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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) : August 26, 1996
ATRIA COMMUNITIES, INC.
(Exact name of registrant as specified in charter)
Delaware 0-21159 61-1303738
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
515 West Market Street
Louisville, Kentucky
(Address of principal executive offices)
40202
(Zip Code)
502-596-7540
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On August 26, 1996, Atria Communities, Inc. (the "Company") entered into a
bank credit facility (the "Atria Credit Facility") aggregating $200 million
(including a letter of credit option not to exceed $70 million) which will have
a maturity of four years and may be extended at the option of the banks for one
additional year. The Atria Credit Facility will bear interest, at the
Company's option, at either (1) a base rate based on PNC Bank's prime rate or
the daily federal funds rate or (2) a LIBOR rate, plus an additional percentage
based on certain leverage ratios. The obligations under the Atria Credit
Facility will be secured by all of the Company's property, the capital stock of
the Company's present and future principal subsidiaries and all intercompany
indebtedness owed to the Company by its subsidiaries. The Atria Credit Facility
is conditioned upon, among other things, ownership by Vencor, Inc. ("Vencor") of
at least 30% of the Company's common stock.
The Atria Credit Facility contains financial covenants and other
restrictions that (i) require the Company to meet certain financial tests, (ii)
require that there be no change of control of the Company, (iii) limit, among
other things, the ability of the Company and certain of its subsidiaries to
borrow additional funds, dispose of certain assets and engage in mergers and
other business combinations, and (iv) prohibit distributions to the Company's
stockholders. Vencor will guarantee up to $100 million of the Atria Credit
Facility in the first year, which guarantee will decrease annually thereafter.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS.
(c) Exhibits.
(1) Credit Agreement dated as of August 15, 1996, among (a) Atria
Communities, Inc., as Borrower; (b) the lending institutions listed in Annex I
to the Credit Agreement, as Lenders; (c) PNC Bank, National Association, as
Administrative Agent; (d) PNC Bank, Kentucky, Inc., as Managing Agent; (e)
National City Bank of Kentucky, as Documentation Agent, and (f) PNC Bank,
National Association, National City Bank of Kentucky, and The Toronto-Dominion
Bank, New York Agency, as Syndication Agents.
(2) Security Agreement dated as of August 15, 1996 among Atria
Communities, Inc. as Assignor and the other Assignors named therein, and PNC
Bank, National Association, as Collateral Agent.
(3) Pledge Agreement dated as of August 15, 1996 among Atria
Communities, Inc. as a Pledgor and the other Pledgors named therein, and PNC
Bank, National Association, as Collateral Agent.
(4) Parent Guaranty dated as of August 15, 1996 among (a) Atria
Communities, Inc., as Borrower, (b) Vencor, Inc., as Parent Guarantor, (c) First
Healthcare Corporation, Northwest Healthcare, Inc., Medisave Pharmacies, Inc.,
Hillhaven of Central Florida, Inc., and Nationwide Care, Inc., as Supporting
Guarantors, and (d) PNC Bank, National Association, as Administrative Agent.
(5) Subsidiary Guaranty dated as of August 15, 1996 between the
subsidiaries of Atria Communities, Inc. named therein and PNC Bank, National
Association, as Administration Agent.
(6) Future Advance Mortgage, Assignment of Leases and Security
Agreement dated as of August 15, 1996, executed by Atria Communities, Inc. in
favor of PNC Bank, National Association, as Collateral Agent (Heritage at
Wildwood). (Similar forms were used for other properties. See Annex III to the
Credit Facility Agreement.)
(7) Future Advance Deed of Trust, Fixture Filing, and Assignment
of Leases and Rents and Security Agreement dated as of August 15, 1996, executed
by Atria Communities, Inc. in favor of Transnation Title Insurance Company
(Valley Manor). (Similar forms were used for other properties. See Annex III to
the Credit Facility Agreement.)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date : September 10, 1996 ATRIA COMMUNITIES, INC.
By: /s/ J. Timothy Wesley
J. Timothy Wesley
Chief Financial Officer, Vice
President of Development and
Secretary
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EXHIBIT INDEX
(1) Credit Agreement dated as of August 15, 1996, among (a) Atria
Communities, Inc., as Borrower; (b) the lending institutions listed in Annex I
to the Credit Agreement, as Lenders; (c) PNC Bank, National Association, as
Administrative Agent; (d) PNC Bank, Kentucky, Inc., as Managing Agent; (e)
National City Bank of Kentucky, as Documentation Agent, and (f) PNC Bank,
National Association, National City Bank of Kentucky, and The Toronto-Dominion
Bank, New York Agency, as Syndication Agents.
(2) Security Agreement dated as of August 15, 1996 among Atria
Communities, Inc. as Assignor and the other Assignors named therein, and PNC
Bank, National Association, as Collateral Agent.
(3) Pledge Agreement dated as of August 15, 1996 among Atria
Communities, Inc. as a Pledgor and the other Pledgors named therein, and PNC
Bank, National Association, as Collateral Agent.
(4) Parent Guaranty dated as of August 15, 1996 among (a) Atria
Communities, Inc., as Borrower, (b) Vencor, Inc., as Parent Guarantor, (c) First
Healthcare Corporation, Northwest Healthcare, Inc., Medisave Pharmacies, Inc.,
Hillhaven of Central Florida, Inc., and Nationwide Care, Inc., as Supporting
Guarantors, and (d) PNC Bank, National Association, as Administrative Agent.
(5) Subsidiary Guaranty dated as of August 15, 1996 between the
subsidiaries of Atria Communities, Inc. named therein and PNC Bank, National
Association, as Administration Agent.
(6) Future Advance Mortgage, Assignment of Leases and Security
Agreement dated as of August 15, 1996, executed by Atria Communities, Inc. in
favor of PNC Bank, National Association, as Collateral Agent (Heritage at
Wildwood). (Similar forms were used for other properties. See Annex III to the
Credit Facility Agreement.)
(7) Future Advance Deed of Trust, Fixture Filing, and Assignment
of Leases and Rents and Security Agreement dated as of August 15, 1996, executed
by Atria Communities, Inc. in favor of Transnation Title Insurance Company
(Valley Manor). (Similar forms were used for other properties. See Annex III to
the Credit Facility Agreement.)
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EXHIBIT 1
================================================================================
U.S.$200,000,000
CREDIT AGREEMENT
dated as of
August 15, 1996
Among
ATRIA COMMUNITIES, INC.
as Borrower
THE LENDING INSTITUTIONS NAMED THEREIN
as Lenders
PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent
PNC BANK, KENTUCKY, INC.
as Managing Agent
NATIONAL CITY BANK OF KENTUCKY
as Documentation Agent
PNC BANK, NATIONAL ASSOCIATION
NATIONAL CITY BANK OF KENTUCKY
THE TORONTO-DOMINION BANK, New York Agency
as Syndication Agents
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TABLE OF CONTENTS
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SECTION 1. AMOUNT AND TERMS OF CREDIT.................................................................... 1
1.1. Commitments................................................................................... 1
1.2. Minimum Borrowing Amounts, etc................................................................ 3
1.3. Notice of Borrowing........................................................................... 3
1.4. Disbursement of Funds......................................................................... 4
1.5. Notes......................................................................................... 4
1.6. Conversions................................................................................... 4
1.7. Pro Rata Borrowings........................................................................... 5
1.8. Interest...................................................................................... 5
1.9. Interest Periods.............................................................................. 7
1.10. Increased Costs, Illegality, etc.............................................................. 8
1.11. Compensation.................................................................................. 9
1.12. Change of Lending Office...................................................................... 10
SECTION 2. LETTERS OF CREDIT............................................................................. 10
2.1. Letters of Credit............................................................................. 10
2.2. Letter of Credit Requests: Notices of Issuance................................................ 10
2.3. Agreement to Repay Letter of Credit Drawings.................................................. 11
2.4. Letter of Credit Participations............................................................... 11
2.5. Increased Costs............................................................................... 13
2.6. Obligations Absolute.......................................................................... 13
2.7. Guaranty of Subsidiary Letter of Credit Obligations........................................... 14
SECTION 3. FEES; COMMITMENTS............................................................................. 16
3.1. Fees.......................................................................................... 16
3.2. Voluntary Reduction of Commitments............................................................ 16
3.3. Mandatory Adjustments of Commitments, etc..................................................... 16
3.4. Extension of Revolving Loan Maturity Date..................................................... 17
SECTION 4. PAYMENTS...................................................................................... 17
4.1. Voluntary Prepayments......................................................................... 17
4.2. Mandatory Prepayments......................................................................... 17
4.3. Method and Place of Payment................................................................... 18
4.4. Net Payments.................................................................................. 19
SECTION 5. CONDITIONS PRECEDENT.......................................................................... 20
5.1. Conditions Precedent at Closing Date.......................................................... 20
5.2. Conditions Precedent to All Credit Events..................................................... 26
SECTION 6. REPRESENTATIONS AND WARRANTIES................................................................ 26
6.1. Corporate Status, etc......................................................................... 26
6.2. Corporate Power and Authority, etc............................................................ 27
6.3. No Violation.................................................................................. 27
6.4. Litigation.................................................................................... 27
6.5. Use of Proceeds; Margin Regulations........................................................... 27
6.6. Governmental Approvals........................................................................ 27
6.7. True and Complete Disclosure.................................................................. 28
6.8. Financial Condition: Financial Statements..................................................... 28
6.9. Security Interests............................................................................ 29
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6.10. Representations and Warranties in Transaction Documents....................................... 29
6.11. Tax Returns and Payments...................................................................... 29
6.12. Compliance with ERISA......................................................................... 29
6.13. Subsidiaries.................................................................................. 30
6.14. Intellectual Property, etc.................................................................... 30
6.15. Environmental Matters......................................................................... 30
6.16. Properties.................................................................................... 31
6.17. Labor Relations: Collective Bargaining Agreements............................................. 31
6.18. Indebtedness.................................................................................. 31
6.19. Transaction................................................................................... 31
6.20. Certain Material Agreements................................................................... 31
6.21. Third-Party Rights............................................................................ 32
SECTION 7. AFFIRMATIVE COVENANTS......................................................................... 32
7.1. Reporting Requirements........................................................................ 32
7.2. Books, Records and Inspections................................................................ 34
7.3. Insurance..................................................................................... 34
7.4. Payment of Taxes.............................................................................. 35
7.5. Corporate Franchises.......................................................................... 35
7.6. Compliance with Statutes, etc................................................................. 35
7.7. Good Repair................................................................................... 35
7.8. Compliance with Environmental Laws............................................................ 35
7.9. Change of Fiscal Years, Fiscal Quarters....................................................... 36
7.10. Additional Security; Further Assurances....................................................... 36
7.11. Corporate Separateness........................................................................ 38
7.12. ERISA......................................................................................... 38
7.13. Senior Debt................................................................................... 39
SECTION 8. NEGATIVE COVENANTS............................................................................ 39
8.1. Changes in Business........................................................................... 39
8.2. Consolidation, Merger or Sale of Assets, etc.................................................. 39
8.3. Liens......................................................................................... 41
8.4. Indebtedness.................................................................................. 43
8.5. Advances, Investments and Loans............................................................... 44
8.6. Certain Leases................................................................................ 45
8.7. Prepayments and Refinancings of IRB Debt, Modifications of Agreements, etc.................... 46
8.8. Dividends, etc................................................................................ 46
8.9. Transactions with Affiliates.................................................................. 47
8.10. Consolidated Net Worth........................................................................ 47
8.11. Capitalization Ratio.......................................................................... 47
8.12. Leverage Ratio................................................................................ 47
8.13. Interest Coverage............................................................................. 48
8.14. Creation of Subsidiaries...................................................................... 48
8.15. Limitation on Certain Restrictions on Subsidiaries............................................ 48
8.16. Interest Rate Hedging......................................................................... 49
SECTION 9. EVENTS OF DEFAULT............................................................................. 49
9.1. Events of Default............................................................................. 49
9.2. Acceleration, etc............................................................................. 52
9.3. Application of Liquidation Proceeds........................................................... 52
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SECTION 10. DEFINITIONS................................................................................... 54
SECTION 11. THE ADMINISTRATIVE AGENT AND THE MANAGING AGENT............................................... 72
11.1. Appointment................................................................................... 72
11.2. Delegation of Duties.......................................................................... 72
11.3. Exculpatory Provisions........................................................................ 73
11.4. Reliance by Agents............................................................................ 73
11.5. Notice of Default............................................................................. 73
11.6. Non-Reliance.................................................................................. 74
11.7. Indemnification............................................................................... 74
11.8. The Agents in Their Individual Capacity....................................................... 74
11.9. Successor Agents.............................................................................. 75
11.10. Other Agents.................................................................................. 75
SECTION 12. MISCELLANEOUS..................................................................................75
12.1. Payment of Expenses etc....................................................................... 75
12.2. Right of Setoff............................................................................... 76
12.3. Notices....................................................................................... 76
12.4. Benefit of Agreement.......................................................................... 76
12.5. No Waiver: Remedies Cumulative................................................................ 78
12.6. Payments Pro Rata............................................................................. 78
12.7. Calculations: Computations.................................................................... 78
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial........................ 79
12.9. Counterparts.................................................................................. 79
12.10. Effectiveness................................................................................. 79
12.11. Headings Descriptive.......................................................................... 80
12.12. Amendment or Waiver........................................................................... 80
12.13. Survival...................................................................................... 80
12.14. Domicile of Loans............................................................................. 80
12.15. Confidentiality............................................................................... 80
12.16. Lender Register............................................................................... 81
12.17. Limitations on Liability of the Letter of Credit Issuers...................................... 81
12.18. General Limitation of Liability............................................................... 81
12.19. No Duty....................................................................................... 81
12.20. Lenders and Agent Not Fiduciary to Credit Parties, etc........................................ 82
12.21. Survival of Representations and Warranties.................................................... 82
12.22. Limitation on Enforcement of Guaranties and Security Documents................................ 82
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ANNEX I - INFORMATION AS TO LENDERS
ANNEX II - INFORMATION AS TO SUBSIDIARIES
ANNEX III - DESCRIPTION OF REAL PROPERTIES
ANNEX IV - DESCRIPTION OF EXISTING INDEBTEDNESS
ANNEX V - DESCRIPTION OF EXISTING LIENS
ANNEX VI - DESCRIPTION OF EXISTING ADVANCES, LOANS AND INVESTMENTS
ANNEX VII - DESCRIPTION OF LETTERS OF CREDIT DEEMED ISSUED UNDER THE
CREDIT AGREEMENT
EXHIBIT A-1 - FORM OF NOTICE OF BORROWING
EXHIBIT A-2 - FORM OF LETTER OF CREDIT REQUEST
EXHIBIT B - FORM OF REVOLVING NOTE
EXHIBIT C-1 - FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
EXHIBIT C-2 - FORM OF OPINION OF GENERAL COUNSEL TO THE PARENT
EXHIBIT D - FORM OF OFFICER'S CERTIFICATE
EXHIBIT E - FORM OF PARENT GUARANTY
EXHIBIT F - FORM OF SUBSIDIARY GUARANTY
EXHIBIT G - FORM OF PLEDGE AGREEMENT
EXHIBIT H - FORM OF SECURITY AGREEMENT
EXHIBIT I - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT J - FORM OF SOLVENCY CERTIFICATE
EXHIBIT K - FORM OF SECTION 4.4(b)(ii) CERTIFICATE
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CREDIT AGREEMENT, dated as of August 15, 1996, among the following:
(i) ATRIA COMMUNITIES, INC., a Delaware corporation (herein,
together with its successors and assigns, the "Borrower");
(ii) the lending institutions listed in Annex I hereto (each
a "Lender" and collectively, the "Lenders");
(iii) PNC BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent (the "Administrative Agent");
(iv) PNC BANK, KENTUCKY, INC., a Kentucky banking
corporation, as managing agent (the "Managing Agent");
(v) NATIONAL CITY BANK of KENTUCKY, a national banking
association, as documentation agent (the "Documentation Agent"); and
(vi) PNC BANK, NATIONAL ASSOCIATION, a national banking
association, NATIONAL CITY BANK of KENTUCKY, a national banking
association, and THE TORONTO-DOMINION BANK, New York Agency, as
syndication agents (the "Syndication Agents"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in section 10 are used herein as so defined.
(2) The Borrower has applied to the Lenders for credit facilities in
order to refinance certain indebtedness of the Borrower and in order to provide
working capital and funds for acquisitions and other lawful purposes.
(3) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrower the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed:
SECTION 1. AMOUNT AND TERMS OF CREDIT
1.1. Commitments. Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a loan or
loans (each a "Loan" and, collectively, the "Loans") to the Borrower, which
Loans shall be drawn and considered outstanding, to the extent such Lender has a
commitment hereunder, as set forth below:
(a) Loans may be made either as MPP Revolving Loans or DPP
Revolving Loans, as such terms are defined below. The term "Loans"
includes both MPP Revolving Loans and DPP Revolving Loans.
(b) Loans which are made with reference to the Mature
Property Pool (each an "MPP Revolving Loan" and, collectively, the
"MPP Revolving Loans"): (i) may be made at any time and from time to
time on and after the Closing Date and prior to the Revolving Loan
Maturity Date, provided that, after giving effect thereto, the sum of
the outstanding MPP Revolving Loans,
<PAGE>
the Allocated MPP Letter of Credit Outstandings and the Allocated
Measured MPP Swap Credit Exposure do not exceed the MPP Revolving Loan
Sublimit, and provided, further, that, after giving effect thereto,
the sum of the outstanding Loans, the Letter of Credit Outstandings
and the Aggregate Measured Swap Credit Exposure do not exceed the
aggregate Commitments; (ii) except as hereinafter provided, may, at
the option of the Borrower, be incurred and maintained as, and/or
converted into, MPP Revolving Loans which are Base Rate Loans or
Eurodollar Loans, provided that all MPP Revolving Loans made as part
of the same Borrowing shall, unless otherwise specifically provided
herein, consist of MPP Revolving Loans of the same Type; (iii) may be
repaid and reborrowed in accordance with the provisions hereof; and
(iv) shall not for any Lender exceed the amount which remains after
subtracting from the Commitment of such Lender at such time the sum of
(A) the outstanding principal amount of all other Loans made by such
Lender, plus (B) the product at such time of (x) such Lender's
Percentage and (y) the sum of the Letter of Credit Outstandings and
the Aggregate Measured Swap Credit Exposure at such time.
(c) Loans which cannot be made as MPP Revolving Loans because
of the limitation contained in the first proviso to clause (i) of
section 1.1(b) above (each a "DPP Revolving Loan" and, collectively,
the "DPP Revolving Loans"): (i) may be made at any time and from time
to time on and after the Closing Date and prior to the DPP Loan
Maturity Date, provided that, after giving effect thereto, the sum of
the outstanding DPP Revolving Loans, the Allocated DPP Letter of
Credit Outstandings and the Allocated Measured DPP Swap Credit
Exposure do not exceed the DPP Revolving Loan Sublimit, and provided,
further, that, after giving effect thereto, the sum of the outstanding
Loans, the Letter of Credit Outstandings and the Aggregate Measured
Swap Credit Exposure do not exceed the aggregate Commitments; (ii)
except as hereinafter provided, may, at the option of the Borrower, be
incurred and maintained as, and/or converted into, DPP Revolving Loans
which are Base Rate Loans or Eurodollar Loans, provided that all DPP
Revolving Loans made as part of the same Borrowing shall, unless
otherwise specifically provided herein, consist of DPP Revolving Loans
of the same Type; (iii) may be repaid and reborrowed in accordance
with the provisions hereof; and (iv) shall not for any Lender exceed
the amount which remains after subtracting from the Commitment of such
Lender at such time the sum of (A) the outstanding principal amount of
all other Loans made by such Lender, plus (B) the product at such time
of (x) such Lender's Percentage and (y) the sum of the Letter of
Credit Outstandings and the Aggregate Measured Swap Credit Exposure at
such time.
(d) No DPP Revolving Loans shall be made at any time when the
Borrower could obtain an MPP Revolving Loan in any amount.
(e) In the event that, at any time while any DPP Revolving
Loans are outstanding, the Borrower would, by reason of any change in
the Mature Property Pool or otherwise, be entitled to make MPP
Revolving Loans, the Borrower may request that the Managing Agent
determine, or the Managing Agent on its own initiative may determine,
that a portion of the outstanding principal amount of DPP Revolving
Loans be
reclassified hereunder as MPP Revolving Loans, provided that the
principal amount so reclassified shall not exceed the principal amount
of the MPP Revolving Loans that the Borrower could obtain at such
time. The Managing Agent shall promptly notify the Borrower and the
Lenders of any such determination by the Managing Agent that any
principal amount of DPP Revolving Loans is being reclassified as MPP
Revolving Loans, specifying the principal amount so reclassified, the
particular Borrowing relating thereto and the effective date of such
reclassification (which shall not be earlier than the date of such
notice).
(f) The Borrower shall from time to time upon request from
the Managing Agent or the Administrative Agent advise the Managing
Agent and the Administrative Agent in writing of the amount of the
Allocated MPP Letter of Credit Outstandings, the amount of the
Allocated DPP Letter of Credit Outstandings, the amount of the
Allocated Measured MPP Swap Credit Exposure, the amount of the
Allocated Measured DPP Swap Credit Exposure, the amount of the MPP
Revolving Loan Sublimit, the amount of the DPP Revolving Loan
Sublimit, and shall identify which Loans are classified as MPP
Revolving Loans and which are classified as DPP Revolving
2
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Loans, providing such financial and other information and computations
as may be necessary to support the computation of any such amounts or
the classification of any such Loans. In so advising the Managing
Agent and the Administrative Agent as to the amount of the Allocated
Measured MPP Swap Credit Exposure and the Allocated Measured DPP Swap
Credit Exposure, the Borrower shall be entitled to rely upon such
financial methodology for determining the amount thereof as shall have
been furnished by the Managing Agent. Any such amounts or the
classification of any such Loans so advised by the Borrower will be
effective for all purposes hereunder and under the other Credit
Documents until further written advice from the Borrower is delivered
to the Managing Agent and the Administrative Agent with respect
thereto which changes any such amounts or classifications; provided,
that in the event that the Managing Agent (acting on instructions from
the Required Lenders) at any time disagrees with the Borrower's advice
as to any such amount or the classification of any such Loans, such
amount or the classification of such Loans shall instead be determined
by the Managing Agent, upon the basis of financial statements,
information and certifications provided by the Borrower, and such
other evidence as the Managing Agent considers appropriate, and in
such event the Managing Agent shall from time to time, or promptly
upon request, provide notice of such determinations to the Borrower,
the Administrative Agent and the Lenders. Any such determination by
the Managing Agent pursuant to this section 1.1 shall be conclusive
and binding, absent manifest error, and the Managing Agent shall incur
no liability hereunder or under any other Credit Document or in
connection herewith or therewith in the event of any error or other
mistake in any such determination in the absence of bad faith on the
part of the Managing Agent.
1.2. Minimum Borrowing Amounts, etc.1.2.Minimum Borrowing Amounts,
etc. The aggregate principal amount of each Borrowing shall not be less than the
Minimum Borrowing Amount for such Borrowing. More than one Borrowing may be
incurred on any day, provided that at no time shall there be outstanding more
than nine Borrowings of Eurodollar Loans.
1.3. Notice of Borrowing. (a) Whenever the Borrower desires to incur
Loans, it shall give the Administrative Agent at its Notice Office, (A) prior to
1:00 P.M. (local time at the Notice Office), at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans, and (B) prior to 12:00 noon (local time at the
Notice Office) on the proposed date thereof written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Base Rate Loans to be made
hereunder. Each such notice (each such notice, a "Notice of Borrowing") (or the
written confirmation) shall be in the form of Exhibit A-1 and shall be
irrevocable and shall specify: (i) whether the respective Borrowing consists of
MPP Revolving Loans or DPP Revolving Loans; (ii) the aggregate principal amount
of the Loans to be made pursuant to such Borrowing; (iii) the date of Borrowing
(which shall be a Business Day); and (iv) whether the respective Borrowing shall
consist of Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, of such Lender's proportionate
share thereof and of the other matters covered by the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from an Authorized Officer of the
Borrower entitled to give telephonic notices under this Agreement on behalf of
the Borrower. In each such case, the Administrative Agent's record of the terms
of such telephonic notice shall be conclusive absent manifest error.
1.4. Disbursement of Funds. (a) No later than 1:00 P.M. (local time
at the Payment Office) on the date specified in each Notice of Borrowing
relating to Eurodollar Loans, and no later than 3:00 P.M. (local time at the
Payment Office) on the date specified in each Notice of Borrowing relating to
Base Rate Loans, each Lender will make available its pro rata share, if any, of
each Borrowing requested to be made on such date in the manner provided below.
All amounts shall be made available to the Administrative Agent in U.S. dollars
and immediately available funds at the Payment Office and the Administrative
Agent promptly will make available to the Borrower by depositing to its account
at the Payment Office the aggregate of the amounts so made available in the type
of funds received. Unless the Administrative Agent shall have been notified by
any Lender prior to the date of Borrowing
3
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that such Lender does not intend to make available to the Administrative Agent
its portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date of Borrowing, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Administrative
Agent by such Lender and the Administrative Agent has made available same to the
Borrower, the Administrative Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Lender or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if paid
by such Lender, the overnight Federal Funds Effective Rate or (y) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
section 1.8, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
1.5. Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made to it by each Lender shall be evidenced by a
promissory note substantially in the form of Exhibit B with blanks appropriately
completed in conformity herewith (each a "Note" and, collectively, the "Notes").
(b) The Note issued to a Lender shall: (i) be executed by the
Borrower; (ii) be payable to the order of such Lender and be dated on or prior
to the Closing Date; (iii) be in a stated principal amount equal to the
Commitment of such Lender and be payable in the principal amount of Loans
evidenced thereby; (iv) mature, in the case of MPP Revolving Loans, on the
Revolving Loan Maturity Date, and in the case of DPP Revolving Loans, on the DPP
Loan Maturity Date; (v) bear interest as provided in the appropriate clause of
section 1.8 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby; (vi) be subject to mandatory prepayment as provided
in section 4.2: and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(c) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of its Note, endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect the Borrower's obligations in
respect of such Loans.
1.6. Conversions. The Borrower shall have the option to convert on
any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans into a
Borrowing or Borrowings of the other Type of Loan, provided that: (i) no
conversion of MPP Revolving Loans into DPP Revolving Loans, or vice versa, may
be made; (ii) no partial conversion of a Borrowing of Eurodollar Loans shall
reduce the outstanding principal amount of the Eurodollar Loans made pursuant to
such Borrowing to less than the Minimum Borrowing Amount applicable thereto;
(iii) Base Rate Loans may only be converted into Eurodollar Loans if no Default
under section 9.1(a) or Event of Default is in existence on the date of the
conversion unless the Required Lenders otherwise agree; and (iv) Borrowings of
Eurodollar Loans resulting from this section 1.6 shall be limited in numbers as
provided in section 1.2. Each such conversion shall be effected by the Borrower
giving the Administrative Agent at its Notice Office, prior to 1:00 P.M. (local
time at the Notice Office), at least three Business Days' (or prior to 12:00
noon (local time at the Notice Office) same Business Day's, in the case of a
conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each a "Notice of Conversion") specifying the
Loans to be so converted, the Type of Loans to be converted into and, if to be
converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Lender
prompt notice of any such proposed conversion affecting any of its Loans.
4
<PAGE>
1.7. Pro Rata Borrowings. All Borrowings of Loans shall be made by
the Lenders pro rata on the basis of their Commitments. It is understood that no
Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to fulfill its commitments hereunder.
1.8. Interest. (a) The unpaid principal amount of each MPP Revolving
Loan which is a Base Rate Loan shall bear interest from the date of the
Borrowing thereof until maturity (whether by acceleration or otherwise) at a
rate per annum which shall at all times be the Applicable MPP Base Rate Margin
(as defined below) plus the Base Rate in effect from time to time. The unpaid
principal amount of each DPP Revolving Loan which is a Base Rate Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable DPP Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each MPP Revolving Loan which is a
Eurodollar Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Applicable MPP Eurodollar Margin (as defined below) plus the
relevant Eurodollar Rate. The unpaid principal amount of each DPP Revolving Loan
which is a Eurodollar Loan shall bear interest from the date of the Borrowing
thereof until maturity (whether by acceleration or otherwise) at a rate per
annum which shall at all times be the Applicable DPP Eurodollar Margin plus the
relevant Eurodollar Rate.
(c) Notwithstanding the above provisions, if a Default under section
9.1(a) or Event of Default is in existence, all outstanding amounts of principal
and, to the extent permitted by law, all overdue interest, in respect of each
Loan shall bear interest at a rate per annum equal to the Base Rate in effect
from time to time plus the sum of (i) 2% per annum and (ii) the Applicable MPP
Base Rate Margin then in effect for MPP Revolving Loans which are Base Rate
Loans.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on the last Business Day of
March, June, September and December, (ii) in respect of each Eurodollar Loan, on
the last day of each Interest Period applicable thereto and, in the case of an
Interest Period in excess of three months, on the dates which are successively
three months after the commencement of such Interest Period, and (iii) in
respect of each Loan, on any prepayment or conversion (on the amount prepaid or
converted), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) All computations of interest hereunder shall be made in accordance
with section 12.7(b).
(f) The Administrative Agent upon determining the interest rate for
any Borrowing shall promptly notify the Borrower and the Lenders thereof.
(g) As used herein, the term "Applicable MPP Base Rate Margin" means
0.00% per annum and the term "Applicable MPP Eurodollar Margin" means 1+1/8% per
annum; provided, that if a Default under section 9.1(a) or Event of Default
shall have occurred and be continuing, the Applicable MPP Base Rate Margin and
the Applicable MPP Eurodollar Rate Margin shall so long as such Default or Event
of Default shall be continuing be the highest percentage rates per annum
indicated in the Pricing Grid tables which appear below, based on the ratio
referred to in section 8.12(a) or (b), whichever is applicable, and provided,
further, that if subsequent to the fiscal quarter of the Borrower ended nearest
to September 30, 1996, no Default under section 9.1(a) or Event of Default shall
have occurred and be continuing, the Applicable MPP Base Rate Margin and the
Applicable MPP Eurodollar Margin will change to the percentage rate per annum
indicated in the Pricing Grid tables which appear below, based on the ratio
referred to in section 8.12(a) or (b), whichever is applicable. Changes in the
Applicable MPP Base Rate Margin and the Applicable MPP Eurodollar Margin based
upon changes in such ratio shall become effective on the first day of the month
following the delivery to the Administrative Agent pursuant to clause (a) or (b)
of section 7.1 of the financial statements of the Borrower, accompanied by the
certificate referred to in clause (e) of section 7.1, demonstrating the
computation of such ratio, based upon the ratio in effect at the end of the
applicable period covered by such financial statements. Any changes in the
Applicable MPP Base Rate Margin or Applicable MPP Eurodollar Margin shall be
determined by the Managing Agent and from time to time, or promptly upon
request, the Managing
5
<PAGE>
Agent will provide notice of such determinations to the
Borrower, the Administrative Agent and the Lenders. Any such determination by
the Managing Agent pursuant to this section 1.8(g) shall be conclusive and
binding absent manifest error.
PRICING GRID
<TABLE>
<CAPTION>
===================================================================================================================================
Ratio Provided Applicable MPP Base Applicable MPP
in 8.12(a) Rate Margin Eurodollar Margin
===================================================================================================================================
<S> <C> <C>
[greater than] 4.00 to 1.00 [less than or equal to] 4.75 to 1.00 3/4 of 1% 2+1/4%
- -----------------------------------------------------------------------------------------------------------------------------------
[greater than] 3.25 to 1.00 [less than or equal to] 4.00 to 1.00 1/2 of 1% 2%
- -----------------------------------------------------------------------------------------------------------------------------------
[greater than] 2.50 to 1.00 [less than or equal to] 3.25 to 1.00 1/8 of 1% 1+5/8%
- -----------------------------------------------------------------------------------------------------------------------------------
[greater than] 1.50 to 1.00 [less than or equal to] 2.50 to 1.00 0% 1+3/8%
- -----------------------------------------------------------------------------------------------------------------------------------
[less than or equal to] 1.50 to 1.00 0% 1+1/8%
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
Ratio Provided Applicable MPP Base Applicable MPP
in 8.12(a) Rate Margin Eurodollar Margin
===================================================================================================================================
<S> <C> <C>
[greater than] 3.25 to 1.00 1/2 of 1% 2%
- -----------------------------------------------------------------------------------------------------------------------------------
[greater than] 2.50 to 1.00 [less than or equal to] 3.25 to 1.00 1/8 of 1% 1+5/8%
- -----------------------------------------------------------------------------------------------------------------------------------
[greater than] 1.50 to 1.00 [less than or equal to] 2.50 to 1.00 0% 1+3/8%
- -----------------------------------------------------------------------------------------------------------------------------------
[less than or equal to] 1.50 to 1.00 0% 1+1/8%
===================================================================================================================================
</TABLE>
(h) As used herein, the term "Applicable DPP Base Rate Margin" means
0% per annum and the term "Applicable DPP Eurodollar Margin" means 7/8 of 1% per
annum; provided, that if a Default under section 9.1(a) or Event of Default
shall have occurred and be continuing, the Applicable DPP Base Rate Margin and
the Applicable DPP Eurodollar Rate Margin shall so long as such Default or Event
of Default shall be continuing be the highest percentage rates per annum
indicated in the Pricing Grid tables which appear below, based on the leverage
ratio referred to in section 14(b) of the Parent Guaranty, and provided,
further, that if subsequent to the fiscal quarter of the Parent ended nearest to
June 30, 1996, no Default under section 9.1(a) or Event of Default shall have
occurred and be continuing, the Applicable DPP Base Rate Margin and the
Applicable DPP Eurodollar Margin will change to the percentage rate per annum
indicated in the Pricing Grid table which appears below, based on the leverage
ratio referred to in section 14(b) of the Parent Guaranty. Changes in the
Applicable DPP Base Rate Margin and the Applicable DPP Eurodollar Margin based
upon changes in such ratio shall become effective on first day of the month
following the delivery to the Administrative Agent pursuant to subdivision (a)
or (b) of section 7 of the Parent Guaranty of the financial statements of the
Parent, accompanied by the certificate referred to in subdivision (c) of such
section, demonstrating the computation of such ratio, based upon the ratio in
effect at the end of the applicable period covered by such financial statements.
Any changes in the Applicable DPP Base Rate Margin or Applicable DPP Eurodollar
Margin shall be determined by the Managing Agent and from time to time, or
promptly upon request, the Managing Agent will provide notice of such
determinations to the Borrower, the Administrative Agent and the Lenders. Any
such determination by the Managing Agent pursuant to this section 1.8(h) shall
be conclusive and binding absent manifest error.
6
<PAGE>
PRICING GRID
<TABLE>
<CAPTION>
===================================================================================================================================
Applicable DPP Base Applicable DPP
Leverage Ratio Rate Margin Eurodollar Margin
===================================================================================================================================
<S> <C> <C>
[less than or equal to] 2.00 to 1.00 0% 3/4 of 1%
- -------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 2.00 to 1.00 [less than or equal to] 2.25 to 1.00 0% 7/8 of 1%
- -------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 2.25 to 1.00 [less than or equal to] 2.50 to 1.00 0% 1%
- -------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 2.50 to 1.00 [less than or equal to] 2.75 to 1.00 1/8 of 1% 1+1/8%
- -------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 2.75 to 1.00 [less than or equal to] 3.00 to 1.00 1/4 of 1% 1+1/4%
- -------------------------------------------------------------------- ------------------------------ -------------------------------
[greater than] 3.00 to 1.00 1/2 of 1% 1+1/2%
==================================================================== ============================== ===============================
</TABLE>
1.9. Interest Periods. (a) At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 1:00 P.M. (local time at the Notice
Office) on the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of Eurodollar Loans, it shall have the right to elect
by giving the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of the Interest Period applicable to such Borrowing, which
Interest Period shall, at the option of the Borrower, be a one, two, three or
six month period. Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of
such Borrowing shall commence on the day on which the next preceding
Interest Period expires;
(ii) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the end
of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day; and
(iv) no Interest Period may be elected at any time when a
Default under section 9.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree.
(b) If upon the expiration of any Interest Period the Borrower has
failed to (or may not) elect a new interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing to Base Rate Loans effective
as of the expiration date of such current Interest Period.
1.10. Increased Costs, Illegality, etc. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender, shall have determined on a reasonable
basis (which determination shall, absent manifest error, be final and conclusive
and binding upon all parties hereto):
7
<PAGE>
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the
Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder in
an amount which such Lender deems material with respect to any
Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a
change in the rate of taxes or similar charges) because of (x) any
change since the Effective Date in any applicable law, governmental
rule, regulation, guideline, order or request (whether or not having
the force of law), or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves includable in the Eurodollar Rate pursuant
to the definition thereof) and/or (y) other circumstances adversely
affecting the interbank Eurodollar market or the position of such
Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any change since the Effective Date in any law,
governmental rule, regulation, guideline or order, or the
interpretation or application thereof, or would conflict with any
thereof not having the force of law but with which such Lender
customarily complies or has become impracticable as a result of a
contingency occurring after the Effective Date which materially
adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within 10 Business Days
of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by the Borrower or, in the case of a Notice of Borrowing,
shall, at the option of the Borrower, be deemed converted into a Notice of
Borrowing for Base Rate Loans to be made on the date of Borrowing contained in
such Notice of Borrowing, (y) in the case of clause (ii) above, the Borrower
shall pay to such Lender, upon written demand therefor, such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender shall determine) as shall be required to
compensate such Lender, for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to such
Lender, showing the basis for the calculation thereof, which basis must be
reasonable, submitted to the Borrower by such Lender shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions
specified in section 1.10(b) as promptly as possible and, in any event, within
the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to section 1.10(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrower was
notified by a Lender pursuant to section 1.10(a)(ii) or (iii), cancel said
Borrowing, convert the related Notice of Borrowing into one requesting a
Borrowing of Base Rate Loans or require the affected Lender to make its
requested Loan as a Base Rate Loan, or (ii) if the affected Eurodollar Loan is
then outstanding, upon at least one Business Day's notice to the Administrative
Agent, require the affected Lender to convert each such Eurodollar Loan into a
Base Rate Loan, provided that if more than one Lender is affected at any time,
then all affected Lenders must be treated the same pursuant to this section
1.10(b).
8
<PAGE>
(c) If any Lender shall have determined that after the Effective Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank: or comparable agency, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 1.10(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth the basis
of the calculation of such additional amounts, which basis must be reasonable,
although the failure to give any such notice shall not release or diminish any
of the Borrower's obligations to pay additional amounts pursuant to this section
1.10(c) upon the subsequent receipt of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, (i) no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under section 1.10, 2.5 or 4.4 for any amounts incurred or accruing more
than 90 days prior to the giving of notice to the Borrower of additional costs
or other amounts of the nature described in such sections, and (ii) no Lender
shall demand compensation for any reduction referred to in section 1.10(c) or
payment or reimbursement of other amounts under section 2.5 or 4.4 if it shall
not at the time be the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances under comparable
provisions of other credit agreements.
1.11. Compensation. The Borrower shall compensate each Lender, upon
its written request (which request shall set forth the detailed basis for
requesting and the method of calculating such compensation), for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund its Eurodollar Loans)
which such Lender may sustain: (i) if for any reason (other than a default by
such Lender or the Administrative Agent) a Borrowing of Eurodollar Loans does
not occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to section 1.10(a)); (ii) if any repayment, prepayment or conversion of
any of its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period applicable thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Eurodollar Loans when required by the terms of this
Agreement or (y) an election made pursuant to section 1.10(b).
1.12. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of section 1.10(a)(ii) or
(iii), 1.10(c), 2.5 or 4.4 with respect to such Lender, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Lender) to designate another lending office for any Loans or Commitment
affected by such event, provided that such designation is made on such terms
that such Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such section. Nothing in this section 1.12 shall
affect or postpone any of the obligations of the Borrower or the right of any
Lender provided in section 1.10, 2.5 or 4.4.
SECTION 2. LETTERS OF CREDIT
2.1. Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Closing Date and prior to the
date that is 30 days prior to the Revolving Loan Maturity Date to issue, for the
account of the Borrower or any of
9
<PAGE>
its Subsidiaries and in support of (x) trade obligations, workmen's
compensation and other obligations of the Borrower or any such Subsidiary
incurred in the ordinary course of its business and/or (y) such other
obligations of the Borrower or any such Subsidiary to any other person that are
acceptable to the Administrative Agent and such Letter of Credit Issuer, and
subject to and upon the terms and conditions herein set forth such Letter of
Credit Issuer agrees to issue from time to time, irrevocable standby, direct pay
or documentary letters of credit in such form as may be approved by such Letter
of Credit Issuer and the Administrative Agent (each such letter of credit (and
each Existing Letter of Credit described in section 2.1(d)), a "Letter of
Credit" and collectively, the "Letters of Credit").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed either (x) $70,000,000 or (y) when added
to the aggregate principal amount of all Loans then outstanding, an amount equal
to the Total Commitment at such time, and (ii) each Letter of Credit shall have
an expiry date (including any renewal periods) occurring not later than 5 days
prior to the Revolving Loan Maturity Date, on terms acceptable to the
Administrative Agent and the relevant Letter of Credit Issuer.
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless such Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Lender or Lenders, including by cash collateralizing such Defaulting Lender's or
Lenders' Percentage of the Letter of Credit Outstandings.
(d) Annex VII hereto contains a description of all letters of credit
outstanding on, and to continue in effect after, the Closing Date. Each such
letter of credit issued by a bank that is or becomes a Lender under this
Agreement on the Effective Date (each, an "Existing Letter of Credit") shall
constitute a "Letter of Credit" for all purposes of this Agreement, issued, for
purposes of section 2.4(a), on the Closing Date, and the Borrower, the
Administrative Agent and the Lenders hereby agree that, from and after such
date, the terms of this Agreement shall apply to such Letters of Credit,
superseding any other agreement theretofore applicable to them to the extent
inconsistent with the terms hereof.
2.2. Letter of Credit Requests: Notices of Issuance2.2. Letter of
Credit Requests: Notices of Issuance. (a) Whenever it desires that a Letter of
Credit be issued, the Borrower shall give the Administrative Agent and the
Letter of Credit Issuer written notice (including by way of telecopier) in the
form of Exhibit A-2 hereto prior to 1:00 P.M. (local time at the Notice Office)
at least five Business Days (or such shorter period as may be acceptable to the
relevant Letter of Credit Issuer) prior to the proposed date of issuance (which
shall be a Business Day) (each a "Letter of Credit Request"), which Letter of
Credit Request shall include such supporting documents that such Letter of
Credit Issuer customarily requires in connection therewith (including, in the
case of a Letter of Credit for an account party other than the Borrower, an
application for, and if applicable a reimbursement agreement with respect to,
such Letter of Credit). Any such documents executed in connection with the
issuance of a Letter of Credit, including the Letter of Credit itself, are
herein referred to as "Letter of Credit Documents". In the event of any
inconsistency between any of the terms or provisions of any Letter of Credit
Document and the terms and provisions of this Agreement respecting Letters of
Credit, the terms and provisions of this Agreement shall control. The
Administrative Agent shall promptly notify each Lender of each Letter of Credit
Request.
(b) Each Letter of Credit Issuer shall, on the date of each issuance
of a Letter of Credit by it, give the Administrative Agent, each Lender and the
Borrower written notice of the issuance of such Letter of Credit, accompanied by
a copy to the Administrative Agent of the Letter of Credit or Letters of Credit
issued by it. Each Letter of Credit Issuer shall provide to the Administrative
Agent a quarterly (or monthly if requested by any Lender) summary describing
each Letter of Credit issued by such Letter of Credit Issuer and then
outstanding.
2.3. Agreement to Repay Letter of Credit Drawings2.3. Agreement to
Repay Letter of Credit Drawings. (a) The Borrower hereby agrees to reimburse (or
cause any Subsidiary for whose account a Letter of Credit was issued to
reimburse) each Letter of Credit Issuer, by making payment directly to such
Letter of Credit Issuer in immediately available funds at the payment office of
such Letter of Credit Issuer, for any payment or disbursement made by such
Letter of Credit Issuer under any Letter of Credit (each such amount so paid or
disbursed until reimbursed, an "Unpaid Drawing") immediately after, and in any
event on the date on which, such Letter of Credit Issuer notifies the Borrower
(or any such Subsidiary for
10
<PAGE>
whose account such Letter of Credit was issued) of such payment or disbursement
(which notice to the Borrower (or such Subsidiary) shall be delivered reasonably
promptly after any such payment or disbursement), with interest on the amount so
paid or disbursed by such Letter of Credit Issuer, to the extent not reimbursed
prior to 1:00 P.M. (local time at the payment office of the Letter of Credit
Issuer) on the date of such payment or disbursement, from and including the date
paid or disbursed to but not including the date such Letter of Credit Issuer is
reimbursed therefor at a rate per annum which shall be the rate then applicable
to MPP Revolving Loans which are Base Rate Loans (plus an additional 2% per
annum if not reimbursed by the third Business Day after the date of such payment
or disbursement), in the case of payments or disbursements related to Allocated
MPP Letter of Credit Outstandings, or the rate then applicable to DPP Revolving
Loans which are Base Rate Loans (plus an additional 2% per annum if not
reimbursed by the third Business Day after the date of such payment or
disbursement), in the case of payments or disbursements related to Allocated DPP
Letter of Credit Outstandings, any such interest also to be payable on demand.
(b) The Borrower's obligation under this section 2.3 to reimburse each
Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against such Letter of Credit Issuer,
the Administrative Agent, any other Letter of Credit Issuer or any Lender,
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
drawing, provided, however that the Borrower shall not be obligated to reimburse
a Letter of Credit Issuer for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer.
2.4. Letter of Credit Participations. (a) Immediately upon the
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each Lender, and
each Lender (each a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Percentage, in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the obligations of
the Borrower under this Agreement with respect thereto (although Letter of
Credit Fees shall be payable directly to the Administrative Agent for the
account of the Lenders as provided in section 3.1(b) and the Participants shall
have no right to receive any portion of any Facing Fees) and any security
therefor or guaranty pertaining thereto. Upon any change in the Commitments of
the Lenders pursuant to section 12.4(b), it is hereby agreed that, with respect
to all outstanding Letters of Credit and Unpaid Drawings, there shall be an
automatic adjustment to the participations pursuant to this section 2.4 to
reflect the new Percentages of the assigning and assignee Lender.
(b) In determining whether to pay under any Letter of Credit, a Letter
of Credit Issuer shall not have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by a Letter of Credit Issuer under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.
(c) In the event that a Letter of Credit Issuer makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to such Letter of Credit Issuer pursuant to section 2.3(a), such
Letter of Credit Issuer shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each Participant of such failure, and
each Participant shall promptly and unconditionally pay to the Administrative
Agent for the account of such Letter of Credit Issuer, the amount of such
Participant's Percentage of such payment in U.S. dollars and in same day funds,
provided, however, that no Participant shall be obligated to pay to the
Administrative Agent its Percentage of such unreimbursed amount for any wrongful
payment made by such Letter of Credit Issuer under a Letter of Credit as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of such Letter of Credit Issuer. If the Administrative Agent so
notifies any Participant required to fund a payment under a Letter of Credit
prior to 11:00 A.M. (local time at the Notice Office) on any Business Day, such
Participant shall make available to the Administrative Agent for the account of
the relevant Letter of Credit Issuer such Participant's Percentage of the amount
of such payment on such Business Day in same day
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funds. If and to the extent such Participant shall not have so made its
Percentage of the amount of such payment available to the Administrative Agent
for the account of the relevant Letter of Credit Issuer, such Participant agrees
to pay to the Administrative Agent for the account of such Letter of Credit
Issuer, forthwith on demand such amount, together with interest thereon, for
each day from such date until the date such amount is paid to the Administrative
Agent for the account of such Letter of Credit Issuer at the Federal Funds
Effective Rate. The failure of any Participant to make available to the
Administrative Agent for the account of the relevant Letter of Credit Issuer its
Percentage of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Administrative
Agent for the account of such Letter of Credit Issuer its Percentage of any
payment under any Letter of Credit on the date required, as specified above, but
no Participant shall be responsible for the failure of any other Participant to
make available to the Administrative Agent for the account of such Letter of
Credit Issuer such other Participant's Percentage of any such payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to section 2.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Percentage thereof, in U.S. dollars and in same
day funds, an amount equal to such Participant's Percentage of the principal
amount thereof and interest thereon accruing after the purchase of the
respective participations, as and to the extent so received.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off defense or other
right which the Borrower may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit
(or any person for whom any such transferee may be acting), the
Administrative Agent, any Letter of Credit Issuer, any Lender, or
other person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit),
other than any claim which the Borrower (or any Subsidiary which is
the account party with respect to a Letter of Credit) may have against
any applicable Letter of Credit Issuer for gross negligence or wilful
misconduct of such Letter of Credit Issuer in making payment under any
applicable Letter of Credit;
(iii) any draft, certificate or other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents: or
(v) the occurrence of any Default or Event of Default.
2.5. Increased Costs. If after the Effective Date, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Letter of Credit Issuer or any
Lender with any request or directive (whether or not having the force of law) by
any such authority, central bank or comparable agency (in each case made
subsequent to the Effective Date) shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement against
Letters of Credit issued by such Letter of Credit Issuer or such Lender's
participation therein, or (ii) shall impose
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on such Letter of Credit Issuer or any Lender any other conditions affecting
this Agreement, any Letter of Credit or such Lender's participation therein; and
the result of any of the foregoing is to increase the cost to such Letter of
Credit Issuer or such Lender of issuing, maintaining or participating in any
Letter of Credit, or to reduce the amount of any sum received or receivable by
such Letter of Credit Issuer or such Lender hereunder (other than any increased
cost or reduction in the amount received or receivable resulting from the
imposition of or a change in the rate of taxes or similar charges), then, upon
demand to the Borrower by such Letter of Credit Issuer or such Lender (a copy of
which notice shall be sent by such Letter of Credit Issuer or such Lender to the
Administrative Agent), the Borrower shall pay to such Letter of Credit Issuer or
such Lender such additional amount or amounts as will compensate any such Letter
of Credit Issuer or such Lender for such increased cost or reduction. A
certificate submitted to the Borrower by any Letter of Credit Issuer or any
Lender, as the case may be (a copy of which certificate shall be sent by such
Letter of Credit Issuer or such Lender to the Administrative Agent), setting
forth the basis for the determination of such additional amount or amounts
necessary to compensate any Letter of Credit Issuer or such Lender as aforesaid
shall be conclusive and binding on the Borrower absent manifest error, although
the failure to deliver any such certificate shall not release or diminish any of
the Borrower's obligations to pay additional amounts pursuant to this section
2.5. Reference is hereby made to the provisions of section 1.10(d) for certain
limitations upon the rights of a Letter of Credit Issuer or Lender under this
section.
2.6. Obligations Absolute. The obligations of the Borrower under this
Agreement in respect of any Letter of Credit and under any other agreement or
instrument relating to any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement (as the same may be amended from time to time) and such other
agreement or instrument under all circumstances, including, without limitation,
to the extent permitted by law, the following circumstances:
(i) any lack of validity or enforceability of any agreement
or instrument the obligations under which are supported by a Letter of
Credit;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations of the Borrower
(or any Subsidiary) in respect of the Letters of Credit or any other
amendment or waiver of or any consent to departure from all or any of
the Letter of Credit Documents or any other Credit Document;
(iii) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the obligations of the
Borrower (or any Subsidiary) in respect of the Letters of Credit;
(iv) the existence of any claim, set-off, defense or other
right that the Borrower (or any Subsidiary) may have at any time
against any beneficiary or any transferee of a Letter of Credit (or
any persons for whom any such beneficiary or any such transferee may
be acting), the Letter of Credit Issuer, or any other person, whether
in connection with the Credit Documents, the transactions contemplated
hereby or by the Letter of Credit Documents or any unrelated
transaction, other than any claim which the Borrower (or any
Subsidiary which is the account party with respect to a Letter of
Credit) may have against any applicable Letter of Credit Issuer for
gross negligence or wilful misconduct of such Letter of Credit Issuer
in making payment under any applicable Letter of Credit;
(v) any statement or any other document presented under or in
connection with any Letter of Credit or other Credit Document proving
to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect,
provided that payment by a Letter of Credit Issuer under such Letter
of Credit against presentation of such statement or document shall not
have constituted gross negligence or willful misconduct;
(vi) payment by a Letter of Credit Issuer under a Letter of
Credit against presentation of a draft or certificate that does not
comply with the terms of the Letter or Credit, except any such payment
resulting solely from the gross negligence or willful misconduct of
the Letter of Credit Issuer; and
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(vii) any other circumstance or happening whatsoever other
than the payment in full of all obligations hereunder in respect of
any Letter of Credit or any agreement or instrument relating to any
Letter of Credit, whether or not similar to any of the foregoing, that
might otherwise constitute a defense available to, or a discharge of,
the Borrower.
2.7. Guaranty of Subsidiary Letter of Credit Obligations. (a) The
Borrower hereby unconditionally guarantees, for the benefit of the
Administrative Agent and the Lenders, the full and punctual payment of the
Obligations of each Subsidiary under each Letter of Credit Document to which
such Subsidiary is now or hereafter becomes a party. Upon failure by any such
Subsidiary to pay punctually any such amount, the Borrower shall forthwith on
demand by the Administrative Agent pay the amount not so paid at the place and
in the currency and otherwise in the manner specified in this Agreement or any
applicable Letter of Credit Document.
(b) As a separate, additional and continuing obligation, the Borrower
unconditionally and irrevocably undertakes and agrees, for the benefit of the
Administrative Agent and the Lenders, that, should any amounts not be
recoverable from the Borrower under section 2.7(a) for any reason whatsoever
(including, without limitation, by reason of any provision of any Credit
Document or any other agreement or instrument executed in connection therewith
being or becoming void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any notice or knowledge thereof by any Lender, the
Administrative Agent, any of their respective Affiliates, or any other person,
at any time, the Borrower as sole, original and independent obligor, upon demand
by the Administrative Agent, will make payment to the Administrative Agent, for
the account of the Lenders and the Administrative Agent, of all such obligations
not so recoverable by way of full indemnity, in such currency and otherwise in
such manner as is provided in the Credit Documents.
(c) The obligations of the Borrower under this section shall be
unconditional and absolute and, without limiting the generality of the foregoing
shall not be released, discharged or otherwise affected by the occurrence, one
or more times, of any of the following:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect to any obligation of any Subsidiary under any
Letter of Credit Document, by operation of law or otherwise:
(ii) any modification or amendment of or supplement to this
Agreement, any Note or any other Credit Document;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for any obligation of the Borrower under this
Agreement, any Note or any other Credit Document or of any Subsidiary
under any Letter of Credit Document;
(iv) any change in the corporate existence, structure or
ownership of any Subsidiary or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Subsidiary or
its assets or any resulting release or discharge of any obligation of
any Subsidiary contained in any Letter of Credit Document;
(v) the existence of any claim, set-off or other rights which
the Borrower may have at any time against any Subsidiary, the
Administrative Agent, 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;
(vi) any invalidity or unenforceability relating to or
against any Subsidiary for any reason of any Letter of Credit
Document, or any provision of applicable law or regulation purporting
to prohibit the payment by any Subsidiary of any Obligations in
respect of any Letter of Credit; or
(vii) any other act or omission to act or delay of any kind
by any Subsidiary, the Administrative Agent, any Lender or any other
person or any other circumstance whatsoever which
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might, but for the provisions of this section, constitute a legal or
equitable discharge of the Borrower's obligations under this section.
(d) The Borrower's obligations under this section shall remain in full
force and effect until the Commitments shall have terminated and the principal
of and interest on the Notes and all other amounts payable by the Borrower and
each other Credit Party under the Credit Documents shall have been paid in full.
If at any time any payment of any of the Obligations of any Subsidiary in
respect of any Letter of Credit Documents is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of such
Subsidiary, the Borrower's obligations under this section with respect to such
payment shall be reinstated at such time as though such payment had been due but
not made at such time.
(e) The Borrower 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 any
Subsidiary or any other person, or against any collateral or guaranty of any
other person.
