY PROPERTIES, INC.
By: /s/ David J. Hegarty
Name: David J. Hegarty
Title: President
HEALTH AND RETIREMENT PROPERTIES
INTERNATIONAL, INC.
By: /s/ David J. Hegarty
Name: David J. Hegarty
Title: President
S-3
Acknowledgement by Process Agent
We hereby acknowledge and accept the designation of our
firm at our address of 767 Third Avenue, New York, New York 10017
(or such other address as the Process Agent may notify the Agent
and Administrative Agent under the foregoing Agreement) as
Process Agent for Health and Retirement Properties Trust,
Hospitality Properties, Inc. and Health and Retirement Properties
International, Inc pursuant to Section 10.2 of the foregoing
Agreement.
SULLIVAN & WORCESTER
By: /s/ Lena Goldberg
Sullivan & Worcester
S-4
EXHIBIT A
FORM OF
PROMISSORY NOTE
A-1
EXHIBIT B
FORM OF
NOTICE OF BORROWING
B-1
EXHIBIT C
FORM OF
NOTICE OF CONTINUATION/CONVERSION
C-1
EXHIBIT D
FORM OF
SUBORDINATION AGREEMENT
D-1
SCHEDULE 1
LENDERS' COMMITMENTS
LENDER COMMITMENT
Kleinwort Benson Limited $47,500,000
Wells Fargo Bank, National Association
$15,000,000
NatWest Bank N.A. $25,000,000
The Daiwa Bank, Limited $20,000,000
Fleet Bank of Massachusetts $20,000,000
Bank Hapoalim B.M. $20,000,000
Dresdner Bank AG, New York Branch $20,000,000
and Grand Cayman Branch
Credit Lyonnais, $20,000,000
Cayman Island Branch
Mitsui Leasing (USA) Inc.
$12,500,000
Total $200,000,000
CERTAIN LENDING OFFICES
Kleinwort Benson Limited
20 Fenchurch Street
London EC3P 3DB
Tel: (44) 171-623-8000
Fax: (44) 171-623-3598
Attn:______________
Wells Fargo Bank, National Association
Corporate Banking
420 Montgomery Street
San Francisco, California 94163
Tel: (415) 396-5997
Fax: (415) 421-1352
Attn: Lenny Mason
NatWest Bank N.A.
175 Water Street, 28th Floor
S1-1
New York, New York 10038
Tel: (212) 602 2610
Fax: (212) 602 2671
Attn: Paul Chau
The Daiwa Bank, Limited
233 South Wacker Drive
Suite 5400
Chicago, Illinois 60606
Tel: (617) 451-3200
Fax: (617) 423-4884
Attn: Vice President/Credit Administration
Fleet Bank of Massachusetts
75 State Street
Boston, Massachusetts 02109
Tel: (617) 346-1647
Fax: (617) 346-1634
Attn: Ginger Stolzenthaler
Mitsui Leasing (U.S.A.) Inc.
200 Park Avenue, Suite 3214
New York, New York 10166
Tel: (212) 557 0454
Fax: (212) 490 1684
Attn: Ms. Takako Sumi
Bank Hapoalim B.M.
70 Federal Street
Boston, Massachusetts 02110
Tel: (617) 457-1811
Fax: (617) 542-0015
Attn: Nancy Lushan
Dresdner Bank, New York Branch
and Grand Cayman Branch
75 Wall Street
New York, New York 10005-2889
Tel: (212) 574 0100
Fax: (212) 574 0127
Attn: Andrew Nesi
Credit Lyonnais,
Cayman Island Branch
1301 Avenue of the Americas 20th Floor
New York, New York 10019
Tel: (212) 261 7748
Fax: (212) 261 3440
Attn: Francoise Giacalone
S1-2
S1-3
SCHEDULE 2
PERMITTED EXCEPTIONS
1. Liens of landlords, mechanics, materialmen and other
Liens imposed by law incurred in the ordinary course of
business for sums not yet delinquent or being contested
in good faith; provided that, in each case, any such
Lien is not reasonably likely to cause a MAC; and
provided further that, in the case of any Liens being
so contested, (v) the amount secured thereby is not
material in relation to the Allowed Value of the
affected Property or Mortgage Interest, (w) such
Property or any interest therein would not be in any
danger of being sold, forfeited or lost by reason of
such contest; (y) no insurance coverage required to be
maintained pursuant to this Agreement shall be
cancelled or jeopardized as a result of the contest;
and (z) if required by Agent, Borrower shall have
furnished to Agent a bond, or other security
satisfactory to Borrower, to protect Lenders from any
liability to which it may be exposed as a result of
such contest.