(f) Until the indefeasible payment in full of all of the Obligations
and the termination of the Commitments of the Lenders hereunder, the Borrower
shall have no rights, by operation of law or otherwise, upon making any payment
under this section to be subrogated to the rights of the payee against any
Subsidiary with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by any Subsidiary in respect thereof.
(g) In the event that acceleration of the time for payment of any
amount payable by any Subsidiary under any Letter of Credit Document is stayed
upon insolvency, bankruptcy or reorganization of such Subsidiary, all such
amounts otherwise subject to acceleration under the terms of any applicable
Letter of Credit Document shall nonetheless by payable by the Borrower under
this section forthwith on demand by the Administrative Agent.
SECTION 3. FEES; COMMITMENTS.
3.1. Fees. (a) The Borrower agrees to pay to the Administrative Agent
a Commitment Commission ("Commitment Commission") for the account of each Non-
Defaulting Lender for the period from and including the Effective Date to but
not including the date the Total Commitment has been terminated, computed at a
rate equal to 3/8 of 1 % per annum on the average daily Unutilized Commitment of
such Lender. Such Commitment Commission shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December of
each year, commencing September, 1996, and on the date upon which the Total
Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent, for the
account of each Non-Defaulting Lender, pro rata on the basis of its Percentage,
a fee in respect of each Letter of Credit (the "Letter of Credit Fee") computed
(i) in the case of Letters of Credit constituting a part of the Allocated MPP
Letter of Credit Outstandings, at the rate per annum equal to the Applicable MPP
Eurodollar Margin in effect from time to time, and (ii) in the case of Letters
of Credit constituting a part of the Allocated DPP Letter of Credit
Outstandings, at the rate per annum equal to the Applicable DPP Eurodollar
Margin in effect from time to time, in each case on the average daily Stated
Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December of each year, commencing September, 1996, and on the date
upon which the Total Commitment is terminated.
(c) The Borrower agrees to pay directly to each Letter of Credit
Issuer a fee in respect of each Letter of Credit issued by it (the "Facing
Fee"), computed at such rate as may from time to time be agreed between such
Letter of Credit Issuer and the Borrower, on the average daily Stated Amount of
such Letter of Credit. Such Facing Fees shall be due and payable on such dates
as may be agreed in the case of any Letter of Credit by the Borrower and the
Letter of Credit Issuer which has issued such Letter of Credit.
(d) The Borrower agrees to pay directly to each Letter of Credit
Issuer upon each issuance of, drawing under, and/or amendment of, a Letter of
Credit issued by it such amount as shall at the time of such issuance, drawing
or amendment be the administrative charge which such Letter of Credit Issuer is
customarily charging for issuances of, drawings under or amendments of, letters
of credit issued by it.
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(e) The Borrower shall pay to the Administrative Agent on the Closing
Date and thereafter for its own account and/or for distribution to the Lenders
such fees as heretofore agreed by the Borrower, the Administrative Agent and the
Documentation Agent.
(f) All computations of Fees shall be made in accordance with section
12.7(b).
3.2. Voluntary Reduction of Commitments. Upon at least three Business
Days' prior written notice (or telephonic notice confirmed in writing) to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the Borrower shall have the
right, without premium or penalty, to terminate or partially reduce the
Unutilized Total Commitment, provided that (i) any such termination shall apply
to proportionately and permanently reduce the Commitment, if any, of each of the
Lenders, and (ii) any partial reduction pursuant to this section 3.2 shall be in
the amount of at least $10,000,000 (or, if greater, in integral multiples of
$1,000,000).
3.3. Mandatory Adjustments of Commitments, etc. (a) The Commitment of
each Lender shall terminate on the Expiration Date unless the Closing Date has
occurred on or before such date .
(b) On each date upon which a mandatory prepayment of Loans pursuant
to section 4.2(d) is required, the Total Commitment shall be permanently reduced
by an amount equivalent to the principal amount of the Loans so prepaid.
(c) The Total Commitment (and the Commitment of each Lender) shall
terminate on the earlier of (x) the Revolving Loan Maturity Date and (y) the
date on which a Change of Control occurs.
(d) Each partial reduction of the Total Commitment provided for in
this section 3.3 shall apply pro rata to the Commitment of each Lender.
3.4. Extension of Revolving Loan Maturity Date. At any time following
the second anniversary of the Closing Date and during the 30 day period
following delivery by the Borrower pursuant to section 7.1(a) of its
consolidated financial statements for its fiscal year then most recently ended,
and annually thereafter during the 30 day period following delivery by the
Borrower of its consolidated financial statements pursuant to section 7.1(a),
the Borrower may request the Administrative Agent to determine if all of the
Lenders are then willing to extend the Revolving Loan Maturity Date for a single
additional year. If the Borrower so requests, the Administrative Agent will so
advise the Lenders. If the Lenders in their sole discretion are all willing to
so extend the Revolving Loan Maturity Date, after taking into account such
considerations as any Lender may deem relevant (including, without limitation,
the financial condition of the Borrower and applicable termination provisions
applicable to the Parent Guaranty), the Borrower, the Administrative Agent and
all of the Lenders (including each Letter of Credit Issuer) shall execute and
deliver a definitive written instrument so extending the Revolving Loan Maturity
Date. No such extension of the Revolving Loan Maturity Date shall be valid or
effective for any purpose unless such definitive written instrument is so signed
and delivered within 60 days following the giving by the Administrative Agent of
notice to the Lenders that the Borrower has requested such an extension, and
only one such extension may be granted pursuant to this provision.
SECTION 4. PAYMENTS.
4.1. Voluntary Prepayments. The Borrower shall have the right to
prepay Loans, in whole or in part, without premium or penalty, from time to time
on the following terms and conditions: (i) no MPP Revolving Loans may be prepaid
at any time if after giving effect thereto any DPP Revolving Loans are
outstanding; (ii) the Borrower shall give the Administrative Agent at the
Payment Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, whether such Loans are MPP Revolving
Loans or DPP Revolving Loans, the amount of such prepayment and (in the case of
Eurodollar Loans) the specific Borrowing(s) pursuant to which made, which notice
shall be received by the Administrative Agent by (x) 1:00 P.M. (local time at
the Notice Office) one Business Day prior to the date of such prepayment, in the
case of any prepayment of Eurodollar Loans, or (y) 12:00 noon (local time at the
Notice Office) on the date of such prepayment, in the case of any prepayment of
Base
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Rate Loans, and which notice shall promptly be transmitted by the Administrative
Agent to each of the Lenders; (iii) each partial prepayment of any Borrowing
shall be in an aggregate principal of at least $500,000 or an integral multiple
of $100,000 in excess thereof, in the case of Base Rate Loans and at least
$2,500,000 or an integral multiple of $500,000 in excess thereof, in the case of
Eurodollar Loans, provided that no partial prepayment of Eurodollar Loans made
pursuant to a Borrowing shall reduce the aggregate principal amount of the Loans
outstanding pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount applicable thereto; (iv) each prepayment in respect of any
Loans made pursuant to a Borrowing shall be applied pro rata among such Loans;
and (v) each prepayment of Eurodollar Loans pursuant to this section 4.1 on any
date other than the last day of the Interest period applicable thereto shall be
accompanied by any amounts payable in respect thereof under section 1.11.
4.2. Mandatory Prepayments. (a) If on any date (after giving effect
to any other payments on such date) the sum of (i) the aggregate outstanding
principal amount of Loans plus (ii) the aggregate amount of Letter of Credit
Outstandings, exceeds the Total Commitment as then in effect, the Borrower shall
prepay on such date that principal amount of Loans and, after Loans have been
paid in full, Unpaid Drawings, in an aggregate amount equal to such excess. If,
after giving effect to the prepayment of Loans and Unpaid Drawings, the
aggregate amount of Letter of Credit Outstandings exceeds the Total Commitment
as then in effect, the Borrower shall pay to the Administrative Agent an amount
in cash and/or Cash Equivalents equal to such excess and the Administrative
Agent shall hold such payment as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in form and
substance reasonably satisfactory to the Administrative Agent and the Borrower
(which shall permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent and the Borrower until the proceeds are applied to the
secured obligations).
(b) If on any date (after giving effect to any other payments on such
date) the aggregate outstanding principal amount of MPP Revolving Loans plus the
Allocated MPP Letter of Credit Outstandings, exceeds the MPP Revolving Loan
Sublimit then in effect, the Borrower shall prepay on such date that principal
amount of MPP Revolving Loans in an aggregate amount equal to such excess. If on
any date (after giving effect to any other payments on such date) the aggregate
outstanding principal amount of DPP Revolving Loans plus the Allocated DPP
Letter of Credit Outstandings, exceeds the DPP Revolving Loan Sublimit then in
effect, the Borrower shall prepay on such date that principal amount of DPP
Revolving Loans in an aggregate amount equal to such excess.
(c) Promptly, and in any event not later than the third Business Day
following the date of receipt thereof by the Borrower and/or any of its
Subsidiaries of the Cash Proceeds from any Asset Sale, an amount equal to such
portion of the Net Cash Proceeds then received from such Asset Sale as is
required pursuant to the terms of section 8.2 to be applied as a prepayment of
Loans shall be so applied as a mandatory prepayment of principal of (x) first,
the then outstanding MPP Revolving Loans and (y) second, once no MPP Revolving
Loans remain outstanding, the then outstanding DPP Revolving Loans.
(d) On the date of which a Change of Control occurs the then
outstanding principal amount of all Loans, if any, shall become due and payable
and shall be prepaid in full, and the Borrower shall contemporaneously either
(i) cause all outstanding Letters of Credit to be surrendered for cancellation
(any such Letters of Credit to be replaced by letters of credit issued by other
financial institutions), or (ii) the Borrower shall pay to the Administrative
Agent an amount in cash and/or Cash Equivalents equal to 100% of the Letter of
Credit Outstandings and the Administrative Agent shall hold such payment as
security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower (which shall permit
certain investments in Cash Equivalents satisfactory to the Administrative Agent
and the Borrower until the proceeds are applied to the secured obligations).
(e) With respect to each prepayment of Loans required by this section
4.2, the Borrower shall designate the Types of Loans which are to be prepaid,
whether such Loans are MPP Revolving Loans or DPP Revolving Loans and the
specific Borrowing(s) pursuant to which such prepayment is to be made, provided
that (i) the Borrower shall first so designate all Loans that are Base Rate
Loans and Eurodollar Loans with Interest Periods ending on the date of
prepayment prior to designating any other Eurodollar Loans for prepayment, (ii)
if the outstanding principal amount of Eurodollar Loans made pursuant to a
Borrowing is reduced below the applicable Minimum Borrowing Amount as a result
of any such prepayment, then all the Loans outstanding pursuant to such
Borrowing shall be converted into Base Rate Loans, and (iii) each prepayment of
any Loans made pursuant to a Borrowing shall be
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applied pro rata among such Loans. In the absence of a designation by the
Borrower as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its sole discretion with a view,
but no obligation, to minimize breakage costs owing under section 1.11.
4.3. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its pro rata share) account of
the Lenders entitled thereto, not later than 1:00 P.M. (local time at the
Payment Office) on the date when due and shall be made in immediately available
funds and in lawful money of the United States of America at the Payment Office,
it being understood that written notice by the Borrower to the Administrative
Agent to make a payment from the funds in the Borrower's account at the Payment
Office shall constitute the making of such payment to the extent of such funds
held in such account. Any payments under this Agreement which are made later
than 1:00 P.M. (local time at the Payment Office) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
4.4. Net Payments. (a) All payments made by the Borrower hereunder,
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as provided for in section 4.4(b), all
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax, imposed on or measured by the net income or
net profits of a Lender pursuant to the laws of the jurisdiction under which
such Lender is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located or any subdivision thereof
or therein) and all interest, penalties or similar liabilities with respect to
such non excluded taxes, levies imposts, duties, fees, assessments or other
charges (all such nonexcluded taxes levies, imposts, duties, fees assessments or
other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes and
such additional amounts as may be necessary so that every payment of all amounts
due hereunder, under any Note or under any other Credit Document, after
withholding or deduction for or on account of any Taxes will not be less than
the amount provided for herein or in such Note or in such other Credit Document.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrower agrees to reimburse each Lender, upon the written request
of such Lender for taxes imposed on or measured by the net income or profits of
such Lender pursuant to the laws of the jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Lender is located and for any withholding of income or
similar taxes imposed by the United States of America as such Lender shall
determine are payable by, or withheld from, such Lender in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes, or any withholding or
deduction on account thereof, is due pursuant to applicable law certified copies
of tax receipts, or other evidence satisfactory to the Lender, evidencing such
payment by the Borrower. The Borrower will indemnify and hold harmless the
Administrative Agent and each Lender, and reimburse the Administrative Agent or
such Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid or withheld by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 12.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 4.4(b)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement, any Note or any other Credit Document,
or (ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a
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certificate substantially in the form of Exhibit K (any such certificate, a
"section 4.4(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement, any Note or any other Credit Document. In addition, each Lender
agrees that from time to time after the Effective Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a section 4.4(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement, any Note or any other Credit Document, or it
shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
section 4.4(b). Notwithstanding anything to the contrary contained in section
4.4(a), but subject to section 12.4(b) and the immediately succeeding sentence,
(x) the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or other similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for United States federal income tax purposes and which
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to section 4.4(a) hereof to gross-up payments to be made to a Lender in
respect of income or similar taxes imposed by the United States or any
additional amounts with respect thereto (I) if such Lender has not provided to
the Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to this section 4.4(b) or (II) in the case of a payment other
than interest, to a Lender described in clause (ii) above, to the extent that
such forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this section 4.4 and except as specifically provided for in section
12.4(b), the Borrower agrees to pay additional amounts and indemnify each Lender
in the manner set forth in section 4.4(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the previous sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.
(c) Reference is hereby made to the provisions of section 1.10(d) for
certain limitations upon the rights of a Lender under this section.
SECTION 5. CONDITIONS PRECEDENT.
5.1. Conditions Precedent at Closing Date. The obligation of the
Lenders to make Loans, and of any Letter of Credit Issuer to issue Letters of
Credit, is subject to the satisfaction of each of the following conditions on
the Closing Date:
(a) Effectiveness; Notes. On or prior to the Closing Date,
(i) the Effective Date shall have occurred and (ii) there shall have
been delivered to the Administrative Agent for the account of each
Lender the appropriate Note executed by the Borrower, in each case, in
the amount, maturity and as otherwise provided herein.
(b) Opinions of Counsel. On the Closing Date, the
Administrative Agent shall have received opinions, addressed to the
Administrative Agent and each of the Lenders and dated the Closing
Date, from (i) Greenebaum Doll & McDonald PLLC, special counsel to the
Borrower, substantially in the form of Exhibit C-1 hereto and covering
such other matters incident to the transactions contemplated hereby as
the Administrative Agent or the Documentation Agent may reasonably
request, and (ii) T. Richard Riney, Esq., Transactions Counsel of the
Parent, substantially in the form of Exhibit C-2 hereto and covering
such other matters incident to the transactions contemplated hereby as
the Administrative Agent or the Documentation Agent may reasonably
request, all such opinions to be in form and substance satisfactory to
the Administrative Agent and the Documentation Agent.
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(c) Corporate Proceedings. (i) On the Closing Date, the
Administrative Agent shall have received from (x) each Credit Party a
certificate, dated the Closing Date, signed by the President or any
Vice-President of such Credit Party in the form of Exhibit D hereto
with appropriate insertions and deletions, together with copies of the
articles of incorporation, partnership agreement, limited liability
company agreement, certificate of formation and the bylaws or other
organizational documents of such Credit Party and the resolutions, or
such other administrative approval of such Credit Party referred to in
such certificate and all of the foregoing shall be reasonably
satisfactory to the Administrative Agent, and (y) the Borrower a
certificate of its chief financial officer, dated the Closing Date, to
the effect that all of the applicable conditions set forth in sections
5.1(e), (h), (i), (j) and (k) and 5.2 exist as of such date.
(ii) On the Closing Date, all corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Transaction Documents
shall be reasonably satisfactory in form and substance to the
Administrative Agent and the Documentation Agent, and the
Administrative Agent and the Documentation Agent shall have received
all information and copies of all certificates, documents, and papers,
including good standing certificates and any other records of
corporate proceedings and governmental approvals, if any, which the
Administrative Agent or the Documentation Agent may have reasonably
requested in connection therewith such documents and papers where
appropriate, to be certified by proper corporate or governmental
authorities.
(d) Plans, etc. On or prior to the Closing Date, there shall
have been made available for review by the Administrative Agent and
the Documentation Agent true and correct copies of:
(i) any Plans, and for each Plan (x) that is a
Single-Employer plan the most recently completed actuarial
valuation prepared therefor by such Plan's regular enrolled
actuary and the Schedule B (Actuarial Information) to the
most recent annual report (Form 5500 Series) for each Plan
filed with the Internal Revenue Service and (y) that is a
Multiemployer Plan, each of the documents referred to in
clause (x) either in the possession of the Borrower or any of
its Subsidiaries or any ERISA Affiliate or reasonably
available thereto from the sponsor or trustees of such Plan:
(ii) any collective bargaining agreements or any other
similar agreement or arrangements covering the employees of
the Borrower or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(iii) all agreements evidencing or relating to the
Existing Indebtedness (the "Existing Indebtedness
Agreements");
(iv) all agreements entered into by the Borrower
governing the terms and relative rights of its capital stock,
agreements entered into by shareholders of the Borrower with
and any respect to its capital stock (collectively, the
"Shareholders' Agreements");
(v) any agreement with respect to, the management of the
Borrower or any of its Subsidiaries (collectively, the
"Management Agreements");
(vi) any material employment agreements entered into by
the Borrower or any of its Subsidiaries (collectively, the
"Employment Agreements");
(vii) management contracts relating to assisted living
communities or similar facilities managed by the Borrower or
any of its Subsidiaries (collectively the "Management
Contracts") to the extent in existence on the
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Closing Date; and
(viii) any tax sharing, tax allocation and other similar
agreements entered into by the Borrower and/or any of its
Subsidiaries (collectively, the "Tax Sharing Agreements");
all of which Plans, Collective Bargaining Agreements, Existing
Indebtedness Agreements, Shareholders' Agreements, Management
Agreements, Employment Agreements, Management Contracts and Tax
Sharing Agreements shall be in form and substance satisfactory to the
Administrative Agent and the Documentation Agent.
(e) Adverse Change, etc. From December 31, 1995 to the
Closing Date, nothing shall have occurred (and neither the Lenders nor
the Administrative Agent or the Documentation Agent shall have become
aware of any facts or conditions not previously known) which the
Administrative Agent, the Documentation Agent or the Required Lenders
shall reasonably determine (i) has, or could reasonably be expected to
have, a material adverse effect on the Assets or the rights or
remedies of the Lenders or the Administrative Agent under this
Agreement or any other Credit Document, or on the ability of the
Borrower to perform its obligations to them, or (ii) has, or could
reasonably be expected to have, a Material Adverse Effect.
(f) Litigation. No actions, suits or proceedings shall be
pending or, to the knowledge of the Borrower, threatened against the
Parent or any of its Subsidiaries or any of their assets on the
Closing Date (i) with respect to this Agreement or any other Credit
Document or (ii) which the Administrative Agent, the Documentation
Agent or the Required Lenders shall determine has, or could reasonably
be expected to have, (x) a Material Adverse Effect or (y) a material
adverse effect on the Assets or the rights or remedies of the Lenders
or the Administrative Agent hereunder or under any other Credit
Document or on the ability of any Credit Party to perform its
respective obligations to the Lenders hereunder or under any other
Credit Document.
(g) Approvals. On the Closing Date, all material governmental
and third party approvals in connection with the transactions
contemplated by the Credit Documents and the other Transaction
Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods
shall have expired without any action being taken by any competent
authority (including any court having jurisdiction) which restrains or
prevents such transactions or imposes, in the judgment of the Required
Lenders, the Administrative Agent or the Documentation Agent,
materially adverse conditions upon the consummation of such
transactions.
(h) Reorganization. On or prior to the Closing Date, there
shall have been transferred to the Borrower assets and business
comprising the assisted and independent living divisions of the Parent
in exchange for, among other things, the issuance by the Borrower of
common stock of the Borrower, in accordance with the terms and
provisions of the Incorporation Agreement (collectively, the
"Reorganization"), and the Reorganization shall have been consummated
in compliance with all applicable laws and in a manner reasonably
satisfactory to the Administrative Agent and the Documentation Agent.
(i) Acquisition Documents, etc. On or prior to the Closing
Date, the Borrower shall have delivered to the Administrative Agent
all Acquisition Documents, certified as true and correct by an
Authorized Officer, all of which Acquisition Documents shall be in the
same form as they were in on August 15, 1996 or shall otherwise be
satisfactory to the Administrative Agent and the Documentation Agent
and each of the conditions precedent to the obligations of the
Borrower to consummate the Acquisition shall have been satisfied
(without any waiver thereto not consented to by the Administrative
Agent) to the satisfaction of the Administrative Agent.
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(j) IPO Proceeds; Ownership by Parent Guarantor. On or prior
to the Closing Date, the Borrower shall have received in available
funds at least $50,000,000, consisting of (i) an incremental equity
contribution of $4,350,000 to the Borrower and/or one or more of its
Subsidiaries by the Parent and/or one or more of its Subsidiaries
(other than the Borrower and its Subsidiaries), above and beyond any
equity contribution otherwise provided for pursuant to the
Incorporation Agreement, and (ii) net cash proceeds of at least
$45,650,000 from the initial public issuance of its common stock (the
"IPO") effected as contemplated by the Registration Statement, but
without giving effect to the over-allotment option referred to in the
Registration Statement. After giving effect to the completion of the
IPO (but without regard to such over-allotment option), the Parent
Guarantor shall be the owner, beneficially and of record, of not less
than 55% of the outstanding shares of Common Stock of the Borrower on
a fully diluted basis, if the public offering price per share in the
IPO is $13.00 or greater (63%, if such offering price per share is
less than $13.00).
(k) Other Debt. On the Closing Date and after giving effect
to the consummation of the Transaction, neither the Borrower nor any
of its Subsidiaries shall have any outstanding Indebtedness other than
the Existing Indebtedness described in section 6.18 and no default or
event of default under and as defined in the documentation governing
any such Existing Indebtedness shall have occurred or be continuing
both before and after giving effect to the Transaction.
(l) Parent Guaranty. On the Closing Date, the Borrower, the
Parent and each Subsidiary of the Parent named therein shall have duly
authorized, executed and delivered a Guaranty in the form of Exhibit E
hereto (as modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof, the "Parent Guaranty"),
and the Parent Guaranty shall be in full force and effect.
(m) Subsidiary Guaranty. On the Closing Date, each
Wholly-Owned Subsidiary shall have duly authorized, executed and
delivered a Guaranty in the form of Exhibit F hereto (as modified,
amended or supplemented from time to time in accordance with the terms
hereof and thereof, the "Subsidiary Guaranty"), and the Subsidiary
Guaranty shall be in full force and effect.
(n) Security Documents. (i) Pledge Agreement. On the Closing
Date, each Credit Party named therein shall have duly authorized,
executed and delivered a Pledge Agreement substantially in the form of
Exhibit G hereto (as modified, amended or supplemented from time to
time in accordance with the terms thereof and hereof, the "Pledge
Agreement"), and shall have delivered to the Collateral Agent, as
pledgee thereunder:
(A) all of the certificates and instruments representing
the Pledged Securities referred to therein, endorsed in blank
or accompanied by executed and undated stock or bond powers;
and
(B) executed copies of notices delivered to each
partnership entity or limited liability company entity which
is the issuer of partnership interests or membership
interests, as the case may be, pledged under the Pledge
Agreement and executed copies of acknowledgements executed by
each such entity, together with evidence that such other
actions have been taken as may be necessary or, in the
opinion of the Collateral Agent, desirable to perfect the
security interest purported to be created by the Pledge
Agreement (including, without limitation, evidence that each
such partnership entity or limited liability company entity
has duly recorded the security interest created by the Pledge
Agreement on the partnership or limited liability company
books and records of such entity);
and the Pledge Agreement shall be in full force and effect.
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(ii) Security Agreement. On the Closing Date, each Credit
Party named therein shall have duly authorized, executed and delivered
a Security Agreement substantially in the form of Exhibit H (as
modified, supplemented or amended from time to time in accordance with
the terms thereof and hereof, the "Security Agreement") covering all
of such Credit Party's present and future Security Agreement
Collateral, in each case together with:
(A) executed copies of Financing Statements (Form UCC-1)
in appropriate form for filing under the UCC of each
jurisdiction as may be necessary to perfect the security
interests purported to be created by the Security Agreement;
(B) certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, each of recent
date listing all effective financing statements that name
each Credit Party as debtor and that are filed in the
jurisdictions referred to in clause (A), together with copies
of such financing statements (none of which shall cover the
Collateral except (x) those with respect to which appropriate
termination statements executed by the secured lender
thereunder have been delivered to the Collateral Agent and
(y) to the extent evidencing Liens permitted pursuant to
section 8.3(d));
(C) evidence of the completion of all other recordings
and filings of, or with respect to, the Security Agreement
as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the security interests intended
to be created by the Security Agreement; and
(D) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to
perfect and protect the security interest purported to be
created by the Security Agreement have been taken;
and the Security Agreement shall be in full force and effect.
(iii) Mortgages. On the Closing Date, the Collateral Agent
shall have received:
(A) fully executed counterparts of mortgages, deeds of
trust or deeds to secure debt, in each case in form and
substance reasonably satisfactory to the Collateral Agent and
the Documentation Agent (each as modified, amended or
supplemented from time to time in accordance under the terms
hereof and thereof, a "Mortgage" and, collectively, the
"Mortgages"), which Mortgages shall cover such of the Real
Property owned or leased by any Credit Party as is designated
on Part I of Annex III as a mortgaged property (each
"Mortgaged Property" and, collectively, the "Mortgaged
Properties"), together with evidence that counterparts of the
Mortgages have been delivered to the title insurance company
insuring the Lien of the Mortgages for recording in all
places to the extent necessary or, in the reasonable opinion
of the Collateral Agent, desirable to effectively create a
valid and enforceable first priority mortgage lien on such
Credit Party's interest in each Mortgaged Property (subject
only to Permitted Encumbrances) in favor of the Collateral
Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Lenders;
(B) executed copies of Financing Statements (Form UCC-1
or other applicable form) in appropriate form for filing
under the UCC of each jurisdiction as may be reasonably
necessary to perfect the security interests in fixtures,
equipment and personal property purported to be created by
the Mortgages;
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(C) executed copies of such consents of landlords,
non-disturbance and attornment agreements, and similar
documents, in form and substance reasonably satisfactory to
the Collateral Agent and the Documentation Agent, as the
Collateral Agent or the Documentation Agent may consider
necessary or desirable in connection with the creation of the
lien of any Mortgage on any Mortgaged Property or the
enforcement thereof;
(D) mortgagee title insurance policies (or marked
commitments to issue the same) for the Mortgaged Properties
issued by title insurers reasonably satisfactory to the
Collateral Agent (each a "Mortgage Policy" and, collectively,
the "Mortgage Policies") in amounts satisfactory to the
Collateral Agent assuring the Collateral Agent that the
Mortgages on such Mortgaged Properties are valid and
enforceable first priority mortgage liens on such Mortgaged
Properties, free and clear of all defects and encumbrances
except Permitted Encumbrances, and the Mortgage Policies
shall otherwise be in form and substance reasonably
satisfactory to the Collateral Agent and the Documentation
Agent; and
(E) surveys, in form and substance reasonably
satisfactory to the Collateral Agent and the Documentation
Agent, of the Mortgaged Properties specified by the
Administrative Agent or the Documentation Agent, certified in
a manner satisfactory to the Collateral Agent and the
Documentation Agent (which certification must include, among
other things, a certification whether the Mortgaged Property
is located in a special flood hazard area, and if it is so
located, as to the flood zone designation which appears in
the Flood Insurance Rate Map for the area in which the
Mortgaged Property is located, including the Community Panel
Number of the map used) by a licensed professional surveyor
reasonably satisfactory to the Collateral Agent and the
Documentation Agent.
(o) Solvency. On the Closing Date, the Administrative Agent
shall have received from the chief financial officer of the Borrower a
certificate in the form of Exhibit J hereto, expressing opinions of
value and other appropriate facts or information regarding the
solvency of the Borrower and its Subsidiaries taken as a whole.
(p) Fees, etc. On or prior to the Closing Date, the Borrower
shall have paid to (i) the Administrative Agent and the Lenders all
Fees and expenses agreed upon by such parties to be paid on or prior
to such date, and (ii) Jones, Day, Reavis & Pogue, special counsel to
the Documentation Agent, such fees and disbursements as shall have
been invoiced by such firm in connection with the transactions
contemplated hereby in accordance with the proposal letter of such
firm dated July 16, 1996.
(q) Insurance Policies. On the Closing Date, the Collateral
Agent shall have received evidence of insurance complying with the
requirements of section 7.3 for the business and properties of the
Borrower and its Subsidiaries, in form and substance satisfactory to
the Administrative Agent and with respect to all casualty insurance,
naming the Collateral Agent as an additional insured and loss payee.
(r) Environmental Reports. On or prior to the Closing Date,
the Administrative Agent and the Documentation Agent shall have
received Phase I environmental assessments from Dames & Moore (or such
other firm satisfactory to the Administrative Agent and the
Documentation Agent and in form and substance satisfactory to the
Administrative Agent and the Documentation Agent, and covering each
Mortgaged Property.
(s) Appraisals. On or prior to the Closing Date, the
Administrative Agent and the Documentation Agent shall have received
copies of any appraisals obtained by the Borrower or any
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of its Affiliates with respect to any of the properties of the
Borrower or any of its Subsidiaries within the two year period prior
to the Closing Date.
5.2. Conditions Precedent to All Credit Events. The obligations of
the Lenders to make each Loan and/or of a Letter of Credit Issuer to issue each
Letter of Credit is subject, at the time thereof, to the satisfaction of the
following conditions:
(a) Notice of Borrowing, etc. The Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of
section 1.3 with respect to the incurrence of Loans or a Letter of
Credit Request meeting the requirement of section 2.2 with respect to
the issuance of a Letter of Credit.
(b) No Default; Representations and Warranties. At the time
of each Credit Event and also after giving effect thereto, (i) there
shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit
Documents shall be true and correct in all material respects with the
same effect as though such representations and warranties had been
made on and as of the date of such Credit Event, except to the extent
that such representations and warranties expressly relate to an
earlier date.
(c) Sublimit Matters. The Administrative Agent shall have
received such certificates pursuant to section 7.1(e) and other
evidence as it may require to establish that such Credit Event
complies with the MPP Revolving Loan Sublimit or DPP Revolving Loan
Sublimit specified in section 1.1(b) or (c), as applicable.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in section 5.1 and/or 5.2, as the case may
be, exist as of that time. All of the certificates, legal opinions and other
documents and papers referred to in this section 5, unless otherwise specified,
shall be delivered to the Administrative Agent for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts for each of the
Lenders, and the Administrative Agent will promptly distribute to the Lenders
their respective Notes and the copies of such other certificates, legal opinions
and documents.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to
make the Loans, and/or to issue and/or to participate in the Letters of Credit
provided for herein, the Borrower makes the following representations and
warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and each Credit Event:
6.1. Corporate Status, etc. Each of the Borrower and its Subsidiaries
(i) is a duly organized or formed and validly existing corporation, partnership
or limited liability company, as the case may be, in good standing under the
laws of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (ii) has duly qualified and is authorized to do
business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material Adverse Effect.
6.2. Corporate Power and Authority, etc. Each Credit Party has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is party
and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit Documents to
which it is party. Each Credit Party has duly executed and delivered each Credit
Document to which it is party and each Credit Document to which it is party
constitutes the legal, valid and binding agreement or obligation of each Credit
Party enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or
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other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
6.3. No Violation. Neither the execution, delivery and performance by
any Credit Party of the Credit Documents to which it is party nor compliance
with the terms and provisions thereof, nor the consummation of the loan
transactions contemplated therein (i) will contravene any provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality applicable to such Credit Party or its properties
and assets, (ii) will conflict with or result in any breach of, any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
(other than pursuant to the Security Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Borrower or any of its Subsidiaries pursuant to the
terms of any indenture, mortgage, deed of trust, agreement or other instrument
to which the Borrower or any of its Subsidiaries is a party or by which it or
any of its property or assets are bound or to which it may be subject, or (iii)
will violate any provision of the partnership agreement, certificate of
formation, certificate or articles of incorporation or by-laws, as the case may
be, of such Credit Party.
6.4. Litigation. There are no actions, suits or proceedings pending
or, to, the knowledge of the Borrower, threatened with respect to the Borrower
or any of its Subsidiaries (i) that have, or could reasonably be expected likely
to have, a Material Adverse Effect, or (ii) that have, or could reasonably be
expected to have, a material adverse effect on the rights or remedies of the
Collateral Agent, the Administrative Agent or the Lenders or on the ability of
any Credit Party to perform its obligations to them hereunder and under the
other Credit Documents.
6.5. Use of Proceeds; Margin Regulations. (a) The proceeds of all
Loans shall be utilized (i) to finance Permitted Acquisitions, and (ii) for
general corporate purposes, other than to finance Permitted Acquisitions and/or
any other acquisition, not inconsistent with the requirements of this Agreement.
(b) No part of the proceeds of any Credit Event will be used directly
or indirectly to purchase or carry Margin Stock, or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock. Neither any Credit
Event, nor the use of the proceeds thereof, will violate or be inconsistent with
the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. At no time
would more than 25% of the value of the assets of the Borrower or of the
Borrower and its consolidated Subsidiaries that are subject to any "arrangement"
(as such term is used in section 221.2(g) of such Regulation U) hereunder be
represented by Margin Stock.
6.6. Governmental Approvals. No order, consent approval license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document, other than filings and recordings necessary to establish and
perfect the security interests and Liens provided for in the Security Documents.
6.7. True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
or any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of such person in writing to any
Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided. The projections and pro forma financial information
prepared by the Borrower which are contained in such materials are based on good
faith estimates and assumptions believed by such persons to be reasonable at the
time made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ materially from the
projected results. As of the Effective Date, there is no fact known to the
Borrower or any of its Subsidiaries which
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has, or could reasonably be expected to have, a Material Adverse Effect which
has not theretofore been disclosed to the Lenders or to the Administrative Agent
on behalf of the Lenders.
6.8. Financial Condition: Financial Statements. (a) On and as of the
Closing Date on a pro forma basis after giving effect to the Transaction and to
all Indebtedness incurred and to be incurred, and Liens created, and to be
created, by the Borrower in connection therewith, (i) the sum of the assets, at
a fair valuation, of the Borrower will exceed its debts, (ii) the Borrower will
not have incurred or intended to, or believe that it will, incur debts beyond
its ability to pay such debts as such debts mature and (iii) the Borrower will
have sufficient capital with which to conduct its business. For purposes of this
section 6.8, "debt" means any liability on a claim, and "claim" means (x) right
to payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured; or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.
(b) (i) The combined balance sheets of the Borrower (formerly the
assisted and independent living business of the Parent and certain of its
Affiliates) at December 31, 1994 and December 31, 1995, and the related combined
statements of income, investments by and advances from the Parent, and cash
flows for the fiscal periods ended as of said dates, which have been examined by
Ernst & Young LLP, independent certified public accountants, and (ii) the pro
forma (after giving effect to the Transaction and the related financings
thereof) consolidated balance sheet of the Borrower and its Subsidiaries as of
March 31, 1996, copies of each of which have heretofore been furnished to each
Lender, present fairly the financial position of the respective entities as of
the dates of said statements and the results for the periods covered thereby
(or, in the case of the balance sheet, presents a good faith estimate of the
consolidated financial condition of the Borrower and its Subsidiaries after
giving effect to the Transaction and the related financings thereof at the date
thereof). All such financial statements (other than the aforesaid pro forma
balance sheets) have been prepared in accordance with generally accepted
accounting principles and practices consistently applied except to the extent
provided in the notes to said financial statements. Nothing has occurred since
December 31, 1995 that has had a Material Adverse Effect.
(c) Except as fully reflected in the financial statements and the
notes thereto described in section 6.8(b), there were as of the Closing Date
(after giving effect to the Loans made on such date), no material Contingent
Obligations, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation,
interest rate or foreign currency swap or exchange transaction with respect to
the Borrower or any of its Subsidiaries which, either individually or in
aggregate, would be material to the Borrower and its Subsidiaries taken as a
whole, except as incurred in the ordinary course of business consistent with
past practices subsequent to December 31, 1995.
(d) The Borrower has delivered to the Lenders prior to the execution
and delivery of this Agreement (i) a brochure dated July 1996 prepared by the
Administrative Agent and the Documentation Agent, which contains a general
description of the business and affairs of the Borrower and its Subsidiaries
(the "Information Memorandum"), and (ii) financial projections prepared by
management of the Borrower which are included in the Information Memorandum
under Tab VIII thereof for the Borrower for the fiscal years 1996-2000 (the
"Financial Projections"). The Financial Projections were prepared on behalf of
the Borrower in good faith after taking into account the existing and historical
levels of business activity of the Borrower, its Subsidiaries and their
predecessors in interest, known trends, including general economic trends, and
all other information, assumptions and estimates pertinent thereto. The
Financial Projections were considered by management of the Borrower, as of such
date of preparation, to be realistically achievable; provided, that no
representation or warranty is made as to the impact of future general economic
conditions or as to whether the Borrower's projected consolidated results as set
forth in the Financial Projections will actually be realized. No facts are known
to the Borrower at the date hereof which, if reflected in the Financial
Projections, would result in a material adverse change in the assets,
liabilities, results of operations or cash flows reflected therein.
6.9. Security Interests. Once executed and delivered, and until
terminated in accordance with the terms thereof, each of the Security Documents
creates, as security for the obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto from time to time,
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superior to and prior to the rights of all third persons (subject in the case of
the Mortgages to Permitted Encumbrances and subject to no other Liens (except
that the Security Agreement Collateral and/or Mortgaged Properties may be
subject to Permitted Liens and (in the case of the Mortgaged Properties)
Permitted Encumbrances relating thereto)) in favor of the Collateral Agent for
the benefit of the Lenders. No filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings required in connection with any such Security Document
which shall have been made, or for which satisfactory arrangements have been
made, upon or prior to the execution and delivery thereof. All mortgage,
mortgage recording, stamp, intangible or other similar taxes required to be paid
by any person under applicable Legal Requirements or other laws applicable to
the Real Property encumbered by the Mortgages in connection with the execution,
delivery, recordation, filing, registration, perfection or enforcement of the
Mortgages have been paid.
6.10. Representations and Warranties in Transaction Documents. All
representations and warranties of the Parent and/or any of its Subsidiaries set
forth in any of the Transaction Documents were true and correct in all material
respects as of the time such representations and warranties were made and shall
be true and correct in all material respects as of the Closing Date as if such
representations and warranties were 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 and correct in all material respects as of such earlier
date.
6.11. Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries have paid, or have provided adequate
reserves for the payment of, all federal, state and foreign income taxes
applicable for all prior fiscal years and for the current fiscal year to the
date hereof (giving effect to the Reorganization).
6.12. Compliance with ERISA. Each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws, including without limitation ERISA and the Code; each Plan
(and each related trust, if any) which is intended to be qualified under section
401(a) of the Code has received a determination letter from the Internal Revenue
Service to the effect that it meets the requirements of sections 401(a) and
501(a) of the Code; no Reportable Event has occurred; no Plan which is a
multiemployer plan (as defined in section 4001(a)(3) of ERISA) is insolvent or
in reorganization; no Plan has an Unfunded Current Liability; no Plan which is
subject to section 412 of the Code or section 302 of ERISA has an accumulated
funding deficiency, within the meaning of such sections of the Code or ERISA, or
has applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of section 412 of the
Code or section 303 or 304 of ERISA; all contributions required to be made with
respect to a Plan have been timely made; neither the Borrower nor any Subsidiary
of the Borrower nor any ERISA Affiliate has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan pursuant to section 409, 502(i), 502(i), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or section 401(a)(29), 4971 or 4975 of the Code or
expects to incur any such liability under any of the foregoing sections with
respect to any Plan; no condition exists which presents a material risk to the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted to terminate or appoint
a trustee to administer any Plan which is subject to Title IV of ERISA; no
action, suit, proceeding, hearing, audit or investigation with respect to the
administration, operation or the investment of assets of any Plan (other than
routine claims for benefits) is pending, expected or threatened; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of the Borrower and its
Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer plans
(as defined in section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date hereof, would not exceed $100,000; each group
health plan (as defined in section 607(1) of ERISA or section 4980B(g)(2) of the
Code) which covers or has covered employees or former employees of the Borrower,
any Subsidiary of the Borrower, or any ERISA Affiliate has at all times been
operated in compliance with the provisions of Part 6 of subtitle B of Title I of
ERISA and section 4980B of the Code; no lien imposed under the Code or ERISA on
the assets of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate exists or is likely to arise on account of any Plan; and the Borrower
and its Subsidiaries do not maintain or contribute to any employee welfare
benefit plan (as defined in section 3(1) of ERISA) which provides benefits to
retired employees or other former employees (other than as
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required by section 601 of ERISA) or any Plan the obligations with respect to
which could reasonably be expected to have a material adverse effect on the
ability of any Credit Party to perform its obligations under this Agreement or
the other Credit Documents.
6.13. Subsidiaries. Annex II hereto lists each Subsidiary of the
Borrower (and the direct and indirect ownership interest of the Borrower
therein), in each case existing on the Closing Date but after giving effect to
the Transaction.
6.14. Intellectual Property, etc. The Borrower and each of its
Subsidiaries has obtained or has the right to use during the term of this
Agreement all material patents, trademarks, servicemarks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of its business as presently conducted and as
proposed to be conducted.
6.15. Environmental Matters. (a) The Borrower and each of its
Subsidiaries is in compliance with all Environmental Laws governing its business
except to the extent that any such failure to comply (together with any
resulting penalties, fines or forfeitures) would not reasonably be expected to
have a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the business of the Borrower and each of its
Subsidiaries, as conducted as of the Closing Date, under any Environmental Law
have been secured and the Borrower and each of its Subsidiaries is in
substantial compliance therewith, except for such licenses, permits,
registrations or approvals the failure to secure or to comply therewith is not
reasonably likely to have a Material Adverse Effect. Neither the Borrower nor
any of its Subsidiaries is in any respect in noncompliance with, breach of or
default under any applicable writ, order, judgment, injunction, or decree to
which the Borrower or such Subsidiary is a party or which would affect the
ability of the Borrower or such Subsidiary to operate any real property and no
event has occurred and is continuing which, with the passage of time or the
giving of notice or both, would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or defaults
as would not reasonably be expected to, in the aggregate, have a Material
Adverse Effect. There are as of the Closing Date no Environmental Claims pending
or, to the best knowledge of the Borrower, threatened wherein an unfavorable
decision, ruling or finding would reasonably be expected to have a Material
Adverse Effect. There are no facts, circumstances, conditions or occurrences on
any Real Property now or at any time owned, leased or operated by the Borrower
or any of its Subsidiaries or, to the knowledge of the Borrower, on any property
adjacent to any such Real Property that could reasonably be expected (i) to form
the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property of the Borrower or any of its Subsidiaries, or
(ii) to cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Borrower or any of its Subsidiaries or (ii) released on any such Real Property,
in each case where such occurrence or event is reasonably likely to have a
Material Adverse Effect.
(c) There are not now any underground storage tanks located on any
Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries.
6.16. Properties. Annex III contains a true and complete list of each
Real Property owned or leased by the Borrower or any of its Subsidiaries on the
Closing Date (after giving effect to the Transaction) and the type of interest
therein held by the Borrower or the respective Subsidiary. The Borrower and each
of its Subsidiaries has good and indefeasible title in fee to each Real Property
owned by it and a valid and subsisting Leasehold in each Real Property leased by
it, in each case, after giving effect to the Transaction, free and clear of all
Liens and security interests other than the Liens created pursuant to the
Mortgages, Permitted Liens and Permitted Encumbrances. The Borrower and each of
its Subsidiaries has received all material assignments, waivers, consents and
other documents, and duly effected all material recordings, filings and other
material actions necessary to establish, protect and perfect its right, title
and interest in and to each Real Property owned or leased by it. All material
transfer taxes, deed stamps, intangible taxes or other amounts in the nature of
transfer taxes required to be paid by any person under applicable Legal
Requirements or other laws applicable to the Real Property in connection,with
the Transaction have been paid.
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6.17. Labor Relations: Collective Bargaining Agreements. There is (i)
no significant unfair labor practice complaint pending against the Borrower or
any of its Subsidiaries or, to the knowledge of the Borrower, threatened against
any of them, before the National Labor Relations Board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is now pending against the Borrower or any of
its Subsidiaries or, to the knowledge of the Borrower, threatened against any of
them, (ii) no significant strike, labor dispute, slowdown or stoppage is pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries, and (iii)
to the knowledge of the Borrower, no union representation question exists with
respect to the employees of the Borrower or any of its Subsidiaries, except
(with respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as would not reasonably be expected to
have a Material Adverse Effect.
6.18. Indebtedness. Annex IV sets forth a true and complete list of
all Indebtedness of the Borrower and each of its Subsidiaries (after giving
effect to the Transaction) incurred prior to, but which is to remain outstanding
after, the Closing Date (collectively, the "Existing Indebtedness"), in each
case showing the aggregate principal amount, amortization and interest rate
thereof (and available commitments, if any, thereunder) and the name of the
respective borrower and any other entity which directly or indirectly guaranteed
such debt.
6.19. Transaction. On and as of the Closing Date, (i) all material
consents and approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required to be obtained, given, filed or taken by the Parent,
the Borrower or any other Credit Party in order to make or consummate each
component of the Transaction will have been obtained, given, filed or taken and
are or will be in full force and effect (or effective judicial relief with
respect thereto will have been obtained) except for filings, consents or notices
not required by federal or state securities laws to be made at such time, which
filings, consents or notices have been or will be made during the period in
which they are required to be made and (ii) each component of the Transaction
shall have been consummated in accordance, in all material respects, with the
applicable Transaction Documents and in compliance, in all material respects,
with all applicable laws.
6.20. Certain Material Agreements. After giving effect to the
Transaction, each Management Contract and each Existing Indebtedness Agreement
is in full force and effect in accordance with its respective terms, without any
material default existing thereunder.
6.21. Third-Party Rights. No person holds any right of first refusal,
option to purchase or lease, buy-out right, right of first offer or other
similar right or option with respect to any portion of the Collateral or any
partnership interest, joint venture interest or shareholder interest owned by
the Borrower in any of its Subsidiaries.
SECTION 7. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees that so long as this
Agreement is in effect and until such time as the Total Commitment has been
terminated, no Notes are outstanding and the Loans, together with interest, Fees
and all other Obligations hereunder, have been paid in full:
7.1. Reporting Requirements. The Borrower will furnish to the
Administrative Agent, in sufficient quantities for the Lenders (and the
Administrative Agent will promptly transmit such copies to the Lenders):
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the close of each fiscal year of the
Borrower, the consolidated and consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such
fiscal year and the related consolidated statements of income, of
stockholder's equity and of cash flows and consolidating statement of
income for such fiscal year, in each case setting forth comparative
figures for the preceding fiscal year and accompanied by the opinion
of independent certified public accountants of recognized national
standing as to such consolidated financial statements, which opinion
shall not be qualified as to the scope of audit or as to the status of
the Borrower or any of its Subsidiaries as a going concern, together
with a certificate of such accounting firm stating that in the course
of its regular audit of the business of the Borrower and its
Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, nothing came to the
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attention of such accounting firm which would lead it to believe that
any Default or Event of Default as they relate to accounting matters
has occurred and is continuing or if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(b) Quarterly Financial Statements. As soon as available and
in any event within 45 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower, the
consolidated and consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarterly period and
the related consolidated statements of income and of cash flows and
the consolidating income statement for such quarterly period, and
setting forth, in the case of such consolidated statements of income
and of cash flows, comparative figures for the related periods in the
prior fiscal year, and which shall be certified on behalf of the
Borrower by the Chief Financial Officer or other Authorized Officer of
the Borrower, subject to changes resulting from normal year-end audit
adjustments.
(c) Monthly Property Specific Financial Statements. As soon
as available and in any event within 30 days after the close of each
month, financial statements for each separate Mature Property and
completed Development Property, showing Cash Flow from Operations
therefor for such period and for the elapsed portion of the fiscal
year ended with the last day of such period, together with such other
financial information with respect thereto as the Administrative Agent
may reasonably request, and which shall be certified on behalf of the
Borrower by the Chief Financial Officer or other Authorized Officer of
the Borrower, subject to changes resulting from normal year-end audit
adjustments.
(d) Budget. Not less than 10 days prior to the commencement
of each fiscal year of the Borrower, a preliminary consolidated budget
(to be followed no later than 30 days after the commencement of such
fiscal year by a final consolidated budget) of the Borrower and its
Subsidiaries in reasonable detail for each of the four fiscal quarters
of such fiscal year, and for any subsequent fiscal years, as
customarily prepared by management for its internal use, setting
forth, with appropriate discussion, the forecasted balance sheet,
income statement, operating cash flows and capital expenditures of the
Borrower and its Subsidiaries for the period covered thereby, and the
principal assumptions upon which forecasts and budget are based.
(e) Officer's Certificates. At the time of the delivery of
the financial statements provided for in sections 7.1(a), (b) and (c),
a certificate on behalf of the Borrower of the Chief Financial Officer
or other Authorized Officer of the Borrower to the effect that no
Default or Event of Default exists or, if any Default or Event of
Default does exist, specifying the nature and extent thereof, which
certificate shall set forth the calculations required to establish
compliance with the provisions of sections 8.10, 8.11, 8.12 and 8.13
of this Agreement, and (if the Parent Guarantor has notified the
Administrative Agent that it believes the conditions specified in
section 2.3 of the Parent Guaranty have been satisfied so as to
entitle the Parent Guarantor to an early termination of the Parent
Guaranty) sections 2.3(a) and (b) of the Parent Guaranty as at the end
of such fiscal year or quarter or month, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence
of any event which constitutes a Default or Event of Default, which
notice shall specify the nature thereof, the period of existence
thereof and what action the Borrower proposes to take with respect
thereto, and (ii) any litigation or governmental or regulatory
proceeding pending against the Borrower or any of its Subsidiaries
which is likely to have a Material Adverse Effect or a material
adverse effect on the Collateral or the ability of any Credit Party to
perform its obligations hereunder or under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy
of each other report or management letter" submitted to the Borrower
or any of its Subsidiaries by their independent
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accountants or independent actuaries in connection with any annual,
interim or special audit made by them of the books of the Borrower or
any of its Subsidiaries.
(h) ERISA. Promptly upon completion thereof, a complete copy
of the annual report (Form 5500) of each Plan (including, to the
extent required, the related financial and actuarial statements and
opinions and other supporting statements, certifications, schedules
and information) required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered pursuant
to the first sentence hereof, copies of reports and any material
notices received by the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate with respect to any Plan shall be delivered to the
Administrative Agent (in sufficient quantities for the Lenders)
promptly after the Borrower is aware, and in any event no later than
30 days after the date such report has been filed with the Internal
Revenue Service or such notice has been received by the Borrower, such
Subsidiary or such ERISA Affiliate, as applicable.
(i) Environmental Matters. Promptly upon, and in any event
within 10 Business Days after, an officer of the Borrower or any of
its Subsidiaries obtains knowledge thereof, notice of one or more of
the following environmental matters: (i) any pending or threatened (in
writing) material Environmental Claim against the Borrower or any of
its Subsidiaries or any Real Property owned or operated by the
Borrower or any of its Subsidiaries; (ii) any condition or occurrence
on or arising from any Real Property owned or operated by the Borrower
or any of its Subsidiaries that (A) results in material noncompliance
by the Borrower or any of its Subsidiaries with any applicable
Environmental Law or (B) would reasonably be expected to form the
basis of a material Environmental Claim against the Borrower or any of
its Subsidiaries or any such Real Property; (iii) any condition or
occurrence on any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries that could reasonably be expected
to cause such Real Property to be subject to any material restrictions
on the ownership, occupancy, use or transferability by the Borrower or
any of its Subsidiaries of such Real Property under any Environmental
Law; and (iv) the taking of any material removal or remedial action in
response to the actual or alleged presence of any Hazardous Material
on any Real Property owned, leased or operated by the Borrower or any
of its Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency. All such notices shall
describe in reasonable detail the nature of the Environmental Claim
and the Borrower's or such Subsidiary's response thereto.
(j) SEC Reports and Registration Statements. Promptly upon
transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and annual,
quarterly or current reports that the Borrower or any of its
Subsidiaries files with the SEC.
(k) Other Information. With reasonable promptness, such other
information or documents (financial or otherwise) relating to the
Borrower or any of its Subsidiaries or any property included in the
Mature Property Pool or the Development Property Pool as the
Administrative Agent on its own behalf or on behalf of the Required
Lenders may reasonably request from time to time.
7.2. Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, permit, upon at least two Business Days'
notice to the Chief Financial Officer or any other Authorized Officer of the
Borrower, officers and designated representatives of the Administrative Agent or
any of the Lenders to visit and inspect any of the properties or assets of the
Borrower and any of its Subsidiaries in whomsoever's possession (but only to the
extent the Borrower or such Subsidiary has the right to do so to the extent in
the possession of another person), and to examine the books of account of the
Borrower and any of its Subsidiaries and discuss the affairs, finances and
accounts of the Borrower and of any of its Subsidiaries with, and be advised as
to the same by, its and their officers and independent accountants and
independent actuaries, if any, all at such reasonable times and intervals and to
such reasonable extent as the Administrative Agent or any of the Lenders may
request.
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7.3. Insurance. (a) The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance with
reputable and solvent insurers in such amounts and covering such risks and
liabilities as are in accordance with normal industry practice, provided that
this covenant shall be satisfied in respect of any Mortgaged Property to the
extent the insurance covenants in the related Mortgage are satisfied. The
Borrower will, and will cause each of its Subsidiaries to, furnish annually, on
or prior to May 1, to the Administrative Agent a summary of the insurance
carried.
(b) The Borrower will, and will cause each of its Subsidiaries to, at
all times keep their respective property insured in favor of the Collateral
Agent, and all policies (including the Mortgage Policies) or certificates (or
certified copies thereof) with respect to such insurance (and any other
insurance maintained by the Borrower or any such Subsidiary) (i) shall be
endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee (with respect to Collateral) or, to the extent permitted by
applicable law, as an additional insured), (ii) shall state that such insurance
policies shall not be cancelled without 30 days' prior written notice thereof
(or 10 days' prior written notice in the case of cancellation for the
non-payment of premiums) by the respective insurer to the Collateral Agent,
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the Lenders, and
(iv) shall be deposited with the Collateral Agent. In no event shall the
Borrower be required to deposit the actual insurance policies with the
Collateral Agent. The Administrative Agent shall deliver copies of any
certificates of insurance to a Lender upon such Lender's request.
(c) If the Borrower or any of its Subsidiaries shall fail to maintain
all insurance in accordance with this section 7.3, or if the Borrower or any of
its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Administrative Agent and/or the
Collateral Agent shall have the right (but shall be under no obligation), upon
prior notice to the Borrower, to procure such insurance and the Borrower agrees
to reimburse the Administrative Agent or the Collateral Agent, as the case may
be for all costs and expenses of procuring such insurance.
7.4. Payment of Taxes. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims (other than claims relating to the adjustment or
settling, in the ordinary course of business, of claims in respect of insurance
policies or reinsurance contracts) which, if unpaid, might become a Lien or
charge upon any properties of the Borrower or any of its Subsidiaries, provided
that neither the Borrower nor any of its Subsidiaries shall be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP.
7.5. Corporate Franchises. The Borrower will do, and will cause each
of its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate existence, rights and authority,
provided that any transaction permitted by section 8.2 will not constitute a
breach of this section 7.5.
7.6. Compliance with Statutes, etc. The Borrower will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property other than those the noncompliance with which would
not have, and which would not be reasonably expected to have, a Material Adverse
Effect or a material adverse effect on the Collateral or the ability of any
Credit Party to perform its obligations under any Credit Document.
7.7. Good Repair. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements, thereto, to the extent and in the manner customary for
companies in similar businesses.
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7.8. Compliance with Environmental Laws. (a) The Borrower will comply,
and will cause each of its Subsidiaries to comply, in all material respects,
with all Environmental Laws applicable to the ownership, lease or use of all
Real Property now or hereafter owned, leased or operated by the Borrower or any
of its Subsidiaries, will promptly pay or cause to be paid all costs and
expenses incurred in connection with such compliance, and will keep or cause to
be kept all such Real Property free and clear of any Liens imposed pursuant to
such Environmental Laws. Neither the Borrower nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of, Hazardous Materials on any Real
Property now or hereafter owned, leased or operated by the Borrower or any of
its Subsidiaries or transport or permit the transportation of Hazardous
Materials to or from any such Real Property other than in compliance with
applicable Environmental Laws and in the ordinary course of business. If
required to do so under any applicable directive or order of any governmental
agency, the Borrower will undertake, and cause each of its Subsidiaries to
undertake, any clean up, removal, remedial or other action necessary to remove
and clean up any Hazardous Materials from any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries in accordance with, in all
material respects, the requirements of all applicable Environmental Laws and in
accordance with, in all material respects, such orders and directives of all
governmental authorities, except to the extent that the Borrower or such
Subsidiary is contesting such order or directive in good faith and by
appropriate proceedings and for which adequate reserves have been established to
the extent required by GAAP.
(b) At the written request of the Administrative Agent or the Required
Lenders, which request shall specify in reasonable detail the basis therefor, at
any time and from time to time (i) while an Event of Default exists, or (ii)
after the Lenders receive notice under section 7.1(i) for any event for which
notice is required to be delivered for any Real Property, the Borrower will
provide, at its sole cost and expense, an environmental site assessment report
concerning any such Real Property now or hereafter owned, leased or operated by
the Borrower or any of its Subsidiaries, prepared by an environmental consulting
firm approved by the Administrative Agent, indicating the presence or absence of
Hazardous Materials and the potential cost of any removal or a remedial action
in connection with any Hazardous Materials on such Real Property. If the
Borrower fails to provide the same within 90 days after such request was made,
the Administrative Agent may order the same, and the Borrower shall grant and
hereby grants, to the Administrative Agent and the Lenders and their agents,
access to such Real Property and specifically grants the Administrative Agent
and the Lenders an irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment, all at the Borrower's expense.
7.9. Change of Fiscal Years, Fiscal Quarters. In the event that the
Borrower, for financial reporting purposes, shall change its or any of its
Subsidiaries' fiscal years or fiscal quarters, the Borrower will promptly, and
in any event within 30 days following any such change, deliver a notice to the
Administrative Agent (in sufficient quantities for the Lenders) describing such
change and any material accounting entries made in connection therewith and
stating whether such change will have any impact upon any financial computations
to be made hereunder, and if any such impact is foreseen, describing in
reasonable detail the nature and extent of such impact.
7.10. Additional Security; Further Assurances. (a) Developed
Properties Acquired and Property Development Completed Following the Closing
Date. The Borrower will give the Collateral Agent not less than 10 days prior
written notice of the scheduled closing date for any Permitted Acquisition by
the Borrower or any of its Subsidiaries occurring after the Closing Date.
Subject to obtaining any consents from third parties (including third party
lessors and co-venturers) necessary to be obtained for the granting of a Lien on
the interests or assets acquired pursuant to any such Permitted Acquisition
(with the Borrower hereby agreeing to use its reasonable best efforts to obtain
such consents), the Borrower will, and will cause its Subsidiaries to, grant the
Collateral Agent for the benefit of the Lenders security interests and mortgages
(each an "Additional Security Document") in the interests or properties of the
Borrower or any Subsidiary (A) which are acquired after the Closing Date as
fully developed properties, or (B) the completion of the development of which
has occurred after the Closing Date, other than (i) any Real Property and
related personal property assets acquired by a joint venture (in which there are
minority interests held by persons who are not Affiliates of the Borrower) with
the proceeds of equity investments made by the Borrower or a Subsidiary to the
extent such equity investments are pledged to the Collateral Agent, and (ii) any
Real Property and related personal property assets acquired with the proceeds
of, and securing, or subject to assumed, Priority Debt and those constituting
expansions of existing facilities subject to mortgages in favor of other
persons), as additional security for the Obligations. Each Additional Security
Document shall be granted pursuant to documentation satisfactory in form and
substance to the Administrative Agent and the Documentation Agent, which
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documentation shall be accompanied by such Phase I environmental assessments (in
the case of owned property), surveys and surveyor's certifications (in the case
of owned property) meeting the requirements contemplated by section
5.1(n)(iii)(E), mortgage policy of title insurance, consents of landlords and
other supporting documentation requested by and satisfactory in form and
substance to the Administrative Agent and the Documentation Agent, and shall
constitute a valid and enforceable perfected Lien upon the interests or
properties so acquired, superior to and prior to the rights of all third persons
and subject to no other Liens except those permitted by section 8.3 or otherwise
agreed by the Administrative Agent at the time of perfection thereof and such
other encumbrances as may be set forth in the mortgage policy, if any, relating
to such Additional Security Document which shall be delivered to the Collateral
Agent together with such Additional Security Document and which shall be
satisfactory in form and substance to the Collateral Agent. The Borrower, at its
sole cost and expense, will cause each Additional Security Document or
instruments related thereto to be duly recorded or filed in such manner and in
such places as are required by law to establish, perfect, preserve and protect
the Liens created thereby required to be granted pursuant to the Additional
Security Document, and will pay or cause to be paid in full all taxes, fees and
other charges payable in connection therewith.
(b) Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, and other assurances or instruments and take such further steps
relating to the Collateral covered by any of the Security Documents as the
Collateral Agent may reasonably require. If at any time the Collateral Agent
determines, based on applicable law, that all applicable taxes (including,
without limitation, mortgage recording taxes or similar charges) were not paid
in connection with the recordation of any Mortgage, the Borrower shall promptly
pay the same upon demand. Furthermore, the Borrower shall cause to be delivered
to the Collateral Agent such opinions of local counsel, title insurance,
surveys, environmental assessments, consents of landlords, lien waivers from
landlords (if and to the extent that the aggregate value of the Borrower's and
its Subsidiaries' equipment located on leaseholds and not covered by effective
lien waivers from landlords exceeds $500,000) and other related documents as may
be reasonably requested by the Administrative Agent or the Collateral Agent in
connection therewith, all of which documents shall be in form and substance
satisfactory to the Administrative Agent and the Collateral Agent, except that
no title insurance or surveys shall be required for any leasehold properties
(unless the lessee has a nominal or bargain purchase option).
(c) Certain Appraisals. Recognizing that the Lenders, in making their
own respective credit analyses and determinations whether to enter into this
Agreement, (i) have relied primarily on the financial condition and results of
operations of the Borrower and its consolidated subsidiaries and, to the extent
relevant to the performance by the Borrower of its obligations under this
Agreement and the other Credit Documents to which it is or is to be a party, the
terms and provisions of the Parent Guaranty and the financial condition and
results of operations of the Parent and its consolidated subsidiaries, and (ii)
have determined that it is not necessary or appropriate, in light of their
respective credit analyses and determinations, to require the Borrower to
deliver to the Lenders at the Closing Date appraisals covering the Mortgaged
Properties, the Borrower will nevertheless (A) comply with all provisions of the
Credit Documents respecting the execution, delivery and performance of all
Mortgages, and any other provisions of this Agreement and the other Credit
Documents related thereto, and (B) if requested by any Lender at any time, in
order to meet any legal requirement applicable to such Lender, provide to
Administrative Agent, the Documentation Agent and the Lenders, at the sole cost
and expense of the Borrower, appraisals and other supporting documentation
relating to the Mortgage or Mortgages covering any or all of the Mortgaged
Properties, as specified by any Lender, meeting the appraisal and other
documentation requirements of the Real Estate Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended, or any
other legal requirements applicable to any Lender, which in the case of any such
appraisal shall be prepared by one or more valuation firms of national standing,
acceptable to the Required Lenders, utilizing appraisal standards satisfying
such Amendments, Act or other legal requirements.
(d) Mortgage Taxes, etc. The Administrative Agent may, in the case of
any Mortgage to be recorded in any jurisdiction which imposes a significant
documentary stamp tax, intangible tax, or other tax or governmental charge
incident to the recording of a mortgage or deed of trust, include in such
Mortgage appropriate provisions limiting the amount of the obligations secured
thereby, or the amount of the maximum recovery upon foreclosure or other
exercise of remedies, to an amount which, in the reasonable opinion of the
Managing Agent, approximates
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the maximum reasonably expected fair market value of the property subject
thereto during the period such Mortgage is expected to be effective, as
determined by the Managing Agent on the basis of a fixed price per unit, a
multiple of potential cash flow per unit, or other method which may be employed
by the Managing Agent. In the case of the two properties located in Florida
which are being subjected to Mortgages on the Closing Date, the Borrower and the
Managing Agent have agreed that provisions shall be included in those Mortgages
of the nature referred to above which reflect a valuation of approximately
$70,000 per unit for each such property. The Managing Agent has proposed, and
the Borrower has approved, a valuation methodology for any additional properties
as to which provisions of this nature may be included in the applicable
Mortgage. Such valuation methodology, which is subject to change by the Managing
Agent from time to time in light of perceived changes in market conditions,
values a property in accordance with the following formula: (RCP) x (CF) x (No.
Units) x (95% occupancy) x (CF per Unit) = Resulting Value, where RCP is the
reciprocal of an appropriate capitalization rate, such as 8.5 based on a 12%
capitalization rate, CF is a coefficient for inflation and potentially higher
market values, such as 1.3, representing a potential 30% combined increase in
value (after inflation) of the property over the expected life of the Mortgage,
No. Units is the number of individual assisted or independent living units
available for occupancy at the applicable property, 95% occupancy is an assumed
occupancy rate, CF per Unit is the reasonably expected annual Cash Flow from
Operations for each such unit (not expected to be less than $8,400 per unit),
and Resulting Value is the value of the property, based on such formula
valuation, which would be included in the applicable provisions of the Mortgage
relating thereto. The Managing Agent shall be free to use its own judgment in
directing the Administrative Agent to include any such provisions in any such
Mortgage, shall not be required to rely upon any appraisals or other supporting
evidence as to valuation in determining any such amounts, shall not be required
to obtain any consent or instructions from any Lenders in directing the
Administrative Agent to include any such provisions in any such Mortgage, and
such actions of the Managing Agent and the Administrative Agent's actions in
including any such provisions in any such Mortgage shall be entitled to the
benefit of the provisions of section 11.4 hereof.
(e) Lenders to be Provided with copies of Additional Security
Documents. The Borrower will provide the Administrative Agent with sufficient
copies of each Additional Security Document and any additional supporting
documents delivered in connection therewith for distribution of copies thereof
to the Lenders, and the Administrative Agent will promptly so distribute such
copies.
(f) Actions to be Completed. The Borrower agrees that each action
required above by this section 7.10 shall be completed as soon as possible, but
in no event later than 60 days after such action is requested to be taken by the
Administrative Agent, the Collateral Agent or the Required Lenders. In the case
of any property which is proposed to be added to the Mature Property Pool,
reference is made to the requirements of the definition of the term Mature
Property Pool for information concerning the conditions to be satisfied prior to
the addition of properties to the Mature Property Pool, including, without
limitation, the requirement that the Mortgage in respect thereof must have been
perfected for a period of at least 90 days prior to the date such property is
added to the Mature Property Pool.
7.11. Corporate Separateness. The Borrower will take, and will cause
each of its Subsidiaries to take, all such action as is necessary to keep the
operations of the Borrower and its Subsidiaries separate and apart from those of
each Subsidiary which has outstanding IRB Debt or Priority Debt, including,
without limitation, ensuring that all customary formalities regarding corporate
existence, including holding regular board of directors' meetings and
maintenance of corporate records, are followed. All financial statements of the
Borrower and its Subsidiaries provided to creditors will clearly evidence the
corporate separateness of the Borrower and its other Subsidiaries from each
Subsidiary which has IRB Debt or Priority Debt outstanding. Finally, neither the
Borrower nor any of its other Subsidiaries will take any action, or conduct its
affairs in a manner which is likely to result in the corporate existence of a
Subsidiary which has IRB Debt or Priority Debt outstanding, on the one hand, and
the Borrower and its other Subsidiaries, on the other hand, being ignored, or in
the assets and liabilities of the Borrower or any of its other Subsidiaries
being substantively consolidated with those of a Subsidiary which has IRB Debt
or Priority Debt outstanding in a bankruptcy, reorganization or other insolvency
proceeding. No action or indemnity, or provision of support in the form of a
letter of credit, expressly permitted by this Agreement will breach this
covenant.
7.12. ERISA. As soon as possible and, in any event, within 10 days
after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, the Borrower
will deliver to each of the Lenders a certificate of the chief financial officer
of the Borrower setting forth
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the full details as to such occurrence and the action, if any, that the
Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or filed
with or by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred; that an accumulated funding deficiency, within the meaning
of section 412 of the Code or section 302 of ERISA, has been incurred or an
application may be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under section 412 of the Code or section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability; that proceedings may be or
have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to section 515 of ERISA to collect a delinquent contribution to a Plan;
that the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or
may incur any liability (including any indirect, contingent, or secondary'
liability) to or on account of the termination of or withdrawal from a Plan
under section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under section 401(a)(29), 4971, 4975 or 4980 of the Code or
section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in section 607(1) of ERISA or section 4980B(g)(2) of the Code) under
section 4980B of the Code; or that the Borrower or any Subsidiary of the
Borrower may incur any material liability pursuant to any employee welfare
benefit plan (as defined in section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by section
601 of ERISA) or any Plan.
7.13. Senior Debt. The Borrower will at all times ensure that (a) the
claims of the Lenders in respect of the Obligations of the Borrower will not be
subordinate to, and will in all respects at least rank pari passu with, the
claims of every other senior unsecured creditor of the Borrower, and (b) any
Indebtedness subordinated in any manner to the claims of any other senior
unsecured creditor of the Borrower will be subordinated in like manner to such
claims of the Lenders.
SECTION 8. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date
and thereafter for so long as this Agreement is in effect and until such time as
the Total Commitment has been terminated, no Notes remain outstanding and the
Loans, together with interest, Fees and all other Obligations incurred hereunder
are paid in full:
8.1. Changes in Business. The Borrower will not permit the business
activities of itself and its Subsidiaries taken as a whole to be substantively
altered from the business activities conducted by the Borrower and its
Subsidiaries (after giving effect to the Transaction) on the Closing Date, and
business activities incidental or directly related thereto, such as those
related to home health care.
8.2. Consolidation, Merger or Sale of Assets, etc. The Borrower will
not, and will not permit any Subsidiary to, wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation or sell or
otherwise dispose of any of its property or assets (but excluding any sale or
disposition of obsolete or excess furniture, fixtures or equipment or excess
land in the ordinary course of business), or purchase, lease or otherwise
acquire (in one transaction or a series of related transactions) all or any part
of the property or assets of any person (excluding any purchases, leases or
other acquisitions of property or assets in, and for use in, the ordinary course
of business) or agree to do any of the foregoing at any future time, except that
the following shall be permitted:
(a) capital expenditures by the Borrower and its
Subsidiaries;
(b) the investments permitted pursuant to section 8.5;
(c) if no Default or Event of Default shall have occurred and
be continuing or would result therefrom, (i) the merger or
consolidation of any Subsidiary Guarantor with or into the Borrower or
another Subsidiary Guarantor or the liquidation or dissolution of any
Subsidiary (contemporaneously with the retirement or other discharge
of all IRB Debt and Priority Debt of
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such Subsidiary, if any) or (ii) the transfer or other disposition of
any property by the Borrower to any Subsidiary Guarantor or by any
Subsidiary Guarantor to the Borrower or any other Subsidiary
Guarantor, provided that all Liens granted pursuant to the Security
Documents on any property or assets involved in any of the foregoing
transactions shall remain in full force and effect (with the same
priority as they would have if such transfer pursuant to this clause
(ii) had not occurred), either as a result of any such transfer being
made subject to such Liens or as a result of the surviving or
transferee entity executing and delivering new Security Documents, in
each case to the satisfaction of the Administrative Agent;
(d) if no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower or any
Subsidiary may make Permitted Acquisitions, provided that at least 10
days prior to the date of such acquisition, the Borrower shall have
delivered to the Administrative Agent an officer's certificate
executed on behalf of the Borrower by an Authorized Officer of the
Borrower, which certificate shall (i) contain the date such Permitted
Acquisition is scheduled to be consummated, (ii) contain the estimated
purchase price of such Permitted Acquisition, (iii) contain a
description of the property and/or assets acquired in connection with
such Permitted Acquisition, (iv) demonstrate that at the time of
making any such Permitted Acquisition the covenants contained in
sections 8.10, 8.11, 8.12 and 8.13 shall be complied with on a pro
forma basis as if the properties and/or assets so acquired had been
owned by the Borrower, and the Indebtedness assumed and/or incurred to
acquire and/or finance same has been outstanding, for the 12 month
period immediately preceding such acquisition (without giving effect
to any credit for unobtained or unrealized gains in connection with
such Permitted Acquisition, but taking into account such adjustments
to the overhead of such properties and assets as may reasonably
determined and specified by the Borrower to reflect the overhead
generally applicable to similar properties and assets owned by the
Borrower and its Subsidiaries, including provision for a management
fee of 5%, as and to the extent the Administrative Agent determines
such adjustments to be reasonable and appropriate under the particular
circumstances), (v) to the extent applicable, confirms that the
Borrower has obtained an environmental assessment which demonstrate
that the representations and warranties of the Borrower contained in
this Agreement (including those set forth in section 6.15) shall be
true and correct after giving effect to such Permitted Acquisition,
(vi) confirms that the property acquired pursuant to such Permitted
Acquisition (or owned by the partnership or other entity in which
interests have been acquired or to which loans and/or advances have
been made pursuant to such Permitted Acquisition) is to be managed by
the Borrower or any Subsidiary Guarantor, and (vii) attach thereto a
true and correct copy of the then proposed purchase agreement or
similar agreement, partnership agreement and/or management contract
entered into in connection with such Permitted Acquisition;
(e) if no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower or any of its
Subsidiaries may (i) sell any property, land or building (including
any related receivables or other intangible assets), or (ii) sell the
entire capital stock (or other equity interests) and Indebtedness of
any Subsidiary owned by the Borrower or any other Subsidiary, or (iii)
permit any Subsidiary to be merged or consolidated with a person which
is not an Affiliate, or (iv) consummate any other Asset Sale; provided
that (A) the consideration for such transaction represents fair value
(as determined by the Board of Directors of the Borrower), (B) such
consideration consists of at least 90% cash or Cash Equivalents, or in
the case of an exchange of properties the property acquired represents
reasonably equivalent value (or to the extent that such value is less
than the value of the property transferred, the difference is payable
in cash or Cash Equivalents), (C) at least 15 days prior to the date
of any such transaction, the Borrower shall have delivered to the
Administrative Agent an officer's certificate executed on behalf of
the Borrower by an Authorized Officer of the Borrower, which
certificate shall contain a description of the proposed transaction,
the date such transaction is scheduled to be consummated, the
estimated purchase price or other consideration for such transaction,
and which shall include a certified copy of the draft or definitive
documentation pertaining thereto, (D) any such assets, capital stock
(or other equity interests) and Indebtedness or Subsidiary shall not
represent more than 5% of the Consolidated Net Worth of the Borrower
as at the end of its most recently completed
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fiscal quarter for which financial statements have been delivered
pursuant to section 7.1(a) or (b), and shall not have contributed more
than 5% of EBITDA of the Borrower for the four consecutive fiscal
quarters ended most recently prior thereto for which financial
statements have been delivered pursuant to section 7.1(a) or (b), (E)
all such assets, capital stock (or other equity interests) and
Indebtedness or Subsidiary so disposed of after the Closing Date shall
not represent more than 15% of the Consolidated Net Worth of the
Borrower as at the end of its most recently completed fiscal quarter
prior to the last such transaction for which financial statements have
been delivered pursuant to section 7.1(a) or (b);
(f) the Borrower may complete any transaction otherwise
permitted by the preceding clause (e), notwithstanding the limitations
contained in clauses (D) and (E) thereof, if (A) as to any such
transaction where the Net Cash Proceeds are not in excess of
$5,000,000, within six months following any such transaction the
Borrower purchases or enters into a binding commitment to purchase
property, land or buildings of at least equivalent value, and if any
such property, land or buildings of at least equivalent value are not
so purchased within six months, the Borrower will take such actions in
respect thereof as are contemplated by clauses (C) or (D) below, or
(B) contemporaneously with the consummation of such transaction, the
Borrower purchases property, land or buildings of at least equivalent
value which are subjected to the Lien of Additional Security Documents
in accordance with the provisions hereof, or (C) the Borrower prepays
the Loans in an aggregate amount (1) equal to the Net Cash Proceeds of
such transaction, in the case of any such property which is part of
the Development Property Pool, or (2) in the case of any property
which is part of the Mature Property Pool, the amount determined for
such property on the basis of the multiple (i.e. 5, 4.75 or 4)
reflected in the maximum ratio contained in section 8.12(a) applicable
at the time (even if section 8.12(a) shall no longer be in effect,
having been superseded by section 8.12(b), times the Cash Flow from
Operations for such property, or (D) the Borrower pays to the
Administrative Agent an amount in cash and/or Cash Equivalents equal
to such amount and the Administrative Agent shall hold such payment as
security for the obligations of the Borrower hereunder pursuant to a
cash collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent and the Borrower
(which shall permit certain investments in Cash Equivalents
satisfactory to the Administrative Agent and the Borrower until the
proceeds are applied to the secured obligations or earlier released by
the Administrative Agent to the Borrower from time to time in amounts
equal to the aggregate MPP Revolving Loans which the Borrower could
obtain at any such time, based upon the receipt by the Administrative
Agent of such certificates pursuant to section 7.1(e) and other
evidence as it may require to establish the amount of MPP Revolving
Loans which could be obtained at any such time in compliance with the
MPP Revolving Loan Sublimit and other applicable provisions of this
Agreement);
(g) the Reorganization; and
(h) the Borrower or any of its Subsidiaries may enter into
leases of property or assets not constituting Permitted Acquisitions
in the ordinary course of business not otherwise in violation of this
Agreement and to the extent not prohibited by section 8.6.
To the extent the Required Lenders (or all of the Lenders as shall be required
by section 12.12) waive the provisions of this section 8.2 with respect to the
sale, transfer or other disposition of any Collateral, or any Collateral is
sold, transferred or disposed of as permitted by a this section 8.2, (i) such
Collateral shall be sold, transferred or disposed of free and clear of the Liens
created by the respective Security Document; (ii) if such Collateral includes
all of the capital stock of a Subsidiary Guarantor, such capital stock shall be
released from the Pledge Agreement and such Subsidiary shall be released from
the Subsidiary Guaranty; and (iii) the Administrative Agent and the Collateral
Agent shall be authorized to take actions deemed appropriate by them in order to
effectuate the foregoing.
8.3. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
39
<PAGE>
or assets (including sales of accounts receivable or notes with recourse to the
Borrower or any of its Subsidiaries, other than for purposes of collection in
the ordinary course of business) or assign any right to receive income, or file
or permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute, except:
(a) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Borrower) have been established;
(b) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and
other similar Liens arising in the ordinary course of business, which
do not in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the
operation of the business of the Borrower or any Subsidiary;
(c) Liens created by this Agreement or the other Credit
Documents;
(d) Liens (i) in existence on the Closing Date which are
listed, and the Indebtedness secured thereby and the property subject
thereto on the Closing Date described, in Annex V, (ii) arising out of
the refinancing, extension, renewal or refunding of any Indebtedness
secured by any such Liens, provided that the principal amount of such
Indebtedness is not increased and such Indebtedness is not secured by
any additional assets;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
9.1(h);
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money);
(g) Leases or subleases granted to others not interfering in
any material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Agreement;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material, respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from financing statements regarding leases
not in violation of this Agreement;
(j) Liens securing Priority Debt to the extent such Liens do
not attach to any property or assets other than the property or asset
financed or refinanced by any such Debt;
(k) Liens created by virtue of Capitalized Lease Obligations,
provided that such Liens are only in respect of the property or assets
subject to, and secure only, the respective Capital Lease;
(l) Liens (i) placed upon equipment or machinery used in the
ordinary course of business of the Borrower or any Subsidiary at the
time of (or within 180 days after) the acquisition thereof by the
Borrower or any such Subsidiary to secure Indebtedness incurred to pay
all or a portion of the purchase price thereof, provided that the Lien
encumbering the equipment or
40
<PAGE>
machinery so acquired does not encumber any other asset of the
Borrower or any such Subsidiary; or (ii) existing on specific tangible
assets at the time acquired by the Borrower or any Subsidiary or on
assets of a person at the time such person first becomes a Subsidiary
of the Borrower, provided that (A) any such Liens were not created at
the time of or in contemplation of the acquisition of such assets or
person by the Borrower or any of its Subsidiaries, (B) in the case of
any such acquisition of a person, any such Lien attaches only to
specific tangible assets of such person and not assets of such person
generally, (C) the Indebtedness secured by any such Lien does not
exceed 100% of the fair market value of the asset to which such lien
attaches, determined at the time of the acquisition of such asset or
the time at which such person becomes a Subsidiary of the Borrower
(except in the circumstances described in clause (ii) above to the
extent such Liens constituted customary purchase money Liens at the
time of incurrence entered into in the ordinary course of business),
and (D) the Indebtedness secured thereby is permitted by section
8.4(b); and
(m) Permitted Encumbrances.
8.4. Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower or any Subsidiary subject to
Liens permitted by section 8.3(l), provided that the aggregate
principal amount of such Indebtedness shall not exceed $3,000,000 at
any time outstanding; and Indebtedness of the Borrower or any
Subsidiary in respect of Capital Leases, provided that the aggregate
amount of such Capitalized Lease Obligations under all Capital Leases
entered into after the Closing Date shall not exceed $10,000,000 at
any time outstanding;
(c) Existing Indebtedness, and any refinancing, extension,
renewal or refunding of any such Existing Indebtedness, provided that
(i) the aggregate principal amount of any such Indebtedness in respect
of Residential Mortgage Bond programs of the Borrower and its
Subsidiaries (as described in the Registration Statement) currently in
existence is not increased above $50,000,000, and (ii) the principal
amount of any other such Existing Indebtedness is not increased;
(d) Indebtedness of the Borrower under the Interest Rate
Agreements entered into pursuant to section 8.16;
(e) Indebtedness of (i) the Borrower to any Subsidiary
Guarantor; or (ii) any Subsidiary Guarantor to the Borrower or any
other Subsidiary Guarantor; or (iii) any Subsidiary (other than a
Subsidiary Guarantor) to the Borrower or to a Subsidiary Guarantor, in
an aggregate principal amount not in excess of $10,000,000 at any time
outstanding for all Indebtedness of all Subsidiaries which are not
Subsidiary Guarantors to the Borrower and the Subsidiary Guarantors;
provided that such Indebtedness referred to in this clause (e) shall
be evidenced by a promissory note which shall be pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(f) Contingent Obligations of (i) the Borrower or any
Subsidiary in respect of (A) leases of real property entered into by
the Borrower or any Subsidiary and (B) obligations of any Subsidiary
Guarantor permitted under this Agreement and (ii) the Borrower or any
Subsidiary in respect of any other person (other than in respect of
indebtedness for borrowed money) arising as a matter of applicable law
because the Borrower or such Subsidiary is or is deemed to be a
general partner of such other person;
(g) any Subsidiary may incur indebtedness ("Priority Debt")
to finance or refinance a property owned at the Closing Date and not
then subject to any IRB Debt or acquired pursuant
41
<PAGE>
to a Permitted Acquisition, provided that (i) Priority Debt of any
Subsidiary which is not a Subsidiary Guarantor shall not be guaranteed
(or otherwise supported) directly or indirectly by the Borrower, any
Subsidiary Guarantor or any other Subsidiary (other than the
Subsidiary incurring same) (except that the documentation governing
any Priority Debt may contain provisions relating to customary
indemnities from the Borrower or a Subsidiary Guarantor for fraud, use
of proceeds and environmental matters or as are otherwise reasonably
acceptable to the Administrative Agent), (ii) the principal amount of
any issue of Priority Debt shall not exceed 115% of the fair market
value of the property securing such Debt, determined at the time of
the acquisition of such property by the Borrower (and evidenced by a
certificate on behalf of the Borrower by an Authorized Officer of the
Borrower, if requested by the Administrative Agent), and (iii) the
aggregate principal amount of Priority Debt incurred by all
Subsidiaries at any time outstanding shall not exceed an amount equal
to 25% of Consolidated Net Worth, determined as of the most recently
completed fiscal quarter prior to the date of the most recent such
incurrence for which financial statements have been delivered pursuant
to section 7.1(a) or (b); and
(h) the Borrower or any Subsidiary Guarantor may incur
additional Indebtedness other than any guaranty or other Contingent
Obligation created in respect of Priority Debt (except for the
indemnities specifically referred to in clause (g)) in an aggregate
principal amount not to exceed $5,000,000 at any time outstanding.
8.5. Advances, Investments and Loans. The Borrower will not, and will
not permit any of its Subsidiaries to, lend money or credit or make advances to
any person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any person, except:
(a) the Borrower or any of its Subsidiaries may invest in
cash and Cash Equivalents;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(c) loans and advances (i) to employees for business-related
travel expenses, moving expenses and other similar expenses, in each
case incurred in the ordinary course of business, and (ii) to
employees in an aggregate principal amount not to exceed $500,000 at
any time outstanding, shall be permitted;
(d) to the extent allowed by section 8.2(c), (d) or (h), and
the creation of Subsidiaries in compliance with section 8.14 shall be
permitted;
(e) investments acquired by the Borrower or any of its
Subsidiaries (i) in exchange for any other investment held by the
Borrower or any such Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other investment, or (ii) as a result of a foreclosure by the
Borrower or any of its Subsidiaries with respect to any secured
investment or other transfer of title with respect to any secured
investment in default;
(f) investments of the Borrower in Interest Rate Agreements
entered into pursuant to section 8.16;
(g) Loans and advances permitted by section 8.4(e);
(h) the investments outstanding on the Closing Date which are
listed on Annex VI hereto (without any increase thereto); and
(i) loans, advances and investments not otherwise permitted
pursuant to the preceding clauses, made in cash or Cash Equivalents
after the Closing Date and taking into account any
42
<PAGE>
repayment of any such loans or advances or the return or other
realization in cash or Cash Equivalents of the amount of such
investments, in compliance with the following requirements: (A) at the
time of making any such loan, advance or investment and after giving
effect thereto, no Default or Event of Default shall have occurred and
be continuing; (B) the person (including a joint venture) to which
such loan or advance is made, or in which such investment is made,
shall own or be committed to acquire one or more assisted living
properties located in the United States; (C) the Borrower or a
Subsidiary Guarantor shall have been retained (or shall have a
commitment to be retained upon completion of any proposed development)
to manage such property or properties, subject to any termination of
any existing management contracts pertaining thereto; (D) at least 10
days prior to the date of any such loan, advance or investment
involving $3,000,000 or more (including any commitments in respect of
future loans, advances or investments), the Borrower shall have
delivered to the Administrative Agent an officer's certificate
executed on behalf of the Borrower by an Authorized Officer of the
Borrower, which certificate shall (1) contain the date such loan,
advance or investment is scheduled to be consummated, (2) specify the
known or estimated amount thereof, (3) contain a description, to the
extent then known, of the property and/or assets owned or proposed to
be acquired by such person, (4) demonstrate that at the time of making
any such loan, advance or investment the covenants contained in
sections 8.10, 8.11, 8.12 and 8.13 shall be complied with on a pro
forma basis as if the loan, advance or investment so made had been
made by the Borrower, and the Indebtedness assumed and/or incurred to
acquire and/or finance same has been outstanding, for the 12 month
period immediately preceding such loan, advance or investment (without
giving effect to any credit for unobtained or unrealized gains in
connection therewith), (5) confirms that the property acquired or to
be acquired by such person with the proceeds of such loan, advance or
investment is to be (or is to be following completion of development
thereof) managed by the Borrower or a Subsidiary Guarantor, and (6)
attach thereto a true and correct copy of the then proposed loan
agreement, purchase agreement or similar agreement, partnership
agreement and/or management contract entered into in connection with
such loan, advance or investment; and (E) the aggregate amount of all
such loans, advances and investments made after the Closing Date, when
taken together with the aggregate principal amount of all loans and
advances at the time outstanding made by the Borrower and the
Subsidiary Guarantors to all Subsidiaries which are not Subsidiary
Guarantors, shall not exceed $20,000,000; provided that there shall be
excluded from the foregoing amount the amount of any such loans,
advances and investments made pursuant to this clause (i) as to which
the person to whom or in whom any such loan, advance or investment is
made has executed and delivered to the Administrative Agent (I) a
guaranty agreement, substantially in the form of the Subsidiary
Guaranty, guaranteeing the Obligations, subject to the effect of any
limitations on the enforceability of such guaranty arising under any
fraudulent transfer laws and has provided to the Administrative Agent
such evidence as the Administrative Agent may reasonably request to
establish the financial condition and solvency of such person, and
(II) a mortgage and security agreement, satisfactory in form and
substance to the Administrative Agent, pursuant to which such person
has granted a first priority Lien on and security interest in all of
its assets and properties, subject to no encumbrances which are not
acceptable to the Administrative Agent, accompanied by such supporting
documentation as is contemplated by section 7.10(a).
8.6. Certain Leases. The Borrower will not permit the aggregate
payments (including, without limitation, any property taxes paid by the Borrower
and its Subsidiaries as additional rent or lease payments) by the Borrower and
its Subsidiaries on a consolidated basis under agreements in effect as of the
Closing Date and/or entered into after the Closing Date (including any such
agreement that is an extension, replacement, substitution, or renewal of any
agreement entered into prior to such date) to rent or lease any real or personal
property (exclusive of (i) Capitalized Lease Obligations and (ii) "true leases",
that is leases which for Federal income tax purposes the Borrower or any
Subsidiary is not considered the owner of the property involved) to exceed
$1,000,000 in any fiscal year of the Borrower.
8.7. Prepayments and Refinancings of IRB Debt, Modifications of
Agreements, etc. The Borrower will not, and will not permit any of its
Subsidiaries to:
43
<PAGE>
(a) make (or give any notice in respect thereof) any
voluntary or optional payment or prepayment or redemption or
acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities
before due for the purpose of paying when due) or exchange of, or
refinance or refund, any Existing Indebtedness which is IRB Debt;
provided that the Borrower or any Subsidiary may refinance or refund
any such IRB Debt if the aggregate principal amount thereof is not
increased and the weighted average life to maturity thereof (computed
in accordance with standard financial practice) is not reduced by more
than 10%, or if such aggregate principal amount is so increased (in
compliance with any limitations contained in section 8.4) or weighted
average life to maturity is so decreased, the Borrower shall have, or
shall have caused the applicable Subsidiary to have, granted to the
Administrative Agent, as security for the Obligations, a Mortgage
covering the property financed by such IRB Debt, together with such
supporting documentation as is contemplated by section 7.10(a), which
Mortgage shall be (i) a first priority Mortgage, if such IRB Debt is
supported, directly or indirectly by a Letter of Credit issued (or
deemed issued) hereunder, securing only the Obligations (and such IRB
Debt), or (ii) a second priority Mortgage, securing the Obligations,
which is junior to any mortgage securing such IRB Debt (and any
letters of credit issued in support thereof), in the case of any such
IRB Debt not supported, directly or indirectly by a Letter of Credit
issued (or deemed issued) hereunder;
(b) amend or modify (or permit the amendment or modification
of) any of the terms or provisions of or terminate (other than any
scheduled termination in accordance with the terms thereof) (i) in any
manner adverse to the interests of the Lenders any documents or
agreement governing any Existing Indebtedness, or (ii) in any manner
that has, or which would reasonably be expected to have, a Material
Adverse Effect, any Acquisition Document: and/or
(c) amend, modify or change in any manner materially adverse
to the interests of the Lenders the certificate of incorporation
(including, without limitation, and in any event, by the filing of any
certificate of designation), partnership agreement, certificate of
formation or by-laws of any Credit Party, or enter into any new
agreement with respect to the capital stock or equity interests, as
the case may be, of any Credit Party (to the extent adverse to the
interests of the Lenders).
8.8. Dividends, etc. The Borrower will not, and will not permit any
Subsidiary to declare or pay any dividends (other than, in the case of the
Borrower, dividends payable solely in common stock of the Borrower) or return
any capital to, its stockholders, equity holders or partners or authorize or
make any other distribution, payment or delivery of property or cash to its
stockholders, equity holders or partners, as such, or redeem, retire, purchase
or otherwise acquire, directly or indirectly, for any consideration, any shares
of any class of its capital stock or equity or partnership interests now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any of such shares), or set aside any funds for any of the
foregoing purposes, or permit any Subsidiary to purchase or otherwise acquire
for consideration, any shares of any class of the capital stock or equity or
partnership interests of the Borrower or any such Subsidiary, as the case may
be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued with respect to such capital stock or limited
liability company or partnership interests) (all of the foregoing "Dividends"),
except that (i) any Wholly-Owned Subsidiary of the Borrower may pay Dividends to
the Borrower or to any Subsidiary Guarantor, and (ii) any other Subsidiary of
the Borrower may pay Dividends to the holders of its equity interests in
accordance with such contractual arrangements as may exist from time to time
among the holders of its equity interests.
8.9. Transactions with Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than, in the case of a Subsidiary, the Borrower or a
Subsidiary Guarantor) other than in the ordinary course of business and on terms
and conditions substantially as favorable to the Borrower or such Subsidiary as
would be obtainable, in the Borrower's reasonable judgment, by the Borrower or
such Subsidiary at the time in a comparable arm's-length transaction with a
person other than an Affiliate except (i) Management Contracts, (ii) investments
permitted by section 8.5 and (iii) payments made pursuant to section 8.8.
44
<PAGE>
8.10. Consolidated Net Worth. The Borrower will not permit
Consolidated Net Worth at any time to be less than $69,928,000 (plus the net
proceeds of the exercise of the over-allotment option referred to in the
Registration Statement, if such option is exercised), except that (i) effective
as of the end of the Borrower's fiscal quarter ended December 31, 1996, and as
of the end of each fiscal quarter thereafter, the foregoing amount (as it may
from time to time be increased as herein provided), shall be increased by 50% of
Consolidated Net Income for the fiscal quarter ended on such date, if any (there
being no reduction in the case of any such Consolidated Net Income which
reflects a deficit), and (ii) the foregoing amount (as it may from time to time
be increased as herein provided), shall be increased by an amount equal to 100%
of the cash proceeds (net of underwriting discounts and commissions and other
customary fees and costs associated therewith) from any sale or issuance of
equity by the Borrower after the Closing Date (other than (i) the over-allotment
option related to the IPO and (ii) any sale or issuance to management or
employees).
8.11. Capitalization Ratio. The Borrower will not at any time permit
the ratio of (i) Total Indebtedness to (ii) Total Capitalization, expressed as a
percentage, to exceed (A) 75.00%, at any time prior to the termination of the
Parent Guaranty in accordance with its terms, or (B) 60.00% at any time
thereafter.
8.12. Leverage Ratio. (a) The Borrower will not, at any time prior to
the termination of the Parent Guaranty in accordance with its terms, permit the
ratio of (i) Net Debt on the Mature Property Pool to (ii) Cash Flow from
Operations for the Mature Property Pool for any Test Period of 12 consecutive
months, to exceed the ratio applicable at such time as follows:
<TABLE>
<CAPTION>
==================================================== ===============================================================
Time Ratio
==================================================== ===============================================================
<S> <C>
Prior to June 30, 1997 4.75 to 1.00
- ---------------------------------------------------- ---------------------------------------------------------------
June 30, 1997 through June 29, 1998 4.75 to 1.00
- ---------------------------------------------------- ---------------------------------------------------------------
June 30, 1998 through June 29, 1999 4.50 to 1.00
- ---------------------------------------------------- ---------------------------------------------------------------
Thereafter 4.25 to 1.00
==================================================== ===============================================================
</TABLE>
As used herein, the term "Net Debt on the Mature Property Pool" means (i) all
Indebtedness of the Borrower and its Subsidiaries, on a consolidated basis, but
without duplication in respect of Letters of Credit supporting any Indebtedness
otherwise included, less the sum of (ii) cash and Cash Equivalents of the
Borrower and the Subsidiary Guarantors, to the extent that the same exceeds
$10,000,000, (iii) any such Indebtedness guaranteed pursuant to the Parent
Guaranty, (iv) the existing $14,000,000 Indebtedness owed to HPL, incurred
pursuant to the Incorporation Agreement, (v) any such Indebtedness associated
with the existing Resident Mortgage Bonds programs referred to in the
Registration Statement (without giving effect to any refinancing thereof which
increases the aggregate principal amount thereof above $50,000,000), and (v) any
such Indebtedness which constitutes Priority Debt of a Subsidiary; and the term
"Cash Flow from Operations" means, for any particular property or group of
properties, the sum of, after elimination of minority interests not owned by the
Borrower or a Subsidiary Guarantor, of net income, depreciation, amortization
and other non-cash charges to net income, interest expense and provision for
income taxes, minus non-cash credits to net income, all as determined under GAAP
with respect to the property or group of properties, and after allocation of a
management fee of 5% with respect to such property or group of properties. In
determining Cash Flow from Operations with respect to properties in the Mature
Property Pool, there shall be excluded from such Cash Flow from Operations the
Cash Flow from Operations in respect of (A) any such properties which are leased
(other than Hearthstone #7165), to the extent that the Cash Flow from Operations
of all such properties for any Test Period exceeds $1,000,000, (B) any such
properties which are managed but not owned or leased, to the extent that the
Cash Flow from Operations of all such properties for any Test Period exceeds
$200,000.
(b) The Borrower will not, at any time following the termination of
the Parent Guaranty in accordance with its terms, permit the ratio of (i) Total
Indebtedness to (ii) EBITDA for any Test Period, to exceed 3.50 to 1.00.
45
<PAGE>
8.13. Interest Coverage. The Borrower will not permit the Interest
Coverage Ratio for any Test Period to be less than 2.00 to 1.00.
8.14. Creation of Subsidiaries. The Borrower will not, and will not
permit any Subsidiary to, create or acquire any Subsidiary other than (i) a
Subsidiary that executes a counterpart of the Subsidiary Guaranty, the Pledge
Agreement and the Security Agreement, and (ii) a Subsidiary (other than a
Wholly-Owned Subsidiary, unless such Wholly-Owned Subsidiary has outstanding
Priority Debt), to the extent, in each case, that 100% of the capital stock or
other equity interests of such entity which is owned by the Borrower or any
other Subsidiary is pledged to the Collateral Agent pursuant to the Pledge
Agreement. Upon an entity ceasing to be a Subsidiary to which reference is made
in the preceding clause (ii), such entity, unless liquidated, shall become a
Subsidiary Guarantor and execute all documents required by the preceding and
following sentences. In addition, each new Subsidiary Guarantor created pursuant
to this section 8.14 shall execute and deliver, or cause to be executed, all
other relevant documentation of the type described in section 5 as such new
Subsidiary Guarantor would have had to deliver if such new Subsidiary were a
Credit Party on the Closing Date.
8.15. Limitation on Certain Restrictions on Subsidiaries. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction in the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (b) make loans or advances to the Borrower or any of the
Borrower's other Subsidiaries, or transfer any of its property or assets to the
Borrower or any of the Borrower's other Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) this Agreement and the other Credit Documents, (iii) customary provisions
restricting subletting or assignment of any lease governing a leasehold interest
of a Subsidiary of the Borrower, (iv) customary provisions restricting
assignment of any licensing agreement entered into by any Subsidiary of the
Borrower in the ordinary course of business, (v) customary provisions
restricting the transfer of assets subject to Liens permitted under section
8.3(j) and (l), (vi) customary restrictions governing any of the Indebtedness of
a Subsidiary permitted pursuant to 8.4(d) or (g), (vii) restrictions contained
in the reimbursement and other agreements relating to existing letters of credit
issued to support outstanding industrial revenue bonds the proceeds of which
were used to finance the Valley Gardens Health Care Center located in Stockton,
California, and the Meridian House retirement housing facility located in
Lantan, Florida, insofar as the provisions thereof in effect on the Closing Date
prohibit distributions to partners of the partnerships which own such facilities
unless certain cash flow tests have been satisfied, (viii) any document relating
to Indebtedness secured by a Lien permitted by section 8.3, insofar as the
provisions thereof limit grants of junior liens on the assets securing such
Indebtedness, (ix) any agreement relating to industrial revenue bonds permitted
by section 8.4(c) insofar as the provisions thereof limit grants to other
persons of Liens on the related facility or on any of such industrial revenue
bonds held by the remarketing agent with respect thereto (or, in the case where
the obligor thereon is a partnership, on any other assets of such partnership),
and (x) any operating lease or Capital Lease, insofar as the provisions thereof
limit grants of a security interest in, or other assignments of, the related
leasehold interest to any other person.
8.16. Interest Rate Hedging. The Borrower will not, and will not
permit any Subsidiary to, enter into any Interest Rate Agreement unless (i) such
Interest Rate Agreement is intended to fix or establish a maximum interest rate
in respect of Indebtedness with a notional amount not in excess of the Total
Commitment and is embodied in a standard ISDA form of agreement which is
acceptable to the Documentation Agent with respect to any intercreditor issues,
(ii) the counterparty is a Lender or another financial institution acceptable to
the Managing Agent and the Documentation Agent, and (iii) the Borrower promptly
provides a true and complete copy of such Interest Rate Agreement to the
Documentation Agent, the Managing Agent and the Administrative Agent. At or
following the effective date of any such Interest Rate Agreement, the Managing
Agent may, upon written notification to the Borrower, the Administrative Agent,
the Lenders and such counterparty, designate (which designation shall be made
only upon the instructions or with the consent of the Required Lenders in the
event the counterparty is not a Lender or an Affiliate of a Lender) the credit
exposure of such counterparty under such Interest Rate Agreement as an
obligation entitled to share, pari passu with the Obligations, in respect of the
benefits provided by the Collateral under the Security Documents, in accordance
with the applicable provisions of the Security Documents, and/or in the benefits
provided by the Parent Guaranty (in respect of any credit exposure which
constitutes a Required Payment
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(as defined in the Parent Guaranty)), and if the Managing Agent so designates
such credit exposure, the applicable Interest Rate Agreement of such
counterparty shall be considered a "Designated Interest Rate Agreement".
SECTION 9. EVENTS OF DEFAULT.
9.1. Events of Default. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payments: the Borrower shall (i) default in the payment
when due of any principal of the Loans or any reimbursement obligation
in respect of any Unpaid Drawing or (ii) default, and such default
shall continue for three or more days, in the payment when due of any
interest on the Loans or any Fees or any other amounts owing hereunder
or under any other Credit Document; or
(b) Representations, etc.: any representation, warranty or
statement made by any Credit Party herein or in any other Credit
Document or in any statement or certificate delivered or required to
be delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
(c) Covenants: the Parent or the Borrower shall (i) default
in the due performance or observance by it of any term, covenant or
agreement contained in section 11, 12, 13(f), 14, 15, 16 or 17 of the
Parent Guaranty or section 7.10, 7.11 or 8 of this Agreement, or (ii)
default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in clause (a) or
(b) above or the preceding clause (i) of this clause (c)) contained in
the Parent Guaranty or this Agreement or any other Credit Document and
such default shall continue unremedied for a period of at least 30
days after notice by the Administrative Agent or the Required Lenders;
or
(d) Default Under Other Agreements: (i) Borrower and
Subsidiaries: the Borrower or any of its Subsidiaries shall (A)
default in any payment with respect to any Indebtedness (other than
the Obligations and/or any non-recourse Indebtedness), and such
default shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such
Indebtedness, or (B) default in the observance or performance of any
agreement or condition relating to any such Indebtedness or contained
in any instrument or agreement evidencing, securing or relating
thereto (and all grace periods applicable to such observance,
performance or condition shall have expired), or any other event shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of the Borrower or any of
its Subsidiaries shall be declared to be due and payable, or shall be
required to be prepaid (other than by a regularly scheduled required
prepayment or redemption, prior to the stated maturity thereof),
provided that it shall not constitute an Event of Default pursuant to
this clause (d)(i) unless the aggregate amount of all Indebtedness
referred to in this clause (d)(i) above exceeds $2,000,000 at any one
time; or
(ii) Parent and Certain of its Subsidiaries: unless the
Parent Guaranty shall have been terminated in accordance with its
terms, (A) any event or condition shall occur that constitutes an
Event of Default under and as defined in the 1995 Credit Agreement (as
defined in the Parent Guaranty), after giving effect to any waivers,
consents or amendments with respect thereto; or (B) any event or
condition shall occur that (1) results in the acceleration of the
maturity of any Indebtedness of the Parent or any of its Subsidiaries
(other than the Borrower and its Subsidiaries), other than any such
Indebtedness outstanding under the 1995 Credit Agreement, or (2)
enables the holder or holders of such Indebtedness or any person
acting on behalf of such holder or holders to accelerate the maturity
thereof, and the aggregate amount that would be payable by the Parent
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and such Subsidiaries upon the acceleration of all Indebtedness
referred to in this clause (B) equals or exceeds $25,000,000; or
(e) Bankruptcy, etc.: (i) Borrower and Subsidiaries: the
Borrower or any of its Material Subsidiaries shall commence a
voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Material Subsidiaries and
the petition is not controverted within 10 days, or is not dismissed
within 60 days, after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of,
all or substantially all of the property of the Borrower or any of its
Material Subsidiaries; or the Borrower or any of its Material
Subsidiaries commences (including by way of applying for or consenting
to the appointment of, or the taking of possession by, a
rehabilitator, receiver, custodian, trustee, conservator or liquidator
(collectively, a "conservator") of itself or all or any substantial
portion of its property) any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation, conservatorship
or similar law of any jurisdiction whether now or hereafter in effect
relating to the Borrower or any of its Material Subsidiaries; or any
such proceeding is commenced against the Borrower or any of its
Material Subsidiaries to the extent such proceeding is consented by
such person or remains undismissed for a period of 60 days; or the
Borrower or any of its Material Subsidiaries is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Borrower or any of its Material
Subsidiaries suffers any appointment of any conservator or the like
for it or any substantial part of its property which continues
undischarged or unstayed for a period of 60 days; or the Borrower or
any of its Material Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate (or similar organizational)
action is taken by the Borrower or any of its Material Subsidiaries
for the purpose of effecting any of the foregoing; or
(ii) Parent and Certain of its Subsidiaries: unless the
Parent Guaranty shall have been terminated in accordance with its
terms, an involuntary case or other proceeding shall be commenced
against the Parent or any of its Material Subsidiaries (other than the
Borrower and its Subsidiaries) seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be
entered against the Parent or any of its Material Subsidiaries (other
than the Borrower and its Subsidiaries) under the Bankruptcy Code; or
(f) ERISA: (i) any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under
section 412 of the Code or section 302 of ERISA or a waiver of such
standard or extension of any amortization period is sought or granted
under section 412 of the Code or section 303 or 304 of ERISA, a
Reportable Event shall have occurred, any Plan which is subject to
Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title
IV of ERISA is, shall have been or is likely to be terminated or to be
the subject of termination proceedings under ERISA, any Plan shall
have an Unfunded Current Liability, a contribution required to be made
with respect to a Plan has not been timely made, the Borrower, or any
Subsidiary of the Borrower or any ERISA Affiliate has incurred or is
likely to incur any liability to or on account of a Plan under section
409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or section 401(a)(29), 4971 or 4975 of the Code or on account
of a group health plan (as defined in section 607(1) of ERISA or
section 4980B(g)(2) of the Code) under section 4980B of the Code, or
the Borrower, or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare
benefit plans (as defined in section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as
required by section 601 of ERISA) or Plans; or (ii) there shall result
from any such event or events the imposition of a lien, the granting
of a
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security interest, or a liability or a material risk of incurring a
liability; and (iii) any such event or events or any such lien,
security interest or liability, individually, and/or in the aggregate,
in the opinion of the Required Lenders, has had, or could reasonably
be expected to have, a Material Adverse Effect; or
(g) Security Documents: any Security Document shall cease to
be in full force and effect (other than upon termination thereof in
accordance with its terms), or shall cease to give the Collateral
Agent the Liens purported to be created thereby in favor of the
Collateral Agent, or any Credit Party shall default in the due
performance or observance of any material term, covenant or agreement
on its part to be performed or observed pursuant to any Security
Document and such default shall continue beyond any cure or grace
period specifically provided for in such Security Document; or
(h) Judgments: (i) Borrower and Subsidiaries: one or more
judgments or decrees shall be entered against the Borrower and/or any
of its Subsidiaries involving a liability (not paid or fully covered
by insurance) of $2,000,000 or more in the aggregate for all such
judgments and decrees for the Borrower and its Subsidiaries) and any
such judgments or decrees shall not have been vacated, discharged or
stayed or bonded pending appeal within 30 days from the entry thereof;
or
(ii) Parent and Certain of its Subsidiaries: unless the
Parent Guaranty shall have been terminated in accordance with its
terms, any one or more Enforceable Judgments for the payment of money
aggregating in excess of $20,000,000 shall be rendered against one or
more of the Parent or any of its Subsidiaries (other than the Borrower
and its Subsidiaries), net of any portion thereof covered by insurance
as to which the insurance carrier has acknowledged its responsibility;
or
(i) Guaranty: any Guaranty or any provision thereof shall
cease to be in full force or effect at any time prior to the
termination thereof in accordance with its terms, or any Guarantor or
any person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such Guaranty or any
Guarantor shall default in the due performance or observance of any
material term, covenant, or agreement on its part to be performed or
observed pursuant to the relevant Guaranty.
9.2. Acceleration, etc. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent or any
Lender to enforce its claims against the Borrower, except as otherwise
specifically provided for in this Agreement (provided that, if an Event of
Default specified in section 9.1(e) shall occur with respect to the Borrower,
the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Lender shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans, all Unpaid Drawings and all
obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Administrative Agent (or direct the Collateral Agent to enforce),
any or all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; and (v) direct the Borrower to pay (and the Borrower
hereby agrees that on receipt of such notice or upon the occurrence of an Event
of Default with respect to the Borrower under section 9.1(e), it will pay) to
the Collateral Agent an amount of cash equal to the aggregate Stated Amount of
all Letters of Credit then outstanding (such amount to be held as security after
the Borrower's reimbursement obligations in respect thereof).
9.3. Application of Liquidation Proceeds9.3. Application of
Liquidation Proceeds. All monies received by the Administrative Agent, the
Collateral Agent or any Lender from the exercise of remedies hereunder or under
the Security Documents, the other
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Credit Documents or under any other documents relating to this Agreement shall,
unless otherwise required by the terms of the Security Documents, the other
Credit Documents or by applicable law, be applied as follows:
(a) Proceeds of Parent Guaranty. All monies received from the
exercise of remedies under the Parent Guaranty shall be applied:
(i) first, to the payment of all expenses (to the extent
not paid by the Parent) incurred by the Administrative Agent,
the Collateral Agent and the Lenders in connection with the
exercise of such remedies, including, without limitation, all
costs and expenses of collection, attorneys' fees, court
costs and foreclosure expenses;
(ii) second, to the payment pro rata of interest then
accrued on the outstanding DPP Revolving Loans;
(iii) third, to the payment pro rata of any fees then
accrued and payable to the Administrative Agent, any Letter
of Credit Issuer or any Lender under this Agreement in
respect of the DPP Revolving Loans or the Allocated DPP
Letter of Credit Outstandings;
(iv) fourth, to the payment pro rata of (A) the principal
balance then owing on the outstanding DPP Revolving Loans,
(B) the Stated Amount of the Allocated DPP Letter of Credit
Outstandings (to be held and applied by the Collateral Agent
as security for the reimbursement obligations in respect
thereof), and (C) the amounts owing in respect of the
Designated Interest Rate Agreements which constitute Required
Payments (as defined in the Parent Guaranty);
(v) fifth, to the payment to the Lenders of any amounts
then accrued and unpaid under sections 1.07, 1.11, 1.14 and
8.08(d) hereof and which constitute Required Payments (as
defined in the Parent Guaranty), and if such proceeds are
insufficient to pay such amounts in full, to the payment of
such amounts pro rata;
(vi) sixth, to the payment pro rata of all other amounts
owed by the Borrower or any other Credit Party to the
Administrative Agent, to any Letter of Credit Issuer or any
Lender under this Agreement, any Security Document, or any
other Credit Document, which constitute Required Payments (as
defined in the Parent Guaranty), and if such proceeds are
insufficient to pay such amounts in full, to the payment of
such amounts pro rata; and
(vii) finally, any remaining surplus after all of the
Required Payments (as defined in the Parent Guaranty) have
been paid in full, to the Parent, the Borrower or to
whomsoever shall be entitled thereto.