2. In the case of a Property, all Leases for such Property
and the rights of the Operators under such Leases and
any Credit Support Agreements relating to such Leases.
3. In the case of a Mortgaged Property, the Mortgaged
Interest Agreements for such Mortgaged Property and any
Credit Support Agreements relating thereto.
4. Liens for taxes, assessments, water rates, sewer or
other governmental charges or claims, the payment of
which is not, at the time, due.
5. Easements, rights-of-way, rights of access,
encroachments upon or by any Property, in respect of
which affirmative insurance, without payment of
additional premiums, has been provided by a reputable
title insurance company.
6. Easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other
similar charges or encumbrances that, in respect of any
Property, could not reasonably be likely to result in a
MAC.
7. Liens resulting from equipment financings or similar
security arrangements entered into by an Operator.
S2-1
SCHEDULE 3
AMOUNTS OWED UNDER THE EXISTING LOAN AGREEMENT
Kleinwort Benson Limited
1. Aggregate principal amount of Existing
Loans outstanding on March 15, 1995
$1,176,470.59
2. Aggregate interest accrued (whether
or not due and payable) on March 15, 1995
$5,511.68
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 15, 1995
$10,261.44
Wells Fargo Bank, N.A.
1. Aggregate principal amount of Existing
Loans outstanding on March 15, 1995 $882,352.94
2. Aggregate interest accrued (whether
or not due and payable) on March 15, 1995
$4,133.76
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 15, 1995
$7,696.08
NatWest Bank, N.A.
1. Aggregate principal amount of Existing
Loans outstanding on March 15, 1995 $1,470,588.24
2. Aggregate interest accrued (whether
or not due and payable) on March 15, 1995
$6,889.61
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 15, 1995
$12,826.80
S3-1
Fleet Bank of Massachusetts
1. Aggregate principal amount of Existing
Loans outstanding on March 15, 1995 $1,176,470.59
2. Aggregate interest accrued (whether
or not due and payable) on March 15, 1995
$5,511.68
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 15, 1995
$10,261.44
The Daiwa Bank, Limited
1. Aggregate principal amount of Existing
Loans outstanding on March 15, 1995 $1,176,470.59
2. Aggregate interest accrued (whether
or not due and payable) on March 15, 1995
$5,511.68
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 15, 1995
$10,261.44
Mitsui Leasing (USA) Inc.
1. Aggregate principal amount of Existing
Loans outstanding on March 15, 1995 $735,294.12
2. Aggregate interest accrued (whether
or not due and payable) on March 15, 1995
$3,444.80
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 15, 1995
$6,413.40
S3-2
Bank Hapoalim B.M.