(b) Other Proceeds. All monies received from the exercise of
remedies under any Credit Document (other than the Parent Guaranty)
shall be applied:
(i) first, to the payment of all expenses (to the extent
not paid by the Parent) incurred by the Administrative Agent,
the Collateral Agent and the Lenders in connection with the
exercise of such remedies, including, without limitation, all
costs and expenses of collection, attorneys' fees, court
costs and foreclosure expenses;
(ii) second, to the payment pro rata of interest then
accrued on the outstanding MPP Revolving Loans;
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(iii) third, to the payment pro rata of any fees then
accrued and payable to the Administrative Agent, any Letter
of Credit Issuer or any Lender under this Agreement in
respect of the MPP Revolving Loans or the Allocated MPP
Letter of Credit Outstandings;
(iv) fourth, to the payment pro rata of (A) the
principal balance then owing on the outstanding MPP Revolving
Loans, (B) the Stated Amount of the Allocated MPP Letter of
Credit Outstandings (to be held and applied by the Collateral
Agent as security for the reimbursement obligations in
respect thereof), and (C) the amounts owing in respect of the
Designated Interest Rate Agreements which do not constitute
Required Payments (as defined in the Parent Guaranty);
(v) fifth, to the payment to the Lenders of any
amounts then accrued and unpaid under sections 1.07, 1.11,
1.14 and 8.08(d) hereof and which do not constitute Required
Payments (as defined in the Parent Guaranty), and if such
proceeds are insufficient to pay such amounts in full, to the
payment of such amounts pro rata;
(vi) sixth, to the payment pro rata of all other
amounts owed by the Borrower or any other Credit Party to the
Administrative Agent, to any Letter of Credit Issuer or any
Lender under this Agreement, any Security Document, or any
other Credit Document, which do not constitute Required
Payments (as defined in the Parent Guaranty), and if such
proceeds are insufficient to pay such amounts in full, to the
payment of such amounts pro rata;
(vii) seventh, any remaining surplus after all
Obligations (other than Obligations which constitute Required
Payments, as defined in the Parent Guaranty) have been paid
in full, as provided and in the order of priority specified
in clause (a) above; and
(viii) finally, any remaining surplus after all of the
Obligations have been paid in full, to the Parent, the
Borrower or to whomsoever shall be entitled thereto.
SECTION 10. DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms in this Agreement
shall include in the singular number the plural and in the plural the singular:
"Acquisition" shall mean the acquisition by the Borrower of the Assets
as provided in the Acquisition Documents.
"Acquisition Documents" shall mean the Incorporation Agreement and the
transfer documents referred to therein, in each case in the form delivered to
the Administrative Agent pursuant to section 5.1(i) and without giving effect to
any amendment or modification thereof not consented to by the Required Lenders.
"Additional Security Documents" shall have the meaning provided in
section 7.10.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
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"Administrative Services Agreement" shall mean the Administrative
Services Agreement, between the Borrower and the Parent, in the form delivered
to the Administrative Agent pursuant to section 5.1(d) and without giving effect
to any amendment or modification thereof not consented to by the Required
Lenders.
"Affiliate" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person. A person shall be deemed to control a second
person if such first person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise.
"Aggregate Measured Swap Credit Exposure" shall mean the sum of the
Allocated Measured MPP Swap Credit Exposure and the Allocated Measured DPP Swap
Credit Exposure.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time further modified, amended and/or supplemented.
"Allocated DPP Letter of Credit Outstandings" shall mean the portion,
expressed as a percentage of the Letter of Credit Outstandings, which the
Administrative Agent determines from time to time has been a deemed utilization
of the Commitments in respect of DPP Revolving Loans. The sum of the Allocated
MPP Letter of Credit Outstandings and the Allocated DPP Letter of Credit
Outstandings shall always equal 100%.
"Allocated Measured DPP Swap Credit Exposure" shall mean, at any time
or times, an amount which is equal to (i) a fraction the numerator of which is
the largest amount of DPP Revolving Loans which the Borrower could have
outstanding under this Agreement at such time and the denominator of which is
the Total Commitment at such time, times (ii) the aggregate credit exposure of
the Borrower to the counterparties to the Designated Interest Rate Agreements,
calculated in accordance with standard financial practices, including
appropriate assumptions, employed by financial institutions in evaluating such
credit exposure.
"Allocated MPP Letter of Credit Outstandings" shall mean the portion,
expressed as a percentage of the Letter of Credit Outstandings, which the
Administrative Agent determines from time to time has been a deemed utilization
of the Commitments in respect of MPP Revolving Loans. The sum of the Allocated
DPP Letter of Credit Outstandings and the Allocated MPP Letter of Credit
Outstandings shall always equal 100%.
"Allocated Measured MPP Swap Credit Exposure" shall mean, at any time
or times, an amount which is equal to the aggregate credit exposure of the
Borrower to the counterparties to the Designated Interest Rate Agreements,
calculated in accordance with standard financial practices, including
appropriate assumptions, employed by financial institutions in evaluating such
credit exposure, reduced by the amount, if any, of the Allocated Measured DPP
Swap Credit Exposure.
"Assets" shall mean the assets acquired by the Borrower pursuant to,
and as more fully described in, the Acquisition Documents.
"Asset Sale" shall mean the sale, transfer or other disposition
(including by liquidations of a partnership of the interests therein of the
Borrower or any Subsidiary) by the Borrower or any Subsidiary to any person
other than the Borrower or any Subsidiary Guarantor of any of their respective
asset (other than sales, transfers or other dispositions of obsolete or excess
furniture, fixtures or equipment in the ordinary course of business).
"Assignment Agreement" shall mean an Assignment Agreement
substantially in the form of Exhibit I hereto.
"Authorized Officer" shall mean any officer or employee of a Credit
Party designated as such in writing to the Administrative Agent by such Credit
Party.
"Bankruptcy Code" shall have the meaning provided in section 9.1(e).
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"Base Rate" shall mean, for any period, 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 rate of interest established by PNC
Bank in Pittsburgh, Pennsylvania, from time to time, as its prime rate, whether
or not publicly announced, which interest rate may or may not be the lowest rate
charged by it for commercial loans or other extensions of credit; and (ii) the
Federal Funds Effective Rate in effect from time to time plus 1/2 of 1% per
annum.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in section 1.8(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of MPP Revolving Loans or DPP
Revolving Loans, as the case may be, consisting of one Type of Loan, by the
Borrower from all of the Lenders having Commitments on a pro rata basis on a
given date (or resulting from conversions on a given date), having in the case
of Eurodollar Loans the same Interest Period.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in Pittsburgh, Pennsylvania or Louisville, Kentucky a legal holiday or a day
on which banking institutions are authorized by law or other governmental
actions to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in U.S. dollar deposits in the interbank
Eurodollar market.
"Capital Lease" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Lender or
(y) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof (any such bank, an "Approved Lender"), in each case with maturities of
not more than one year from the date of acquisition, (iii) commercial paper
issued by any Lender or Approved Lender or by the parent company of any Lender
or Approved Lender and commercial paper issued by, or guaranteed by, any
industrial or financial company with a short- term commercial paper rating of at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within one
year after the date of acquisition and (iv) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (i) through (iii) above.
"Cash Flow from Operations" shall have the meaning provided in section
8.12(a).
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Borrower and/or any Subsidiary from such Asset
Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. (S) 9601 et seq.
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"Change of Control" shall mean and include (i) any person or group (as
such term is defined in section 13(d)(3) of the 1934 Act), other than the
Parent, shall acquire, directly or indirectly, beneficial ownership (within the
meaning of Rule 13d-3 and 13d-5 of the 1934 Act) of more than 50%, on a fully
diluted basis, of the economic or voting interest in the Borrower's capital
stock, (ii) the Parent shall cease, for any reason, to have, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3 and 13d-5 of
the 1934 Act) of at least 30%, on a fully diluted basis, of the economic or
voting interest in the Borrower's capital stock, and/or (iii) unless the Parent
Guaranty shall have been terminated in accordance with its terms, any person or
group (as such term is defined in section 13(d)(3) of the 1934 Act), shall
acquire, directly or indirectly, beneficial ownership (within the meaning of
Rule 13d-3 and 13d-5 of the 1934 Act) of more than 35%, on a fully diluted
basis, of the economic or voting interest in the Parent's capital stock.
"Closing Date" shall mean the date, on or after the Effective Date,
upon which the conditions specified in section 5.1 are satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Lenders pursuant to the Security Documents.
"Collective Bargaining Agreement" shall have the meaning provided in
section 5.1(d).
"Commitment" shall mean, with respect to each Lender, the amount set
forth opposite such Lender's name in Annex I as its "Commitment" as the same may
be reduced from time to time pursuant to section 3.2, 3.3 and/or 9 or adjusted
from time to time as a result of assignments to or from such Lender pursuant to
section 12.4.
"Commitment Commission" shall have the meaning provided in section
3.1(a).
"Consolidated Net Income" shall mean for any period, the net income
(or loss), without deduction for minority interests, of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP, provided that there shall
be excluded (i) the income (or loss) of any entity (other than a Subsidiary) in
which any other person (other than the Borrower or any of its Subsidiaries) has
a joint interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of its Subsidiaries by any
such entity during such period, (ii) the income, (or loss) of any entity accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with
the Borrower or any of its Subsidiaries or on which its assets are acquired by
the Borrower or any of its Subsidiaries and (iii) the income of any Subsidiary
to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary.
"Consolidated Net Worth" shall mean at any time for the determination
thereof all amounts which, in conformity with GAAP, would be included under the
caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Borrower as at such date.
"Contingent Obligations" shall mean as to any person any obligation of
such person guaranteeing 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
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the owner of any such primary obligation of 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, however, 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 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.
"Credit Documents" shall mean this Agreement, the Notes, the Security
Documents, the Parent Guaranty, the Subsidiary Guaranty and any Letter of Credit
Document.
"Credit Event" shall mean the making of any Loans and/or the issuance
of any Letter of Credit.
"Credit Party" shall mean the Parent, each Affiliate of the Parent
which is a party to the Parent Guaranty, the Borrower and each Subsidiary
Guarantor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with, respect to which a
Lender Default is in effect.
"Designated Interest Rate Agreement" shall have the meaning provided
in section 8.16.
"Development Property Pool" shall mean any and all properties owned,
leased or managed by the Borrower or any of its Subsidiaries which at the time
are not part of the Mature Property Pool.
"Dividends" shall have the meaning provided in section 8.9.
"DPP Loan Maturity Date" shall mean the date the Parent Guaranty
terminates in accordance with its terms.
"DPP Revolving Loan" shall have the meaning provided in section 1.1.
"DPP Revolving Loan Sublimit" shall mean (i) during the period
commencing on the Closing Date and ending 120 days thereafter, or such earlier
time as there shall be no possibility that any properties included in the Mature
Property Pool pursuant to clause (i) of the definition of the term Mature
Property Pool will be excluded therefrom because of failure to satisfy
conditions applicable thereto as provided in clause (i) of such definition,
$34,000,000, and (ii) at any time thereafter, the Maximum Guaranteed Amount, as
defined in the Parent Guaranty, which at any time of determination will be
applicable (without any reduction) for at least 30 days thereafter (it being
understood that if any reduction in the Maximum Guaranteed Amount is to become
effective within 30 days, then such reduced Maximum Guaranteed Amount shall be
applicable for purposes of this clause (ii)).
"EBIT" shall mean, for any period, (A) the sum of the amounts for such
period of (i) Consolidated Net Income, (ii) provisions for taxes based on
income, (iii) Total Interest Expense, (iv) amortization or write-off of deferred
financing costs to the extent deducted in determining Consolidated Net Income
and (v) losses on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary losses and other onetime non-cash charges,
less (B) gains on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary gains and other one-time non-cash gains, all
as determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"EBITDA"' shall mean, for any period, the sum of the amounts for such
period of (i) EBIT, (ii) depreciation expense, (iii) amortization expense and
(iv) any other non-cash charges, all as determined for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"Effective Date" shall have the meaning provided in section 12.10.
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"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which (i) so long as no Event of Default shall have
occurred and be continuing, and so long as the financial covenants and the
borrowing base limitations contained in this Agreement have not been waived or
modified following a deterioration in the financial condition or results of
operations of the Borrower, is not disapproved in writing by the Borrower in a
notice given to a requesting Lender and the Administrative Agent, specifying the
reasons for such disapproval, within five Business Days following the giving of
notice to the Borrower of the identity of any proposed transferee (any such
disapproval by the Borrower must be reasonable), and (ii) is not a direct
competitor of the Borrower or engaged in the same or similar business as the
Borrower, or any of its respective Subsidiaries or is not an Affiliate of any
such competitors of the Borrower or any of its respective Subsidiaries.
"Employment Agreements" shall have the meaning provided in section
5.1(d).
"Enforceable Judgment" shall mean a judgment or order of a court or
arbitral or regulatory authority as to which the period, if any, during which
the enforcement of such judgment or order is stayed shall have expired. A
judgment or order which is under appeal or as to which the time in which to
perfect an appeal has not expired shall not be deemed an Enforceable Judgment so
long as enforcement thereof is effectively stayed pending the outcome of such
appeal or the expiration of such period, as the case may be.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any binding and
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower or any of its Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. (S) 2601 et seq.; the Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. (S) 3803 et seq.; the Oil Pollution Act of 1990,
33 U.S.C. (S) 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. (S) 11001 et seq., the Hazardous Material
Transportation Act, 49 U.S.C. (S) 1801 et seq. and the Occupational Safety and
Health Act, 29 U.S.C. (S) 651 et seq. (to the extent it regulates occupational
exposure to Hazardous Materials); and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a "single employer" (i) within the meaning of section
414(b),(c), (m) or (o) of the Code or (ii) as a result of the Borrower or a
Subsidiary of the Borrower being or having been a general partner of such
person.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in section 1.8(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (A) (i) the rate for deposits in U.S. Dollars for a period
equal to such Interest Period which appears on the Telerate Page 3750 as
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of 11:00 A.M. London time, on, the day that is two Business Days prior to the
commencement of such Interest Period or (ii) in the event that the Eurodollar
Rate can not be determined pursuant to the preceding clause (i), the offered
quotation to first-class banks in the interbank Eurodollar market by the
Administrative Agent for dollar deposits of amounts in same day funds comparable
to the outstanding principal amount of the Eurodollar Loan of the Administrative
Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 11:00 A.M. (London time) on the date which is two Business Days
prior to the commencement of such Interest Period, in each case divided (and
rounded to the nearest 1/100th of 1%) by (B) a percentage equal to 100% minus
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in section 9.1.
"Existing Indebtedness" shall have the meaning provided in section
6.18.
"Existing Indebtedness Agreements" shall have the meaning provided in
section 5.1(d).
"Existing Letter of Credit" shall have the meaning provided in section
2.1(d).
"Expiration Date" shall mean September 15, 1996.
"Facing Fee" shall have the meaning provided in section 3.1(c)
"Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate 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 Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
section 3.1.
"Financial Projections" shall have the meaning provided in section
6.8(d).
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of section 8,
including defined terms as used therein, are subject (to the extent provided
therein) to section 12.7(a).
"Governmental Authority" shall mean 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.
"Guaranties" shall mean the Parent Guaranty and the Subsidiary
Guaranty.
"Guarantor" shall mean the Parent and each Subsidiary Guarantor.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials,' "restricted hazardous materials," "extremely hazardous wastes, a
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect under any applicable Environmental Law.
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"HPL" shall mean Hillhaven Properties, Ltd., an Oregon corporation,
and its successors and assigns, a Wholly-Owned Subsidiary of the Borrower.
"Incorporation Agreement" shall mean the Incorporation Agreement, by
and among the Borrower, the Parent, and certain Affiliates of the Parent, in the
form delivered to the Administrative Agent pursuant to section 5.1(i) and
without giving effect to any amendment or modification thereof not consented to
by the Required Lenders.
"Indebtedness" of any person shall mean without duplication (i) all
indebtedness of such person for borrowed money, (ii) all bonds, notes,
debentures and similar debt securities of such person, (iii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such person, (iv) the face
amount of all letters of credit issued for the account of such person and,
without duplication, all drafts drawn thereunder, (v) all Indebtedness of a
second person secured by any Lien on any property owned by such first person,
whether or not such indebtedness has been assumed, (vi) all Capitalized Lease
Obligations of such person, (vii) all obligations of such person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (viii) all net obligations
of such person under Interest Rate Agreements and (ix) all Contingent
Obligations of such person, provided that neither trade payables and accrued
expenses, in each case arising in the ordinary course of business, nor
obligations in respect of insurance policies or performance or surety bonds
which themselves are not guarantees of Indebtedness (nor drafts, acceptances or
similar instruments evidencing the same nor obligations in respect of letters of
credit supporting the payment of the same), shall constitute Indebtedness.
"Information Memorandum" shall have the meaning provided in section
6.8(d).
"Interest Coverage Ratio" shall mean, for any Test Period, the ratio
of (x) EBITDA to (y) Total Interest Expense, in each case for such Test Period.
"Interest Period" with respect to any Eurodollar Loan shall mean the
interest period applicable thereto, as determined pursuant to section 1.9.
"Interest Rate Agreement" shall mean any interest rate swap agreement,
any interest rate cap agreement, any interest rate collar agreement or other
similar agreement or arrangement designed to protect against fluctuations in
interest rates.
"IPO" shall have the meaning provided in section 5.1(j).
"IRB Debt" shall mean the industrial revenue bonds or similar
instruments comprising a part of the Existing Indebtedness as identified in
Annex IV hereto, and any industrial revenue bonds or similar instruments issued
in connection with a refinancing or refunding of any thereof.
"Leaseholds" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Legal Requirements" shall mean all applicable laws, rules, orders and
regulations made by any legislature or government or any governmental body or
regulatory authority having jurisdiction over the Borrower or a Subsidiary.
"Lender" shall have the meaning provided in the first paragraph of
this Agreement.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) in violation of the terms of this Agreement of a Lender to make
available its portion of any incurrence of Loans or to fund its portion of any
unreimbursed payment under section 2.4(c) or (ii) a Lender having notified the
Administrative Agent and/or the Borrower that it does not intend to comply with
the obligations under section 1.1 and/or section 2.4(c), in the case of either
(i) or (ii) as a result of the appointment of a receiver or conservator with
respect to such Lender at the direction or request of any regulatory agency or
authority.
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"Letter of Credit" shall have the meaning provided in section 2.1(a).
"Letter of Credit Documents" shall have the meaning specified in
section 2.2(a).
"Letter of Credit Fee" shall have the meaning provided in section
3.1(b).
"Letter of Credit Issuer" shall mean (i) PNC Bank, (ii) in respect of
each Existing Letter of Credit, the Lender that has issued same as of the
Effective Date and/or (iii) such other Lender that is requested, and agrees, to
so act by the Borrower.
"Letter of Credit Outstandings" shall mean, at anytime, the sum,
without duplication, of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in section
2.2(a).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Loan" shall have the meaning provided in section 1.1.
"Management Agreements" shall have the meaning provided in section
5.1(d).
"Management Contracts" shall have the meaning provided in section
5.1(d).
"Managing Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the Managing
Agent appointed pursuant to section 11.9.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of, when used with reference to the Parent, the Parent
and its Subsidiaries, taken as a whole, or when used with reference to the
Borrower, the Borrower and its Subsidiaries, taken as a whole, as the case may
be, in each case after giving effect to the Transaction.
"Material Subsidiary" shall mean, at any time, with reference to any
person, any Subsidiary of such person that (x) has assets at such time
comprising 5% or more of the consolidated assets of such person and its
Subsidiaries or (y) had net income in the most recently ended fiscal year of
such person comprising 5% or more of the consolidated net income of such person
and its Subsidiaries for such fiscal year.
"Mature Property Pool" shall mean:
(i) all properties owned, leased or managed by the Borrower
or any of its Subsidiaries on the Closing Date (after giving effect to
consummation of the Transaction), other than the Valley Manor property
located in Tucson, Arizona, as to which the following conditions are
satisfied:
(1) in the case of any property described in Part I
or Part II of Annex III, the Borrower shall have provided to
the Managing Agent a Phase I environmental audit report,
addressed to the Managing Agent and the Administrative Agent,
or accompanied by an appropriate letter authorizing such
reliance, with respect to such property, prepared by an
environmental consulting firm acceptable to the Managing
Agent, which report shall be satisfactory in form and
substance to the Managing Agent, and the Borrower shall have,
or shall have caused its applicable Subsidiary to, complete,
to the satisfaction of the Managing Agent, any remedial work
and establish any additional environmental compliance
activities as are recommended in such environmental report;
provided, that with respect to any such property as to which
such
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requirement was not satisfied on the Closing Date, such
property shall be excluded from the Mature Property Pool and
become part of the Development Property Pool if either (i)
such condition is not satisfied within 90 days following the
Closing Date, or (ii) the Managing Agent determines at any
time thereafter that any such remedial work or establishment
of environmental compliance activities has not been completed
to its satisfaction;
(2) in the case of any property described in Part I of
Annex III which is owned by the Borrower or a Subsidiary, the
Borrower shall have provided to the Managing Agent, with
respect to such property, a survey, in form and substance
reasonably satisfactory to the Collateral Agent and the
Managing Agent, of such property, certified in a manner
satisfactory to the Collateral Agent and the Managing Agent
by a licensed professional surveyor reasonably satisfactory
to the Collateral Agent and the Managing Agent, and an
endorsement to the Mortgage Policy covering such property
which eliminates the "survey" exception, or if such "survey"
exception is so eliminated by endorsement without the
necessity of an updated survey, such endorsement shall have
been so delivered, whether or not an updated survey is so
delivered; provided, that with respect to any such property
as to which such requirement was not satisfied on the Closing
Date, such property shall be excluded from the Mature
Property Pool and become part of the Development Property
Pool if such condition is not satisfied within 90 days
following the Closing Date;
(3) in the case of any property described in Part II of
Annex III as to which there is outstanding any IRB Debt
supported directly or indirectly by a Letter of Credit issued
(or deemed issued) hereunder and which is owned or leased by
the Borrower or a Subsidiary, such property shall be excluded
from the Mature Property Pool and become part of the
Development Property Pool if within 120 days following the
Closing Date any of the following conditions are not
satisfied with respect to such property:
(A) in connection with the original issuance or
refunding of such IRB Debt prior to the Closing Date, the
Borrower or the applicable Subsidiary shall have
mortgaged such property or entered into a deed of trust
with respect to such property, as security for such IRB
Debt and/or such Letter of Credit (or another letter of
credit supported by such Letter of Credit, under
circumstances where a drawing under such Letter of Credit
shall entitle the applicable Letter of Credit Issuer to
succeed to the rights of the issuer of such other letter
of credit as a beneficiary of such mortgage or deed
of trust), which mortgage or deed of trust shall be
first priority and subject to no Liens which are not
acceptable to the Managing Agent;
(B) any Subsidiary which is the owner of any direct
or indirect interest therein shall have become (if it is
not already) a party to the Subsidiary Guaranty, the
Pledge Agreement and the Security Agreement; and
(C) there shall have been delivered in connection
with such mortgage or deed of trust such related UCC
financing statements, consents of landlords,
non-disturbance and attornment agreements and similar
documents, and such other documents as are customarily
delivered in connection with similar transactions, and
copies thereof shall have been delivered to the Managing
Agent and the Collateral Agent, with respect to such
property;
(4) in the case of any property described in Part II of
Annex III as to which there is outstanding any IRB Debt
supported directly or indirectly by a Letter of Credit issued
(or deemed issued) hereunder and which is owned or leased by
the Borrower, and as to which the conditions specified in the
foregoing clause (3) are not satisfied as provided therein,
such property shall be excluded from the Mature Property Pool
and become part of the Development Property Pool if within
120 days following the Closing Date any of the following
conditions are not satisfied with respect to such property:
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(A) either (i) the Collateral Agent shall have been
granted a Mortgage covering such property (or the
interest of the Borrower or its Subsidiary therein, in
the case of a leasehold), which Mortgage shall, if a
first priority mortgage as to such property (or
leasehold) has been granted to secure existing IRB Debt
related thereto, or letters of credit issued to support
such IRB Debt, constitute a second priority Lien thereon,
subject to such Permitted Encumbrances as may be
acceptable to the Managing Agent, or (ii) the Lenders
shall have acquired a 100% risk participation in all
such letters of credit on terms and conditions
satisfactory to all of the Lenders in their sole
discretion, in which event such letters of credit shall
be deemed Letters of Credit issued hereunder, and the
Collateral Agent shall have been granted or assigned a
first priority Mortgage on such property (or leasehold),
or a second priority Mortgage on such property (or
leasehold) in the event a trustee for any industrial
revenue bonds shall hold a first mortgage thereon;
(B) any Subsidiary which is the owner of any direct
or indirect interest therein shall have become (if it is
not already) a party to the Subsidiary Guaranty, the
Pledge Agreement and the Security Agreement; and
(C) the Managing Agent and the Collateral Agent shall
have received related UCC financing statements, consents
of landlords, non-disturbance and attornment agreements
and similar documents, a Mortgage Policy, a survey and
such other documents as are contemplated by section
5.1(n) and this definition, all in form and substance
satisfactory to the Managing Agent and the Collateral
Agent, with respect to such property;
(5) in the case of any other property described in Part
III of Annex III which is leased by the Borrower or a
Subsidiary, such property shall be excluded from the Mature
Property Pool and become part of the Development Property
Pool if within 120 days following the Closing Date any of the
following conditions are not satisfied with respect to such
property:
(A) the Collateral Agent shall have been granted a
Mortgage covering such leasehold interest in such
property, which Mortgage shall be first priority and
subject to no Permitted Encumbrances which are not
acceptable to the Managing Agent;
(B) any Subsidiary which is the owner of any direct
or indirect interest therein shall have become (if it is
not already) a party to the Subsidiary Guaranty, the
Pledge Agreement and the Security Agreement; and
(C) the Managing Agent and the Collateral Agent shall
have received related UCC financing statements, consents
of landlords, non-disturbance and attornment agreements
and similar documents, and such other documents (not
including a Mortgage Policy or a survey) as are
contemplated by section 5.1(n) and this definition, all
in form and substance satisfactory to the Managing Agent
and the Collateral Agent, with respect to such property;
(6) in the case of the San Marcos Facility, such Facility
shall be excluded from the Mature Property Pool and become
part of the Development Property Pool if any of the following
conditions are not satisfied with respect to such Facility on
the Closing Date:
(A) the Borrower shall have pledged to the Collateral
Agent all equity interests in HPL held by the Borrower,
pursuant to the Pledge Agreement;
(B) HPL shall have pledged to the Collateral Agent
all promissory notes of San Marcos Courtyard, Ltd.
("SMCL") issued to it pursuant to the Restructuring
Agreement, dated as of December 1, 1994, between HPL and
SMCL, or otherwise held by HPL, pursuant to the Pledge
Agreement;
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(C) HPL shall have assigned to the Collateral Agent,
pursuant to a collateral assignment in form and substance
satisfactory to the Collateral Agent and the
Documentation Agent, as security for the Obligations, all
right, title and interest of HPL under the deed of trust,
granted as of December 1, 1994 by SMCL only for the
benefit of HPL, First Healthcare Corporation and
Hillhaven Corporation, to secure SMCL's share of
obligations under the Restructuring Agreement and the
Tenants in Common Agreement, each dated as of December 1,
1994, and a Working Capital Note related thereto, and all
recordings and filings necessary to give effect to such
collateral assignment shall have been duly made;
(D) HPL shall have collaterally assigned to the
Collateral Agent all contractual rights under all
contracts pertaining to the San Marcos Facility
(including, without limitation, the Tenants in Common
Agreement and the Restructuring Agreement), pursuant to
the Security Agreement; and
(E) HPL shall have entered into the Subsidiary
Guaranty; and
(7) in the case of any such property managed by a
Subsidiary of the Borrower, such Subsidiary shall have become
(if it is not already) a party to the Subsidiary Guaranty,
the Pledge Agreement and the Security Agreement; and
(ii) all properties owned, leased or managed by the Borrower
or any Subsidiary which are added to the Mature Property Pool (whether
by reason of transfer from the Development Property Pool or upon
acquisition thereof in a Permitted Acquisition) upon satisfaction of
the following conditions:
(1) in the case of the Valley Manor property (which is
covered by a Mortgage delivered on the Closing Date) only,
the Borrower shall have, or shall have caused its applicable
Subsidiary to, complete, to the satisfaction of the Managing
Agent, any further investigative work or remedial work with
respect to fill pipes, as identified in the environmental
report with respect thereto, as the same may be supplemented
after the Closing Date; provided, that with respect to any
such property as to which such requirement was not satisfied
on the date such property was added to the Mature Property
Pool, such property shall be excluded from the Mature
Property Pool and become part of the Development Property
Pool if the Managing Agent determines at any time thereafter
that any such remedial work has not been completed to its
satisfaction;
(2) any such property (other than the Valley Manor
property referred to in clause (1) above) which is owned or
leased by the Borrower or any Subsidiary must have achieved
an annualized Cash Flow from Operations per unit of $8,400
for three consecutive months (determined as provided below),
and the Borrower shall have provided to the Managing Agent
such certificates, information and other evidence as the
Managing Agent may reasonably require to demonstrate
satisfaction of this condition;
(3) any such property (other than the Valley Manor
property referred to in clause (1) above) must have achieved
at least 85% occupancy for each month during such three
consecutive month period, and the Borrower shall have
provided to the Managing Agent such certificates, information
and other evidence as the Managing Agent may reasonably
require to demonstrate satisfaction of this condition;
(4) if any such property (other than the Valley Manor
property referred to in clause (1) above, as to which this
condition has already been satisfied) is owned, leased or
managed by a Subsidiary of the Borrower, such Subsidiary
shall have become (if it is not already) a party to the
Subsidiary Guaranty, the Pledge Agreement and the Security
Agreement;
(5) if any such property (other than the Valley Manor
property referred to in clause (1) above) is owned or leased
by the Borrower or any Subsidiary, the Borrower shall have
provided
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to the Managing Agent a Phase I environmental audit report,
addressed to the Managing Agent and the Administrative Agent,
or accompanied by an appropriate letter authorizing such
reliance, with respect to such property, prepared by an
environmental consulting firm acceptable to the Managing
Agent, which report shall be satisfactory in form and
substance to the Managing Agent, and the Borrower shall have,
or shall have caused its applicable Subsidiary to, complete,
to the satisfaction of the Managing Agent, any remedial work
and establish any additional environmental compliance
activities as are recommended in such environmental report;
provided, that with respect to any such property as to which
such requirement was not satisfied on the date such property
was added to the Mature Property Pool, such property shall be
excluded from the Mature Property Pool and become part of the
Development Property Pool if the Managing Agent determines at
any time thereafter that any such remedial work or
establishment of environmental compliance activities has not
been completed to its satisfaction;
(6) if any such property (other than the Valley Manor
property referred to in clause (1) above, as to which the
following conditions have been satisfied) is owned or leased
by the Borrower or any Subsidiary, all of the following
conditions are satisfied with respect to such property:
(A) the Collateral Agent shall have been granted a
Mortgage covering the ownership interest or leasehold
interest of the Borrower or such Subsidiary in such
property, which Mortgage shall be first priority and
subject to no Permitted Encumbrances which are not
acceptable to the Managing Agent, and such Mortgage shall
have been duly recorded and effective to establish such
Lien for a period of at least 90 days; and
(B) the Managing Agent and the Collateral Agent shall
have received related UCC financing statements, consents
of landlords, non-disturbance and attornment agreements
and similar documents, a Mortgage Policy, a survey and
such other documents as are contemplated by section
5.1(n) and this definition, all in form and substance
satisfactory to the Managing Agent and the Collateral
Agent, with respect to such property; and
(7) in the case of any such property (other than the
Valley Manor property referred to in clause (1) above, as to
which this condition has already been satisfied) managed by a
Subsidiary of the Borrower, such Subsidiary shall have become
(if it is not already) a party to the Subsidiary Guaranty,
the Pledge Agreement and the Security Agreement; and
(8) in the case of any property as to which any of the
applicable conditions specified above has not been satisfied,
the Borrower may propose in writing to the Managing Agent
that such property nevertheless be included in the Mature
Property Pool upon compliance with such conditions, and
subject to such adjustments, if any, the Cash Flow from
Operations with respect to such property, as the Borrower may
determine to be appropriate and generally consistent with the
overall intent of this Agreement, with any such proposal to
be accompanied by such supporting materials as the Borrower
considers appropriate to a full and fair consideration of
such proposal by the Lenders, in which event the Managing
Agent shall advise the Lenders of such proposal and provide
the Lenders with copies of all materials submitted by the
Borrower in connection with such proposal; the Managing Agent
shall use reasonable efforts to communicate with the Lenders
and the Borrower as to any objections any Lender may have as
to such inclusion as proposed by the Borrower; if within
three weeks following the submission by the Managing Agent of
any such proposal to the Lenders the Managing Agent shall not
have received written indications of consent or approval to
such proposal (as it may be modified in any manner acceptable
to the Borrower and all of the Lenders) from all of the
Lenders, such proposal shall not become effective to add such
property to the Mature Property Pool; otherwise, if such
proposal (as it may be modified in any manner acceptable to
the Borrower and all of the Lenders) is approved as evidenced
by written consents or approvals from all of the Lenders,
such proposal (including any such modifications) shall become
effective to add such property to the Mature Property Pool;
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other than, in any such case referred to in clause (i) or (ii) of this
definition, any such properties owned, leased or managed by a Subsidiary which
has Priority Debt outstanding, and any such property which is encumbered by any
Lien securing or otherwise relating to any Residential Mortgage Bond Programs of
the Borrower and its Subsidiaries or with reference to which any such
Residential Mortgage Bond Program is in effect. The Managing Agent shall
determine from time to time which properties are included in the Mature Property
Pool. The Managing Agent shall notify the Borrower, the Administrative Agent and
the Lenders promptly after making any such determinations and from time to time,
in response to a request from any Lender, the Administrative Agent or the
Borrower, shall notify the Administrative Agent, the Lenders and the Borrower of
the properties included in the Mature Property Pool and the reasons why any
particular property has been excluded from the Mature Property Pool. Any
properties not in the Mature Property Pool shall be considered part of the
Development Property Pool. Any such determination by the Managing Agent shall be
conclusive and binding absent manifest error.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans,
$500,000, with minimum increments thereafter of $100,000 and (ii) for Eurodollar
Loans, $2,500,000, with minimum increments thereafter of $500,000.
"Moody's" shall mean Moody's Investors Service, Inc. and its
successors.
"Mortgage" shall have the meaning provided in section 5.1(n)(iii) and,
after the execution and delivery thereof, shall include each mortgage
constituting an Additional Security Document.
"Mortgage Policies" shall have the meaning provided in section
5.1(n)(iii).
"Mortgaged Property" shall have the meaning provided in section
5.1(n)(iii) and, after the execution and delivery of any mortgage or deed of
trust constituting an Additional Security Document, shall include the respective
property subject thereto but shall not include after the date of such release
any real property theretofore a Mortgaged Property that has been released from
the Liens of the Security Documents in accordance with the terms thereof or of
this Agreement.
"MPP Revolving Loan" shall have the meaning provided in section 1.1.
"MPP Revolving Loan Sublimit" shall mean an amount, as determined from
time to time by the Managing Agent and notified to the Borrower and the Lenders,
equal to the sum of (i) the amount that the Managing Agent determines would not
result in, or contribute to, a violation by the Borrower of the covenants
contained in section 8.12(a), whether or not the covenants contained in section
8.12(a) shall have been superseded by the covenants contained in section
8.12(b), plus (ii) if the Borrower has cash and Cash Equivalents which are
unencumbered by any Lien (including any cash collateral agreement in favor of
the Administrative Agent) in excess of $10,000,000, the amount of cash and Cash
Equivalents of the Borrower in excess of such amount which has been deposited by
the Borrower with the Administrative Agent pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Administrative Agent and the Borrower (which shall permit certain
investments in Cash Equivalents satisfactory to the Administrative Agent and the
Borrower until the proceeds are applied to the secured obligations or earlier
released by the Administrative Agent to the Borrower from time to time). Any
such determination by the Managing Agent shall be conclusive and binding absent
manifest error.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (i) reasonable and customary expenses
of sale incurred in connection with such Asset Sale, and other reasonable and
customary fees and expenses incurred, and all state, and local taxes paid or
reasonably estimated to be payable by such person, as a consequence of such
Asset Sale and the payment of principal, premium and interest of Indebtedness
secured by the asset which is the subject of the Asset Sale and required to be,
and which is, repaid under the terms thereof as a result of such Asset Sale,
(ii) amounts of any distributions payable to holders of minority interests in
the relevant person or in the relevant property or assets and (iii) incremental
income taxes paid or payable as a result thereof.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Non-Defaulting Lender" shall mean each Lender other than a Defaulting
Lender.
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"Note" shall have the meaning provided in section 1.5(a).
"Notice of Borrowing" shall have the meaning provided in section
1.3(a).
"Notice of Conversion" shall have the meaning provided in section 1.6.
"Notice Office" shall mean the office of the Administrative Agent at
One PNC Plaza, Fourth Floor Annex, Fifth Avenue and Wood Street, Pittsburgh,
Pennsylvania 15265, Attention: Arlene Ohler, Vice President, Multi-Bank Loan
Administration (telephone: (412) 762-3627; facsimile: (412) 762-8672), or such
other office as the Administrative Agent may designate to the Borrower from time
to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent or any Lender pursuant to the terms of this Agreement
or any other Credit Document.
"Parent" shall mean Vencor, Inc., a Delaware corporation, and its
successors and assigns.
"Parent Guaranty" shall have the meaning provided in section 5.1(l).
"Participant" shall have the meaning provided in section 2.4(a).
"Payment Office" shall mean the office of the Administrative Agent's
Affiliate, PNC Kentucky, at 500 West Jefferson Street, Louisville, Kentucky
40202, Attention: Todd Munson, Vice President, Mail Stop: K1-KHDQ-08-03
(telephone: (502) 581-4734; facsimile: (502) 581-2302), or such other office as
the Administrative Agent may designate to the Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean, at any time for each Lender with a
Commitment, the percentage obtained by dividing such Lender's Commitment by the
Total Commitment, provided that if the Total Commitment has been terminated, the
Percentage of each Lender shall be determined by dividing such Lender's
Commitment immediately prior to such termination by the Total Commitment
immediately prior to such termination.
"Permitted Acquisitions" shall mean and include, exclusive of
expenditures (including the purchase of adjacent land) to expand then existing
assisted living facilities located in the United States to the extent owned by
the Borrower or any Subsidiary Guarantor on the Closing Date or acquired
pursuant to a Permitted Acquisition, and exclusive of any loans, advances or
investments permitted pursuant to section 8.5(i): (i) advances or credit
extensions to, or other investments in, any person owning an assisted living
property located in the United States made in connection with the Borrower or
any Subsidiary Guarantor obtaining a management contract for such assisted
living property, in an aggregate amount not to exceed $500,000 for all advances,
credit extensions and investments pursuant to this clause (i); and (ii)
acquisitions (whether by purchase, lease or otherwise, and including
expenditures for start-up activities and operations and renovations) of assisted
living properties (or interests in such properties) located in the United States
and/or interests in (or the making of advances or credit extensions to or
investments in) partnerships or joint ventures owning assisted living properties
located in the United States, provided that the only Indebtedness that may be
incurred by the Borrower and its Subsidiaries to effect a Permitted Acquisition
shall be MPP Revolving Loans (if such Permitted Acquisition qualifies for
addition to the Mature Property Pool), DPP Revolving Loans and Priority Debt;
provided, that, unless the Required Lenders otherwise consent, with respect to
any transaction referred to in the foregoing clauses (i) and (ii), no such
transaction shall be considered a Permitted Acquisition if (A) the value of the
consideration paid or agreed to be paid (including any Priority Debt) exceeds
$15,000,000 on an individual facility basis, or $25,000,000 on a per transaction
basis, or (B) the cumulative consideration paid or agreed to be paid (including
Priority Debt) for all such transactions would exceed $50,000,000 in any fiscal
year, or (C) such transaction is not "friendly", or the validity or
effectiveness of the transaction itself is contested in any manner by the
seller, any holders of equity interests in the seller, or any governmental
agency, or (D) as a result thereof the Borrower or any Subsidiary acquires any
equity interest in any person and either (1) such person does not by virtue
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of such transaction become a Subsidiary of the Borrower, or (2) if such person
does not become a Subsidiary of the Borrower, all equity interests in such
person owned by the Borrower or any Subsidiary are not pledged pursuant to the
Pledge Agreement. For purposes of the preceding proviso, consideration paid in
the form of common stock of the Borrower shall be valued at 50% of the last
reported sales price of such stock on a national securities exchange or on
NASDAQ, as applicable, prior to the issuance thereof as payment in such
transaction.
"Permitted Encumbrances" shall mean, with respect to a Real Property
constituting part of the Collateral, (i) the liens, encumbrances and other
matters disclosed in the Mortgage Policy relating to the Mortgage on such Real
Property or "insured over" or "insured around" to the satisfaction of the
Collateral Agent in such Mortgage Policy, (ii) such other title and survey
exceptions as the Collateral Agent may approve in writing in its sole
discretion, and (iii) the Permitted Liens, if any, described in section 8.3(h)
affecting such Real Property.
"Permitted Liens" shall mean Liens described in section 8.3.
"person" shall mean any individual, partnership, joint venture, firm
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) the Borrower or a Subsidiary of the
Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in section
5.1(n)(i).
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement.
"PNC Bank" shall mean PNC Bank, National Association, and its
successors and assigns.
"PNC Kentucky" shall mean PNC Bank, Kentucky, Inc., and its successors
and assigns.
"Priority Debt" shall have the meaning provided in section 8.4(g).
"Prohibited Transaction" shall mean a transaction with respect to a
Plan that is prohibited under section 4975 of the Code or section 406 of ERISA
and not exempt under section 4975 of the Code or section 408 of ERISA.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. (S) 6901 et seq.
"Real Property" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, between the Borrower and the Parent, in the form delivered to the
Administrative Agent pursuant to section 5.1(d) and without giving effect to any
amendment or modification thereof not consented to by the Required Lenders.
"Registration Statement" shall mean the Registration Statement on Form
S-1, Registration Number 333-06907 filed by the Borrower with the SEC on June
26, 1996, as amended by Amendment No. 1 thereto filed by the Borrower with the
SEC on July 10, 1996, as amended by Amendment No. 2 thereto filed by the
Borrower with the SEC on July 29, 1996, together with any subsequent amendment
thereto satisfactory to the Administrative Agent.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
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"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Reorganization" shall have the meaning provided in section 5.1(h).
"Reportable Event" shall mean an event described in section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation section 2615.
"Required Lenders" shall mean Non-Defaulting Lenders whose outstanding
Loans and Unutilized Commitments constitute at least a majority of the sum of
the total outstanding Loans and Unutilized Commitments of Non-Defaulting
Lenders.
"Revolving Loan Maturity Date" shall mean the fourth anniversary of
the Closing Date, unless extended as provided in section 3.4.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"San Marcos Facility" shall mean the 212 unit independent and assisted
living facility known as San Marcos Retirement Village, located in San Marcos,
California, owned as tenants in common by HPL, a Wholly-Owned Subsidiary of the
Borrower, as to a 65% interest, and San Marcos Courtyard, Ltd., a California
limited partnership, as to a 35% interest, pursuant to a Tenants in Common
Agreement, dated as of December 1, 1994, pursuant to which, among other things,
HPL manages the facility, the facility has been leased to HPL and HPL has
certain rights to acquire the facility commencing September 15, 1999, or
pursuant to a right of first refusal. "SEC" shall mean the United States
Securities and Exchange Commission.
"SEC Regulation D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"section 4.4(b)(ii) Certificate" shall have the meaning provided in
section 4.4(b)(ii).
"Security Agreement" shall have the meaning provided in section
5.1(n)(ii).
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage, each other Additional Security Document and each
security document entered into pursuant to section 8.2(c).
"Shareholders' Agreements" shall have the meaning provided in section
5.1(d).
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"Subsidiary" of any person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean each Wholly-Owned Subsidiary that is
party to the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in section
5.1(m).
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"Tax Sharing Agreements" shall have the meaning provided in section
5.1(d).
"Taxes" shall have the meaning provided in section 4.4.
"Testing Period" shall mean (i) for any determination made prior to
June 30, 1997, the consecutive fiscal quarters of the Borrower then last ended
plus any period of historical results prior to consummation of the Transaction
necessary to make such period consist of four consecutive fiscal quarters, and
(ii) for any determination made thereafter, the four consecutive fiscal quarters
of the Borrower then last ended.
"Total Capitalization" shall mean the sum of Total Indebtedness and
Consolidated Net Worth.
"Total Commitment" shall mean the sum of the Commitments of the
Lenders.
"Total Indebtedness" shall mean all Indebtedness for borrowed money,
and all bonds, notes, debentures and similar debt securities, and all
Capitalized Lease Obligations, of or guaranteed by the Borrower and/or any of
its Subsidiaries all as determined on a consolidated basis.
"Total Interest Expense" shall mean, for any period, total interest
expense (including that which is capitalized and that which is attributable to
Capital Leases, in accordance with GAAP) of the Borrower and its Subsidiaries on
a consolidated basis with respect to all outstanding Indebtedness of the
Borrower and its Subsidiaries including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
net costs under Interest Rate Agreements, but excluding, however, any
amortization of deferred financing costs, all as determined in accordance with
GAAP.
"Transaction" shall include (i) the Reorganization, (ii) the IPO, and
(iii) if consummated on the Closing Date, any Permitted Acquisition.
"Transaction Documents" shall mean and include the Acquisition
Documents, the Registration Rights Agreement, the Administrative Services
Agreement, the Tax Sharing Agreement, the Registration Statement, all agreements
and documents governing the Transaction and the Credit Documents.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"Unpaid Drawing" shall have the meaning provided in section 2.3(a).
"Unutilized Commitment" for any Lender at any time shall mean the
excess of (i) such Lender's Commitment at such time over (ii) the sum of the
principal amount of Loans made by such Lender and outstanding at such time and
(y) such Lender's Percentage of Letter of Credit Outstandings at such time.
"Unutilized Total Commitment" shall mean, at any time, the excess of
(i) the Total Commitment at such time over (ii) the sum of (x) the aggregate
principal amount of all Loans then outstanding plus (y) the aggregate Letter of
Credit Outstandings at such time.
"Wholly-Owned Subsidiary" shall mean each Subsidiary of the Borrower
all of whose capital stock, equity interests and partnership interests are owned
directly or indirectly by the Borrower, its officers, stockholders and
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affiliates but excluding any Subsidiary primarily engaged in the business of
issuing insurance and/or insurance policies.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, facsimile transmission, telegraph or
cable.
SECTION 11. THE ADMINISTRATIVE AGENT
AND THE MANAGING AGENT.
11.1. Appointment. Each Lender hereby irrevocably designates and
appoints PNC Bank as Administrative Agent (such term to include, for the
purposes of this section 11, PNC Bank acting as Collateral Agent) and PNC
Kentucky as Managing Agent, in each case to act as specified herein and in the
other Credit Documents, and each such Lender hereby irrevocably authorizes PNC
Bank as the Administrative Agent for such Lender and PNC Kentucky as the
Managing Agent for such Lender, to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent or the Managing Agent, as the case may be, by the terms of this Agreement
and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent and the Managing Agent
each agrees to act as such upon the express conditions contained in this section
11. Notwithstanding any provision to the contrary elsewhere in this Agreement,
neither the Administrative Agent nor the Managing Agent shall have any duties or
responsibilities, except those expressly set forth herein or in the other Credit
Documents, nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent
or the Managing Agent. The provisions of this section 11 are solely for the
benefit of the Administrative Agent and the Managing Agent, and the Lenders, and
no Credit Party shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Administrative Agent and the Managing Agent shall each act solely as agent
of the Lenders and do not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for any Credit Party.
11.2. Delegation of Duties. The Administrative Agent and the Managing
Agent may each execute any of its duties under this Agreement or any other
Credit Document by or through agents or attorneys-in-fact and each shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Neither the Administrative Agent nor the Managing Agent shall be responsible for
the negligence or misconduct of the other or for any agents or attorneys-in-fact
selected by it with reasonable care except to the extent otherwise required by
section 11.3.
11.3. Exculpatory Provisions. Neither the Administrative Agent nor the
Managing Agent, 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 or such person under or in
connection with this Agreement (except for its or such person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower or any other Credit Party or any of their respective officers
contained in this Agreement, any other Credit Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent or the Managing Agent under or in connection with,
this Agreement or any other Credit Document or for any failure of the Borrower
or any other Credit Party or any of their respective officers to perform its
obligations hereunder or thereunder. Neither the Administrative Agent nor the
Managing Agent shall 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, this Agreement, or to inspect the properties, books or
records of the Borrower or any other Credit Party. Neither the Administrative
Agent nor the Managing Agent shall be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent or the Managing Agent to the
Lenders or by or on behalf of the Borrower or any other Credit Party to the
Administrative Agent, the Managing Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions,
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provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default.
11.4. Reliance by Agents. The Administrative Agent and the Managing
Agent shall each be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, facsimile transmission, telex or teletype message,
statement, order or other document or conversation believed by it, in good
faith, 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 the Borrower or any other Credit
Party), independent accountants and other experts selected by the Administrative
Agent or the Managing Agent, as the case may be. The Administrative Agent and
the Managing Agent shall each be fully justified in failing or refusing to take
any action under this Agreement or any other Credit Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be 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. The Administrative Agent and
the Managing Agent shall each in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders.
11.5. Notice of Default. Neither the Administrative Agent nor the
Managing Agent shall be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the Administrative Agent or the
Managing Agent, as the case may be, has received notice from a Lender or the
Borrower or any other Credit Party referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default." In the event that the Administrative Agent or the managing Agent
receives such a notice, the Administrative Agent or the Managing Agent, as the
case may be, shall give prompt notice thereof to the Lenders. The Administrative
Agent or the Managing Agent, as the case may be, shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders, provided that unless and until the Administrative Agent or
the Managing Agent, as the case may be, shall have received such directions, the
Administrative Agent or the Managing Agent, as the case may be, may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as shall be both (x) consistent with
the terms and provisions of the Credit Documents (including, without limitation,
the terms and provisions of section 12.12 hereof governing changes, waivers,
discharges and terminations) and (y) deemed advisable by it as being in the best
interests of the Lenders.
11.6. Non-Reliance. Each Lender expressly acknowledges that neither
the Administrative Agent nor the Managing Agent, nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates have
made any representations or warranties to it and that no act by the
Administrative Agent or the Managing Agent, as the case may be, hereinafter
taken, including any review of the affairs of the Borrower or other Credit
Party, shall be deemed to constitute any representation or warranty by the
Administrative Agent or the Managing Agent to any Lender. Each Lender represents
to the Administrative Agent and the Managing Agent that it has, independently
and without reliance upon the Administrative Agent or the Managing 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,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and the other Credit Parties and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent or the Managing 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, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Borrower and the other Credit Parties. Neither the Administrative Agent nor the
Managing Agent shall have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations, assets,
property, financial and other conditions, prospects or creditworthiness of the
Borrower or any other Credit Party which may come into the possession of the
Administrative Agent or the Managing Agent, as the case may be, or any of its
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates, other than the copies of certificates, financial statements and
documents provided by or on behalf of the Parent or the Borrower pursuant to the
provisions of the Credit Documents which are intended for the Lenders generally
and as to which the Administrative Agent or the Managing Agent, as the case may
be, is specifically required to provide copies thereof to the Lenders, and in
any such case the Administrative Agent or
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the Managing Agent, as the case may be, shall promptly so provide the Lenders
with such copies.
11.7. Indemnification. The Lenders agree to indemnify the
Administrative Agent and the Managing Agent in their respective capacities as
such ratably according to their respective Loans and unutilized Commitments,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against the Administrative Agent or the Managing Agent
in its capacity as such in any way relating to or arising out of this Agreement
or any other Credit Document, or any documents contemplated by or referred to
herein or the transactions contemplated hereby or any action taken or omitted to
be taken by the Administrative Agent or the Managing Agent, as the case may be,
under or in connection with any of the foregoing, but only to the extent that
any of the foregoing is not paid by the Borrower or another Credit Party,
provided that no Lender shall be liable to the Administrative Agent or the
Managing Agent for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent resulting solely from the Administrative Agent's or
the Managing Agent's, as the case may be, gross negligence or willful
misconduct. If any indemnity furnished to the Administrative Agent or the
Managing Agent for any purpose shall, in the opinion of the Administrative Agent
or the Managing Agent, as the case may be, be insufficient or become impaired,
the Administrative Agent or the Managing Agent, as the case may be, may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
section 11.7 shall survive the payment of all Obligations.
11.8. The Agents in Their Individual Capacity. The Administrative
Agent and the Managing Agent and their respective Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower, the other Credit Parties and their Affiliates as though not acting as
Administrative Agent or Managing Agent, as the case may be, hereunder. With
respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent and the Managing Agent shall each have the same rights and
powers under this Agreement as any Lender and may exercise the same as though it
were not the Administrative Agent or the Managing Agent, as the case may be, and
the terms "Lender" and "Lenders" shall include the Administrative Agent and the
Managing Agent in their respective individual capacities.
11.9. Successor Agents. The Administrative Agent and the Managing
Agent may each resign as the Administrative Agent or the Managing Agent, as the
case may be, upon 20 days' notice to the Lenders and the Borrower. The Required
Lenders shall appoint from among the Lenders a successor Administrative Agent or
Managing Agent, as the case may be, for the Lenders subject to prior approval by
the Borrower (such approval not to be unreasonably withheld or delayed),
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent or the Managing Agent, as the case may be, and the term
"Administrative Agent" or "Managing Agent", as the case may be, shall include
such successor agent effective upon its appointment, and the resigning
Administrative Agent's or Managing Agent's, as the case may be, rights, powers
and duties as the Administrative Agent or the Managing Agent, as the case may
be, shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or Managing Agent, as the case may be, or any
of the parties to this Agreement. After the retiring Administrative Agent's or
Managing Agent's, as the case may be, resignation hereunder as the
Administrative Agent or as the Managing Agent, as the case may be, the
provisions of this section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent or the Managing
Agent, as the case may be, under this Agreement.
11.10. Other Agents. The above provisions of this section 11 shall
inure to the benefit of the Documentation Agent as fully as if the Documentation
Agent were the Administrative Agent hereunder. Any Lender identified herein as a
Co-Agent, Syndication Agent or any other corresponding title, other than
"Administrative Agent", "Managing Agent", "Collateral Agent" or "Documentation
Agent", shall have no right, power, obligation, liability, responsibility or
duty under this Agreement or any other Credit Document except those applicable
to all Lenders as such. Each Lender acknowledges that it has not relied, and
will not rely, on any Lender so identified in deciding to enter into this
Agreement or in taking or not taking any action hereunder.
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SECTION 12. MISCELLANEOUS.
12.1. Payment of Expenses etc. The Borrower agrees to: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent, the Managing Agent
and the Documentation Agent in connection with the negotiation, preparation,
execution and delivery of the Credit Documents and the documents and instruments
referred to therein and any amendment, waiver or consent relating thereto
(including, without limitation, the reasonable fees and disbursements of Jones,
Day, Reavis & Pogue, in accordance with the proposal letter dated July 16, 1996
of such firm) and of the Administrative Agent and each of the Lenders in
connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent and for each of
the Lenders); (ii) in the event (x) that any of the Mortgages are foreclosed in
whole or in part or that any of the Mortgages are put into the hands of an
attorney for collection, suit, action or foreclosure, (y) of the foreclosure of
any mortgage prior to or subsequent to any of the Mortgages in which proceeding
the Collateral Agent is made a party, or (z) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of the Borrower or any of
its Subsidiaries, pay all costs of collection and defense, including reasonable
attorneys' fees in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, which shall be due and
payable together with all required service or use taxes; (iii) pay and hold each
of the Lenders harmless from and against any and all present and future stamp
and other similar taxes with respect to the foregoing matters and save each of
the Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iv) indemnify each Lender, its officers,
directors, employees, representatives and agents (collectively, the
"Indemnitees") from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of (a) any interest in
any Real Property (other than as permitted hereunder and/or under the other
Credit Documents) is claimed by any other person, (b) any investigation,
litigation or other proceeding (whether or not any Lender is a party thereto)
related to the entering into and/or performance of any Credit Document or the
use of the proceeds of any Loans hereunder or the Transaction or the
consummation of any transactions contemplated in any Credit Document, or (c) the
actual or alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any Real Property owned, leased
or at any time operated by the Borrower or any of its Subsidiaries, the release,
generation, storage, transportation, handling or disposal of Hazardous Materials
at any location, whether or not owned or operated by the Borrower or any of its
Subsidiaries, the non-compliance of any Real Property with foreign, federal,
state and local laws, regulations and ordinances (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim asserted
against the Borrower or any of its Subsidiaries or any Real Property owned,
leased or at any time operated by the Borrower or any of its Subsidiaries,
including, in each case, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the person to be indemnified or of any other
Indemnitee who is such person or an Affiliate of such person). To the extent
that the undertaking to indemnify, pay or hold harmless any person set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Lender (including, without limitation, by
branches and agencies of such Lender wherever located) to or for the credit or
the account of the Borrower against and on account of the Obligations and
liabilities of the Borrower to such Lender under this Agreement or under any of
the other Credit Documents, including, without limitation, all interests in
Obligations the Borrower purchased by such Lender pursuant to section 12.4(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
such Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
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12.3. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, transmitted, cabled or delivered, if to the
Borrower, at 3300 Providian, 400 West Market Street, Louisville, Kentucky 40202,
attention: Chief Financial Officer (facsimile: (502) 596-4160); if to any Lender
at its address specified for such Lender on Annex I hereto; if to the
Administrative Agent, at its Notice Address; if to the Managing Agent, to PNC
Bank, Kentucky, Inc. at 500 West Jefferson Street, Louisville, Kentucky 40202,
Attention: Todd Munson, Vice President, Mail Stop: K1-KHDQ-08-03 (telephone:
(502) 581-4734; facsimile: (502) 581-2302); or at such other address as shall be
designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, and shall be effective when
received.
12.4. Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that no Credit Party may assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders. Each Lender may at any time grant participations in
any of its rights hereunder or under any of the Notes to another financial
institution, provided that in the case of any such participation, (i) the
participant shall not have any rights under this Agreement or any of the other
Credit Documents, including rights of consent, approval or waiver (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), (ii) such Lender's obligations under this
Agreement (including, without limitation, its Commitment hereunder) shall remain
unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iv) such Lender shall
remain the holder of any Note for all purposes of this Agreement and (v) the
Borrower, the Administrative Agent, and the other Lenders shall continue to deal
solely and directly with the selling Lender in connection with such Lender's
rights and obligations under this Agreement, and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold such
participation, except that the participant shall be entitled to the benefits of
sections 1.10, 1.11 and 4.4 of this Agreement to the extent that such Lender
would be entitled to such benefits if the participation had not been entered
into or sold, and, provided further, that no Lender shall transfer, grant or
sell any participation under which the participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Credit Document except
to the extent such amendment or waiver would (x) extend the final scheduled
maturity of the Loans in which such participant is participating (it being
understood that any waiver of the making of, or the application of any
amortization payment or other prepayment or the method of any application of any
prepayment to the amortization of the Loans shall not constitute an extension of
the final maturity date thereof), or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of any mandatory prepayment
or a mandatory reduction in the Total Commitment, or a mandatory prepayment,
shall not constitute a change in the terms of any Commitment), (y) release all
or substantially all of the Collateral (in each case except as expressly
provided in the Credit Documents) or (z) consent to the assignment or transfer
by the Parent and/or the Borrower of any of its rights and obligations under
this the Parent Guaranty and this Agreement.
(b) Notwithstanding the foregoing, (x) any Lender may assign all or a
portion of its Loans and/or Commitment, and its rights and obligations hereunder
to another Lender that is not a Defaulting Lender or to an Affiliate of such
Lender which is a commercial bank, financial institution or other "accredited
investor" (as defined in SEC Regulation D), and (y) any Lender may assign all,
or if less than all, a portion equal to at least $5,000,000 in the aggregate for
the assigning Lender or assigning Lenders, of its Loans and/or Commitment and
its rights and obligations hereunder, to one or more Eligible Transferees, each
of which assignees shall become a party to this Agreement as a Lender by
execution of an Assignment Agreement, provided that, (i) at such time Annex I
shall be deemed modified to reflect the Commitment of such new Lender and of the
existing Lenders, (ii) upon surrender of the old Notes, new Notes will be
issued, at the Borrower's expense, to such new Lender and to the assigning
Lender, such new Notes to be in conformity with the requirements of section 1.5
(with appropriate modifications) to the extent needed to reflect the revised
Commitments, (iii) in the case of clause (y) only, the consent of the
Administrative Agent and each Letter of Credit Issuer shall be required in
connection with any such assignment (which consent shall not be unreasonably
withheld or delayed), and (iv) the Administrative Agent shall receive at the
time of each such assignment, from the assigning or assignee Lender, the payment
of a non-refundable assignment fee of $2,000 and,
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provided further, that such transfer or assignment will not be effective until
recorded by the Administrative Agent on a register maintained by it. To the
extent of any assignment pursuant to this section 12.4(b) the assigning Lender
shall be relieved of its obligations hereunder with respect to its assigned
Commitments. At the time of each assignment pursuant to this section 12.4(b) to
a person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in section 7701(a)(30) of the Code) for
Federal income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a section 4.4(b)(ii) Certificate) described in section
4.4(b). To the extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this section 12.4(b)
would, at the time of such assignment, result in increased costs under section
1.10 from those being charged by the respective assigning bank prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to any other increased costs of the
type described above resulting from changes after the date of the respective
assignment). Nothing in this section 12.4(b) shall prevent or prohibit any
Lender from pledging its Notes or Loans to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this section 12.4, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) Each Lender initially party to this Agreement hereby represents,
and each person that became a Lender pursuant to an assignment permitted by this
section 12.4 will, upon its becoming party to this Agreement, represent that it
is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires loans in the
ordinary course of its business and that it will make or acquire Loans for its
own account in the ordinary course of such business, provided that subject to
the preceding sections 12.4(a) and (b), the disposition of any promissory notes
or other evidences of or interests in Indebtedness held by such Lender shall at
all times be within its exclusive control.
(e) The Administrative Agent shall maintain at its Notice Office a
copy of each Assignment Agreement delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Loans owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Administrative
Agent and the Lenders may treat each person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
12.5. No Waiver: Remedies Cumulative. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Lender would otherwise have. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
12.6. Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower in
respect of any Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived in writing its right to receive
its pro rata share thereof) pro rata based upon their respective shares, if any,
of the Obligations with respect to which such payment was received. As to any
such payment received by the Administrative Agent prior to 1:00 P.M. (local time
at the Payment Office) in funds which are immediately available on such day, the
Administrative Agent will use all reasonable efforts to distribute such payment
in immediately available funds on the same day to the Lenders as aforesaid.
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(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount, provided that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
12.7. Calculations: Computations. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); provided, that except as otherwise specifically
provided herein, all computations determining compliance with sections 4.2 and
8, including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the December 31, 1995 financial statements delivered to
the Lenders pursuant to section 6.8(b), but shall not give effect to purchase
accounting adjustments required or permitted by APB 16 (including non-cash
write-ups and non-cash charges relating to inventory and fixed assets, in each
case arising in connection with the Transaction) and APB 17 (including non-cash
charges relating to intangibles and goodwill arising in connection with the
Transactions).
(b) All computations of interest on Base Rate Loans hereunder and all
computations of Commitment Commission hereunder shall be made on the actual
number of days elapsed over a year of 365 or 366 days, as applicable, and all
computations of interest on Eurodollar Loans, Letter of Credit Fees and other
Fees (other than Commitment Commission) hereunder shall be made on the actual
number of days elapsed over a year of 360 days.
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE COMMONWEALTH OF KENTUCKY,
EXCEPT THAT THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE
LIENS CREATED PURSUANT TO THE MORTGAGES SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE REAL PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE COMMONWEALTH OF KENTUCKY SHALL GOVERN THE VALIDITY
AND ENFORCEABILITY OF ALL CREDIT DOCUMENTS, INCLUDING ALL MORTGAGES, AND ALL OF
THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED
BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO
ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE COMMONWEALTH OF KENTUCKY
GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, EXCEPT TO THE
EXTENT AFORESAID WITH RESPECT TO THE LIENS CREATED BY THE MORTGAGES. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the Jefferson Circuit Court, Louisville, Kentucky, or of the
United States for the Western District of Kentucky, and, by execution and
delivery of this Agreement, the Borrower hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The Borrower hereby further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Borrower at its address for notices pursuant to section
12.3, such service to become effective 30 days after such mailing or at such
earlier time as may be provided under applicable law. Nothing herein shall
affect the right of the Administrative Agent or any Lender to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
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(b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) Each of the parties to this Agreement hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this Agreement, the other Credit Documents or the
transactions contemplated hereby or thereby.
12.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10. Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which the Borrower and each of the Lenders shall
have signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it.
12.11. Headings Descriptive. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12. Amendment or Waiver. Neither this Agreement nor any terms
hereof or thereof may be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing signed by the Borrower
and the Required Lenders, provided that no such change, waiver, discharge or
termination shall, without the consent of each Lender (other than a Defaulting
Lender) affected thereby, (i) extend the final maturity date applicable to a
Loan or a Commitment (it being understood that any waiver of the making of, or
application of any prepayment of or the method of application of any
amortization payment or other prepayment to, the amortization of, the Loans
shall not constitute an extension of such final maturity thereof), reduce the
rate or extend the time of payment of interest (other than as a result of
waiving the applicability of any post-default increase in interest rates) or
Fees thereon, or reduce the principal amount thereof, or increase the Commitment
of any Lender over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of any mandatory prepayment or a
mandatory reduction in the Total Commitment shall not constitute a change in the
terms of any Commitment of any Lender), (ii) release all or substantially all of
the Collateral (in each case except as expressly provided in the Credit
Documents), (iii) release any Guarantor from its Guaranty, except in strict
compliance with the provisions thereof, (iv) change the definition of the term
"Change of Control", (v) amend, modify or waive any provision of this section
12.12, or section 11.7, 12.1, 12.4, 12.6 or 12.7(b), (vi) reduce the percentage
specified in, or otherwise modify, the definition of Required Lenders, or (vii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. No provision of section 2 or 11 may be amended
without the consent of (x) any Letter of Credit Issuer adversely affected
thereby or (y) the Administrative Agent, respectively.
12.13. Survival. All indemnities set forth herein including, without
limitation, in section 1.10, 1.11, 2.5, 4.4, 11.7 or 12.1 shall survive the
execution and delivery of this Agreement and the making and repayment of Loans.
12.14. Domicile of Loans. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, provided that the Borrower shall not be responsible for costs arising
under section 1.10 or 4.4 resulting from any such transfer (other than a
transfer pursuant to section 1.12) to the extent not otherwise applicable to
such Lender prior to such transfer.
12.15. Confidentiality. Subject to section 12.4, the Lenders shall
hold all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as such by the Borrower in accordance with
76
<PAGE>
its customary procedure for handling confidential information of this nature and
in accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by any bona fide transferee or participant in
connection with the contemplated transfer of any Loans or Commitment or
participation therein (provided that each such prospective transferee and/or
participant shall execute an agreement for the benefit of the Borrower with such
prospective transferor Lender containing provisions substantially identical to
those contained in this section 12.15), to its auditors, attorneys or as
required or requested by any governmental agency or representative thereof or
pursuant to legal process, provided that, unless specifically prohibited by
applicable law or court order, each Lender shall notify the Borrower of any
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information, and provided further that
in no event shall any Lender be obligated or required to return any materials
furnished by or on behalf of the Borrower or any other Credit Party. The
Borrower hereby agrees that the failure of a Lender to comply with the
provisions of this section 12.15 shall not relieve the Borrower of any of the
obligations to such Lender under this Agreement and the other Credit Documents.
12.16. Lender Register. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
12.16, to maintain a register (the "Lender Register") on which it will record
the Commitments from time to time of each of the Lenders, the Loans made by each
of the Lenders and each repayment in respect of the principal amount of the
Loans of each Lender. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Lender Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Loans and prior to such recordation
all amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to section 12.4(b). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this section 12.16.
12.17. Limitations on Liability of the Letter of Credit Issuers. The
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit. Neither any Letter of Credit Issuer nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by a
Letter of Credit Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that such Borrower shall have a claim against a Letter of
Credit Issuer, and a Letter of Credit Issuer shall be liable to the Borrower, to
the extent of any direct, but not consequential, damages suffered by the
Borrower which the Borrower proves were caused by (i) such Letter of Credit
Issuer's willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (ii) such Letter of Credit Issuer's willful failure to make lawful
payment under any Letter of Credit after the presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, a Letter of Credit Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation.
12.18. General Limitation of Liability. No claim may be made by the
Borrower, any Lender, the Administrative Agent, the Documentation Agent, any
Letter of Credit Issuer or any other person against the Administrative Agent,
the Documentation Agent, any Letter of Credit Issuer, or any other Lender or the
Affiliates, directors, officers, employees, attorneys or agents of any of them
for any special, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement or any of the other Credit
Documents, or any act, omission or event
77
<PAGE>
occurring in connection therewith; and each of the Borrower, each Lender, the
Administrative Agent and each Letter of Credit Issuer hereby waives, releases
and agrees not to sue or counterclaim upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
12.19. No Duty. All attorneys, accountants, appraisers, consultants
and other professional persons (including the firms or other entities on behalf
of which any such person may act) retained by the Administrative Agent, the
Documentation Agent or any Lender with respect to the transactions contemplated
by the Credit Documents shall have the right to act exclusively in the interest
of the Administrative Agent, the Documentation Agent or such Lender, as the case
may be, and shall have no duty of disclosure, duty of loyalty, duty of care, or
other duty or obligation of any type or nature whatsoever to the Borrower, to
any of the other Credit Parties, to any of their Subsidiaries, or to any other
person, with respect to any matters within the scope of such representation or
related to their activities in connection with such representation.
12.20. Lenders and Agent Not Fiduciary to Credit Parties, etc. The
relationship among the Credit Parties and their Subsidiaries, on the one hand,
and the Administrative Agent, the Documentation Agent, each Letter of Credit
Issuer and the Lenders, on the other hand, is solely that of debtor and
creditor, and the Administrative Agent, the Documentation Agent, each Letter of
Credit Issuer and the Lenders have no fiduciary or other special relationship
with the Credit Parties and their Subsidiaries, and no term or provision of any
Credit Document, no course of dealing, no written or oral communication, or
other action, shall be construed so as to deem such relationship to be other
than that of debtor and creditor.
12.21. Survival of Representations and Warranties. All representations
and warranties herein shall survive the making of Loans and the issuance of
Letters of Credit hereunder, the execution and delivery of this Agreement, the
Notes and the other documents the forms of which are attached as Exhibits
hereto, the issue and delivery of the Notes, any disposition thereof by any
holder thereof, and any investigation made by the Administrative Agent or any
Lender or any other holder of any of the Notes or on its behalf. All statements
contained in any certificate or other document delivered to the Administrative
Agent or any Lender or any holder of any Notes by or on behalf of the Borrower
or any other Credit Party pursuant hereto or otherwise specifically for use in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder, made as of the
respective dates specified therein or, if no date is specified, as of the
respective dates furnished to the Administrative Agent or any Lender.
12.22. Limitation on Enforcement of Guaranties and Security Documents.
The Lenders agree that the Parent Guaranty, the Subsidiary Guaranty and the
Security Documents may be enforced by the action of the Administrative Agent or
the Collateral Agent, in each case acting upon the instructions of the Required
Lenders and that no Lender shall have any right individually to seek to enforce
or to enforce the Parent Guaranty, the Subsidiary Guaranty or any Security
Document or to realize upon the security to be granted by any Security Document,
it being understood and agreed that such rights and remedies may be exercised by
the Administrative Agent or the Collateral Agent for the benefit of the Lenders
(and any Interest Rate Creditors, as such term is respectively defined in the
Parent Guaranty, the Subsidiary Guaranty and the Security Documents) upon the
terms of this Agreement, the Parent Guaranty, the Subsidiary Guaranty and any
Security Document.
[The balance of this page is intentionally blank.]
78
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
ATRIA COMMUNITIES, INC.
By: /s/ J. Timothy Wesley
----------------------------
Chief Financial Officer and
Vice President of Development
PNC BANK, NATIONAL ASSOCIATION,
individually as a Letter of Credit
Issuer and as Administrative Agent
By: /s/ Edward J. Weisto
----------------------------
Vice President
NATIONAL CITY BANK OF KENTUCKY,
individually and as
Documentation Agent
By: /s/ Deroy Scott
----------------------------
Vice President
PNC BANK, KENTUCKY, INC.,
individually and as Managing Agent
By: /s/ Todd T. Munson
----------------------------
Vice President
THE TORONTO-DOMINION BANK,
New York Agency
By: /s/ Warren Finlay
----------------------------
Vice President
79
<PAGE>
BANK ONE, KENTUCKY, NA
By: /s/ Dennis P. Heishman
----------------------------
Vice President
NATIONSBANK, N.A.
By: /s/ S. Walter Choppin
----------------------------
Vice President
FLEET NATIONAL BANK
By: /s/ Ginger Stolzenthaler
----------------------------
Vice President
THE BANK OF NEW YORK
By: /s/ Douglas Ober
----------------------------
Vice President
THE CHASE MANHATTAN BANK
By: /s/ Dawn Lee-Lum
----------------------------
Vice President
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<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Diana H. Imhof
----------------------------
Vice President
AMSOUTH BANK OF ALABAMA
By: /s/ Timothy J. Vardaman
----------------------------
Vice President
U. S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By: /s/ Arnold J. Conrad
----------------------------
Vice President
FIRST AMERICAN NATIONAL BANK
By: /s/ Wallace Carter III
----------------------------
Vice President
81
<PAGE>
ANNEX I
INFORMATION AS TO LENDERS
<TABLE>
<CAPTION>
====================================================================================================================
- --------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
<S> <C> <C> <C>
PNC Bank, National No Commitment; PNC Bank, National Association PNC Bank, National Association
Association Letter of Credit One PNC Plaza One PNC Plaza
Issuer and Fifth Avenue and Wood Street Fifth Avenue and Wood Street
Administrative Pittsburgh, Pennsylvania 15265 Pittsburgh, Pennsylvania 15265
Agent only
Contacts/Notification Methods:
C. David Cook
Senior Vice President
PNC Bank, National Association
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Mail Stop: P1-POPP-06-3
Telephone: (412) 762-2217
Facsimile: (412) 762-2784
Edward J. Weisto
Assistant Vice President
PNC Bank, National Association
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Mail Stop: P1-POPP-05-3
Telephone: (412) 762-8358
Facsimile: (412) 762-2784
Contact to Arrange all Borrowings
from the Lenders and Prepayments
to the Lenders:
Arlene Ohler
Vice President
4th Floor Annex
PNC Bank, National Association
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Telephone: (412) 762-3627
Facsimile: (412) 762-8672
Letter of Credit Notification:
Mary Ann McCarthy
Letter of Credit Officer
PNC Bank, National Association
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Telephone: (412) 762-2798
Payment Instructions
for Payments to the
Administrative Agent:
PNC Bank, Louisville
ABA # 083 000 108
Credit: Commercial Loan Operations
Ref.: Atria Communities, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
- --------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
<S> <C> <C> <C>
National City Bank $25,000,000 National City Bank of Kentucky National City Bank of Kentucky
of Kentucky 101 South Fifth Street 101 South Fifth Street
Louisville Regional Division--8th Floor Louisville Regional
Louisville, Kentucky 40202 Division--8th Floor
Louisville, Kentucky 40202
Contacts/ Notification Methods:
Deroy Scott
Vice President
Telephone: (502) 581-7821
Facsimile: (502) 581-4424
Chuck Denney
Vice President
Telephone: (502) 581-4212
Facsimile: (502) 581-4424
Contact for Borrowings, Payments, etc.:
Sandy Elmore
Commercial Loan Operations
14th Floor
Telephone: (502) 581-5637
Facsimile: (502) 581-4079
Letter of Credit Notification:
Dawn Norris
International Division
7th Floor
Telephone: (502) 581-4386
Facsimile: (502) 581-7925
Wiring Information:
ABA # 0830-0005-6
Commercial Loan Operations:
Account No. 151-804
Letter of Credit Division:
Account No.: GL # 29930
re: Atria Communities, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PNC Bank, Kentucky, $25,000,000 PNC Bank, Kentucky, Inc. PNC Bank, Kentucky, Inc.
Inc. 500 West Jefferson Street 500 West Jefferson Street
Louisville, Kentucky 40202 Louisville, Kentucky 40202
Notices/Primary Contacts:
Michael Vairin
Senior Vice President
Mail Stop: K1-KHDQ-08-03
Direct Dial: (502) 581-7178
Facsimile: (502) 581-2302
Todd Munson
Vice President
Mail Stop: K1-KHDQ-08-03
Direct Dial: (502) 581-4734
Facsimile: (502) 581-2302
Contact for Borrowings, Payments, etc.:
Todd Munson
Vice President
Mail Stop: K1-KHDQ-08-03
Direct Dial: (502) 581-4734
Facsimile: (502) 581-2302
0r the Commercial Loan Operations
Department
Wiring Information:
ABA # 083-000-108
Ref.: Atria Communities, Inc.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
- --------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
<S> <C> <C> <C>
The Toronto-Dominion $25,000,000 The Toronto-Dominion Bank, New York The Toronto-Dominion Bank, New
Bank, New York Agency Agency York Agency
31 West 52nd Street 31 West 52nd Street
New York, New York 10019-6101 New York, New York 10019-6101
Notices:
Toronto Dominion (Texas), Inc.
909 Fannin Street, 17th Floor
Houston, Texas 77010
Attn.: Jimmy Simien
Assistant Manager, Credit
Administration
Direct Dial: (713) 653-8259
Facsimile: (713) 951-9921
Main Tel. No.: (713) 653-8200
Swift Address: TDOMUS4H
with a copy to:
The Toronto-Dominion Bank, New York
Agency
31 West 52nd Street
New York, New York 10019-6101
Attention: Sara S. Tirner,
Director Health Care Finance
Facsimile: (212) 974-0396
Primary Contacts:
Credit Contact:
Sara S. Tirner,
Director Health Care Finance
The Toronto-Dominion Bank, New York
Agency
31 West 52nd Street
New York, New York 10019-6101
Telephone: (212) 468-0746
Facsimile: (212) 974-0396
Operations Contact:
Toronto Dominion (Texas), Inc.
909 Fannin Street, 17th Floor
Houston, Texas 77010
Attn.: Jimmy Simien
Assistant Manager, Credit
Administration
Direct Dial: (713) 653-8259
Facsimile: (713) 951-9921
Main Tel. No.: (713) 653-8200
Swift Address: TDOMUS4H
Contact for Borrowings, Payments, etc.:
[see Operations Contact above]
Wiring Information:
Toronto-Dominion Bank-New York
ABA # 026003243
Credit: Acct. #2159251
Favor: TD Houston
Re: Atria Communities, Inc.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bank One, Kentucky, Bank One, Kentucky, NA Bank One, Kentucky, NA
NA $25,000,000 416 West Jefferson Street 416 West Jefferson Street
Louisville, Kentucky 40202 Louisville, Kentucky 40202
Notices:
Bank One, Kentucky, NA
416 West Jefferson Street
Louisville, Kentucky 40202
Attention: Dennis Heishman
Senior Vice President
Primary Contact:
Dennis Heishman
Senior Vice President
Bank One, Kentucky, NA
2nd Floor
416 West Jefferson Street
Louisville, Kentucky 40202
Telephone: (502) 566-2018
Facsimile: (502) 566-2367
Secondary Contact:
David M. Bryant
Associate Relationship Manager
Bank One, Kentucky, NA
2nd Floor
416 West Jefferson Street
Louisville, Kentucky 40202
Telephone: (502) 566-4844
Facsimile: (502) 566-2367
Contact for Borrowings, Payments, etc.:
Cathy P. Harris
Corporate Banking Representative
Bank One, Kentucky, NA
2nd Floor
416 West Jefferson Street
Louisville, Kentucky 40202
Telephone: (502) 566-8146
Facsimile: (502) 566-2367
Wiring Information:
ABA # 083-000-137
GL #151010 Center 2000
Ref.: Commercial Loan Operations
Account of Atria Communities, Inc.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NationsBank, N.A. $20,000,000 NationsBank, N.A. NationsBank, N.A.
100 North Tryon Street 100 North Tryon Street
Charlotte, North Carolina 28255 Charlotte, North Carolina 28255
Notices:
NationsBank
One NationsBank Plaza
Fifth Floor
Nashville, Tennessee 37239-1697
Attention:
S. Walter Choppin
Senior Vice President
Telephone: (615) 749-3023
Facsimile: (615) 749-4640
with a copy to the Secondary Contact
indicated below
Primary Contact:
S. Walter Choppin
Senior Vice President
NationsBank
One NationsBank Plaza
Fifth Floor
Nashville, Tennessee 37239-1697
Telephone: (615) 749-3023
Facsimile: (615) 749-4640
Secondary Contact:
Alan B. Gardner
Senior Vice President
NationsBank, N.A.
100 North Tryon Street
Charlotte, North Carolina 28255
Telephone: (704) 388-6005
Facsimile: (704) 388-6007
Contact for Borrowings, Payments, etc.:
Jacquette Banks
NationsBank, N.A.
100 North Tryon Street
NC 1-001-15-05
Charlotte, North Carolina 28255
Telephone: (704) 388-1111
Facsimile: (704) 386-8694
Wiring Information:
NationsBank, N.A.
ABA # 053 000 196
Corporate Credit Services
A/C No.: 136621-22506
Ref.: Atria Communities, Inc.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fleet National Bank $20,000,000 Fleet National Bank Fleet National Bank
Fleet Center Fleet Center
75 State Street 75 State Street
Boston, Massachusetts 02109-1810 Boston, Massachusetts 02109-1810
Notices:
Fleet National Bank
Fleet Center
75 State Street
Boston, Massachusetts 02109-1810
Attention:
Ginger Stolzenthaler
Vice President
Mail Stop: MA BO FO4A
Telephone: (617) 346-1647
Facsimile: (617) 346-1634
Primary Contact:
Ginger Stolzenthaler
Vice President
Mail Stop: MA BO FO4A
Telephone: (617) 346-1647
Facsimile: (617) 346-1634
Secondary Contact:
Richard Mynahan
Mail Stop: MA BO FO4A
Telephone: (617) 346-1575
Facsimile: (617) 346-1634
Contact for Borrowings, Payments, etc.:
Cassie Carlan
Mail Stop: MA BO FO4A
Telephone: (617) 346-1635
Facsimile: (617) 346-1634
Wiring Information:
ABA # 011-000-138
Incoming Wire
Account No. 151035103145
Ref.: Atria Communities, Inc.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Bank of The Bank of New York The Bank of New York
New York $10,000,000 One Wall Street One Wall Street
22nd Floor 22nd Floor
New York, New York 10286 New York, New York 10286
Notices:
The Bank of New York
One Wall Street
Midwest Division, 22nd Floor
New York, New York 10286
Attention:Gail Kurz
Assistant Treasurer
Telephone: (212) 635-7842
Facsimile: (212) 635-6434
Primary Contact:
Gail Kurz
Assistant Treasurer
Telephone: (212) 635-7842
Facsimile: (212) 635-6434
Secondary Contact:
Douglas Oher
Telephone: (212) 635-1330
Facsimile: (212) 635-6434
Contact for Borrowings, Payments, etc.:
Janeth Lopez
The Bank of New York
One Wall Street
Corporate Administration, 22nd Floor
New York, New York 10286
Telephone: (212) 635-6761
Facsimile: (212) 635-6397
Wiring Information:
The Bank of New York
ABA # 021000018
Account Name: Commercial Loans
A/C No.: GLA 111556
Attn.: Lorna Alleyne
Ref.: Atria Communities, Inc.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Chase Manhattan The Chase Manhattan Bank The Chase Manhattan Bank
Bank $10,000,000 270 Park Avenue 270 Park Avenue
New York, New York 10017 New York, New York 10017
Notices:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attn.: Carol Burt
Telephone: (212) 270-7684
Facsimile: (212) 270-3279
Primary Contact:
Carol Burt
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Telephone: (212) 270-7684
Facsimile: (212) 270-3279
Secondary Contact:
Dawn Lee-Lum
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Telephone: (212) 270-2472
Facsimile: (212) 270-3279
Contact for Borrowings, Payments, etc.:
Renee Pierre Louis
The Chase Manhattan Bank
140 East 45th Street
New York, New York 10017
Telephone: (212) 622-1442
Facsimile: (212) 622-0002
Wiring Information:
ABA # 021000021
Attn.: Loan Dep't./John Knapp
Ref.: Atria Communities, Inc.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Morgan Guaranty Morgan Guaranty Trust Company of New Morgan Guaranty Trust Company
Trust Company of New $10,000,000 York of New York
York 60 Wall Street 60 Wall Street
New York, New York 10260-0060 New York, New York 10260-0060
Notices:
Morgan Guaranty Trust Company of New
York
60 Wall Street
New York, New York 10260-0060
Attention: Diana H. Imhof
Vice President
Telephone: (212) 648-6498
Facsimile: (212) 648-5018
Primary Contact:
Diana H. Imhof
Vice President
Morgan Guaranty Trust Company of New
York
60 Wall Street
New York, New York 10260-0060
Telephone: (212) 648-6498
Facsimile: (212) 648-5018
Secondary Contact:
Robert M. Osieski
Vice President
Morgan Guaranty Trust Company of New
York
60 Wall Street
New York, New York 10260-0060
Telephone: (212) 648-7173
Facsimile: (212) 648-5018
Contact for Borrowings, Payments, etc.:
Jeannie Mattson
Associate
J. P. Morgan Services, Inc.
500 Stanton Christiana Road
Newark, Delaware 19713
Telephone: (302) 634-1938
Facsimile: (302) 634-1092
Wiring Information:
Morgan Guaranty Trust Company of New
York
ABA # 021 000 238
Attn.: Loan Dep't.
A/C No.: 999-99-090
- ---------------------------------------------------------------------------------------------------------------------
Ref.: Atria Communities, Inc.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AmSouth Bank of $10,000,000 AmSouth Bank of Alabama AmSouth Bank of Alabama
Alabama 1900 Fifth Avenue North 1900 Fifth Avenue North
Sonat 7th Floor Sonat 7th Floor
Birmingham, Alabama 35203 Birmingham, Alabama 35203
Notices:
AmSouth Bank of Alabama
1900 Fifth Avenue North
Sonat 7th Floor
Birmingham, Alabama 35203
Attn.: Timothy L. Vardaman
Commercial Banking Officer
Telephone: (205) 801-0358
Facsimile: (205) 326-4790
Primary Contact:
Timothy L. Vardaman
Commercial Banking Officer
Telephone: (205) 801-0358
Facsimile: (205) 326-4790
Secondary Contact:
L. Mark Housel
Relationship Representative
Telephone: (205) 307-7278
Facsimile: (205) 326-4790
Contact for Borrowings, Payments, etc.:
Nancy C. Parsons
Commercial Banking Officer/ParaLender
Telephone: (205) 326-5191
Facsimile: (205) 326-4790
Wiring Information:
ABA # 062 000 019
A/C Name: Corporate Clearing
A/C No.: 0011 0245 0400 100
Attn.: Healthcare Banking
- ---------------------------------------------------------------------------------------------------------------------
Ref.: Atria Communities, Inc.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Bank of $10,000,000 U.S. Bank of Washington, National U.S. Bank of Washington,
Washington, National Association National Association
Association 1420 Fifth Avenue 1420 Fifth Avenue
National Corporate Banking, 11th Floor Loan Servicing Department, 7th
Seattle, Washington 98101 Floor
Seattle, Washington 98101
Notices:
U.S. Bank of Washington, National
Association
National Corporate Banking, 11th Floor
1420 Fifth Avenue
Seattle, Washington 98101
Attn.: Arnold J. Conrad
Vice President
Telephone: (206) 587-5236
Facsimile: (206) 587-5259
Primary Contact:
Arnold J. Conrad
Vice President
Telephone: (206) 587-5236
Facsimile: (206) 587-5259
Secondary Contact:
Isha Singh
ARM (Analyst)
Telephone: (206) 587-5205
Facsimile: (206) 587-5259
Contact for Borrowings, Payments, etc.:
Lorrie Smith
Commercial Note Specialist
Loan Servicing Department--Notes, 7th
Floor
Telephone: (206) 344-4696
Facsimile: (206) 340-8367
Wiring Information:
ABA # 125 000 105
C/O Commercial Loan Department
Account # 4703-1111061
Attn.: Lorrie Smith
Ref.: Atria Communities, Inc.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First American $10,000,000 First American National Bank First American National Bank
National Bank First American Center First American Center
Nashville, Tennessee 37237 Nashville, Tennessee 37237
Notices:
First American National Bank
First American Center
Nashville, Tennessee 37237
Attn.: Wallace Carter III
Senior Vice President
Telephone: (615) 748-6972
Facsimile: (615) 748-2812
Primary Contact:
Wallace Carter III
Senior Vice President
Telephone: (615) 748-6972
Facsimile: (615) 748-2812
Secondary Contact:
Kent Wood
Banking Officer
Telephone: (615) 748-1490
Facsimile: (615) 748-2812
Contact for Borrowings, Payments, etc.:
Tina Callahan
Commercial Banking Representative
Telephone: (615) 748-6917
Facsimile: (615) 748-2812
Wiring Information:
ABA # 064 0000 17
Wire Transfer Clearing Account
A/C 0901256
Attn.: Frenisa Joy
- --------------------------------------------------------------------------------------------------------------------
Ref.: Atria Communities, Inc.
TOTAL
====================================================================================================================
$200,000,000
</TABLE>
13
<PAGE>
ANNEX II
INFORMATION AS TO SUBSIDIARIES
<TABLE>
<CAPTION>
====================================================================================================================
<S> <C> <C> <C> <C> <C>
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interests Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
- --------------------------------------------------------------------------------------------------------------------
Lantana Partners, Florida 100%, owned as follows: None Florida
Ltd., a limited
partnership 98% limited partnership
interest owned by the
Borrower
1% general partnership
interest owned by
Twenty-Nine Hundred
Associates Limited
Partnership
1% general partnership
interest owned by
Hillhaven Properties,
Ltd.
- --------------------------------------------------------------------------------------------------------------------
Phillippe Indiana 100% of Common Stock, Florida
Enterprises, represented by 2,000
Inc., a shares, owned by the
corporation Borrower
- --------------------------------------------------------------------------------------------------------------------
Hillhaven Oregon 100% of Common Stock, Florida;
Properties, Ltd., represented by 1,000 Washington;
a corporation shares, owned by the Arizona;
Borrower California;
Colorado;
Kansas; Utah
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================================
Name of Jurisdicition Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interests Owed Holders, a foreign Assets
Organization (Indicating whether If Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Castle Gardens Colorado 100%, owned as follows: Colorado
Retirement
Center, a general 98% general partnership
partnership interest, owned by the
Borrower
2% general partnership
interest owned by
Hillhaven Properties,
Ltd.
- --------------------------------------------------------------------------------------------------------------------
Hillcrest Oregon 100%, owned as follows: Idaho
Retirement
Center, Ltd., a 68.6% limited
limited partnership interest,
partnership owned by the Borrower
29.4% balance of LP and
2% GP interests held by
Fairview Living
Centers, Inc., a wholly
owned subsidiary of
Hillhaven Properties,
Ltd.
- --------------------------------------------------------------------------------------------------------------------
Sandy Retirement Oregon 100%, owned as follows: Utah
Center Limited
Partnership, a 98% limited partnership
limited interest, owned by the
partnership Borrower
2% general partnership
interest owned by
Hillhaven Properties,
Ltd.
====================================================================================================================
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interest Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Topeka Retirement Missouri 100%, owned as follows: Kansas
Center, Ltd., a
limited 10% limited partnership
partnership interest, owned by the
Borrower
90% general partner
interest owned by
Hillhaven Properties,
Ltd.
- --------------------------------------------------------------------------------------------------------------------
Evergreen Woods, Florida 100%, owned as follows: Florida
Ltd., a limited
partnership 98% limited partner
interest, and 1%
general partner
interest owned by the
Borrower
Hillhaven Properties,
Ltd. owns a 1% limited
partnership interest
- --------------------------------------------------------------------------------------------------------------------
Fairview Living Oregon 100% of capital stock, Idaho
Centers, Inc., a represented by 10
corporation shares, owned by
Hillhaven Properties,
Ltd.
- --------------------------------------------------------------------------------------------------------------------
Twenty-Nine Florida 100%, owned as follows: Florida
Hundred
Associates, Ltd., 99% limited partner
a limited interest owned by the
partnership Borrower
1% general partner
interest owned by
Twenty-Nine Hundred
Corporation
====================================================================================================================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interest Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Twenty-Nine Florida 100% of capital stock, Florida
Hundred represented by
---
Corporation, a shares, owned by
corporation Hillhaven Properties,
Ltd.
- --------------------------------------------------------------------------------------------------------------------
Woodhaven Florida 100%, owned as follows: Florida
Partners, Ltd., a
limited Hillhaven Properties,
partnership Ltd. owns a 51% GP
interest
The Borrower owns a 49%
LP interest
- --------------------------------------------------------------------------------------------------------------------
Tucson Retirement Arizona 100%, owned as follows: Arizona
Center Limited
Partnership, a Hillhaven Properties,
limited Ltd. owns an 80% GP
partnership interest
The Borrower owns a 20%
LP interest
====================================================================================================================
</TABLE>
4
<PAGE>
ANNEX III
DESCRIPTION OF REAL PROPERTIES
Definitions:
FHC = First Healthcare Corporation, a DE corporation
HPL = Hillhaven Properties Ltd., an OR corporation
Nationwide = Nationwide Care, Inc., an IN corporation
PEI = Phillippe Enterprises, Inc., an IN corporation
PART I. PROPERTIES MORTGAGED ON THE CLOSING DATE
<TABLE>
<CAPTION>
====================================================================================================================
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pima County, Tucson,
Arizona Valley Manor 437 69 Atria will own fee simple interest by
transfer from FHC. Mortgage to be
granted by Atria.
- --------------------------------------------------------------------------------------------------------------------
Pima County, Tucson,
Arizona Villa Campana 852 141 HPL will own fee simple interest by
transfer from FHC. Mortgage to be
granted by HPL.
- --------------------------------------------------------------------------------------------------------------------
Hernando County,
Springhill, Florida Evergreen Woods 7132 216 Fee simple interest held by Evergreen
Woods, Ltd., a FL limited partnership.
Subdivision required: nursing home will
be transferred by EWL to Nationwide
(not part of deal); assisted living
facility stays in name of EWL; 1% GP
and 98% LP interest in EWL to be
assigned to Atria by Nationwide and 1%
LP interest to be transferred from FHC
to its wholly owned sub HPL; Atria will
acquire 100% of the stock of HPL from
FHC. Mortgage to be granted by EWL.
- --------------------------------------------------------------------------------------------------------------------
Hernando County,
Brooksville, Florida Heritage at Hernando 7135 57 Fee held by PEI; Atria will acquire
100% of the stock of PEI from Vencor.
Mortgage to be granted by PEI.
====================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ada County,
Boise, Idaho Hillcrest 7160 115 Fee simple interest held by Hillcrest
Retirement Center, Ltd., an OR limited
partnership; Atria will hold 68.6% LP
interest by transfer from FHC; 29.4% LP
interest and 2% GP interest held by
Fairview Living Centers, Inc. of which
HPL owns 100% of the stock; Atria will
acquire 100% of the stock of HPL from
FHC. Mortgage to be granted by HRCL.
- --------------------------------------------------------------------------------------------------------------------
Marion County,
Indianapolis, Indiana Heritage at Wildwood 616 72 Atria will own fee simple interest by
transfer from Nationwide. Mortgage to
be granted by Atria.
- --------------------------------------------------------------------------------------------------------------------
Jackson County,
Kansas City, Missouri Villa Ventura 821 172 Atria will own fee simple interest by
transfer from FHC. Mortgage to be
granted by Atria.
- --------------------------------------------------------------------------------------------------------------------
Pierce County,
Tacoma, Washington Narrows
Glen/Laurel 7195 142/57 Fee held by HPL; Atria will acquire
House 100% of the stock of HPL from FHC.
Mortgage to be granted by HPL
====================================================================================================================
</TABLE>
2
<PAGE>
PART II. OTHER PROPERTIES WHICH HAVE OUTSTANDING IRB DEBT
OR MAY BE SUBSEQUENTLY MORTGAGED
<TABLE>
<CAPTION>
====================================================================================================================
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pima County, Fee held by Tucson Retirement Center
Tucson, Arizona Campana Del Rio 7100 214 Limited Partnership, an AZ limited
partnership; HPL is the 80% GP; Atria
will acquire 100% of the stock of HPL from
FHC; Atria owns 20% LP interest already
- --------------------------------------------------------------------------------------------------------------------
Yavapai County, Fee held by HPL; Atria will acquire
Sedona, Arizona Kachina Point 7105 102 100% of the stock of HPL from FHC
- --------------------------------------------------------------------------------------------------------------------
San Diego County, Courtyard at San
San Marcos, California Marcos 7112 212 Fee held as joint tenants per Joint
Tenant Agreement with 65% interest held
by HPL; Atria will acquire 100% of the
stock of HPL from FHC (35% interest
held by San Marcos Courtyard Ltd., a CA
limited partnership, an unrelated
entity). Leased to HPL w/ option to
purchase - CHECK
- --------------------------------------------------------------------------------------------------------------------
Adams County, Courtcastle Gardens Fee held by Castle Gardens Retirement
Denver, Colorado 7125 99 Center, a CO general partnership; Atria
will acquire 98% GP interest in CGRCLP
from FHC and 2% GP interest
held by HPL will be acquired by Atria
pursuant to acquisition of stock of HPL
from FHC
- --------------------------------------------------------------------------------------------------------------------
Pasco County, Woodhaven at Windsor 7137 180 Fee simple interest held by Woodhaven
Hudson, Florida Woods Partners, Ltd., a FL limited
partnership; HPL is a 51% GP; Atria will
acquire 100% of stock of HPL from FHC;
Atria holds 49% LP interest
====================================================================================================================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Palm Beach County, Meridian House 7138 173 Fee simple interest held by Lantana
Lantana, Florida Lantana Partners, Ltd., a FL limited
partnership; HPL is a 1% general partner;
and Twenty-Nine Hundred Associates, Ltd, a
FL limited partnership is also a 1%
general partner; Atria will acquire 100%
of stock of HPL from FHC; Vencor holds 98%
LP interest in Lantana Partners, Ltd. and
will transfer that interest to the
Borrower; FHC holds 99% LP interest in
Twenty-Nine Hundred Associates, Ltd. and
will transfer that interest to Atria; HPL
owns all of the stock of Twenty-Nine
Hundred Corporation which, in turn, owns a
1% GP interest in Twenty-Nine Hundred
Associates, Ltd.
- --------------------------------------------------------------------------------------------------------------------
Shawnee County, Hearthstone 7165 155 Fee held by The City of Topeka;
Topeka, Kansas leasehold interest held by Topeka
Retirement Center, Ltd., a MO limited
partnership; 10% LP interest in TRCL held
by FHC (to be assigned to Atria) and 90%
GP interest held by HPL; Atria will
acquire 100% of the stock of HPL from FHC.
- --------------------------------------------------------------------------------------------------------------------
Salt Lake County, Crosslands 7185 120 Fee held by Sandy Retirement Center
Sandy, Utah Limited Partnership, an OR limited
partnership, (also an assumed business
name of HPL in UT); FHC is the 98% limited
partner of SRCLP; and HPL is the 2%
general partner; Atria will acquire 98% LP
interest in TSCL from FHC by assignment of
partners interest and 2% GP interest by
acquisition of stock of HPL from FHC
====================================================================================================================
</TABLE>
4
<PAGE>
PART III. LEASED PROPERTIES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Newark, Ohio McMillen Center 238 80 Leasehold Mortgage may be given after
the Closing Date
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
PART IV. MANAGED PROPERTIES-NO LIEN
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Marion, Indiana Colonial Oaks 618 63
- --------------------------------------------------------------------------------------------------------------------
Westwood, Massachusetts Foxhill Village 7174 356
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
PART VI. "NO LIEN" PROPERTIES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Walpole, Massachusetts New Pond Village 7176 199 99 year rent free lease with option to
buy; zoning problem
- --------------------------------------------------------------------------------------------------------------------
Hanover, New Hampshire The Greens 589 28 Residential Mortgage Bonds
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
PART VII. DEVELOPMENT PROPERTIES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
LOCATION COMMUNITY SITE NO. UNITS COMMENTS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sedona, Arizona 853/7101 60 Zoned/May 1997 (includes 20 units for
the memory impaired)
- --------------------------------------------------------------------------------------------------------------------
Tucson, Arizona N/A 40 Zoned/Needs Special Use
Permit/September 1997
- --------------------------------------------------------------------------------------------------------------------
Redding, California 167 60 Under Construction/April
1997/Subdivision Required/leased from
Vencor under 99-year lease under which
Atria will acquire the property upon
obtaining certain approvals
- --------------------------------------------------------------------------------------------------------------------
Northglenn, Colorado [adjacent to 40 Zoned/October 1997 (all units for
existing communities] memory impaired)
- --------------------------------------------------------------------------------------------------------------------
Dennis, Massachusetts 573 40 Land Acquired/June 1998
- --------------------------------------------------------------------------------------------------------------------
Charlotte, North Eastover Manor N/A 90 Zoned/December 1997
Carolina
- --------------------------------------------------------------------------------------------------------------------
Sandy, Utah N/A 63 Under Construction/February 1997
- --------------------------------------------------------------------------------------------------------------------
Virginia Beach, N/A 90 Land Acquired/November 1997
Virginia
- --------------------------------------------------------------------------------------------------------------------
Tacoma, Washington 7195 40 Zoned/September 1997
- --------------------------------------------------------------------------------------------------------------------
Kenosha, Wisconsin 775-776 40 Land Acquired/December 1997
- --------------------------------------------------------------------------------------------------------------------
Lantana, Florida [adjacent to 7138 60 Zoned/July 1997/adjacent to existing
Meridian House] Atria communities
- --------------------------------------------------------------------------------------------------------------------
Topeka, Kansas [adjacent to 7165 60 Zoned/August 1996/adjacent to existing
Hearthstone] Atria communities
- --------------------------------------------------------------------------------------------------------------------
Tulsa, Oklahoma Mayfair Regal 157
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
ANNEX IV
DESCRIPTION OF EXISTING INDEBTEDNESS
<TABLE>
<CAPTION>
====================================================================================================================
Name Principal
Facility of @ Interest
No. Borrower 6/30/96 Maturity Rate Amort.
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7137 Woodhaven Partners, Ltd. 9,500,000 1/2009 3.4% floating none
- --------------------------------------------------------------------------------------------------------------------
7165 Topeka Retirement Center, 8,440,000 1/2009 3.4% floating none
Ltd.
- --------------------------------------------------------------------------------------------------------------------
7112 San Marcos Retirement 11,500,000 12/2010 3.5% floating $500,000/yr.
Village Ptnshp.
- --------------------------------------------------------------------------------------------------------------------
7100 Tucson Retirement Center 10,750,000 1/2009 3.3% floating none
Ptnshp.
- --------------------------------------------------------------------------------------------------------------------
7105 Hillhaven Properties, Ltd. 5,300,000 1/2009 3.3% floating none
- --------------------------------------------------------------------------------------------------------------------
7125 Castle Gardens Partnership 5,000,000 1/2009 3.3% floating none
- --------------------------------------------------------------------------------------------------------------------
7185 Sandy Retirement Center LP. 5,900,000 1/2009 3.3% floating none
- --------------------------------------------------------------------------------------------------------------------
7138 Lantana Partners, Ltd. 5,725,000 5/2010 4.0 % floating $325,000/yr
- --------------------------------------------------------------------------------------------------------------------
7160 First Healthcare Corp./1/ 3,586,000
- --------------------------------------------------------------------------------------------------------------------
616 Nationwide Care, Inc./2/ 2,505,000
- --------------------------------------------------------------------------------------------------------------------
7132 Nationwide Care, Inc./3/ 3,045,000
- --------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ltd. 14,000,000/4/ 1 year Prime + 1% none
- --------------------------------------------------------------------------------------------------------------------
7176 New Pond Village Associates 31,147,000 1/2040 0.0% none
- --------------------------------------------------------------------------------------------------------------------
589 Atria Communities, Inc. 2,032,000 None stated 0.0% none
- --------------------------------------------------------------------------------------------------------------------
118,430,000
====================================================================================================================
</TABLE>
LETTERS OF CREDIT
- ------------------------------
/1/ This debt is currently under the VC Revolver and will be replaced with
Atria debt after the closing of the Atria credit facility.
/2/ Same as above footnote.
/3/ Same as above footnote.
/4/ This subordinated note was not outstanding at 6/30/96 but will be
outstanding as of IPO date.
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
LC At
L/C # Issuer Back Benef. For A/C Request Facility Amount Expiry
Stop of of #
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
I-147751 Bank of Cal Y State St. Lantana FHC 7138 7,018,938 11/29/96
Bank & Trust Partners, (original
Ltd. request)
PNC Bank of Cal,
A-305498 N.A. 7,018,938 12/30/96
- --------------------------------------------------------------------------------------------------------------------
9770 KredeitBank Y 1st American Topeka FHC 7165 8,805,734 12/1/96
Nat'l Bank Retirement (original
PNC Bank Center, request)
A-305576 KredeitBank Ltd. 1/1/97
N.V. 8,805,734
- --------------------------------------------------------------------------------------------------------------------
9771 KredeitBank Y 1st American Woodhaven FHC 7137 9,975,000 1/10/97
Nat'l Bank Partners, (original
PNC Bank Ltd. request)
A-305639 KredeitBank 9,975,000 2/10/97
N.V.
- --------------------------------------------------------------------------------------------------------------------
S-867642 JP Morgan Bankers Trust Castle Vencor 7125 5,166,667 8/1/97
Company Gardens GP (original
request)
- --------------------------------------------------------------------------------------------------------------------
S-867639 JP Morgan Bankers Trust Tucson Vencor 7100 11,108,333 8/1/97
Company Retirement (original
Center LP request)
- --------------------------------------------------------------------------------------------------------------------
S-867640 JP Morgan Bankers Trust Hillhaven Vencor 7105 5,476,667 8/1/97
Company Properties, (original
ltd. request)
- --------------------------------------------------------------------------------------------------------------------
S-867641 JP Morgan Bankers Trust Sandy Vencor 7185 6,096,667 8/1/97
Company Retirement (original
Center, LP request)
- --------------------------------------------------------------------------------------------------------------------
ASB 222769 B of A State Street First 7512 11,681,164 9/15/99
Bank & Trust Healthcare
Corp.
====================================================================================================================
</TABLE>
2
<PAGE>
ANNEX V
DESCRIPTION OF EXISTING LIENS
1. The liens on the projects financed by the IRB Debt, granted to secure
the IRB Debt or letters of credit issued in support thereof.
2. The liens on community known as The Greens, Hanover, New Hampshire,
related to the Residential Mortgage Bond Program for such community.
[End of Annex V]
<PAGE>
ANNEX VI
DESCRIPTION OF EXISTING ADVANCES, LOANS AND INVESTMENTS
1. Working Capital Promissory Note dated December 1, 1994, in the
principal amount of $4,526,516.22 plus Advances, made by Hillhaven
Properties, Ltd., acting in its capacity as a 65% tenant in common, and
San Marcos Courtyard Limited, acting in its capacity as a 35% tenant in
common, payable to the order of Hillhaven Properties, Ltd., which Note
is to be pledged pursuant to the Pledge Agreement.
[End of Annex VI]
<PAGE>
ANNEX VII
DESCRIPTION OF LETTERS OF CREDIT DEEMED ISSUED UNDER
THE CREDIT AGREEMENT
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
LETTER OF ORIGINAL DATE AND NO./ EXPIRATION
CREDIT ISSUER APPLICANT BENEFICIARY AMOUNT DATE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PNC Bank, National Topeka Retirement No.: A-305576 $8,805,734 January 1, 1997
Association Center, Ltd. dated January 28, 1994
Attn.: Robert K. and amended August 10,
Letter of Credit Schneider, Treasurer 1994 and August 30, 1995
Department 1148 Broadway Plaza
3rd Floor Annex Tacoma, Washington 98402 KredeitBank N.V.
237 Fifth Avenue 550 South Hope Street
Pittsburgh, Los Angeles, California
Pennsylvania 15222 90071
Attn.: Patrick Daems,
Sr. Rep.
- --------------------------------------------------------------------------------------------------------------------
PNC Bank, National First Healthcare No.: A-305639 $9,975,000 February 10, 1997
Association Corporation dated February 24, 1994
Attn.: Robert K. and amended August 17,
Letter of Credit Schneider, Treasurer 1994 and September 14,
Department 1148 Broadway Plaza 1995
3rd Floor Annex Tacoma, Washington 98402
237 Fifth Avenue KredeitBank N.V.
Pittsburgh, 550 South Hope Street
Pennsylvania 15222 Los Angeles, California
90071
Attn.: Patrick Daems,
Sr. Rep.