1. Aggregate principal amount of Existing
Loans outstanding on March 15, 1995 $735,294.12
2. Aggregate interest accrued (whether
or not due and payable) on March 15, 1995
$3,444.80
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 15, 1995
$6,413.40
Dresdner Bank
1. Aggregate principal amount of Existing
Loans outstanding on March 15, 1995 $1,176,470.59
2. Aggregate interest accrued (whether
or not due and payable) on March 15, 1995
$5,511.68
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 15, 1995
$10,261.44
Credit Lyonnais
1. Aggregate principal amount of Existing
Loans outstanding on March 15, 1995 $588,235.29
2. Aggregate interest accrued (whether
or not due and payable) on March 15, 1995
$2,755.84
3. Aggregate commitment fee accrued (whether
or not due and payable) on March 15, 1995
$5,130.72
S3-3
SCHEDULE 4
BORROWER'S SUBSIDIARIES
Name of Subsidiary Jurisdiction of Shares Shares
%
Incorporation Authorized Outstanding
Owned
1. Church Creek Massachusetts 200,000 100 100%
Corporation common
stock
($0.01 par
value)
2. Hospitality Delaware 3,000 100
100%
Properties, Inc. common
stock
($0.01 par
value)
3. Health and Delaware 3,000 100 100%
Retirement common
Properties stock
International, ($0.01 par
Inc. value)
S4-1
SCHEDULE 5
Calculation of the Mandatory Liquid Asset Costs
for any GBP Loans
(a) The Mandatory Liquid Asset Costs for a Loan if denominated
in GBP for each Interest Period for that Loan is calculated
in accordance with the following formula:
BY + L(Y-X) + S(Y-Z)% PER ANNUM
100 - (B+S)
where on the day of the application of the formula:
B is the percentage of Agent's eligible liabilities which
the Bank of England then requires Agent to hold on a
non-interest-bearing deposit account in accordance with
its cash ration requirements;
Y is the rate at which GBP deposits are offered by Agent
to leading banks in the London interbank market at or
about 11.00 A.M. on that day for the relevant period;
L is the percentage of eligible liabilities which (as a
result of the requirements of the Bank of England)
Agent maintains as secured money with members of the
London Discount Market Association or in certain
marketable or callable securities approved by the Bank
of England, which percentage shall (in the absence of
evidence that any other figure is appropriate) be
conclusively presumed to be 5 per cent.;
X is the rate at which secured GBP deposits may be placed
by Agent with members of the London Discount Market
Association at or about 11.00 A.M. on that day for the
relevant period or, if greater, the rate at which GBP
bills of exchange (of a tenor equal to the duration of
the relevant period) eligible for rediscounting at the
Bank of England can be discounted in the London
Discount Market at or about 11.00 A.M. on that day;
S is the percentage for Agent's eligible liabilities
which the Bank of England requires Agent to place as a
special deposit; and
Z is the interest rate per annum allowed by the Bank of
England on special deposits.
(b) For the purposes of this Schedule:
(i) "eligible liabilities" and "special deposits" have the
meanings given to them at the time of application of
S5-1
the formula by the Bank of England; and
(ii) "relevant period" in relation to each Interest Period
means:
(A) if it is 3 months or less, that Interest Period, or
(B) if it is more than 3 months, 3 months.
(c) In the application of the formula, B, Y, L, X, S and Z are
included in the formula as figures and not as percentages,
e.g. if B=0.5% and Y = 15%, BY is calculated as 0.5 x 15.
(d) The formula is applied on the first day of each relevant
period. Each amount is rounded up to the nearest one-
sixteenth of one per cent.
(e) If Agent determines that a change in circumstances has
rendered, or will render, the formula inappropriate, Agent
(after consultation with the Lenders) shall notify Borrower
of the manner in which the Mandatory Liquid Asset Costs for
such Loans will subsequently be calculated. The manner of
calculation so notified by Agent shall, in the absence of
manifest error, be binding on Borrower.
S5-2
SCHEDULE 6
COURTYARD LODGINGS
1. Seattle/Bellevue, WA
2. Atlanta Airport North, GA
3. Minneapolis/Eden Prairie, MN
4. Spartanburg, SC
5. Boston/Danvers, MA
6. Kansas City South, MO
7. Philadelphia Airport, PA
8. Boston/Foxboro, MA
9. Atlanta Midtown, GA
10. Indianapolis/Carmel, IN
11. Dulles/Fairfax, VA
12. Raleigh/Durham Airport, NC
13. Atlanta Cumberland, GA
14. Detroit/Auburn Hills, MI
15. Boston/Milford, MA
16. Boston/Lowell, MA
17. Atlanta/Jimmy Carter Blvd., GA
18. Phoenix Camelback, AZ
19. Boston/Stoughton, MA
20. Scottsdale/Mayo Clinic, AZ
21. Mahwah, NJ
S6-1
EXECUTION
U.S. $200,000,000
SECOND AMENDED AND RESTATED
REVOLVING LOAN AGREEMENT
among
HEALTH AND RETIREMENT PROPERTIES TRUST,
as Borrower,
THE LENDERS NAMED HEREIN,
KLEINWORT BENSON LIMITED,
as Agent,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
and
NATWEST BANK N.A.