- --------------------------------------------------------------------------------------------------------------------
PNC Bank, National First Healthcare No.: A-305498 $7,018,938.42 December 30, 1996
Association Corporation dated December 29, 1993
Attn.: Robert K. and amended July 22,
Letter of Credit Schneider, Treasurer 1994 and August 30, 1995
Department 1148 Broadway Plaza
3rd Floor Annex Tacoma, Washington 98402 The Bank of California,
237 Fifth Avenue N.A.
Pittsburgh, 400 California Street
Pennsylvania 15222 7th Floor
San Francisco,
California 94104
Attn.: Manager Letter
of Credit
- --------------------------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Sandy Retirement Center No.: S-867641 $6,096,666.67 August 1, 1997
Company of New York Limited Partnership dated July 2, 1996
c/o J.P. Morgan c/o Hillhaven
Services, Inc. Properties, Ltd. Bankers Trust Company
P.O. Box 6071 3300 Providian Center 4 Albany Street
Newark, Delaware 400 West Market St. 4th Floor
19714-9857 Louisville, Kentucky New York, New York 10006
40202
Attention: re: $5,900,000 The
International Trade Attn.: Chief Financial Housing Authority of
Services Officer the County of Salt Lake
Elderly Housing Revenue
Refunding Bonds (Sandy
Retirement Center
Project) Series 1988
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
LETTER OF ORIGINAL DATE AND NO./ EXPIRATION
CREDIT ISSUER APPLICANT BENEFICIARY AMOUNT DATE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Morgan Guaranty Trust Castle Gardens No.: S-867642 $5,166,666.67 August 1, 1997
Company of New York Retirement Center dated July 2, 1996
c/o J.P. Morgan c/o Hillhaven
Services, Inc. Properties, Ltd. Bankers Trust Company
P.O. Box 6071 3300 Providian Center 4 Albany Street
Newark, Delaware 400 West Market St. 4th Floor
19714-9857 Louisville, Kentucky New York, New York 10006
40202
Attention: re: $5,000,000 The City
International Trade Attn.: Chief Financial of Northglen, Colorado,
Services Officer Industrial Development
Revenue Refunding Bonds
(Castle Gardens
Retirement Center
Project) Series 1988
- --------------------------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Tucson Retirement No.: S-867639 $11,108,333.33 August 1, 1997
Company of New York Center Limited dated July 2, 1996
c/o J.P. Morgan Partnership
Services, Inc. c/o Hillhaven Bankers Trust Company
P.O. Box 6071 Properties, Ltd. 4 Albany Street
Newark, Delaware 3300 Providian Center 4th Floor
19714-9857 400 West Market St. New York, New York 10006
Louisville, Kentucky
Attention: 40202 re: $10,750,000 The
International Trade Industrial Development
Services Attn.: Chief Financial Authority of the County
Officer of Pima Industrial
Development Revenue
Refunding Bonds (Tucson
Retirement Center
Project) Series 1988
- --------------------------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Hillhaven Properties No.: S-867640 $5,476,666.67 August 1, 1997
Company of New York Ltd. dated July 2, 1996
c/o J.P. Morgan 3300 Providian Center
Services, Inc. 400 West Market St. Bankers Trust Company
P.O. Box 6071 Louisville, Kentucky 4 Albany Street
Newark, Delaware 40202 4th Floor
19714-9857 New York, New York 10006
Attn.: Chief Financial
Attention: Officer re: $6,200,000 The
International Trade Industrial Development
Services Authority of the County
of Yavapai Industrial
Development Revenue
Refunding Bonds
(Kachina Pointe Project)
Series 1988
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
EXHIBIT A-1
NOTICE OF BORROWING
[Date]
PNC Bank, National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Commercial Loan Operations
--------------------------
Ladies and Gentlemen:
The undersigned, Atria Communities, Inc. (the "Borrower"), refers to
the Credit Agreement, dated as of August 15, 1996 (as amended from time to time,
the "Credit Agreement", the terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "Lenders"), and you, as Administrative Agent for such Lenders, and
hereby gives you notice, irrevocably, pursuant to section 1.3(a) of the Credit
Agreement, that the undersigned hereby requests one or more Borrowings under the
Credit Agreement, and in that connection sets forth in the schedule attached
hereto the information relating to each such Borrowing (collectively the
"Proposed Borrowing") as required by section 1.3(a) of the Credit Agreement.
The undersigned hereby specifies that the Proposed Borrowing will
consist of [MPP Revolving Loans] [DPP Revolving Loans].
The undersigned hereby certifies that at the date of the Proposed
Borrowing the MPP Revolving Loan Sublimit is $ and the DPP Revolving
----------
Loan Sublimit is $ . The undersigned hereby further certifies that
----------
after giving effect to the Proposed Borrowing:
(i) $ principal amount of Loans classified as MPP
---------
Revolving Loans will be outstanding;
(ii) $ principal amount of Loans classified as DPP
---------
Revolving Loans will be outstanding;
(iii) the Allocated MPP Letter of Credit Outstandings will be
$ ;
-----------
(iv) the Allocated DPP Letter of Credit Outstandings will be
$ ;
-----------
(v) the Allocated Measured MPP Swap Credit Exposure will be
$ ; and
-----------
(vi) the Allocated Measured DPP Swap Credit Exposure will be
$ ;
-----------
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
<PAGE>
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and
correct in all material respects, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, except to the extent that such
representations and warranties expressly relate to an earlier date; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
ATRIA COMMUNITIES, INC.
By:
------------------------------------
Title:
2
<PAGE>
BORROWING SCHEDULE
Proposed Borrowing #1:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Business Day Interest Period
of Aggregate Amount if Loans are
Proposed Borrowing Type of Loans of Loans Eurodollar Loans
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Base Rate Loans One Month
- -----------------,
19 Eurodollar Loans $ Two Months
---- --------------------
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Proposed Borrowing #2:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Business Day Interest Period
of Aggregate Amount if Loans are
Proposed Borrowing Type of Loans of Loans Eurodollar Loans
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Base Rate Loans One Month
- -----------------,
19 Eurodollar Loans $ Two Months
---- --------------------
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Proposed Borrowing #3:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Business Day Interest Period
of Aggregate Amount if Loans are
Proposed Borrowing Type of Loans of Loans Eurodollar Loans
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Base Rate Loans One Month
- -----------------,
19 Eurodollar Loans $ Two Months
---- --------------------
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT A-2
LETTER OF CREDIT REQUEST
No. /5/
--------------
Dated /6/
-----------
PNC Bank, National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Commercial Loan Operations
--------------------------
Ladies and Gentlemen:
The undersigned, Atria Communities, Inc. (the "Borrower"), refers to
the Credit Agreement, dated as of August 15, 1996 (as amended, modified or
supplemented from time to time, the "Credit Agreement", the capitalized terms
defined therein being used herein as therein defined), among the Borrower, the
financial institutions from time to time party thereto (the "Lenders"), and you,
as Administrative Agent for such Lenders.
The undersigned hereby requests that , as a Letter of Credit Issuer,
issue a Letter of Credit on , 199 (the "Date of Issuance") in the aggregate
amount of $ , for the account of .
--------------------
The beneficiary of the requested Letter of Credit will be ,/7/
-------
and such Letter of Credit will be in support of /8/ and will have a
-------
stated termination date of ./9/
-------
The undersigned hereby certifies that at the Date of Issuance the MPP
Revolving Loan Sublimit will be $ and the DPP Revolving Loan Sublimit
----------
will be $ . The undersigned hereby further certifies that after giving
----------
effect to the requested issuance of the Letter of Credit:
(i) $ principal amount of Loans classified
---------
as MPP Revolving Loans will be outstanding;
- ----------------------------------
/5/ Letter of Request Number
/6/ Date of Letter of Request (at least five Business Days prior to the Date
of Issuance or such lesser number as may be agreed by the relevant Letter
of Credit Issuer.
/7/ Insert name and address of beneficiary.
/8/ Insert description of the important obligations, name of agreement and/or
the commercial transaction to which this Letter of Credit Request
relates.
/9/ Insert last date upon which drafts may be presented (which may not be
beyond the 5th day next prededing the Revolving Loan Maturity Date).
<PAGE>
(ii) $ principal amount of Loans classified
---------
as DPP Revolving Loans will be outstanding;
(iii) the Allocated MPP Letter of Credit Outstandings will
be $ ;
-----------
(iv) the Allocated DPP Letter of Credit Outstandings will
be $ ;
-----------
(v) the Allocated Measured MPP Swap Credit Exposure will
be $ ; and
-----------
(vi) the Allocated Measured DPP Swap Credit Exposure will
be $ .
-----------
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the Date of Issuance:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and
correct in all material respects, before and after giving effect to the
issuance of the Letter of Credit requested hereby, as though made on
the Date of Issuance, except to the extent that such representations
and warranties expressly relate to an earlier date; and
(B) no Default or Event of Default has occurred and is
continuing, or would result after giving effect to the issuance of the
Letter of Credit requested hereby.
Copies of all documentation with respect to the supported transaction
are attached hereto.
Very truly yours,
ATRIA COMMUNITIES, INC.
By: ____________________________________
Title:
2
<PAGE>
EXHIBIT B
REVOLVING NOTE
$ Louisville, Kentucky
---------------
, 1996
------------
FOR VALUE RECEIVED, the undersigned ATRIA COMMUNITIES, INC., a Delaware
corporation (herein, together with its successors and assigns, the "Borrower"),
hereby promises to pay to the order of (the "Lender"),
-------------------------
in lawful money of the United States of America in immediately available funds,
at the Payment Office (as defined in the Agreement referred to below) of PNC
Bank, National Association (the "Administrative Agent"), on the Revolving Loan
Maturity Date (as defined in the Agreement referred to below), in the case of
any such Loans which are MPP Revolving Loans, or on the DPP Loan Maturity Date,
in the case of any such Loans which are DPP Revolving Loans (as such terms are
defined in the Agreement), the principal sum of DOLLARS ($ )
---------------- ---
or, if less, the then unpaid principal amount of all Loans (as defined in the
Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount of each Loan made by the Lender in like money at said office from the
date hereof until paid at the rates and at the times provided in section 1.8 of
the Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
dated as of August 15, 1996, among the Borrower, the financial institutions from
time to time party thereto (including the Lender), and PNC Bank, National
Association, as Administrative Agent (as from time to time in effect, the
"Agreement"), and is entitled to the benefits thereof and of the other Credit
Documents (as defined in the Agreement). As provided in the Agreement, this Note
is subject to mandatory prepayment prior to the Revolving Loan Maturity Date, in
whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE COMMONWEALTH OF KENTUCKY.
ATRIA COMMUNITIES, INC.
By:
------------------------------------
Chief Financial Officer and
Vice President of Development
<PAGE>
<TABLE>
<CAPTION>
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------------------------------------------
Amount
of
Date Amount MPP Type Principal Unpaid
of of or of Interest Paid or Principal Made
Notation Loan DPP Loan Period Prepaid Balance By
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT C-1
FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
, 1996
--------- --
PNC Bank, National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Commercial Loan Operations
--------------------------
--and--
the Documentation Agent, the Collateral Agent
and each of the Lenders party to the
Credit Agreement referred to below
Re: U.S. $200,000,000 Credit Agreement
with Atria Communities, Inc.
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Atria Communities, Inc., a Delaware
corporation (the "Borrower"), in connection with (i) the execution and delivery
of the Credit Agreement, dated as of August 15, 1996 (the "Credit Agreement"),
among the Borrower, the financial institutions party thereto (the "Lenders") and
PNC Bank, National Association, as Administrative Agent, and (ii) the
transactions contemplated thereby. As used herein, the term "Credit Party"
refers only to the Borrower and such of its Subsidiaries as are party to any
Credit Document. Unless otherwise indicated, capitalized terms used herein but
not otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents as we
have deemed necessary or appropriate as a basis for the opinions set forth
herein, including without limitation (a) the Credit Documents, (b) the other
Transaction Documents and (c) such other public and corporate documents and
records as we deem necessary or appropriate in connection with this opinion.
In our examination we have assumed the genuineness of all signatures
(other than as to the Borrower and the other Credit Parties), the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic copies
and the authenticity of the originals of such copies. As to questions of fact
not independently verified by us we have relied, to the extent we deemed
appropriate, upon representations and certificates of officers of the Borrower,
the other Credit Parties, public officials and other appropriate persons.
Based upon the foregoing, we are of the opinion that:
1. Each of the Borrower and its Subsidiaries (i) is a validly existing
corporation or partnership, as the case may be, under the laws of the
jurisdiction of its formation and has the corporate or other organizational
power
<PAGE>
and authority, as applicable, to own its property and assets and to
transact the business in which it is engaged and presently proposed to engage
and (ii) to our knowledge, is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where it is required to be so
qualified except where the failure to be so qualified would not have a Material
Adverse Effect.
2. Each Credit Party has the corporate or other organizational power
and authority to execute, deliver and carry out the terms and provisions of each
of the Credit Documents to which it is a party and has taken all necessary
corporate or other organizational action to authorize the execution, delivery
and performance of the Credit Documents to which it is a party. Each Credit
Party has duly executed and delivered each Credit Document to which it is a
party and each Credit Document to which it is a party constitutes the legal,
valid and binding agreement or obligation of each Credit Party enforceable in
accordance with its terms.
3. Neither the execution, delivery or performance by any Credit Party
of the Credit Documents to which it is a party nor compliance with the terms and
provisions thereof nor the consummation of the loan transactions contemplated
therein, (i) will contravene any provision of any law, statute, rule, regulation
(including, without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System), or, to our knowledge, any order, writ,
injunction or decree of any court or governmental instrumentality applicable to
such Credit Party or its properties and assets, (ii) will conflict or result in
any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to the Security Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
agreement or other instrument of which we have knowledge to which the Borrower
or any of its Subsidiaries is a party or by which it or any of its property or
assets are bound or to which it may be subject or (iii) will violate any
provision of the partnership agreement, certificate of formation, the
certificate of incorporation or by-laws, as the case may be, of such Credit
Party.
4. To our knowledge, there are no actions, suits or proceedings pending
or, to our knowledge, threatened with respect to the Borrower or any of its
Subsidiaries (i) that have, or could reasonably be likely to have, a Material
Adverse Effect or (ii) that have, or could reasonably be expected to have a
Material Adverse Effect on the rights or remedies of the Lenders or the
Administrative Agent or on the ability of any Credit Party to perform its
obligations to them under the Credit Documents.
5. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of any Credit Document or (ii) the legality, validity,
binding effect or enforceability of Credit Documents, other than filings and
recordings necessary to establish and perfect the security interests and Liens
provided for in the Security Documents.
6. All material consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required to be obtained, given, filed
or taken by the Borrower or any other Credit Party in order to make or
consummate each component of the Transaction have been obtained, given, filed or
taken and are in full force and effect. Each component of the Transaction has
been consummated in accordance, in all material respect, with the applicable
Transaction Documents and in compliance, in all material respects, with all
applicable laws.
7. The Registration Statement is effective under the Securities Act of
1933, as amended, and, to the best of our knowledge after due inquiry, no stop
order suspending the effectiveness of such Registration Statement has been
issued under the Securities Act of 1933, as amended, or proceedings therefor
initiated or threatened by the SEC.
8. On the Closing Date and after giving effect to the Transaction, the
authorized capital stock of the Borrower consists solely of 50,000,000 shares of
Common Stock, par value $0.10 per share, and 5,000,000 shares of Preferred
Stock, par value $1.00 per share, of which 15,095,000 shares of Common Stock are
issued and outstanding and no shares of Preferred Stock are issued and
outstanding. All of such outstanding shares have been
2
<PAGE>
duly and validly issued, are fully paid and nonassessable and are free of
preemptive rights. On the Closing Date and after giving effect to the
Transaction, the Parent is the legal and beneficial owner of
------------
shares of Common Stock of the Borrower.
9. To our knowledge, Annex II to the Credit Agreement correctly sets
forth each Subsidiary of the Borrower and the direct and indirect ownership
interest of the Borrower therein.
10. To our knowledge, each Management Contract and each Existing
Indebtedness Agreement is in full force and effect in accordance with its
respective terms, without any material default existing thereunder.
11. To our knowledge, each Credit Party is the record owner of all of
the Stock and Notes (as each such term is defined in the Pledge Agreement)
listed under its name on Annex B and C, respectively, of the Pledge Agreement.
After giving effect to the delivery to the Collateral Agent of the Pledged Stock
and Pledged Notes (as each such term is defined in the Pledge Agreement), and
assuming the continued possession by the Collateral Agent of such Pledged Stock
and Pledged Notes in the Commonwealth of Pennsylvania, the security interest
created in favor of the Collateral Agent under the Pledge Agreement constitutes
a valid and enforceable first perfected security interest in such Pledged
Securities subject to no other security interest. No filings or recordings are
required in order to perfect the security interest created under the Pledge
Agreement with respect to the Pledged Stock and the Pledged Notes.
12. To our knowledge, each Credit Party is the legal and beneficial
owner of the Partnership Interests (as defined in the Pledge Agreement) listed
under its name on Annex D to the Pledge Agreement. We have examined the
financing statements (the "Financing Statements") to be filed in the filing
offices listed for such Credit Party on Schedule A attached hereto (the "Filing
Offices"), and (i) upon the filing of such Financing Statements in the Filing
Offices, assuming that the representations made by each Credit Party in the
Security Agreement with respect to the location of its chief executive office
and registered office are and remain true and correct and (ii) upon the delivery
of the Partnership Notice (as defined in the Pledge Agreement) to the relevant
partnership and the registration of the pledge on the partnership books of such
partnership, all filings, registrations, recordings and other actions necessary
or appropriate to create, maintain, preserve, protect and perfect the security
interests granted by such Credit Party to the Pledgee under the Pledge Agreement
in respect of Partnership Interests pledged thereunder will have been
accomplished and the security interests granted to the Pledgee pursuant to the
Pledge Agreement in and to such Partnership Interests will constitute perfected
security interests therein.
13. We have examined the Financing Statements to be filed in the Filing
Offices, and upon the filing of such Financing Statements in the Filing Offices,
assuming that the representations made by the relevant Credit Party in the
Security Agreement with respect to the location of its Collateral (as defined in
the Security Agreement) and its registered office are and remain true and
correct, all actions, filings, registrations and recordings necessary or
appropriate to create, maintain, preserve subject to continuation, protect and
perfect the security interests granted by such Credit Party to the Collateral
thereunder will have been accomplished and the security interests granted to the
Collateral Agent pursuant to the Security Agreement in and to such Collateral
will constitute a perfected security interest therein to the extent that the
Collateral consists of the type of property in which a security interest may be
perfected by filing a financing statement under the Uniform Commercial Code (the
"UCC").
14. Assuming that the representation made by the relevant Credit Party
in section 2.4 of the Security Agreement with respect to the location of its
chief executive office and of its registered office is and remains true and
correct, the law of the respective jurisdiction in which a Credit Party's chief
executive office or registered office is located governs the perfection and
priority of the security interests granted by such Credit Party in its
Receivables, Contracts, Contract Rights and General Intangibles (as each such
term is defined in the Security Agreement) to the extent that said Receivables,
Contracts, Contract Rights and General Intangibles consist of "accounts" and
"general intangibles" as described in the UCC of such jurisdiction. Upon the
filing of the Financing Statements in the Filing Offices, assuming that the
representations made by such Credit Party in the Security Agreement with respect
to the location of its chief executive office and registered office is and
remains true and correct, all actions, filings, registrations or recordings
necessary or appropriate to create, maintain, preserve, protect and perfect the
security interest granted by such Credit Party to the Collateral Agent under the
Security Agreement in respect of all Receivables, Contracts, Contract Rights and
General Intangibles thereunder will have been accomplished and the
3
<PAGE>
security interest granted to the Collateral Agent pursuant to the Security
Agreement in and to such Collateral will constitute a perfected security
interest therein.
15. The recordation of the Security Agreement in the United States
Patent and Trademark Office will be effective, under all applicable law, to
perfect the security interest granted to the Collateral Agent in trademarks the
covered by Security Agreement, and the filing of the Security Agreement with the
United States Copyright Office will be effective under applicable law to perfect
the security interest granted to the Collateral Agent in the copyrights covered
by the Security Agreement.
The foregoing opinions are subject to the following qualifications and
limitations:
A. To the extent that the obligations of any party under the Credit
documents and all other documents and instruments as to which any opinion is
rendered herein may be dependent upon such matters, we assume for purposes of
this opinion that all parties other than the Credit Parties (the "Other
Parties") have obtained all necessary authorizations and approvals to execute
and deliver such documents and instruments and to perform the obligations of the
Other Parties under them and that such instruments and documents constitute
legal, valid, binding and enforceable obligations on their part.
B. Whenever our opinion herein with respect to the existence or
non-existence of facts is qualified by the phrase "to our knowledge," "to our
knowledge" "we know," "known to us," "in the course of our review" or any
similar phrase implying a limitation on the basis of knowledge, it is intended
to indicate that, during the course of our representation in connection with the
transactions referenced in this letter, no information has come to our attention
that would give us actual knowledge of the existence or non-existence of facts
contrary to the opinions expressed herein and so qualified. We have not
undertaken, however, any special investigation to determine the existence or
absence of such facts, and no inference as to our knowledge or information
concerning the existence or absence of such facts should be drawn from our
representation. Such phrases shall not be deemed to include matters that may be
contained in our files relating to previous unrelated transactions involving any
of the entities represented by us in connection with these transactions.
C. The opinions expressed herein are limited to matters governed by the
laws of the United States of America, the Commonwealth of Kentucky and the
corporate laws of the State of Delaware as reflected solely in its statutes and
without review of case law decided under or in regard to such corporate laws.
D. The opinions expressed hereinabove are qualified to the extent that
the validity or enforceability of any of the provisions of the Credit documents
may be subject to or affected by (i) laws related to bankruptcy, insolvency,
reorganization, fraudulent conveyance, preferences, arrangements or moratorium
or by other similar laws affecting the rights of creditors generally, (ii)
equitable principles affecting the enforcement of obligations and contractual
rights generally, regardless of whether enforcement is considered in a
proceeding in equity or at law, including without limitation concepts of
materiality, adequacy of security, reasonableness, good faith sand fair dealing,
and procedures such as the marshalling of assets, and (ii) judicial discretion
and statutory limitations with respect to the availability of equitable remedies
and defenses, the calculation of damages and the entitlement of a party to
attorney's fees and other costs.
E. You should be aware that under the UCC, a financing statement is
effective only for a period of five (5) years from the date of its original
filing and unless an appropriate continuation statement is filed as provided in
the UCC within the six (6) months prior to the expiration of said five-year
period, and each successive five-year period thereafter, the financing statement
will lapse and the security interest evidenced thereby will no longer be
perfected.
F. In the event that any Credit Party changes its registered office in
Kentucky, its chief executive office or its principal place of business in any
other jurisdiction or changes the location of any of the Collateral to another
jurisdiction, and the Collateral Agent has notice of the same, we believe that
it would risk the perfected status of its security interest if it failed to file
appropriate financing statements in such other jurisdictions.
4
<PAGE>
G. The Credit Documents include proceeds within the description of the
Collateral. If proceeds are actually received by a Credit Party, preservation of
the security interest in such proceeds, as against third parties, may be subject
to the limitation on the perfection of continuing security interests in
commingled cash proceeds set forth in KRS 355.9-306.
H. We call your attention to the fact that where under traditional
Kentucky common law, the parties' choice of law will be upheld, so long as it is
deemed to be reasonable, this may no longer hold true. Recent Kentucky cases
have imposed a "most significant relationship" test, which is a question of
fact; Breeding v. Massachusetts Indemnity and Life Insurance Company, Ky., 633
--------------------------------------------------------------
S.W.2d 717 (1982). At least one federal court has indicated that Kentucky courts
will apply Kentucky law unless there are overwhelming interests to the contrary;
Harris Corp. v. Comair, Inc., 712 F.2d 1069 (6th Cir., 1983). Most recently in
Paine v. La Quinta Motor Inns, Inc., 736 S.W.2d 355 (1987), the court
- -----------------------------------
specifically approved of the Harris rule that Kentucky could apply to its own
laws when there are "significant contacts and no overwhelming interests to the
contrary, even if the parties have voluntarily agreed to apply the law of a
different state."
I. No opinion is expressed with respect to the Credit Documents as to
the enforceability of (i) self-help provisions; (ii) waivers of constitutional
and statutory rights; (iii) provisions related to the waiver of remedies (or
delay in or omission of enforcement thereof), disclaimers, exculpation clauses,
liability limitations with respect to third parties, release of legal or
equitable rights, discharges of defenses or the creation of remedies not
available under Kentucky laws; (iv) provisions purporting to waive any
requirements of diligent performance or care on the part of the Lenders with
respect to the recognition and preservations of the Credit Parties' rights to or
interest in any property subject to the liens or security interests created
under the Credit Documents; (v) covenants to the extent that they can be
construed as independent clauses (although a violation of the terms of such
covenants would constitute an act or event of default if the Credit Documents so
provided); (vi) provisions purporting to shift evidentiary burdens of proof;
(vii) provisions purporting to appoint the Lenders, or any of them, as
attorney-in-fact or agent for any of the Credit Parties or any other Person;
(viii) provisions purporting to modify the rights to notice and to service of
process in accordance with the requirements of Kentucky law of the laws of any
other jurisdiction; (ix) any provision purporting to preclude the modification
of any of the Credit Documents through conduct, custom, or course of
performance, action or dealing; or (x) any provision purporting to require the
payment or reimbursement of fees, costs, expenses or other amounts which are
unreasonable in nature or amount or purporting to provide indemnification
against liability for actions taken under the Credit Documents, but the
inclusion of any such provisions discussed herein (or all of them) does not
affect the validity of any of the Credit Documents, taken as a whole, and each
of the Credit Documents, taken as a whole, together with applicable law,
contains adequate provisions for the practical realization of the benefits of
the security created thereby.
J. The opinions expressed herein are rendered as of the date hereof. We
assume no obligation to update or supplement these opinions to reflect any fact
or other matter which may hereafter come to our attention or any change in
applicable law which may hereafter occur.
The foregoing conclusions are limited to the matters expressly stated
herein, and no other conclusions are implied or may be inferred beyond such
matters. This opinion is rendered solely for your benefit and may not be relied
upon in any manner by any other person without our written consent.
Very truly yours,
5
<PAGE>
EXHIBIT C-2
FORM OF OPINION OF TRANSACTIONS COUNSEL TO THE PARENT
, 1996
-------- --
PNC Bank, National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Commercial Loan Operations
--------------------------
--and--
the Documentation Agent, the Collateral Agent
and each of the Lenders party to the
Credit Agreement referred to below
Re: U.S. $200,000,000 Credit Agreement
with Atria Communities, Inc.
----------------------------------
Ladies and Gentlemen:
I am Transactions Counsel of Vencor, Inc., a Delaware corporation (the
"Parent"), and have acted as counsel to the Parent in connection with (i) the
execution and delivery of the Guaranty, dated as of August 15, 1996 (the "Parent
Guaranty"), by the Parent and the Supporting Guarantors named therein (the
Parent and all such Supporting Guarantors, each a "Guarantor" and collectively,
the "Guarantors"), in favor of, among others, the Lenders party to the Credit
Agreement referred to therein and PNC Bank, National Association, as
Administrative Agent (the "Administrative Agent") for the Lenders under the
Credit Agreement, and (ii) the transactions contemplated thereby. Unless
otherwise indicated, capitalized terms used herein but not otherwise defined
herein shall have the respective meanings set forth in the Parent Guaranty or
the Credit Agreement referred to in the Parent Guaranty.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of such documents as I
have deemed necessary or appropriate as a basis for the opinions set forth
herein, including without limitation (a) the Parent Guaranty, (b) the other
Credit Documents, (c) the other Transaction Documents and (d) such other public
and corporate documents and records as I deem necessary or appropriate in
connection with this opinion.
In my examination I have assumed the genuineness of all signatures
(other than as to the Guarantors), the authenticity of all documents submitted
to me as originals, the conformity to original documents of all documents
submitted to me as certified or photostatic copies and the authenticity of the
originals of such copies. As to questions of fact not independently verified by
me I have relied, to the extent I deemed appropriate, upon representations and
certificates of officers of the Parent, the other Guarantors, public officials
and other appropriate persons.
Based upon the foregoing, I am of the opinion that:
<PAGE>
1. The Parent (i) is a duly organized and validly existing corporation
in good standing under the laws of the State of Delaware and has the corporate
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposed to engage and (ii) is qualified
and is authorized to do business and is in good standing in each jurisdiction
where it is required to be so qualified except where the failure to be so
qualified would not have a Material Adverse Effect.
2. Each Supporting Guarantor (i) is a corporation organized and
existing and in good standing under the laws of the jurisdiction of its
formation and has the corporate power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposed to engage and (ii) is qualified and is authorized to do business and is
in good standing in each jurisdiction where it is required to be so qualified
except where the failure to be so qualified would not have a Material Adverse
Effect.
3. Each Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of the Parent Guaranty and has
taken all necessary corporate or other organizational action to authorize the
execution, delivery and performance of the Parent Guaranty. Each Guarantor has
duly executed and delivered the Parent Guaranty and the Parent Guaranty
constitutes the legal, valid and binding agreement or obligation of each
Guarantor enforceable in accordance with its terms.
4. Neither the execution, delivery or performance by any Guarantor of
the Parent Guaranty nor compliance with the terms and provisions thereof (i)
will contravene any provision of any law, statute, rule, regulation (including,
without limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System), order, writ, injunction or decree of any court or
governmental instrumentality applicable to any such Guarantor or its properties
and assets, (ii) will conflict or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or (other
than pursuant to the Security Documents) result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of any such Guarantor or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, agreement or other instrument to which
any such Guarantor or any of its Subsidiaries is a party or by which it or any
of its property or assets are bound or to which it may be subject or (iii) will
violate any provision of the certificate of incorporation or by-laws of such
Guarantor.
5. There are no actions, suits or proceedings pending, or to the best
of my knowledge after due inquiry, threatened with respect to any Guarantor or
any of its Subsidiaries that have, or could be reasonably likely to have, a
Material Adverse Effect.
6. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of the Parent Guaranty or (ii) the legality, validity,
binding effect or enforceability of the Parent Guaranty.
7. All material consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required to be obtained, given, filed
or taken by the Parent in order to make or consummate each component of the
Transaction have been obtained, given, filed or taken and are in full force and
effect. Each component of the Transaction has been consummated in accordance, in
all material respects, with the applicable Transaction Documents and in
compliance, in all material respects, with all applicable laws.
The opinions expressed herein are subject to the following limitations
and exceptions:
A. The enforceability of the Parent Guaranty and the obligations of the
Guarantors thereunder and the availability of certain rights and remedial
provisions provided for in the Parent Guaranty, may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, liquidation, conservatorship,
reorganization, moratorium, or other federal or state laws (including, but not
limited to the Constitution of the United States of America and the Commonwealth
of Kentucky) affecting the enforceability of rights of creditors generally and
by equitable principles.
2
<PAGE>
B. No opinion is expressed as to the enforceability of (i) self-help
provisions; (ii) waivers of constitutional rights; (iii) provisions related to
the waiver of remedies (or delay in or omission of enforcement thereof),
disclaimers, exculpation clauses, liability limitations with respect to third
parties, releases of legal or equitable rights, discharges of defenses,
liquidated damages or the creation of remedies not available under Kentucky law;
(iv) any purported assignment of any approval, license, permit, agreement of
rights for which the specific written consent of any other party or person
affected thereby has not been obtained; (v) covenants to the extent that they
can be construed as independent clauses as distinguished from clauses which
trigger events of default; (vi) any provisions which purport to shift
evidentiary burdens of proof; (vii) any provisions purported to appoint a Lender
as attorney-in-fact or agent for a Guarantor; (viii) any provisions regarding
payment of attorneys' fees except to the extent permitted by KID 411.195;; (ix)
provisions relating to lender indemnification; and (x) any provisions purporting
to modify the rights of notice of service of process requirements of the laws of
the Commonwealth of Kentucky.
C. The opinions contained in this letter are rendered only as
of the date hereof, and I undertake no obligation to update my opinions after
the date hereof.
I am a member of the Bar of the Commonwealth of Kentucky and, except as
described in the following sentence, I do not hold myself out as being
conversant with, and express no opinion as to, the laws of any other
jurisdiction. My examination of matters of law in connection with the opinions
expressed herein has been limited to the laws of the Commonwealth of Kentucky,
the federal laws of the United States, and the General Corporation Law of the
State of Delaware.
This opinion is being furnished only to the addresses and is solely for
their benefit and the benefit of their participants and assigns in connection
with the above transaction. This opinion may not be relied upon for any other
purpose, or relied upon by any other person, firm or corporation for any
purpose, without a prior written consent.
Very truly yours,
T. Richard Riney
Transactions Counsel
Vencor, Inc.
3
<PAGE>
EXHIBIT D
OFFICER'S CERTIFICATE
I, the undersigned, [President/Vice President] of [NAME OF CREDIT
PARTY], [a corporation organized and existing under the laws of the State of
] [limited liability company organized and existing under the laws of
- ---------
the State of ] (the "Company") [which corporation constitutes the general
-------
partner of , a limited partnership (the "Partnership")],
------------ ---------
do hereby certify on behalf of the Company [as the general partner of the
Partnership] that:
1. This Certificate is furnished pursuant to the Credit Agreement,
dated as of August 15, 1996, among Atria Communities, Inc., the financial
institutions from time to time party thereto, and PNC Bank, National
Association, as Administrative Agent (such Credit Agreement, as in effect on the
date of this Certificate, being herein called the "Credit Agreement"). Unless
otherwise defined herein, capitalized terms used in this Certificate shall have
the meanings set forth in the Credit Agreement.
2. The individuals named on Annex A hereto /10/ are elected or
appointed officers of the Company and each holds the office of the Company set
forth opposite his name. The signature written opposite the name and title of
each such officer is his genuine signature.
3. Attached hereto as Exhibit A is a certified copy of the [Certificate
of Incorporation of the Company] [Certificate of Formation and Limited Liability
Company Agreement] [Partnership Agreement of the Partnership], [as filed in the
Office of the Secretary of State of the State of on , 19 ],
---------- -------- --
together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws of the Company which were duly adopted, are in full force and effect on
the date hereof, and have been in effect since , 19 .
---------- -- --
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on , 1996 [by unanimous written
---------
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Documents to which the Company [as the general manager partner of
the Partnership] is party.
6. Attached hereto as Exhibit D is a true and complete list of all
Plans, true and correct copies of which have been made available to the
Administrative Agent.
7. Attached hereto as Exhibit E is a true and complete list of all
Collective Bargaining Agreements, true and correct copies of which have been
made available to the Administrative Agent.
8. Attached hereto as Exhibit F is a true and complete list of all
Existing Indebtedness Agreements, true and correct copies of which have been
made available to the Administrative Agent.
9. Attached hereto as Exhibit G is a true and complete list of all
Shareholders' Agreements, true and correct copies of which have been made
available to the Administrative Agent.
- -----------------------------
/10/ Include name, office and signature of each officer who will sign any
Credit Document, including the officers signing this certificate.
<PAGE>
10. Attached hereto as Exhibit H is a true and complete list of all
Management Agreements, true and correct copies of which have been made available
to the Administrative Agent.
11. Attached hereto as Exhibit I is a true and complete list of all
Employment Agreements, true and correct copies of which have been made available
to the Administrative Agent.
12. Attached hereto as Exhibit J is a true and complete list of all
Management Contracts, true and correct copies of which have been made available
to the Administrative Agent.
13. Attached hereto as Exhibit K is a true and complete list of all Tax
Sharing Agreements, true and correct copies of which have been made available to
the Administrative Agent.
14. Attached hereto as Exhibit L is a true and complete list of all
Acquisition Documents, true and correct copies of which have been delivered to
the Administrative Agent.
15. On the date hereof, all of the conditions set forth in sections
5.1(e), (h), (i), (j) and (k), and section 5.2 have been duly satisfied./11/
[6][16]. On the date hereof, the representations and warranties
contained in the Credit Agreement and in the other Credit Documents are true and
correct in all material respects with the same effect as those such
representations and warranties have been made on the date hereof, after giving
effect to the incurrence of Loans on the date hereof and the application of the
proceeds thereof, unless stated to relate to a specific earlier date, in which
case such representation and warranties were true and correct in all material
respects as of such earlier date.
[7][17]. On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from the Borrowing to occur on the
date hereof or from the application of the proceeds thereof.
[8][18]. There is not proceeding dissolution or liquidation of the
Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
----
1996.
- ----------
[NAME OF CREDIT PARTY]
By:
---------------------------
Name:
Title:
- -----------------------------
/11/ Insert items 6 through 15 only in the Certificate for the Borrower.
2
<PAGE>
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do
hereby certify [on behalf of the Company] [on behalf of the Company as general
partner of the Partnership] that:
1. [Name of person making above certifications] is the duly elected
and qualified [President/Vice President] of the Company and the signature above
is his genuine signature.
2. The certifications made by [name of person making above
certifications] in Items 2, 3, 4, 5 and [8][20] above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
----
August, 1996.
[NAME OF CREDIT PARTY]
By:
---------------------------
Name:
Title:
3
<PAGE>
ANNEX A
Name Office Signature
- ------------ ------------ ----------------------
----------------
----------------
----------------
----------------
<PAGE>
EXHIBIT E
----------------------------
FORM OF
PARENT GUARANTY
----------------------------
<PAGE>
EXHIBIT F
----------------------------
FORM OF
SUBSIDIARY GUARANTY
----------------------------
<PAGE>
EXHIBIT G
----------------------------
FORM OF
PLEDGE AGREEMENT
----------------------------
<PAGE>
EXHIBIT H
----------------------------
FORM OF
SECURITY AGREEMENT
----------------------------
<PAGE>
EXHIBIT I
----------------------------
FORM OF
ASSIGNMENT AGREEMENT
----------------------------
<PAGE>
ASSIGNMENT AGREEMENT
DATE:
-------------
Reference is made to the Credit Agreement described in Item 2 of Annex
I annexed hereto (as such Credit Agreement may hereafter be amended, modified or
supplemented from time to time, the "Credit Agreement"). Unless defined in Annex
I attached hereto, terms defined in the Credit Agreement are used herein as
therein defined.
(the "Assignor") and (the "Assignee")
------------- --------------
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I (the "Assigned Share") of all of
Assignor's outstanding rights and obligations under the Credit Agreement
indicated in Item 4 of Annex I, including, without limitation, all rights and
obligations with respect to the Assigned Share of the Assignor's Commitment and
of the Loans, Unpaid Drawings and the Notes held by the Assignor. After giving
effect to such sale and assignment, the Assignee's Commitment will be as set
forth in Item 4 of Annex I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any other Credit Party or the performance or observance by the
Borrower or any other Credit Party of any of its obligations under the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly authorized
to enter into and perform the terms of this Assignment Agreement; (ii) confirms
that it has received a copy of the Credit Agreement and the other Credit
Documents, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement;
(iii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Managing Agent, the Assignor 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 decisions in taking or not taking action
under the Credit Agreement; (iv) appoints and authorizes each of the
Administrative Agent and the Managing Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement and the other
Credit Documents as are delegated to the Administrative Agent or the Managing
Agent, as the case may be, by the terms thereof, together with such powers as
are reasonably incidental thereto; [and] (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender[; and (vi) to
the extent legally entitled to do so, attaches the forms described in section
4.4(b)(ii) of the Credit Agreement /12/.
4. Following the execution of this Assignment Agreement by the Assignor
and the Assignee, an executed original hereof (together with all attachments)
will be delivered to the Administrative Agent. The effective date of this
Assignment Agreement shall be the date of execution hereof by the Assignor, the
Assignee and the
- -----------------------------
/12/ If the assignee is organized under the laws of a jurisdiction outside
the United States.
<PAGE>
consent hereof by the Administrative Agent and the receipt by the Administrative
Agent of the administrative fee referred to in section 12.4(b) of the Credit
Agreement, unless otherwise specified in Item 5 of Annex I hereto (the
"Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Lender thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee shall
be entitled to (x) all interest on the Assigned Share of the Loans at the rates
specified in Item 6 of Annex I, (y) all Commitment Commission (if applicable) on
the Assigned Share of the Commitment at the rate specified in Item 7 of Annex I,
and (z) all Letter of Credit Fees (if applicable) on the Assignee's
participation in all Letters of Credit at the rate specified in Item 8 of Annex
I hereto, which, in each case, accrue on and after the Settlement Date, such
interest and, if applicable, Commitment Commission and Letter of Credit Fees, to
be paid by the Administrative Agent, upon receipt thereof from the Borrower,
directly to the Assignee. It is further agreed that all payments of principal
made by the Borrower on the Assigned Share of the Loans which occur on and after
the Settlement Date will be paid directly by the Agent to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the respective Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves on the
Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF KENTUCKY.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[NAME OF ASSIGNOR],
as Assignor
By
----------------------------
Title:
[NAME OF ASSIGNEE],
as Assignee
By
----------------------------
Title:
2
<PAGE>
Acknowledged and Agreed:
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
------------------------------
Title:
3
<PAGE>
ANNEX 1
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. The Borrower: ATRIA COMMUNITIES, INC.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of August 15, 1996, among Atria Communities,
Inc., the Lenders from time to time party thereto, and PNC Bank, National
Association, as Administrative Agent.
3. Date of Assignment Agreement:
199
--------- ---
4. Amounts (as of date of item #3 above):
Commitments Loans
a. Aggregate Amount
for all Lenders $ $
-------- --------
b. Assigned Share %
--------- ----------
c. Amount of Assigned
Share $ $
-------- --------
5. Settlement Date:
199
--------- ---
6. Rate of Interest
to the Assignee: As set forth in section 1.8 of the Credit
Agreement (unless otherwise agreed
to by the Assignor and the Assignee). /13/
- -----------------------------
/13/ The Borrower and the Administrative Agent shall direct the entire amount
of the interest to the Assignee at the rate set forth in section 1.8 of
the Credit Agreement, with the Assignor and Assignee effecting any
agreed upon sharing of interest through payments by the Assignee to the
Assignor.
<PAGE>
7. Commitment
Commission: As set forth in section 3.1(a) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee)14.
8. Letter of
Credit Fees: As set forth in section 3.1(b) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee)15.
9. Notices:
ASSIGNOR:
-------------
-------------
-------------
Attention:
Telephone No.:
Facsimile No.:
ASSIGNEE:
-------------
-------------
-------------
Attention:
Telephone No.:
Facsimile No.:
- -----------------------------
/14/ The Borrower and the Administrative Agent shall direct the entire
amount of the rate set forth in section 3.1(a) of the Credit
Agreement, with the Assignor and the Assignee affecting any
agreed upon sharing of Commitment Commission through payment by the
Assignee to the Assignor.
/15/ The Borrower and the Adiminstrative Agent shall direct the entire
amount of the Letter of Credit Fees to the Assignee at the rate set
forth in section 3.1(b) of the Credit Agreement, with the Assignor and
the Assignee effecting any agreed upon sharing of the Letter of
Credit Fee through payment by the Assignee to the Assignor.
2
<PAGE>
10. Payment Instructions:
ASSIGNOR:
-------------
-------------
-------------
ABA No.:
Account No.:
Reference:
Attention:
ASSIGNEE:
-------------
-------------
-------------
ABA No.:
Account No.:
Reference:
Attention:
3
<PAGE>
EXHIBIT J
SOLVENCY CERTIFICATE
I, the undersigned, the Chief Financial Officer of Atria Communities,
Inc., a corporation organized and existing under the laws of the State of
Delaware (the "Borrower"), do hereby certify on behalf of the Borrower that:
1. This Certificate is furnished pursuant to section 5.1(o) of the
Credit Agreement, dated as of August 15, 1996, among the Borrower, the financial
institutions from time to time party thereto (the "Lenders"), and PNC Bank,
National Association, as Administrative Agent (such Credit Agreement, as in
effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of
the Borrower would change hands between a willing buyer and a
willing seller, within a commercially reasonable period of
time, each having reasonable knowledge of the relevant facts,
with neither being under any compulsion to act
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent
willing seller from an independent willing buyer if the assets
of the Borrower are sold with reasonable promptness under
normal selling conditions for the sale of comparable business
enterprises in a current market.
(c) "New Financing"
The Indebtedness incurred or to be incurred by the
Borrower under the Credit Documents (assuming the full
utilization by the Borrower of the Commitments under the
Credit Agreement) and the other Transaction Documents and all
other financings contemplated by the Transaction Documents
(including, without limitation, the IPO), in each case after
giving effect to the Transaction.
(d) "Stated Liabilities"
The recorded liabilities (including contingent
liabilities that would be recorded in accordance with
generally accepted accounting principles ("GAAP")) of the
Borrower as of [insert Closing Date] after giving effect to
the consummation of the Transaction, determined in accordance
with GAAP consistently applied, together with the amount of
all Obligations.
(e) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities
reasonably likely to result from pending litigation, asserted
claims and assessments, guaranties, uninsured risks and other
contingent liabilities of the Borrower after giving effect to
the Transaction (including all fees and expenses related
thereto but exclusive of such contingent liabilities to the
extent reflected in Stated Liabilities), as identified and
explained in terms of their nature and estimated magnitude by
responsible officers of the Borrower.
(f) "Will be able to pay its Stated Liabilities,
including Identified Contingent Liabilities, as they mature"
<PAGE>
For the period from the date hereof through the
Revolving Loan Maturity Date, the Borrower will have
sufficient assets and cash flow to pay its Stated Liabilities
and Identified Contingent Liabilities as those liabilities
mature or otherwise become payable.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the
Revolving Loan Maturity Date, the Borrower, after consummation
of the Transaction and all New Financing (including the Loans)
being incurred or assumed and Liens created by the Borrower in
connection therewith, is a going concern and has sufficient
capital to ensure that it will continue to be a going concern
for such period and to remain a going concern.
3. For purposes of this Certificate, I, or officers of the Borrower
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below.
(a) I have reviewed the financial statements of the
Borrower referred to in section 6.8(b) of the Credit
Agreement.
(b) I have reviewed the unaudited pro forma consolidated
balance sheet of the Borrower referred to in section 6.8(b) of
the Credit Agreement.
(c) I have made inquiries of certain officials of the
Borrower who have responsibility for financial and accounting
matters regarding the existence and amount of Identified
Contingent Liabilities associated with the business of the
Borrower.
(d) I have knowledge of and have reviewed to my satis-
faction the Credit Documents and the other Transaction
Documents, and the respective Annexes, Schedules and Exhibits
thereto.
(e) With respect to Identified Contingent Liabilities, I:
1. inquired of certain officials of the Borrower who
have responsibility for legal, financial and accounting
matters as to the existence and estimated liability with
respect to all contingent liabilities associated with the
business of the Borrower; and
2. confirmed with officers of the Borrower, to the
best of such officers' knowledge, that (i) all appropriate
items were included in Stated Liabilities or Identified
Contingent Liabilities and that (ii) the amounts relating
thereto were the maximum estimated amount of liabilities
reasonably likely to result therefrom as of the date hereof.
3. hereby certify that, to the best of my knowledge,
all material Identified Contingent Liabilities that may arise
from any pending litigation, asserted claims and assessments,
guarantees, uninsured risks and other Identified Contingent
Liabilities of the Borrower, (exclusive of such Identified
Contingent Liabilities to the extent reflected in Stated
Liabilities) have been considered in making the certification
set forth in paragraph 4 below, and with respect to each such
Identified Contingent Liability the estimable maximum amount
of liability with respect thereto was used in making such
certification.
(f) I have made inquiries of certain officers of the Borrower
who have responsibility for financial reporting and accounting
matters regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause the
Borrower after giving effect to the consummation of the
Transaction and the New Financing (including the making of
Loans under the Credit Agreement), to (i) have assets with a
Fair Value or Present Fair Salable Value that are less than
Stated Liabilities and Identified Contingent Liabilities; (ii)
have Unreasonably Small Capital; or (iii) not be able to pay
its Stated Liabilities and Identified Contingent Liabilities
as they mature or otherwise become payable.
2
<PAGE>
(g) I have made inquiries of certain officers of the Borrower,
who have responsibility for financial reporting and accounting
matters regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause the
Borrower, after giving effect to the consummation of the
Transaction and the related financing transactions (including
the incurrence of the New Financing), to (i) have assets with
a Fair Value or Present Fair Salable Value that are less than
its or their Stated Liabilities and Identified Contingent
Liabilities; (ii) have Unreasonable Small Capital; or (iii)
not be able to pay its or their Stated Liabilities and
Identified Contingent Liabilities as they mature or otherwise
become payable.
4. Based on and subject to the foregoing, I hereby certify on behalf of
the Borrower that, after giving effect to the consummation of the Transaction
and the New Financing (including the making of Loans under the Credit
Agreement), it is my opinion that (i) the Fair Value and Present Fair Salable
Value of the assets of the Borrower exceed its Stated Liabilities and Identified
Contingent Liabilities; (ii) the Borrower does not have Unreasonably Small
Capital; and (iii) the Borrower will be able to pay its Stated Liabilities and
Identified Contingent Liabilities as they mature or otherwise become payable.
IN WITNESS WHEREOF, I have hereto set my hand this day of
----
1996.
- ---------
ATRIA COMMUNITIES, INC.
By
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Name:
Title:
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EXHIBIT K
SECTION 4.4(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of August
15, 1996, among Atria Communities, Inc., the financial institutions party
thereto from time to time and PNC Bank, National Association, as Administrative
Agent (the "Credit Agreement"). Pursuant to the provisions of section 4.4(b)(ii)
of the Credit Agreement, the undersigned hereby certifies that it is not a
"bank" as such term is used in section 881(c)(3)(A) of the Internal Revenue Code
of 1986, as amended.
[NAME OF BANK]
By:
---------------------------------
Title:
Dated:
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EXHIBIT 2
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ATRIA COMMUNITIES, INC.
as Assignor
THE OTHER ASSIGNORS NAMED HEREIN
as Assignors
With
PNC BANK, NATIONAL ASSOCIATION
as Collateral Agent
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SECURITY AGREEMENT
dated as of
August 15, 1996
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================================================================================
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SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of August 15, 1996 (as amended, modified,
or supplemented from time to time, "this Agreement"), among each of the
undersigned (each, together with its successors and assigns, an "Assignor" and
collectively, the "Assignors"), and PNC BANK, NATIONAL ASSOCIATION, a national
banking association, as collateral agent (herein, together with its successors
and assigns in such capacity, the "Collateral Agent"), for the benefit of the
Secured Creditors (as defined below):
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement (as defined below) shall be used herein as therein
defined.
(2) This Agreement is made pursuant to the Credit Agreement, dated as
of the date hereof (herein, as amended or otherwise modified from time to time,
the "Credit Agreement"), among Atria Communities, Inc., a Delaware corporation
(herein, together with its successsors and assigns, the "Borrower"), the
financial institutions named as lenders therein, and the Administrative Agent,
as agent for the Lenders (as defined in the Credit Agreement), providing, among
other things, for loans or advances or other extensions of credit to or for the
benefit of the Borrower of up to $200,000,000, with such loans or advances being
evidenced by promissory notes (the "Notes", such term to include all notes and
other securities issued in exchange therefor or in replacement thereof).
(3) The Borrower may from time to time be party to one or more
Designated Interest Rate Agreements (as defined in the Credit Agreement). Any
institution that participates, and in each case their subsequent assigns, as a
counterparty to any Designated Interest Rate Agreement (collectively, the
"Interest Rate Creditors," and the Interest Rate Creditors together with the
Lenders, collectively the "Secured Creditors"), shall benefit hereunder as
herein provided.
(4) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(5) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that each
Assignor shall have executed and delivered to the Collateral Agent this
Agreement.
(6) Each Assignor desires to execute this Agreement to satisfy the
conditions described in the preceding paragraph.
NOW, THEREFORE, in consideration of the benefit accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties and hereby
covenants and agrees as follows:
1. SECURITY INTERESTS.
1.1. Grant of Security Interests. (a) As security for the prompt and
complete payment and performance when due of all of the Obligations, each
Assignor does hereby sell, assign and transfer unto the Collateral Agent, and
does hereby grant to the Collateral Agent for the benefit of the Secured
Creditors a continuing security interest of first priority in, all of the right,
title and interest of such Assignor in, to and under all of the following,
whether now existing or hereafter from time to time acquired (collectively, the
"Collateral"):
(i) each and every Receivable,
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(ii) all Contracts, together with all Contract Rights
arising thereunder,
(iii) all Inventory,
(iv) all Equipment,
(v) all Marks, together with the registrations and right to
all renewals thereof, and the goodwill of the business of such Assignor
symbolized by the Marks,
(vi) all Patents and Copyrights,
(vii) all computer programs of such Assignor and all
intellectual property rights therein and all other Proprietary
Information of such Assignor, including, but not limited to, Trade
Secrets,
(viii) all Permits,
(ix) the Cash Collateral Account and all monies, securities
and instruments deposited or required to be deposited in such Cash
Collateral Account,
(x) all other Goods, General Intangibles, Chattel Paper,
Documents and Instruments (other than the Pledged Securities (as
defined in the Pledge Agreement) and other than Cash Equivalents), and
(xi) all Proceeds and products of any and all of the
foregoing;
provided that there shall be excluded from the foregoing, and there shall not be
included in the Collateral, in any event, any of the foregoing as to which any
Assignor has prior to the date hereof granted a security interest as security
for IDB Debt identified in Annex IV to the Credit Agreement.
(b) The security interest of the Collateral Agent under this Agreement
extends to all Collateral of the kind which is the subject of this Agreement
which any Assignor may acquire at any time during the continuation of this
Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all monies and claims for monies due
or to become due to the Assignor under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem to be necessary or advisable in the premises, which
appointment as attorney is coupled with an interest.
2. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. Assuming the filing in the appropriate filing
offices of those UCC-1 financing statements delivered to the Collateral Agent
pursuant to section 5.1(n)(ii)(A) of the Credit Agreement and the filings of the
patent, trademark and copyright security agreements with the United States
Patent and Trademark Office and the United States Copyright Office, all filings,
registrations and recordings necessary or appropriate to create, preserve,
protect and perfect the security interest granted by such Assignor to the
Collateral Agent hereby in respect of the Collateral have been accomplished and
the security interest granted to the Collateral Agent pursuant to this Agreement
in and to the Collateral constitutes a perfected security interest therein
superior and prior to the rights of all other persons therein (except that the
Collateral may be subject to the security interests evidenced by the financing
statements disclosed on Annex A hereto (the "Permitted Filings")) and subject to
no other Liens (except Permitted Liens) and is entitled to
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all the rights, priorities and benefits afforded by the Uniform Commercial Code
or other relevant law as enacted in any relevant jurisdiction to perfected
security interests, subject to compliance with the Assignment of Claims Act of
1940, as amended, and subject to the limitations on assignments of payments
pursuant to 42 C.F.R. (S) 447.10 (Medicaid), or other applicable legal
requirements related to directed payments to assignees under federal and state
payment or reimbursement programs.
2.2. No Liens. Each Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of all
Collateral free from any Lien, security interest, encumbrance or other right,
title or interest of any person (other than evidenced by the Permitted Filings
and Liens permitted under the Credit Agreement), and such Assignor shall defend
the Collateral against all claims and demands of all persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.
2.3. Other Financing Statements. There is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Collateral except as disclosed in Annex A hereto and so long as the Total
Commitment has not been terminated or any Letter of Credit remains outstanding
or any of the Obligations remain unpaid or any Designated Interest Rate
Agreement remains in effect, no Assignor will execute or authorize to be filed
in any public office any financing statement (or similar statement or instrument
of registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby such Assignor or as otherwise
permitted by the Credit Agreement.
2.4. Chief Executive Office, etc; Records. The chief executive office
(and the registered office of each Assignor which is a corporation) of each
Assignor is located at the address indicated on Annex B hereto. No Assignor will
move its chief executive office (or registered office in the case of an Assignor
which is a corporation) except to such new location as such Assignor may
establish in accordance with the last sentence of this section 2.4. The
originals of all documents evidencing all Receivables and Contract Rights of
such Assignor and the only original books of account and records of such
Assignor relating thereto are, and will continue to be, kept at such chief
executive office, or at such new locations as such Assignor may establish in
accordance with the last sentence of this section 2.4. All Receivables and
Contract Rights of such Assignor are, and will continue to be, maintained at,
and controlled and directed (including, without limitation, for general
accounting purposes) from, the office locations described above, or such new
locations as such Assignor may establish in accordance with the last sentence of
this section 2.4. No Assignor shall establish new locations for such offices
until (i) it shall have given to the Collateral Agent not less than 30 days'
prior written notice (or such lesser notice as shall be acceptable to the
Collateral Agent in the case of a new record location to be established in
connection with newly acquired Contracts) of its intention so to do, clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may reasonably request, and (ii) with respect
to such new location, it shall have taken all action, satisfactory to the
Collateral Agent, to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
2.5. Location of Inventory and Equipment. All Inventory and Equipment
held on the date hereof by each Assignor is located at one of the locations
shown on Annex C attached hereto. Each Assignor agrees that all Inventory and
Equipment now held or subsequently acquired by it shall be kept at (or shall be
in transport to or from) any one of the locations shown on Annex C hereto, or
such new location as such Assignor may establish in accordance with the last
sentence of this section 2.5. An Assignor may establish a new location for
Inventory and Equipment only if (i) it shall have given to the Collateral Agent
not less than 30 days' prior written notice of its intention so to do, clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may reasonably request, and (ii) with respect
to such new location, it shall have taken all action reasonably satisfactory to
the Collateral Agent to maintain the security interest of the Collateral Agent
in the Collateral intended to be granted hereby at all times in fully perfected
and in full force and effect.
2.6. Trade Names; Change of Name. No Assignor has or operates in any
jurisdiction under, or in the preceding five years has had or has operated in
any jurisdiction under, any trade names, fictitious names or other names
(including, without limitation, any names of divisions or operations) except its
legal name and such other trade, fictitious or other names as are listed on
Annex D hereto. Each Assignor has only operated under each name set forth in
Annex D in the jurisdiction or jurisdictions set forth opposite each such name
on Annex D. No Assignor shall change its legal name or assume or operate in any
jurisdiction under any trade, fictitious or other name except those names listed
on
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Annex D hereto in the jurisdictions listed with respect to such names and new
names (including, without limitation, any names of divisions or operations)
and/or jurisdictions established in accordance with the last sentence of this
section 2.6. No Assignor shall assume or operate in any jurisdiction under any
new trade, fictitious or other name or operate under any existing name in any
additional jurisdiction until (i) it shall have given to the Collateral Agent
not less than 30 days' prior written notice of its intention so to do, clearly
describing in such new name and/or jurisdiction and, in the case of a new name,
the jurisdictions in which such new name shall be used and providing such other
information in connection therewith as the Collateral Agent may reasonably
request, and (ii) with respect to such new i name and/or new jurisdiction, it
shall have taken all action to maintain the security interest of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully
perfected and in full force and effect.
2.7. Recourse. This Agreement is made with full recourse to the
relevant Assignor and pursuant to and upon all the warranties, representations,
covenants, and agreements on the part of such Assignor contained herein, in the
Designated Interest Rate Agreements and otherwise in writing in connection
herewith or therewith.
3. SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS.
3.1. Additional Representations and Warranties. As of the time when
each of its accounts receivable arises, each Assignor shall be deemed to have
represented and warranted that, except in such respects as do not impair in any
material respect the value or collectibility of its accounts receivable taken as
a whole, and except in such other respects as may from time be disclosed by such
Assignor to the Administrative Agent in writing: such receivable, and all
records, papers and documents relating thereto (if any) are, to the best
knowledge of the Assignor after due inquiry, genuine and in all respects what
they purport to be, and that all papers and documents (if any) relating thereto,
to the best knowledge of the Assignor after due inquiry, (i) will represent the
genuine, legal, valid and binding obligation of the account debtor, subject to
adjustments customary in the business of such Assignor, and evidencing
indebtedness unpaid and owed by the respective account debtor arising out of the
performance of labor or services or the sale or lease and delivery of the
merchandise listed therein, or both, (ii) will be the only original writings
evidencing and embodying such obligation of the account debtor named therein
(other than copies created for general accounting purposes), (iii) will evidence
true and valid obligations, enforceable in accordance with their respective
terms, subject to adjustments customary in the business of such Assignor, and
(iv) will be in compliance and will conform with all applicable federal, state
and local laws and applicable laws of any relevant foreign jurisdiction.
3.2. Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense satisfactory and complete records of its Receivables
and Contracts, including, but not limited to, the originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available to the
Collateral Agent for inspection, at such Assignor's own cost and expense, at any
and all reasonable times upon demand and upon reasonable advance notice. Each
Assignor shall, at its own cost and expense, deliver all tangible evidence of
its Receivables and Contract Rights (including, without limitation, copies of
all documents evidencing the Receivables and all Contracts, such copies, if
requested by the Collateral Agent while an Event of Default is in existence, to
be certified as true and complete by an appropriate officer of such Assignor)
and such books and records to the Collateral Agent or to its representatives
(copies of which evidence and books and records may be retained by such
Assignor) at any time upon its demand. If the Collateral Agent so directs, each
Assignor shall legend, in form and manner reasonably satisfactory to the
Collateral Agent, the Receivables and Contracts, as well as books, records and
documents of such Assignor evidencing or pertaining to the Receivables with an
appropriate reference to the fact that the Receivables and Contracts have been
assigned to the Collateral Agent and that the Collateral Agent has a security
interest therein.
3.3. Modification of Terms; etc. No Assignor shall rescind or cancel
any indebtedness evidenced by any Receivable or under any Contract, or modify
any term thereof or make any adjustment with respect thereto, or extend or renew
the same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable or Contract, or interest
therein, without the prior written consent of the Collateral Agent, except (i)
as permitted by section 3.4 hereof and (ii) so long as no Event of Default is
then in existence in respect of which the
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Collateral Agent has given notice that this exception is no longer applicable,
the Assignor may rescind, cancel, modify, make adjustments with respect to,
extend or renew any Contracts or indebtedness evidenced by any Receivable, or
compromise or settle any such dispute, claim, suit, or legal proceeding, or sell
any Receivable or Contract or interest therein, in the ordinary course of
business. Each Assignor will duly fulfill all obligations on its part to be
fulfilled under or in connection with the Receivables and Contracts and will do
nothing to materially impair the rights of the Collateral Agent in the
Receivables or Contracts.
3.4. Collection. Each Assignor shall endeavor to cause to be collected
from the account debtor named in each of its Receivables or obligor under any
Contract, as and when due (including, without limitation, amounts which are
delinquent, such amounts to be collected in accordance with generally accepted
lawful collection procedures) any and all amounts owing under or on account of
such Receivable or Contract, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Receivable or
under such Contract, except that, so long as no Event of Default is then in
existence in respect of which the Collateral Agent has given notice that this
exception is no longer applicable, such Assignor may allow in the ordinary
course of business as adjustments to amounts owing under its Receivables and
Contracts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, which such Assignor finds
appropriate in accordance with sound business judgment and (ii) a refund or
credit due as a result of returned or damaged merchandise or improperly
performed services. The reasonable out-of-pocket costs and expenses (including,
without limitation, attorneys' fees) of collection, whether incurred by such
Assignor or the Collateral Agent, shall be borne by such Assignor.
3.5. Direction to Account Debtors, etc. Upon the occurrence and during
the continuance of an Event of Default, and if the Collateral Agent so directs
the relevant Assignor, to the extent permitted by applicable law, such Assignor
agrees (x) to cause all payments on account of the Receivables to be made
directly to the Cash Collateral Account, (y) that the Collateral Agent may, at
its option, directly notify the obligors with respect to any Receivables to make
payments with respect thereto as provided in preceding clause (x), and (z) that
the Collateral Agent may enforce collection of any such Receivables and may
adjust, settle or compromise the amount of payment thereof. The Collateral Agent
may apply any or all amounts then in, or thereafter deposited in, the Cash
Collateral Account in the manner provided in section 7.4 of this Agreement. The
reasonable out-of-pocket costs and expenses (including attorneys' fees) of
collection, whether incurred by such Assignor or the Collateral Agent, shall be
borne by such Assignor.
3.6. Instruments. If any Assignor owns or acquires any Instrument, such
Assignor will within 10 days notify the Collateral Agent thereof, and upon
request by the Collateral Agent promptly deliver such Instrument to the
Collateral Agent appropriately endorsed to the order of the Collateral Agent as
further security hereunder.
3.7. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to its Receivables, Contracts, Instruments and other
property or rights covered by the security interest hereby granted, as the
Collateral Agent may reasonably require to give effect to the purposes of this
Agreement.
4. SPECIAL PROVISIONS CONCERNING TRADEMARKS.
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner or licensee of the
Marks listed in Annex E attached hereto and that said listed Marks constitute
all the marks registered in the United States Patent and Trademark Office that
such Assignor now owns or uses in connection with its business. Each Assignor
represents and warrants that it owns or is licensed to use all Marks that it
uses, and that it owns all of the registrations listed on Annex E. Each Assignor
further warrants that it is aware of no third party claim that any aspect of
such Assignor's present or contemplated business operations infringes or will
infringe any trademark or service mark in a manner which could have a material
effect on the financial condition, business or property of such Assignor.
4.2. Licenses and Assignments. Each Assignor hereby agrees not to
divest itself of any right under a Mark other than in the ordinary course of
business absent prior written approval of the Collateral Agent.
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4.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who may be infringing or otherwise violating any of such Assignor's
rights in and to any Mark that has a material effect on the financial condition,
business or property of such Assignor taken as a whole (each such Mark, a
"Significant Mark"), or with respect to any party claiming that such Assignor's
use of any Significant Mark violates any property right of that party, to the
extent that such infringement or violation could have a material effect on the
financial condition, business or property of such Assignor. Each Assignor
further agrees, unless otherwise directed by the Collateral Agent, diligently to
prosecute any person infringing any Significant Mark in a manner consistent with
its past practice and in the ordinary course of business.
4.4. Preservation of Marks. Each Assignor agrees to use or license the
use of its Significant Marks in interstate commerce during the time in which
this Agreement is in effect, sufficiently to preserve such Marks as trademarks
or service marks registered under the laws of the United States.
4.5. Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. (S)(S)1051 et seq. to maintain trademark registration which would
reasonably be expected to have a Material Adverse Effect, including but not
limited to affidavits of use and applications for renewals of registration in
the United States Patent and Trademark Office for all of its Marks pursuant to
15 U.S.C. (S)(S)1058(a), 1059 and 1065, and shall pay all fees and disburse-
ments in connection therewith, and shall not abandon any such filing of affi-
davit of use or any such application of renewal prior to the exhaustion of all
administrative and judicial remedies without prior written consent of the
Collateral Agent, which consent shall not be unreasonably withheld.
4.6. Future Registered Marks. If any mark registration issues hereafter
to an Assignor as a result of any application now or hereafter pending before
the United States Patent and Trademark Office, within 30 days of receipt of such
certificate such Assignor shall deliver a copy of such certificate, and a grant
of security in such mark to the Collateral Agent, confirming the grant thereof
hereunder, the form of such confirmatory grant to be substantially the same as
the form hereof.
4.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks, together with all
trademark rights and rights of protection to the same, vested, in which event
such rights, title and interest shall immediately vest, in the Collateral Agent
for the benefit of the Secured Creditors, in which case such Assignor agrees to
execute an assignment in form and substance reasonably satisfactory to the
Collateral Agent, of all its rights, title and interest in and to the Marks to
the Collateral Agent for the benefit of the Secured Creditors; (ii) take and use
or sell the Marks and the goodwill of such Assignor's business symbolized by the
Marks and the right to carry on the business and use the assets of the Assignor
in connection with which the Marks have been used; and (iii) direct such
Assignor to refrain, in which event such Assignor shall refrain, from using tide
Marks in any manner whatsoever, directly or indirectly, and, if requested by the
Collateral Agent, change such Assignor's corporate name to eliminate therefrom
any use of any Mark and execute such other and further documents that the
Collateral Agent may request to further confirm this and to transfer ownership
of the Marks and registrations and any pending trademark application in the
United States Patent and Trademark Office to the Collateral Agent.
5. SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS.
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner or licensee of all
rights in the Patents listed in Annex F attached hereto and in the Copyright
registrations listed in Annex G attached hereto, that said Patents constitute
all the United States patents and applications for United States patents that
such Assignor now owns and that said Copyrights constitute all the registered
United States copyrights that such Assignor now owns. Each Assignor represents
and warrants that it owns or is licensed to practice under all Patents and
Copyright registrations that it now owns, uses or practices under Each Assignor
further warrants that it is aware of no third party claim that any aspect of
such Assignor's present or contemplated business operations infringes or will
infringe any patent or any copyright in a manner which could have a material
effect on the financial condition, business or property of such Assignor.
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5.2. Licenses and Assignments. Each Assignor hereby agrees not to
divest itself of any right under a Patent or Copyright other than in the
ordinary course of business absent prior written approval of the Collateral
Agent, which such approval shall not be unreasonably withheld.
5.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement or other
violation of such Assignor's rights in any Patent that has a material effect on
the financial condition, business or property of such Assignor taken as a whole
(each such Patent, a "Significant Patent") or Copyright, or with respect to any
claim that practice of any Significant Patent or Copyright violates any property
right of that party, to the extent that such infringement or violation could
have a material effect on the financial condition, business or property of such
Assignor. Each Assignor further agrees, absent direction of the Collateral Agent
to the contrary, diligently to prosecute any person infringing any Significant
Patent or Copyright about which it has knowledge in a manner consistent with its
past practice and in the ordinary course of business.
5.4. Maintenance of Patents. At its own expense, each Assignor shall
make timely payment of all post-issuance fees required pursuant to 35 U.S.C. (S)
41 to maintain in force rights under each Patent.
5.5. Prosecution of Patent Applications. At its own expense, each
Assignor shall diligently prosecute all applications for United States patents
listed on Annex F hereto, and shall not abandon any such application, except in
favor of a continuation application based on such application, prior to
exhaustion of all administrative and judicial remedies, absent written consent
of the Collateral Agent, which such consent shall not be unreasonably withheld.
5.6. Other Patents and Copyrights. Within 30 days of acquisition of a
United States Patent or Copyright, or of filing of an application for a United
States Patent or Copyright, the relevant Assignor shall deliver to the
Collateral Agent a copy of said Patent or Copyright, as the case may be, with a
grant of security as to such Patent or Copyright, as the case may be, confirming
the grant thereof hereunder, the form of such confirmatory grant to be
substantially the same as the form hereof.
5.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the relevant Assignor take any or
all of the following actions: (i) declare the entire right, title and interest
of such Assignor in each of the Patents and Copyrights vested, in which event
such right, title and interest shall immediately vest in the Collateral Agent
for the benefit of the Secured Creditors, in which case such Assignor agrees to
execute an assignment in form and substance reasonably satisfactory to the
Collateral Agent of all its right, title, and interest to such Patents and
Copyrights to the Collateral Agent for the benefit of the Secured Creditors;
(ii) take and practice or sell the Patents and Copyrights; (iii) direct such
Assignor to refrain, in which event such Assignor shall refrain, from practicing
the Patents and Copyrights directly or indirectly, and such Assignor shall
execute such other and further documents as the Collateral Agent may request
further to confirm this and to transfer ownership of the Patents and Copyrights
to the Collateral Agent for the benefit of the Secured Creditors.
6. PROVISIONS CONCERNING ALL COLLATERAL.
6.1. Protection of Collateral Agent's Security. Each Assignor will do
nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at its own expense, to the extent required by the Credit
Agreement against fire, theft and all other risks to which such Collateral may
be subject; all policies or certificates with respect to such insurance shall be
endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as an additional insured and loss payee) and copies thereof shall be delivered
upon request to the Collateral Agent. If an Assignor shall fail to insure such
Inventory and/or Equipment to the extent required by the Credit Agreement, or if
such Assignor shall fail to so endorse all policies or certificates with respect
thereto, the Collateral Agent shall have the right (but shall be under no
obligation) to procure such insurance and such Assignor agrees to reimburse the
Collateral Agent for all costs and expenses of procuring such insurance. The
Collateral Agent may apply any proceeds of such insurance in accordance with
section 7.4, it being understood and agreed that the Assignor shall be permitted
to first use any such proceeds to repair and/or replace the relevant Collateral.
Each Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay its
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Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-negotiable. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in section 7-104
of the Uniform Commercial Code as in effect in any relevant jurisdiction or
under other relevant law).
6.3. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
reasonably deems appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to sign and deliver to
the Collateral Agent such financing statements, in form acceptable to the
Collateral Agent, as the Collateral Agent may from time to time reasonably
request or as are necessary or desirable in the opinion of the Collateral Agent
to establish and maintain a valid, enforceable, first priority security interest
in the Collateral as provided herein and the other rights and security
contemplated hereby all in accordance with the Uniform Commercial Code as
enacted in any and all relevant jurisdictions or any other relevant law. Each
Assignor will pay any applicable filing fees and related expenses. Each Assignor
authorizes the Collateral Agent to file any such financing statements without
the signature of such Assignor.
7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, subject to any mandatory requirements of applicable law
then in effect, the Collateral Agent, in addition to any rights now or hereafter
existing under applicable law, shall have all rights as a secured creditor under
the Uniform Commercial Code in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately
retake possession of the Collateral or any part thereof, from such
Assignor or any other person who then has possession of any part
thereof with or without notice or process of law, and for that purpose
may enter upon such Assignor's premises where any of the Collateral is
located and remove the same and use in connection with such removal any
and all services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables) constituting the Collateral to make any payment required
by the terms of such instrument or agreement directly to the Collateral
Agent;
(iii) sell, assign or otherwise liquidate, or direct such
Assignor to sell, assign or otherwise liquidate, any or all of the
Collateral or any part thereof, and take possession of the proceeds of
any such sale or liquidation;
(iv) withdraw any or all monies, securities and/or instruments
in the Cash Collateral Account for application to the Obligations in
accordance with section 7.4 hereof; and
(v) take possession of the Collateral or any part thereof, by
directing such Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense;
(A) forthwith cause the same to be moved to the place
or places so designated by the Collateral Agent and there
delivered to the Collateral Agent,
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(B) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in section 7.2, and
(C) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in good condition;
it being understood that such Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by the Assignor of said obligation.
7.2. Remedies; Disposition of the Collateral. Upon the occurrence and
continuance of an Event of Default, any Collateral repossessed by the Collateral
Agent under or pursuant to section 7. 1 and any other Collateral whether or not
so repossessed by the Collateral Agent, may be sold, assigned, leased or
otherwise disposed of under one or more contracts or as an entirety, and without
the necessity of gathering at the place of sale of the property to be sold, and
in general in such manner, at such time or times, at such place or places and on
such terms as the Collateral Agent may, in compliance with any mandatory
requirements of applicable law, determine to be commercially reasonable. Any of
the Collateral may be sold, leased or otherwise disposed of, in the condition in
which the same existed when taken by the Collateral Agent or after any overhaul
or repair which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to such Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the ten (10) days after the giving of such
notice, to the right of the relevant Assignor or any nominee of the relevant
Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' written notice to
the relevant Assignor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Collateral Agent's option, be subject to reserve), after publication
of notice of such auction not less than 10 days prior thereto in two newspapers
in general circulation in the city where such Collateral is located. To the
extent permitted by any such requirement of law, the Collateral Agent on behalf
of the Secured Creditors (or certain of them) may bid for and become the
purchaser (by bidding in Obligations or otherwise) of the Collateral or any item
thereof, offered for sale in accordance with this section without accountability
to the relevant Assignor (except to the extent of surplus money received as
provided in section 7.4). If, under mandatory requirements of applicable law,
the Collateral Agent shall be required to make disposition of the Collateral
within a period of time which does not permit the giving of notice to the
Assignor as hereinabove specified, the Collateral Agent need give the relevant
Assignor only such notice of disposition as shall be reasonably practicable in
view of such mandatory requirements of applicable law.
7.3. Waiver of Claims. Except as otherwise provided in this Agreement,
EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION
OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING,
WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE ASSIGNOR WOULD OTHERWISE HAVE
UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and
each Assignor hereby further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession
except any damages which are the direct result of the Collateral
Agent's gross negligence or wilful misconduct;
(ii) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the
Collateral Agent's rights here-under; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
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Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against the
relevant Assignor and against any and all persons claiming or attempting to
claim the Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under the relevant Assignor.
7.4. Application of Proceeds. (a) The proceeds of any Collateral
obtained pursuant to section 7.1 or disposed of pursuant to section 7.2 shall be
applied as follows:
(i) first, to the payment of all Obligations to the
Collateral Agent of the type described in clauses (iii) and (iv) of the
definition of "Obligations" contained in section 9 hereof;
(ii) second, to the extent proceeds remain after the
application pursuant to preceding clause (i), an amount equal to the
outstanding Obligations to the Secured Creditors shall be paid to the
Secured Creditors as provided in section 7.4(c) with each Secured
Creditor receiving an amount equal to its outstanding Obligations or,
if the proceeds are insufficient to pay in full all such Obligations,
its Pro Rata Share of the amount remaining to be distributed; and
(iii) third, to the extent remaining after the application
pursuant to the preceding clauses (i) and (ii) or following the
termination of this Agreement pursuant to section 10.9 hereof, to the
relevant Assignor or to whomever may be lawfully entitled to receive
such payment.
(b) For purposes of this Agreement, "Pro Rata Share" shall mean, when
calculating a Secured Creditor's portion of any distribution or amount, the
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then outstanding amount of the relevant Obligations owed such Secured
Creditor and the denominator of which is the then outstanding amount of all
Obligations.
(c) All payments required to be made to the (i) Lenders hereunder shall
be made to the Administrative Agent for the account of the respective Lenders
and (ii) Interest Rate Creditors hereunder shall be made to the paying agent
under the applicable Designated Interest Rate Agreement or, in the case of
Designated Interest Rate Agreements without a paying agent, directly to the
applicable Interest Rate Creditor.
(d) For purposes of applying payments received in accordance with this
section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent for a determination (which the Administrative Agent agrees
to provide upon request to the Collateral Agent) of the outstanding Credit
Document Obligations and (ii) upon any Interest Rate Creditor for determination
(which each Interest Rate Creditor agrees to provide upon request to the
Collateral Agent) of the outstanding Interest Rate Obligations owed to such
Interest Rate Creditor. Unless it has actual knowledge (including by way of
written notice from a Secured Creditor) to the contrary, the Administrative
Agent under the Credit Agreement, in furnishing information pursuant to the
preceding sentence, and the Collateral Agent, in acting hereunder, shall be
entitled to assume that (x) no Credit Document Obligations other than principal,
interest and regularly accruing fees are owing to any Lender and (y) no
Designated Interest Rate Agreements or Interest Rate Obligations with respect
thereto are in existence.
(e) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between (x) the amount of the
proceeds of the Collateral and the amount of the sum referred to in clause
(a)(i) and (ii) of this section 7.4 and (y) the aggregate outstanding amount of
the Obligations.
7.5. Remedies Cumulative. Each and every right, power and remedy hereby
specifically given to the Collateral Agent shall be in addition to every other
right, power and remedy specifically given under this Agreement, any Designated
Interest Rate Agreement or the other Credit Documents or now or hereafter
existing at law or in equity, or by statute and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time or simultaneously and as often and in such order as may be
deemed expedient by the Collateral Agent. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of exercise of one shall
not be deemed a waiver of the right to exercise of any other or others. No delay
or omission of the Collateral Agent in the exercise of any such right, power or
remedy and no renewal or extension of any of the Obligations shall
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impair any such right, power or remedy or shall be construed to be a waiver of
any Default or Event of Default or an acquiescence therein. In the event that
the Collateral Agent shall bring any suit to enforce any of its rights hereunder
and shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case the relevant
Assignor, the Collateral Agent and each holder of any of the Obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Collateral Agent shall continue as if no
such proceeding had been instituted.
8. INDEMNITY.
8.1. Indemnity. (a) The Assignors jointly and severally agree to
indemnify, reimburse and hold the Collateral Agent, each Secured Creditor and
its respective successors, assigns, employees, agents and servants (hereinafter
in this section 8.1 referred to individually as "Indemnitee", and collectively
as "Indemnitees") harmless from any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, suits, judgments and any and all
reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees and expenses) (for the purposes of this section 8.1 the foregoing are
collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnitees in any way relating to or
arising out of this Agreement, any Designated Interest Rate Agreement, any other
Credit Document or the documents executed in connection herewith and therewith
or in any other way connected with the enforcement of any of the terms of, or
the preservation of any rights under any thereof, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable), the violation
of the laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the doctrine of
strict liability, or for or on account of injury to or the death of any person
(including any Indemnitee), or property damage), or contract claim; provided
that no Indemnitee shall be indemnified pursuant to this section 8.1(a) for
losses, damages or liabilities to the extent caused by the gross negligence or
wilful misconduct of such person to be indemnified or of any other Indemnitee
who is such person or an affiliate of such person. If any claim is asserted
against any Indemnitee, such Indemnitee shall promptly notify the Assignor and
each Indemnitee may, and if requested by the Assignor shall, in good faith,
contest the validity, applicability and amount of such claim with counsel
selected by such Indemnitee, and shall permit the Assignor to participate in
such contest. In addition, in connection with any claim covered by this section
8.1 against more than one Indemnitee, all such Indemnitees shall be represented
by the same legal counsel selected by such Indemnitees; provided, however, that
if such legal counsel determines in good faith that representing all such
Indemnitees would or could result in a conflict of interest under the laws or
ethical principles applicable to such legal counsel or that a defense or
counterclaim is available to an Indemnitee that is not available to all such
Indemnitees, then to the extent reasonably necessary to avoid such a conflict of
interest or to permit unqualified assertion of such defense or counterclaim,
each Indemnitee shall be entitled to separate representation by a legal counsel
selected by that Indemnitee. Each Assignor agrees that upon written notice by
any Indemnitee of the assertion of such a liability, obligation, loss, damage,
penalty, claim, demand, action, judgment or suit, such Assignor shall assume
full responsibility for the defense thereof. Each Indemnitee agrees to use its
best efforts to promptly notify the relevant Assignor of any such assertion of
which such Indemnitee has knowledge.
(b) Without limiting the application of section 8.1(a), the Assignors
jointly and severally agree to pay, or reimburse the Collateral Agent for (if
the Collateral Agent shall have incurred fees, costs or expenses because an
Assignor shall have failed to comply with its obligations under this Agreement
or any Credit Document), any and all out-of-pocket fees, costs and expenses of
whatever kind or nature incurred in connection with the creation, preservation
or protection of the Collateral Agent's Liens on, and security interest in, the
Collateral, including, without limitation, all fees and taxes in connection with
the recording or filing of instruments and documents in public offices, payment
or discharge of any taxes or Liens upon or in respect of the Collateral,
premiums for insurance with respect to the Collateral and all other fees, costs
and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral
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Agent's interest therein, whether through judicial proceedings or otherwise, or
in defending or prosecuting any actions, suits or proceedings arising out of or
relating to the Collateral.
(c) Without limiting the application of section 8.1(a) or (b),the
Assignors jointly and severally agree to pay, indemnify and hold each Indemnitee
harmless from and against any loss, costs, damages and expenses which such
Indemnitee may suffer, expend or incur in consequence of or growing out of any
material misrepresentation by an Assignor in this Agreement, or in any statement
or writing contemplated by or made or delivered pursuant to or in connection
with this Agreement.
(d) If and to the extent that the obligations of any Assignor under
this section 8.1 are unenforceable for any reason, each Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of the Assignors contained in this section 8 shall
continue in full face and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement and all of the other Obligations and
notwithstanding the discharge thereof.
9. DEFINITIONS.
The following terms shall have the meanings herein specified unless the
context otherwise requires. Such definitions shall be equally applicable to the
singular and plural forms of the terms defined.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning specified in the first paragraph of
this Agreement.
"Business Day" means any day excluding Saturday, Sunday and any day
which shall be in Louisville, Kentucky a legal holiday or a day on which banking
institutions are authorized by law to close.
"Cash Collateral Account" shall mean a cash collateral account
maintained with, and in the sole dominion and control of, the Collateral Agent
for the benefit of the Secured Creditors (such cash collateral account shall be
interest bearing if it is the general policy of the Collateral Agent in
syndicated credit agreements in which it acts as collateral agent to establish
such cash collateral accounts as interest bearing accounts; otherwise such cash
collateral account shall be non-interest bearing).
"Chattel Paper" shall have the meaning assigned that term under the
Uniform Commercial Code as in effect on the date hereof in the Commonwealth of
Kentucky.
"Collateral" shall have the meaning provided in section 1.1(a).
"Collateral Agent" shall have the meaning specified in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of an Assignor (including,
without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between an Assignor and one or
more additional parties (but shall include Cash Equivalents).
"Copyrights" shall mean any U.S. copyright to which an Assignor now or
hereafter has title, as well as any application for a U.S. copyright hereafter
made by such Assignor.
"Credit Agreement" shall have the meaning provided in the Preliminary
Statements of this Agreement.
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"Credit Document Obligations" shall have the meaning provided in the
definition "Obligations".
"Documents" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the Commonwealth of Kentucky.
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the Commonwealth of
Kentucky, now or hereafter owned by an Assignor and, in any event, shall
include, but shall not be limited to, all machinery, equipment, furnishings,
fixtures and vehicles now or hereafter owned by an Assignor and any and all
additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement, or any payment default, after any applicable
grace period, under any Designated Interest Rate Agreement.
"General Intangibles" shall have the meaning assigned that term under
the Uniform Commercial Code as in effect on the date hereof in the Commonwealth
of Kentucky.
"Goods" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the Commonwealth of Kentucky.
"Indemnitee" shall have the meaning provided in section 8.1.
"Instrument" shall have the meaning assigned that term under the
Uniform Commercial Code as in effect on the date hereof in the Commonwealth of
Kentucky (but shall not include Cash Equivalents).
"Interest Rate Creditors" shall have the meaning provided in the
Preliminary Statements of this Agreement.
"Interest Rate Obligations" shall have the meaning provided in the
definition "Obligations".
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from an Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
Commonwealth of Kentucky, now or hereafter owned by the Assignor.
"Lender" shall have the meaning provided in the Preliminary Statements
of this Agreement.
"Marks" shall mean any trademarks and service marks now held or
hereafter acquired by an Assignor, which are registered in the United States
Patent and Trademark Office, as well as any unregistered marks used by an
Assignor in the United States and trade dress including logos and/or designs in
connection with which any of these registered or unregistered marks are used.
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
section 362(a) of the Bankruptcy Code, would become due) of each Assignor to the
Lenders, whether now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement and the other Credit Documents to which
such Assignor is a party (including without limitation (x) in the case of the
Borrower, all such obligations and indebtedness of the Borrower under the Credit
Agreement and (y) in the case of each other Assignor, all such obligations and
indebtedness under the Guaranty to which such Assignor is a party which relate
to any of the foregoing), and the due performance and compliance by each
Assignor with all of the terms, conditions and agreements contained in the
Credit Agreement and such other Credit Documents (all such obligations and
liabilities under this clause (i), being herein collectively called the "Credit
Document Obligations"); (ii) the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under section 362(a) of the
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Bankruptcy Code, would become due) and liabilities of each Assignor now existing
or hereafter incurred under, arising out of or in connection with any Designated
Interest Rate Agreement with any of the Secured Creditors including, in the case
of Assignors other than the Borrower, all obligations of such Assignor under the
Subsidiary Guaranty in respect of any Designated Interest Rate Agreement, and
the due performance and compliance by such Assignor with all of the terms,
conditions and agreements contained therein (all such obligations and
liabilities under this clause (ii) being herein collectively called the
"Interest Rate Obligations"); (iii) any and all sums advanced by the Collateral
Agent in order to preserve the Collateral or preserve its security interest in
the Collateral; and (iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of any Assignor
referred to in clauses (i) and (ii) above, after an Event of Default shall have
occurred and be continuing, the reasonable expenses of re-taking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, or of any exercise by the Collateral Agent of its rights
hereunder, together with reasonable attorneys' fees and court costs.
"Patents" shall mean any U.S. patent to which an Assignor now or
hereafter has title, as well as any application for a U.S. patent now or
hereafter made by an Assignor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof of by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Proceeds" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect in the Commonwealth of Kentucky on the date hereof
or under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or an Assignor from time to time with respect to
any of the Collateral, (ii) any and all payments (in any form whatsoever) made
or due and payable to an Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Proprietary Information" means all information and know-how worldwide,
including, without limitation, technical data; manufacturing data; research and
development data; data relating to compositions, processes and formulations,
manufacturing and production know-how and experience; management know-how;
training programs; manufacturing, engineering and other drawings;
specifications; performance criteria; operating instructions; maintenance
manuals; technology; technical information; software; engineering and computer
data and databases; design and engineering specifications; catalogs; promotional
literature; financial, business and marketing plans; inventions and invention
disclosures.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the Commonwealth of
Kentucky, now or hereafter owned by an Assignor and, in any event, shall
include, but shall not be limited to, all of an Assignor's rights to payment for
goods sold or leased or services performed by an Assignor, whether now in
existence or arising from time to time hereafter, including, without limitation,
rights evidenced by an account, note, contract, security agreement, chattel
paper, or other evidence of indebtedness or security, together with (a) all
security pledged, assigned, hypothecated or granted to dr held by an Assignor to
secure the foregoing, (b) all of an Assignor's right, title and interest in and
to any goods, the sale of which gave rise thereto, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (d) all
powers of attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith, (e) all books, records, ledger cards,
and invoices relating thereto, (f) all evidences of the filing of financing
statements and other statements and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(g) all credit information, reports and memoranda relating thereto, and (h) all
other writings related in any way to the foregoing.
"Secured Creditors" shall have the meaning provided in the Preliminary
Statements of this Agreement.
"Designated Interest Rate Agreements" shall have the meaning provided
in the Preliminary Statements of this Agreement.
"Significant Mark" shall have the meaning provided in section 4.3 of
this Agreement.
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"Significant Patent" shall have the meaning provided in section 5.3 of
this Agreement.
"Trade Secrets" means any secretly held existing engineering and other
data, information, production procedures and other know-how relating to the
design, manufacture, assembly, installation, use, operation, marketing, sale and
servicing of any products or business of an Assignor worldwide whether written
or not written.
10. MISCELLANEOUS.
10.1. Notices. All notices and other communications hereunder shall
be in writing and shall be delivered or mailed by first class mail, postage
prepaid, addressed:
(i) if to any Assignor, at its address contained in the
Credit Agreement or the Subsidiary Guaranty, as the case may be;
(ii) if to the Collateral Agent, at:
PNC Bank, National Association,
as Collateral Agent
4th Floor Annex
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Attn.: Arlene Ohler
Vice President
Multi-Bank Loan Administration
Tel. No.: (412) 762-3627
Fax No.: (412) 762-8672;
with copies to:
PNC Bank, Kentucky, Inc.
500 West Jefferson Street
Louisville, Kentucky 40202
Attn.: Todd Munson
Vice President
Mail Stop: K1-KHDQ-08-03
Tel. No.: (502) 581-4734
Fax No.: (502) 581-2302
-and-
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attn.: John W. Sager, Esq.
Tel. No.: (216) 586-7228
Fax No.: (216) 579-0212
(iii) if to any Lender (other than the Collateral Agent), at
such address as such Lender shall have specified in the Credit
Agreement;
15
<PAGE>
(iv) if to any Interest Rate Creditor, at such address as such
Interest Rate Creditor shall have specified in writing to each Assignor
and the Collateral Agent;
or at such other address as shall have been furnished in writing by any person
described above to the party required to give notice hereunder.
10.2. Waiver; Amendment. (a) None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor and the Collateral Agent (with
the consent of the Required Lenders or, to the extent required by section 12.12
of the Credit Agreement, all of the Lenders), provided, however, that no such
change, waiver, modification or variance shall be made to section 7.4 hereof or
this section 10.2 without the consent of each Secured Creditor adversely
affected thereby, provided further that any change, waiver, modification or
variance affecting the rights and benefits of a single Class of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors of such Class of Secured
Creditors. For the purpose of this Agreement, the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Lenders as holders of the
Credit Document Obligations or (y) the Interest Rate Creditors as holders of the
Interest Rate Obligations. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Credit Document Obligations, the Required Lenders and (y) with respect to the
Interest Rate Obligations, the holders of 51% of all obligations outstanding
from time to time under the Designated Interest Rate Agreements.
(b) No delay on the part of the Collateral Agent in exercising any
of its rights, remedies, powers and privileges hereunder or partial or single
exercise thereof, shall constitute a waiver thereof. No notice to or demand on
any Assignor in any case shall entitle it to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Collateral Agent to any other or further action in any
circumstances without notice or demand.
10.3. Obligations Absolute. The obligations of each Assignor under
this Agreement shall be absolute and unconditional and shall remain in full
force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation:
(i) any renewal, extension, amendment or modification of,
or addition or supplement to or deletion from other Credit Documents,
or any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof;
(ii) any waiver, consent, extension, indulgence or other
action or inaction under or in respect of any such agreement or
instrument or this Agreement except as expressly provided in such
renewal, extension, amendment, modification, addition, supplement,
assignment or transfer;
(iii) any furnishing of any additional security to the
Collateral Agent or its assignee or any acceptance thereof or any
release of any security by the Collateral Agent or its assignee;
(iv) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof; or
(v) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like
proceeding relating to an Assignor or any Subsidiary of a Pledgor, or
any action taken with respect to this Agreement by any trustee or
receiver, or by any court, in any such proceeding, whether or not a
Pledgor shall have notice or knowledge of any of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding upon
each Assignor and its successors and assigns and shall inure to the benefit of
the Collateral Agent and its successors and assigns, provided that no Assignor
may transfer or assign any or all of its rights or obligations hereunder without
the written consent of the Collateral Agent. All agreements, statements,
representations and warranties made by each Assignor herein or in any
certificate or other instrument delivered by such Assignor or on its behalf
under this Agreement shall be considered to have been relied upon
16
<PAGE>
by the Secured Creditors and shall survive the execution and delivery of this
Agreement and the other Credit Documents regardless of any investigation made by
the Secured Creditors on their behalf.
10.5. Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
10.6. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.7. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE COMMONWEALTH OF KENTUCKY.
10.8. Assignors' Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of an Assignor under or with
respect to any Collateral.
10.9. Termination: Release. (a) After the termination of the Total
Commitment and all Designated Interest Rate Agreements, when no Note nor Letter
of Credit is outstanding and when all Loans and other Obligations have been paid
in full, this Agreement shall terminate, and the Collateral Agent, at the
request and expense of the Assignors, will execute and deliver to the relevant
Assignor a proper instrument or instruments (including Uniform Commercial Code
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to the
relevant Assignor (without recourse and without any representation or warranty)
such of the Collateral as may be in the possession of the Collateral Agent and
as has not theretofore been sold or otherwise applied or released pursuant to
this Agreement.
(b) So long as no payment default on any of the Obligations is in
existence or would exist after the application of proceeds as provided below,
the Collateral Agent shall, at the request of the relevant Assignor, release any
or all of the Collateral, provided that (x) such release is permitted by the
terms of the Credit Agreement (it being agreed for such purposes that a release
will be deemed "permitted by the terms of the Credit Agreement" if the proposed
transaction constitutes an exception contained in section 8.2 of the Credit
Agreement) or otherwise has been approved in writing by the Required Lenders and
(y) the proceeds of such Collateral are to be applied as required pursuant to
the Credit Agreement or any consent or waiver entered into with respect thereto.
(c) At any time that an Assignor desires that the Collateral Agent
take any action to give effect to any release of Collateral pursuant to the
foregoing section 10.9(a) or (b), it shall deliver to the Collateral Agent a
certificate signed by a principal executive officer stating that the release of
the respective Collateral is permitted pursuant to section 10.9(a) or (b). In
the event that any part of the Collateral is released as provided in section
10.9(b), the Collateral Agent, at the request and expense of an Assignor, will
duly release such Collateral and assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold and as may be in the
possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement. The Collateral Agent shall have no liability
whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this section 10.9. Upon any release of Collateral pursuant to
section 10.9(a) or (b), none of the Secured Creditors shall have any continuing
right or interest in such Collateral, or the proceeds thereof.
10.10. Collateral Agent. By accepting the benefits of this Agreement,
each Secured Creditor acknowledges and agrees that the rights and obligations of
the Collateral Agent shall be as set forth in section 11 of the Credit
Agreement. Notwithstanding anything to the contrary contained in section 10.2 of
this Agreement or section 12.12 of the Credit Agreement, this section 10.10, and
the duties and obligations of the Collateral Agent set forth in this section
10.10, may not be amended or modified without the consent of the Collateral
Agent.
17
<PAGE>
11. WAIVER OF JURY TRIAL.
Each Assignor and the Collateral Agent each hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this Agreement or the transactions contemplated hereby.
* * *
18
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
ATRIA COMMUNITIES, INC.,
as an Assignor
By: /s/ J. Timothy Wesley
-------------------------------------
Vice President
LANTANA PARTNERS, LTD.,
as an Assignor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
-------------------------------------
Vice President
PHILLIPPE ENTERPRISES, INC.,
as an Assignor
By: /s/ James H. Gillenwater, Jr.
-------------------------------------
Vice President
HILLHAVEN PROPERTIES, LTD.,
as an Assignor
By: /s/ James H. Gillenwater, Jr.
-------------------------------------
Vice President
19
<PAGE>
CASTLE GARDENS RETIREMENT CENTER,
as an Assignor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
--------------------------------
Vice President
HILLCREST RETIREMENT CENTER, LTD.,
as an Assignor
By: FAIRVIEW LIVING CENTERS, INC.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
--------------------------------
Vice President
SANDY RETIREMENT CENTER LIMITED
PARTNERSHIP,
as an Assignor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
--------------------------------
Vice President
TOPEKA RETIREMENT CENTER, LTD.,
as an Assignor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
--------------------------------
Vice President
20
<PAGE>
EVERGREEN WOODS, LTD.,
as an Assignor
By: ATRIA COMMUNITIES, INC.,
a General Partner
By: /s/ J. Timothy Wesley
-------------------------------------
Vice President
FAIRVIEW LIVING CENTERS, INC.,
as an Assignor
By: /s/ James H. Gillenwater, Jr.
-------------------------------------
Vice President
TWENTY-NINE HUNDRED ASSOCIATES, LTD.,
as an Assignor
By: TWENTY-NINE HUNDRED CORPORATION,
a General Partner
By: /s/ James H. Gillenwater, Jr.
-------------------------------------
Vice President
TWENTY-NINE HUNDRED CORPORATION,
as an Assignor
By: /s/ James H. Gillenwater, Jr.
-------------------------------------
Vice President
21
<PAGE>
WOODHAVEN PARTNERS, LTD.,
as an Assignor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
-------------------------------------
Vice President
TUCSON RETIREMENT CENTER LIMITED
PARTNERSHIP,
as an Assignor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
-------------------------------------
Vice President
PNC BANK, NATIONAL ASSOCIATION,
as Collateral Agent
By: /s/ Edward J. Weisto
-------------------------------------
Vice President
22
<PAGE>
ANNEX A
to
SECURITY AGREEMENT
SCHEDULE OF EXISTING FINANCING STATEMENTS
<TABLE>
<CAPTION>
====================================================================================================================================
Filing Number Original Description
Debtor Secured Party and Filing of
Jurisdiction Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Evergreen Woods Ltd. Bank One FL 7/16/93 Inventory;
Equipment
- -----------------------------------------------------------------------------------------------------------------------------------
Evergreen Woods Ecolab, Inc. FL 10/8/93 Dishmachine
Retirement Center 930000209276
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare J.P. Morgan, DE AZ 9/3/93 Goods, improvements,
Corporation 757045 equipment
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare 1st National CA 8/2/92 All rights, title and
Corporation 92174943 interest of debtor
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Careage Carmel CA 6/ /93 Equipment,
Corporation 93002965 Fixtures
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Suburban Trust CA Equipment
Corporation 9435060103
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare AT&T Capital CA 4/26/96 Bladderscan
Corporation Leasing Services, Inc. 9612060322
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare J.P. Morgan, DE IN 9/3/93 All rights, goods, books,
Corporation 1866236 records, personal
property and all interest
to certain real estate
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare J.P. Morgan, DE KY 9/27/95 See JP Vencor
Corporation 139007
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare J.P. Morgan, DE KY 9/3/93 All improvements,
Corporation 133983 goods, books, personal
property relating to certain
real estate
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Suburban Trust and KY 8/31/94 Equipment
Corporation Savings 136862
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare J.P. Morgan MA 9/3/93 All improvements,
Corporation 183694 goods, books, personal
property relating to certain
real estate
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Suburban Trust and MA 9/8/94 Equipment
Corporation Savings 259437
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Filing Number Original Description
Debtor Secured Party and Filing of
Jurisdiction Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Healthcare Axiom Funding Group MA 7/23/93 Bathing Unit
Corporation 175450
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Shawmut Bank MA 9/22/94 All rights, title and
Corporation 262529 interest of Debtor
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Heritage Pullman MA 8/8/94 Equipment
Corporation Bank and Trust 253346
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare NME Properties MO 7/24/92 All rights, title and
Corporation 2155376 interest of Debtor
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare NME Properties MO 8/3/92 All rights, title and
Corporation 2158867 interest of Debtor
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare NME Properties MO 8/3/92 All rights, title and
Corporation 2158874 interest of Debtor
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Towers Financial MO 1/5/93 All of Debtor's accounts
Corporation Corporation 2210453
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare National Medical NH All rights, title and
Corporation Enterprise Inc. 383051 interest of Debtor
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Banc Ohio OH 5/14/93 All buildings, structures,
Corporation AK0017839 additions, etc.
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Banc Ohio OH 2/21/89 Rent
Corporation AA0084498
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare J.P. Morgan, DE OH 9/7/93 Equipment
Corporation AK44385
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare J.P. Morgan, DE OH 9/7/93 Equipment
Corporation AK44408
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Seattle 1st National WI 6/13/95 All rights, title and
Corporation Bank 1514802 interest of Debtor
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Rock Ford Industries WI 10/13/95 All rights, title and
Corporation Inc. 1539923 interest of Debtor
- -----------------------------------------------------------------------------------------------------------------------------------
First Healthcare Morgan Guaranty WI 9/21/93 All rights, title and
Corporation 1154202 interest of Debtor
- -----------------------------------------------------------------------------------------------------------------------------------
Hillcrest Retirement Ecolab, Inc. ID 10/23/93 Equipment
Center, Ltd. 586166
- -----------------------------------------------------------------------------------------------------------------------------------
Hillcrest Retirement Ecolab, Inc. ID 10/23/93 Equipment
Center, Ltd. 6318682
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. AZ 9/23/91 Dishmachine
Corporation 680021
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. AZ 12/2/91 Dishmachine
Corporation 687296
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Filing Number Original Description
Debtor Secured Party and Filing of
Jurisdiction Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Hillhaven Ecolab, Inc. AZ 2/3/92 Dishmachine
Corporation 693800
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. AZ 2/3/92 Dishmachine
Corporation 693802
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. AZ 4/1/92 Dishmachine
Corporation 699985
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. AZ 9/10/92 Dishmachine
Corporation 717534
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. AZ 9/10/92 Dishmachine
Corporation 717537
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. AZ 4/2/93 Dishmachine
Corporation 799053
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. AZ 9/25/95 Dishmachine
Corporation 610501
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. AZ 9/25/95 Dishmachine
Corporation 610511
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Clune Equipment AZ VCTV
Corporation 766301
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Clune Equipment AZ VCTV
Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Trans-Leasing Int'l AZ 4/27/92 Diapulse Machine
Corporation 702910
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. FL 11/2/94 Diapulse Machine
Corporation 940000222817
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. FL Diapulse Machine
Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. FL Diapulse Machine
Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. FL 5/18/92 Diapulse Machine
Corporation 920000099741
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. FL 6/7/90 Diapulse Machine
Corporation 900000145066
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. FL 6/7/90 Diapulse Machine
Corporation 900000145866
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Clune Equipment FL VCTV
Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Filing Number Original Description
Debtor Secured Party and Filing of
Jurisdiction Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Hillhaven GTE Leasing FL 12/12/91 No assign
Corporation 910000
262075
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Clune Equipment FL VCTV
Corporation
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Paccom Leasing FL 9/15/86 All property subject to
Corporation Corp. 1860134614 lease
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Paccom Leasing FL 8/5/91 All property subject to
Corporation Corp. 910000170235 lease
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. IN 8/17/92 Dishmachine
Corporation 1798183
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. IN 7/6/93 Dishmachine
Corporation 1856218
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Ecolab, Inc. IN 10/29/93 Dishmachine
Corporation 1876147
- -----------------------------------------------------------------------------------------------------------------------------------
The Hillhaven Banc Ohio OH 2/21/89 Rent
Corporation AA0084498
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ecolab, Inc. AZ 9/25/95 Dishmachine
Ltd. 610501
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ecolab, Inc. AZ 9/25/95 Dishmachine
Ltd. 610511
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ecolab, Inc. AZ 9/23/91 Dishmachine
Ltd. 0680021
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ecolab, Inc. AZ 12/2/91 Dishmachine
Ltd. 0687296
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ecolab, Inc. AZ 2/3/92
Ltd. 0693800
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ecolab, Inc. AZ 2/3/92
Ltd. 0693802
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ecolab, Inc. AZ 4/1/92
Ltd. 069985
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Trans Leasing AZ 4/27/92 Diapulse Machine
Ltd. 0702910
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ecolab, Inc. AZ 9/10/92
Ltd. 0717534
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Ecolab, Inc. AZ 9/10/92
Ltd. 0717537
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Filing Number Original Description
Debtor Secured Party and Filing of
Jurisdiction Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hillhaven Properties, Ecolab, Inc. AZ 4/2/93
Ltd. 0739053
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Clune Equipment AZ 7/12/93 VCTV
Ltd. 0750233
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Clune Equipment AZ 11/23/93 VCTW
Ltd. 766301
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, 1st National Bank of CA 2/10/95 Inventory and
Ltd. Boston 9504860301 Equipment
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Bank of America CA 2/10/95 Inventory and
Ltd. 9504860316 Equipment
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, U.S. National Bank OR 7/22/88 Fixture filing
Ltd. of OR M77949
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Redevelopment WA 2/13/95 All Debtor's accounts,
Ltd. Agency of San Marcos 950440000 inventory, goods,
improvements,
equipment, other
personal property
relating to San Marcos,
CA land
- -----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Properties, Bank of America WA 2/13/95 All Debtor's accounts,
Ltd. 950440001 inventory, goods,
improvements,
equipment, other
personal property
relating to San Marcos,
CA land
- -----------------------------------------------------------------------------------------------------------------------------------
Kachina Point Clune Equipment AZ VCTV Media Center &
Retirement Center acco.
- -----------------------------------------------------------------------------------------------------------------------------------
Kachina Point Trans-Leasing Int'l AZ 4/27/92 Diapulse medical unit
Retirement Center 702910
- -----------------------------------------------------------------------------------------------------------------------------------
Kachina Point Ecolab, Inc. AZ 9/25/95 Dishmachine
Retirement Center 610501
- -----------------------------------------------------------------------------------------------------------------------------------
Lantana Partners, Ltd. 1st National Bank of FL Inventory & equipment
Boston
- -----------------------------------------------------------------------------------------------------------------------------------
Narrows Glen Ecolab, Inc. WA 11/7/94 Dishmachine
Retirement Center 948119799
- -----------------------------------------------------------------------------------------------------------------------------------
Narrows Glen Clune Leasing WA VCTV Media Center
Retirement Center 913050340 with accessories
- -----------------------------------------------------------------------------------------------------------------------------------
Nationwide Care, Inc. Bank One FL 7/16/93 All Debtor's accounts
080000149590 inventory, equipment and
general intangibles
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Filing Number Original Description
Debtor Secured Party and Filing of
Jurisdiction Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nationwide Care, Inc. Bank One IN 7/6/93 All accounts and general
1856707 intangibles
- -----------------------------------------------------------------------------------------------------------------------------------
Nationwide Care, Inc. Bank One IN 7/15/93 All accounts and general
1857977-A intangibles
- -----------------------------------------------------------------------------------------------------------------------------------
Nationwide Care, Inc. NBD Leasing IN 11/23/93 All accessions and
1880541 proceeds due
- -----------------------------------------------------------------------------------------------------------------------------------
Nationwide Care, Inc. Continental Textile IN 2/28/94 Equipment
1897695
- -----------------------------------------------------------------------------------------------------------------------------------
Nationwide Care, Inc. Advance Acceptance IN 2/28/94 Auto Scrubber complete
Corp.
- -----------------------------------------------------------------------------------------------------------------------------------
New Pond Village 1st National Bank of MA Subordination
Associates Boston 046216 agreement
- -----------------------------------------------------------------------------------------------------------------------------------
New Pond Village 1st National Bank of MA 11/26/90 Equipment fixture filing
Associates Boston 995382
- -----------------------------------------------------------------------------------------------------------------------------------
San Marcos Courtyard 1st National Bank of CA 3/1/95 All Debtor's accounts,
Ltd. Boston 9506660444 inventory, equipment,
personal property on
land in San Marcos,
County property
- -----------------------------------------------------------------------------------------------------------------------------------
San Marcos Courtyard Bank of America CA 3/1/95 All Debtor's accounts,
Ltd. 9506660474 inventory, equipment,
personal property on
land in San Marcos,
County property
- -----------------------------------------------------------------------------------------------------------------------------------
Topeka Retirement City of Topeka KS 4/2/96 Entire leasehold estate
Center, Ltd. 2233330
- -----------------------------------------------------------------------------------------------------------------------------------
Tucson Retirement City of Topeka KS
Center Limited
Partnership
- -----------------------------------------------------------------------------------------------------------------------------------
Vencor, Inc. J.P. Morgan, DE KY 9/27/95 All obligations of
139008 Debtor's subsidiaries,
including capital stock,
income, profits, all
interests and privileges
with regard to the
foregoing
- -----------------------------------------------------------------------------------------------------------------------------------
Vencor, Inc. Puritan Bennett KY 12/19/93 Equipment
Credit 134445
- -----------------------------------------------------------------------------------------------------------------------------------
Vencor, Inc. National Medical NH 4/10/92 Inventory, equipment
Enterprises 383051
- -----------------------------------------------------------------------------------------------------------------------------------
Villa Compana Clune Equipment AZ VCTV Media Center
Retirement Center 766301 with accessories
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Filing Number Original Description
Debtor Secured Party and Filing of
Jurisdiction Date Collateral
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Villa Ventura Clune Equipment MO 1/3/94 VCTV Media Center
Retirement Center 2350818 and accessories
- -----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
</TABLE>
7
<PAGE>
ANNEX B
to
SECURITY AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
<TABLE>
<CAPTION>
====================================================================================================================================
ASSIGNOR ADDRESS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Atria Communities, Inc. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
- ------------------------------------------------------------------------------------------------------------------------------------
Lantana Partners, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
3061 Donnelly Drive
Lantana, Florida 33461
- ------------------------------------------------------------------------------------------------------------------------------------
Phillippe Enterprises, Inc. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
7251 Grove Road
Brooksville, Florida 34613
9200 Keystone Crossing
Suite 800
Indianapolis, Indiana 46240
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
ASSIGNOR ADDRESS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Hillhaven Properties, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
6653 Carondelet Drive
Tucson, Arizona 85710
1550 East River Road
Tucson, Arizona 85718
405 Jacks Canyon Road
Sedona, Arizona 86351
5549 East Lee Street
Tucson, Arizona 85712
1590 West San Marcos Blvd.
San Marcos, California 92069
11475 Pearl Street
Northglenn, Colorado 80233
3515 South West 6th Street
Topeka, Kansas 66606
3515 South West 6th Street
Topeka, Kansas 66606
10970 South 700 East
Sandy, Utah 84070
8210 Sixth Avenue
Tacoma, Washington 98406
- ------------------------------------------------------------------------------------------------------------------------------------
Castle Gardens Retirement Center 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
11475 Pearl Street
Northglenn, Colorado 80233
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
ASSIGNOR ADDRESS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Woodhaven Partners, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
13707 Dallas Drive
Hudson, Florida 34667
- ------------------------------------------------------------------------------------------------------------------------------------
Hillcrest Retirement Center, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
1093 South Hilton Street
Boise, Idaho 80705
177 N.E. 102nd Avenue
Portland, Oregon 97220
- ------------------------------------------------------------------------------------------------------------------------------------
Sandy Retirement Center Limited Partnership 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
10970 South 700 East
Sandy, Utah 84070
177 N.E. 102nd Avenue
Portland, Oregon 97220
- ------------------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Hundred Associates, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
3061 Donnelly Drive
Lantana, Florida 33461
- ------------------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Hundred Corporation 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
3061 Donnelly Drive
Lantana, Florida 33461
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
ASSIGNOR ADDRESS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Evergreen Woods, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
7030 Evergreen Woods Trail
Springhill, Florida 34608
- ------------------------------------------------------------------------------------------------------------------------------------
Fairview Living Centers, Inc. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
1093 South Hilton Street
Boise, Idaho 80705
177 N.E. 102nd Avenue
Portland, Oregon 97220
- ------------------------------------------------------------------------------------------------------------------------------------
Tucson Retirement Center Limited Partnership 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
1550 East River Road
Tucson, Arizona 85718
- ------------------------------------------------------------------------------------------------------------------------------------
Topeka Retirement Center, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
-------------
Topeka, Kansas
====================================================================================================================================
</TABLE>
4
<PAGE>
ANNEX C
to
SECURITY AGREEMENT
SCHEDULE OF EQUIPMENT
AND INVENTORY LOCATIONS
<TABLE>
<CAPTION>
========================================================================================================================
ASSIGNOR ADDRESS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Atria Communities, Inc. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
- ------------------------------------------------------------------------------------------------------------------------
Lantana Partners, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
3061 Donnelly Drive
Lantana, Florida 33461
- ------------------------------------------------------------------------------------------------------------------------
Phillippe Enterprises, Inc. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
7251 Grove Road
Brooksville, Florida 34613
9200 Keystone Crossing
Suite 800
Indianapolis, Indiana 46240
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================================
ASSIGNOR ADDRESS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Hillhaven Properties, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
6653 Carondelet Drive
Tucson, Arizona 85710
1550 East River Road
Tucson, Arizona 85718
405 Jacks Canyon Road
Sedona, Arizona 86351
5549 East Lee Street
Tucson, Arizona 85712
1590 West San Marcos Blvd.
San Marcos, California 92069
11475 Pearl Street
Northglenn, Colorado 80233
3515 South West 6th Street
Topeka, Kansas 66606
3515 South West 6th Street
Topeka, Kansas 66606
10970 South 700 East
Sandy, Utah 84070
8210 Sixth Avenue
Tacoma, Washington 98406
- ------------------------------------------------------------------------------------------------------------------------
Castle Gardens Retirement Center 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
11475 Pearl Street
Northglenn, Colorado 80233
___________, Oregon
2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================================
ASSIGNOR ADDRESS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
Woodhaven Partners, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
13707 Dallas Drive
Hudson, Florida 34667
- ------------------------------------------------------------------------------------------------------------------------
Hillcrest Retirement Center, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
1093 South Hilton Street
Boise, Idaho 80705
177 N.E. 102nd Avenue
Portland, Oregon 97220
- ------------------------------------------------------------------------------------------------------------------------
Sandy Retirement Center Limited Partnership 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
10970 South 700 East
Sandy, Utah 84070
177 N.E. 102nd Avenue
Portland, Oregon 97220
- ------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Hundred Associates, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
3061 Donnelly Drive
Lantana, Florida 33461
- ------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Hundred Corporation 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
3061 Donnelly Drive
Lantana, Florida 33461
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================================
ASSIGNOR ADDRESS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
Evergreen Woods, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
7030 Evergreen Woods Trail
Springhill, Florida 34608
- ------------------------------------------------------------------------------------------------------------------------
Fairview Living Centers, Inc. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
1093 South Hilton Street
Boise, Idaho 80705
177 N.E. 102nd Avenue
Portland, Oregon 97220
- ------------------------------------------------------------------------------------------------------------------------
Tucson Retirement Center Limited Partnership 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
1550 East River Road
Tucson, Arizona 85718
- ------------------------------------------------------------------------------------------------------------------------
Topeka Retirement Center, Ltd. 3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
515 West Market Street
Louisville, Kentucky 40202
-------------
Topeka, Kansas
- ------------------------------------------------------------------------------------------------------------------------
___________, Massachusetts
- ------------------------------------------------------------------------------------------------------------------------
____________, New Hampshire
- ------------------------------------------------------------------------------------------------------------------------
______________, Georgia
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================================
ASSIGNOR ADDRESS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
_______________, Maine
- ------------------------------------------------------------------------------------------------------------------------
_______________, North Carolina
- ------------------------------------------------------------------------------------------------------------------------
_______________, Virginia
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
========================================================================================================================
</TABLE>
5
<PAGE>
ANNEX D
to
SECURITY AGREEMENT
SCHEDULE OF TRADE AND FICTITIOUS NAMES
<TABLE>
<S> <C>
Name Jurisdiction Where Used
- -------------------- ----------------------------
</TABLE>
<PAGE>
ANNEX E
to
SECURITY AGREEMENT
SCHEDULE OF MARKS
[Name of Assignor]
<TABLE>
<CAPTION>
=============================================================================================================================
Trademark Name TM Number Type of TM Expiration Date
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
=============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
[Name of Assignor]
=============================================================================================================================
Trademark Name TM Number Type of TM Expiration Date
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================================================
Trademark Name TM Number Type of TM Expiration Date
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
=============================================================================================================================
</TABLE>
<PAGE>
ANNEX F
to
SECURITY AGREEMENT
SCHEDULE OF PATENTS AND APPLICATIONS
[Name of Assignor]
<TABLE>
<CAPTION>
==========================================================================================================================
U.S. Patent No. Description Expiration
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
==========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
[Name of Assignor]
==========================================================================================================================
U.S. Patent No. Description Expiration
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
==========================================================================================================================
U.S. Patent No. Description Expiration
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
==========================================================================================================================
</TABLE>
2
<PAGE>
ANNEX G
to
SECURITY AGREEMENT
SCHEDULE OF COPYRIGHTS AND APPLICATIONS
[Name of Assignor]
[Name of Assignor]
<PAGE>
Exhibit 3
================================================================================
ATRIA COMMUNITIES, INC.
as a Pledgor
And
THE OTHER PLEDGORS NAMED HEREIN
With
PNC BANK, NATIONAL ASSOCIATION
as Collateral Agent
-----------------------------
PLEDGE AGREEMENT
dated as of
August 15, 1996
-----------------------------
================================================================================
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of August 15, 1996 (as amended, modified, or
supplemented from time to time, "this Agreement"), made by each of the
undersigned (each, together with its successors and assigns, a "Pledgor" and
collectively, the "Pledgors"), in favor of PNC BANK, NATIONAL ASSOCIATION, a
national banking association, as Collateral Agent (herein, together with its
successors and assigns in such capacity, the "Pledgee"), for the benefit of the
Secured Creditors (as defined below):
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement (as defined below) shall be used herein as therein
defined.