as Co-Agent
Dated as of March 15, 1995
TABLE OF CONTENTS
SECTION PAGE
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . 2
1.1. Defined Terms . . . . . . . . . . . . . . . . . . 2
1.2. Other Definitional Provisions . . . . . . . . . . 24
SECTION 2. AMOUNT AND TERMS OF REVOLVING LOANS . . . . . . . 25
2.1. Revolving Loans. . . . . . . . . . . . . . . . . 25
2.2. Notes; Maturity Date. . . . . . . . . . . . . . . 27
2.3. Procedure for Borrowing. . . . . . . . . . . . . 28
2.4. Interest. . . . . . . . . . . . . . . . . . . . . 31
2.5. Duration of Interest Period; Notice of
Continuation/Conversion. . . . . . . . . . . . 32
2.6. Fees. . . . . . . . . . . . . . . . . . . . . . . 33
2.7. Termination or Reduction of Commitment. . . . . . 34
2.8. Optional Prepayments; Mandatory Prepayments. . . 34
2.9. Computation of Interest and Fees. . . . . . . . . 36
2.10. Payments and Currency. . . . . . . . . . . . . . 36
2.11. Use of Proceeds. . . . . . . . . . . . . . . . . 38
2.12. Increased Costs. . . . . . . . . . . . . . . . . 38
2.13. Change in Law Rendering Eurodollar Loans or
Alternate Rate Loans Unlawful . . . . . . . . 40
2.14. Eurodollar Availability. . . . . . . . . . . . . 42
2.15. Indemnities. . . . . . . . . . . . . . . . . . . 43
2.16 Eligible Mortgages and Eligible Properties. . . . 43
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . 44
3.1. Financial Condition. . . . . . . . . . . . . . . 44
3.2. No Material Adverse Effect. . . . . . . . . . . . 45
3.3. Existence; Compliance with Law. . . . . . . . . . 45
3.4. Operator, Advisor, Credit Support Obligors;
Compliance with Law. . . . . . . . . . . . . . 45
3.5. Power; Authorization; Enforceable Obligations. . 46
3.6. No Legal Bar. . . . . . . . . . . . . . . . . . . 46
3.7. No Material Litigation. . . . . . . . . . . . . . 46
3.8. No Default. . . . . . . . . . . . . . . . . . . . 46
3.9. Ownership of Mortgage Interests and Property;
Liens. . . . . . . . . . . . . . . . . . . . . 47
3.10. No Burdensome Restrictions. . . . . . . . . . . 49
3.11. Taxes. . . . . . . . . . . . . . . . . . . . . . 49
3.12. Federal Regulations. . . . . . . . . . . . . . . 49
3.13. Employees. . . . . . . . . . . . . . . . . . . . 50
3.14. ERISA. . . . . . . . . . . . . . . . . . . . . . 50
3.15. Status as REIT. . . . . . . . . . . . . . . . . 50
3.16. Restrictions on Incurring Indebtedness. . . . . 50
3.17. Subsidiaries. . . . . . . . . . . . . . . . . . 50
3.18. Compliance with Environmental Laws. . . . . . . 50
3.19. Pollution; Hazardous Materials. . . . . . . . . 50
3.20. Securities Laws. . . . . . . . . . . . . . . . . 51
3.21. Declaration of Trust, By-Laws, Advisory
Contract, etc. . . . . . . . . . . . . . . . . 51
i
3.22. Disclosures. . . . . . . . . . . . . . . . . . . 51
3.23. Medicare and Medicaid Certification . . . . . . 51
3.24. Offering, Etc., of Securities . . . . . . . . . 52
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . 52
4.1. Conditions to Effectiveness . . . . . . . . . . . 52
4.2. Conditions Precedent to Loans . . . . . . . . . . 53
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . 54
5.1. Financial Statements. . . . . . . . . . . . . . . 55
5.2. Certificates; Other Information. . . . . . . . . 56
5.3. Payment of Obligations . . . . . . . . . . . . . 57
5.4. Conduct of Business and Maintenance of
Existence . . . . . . . . . . . . . . . . . . 57
5.5. Leases and Mortgage Interests; Credit Support
Agreements . . . . . . . . . . . . . . . . . . 57
5.6. Maintenance of Property, Insurance. . . . . . . 57
5.7. Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . 58
5.8. Notices. . . . . . . . . . . . . . . . . . . . . 58
5.9. Appraisals and Other Valuations. . . . . . . . . 59
5.10. Meetings. . . . . . . . . . . . . . . . . . . . 59
5.11. REIT Requirements. . . . . . . . . . . . . . . . 60
5.12. Indemnification. . . . . . . . . . . . . . . . . 60
5.13. Changes in GAAP. . . . . . . . . . . . . . . . . 60
5.14. Refinancing of Loans . . . . . . . . . . . . . . 61
5.15. Further Assurances; Restrictions on Negative
Pledges . . . . . . . . . . . . . . . . . . . 61
5.16. Currency Arrangements . . . . . . . . . . . . . 61
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . 61
6.1. Financial Covenants. . . . . . . . . . . . . . . 62
6.2. Restricted Payments. . . . . . . . . . . . . . . 62
6.3. Merger; Sale of Assets; Termination and Other
Actions . . . . . . . . . . . . . . . . . . . 62
6.4. Transactions with Affiliates. . . . . . . . . . . 63
6.5. Subsidiaries . . . . . . . . . . . . . . . . . . 63
6.6. Accounting Changes. . . . . . . . . . . . . . . . 63
6.7. Change in Nature of Business. . . . . . . . . . . 63
6.8. Indebtedness. . . . . . . . . . . . . . . . . . . 63
6.9. No Liens. . . . . . . . . . . . . . . . . . . . . 65
6.10. Fiscal Year. . . . . . . . . . . . . . . . . . . 65
6.11. Chief Executive Office. . . . . . . . . . . . . 65
6.12. Amendment of Certain Agreements . . . . . . . . 65
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . 65
7.1. Events of Default. . . . . . . . . . . . . . . . 66
7.2. Annulment of Acceleration. . . . . . . . . . . . 69
7.3. Cooperation by Borrower. . . . . . . . . . . . . 69
SECTION 8. THE AGENTS . . . . . . . . . . . . . . . . . . . 69
8.1. Appointment of Agent and Administrative Agent. . 69
SECTION 9. SUBSIDIARY GUARANTIES . . . . . . . . . . . 73
ii
9.1 Guaranties. . . . . . . . . . . . . . . . . . . 73
SECTION 10. GENERAL . . . . . . . . . . . . . . . . . . 75
10.1 CHOICE OF LAW. . . . . . . . . . . . . . . . . . 75
10.2 SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; ETC. . . . . . . . . . . . . . . . . . 75
10.3 Notices; Certain Payments. . . . . . . . . . . . 77
10.4 No Waivers; Cumulative Remedies; Entire
Agreement; Headings; Successors and Assigns;
Counterparts; Severability. . . . . . . . . . 78
10.5 Survival. . . . . . . . . . . . . . . . . . . . . 80
10.6 Amendments and Waivers. . . . . . . . . . . . . . 80
10.7 Payment of Expenses and Taxes. . . . . . . . . . 80
10.8 Adjustments; Setoff. . . . . . . . . . . . . . . 81
10.9 NONLIABILITY OF TRUSTEES. . . . . . . . . . . . . 82
EXHIBITS
EXHIBIT A - FORM OF PROMISSORY NOTE
EXHIBIT B - FORM OF NOTICE OF BORROWING
EXHIBIT C - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT D - FORM OF SUBORDINATION AGREEMENT
SCHEDULES
Schedule 1 - LENDERS' COMMITMENTS AND CERTAIN LENDING OFFICES
Schedule 2 - PERMITTED EXCEPTIONS
Schedule 3 - AMOUNTS OWED UNDER THE EXISTING LOAN AGREEMENT
Schedule 4 - BORROWER'S SUBSIDIARIES
Schedule 5 - MANDATORY LIQUID ASSET COSTS (FOR GBP LOANS)
Schedule 6 - COURTYARD LODGINGS
iii