(2) This Agreement is made pursuant to the Credit Agreement, dated as
of the date hereof (herein, as amended or otherwise modified from time to time,
the "Credit Agreement"), among Atria Communities, Inc., a Delaware corporation
(herein, together with its successsors and assigns, the "Borrower"), the
financial institutions named as lenders therein, and the Administrative Agent,
as agent for the Lenders (as defined in the Credit Agreement), providing, among
other things, for loans or advances or other extensions of credit to or for the
benefit of the Borrower of up to $200,000,000, with such loans or advances being
evidenced by promissory notes (the "Notes", such term to include all notes and
other securities issued in exchange therefor or in replacement thereof).
(3) The Borrower may from time to time be party to one or more
Designated Interest Rate Agreements (as defined in the Credit Agreement). Any
institution that participates, and in each case their subsequent assigns, as a
counterparty to any Designated Interest Rate Agreement (collectively, the
"Interest Rate Creditors," and the Interest Rate Creditors together with the
Lenders, collectively the "Secured Creditors"), shall benefit hereunder as
herein provided.
(4) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor
has jointly and severally guaranteed to the Secured Creditors the payment when
due of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(5) It is a condition precedent to the making of Loans and the
issuance of, and participation in, Letters of Credit under the Credit Agreement
that each Pledgor shall have executed and delivered to the Pledgee this
Agreement.
(6) Each Pledgor desires to execute this Agreement to satisfy the
conditions described in the preceding paragraph.
NOW, THEREFORE, in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS.
This Agreement is made by each Pledgor for the benefit of the Secured
Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under section
362(a) of the Bankruptcy Code, would become due) of such Pledgor to the
Lenders, whether now existing or hereafter incurred under, arising out
of, or in connection with the Credit Agreement and the other Credit
Documents to which such Pledgor is a party (including without
limitation (x) in the case of the Borrower, all such obligations and
indebtedness of the Borrower under the Credit Agreement and (y) in the
case of each other Pledgor, all such
<PAGE>
obligations and indebtedness under the Guaranty to which such Pledgor
is a party which relate to any of the foregoing), and the due
performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained in the Credit Agreement and such
other Credit Documents (all such obligations and liabilities under this
clause (i), being herein collectively called the "Credit Document
Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under section
362(a) of the Bankruptcy Code, would become due) and liabilities of
each Pledgor now existing or hereafter incurred under, arising out of
or in connection with any Designated Interest Rate Agreement with any
of the Secured Creditors including, in the case of Pledgors other than
the Borrower, all obligations of such Pledgor under the Subsidiary
Guaranty in respect of any Designated Interest Rate Agreement, and the
due performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained therein (all such obligations and
liabilities described in this clause (ii) being herein collectively
called the "Interest Rate Obligations");
(iii) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral (to the extent provided for in the
Credit Documents); and
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of such
Pledgor referred to in clauses (i), (ii) and (iii) above, after an
Event of Default (as such term is defined in the Security Agreement)
shall have occurred and be continuing, the reasonable expenses of
retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Pledgee of its rights hereunder, together with reasonable attorneys'
fees and court costs.
All such obligations, liabilities, sums and expenses set forth in clauses (i)
through (iv) of this section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES,
PARTNERSHIP INTERESTS, PARTNERSHIP ASSETS, ETC.
As used herein, (i) the term "Stock" shall mean all of the issued and
outstanding shares of stock at any time owned by any Pledgor of any corporation;
(ii) the term "Notes" shall mean all promissory notes from time to time issued
to, or held by, any Pledgor other than Cash Equivalents; (iii) the term
"Securities" shall mean all of the Stock and Notes; and (iv) the term
"Partnership Interests" shall mean the entire partnership interest at any time
owned by any Pledgor in any general or limited partnership (a "Pledged Entity").
Each Pledgor represents and warrants that on the date hereof: (a) each
Subsidiary of such Pledgor and the direct ownership thereof is listed on Annex A
hereto; (b) the Stock consists of the number and type of shares of the stock of
the corporations as described in Annex B hereto; (c) such Pledgor is the holder
of record with respect to any Subsidiary and sole beneficial owner of such
Stock; (d) such Stock constitutes that percentage of the issued and outstanding
capital stock of the issuing corporation as is set forth in Annex B hereto; (e)
the Notes held by such Pledgor consist of the promissory notes described in
Annex C hereto; (f) the Partnership Interests held by such Pledgor constitutes
that percentage of the entire interest of each Pledged Entity as is set forth on
Annex D hereto; and (g) on the date hereof, no Pledgor owns or possesses any
other Securities or Partnership Interests.
3. PLEDGE OF SECURITIES, GRANT OF SECURITY INTERESTS, ETC.
3.1. Pledge. To secure the Obligations and for the purposes set
forth in section 1, each Pledgor hereby pledges and grants to the Pledgee a
first priority continuing security interest in, and as part of such grant and
pledge,
2
<PAGE>
hereby transfers and assigns to the Pledgee all of the following whether now
existing or hereafter acquired (the "Collateral"):
(a) such Pledgor's Partnership Interest and all of such
Pledgor's right, title and interest in each Pledged Entity including,
without limitation:
(i) all the capital thereof and its interest in
all profits, losses and other distributions to which such
Pledgor shall at any time be entitled in respect of such
Partnership Interest;
(ii) all other payments due or to become due to
such Pledgor in respect of such Partnership Interest, whether
under any partnership agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or
otherwise;
(iii) all of its claims, rights powers, privileges,
authority, options security interest, liens and remedies, if
any, under any limited partnership agreement or at law or
otherwise in respect of such Partnership Interest;
(iv) all present and future claims if any, of the
Pledgor against any Pledged Entity for moneys loaned or
advanced, for services rendered or otherwise;
(v) all of such Pledgor's rights under any
partnership agreement or at law to exercise and enforce every
right, power, remedy, authority, option and privilege of such
Pledgor relating to the Partnership Interest including any
power to terminate, cancel or modify any partnership
agreement, to execute any instruments and to take any and all
other action on behalf of and in the name of such Pledgor in
respect of the Partnership Interest and any Pledged Entity, to
make determinations, to exercise any election (including, but
not limited to, election of remedies) or option or to give or
receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive,
enforce, collect or receipt for any of the foregoing, to
enforce or execute any checks, or other instruments or orders,
to file any claims and to take any action in connection with
any of the foregoing;
(vi) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof; and
(vii) to the extent not otherwise included, all
proceeds of any or all of the foregoing;
(b) all Securities owned by such Pledgor on the date
hereof, if any, and such Pledgor hereby pledges and deposits as
security with the Pledgee and delivers to the Pledgee certificates or
instruments therefor duly endorsed in blank in the case of Notes and
accompanied by undated stock powers duly executed in blank by such
Pledgor in the case of Stock, or such other instruments of transfer as
are acceptable to the Pledgee; and
(c) all of such Pledgor's right, title and interest in
and to such Securities (and in and to all certificates or instruments
evidencing such Securities), which such Pledgor hereby assigns,
transfers, hypothecates, mortgages, charges and sets over to the
Pledgee, to be held by the Pledgee, upon the terms and conditions set
forth in this Agreement.
3.2. Subsequently Acquired Securities and Partnership Interests. If
a Pledgor shall acquire (by purchase, stock dividend or otherwise) any
additional Securities and/or Partnership Interests at any time or from time to
time after the date hereof which are represented by certificates or instruments,
such Pledgor will forthwith pledge and deposit such Securities and/or
Partnership Interests as security with the Pledgee and deliver to the Pledgee
certificates or instruments thereof, duly endorsed in blank in the case of Notes
and accompanied by undated stock powers duly executed in blank in the case of
Stock, by such Pledgor or such other instruments of transfer as are acceptable
to the Pledgee, and will promptly thereafter deliver to the Pledgee a
certificate executed by a principal executive officer of such
3
<PAGE>
Pledgor describing such Securities and/or Partnership Interests and certifying
that the same have been duly pledged with the Pledgee hereunder.
3.3. Uncertificated Securities and/or Partnership Interests.
Notwithstanding anything to the contrary contained in sections 3.1 and 3.2, if
any Securities and/or Partnership Interests (whether or not now owned or
hereafter acquired) are uncertificated securities, a Pledgor shall promptly
notify the Pledgee thereof, and shall promptly take all actions required to
perfect the security interest of the Pledgee under applicable law (including, in
any event, under sections 8-313 and 8-321 of the Uniform Commercial Code if
applicable). Each Pledgor further agrees to take such actions as the Pledgee
deems reasonably necessary or desirable to effect the foregoing and to permit
the Pledgee to exercise any of its rights and remedies hereunder, and agrees to
provide an opinion of counsel reasonably satisfactory to the Pledgee with
respect to any such pledge of uncertificated securities and/or Partnership
Interests promptly upon the request of the Pledgee.
3.4. Definitions of Pledged Stock, Pledged Notes, and Pledged
Securities and Collateral. All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Stock"; all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes"; and all Pledged Stock and Pledged Notes together are called the
"Pledged Securities".
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC.
The Pledgee shall have the right to appoint one or more sub-agents for
the purpose of retaining physical possession of the Pledged Securities, which
may be held (in the discretion of the Pledgee) in the name of the relevant
Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any nominee
or nominees of the Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC. WHILE NO EVENT OF DEFAULT.
Unless and until there shall have occurred and be continuing an Event
of Default and (except to the extent an Event of Default as specified in section
9.1(e) of the Credit Agreement has occurred) notice given to the relevant
Pledgor by the Pledgee that the Pledgee will thereafter exercise voting rights
in respect of the Pledged Securities (collectively, a "Designated Event of
Default"), each Pledgor shall be entitled to exercise all voting rights
attaching to any and all Collateral owned by it, and to give consents, waivers
or ratifications in respect thereof, provided that no vote shall be cast or any
consent, waiver or ratification given or any action taken which would violate,
result in breach of any covenant contained in or be inconsistent with, any of
the terms of this Agreement, any other Credit Document or any Designated
Interest Rate Agreement (collectively, the "Secured Debt Agreements"), or which
would have the effect of impairing the position or interests of the Pledgee or
any Secured Creditor therein. All such rights of such Pledgor to vote and to
give consents waivers and ratifications shall cease in case a Designated Event
of Default shall occur and be continuing and section 7 hereof shall become
applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS.
Unless and until an Event of Default shall have occurred and be
continuing, all cash dividends or other amounts payable in respect of the
Collateral shall be paid to the relevant Pledgor, provided that all dividends,
distributions or other amounts payable in respect of the Collateral which are
reasonably determined by the Pledgee to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital not
permitted by the Credit Agreement shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital, to the Pledgee and retained by it as part of the Collateral (unless
such cash dividends and/or distributions are applied to repay the Obligations
pursuant to section 9 of this Agreement). The Pledgee shall also be entitled to
receive directly, and to retain as part of the Collateral:
(i) all other or additional stock, other securities,
partnership interests or property (other than cash) paid or distributed
by way of dividend or otherwise in respect of the Collateral;
4
<PAGE>
(ii) all other or additional stock, other securities,
partnership interests or property (including cash) paid or distributed
in respect of the Collateral by way of stock-split, spin-off, split-up,
reclassification, combination of shares or similar rearrangement; and
(iii) all other or additional stock, other securities,
partnership interests or property (including cash) which may be paid in
respect of the Collateral by reason of any consolidation, merger,
exchange of stock, conveyance of assets, liquidation or similar
corporate or partnership reorganization.
All dividends, distributions or other payments which are received by any Pledgor
contrary to the provisions of this section 6 or section 7 shall be received in
trust for the benefit of the Pledgee, shall be segregated from other property or
funds of such Pledgor and shall be forthwith paid over to the Pledgee as
Collateral in the same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT.
In case an Event of Default shall have occurred and be continuing, the
Pledgee shall be entitled to exercise all of the rights, powers and remedies
(whether vested in it by this Agreement or any other Secured Debt Agreement or
by law) for the protection and enforcement of its rights in respect of the
Collateral, including, without limitation all the rights and remedies of a
secured party upon default under the Uniform Commercial Code of the Commonwealth
of Kentucky, and the Pledgee shall be entitled, without limitation to exercise
any or all of the following rights which each Pledgor hereby agrees to be
commercially reasonable:
(i) to receive all amounts payable in respect of the
Collateral otherwise payable under section 6 to a Pledgor;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(iii) in the case of a Designated Event of Default, to vote
all or any part of the Collateral (whether or not transferred into the
name of the Pledgee) and give all consents, waivers and ratifications
in respect of the Collateral and otherwise act with respect thereto as
though it were the outright owner thereof (each Pledgor hereby
irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution to do
so); and
(iv) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by each Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion may
determine, provided that at least 10 days' notice of the time and place
of any such sale shall be given to the relevant Pledgor; each purchaser
at any such sale shall hold the property so sold absolutely free from
any claim or right on the part of any Pledgor, and each Pledgor hereby
waives and releases to the fullest extent permitted by law any right or
equity of redemption with respect to the Collateral, whether before or
after sale hereunder, all rights, if any, of marshalling the Collateral
and any other security for the Obligations or otherwise, and all
rights, if any, of stay and/or appraisal which it now has or may at any
time in the future have under rule of law or statute now existing or
hereafter enacted; at any such sale, unless prohibited by applicable
law, the Pledgee on behalf of all Secured Creditors (or certain of
them) may bid for and purchase (by bidding in Obligations or otherwise)
all or any part of the Collateral so sold free from any such right or
equity of redemption; and neither the Pledgee nor any Secured Creditor
shall be liable for failure to collect or realize upon any or all of
the Collateral or for any delay in so doing nor shall it be under any
obligation to take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE.
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Each right, power and remedy of the Pledgee provided for in this
Agreement or any other Secured Debt Agreement now or hereafter existing at law
or in equity or by statute shall be cumulative and concurrent and shall be in
addition to every other such right, power or remedy. The exercise or beginning
of the exercise by the Pledgee of any one or more of the rights, powers or
remedies provided for in this Agreement or any other Secured Debt Agreement or
now or hereafter existing at law or in equity or by statute or otherwise shall
not preclude the simultaneous or later exercise by the Pledgee or any Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any Secured Creditor to exercise any such right,
power or remedy shall operate as a waiver thereof.
9. APPLICATION OF PROCEEDS.
(a) All moneys collected by the Pledgee upon any sale or other
disposition of the Collateral pursuant to the terms of this Agreement, together
with all other moneys received by the Pledgee hereunder, shall be applied as
follows:
(i) first, to the payment of all Obligations owing to the
Pledgee or any of the Secured Creditors of the type described in
clauses (ii) and (iii) of section 1 of this Agreement;
(ii) second, to the extent monies remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Obligations shall be paid to the Secured Creditors as
provided in section 9(c), with each Secured Creditor receiving an
amount equal to its outstanding Obligations or, if the proceeds are
insufficient to pay in full all such Obligations, its Pro Rata Share
(as defined below) of the amount remaining to be distributed; and
(iii) third, to the extent monies remain after the
application pursuant to the preceding clauses (i) and (ii) or following
the termination of this Agreement pursuant to section 18(a) hereof, to
the relevant Pledgor or to whomever may be lawfully entitled to receive
such surplus.
(b) For purposes of this Agreement, "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount, the
amount (expressed as a percentage) equal to a fraction, the numerator of which
is the then outstanding amount of the relevant Obligations owed such Secured
Creditor and the denominator of which is the then outstanding amount of all
Obligations.
(c) All payments required to be made to the (i) Lenders hereunder
shall be made to the Administrative Agent for the account of the respective
Lenders and (ii) Interest Rate Creditors hereunder shall be made to the paying
agent under the applicable Designated Interest Rate Agreement or, in the case of
Designated Interest Rate Agreements without a paying agent, directly to the
applicable Interest Rate Creditor.
(d) For purposes of applying payments received in accordance with
this section 9, the Pledgee shall be entitled to rely upon (i) the
Administrative Agent for a determination (which the Administrative Agent agrees
to provide upon request to the Pledgee) of the outstanding Credit Document
Obligations (as defined in the Subsidiary Guaranty) and (ii) upon any Interest
Rate Creditor for a determination (which each Interest Rate Creditor agrees to
provide upon request to the Pledgee) of the outstanding Interest Rate
Obligations (as defined in the Subsidiary Guaranty) owed to such Interest Rate
Creditor. Unless it has actual knowledge (including by way of written notice
from a Secured Creditor) to the contrary, the Administrative Agent under the
Credit Agreement, in furnishing information pursuant to the preceding sentence,
and the Pledgee, in acting hereunder, shall be entitled to assume that (x) no
Credit Document Obligation other than principal, interest and regularly accruing
fees are owing to any Lender and (y) no Designated Interest Rate Agreements or
Interest Rate Obligations with respect thereto are in existence.
(e) It is understood and agreed that the Pledgor shall remain
liable to the extent of any deficiency between (x) the amount of the proceeds of
the Collateral applied pursuant to clause (i) of section 9(a) and (y) the
aggregate outstanding amount of the Obligations.
10. PURCHASERS OF COLLATERAL.
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<PAGE>
Upon any sale of the Collateral by the Pledgee hereunder (whether by
virtue of the power of sale herein granted, pursuant to judicial process or
otherwise), the receipt of the Pledgee or the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold,
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Pledgee or such
officer or be answerable in any way for the misapplication or nonapplication
thereof.
11. INDEMNITY.
Each Pledgor jointly and severally agrees (i) to indemnify and hold
harmless the Pledgee and the Secured Creditors from and against any and all
claims, demands, losses, judgments and liabilities (including liabilities for
penalties) of whatsoever kind or nature, and (ii) to reimburse the Pledgee and
the Secured Creditors for all reasonable costs and expenses, including
reasonable attorneys' fees, growing out of or resulting from this Agreement or
the exercise by the Pledgee of any right or remedy granted to it hereunder or
under any other Secured Debt Agreement except, with respect to clauses (i) and
(ii) above, for those arising from the Pledgee's gross negligence or willful
misconduct. In no event shall the Pledgee be liable, in the absence of gross
negligence or willful misconduct on its part, for any matter or thing in
connection with this Agreement other than to account for moneys or other
property actually received by it in accordance with the terms hereof or thereof.
If and to the extent that the obligations of each Pledgor under this section 11
are unenforceable for any reason, each Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES.
Each Pledgor agrees that it will join with the Pledgee in executing
and, at the Pledgor's own expense, file and refile under the Uniform Commercial
Code such financing statements, continuation statements and other documents in
such offices as the Pledgee may deem reasonably necessary or appropriate and
wherever required or permitted by law in order to perfect and preserve the
Pledgee's security interest in the Collateral hereunder and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of such Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder or thereunder.
13. THE PLEDGEE AS AGENT.
The Pledgee will hold in accordance with this Agreement all items of
the Collateral at any time received under this Agreement. It is expressly
understood and agreed that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement. The Pledgee shall act hereunder on the terms and conditions set forth
herein and in section 11 of the Credit Agreement.
14. TRANSFER BY THE PLEDGORS.
No Pledgor will sell or otherwise dispose of, grant any option with
respect to, or mortgage, pledge or otherwise encumber any of the Collateral or
any interest therein (except in accordance with the terms of this Agreement and
the Credit Documents).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
(a) Each Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has
good and marketable title to, all Securities pledged by it
hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever,
except the liens and security interests created by this Agreement;
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<PAGE>
(ii) it has full power, authority and legal right to
pledge all the Securities pledged by it pursuant to this
Agreement;
(iii) all the shares of the Stock have been duly and
validly issued and are fully paid and nonassessable;
(iv) each of the Notes, when executed by the obligor
thereof, will be the legal, valid and binding obligation of
the obligor thereof, enforceable in accordance with its terms;
(v) it will defend the Pledgee's right, title and
interest in and to the Partnership Interests and in and to the
Collateral pledged by it pursuant hereto or in which it has
granted a security interest pursuant hereto against the claims
and demands of all other persons whomsoever, and such Pledgor
covenants and agrees that it will have like title to and right
to pledge any other property at any time hereafter pledged to
the Pledgee as Collateral hereunder and will likewise defend
the right thereto and security interest therein of the Pledgee
and the Secured Creditors;
(vi) it is the legal and beneficial owner of and has
good title to its Partnership Interests and has good title to
all of the other Collateral pledged by it pursuant hereto or
in which it has granted a security interest pursuant hereto,
free and clear of all claims, pledges, liens, encumbrances and
security interests of every nature whatsoever, except such as
are created pursuant to this Agreement, and has the
unqualified right to pledge and grant a security interest in
the same as herein provided without the consent of any other
person, firm, association or entity which has not been
obtained;
(vii) it has full power, authority and legal right to
pledge the Partnership Interests pledged by it pursuant to
this Agreement and such Partnership Interest has been validly
acquired and is fully paid for and is duly and validly pledged
hereunder;
(viii) it is not in default in the payment of any
portion of any mandatory capital contribution, if any,
required to be made under any partnership agreement to which
such Pledgor is a party, and such Pledgor is not in violation
of any other material provisions of any partnership agreement
to which such Pledgor is a party, or otherwise in default or
violation thereunder, no Partnership Interest is subject to
any defense, offset or counterclaim, nor have any of the
foregoing been asserted or alleged against such Pledgor by any
person with respect thereto and as of the Closing Date, there
are no certificates, instruments, documents or other
writings (other than the partnership agreements and
certificates, if any, delivered to the Collateral Agent) which
evidence any Partnership Interest of such Pledgor;
(ix) the pledge and assignment of the Partnership
Interests pursuant to this Agreement, together with the
relevant filings, consents or recordings (which filings and
recordings have been made or obtained), creates a valid,
perfected and continuing first security interest in such
Partnership Interests and the proceeds thereof, subject to no
prior lien or encumbrance or to any agreement purporting to
grant to any third party a lien or encumbrance on the property
or assets of such Pledgor which would include the Collateral;
(x) there are no currently effective financing
statements under the UCC covering any property which is now or
hereafter may be included in the Collateral and such Pledgor
will, without the prior written consent of the Pledgee,
execute and, until the Termination Date, there will not ever
be on file in any public office any enforceable financing
statement or statements covering any or all of the Collateral,
except financing statements filed or to be filed in favor of
the Pledgee as secured party;
(xi) it shall give the Pledgee prompt notice of any
written claim relating to the Collateral and shall deliver to
the Pledgee a copy of each other demand, notice or document
received by it which may adversely affect the Pledgee's
interest in the Collateral promptly upon, but in any event
within 10 days after, such Pledgor's receipt thereof;
8
<PAGE>
(xii) it shall not withdraw as a partner of any
Pledged Entity, or file or pursue or take any action which
may, directly or indirectly, cause a dissolution or
liquidation of or with respect to any Pledged Entity or seek a
partition of any property of any Pledged Entity, except as
permitted by the Credit Agreement; and
(xiii) a notice in the form set forth in Annex E
attached hereto and by this reference made a part hereof (such
notice the "Partnership Notice"), appropriately completed,
notifying each Pledged Entity of the existence of this
Agreement and a certified copy of this Agreement have been
delivered by such Pledgor to the relevant Pledged Entity, and
such Pledgor has received and delivered to the Pledgee an
acknowledgment in the form set forth in Annex E attached
hereto (such acknowledgement, the "Partnership
Acknowledgement"), duly executed by the relevant Pledged
Entity.
(b) Each Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to the Securities and the
proceeds thereof against the claims and demands of all persons whomsoever.
(c) Each Pledgor covenants and agrees that it will take no action
which would violate or be inconsistent with any of the terms of any Secured Debt
Agreement or which would have the effect of impairing the position or interests
of the Pledgee or any Secured Creditor under any Secured Debt Agreement except
as permitted by the Credit Agreement.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC.
The obligations of each Pledgor under this Agreement shall be absolute
and unconditional and shall remain in full force and effect without regard to,
and shall not be released, suspended, discharged, terminated or otherwise
affected by, any circumstance or occurrence whatsoever, including, without
limitation:
(i) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from other Credit Documents, or
any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof;
(ii) any waiver, consent, extension, indulgence or other
action or inaction under or in respect of any such agreement or
instrument or this Agreement except as expressly provided in such
renewal, extension, amendment, modification, addition, supplement,
assignment or transfer;
(iii) any furnishing of any additional security to the Pledgee
or its assignee or any acceptance thereof or any release of any
security by the Pledgee or its assignee;
(iv) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof; or
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to a Pledgor or any Subsidiary of a Pledgor, or any action taken with
respect to this Agreement by any trustee or receiver, or by any court,
in any such proceeding, whether or not a Pledgor shall have notice or
knowledge of any of the foregoing.
17. REGISTRATION, ETC.
(a) If an Event of Default shall have occurred and be continuing and
the relevant Pledgor shall have received from the Pledgee a written request or
requests that such Pledgor cause any registration, qualification or compliance
under any Federal or state securities law or laws to be effected with respect to
all or any part of the Stock of its Subsidiaries, such Pledgor as soon as
practicable and at its expense will use its best efforts to cause such
registration to be effected (and be kept effective) and will use its best
efforts to cause such qualification and compliance to be effected (and be kept
effective) as may be so requested and as would permit or facilitate the sale and
distribution of such Stock, including, without limitation, registration under
the Securities Act of 1933, as then in effect (or any similar
9
<PAGE>
statute then in effect), appropriate qualifications under applicable blue sky or
other state securities laws and appropriate compliance with any other
governmental requirements, provided that the Pledgee shall furnish to such
Pledgor such information regarding the Pledgee as such Pledgor may request in
writing and as shall be required in connection with any such registration,
qualification or compliance. The relevant Pledgor will cause the Pledgee to be
kept reasonably advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, will furnish to
the Pledgee such number of prospectuses, offering circulars and other documents
incident thereto as the Pledgee from time to time may reasonably request, and
will indemnify the Pledgee and all others participating in the distribution of
such Stock against all claims, losses, damages or liabilities caused by any
untrue statement (or alleged untrue statement) of a material fact contained
therein (or in any related registration statement, notification or the like) or
by any omission (or alleged omission) to state therein (or in any related
registration statement, notification or the like) a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same may have been caused by an untrue statement or
omission based upon information furnished in writing to such Pledgor by the
Pledgee expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Stock pursuant to section 7, such
Pledged Stock or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act of 1933, as then
in effect, the Pledgee may, in its sole and absolute discretion, sell such
Pledged Stock or part thereof by private sale in such manner and under such
circumstances as Pledgee may deem necessary or advisable in order that such sale
may legally be effected without such registration, provided that at least 10
days' notice of the time and place of any such sale shall be given to the
relevant Pledgor. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion, (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Pledged Stock or part thereof shall have been filed under
such Securities Act, (ii) may approach and negotiate with a single possible
purchaser to effect such sale and (iii) may restrict such sale to a purchaser
who will represent and agree that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of such
Pledged Stock or part thereof. In the event of any such sale, the Pledgee shall
incur no responsibility or liability to any Pledgor for selling all or any part
of the Pledged Stock at a price which the Pledgee may in good faith deem
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until the
registration as aforesaid.
18. TERMINATION; RELEASE.
(a) After the Termination Date (as defined below), this Agreement
shall terminate (provided that all indemnities set forth herein including,
without limitation, in section 11 hereof shall survive any such termination) and
the Pledgee, at the request and expense of the relevant Pledgor, will execute
and deliver to the relevant Pledgor a proper instrument or instruments
acknowledging the satisfaction and termination of this Agreement as provided
above, and will duly assign, transfer and deliver to the relevant Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Pledgee and as has not theretofore
been sold or otherwise applied or released pursuant to this Agreement, together
with any moneys at the time held by the Pledgee hereunder. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Designated Interest Rate Agreements have been terminated, no
Letter of Credit nor Note under the Credit Agreement is outstanding and all
other Obligations have been paid in full.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by section 8.2 of the Credit Agreement or is
otherwise released at the direction of the Required Banks (or all the Lenders if
required by section 12.12 of the Credit Agreement), and the proceeds of such
sale or sales or from such release are to be applied in accordance with the
terms of the Credit Agreement to the extent required to be so applied, the
Pledgee, at the request and expense of such Pledgor will release such Collateral
from this Agreement, and will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
possession of the Pledgee and has not theretofore been released pursuant to this
Agreement.
(c) At any time that a Pledgor desires that Collateral be released as
provided in the foregoing section 18(a) or (b), it shall deliver to the Pledgee
a certificate signed by an executive officer stating that the release of the
respective
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Collateral is permitted pursuant to section 18(a) or (b). The Pledgee
shall have no liability whatsoever to any Secured Creditor as the result of any
release of Collateral by it as permitted by this section 18.
19. NOTICES, ETC.
All notices and other communications hereunder shall be in writing and
shall be delivered or mailed by first class mail postage prepaid, addressed:
(i) if to any Pledgor at its address contained in the
Subsidiary Guaranty;
(ii) if to the Pledgee, at:
PNC Bank, National Association,
as Administrative Agent
4th Floor Annex
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Attn.: Arlene Ohler
Vice President
Multi-Bank
Loan Administration
Tel. No.: (412) 762-3627
Fax No.: (412) 762-8672;
with copies to:
PNC Bank, Kentucky, Inc.
500 West Jefferson Street
Louisville, Kentucky 40202
Attn.: Todd Munson
Vice President
Mail Stop: K1-KHDQ-08-03
Tel. No.: (502) 581-4734
Fax No.: (502) 581-2302
-and-
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attn.: John W. Sager, Esq.
Tel. No.: (216) 586-7228
Fax No.: (216) 579-0212
(ii) if to any Lender (other than the Pledgee), at such
address as such Lender shall have specified in the Credit Agreement;
(iii) if to any Interest Rate Creditor, at such address as
such Interest Rate Creditor shall have specified in writing to the
Pledgors and the Pledgee;
or at such address as shall have been furnished in writing by any person
described above to the party required to give notice hereunder.
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20. WAIVER; AMENDMENT.
None of the terms and conditions of this Agreement may be changed,
waived, modified or varied in any manner whatsoever unless in writing duly
signed by each Pledgor and the Pledgee (with the consent of the Required Lenders
or, to the extent required by section 12.12 of the Credit Agreement, all of the
Lenders); provided, however, that no such change, waiver, modification or
variance shall be made to section 9 hereof or this section 20 without the
consent of each Secured Creditor adversely affected thereby, provided further,
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors of such Class of Secured Creditors. For the purpose of this Agreement,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lenders as holders of the Credit Document Obligations or (y) the Interest
Rate Creditors as holders of the Interest Rate Obligations. For the purpose of
this Agreement, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to each of the Credit Document Obligations, the Required
Lenders and (y) with respect to the Interest Rate Obligations, the holders of
51% of all obligations outstanding from time to time under the Designated
Interest Rate Agreements.
21. PLEDGEE NOT BOUND.
(a) Nothing herein shall be construed to make the Pledgee liable as a
general partner or limited partner of any Pledged Entity or a shareholder of any
corporation, and the Pledgee by virtue of this Agreement or otherwise (except as
referred to in the following sentence) shall not have any of the duties,
obligations or liabilities of a general partner or limited partner of any
Pledged Entity or a stockholder of any corporation. The parties hereto expressly
agree that, unless the Pledgee shall become the absolute owner of a Partnership
Interest or Stock pursuant hereto, this Agreement shall not be construed as
creating a partnership or joint venture among the Pledgee and/or a Pledgor.
(b) Except as provided in the last sentence of section 21(a), the
Pledgee, by accepting this Agreement, did not intend to become a general partner
or limited partner of any Pledged Entity or a shareholder of any corporation or
otherwise be deemed to be a co-venturer with respect to any Pledgor or any
Pledged Entity or a shareholder of any corporation either before or after an
Event of Default shall have occurred. The Pledgee shall have only those powers
set forth herein and shall assume none of the duties, obligations or liabilities
of a general partner or limited partner of any Pledged Entity or of a Pledgor.
(c) The Pledgee shall not be obligated to perform or discharge any
obligation of a Pledgor as a result of the collateral assignment hereby
effected.
(d) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Pledgee to appear in or defend any action or proceeding
relating to the Collateral to which it is not a party, or to take any action
hereunder or thereunder, or to expend any money or incur any expenses or perform
or discharge any obligation, duty or liability under the Collateral.
22. MISCELLANEOUS.
This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect, subject to release
and/or termination as set forth in section 18, (ii) be binding upon each
Pledgor, its successors and assigns; provided, however, that no Pledgor shall
assign any of its rights or obligations hereunder without the prior written
consent of the Pledgee (with the prior written consent of the Required Lenders
or to the extent required by section 12.12 of the Credit Agreement, all of the
Lenders), and (iii) inure, together with the rights and remedies of the Pledgee
hereunder, to the benefit of the Pledgee, the Secured Creditors and their
respective successors, transferees and assigns. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE COMMONWEALTH OF
KENTUCKY. The headings of the several sections and subsections in this Agreement
are for purposes of reference only and shall not limit or define the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument. In the event that any provision of this Agreement shall prove to be
invalid or unenforceable, such provision shall be deemed to be severable from
the other provisions of this Agreement which shall remain binding on all parties
hereto.
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23. WAIVER OF JURY TRIAL.
Each Pledgor and the Pledgee each hereby irrevocably waives all right
to a trial by jury in any action, proceeding or counterclaim arising out of or
relating to this Agreement or the transactions contemplated hereby.
* * *
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IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
ATRIA COMMUNITIES, INC.,
as a Pledgor
By: /s/ J. Timothy Wesley
---------------------------------
Vice President
LANTANA PARTNERS, LTD.,
as a Pledgor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
PHILLIPPE ENTERPRISES, INC.,
as a Pledgor
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
HILLHAVEN PROPERTIES, LTD.,
as a Pledgor
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
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CASTLE GARDENS RETIREMENT CENTER,
as a Pledgor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
HILLCREST RETIREMENT CENTER, LTD.,
as a Pledgor
By: FAIRVIEW LIVING CENTERS, INC.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
SANDY RETIREMENT CENTER LIMITED
PARTNERSHIP,
as a Pledgor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
TOPEKA RETIREMENT CENTER, LTD.,
as a Pledgor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
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EVERGREEN WOODS, LTD.,
as a Pledgor
By: ATRIA COMMUNITIES, INC.,
a General Partner
By: /s/ J. Timothy Wesley
---------------------------------
Vice President
FAIRVIEW LIVING CENTERS, INC.,
as a Pledgor
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
TWENTY-NINE HUNDRED ASSOCIATES, LTD.,
as a Pledgor
By: TWENTY-NINE HUNDRED CORPORATION,
a General Partner
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
TWENTY-NINE HUNDRED CORPORATION,
as a Pledgor
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
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WOODHAVEN PARTNERS, LTD.,
as a Pledgor
By:HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
TUCSON RETIREMENT CENTER LIMITED
PARTNERSHIP,
as a Pledgor
By:HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
PNC BANK, NATIONAL ASSOCIATION,
as Collateral Agent, as the
Pledgee
By: /s/ Edward J. Weisto
---------------------------------
Vice President
17
<PAGE>
ANNEX A
to
Pledge Agreement
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
==================================================================================================================================
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interests Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lantana Florida 100%, owned as None Florida
Partners, follows:
Ltd., a
limited 98% limited
partnership partnership interest
owned by the
Borrower
1% general
partnership interest
owned by Twenty-
Nine Hundred
Associates Limited
Partnership
1% general
partnership interest
owned by Hillhaven
Properties, Ltd.
- ----------------------------------------------------------------------------------------------------------------------------------
Phillippe Indiana 100% of Common Florida
Enterprises, Stock, represented by
Inc., a 2,000 shares, owned
corporation by the Borrower
- ----------------------------------------------------------------------------------------------------------------------------------
Hillhaven Oregon 100% of Common Florida;
Properties, Stock, represented by Washington;
Ltd., a 1,000 shares, owned Arizona;
corporation by the Borrower California;
Colorado;
Kansas; Utah
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
==================================================================================================================================
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interests Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Castle Colorado 100%, owned as Colorado
Gardens follows:
Retirement
Center, a 98% general
general partnership interest,
partnership owned by the
Borrower
2% general
partnership interest
owned by Hillhaven
Properties, Ltd.
- ----------------------------------------------------------------------------------------------------------------------------------
Hillcrest Oregon 100%, owned as Idaho
Retirement follows:
Center, Ltd.,
a limited 68.6% limited
partnership partnership interest,
owned by the
Borrower
29.4% balance of LP
and 2% GP interests
held by Fairview
Living Centers, Inc., a
wholly owned
subsidiary of
Hillhaven Properties,
Ltd.
- ----------------------------------------------------------------------------------------------------------------------------------
Sandy Oregon 100%, owned as Utah
Retirement follows:
Center
Limited 98% limited
Partnership, partnership interest,
a limited owned by the
partnership Borrower
2% general
partnership interest
owned by Hillhaven
Properties, Ltd.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
==================================================================================================================================
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interests Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Topeka Missouri 100%, owned as Kansas
Retirement follows:
Center, Ltd.,
a limited 10% limited
partnership partnership interest,
owned by the
Borrower
90% general partner
interest owned by
Hillhaven Properties,
Ltd.
- ----------------------------------------------------------------------------------------------------------------------------------
Evergreen Florida 100%, owned as Florida
Woods, Ltd., follows:
a limited
partnership 98% limited partner
interest, and 1%
general partner
interest owned by the
Borrower
Hillhaven Properties,
Ltd. owns a 1%
limited partnership
interest
- ----------------------------------------------------------------------------------------------------------------------------------
Fairview Oregon 100% of capital Idaho
Living stock, represented by
Centers, Inc., 10 shares, owned by
a corporation Hillhaven Properties,
Ltd.
- ----------------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Florida 100%, owned as Florida
Hundred follows:
Associates,
Ltd., a 99% limited partner
limited interest owned by the
partnership Borrower
1% general partner
interest owned by
Twenty-Nine
Hundred
Corporation
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
==================================================================================================================================
Name of Jurisdiction Percentage of Names and Jurisdictions Jurisdictions
Subsidiary Where Outstanding Stock Addresses Where Where
and Organized or other Equity of Minority Qualified as Substantial
Type of Interests Owned Holders, a foreign Assets
Organization (Indicating whether if Any corporation Located
owned by the or
Borrower or a other entity
specified Subsidiary)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Twenty-Nine Florida 100% of capital Florida
Hundred stock, represented by
Corporation, ___ shares, owned by
a corporation Hillhaven Properties,
Ltd.
- ----------------------------------------------------------------------------------------------------------------------------------
Woodhaven Florida 100%, owned as Florida
Partners, follows:
Ltd., a
limited Hillhaven Properties,
partnership Ltd. owns a 51% GP
interest
The Borrower owns
a 49% LP interest
- ----------------------------------------------------------------------------------------------------------------------------------
Tucson Arizona 100%, owned as Arizona
Retirement follows:
Center
Limited Hillhaven Properties,
Partnership, Ltd. owns an 80%
a limited GP interest
partnership
The Borrower owns
a 20% LP interest
==================================================================================================================================
</TABLE>
4
<PAGE>
ANNEX B
to
Pledge Agreement
LIST OF STOCK
<TABLE>
<CAPTION>
================================================================================================================================
Name of Type Number
Issuing of of Certificate Percentage
Corporation Shares Shares No. Owned
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Phillippe Common Stock 2,000 100%
Enterprises, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Hillhaven Common Stock 1,000 100%
Properties, Ltd.
- --------------------------------------------------------------------------------------------------------------------------------
Fairview Living Common Stock 10 100%
Centers, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Common Stock ----- 100%
Hundred
Corporation
================================================================================================================================
</TABLE>
<PAGE>
ANNEX C
to
Pledge Agreement
LIST OF NOTES
<TABLE>
<CAPTION>
================================================================================================================================
Issuer Payee Principal Amount Interest Rate Maturity Date
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
San Marcos Hillhaven $4,526,516.22, plus reference rate of see Note and
Courtyard Properties, Ltd. Advances, Bank of America related
Limited including all rights plus 2% documents
in respect of any referred to
security for such therein
Note, including,
without limitation,
all rights as beneficiary
under a Deed of Trust,
Security Agreement and
Financing Statement, dated
as of December 1, 1994,
which was recorded on
December 30, 1994, as
Document No. 1994-0741882
in the official records of
the San Diego, California
county recorders office
- --------------------------------------------------------------------------------------------------------------------------------
Atria Lantana Partners, any advances; weighted average on demand
Communities, Inc. Ltd. subordinated as borrowing rate or
provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Phillippe any advances; weighted average on demand
Communities, Inc. Enterprises, Inc. subordinated as borrowing rate or
provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Hillhaven any advances; weighted average on demand
Communities, Inc. Properties, Ltd. subordinated as borrowing rate or
provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Castle Gardens any advances; weighted average on demand
Communities, Inc. Retirement Center subordinated as borrowing rate or
provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Hillcrest any advances; weighted average on demand
Communities, Inc. Retirement subordinated as borrowing rate or
Center, Ltd. provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
Issuer Payee Principal Amount Interest Rate Maturity Date
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Atria Sandy Retirement any advances; weighted average on demand
Communities, Inc. Center Limited subordinated as borrowing rate or
Partnership provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Topeka any advances; weighted average on demand
Communities, Inc. Retirement subordinated as borrowing rate or
Center, Ltd. provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Evergreen Woods, any advances; weighted average on demand
Communities, Inc. Ltd. subordinated as borrowing rate or
provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Fairview Living any advances; weighted average on demand
Communities, Inc. Centers, Inc. subordinated as borrowing rate or
provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Twenty-Nine any advances; weighted average on demand
Communities, Inc. Hundred subordinated as borrowing rate or
Associates, Ltd. provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Twenty-Nine any advances; weighted average on demand
Communities, Inc. Hundred subordinated as borrowing rate or
Corporation provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Woodhaven any advances; weighted average on demand
Communities, Inc. Partners, Ltd. subordinated as borrowing rate or
provided therein specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Atria Tucson any advances; weighted average on demand
Communities, Inc. Retirement Center subordinated as borrowing rate or
Limited provided therein specified
Partnership alternative
- --------------------------------------------------------------------------------------------------------------------------------
Lantana Partners, Atria any advances weighted average on demand
Ltd. Communities, Inc. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Phillippe Atria any advances weighted average on demand
Enterprises, Inc. Communities, Inc. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Hillhaven Atria any advances weighted average on demand
Properties, Ltd. Communities, Inc. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Castle Gardens Atria any advances weighted average on demand
Retirement Communities, Inc. borrowing rate or
Center specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Hillcrest Atria any advances weighted average on demand
Retirement Communities, Inc. borrowing rate or
Center, Ltd. specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Sandy Retirement Atria any advances weighted average on demand
Center Limited Communities, Inc. borrowing rate or
Partnership specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
Issuer Payee Principal Amount Interest Rate Maturity Date
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Topeka Atria any advances weighted average on demand
Retirement Communities, Inc. borrowing rate or
Center, Ltd. specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Evergreen Woods, Atria any advances weighted average on demand
Ltd. Communities, Inc. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Fairview Living Atria any advances weighted average on demand
Centers, Inc. Communities, Inc. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Atria any advances weighted average on demand
Hundred Communities, Inc. borrowing rate or
Associates, Ltd. specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Atria any advances weighted average on demand
Hundred Communities, Inc. borrowing rate or
Corporation specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Woodhaven Atria any advances weighted average on demand
Partners, Ltd. Communities, Inc. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Tucson Atria any advances weighted average on demand
Retirement Communities, Inc. borrowing rate or
Center Limited specified
Partnership alternative
- --------------------------------------------------------------------------------------------------------------------------------
Lantana Partners, Hillhaven any advances weighted average on demand
Ltd. Properties, Ltd. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Phillippe Hillhaven any advances weighted average on demand
Enterprises, Inc. Properties, Ltd. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Castle Gardens Hillhaven any advances weighted average on demand
Retirement Properties, Ltd. borrowing rate or
Center specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Hillcrest Hillhaven any advances weighted average on demand
Retirement Properties, Ltd. borrowing rate or
Center, Ltd. specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Sandy Retirement Hillhaven any advances weighted average on demand
Center Limited Properties, Ltd. borrowing rate or
Partnership specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Topeka Hillhaven any advances weighted average on demand
Retirement Properties, Ltd. borrowing rate or
Center, Ltd. specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Evergreen Woods, Hillhaven any advances weighted average on demand
Ltd. Properties, Ltd. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
Issuer Payee Principal Amount Interest Rate Maturity Date
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fairview Living Hillhaven any advances weighted average on demand
Centers, Inc. Properties, Ltd. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Hillhaven any advances weighted average on demand
Hundred Properties, Ltd. borrowing rate or
Associates, Ltd. specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Hillhaven any advances weighted average on demand
Hundred Properties, Ltd. borrowing rate or
Corporation specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Woodhaven Hillhaven any advances weighted average on demand
Partners, ltd. Properties, Ltd. borrowing rate or
specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Tucson Hillhaven any advances weighted average on demand
Retirement Properties, Ltd. borrowing rate or
Center Limited specified
Partnership alternative
- --------------------------------------------------------------------------------------------------------------------------------
Lantana Partners, Twenty-Nine any advances weighted average on demand
Ltd. Hundred borrowing rate or
Associates, Ltd. specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Hillcrest Fairview Living any advances weighted average on demand
Retirement Centers, Inc. borrowing rate or
Center, Ltd. specified
alternative
- --------------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Twenty-Nine any advances weighted average on demand
Hundred Hundred borrowing rate or
Associates, Ltd. Corporation specified
alternative
================================================================================================================================
</TABLE>
4
<PAGE>
ANNEX D to Pledge
Agreement
LIST OF PLEDGED ENTITIES
<TABLE>
<CAPTION>
========================================================================================================================
NAME OF PLEDGED ENTITY TYPE OF ORGANIZATION
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Lantana Partners, Ltd. Florida limited partnership
- ------------------------------------------------------------------------------------------------------------------------
Castle Gardens Retirement Center Colorado general partnership
- ------------------------------------------------------------------------------------------------------------------------
Hillcrest Retirement Center, Ltd. Oregon limited partnership
- ------------------------------------------------------------------------------------------------------------------------
Sandy Retirement Center Limited Partnership Oregon limited partnership
- ------------------------------------------------------------------------------------------------------------------------
Topeka Retirement Center, Ltd. Missouri limited partnership
- ------------------------------------------------------------------------------------------------------------------------
Evergreen Woods, Ltd. Florida limited partnership
- ------------------------------------------------------------------------------------------------------------------------
Twenty-Nine Hundred Associates, Ltd. Florida limited partnership
- ------------------------------------------------------------------------------------------------------------------------
Woodhaven Partners, Ltd. Florida limited partnership
========================================================================================================================
</TABLE>
<PAGE>
ANNEX E
to
Pledge Agreement
PARTNERSHIP NOTICE
[Letterhead of Pledgor]
[Date]
TO:[NAME OF PARTNERSHIP]
Notice is hereby given that, pursuant to a Pledge Agreement (a true and
correct copy of which is attached hereto), dated as of August 15, 1996 (as
amended, modified or supplemented from time to time in accordance with the terms
thereof, the "Pledge Agreement"), among the pledgors party thereto, including
the undersigned (the "Pledgor") and PNC Bank, National Association, as
Collateral Agent (herein, together with its successors and assigns in such
capacity, the "Pledgee") for the Secured Creditors described therein, the
Pledgor has pledged and assigned to the Pledgee for the benefit of the Secured
Creditors, and granted to the Pledgee for the benefit of the Secured Creditors a
continuing security interest in, all right, title and interest of the Pledgor,
whether now existing or hereafter arising or acquired, as a [limited] [general]
partner in [NAME OF PARTNERSHIP] (the "Partnership"), and in, to and under the
[TITLE OF APPLICABLE PARTNERSHIP AGREEMENT] (the "Partnership Agreement"),
including, without limitation:
(i) all the capital of the Partnership and the
Pledgor's interest in all profits, losses and other distributions to
which the Pledgor shall at any time be entitled in respect of such
partnership interest;
(ii) all other payments due or to become due to the
Pledgor in respect of such partnership interest, whether under the
Partnership Agreement or otherwise, whether as contractual obligations,
damages, insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges,
authority, options, security interest, liens and remedies, if any,
under the Partnership Agreement or at law or otherwise in respect of
such partnership interest;
(iv) all present and future claims, if any,
of the Pledgor against the Partnership for moneys loaned or advanced,
for services rendered or otherwise;
(v) all of the Pledgor's rights under the
Partnership Agreement or at law to exercise and enforce every right,
power, remedy, authority, option and privilege of the Pledgor relating
to the partnership interest, including any power to terminate, cancel
or modify the Partnership Agreement, to execute any instruments and to
take any and all other action on behalf of and in the name of the
Pledgor in respect of the Partnership Interest and the Partnership, to
make determinations, to exercise any election (including, but not
limited, election of remedies) or option or to give or receive any
notice, consent, amendment, waiver or approval, together with full
power and authority to demand, receive, enforce, collect or receipt for
any of the foregoing or to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action in
connection with any of the foregoing;
(vi) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such other
property and all cash, securities, interest, dividends, rights and
other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
thereof; and
(vii) to the extent not otherwise included,
all proceeds of any or all of the foregoing.
<PAGE>
Pursuant to the Pledge Agreement, the Partnership is hereby authorized
and directed to register the Pledgor's pledge to the Pledgee on behalf of the
Secured Creditors of the interest of the Pledgor on the Partnership's books.
The Pledgor and the Partnership each hereby consents, notwithstanding
anything to the contrary contained in the Partnership Agreement or any other
agreement for the benefit of the Pledgor or the Partnership relating thereto, to
(i) the grant by any other Pledgor of a security interest to the Pledgee in its
Partnership Interest, its interest in the Partnership Agreement and its other
rights and interests relating thereto, as described above, pursuant to the
Pledge Agreement; and (ii) any sale, transfer or other disposition by the
Pledgee of any Partnership Interest of the Pledgee or any other Pledgor any or
other rights or interests in connection with the foreclosure of such security
interest or the exercise of any other remedies available to the Pledgee under or
in connection with the Pledge Agreement in respect thereof.
The Pledgor hereby requests the Partnership to indicate the
Partnership's acceptance of this Notice and consent to and agreement with its
terms and provisions by signing a copy hereof where indicated on the attached
page and returning the same to the Pledgee on behalf of the Secured Creditors.
[NAME OF PLEDGOR]
By: [NAME OF GENERAL
PARTNER],
its General Partner
By:
---------------------------------------------
Title:
2
<PAGE>
ACKNOWLEDGMENT
[NAME OF PARTNERSHIP] (the "Partnership") hereby (i) acknowledges
receipt of a copy of the assignment by [NAME OF PLEDGOR] (the "Pledgor") of its
interest under the [TITLE OF APPLICABLE PARTNERSHIP AGREEMENT] (the "Partnership
Agreement") pursuant to the terms of the Pledge Agreement, dated as of August
15, 1996 (as amended, modified or supplemented from time to time in accordance
with the terms thereof, the "Pledge Agreement"), among the Pledgors party
thereto, including the Pledgor, and PNC Bank, National Association, as
Collateral Agent (herein, together with its successors and assigns, the
"Pledgee") on behalf of the Secured Creditors described therein; (ii) confirms
its agreement to all of the terms and provisions of the letter to which this
acknowledgment is attached; and (iii) confirms the registration of the Pledgor's
pledge of its interest to the Pledgee on behalf of the Secured Creditors on the
Partnership's books.
Dated: August ___ , 1996
[NAME OF PARTNERSHIP]
By:
------------------------------------
Title:
3
<PAGE>
Exhibit 4
==============================================================================
ATRIA COMMUNITIES, INC.
as Borrower
And
VENCOR, INC.
as Parent Guarantor
FIRST HEALTHCARE CORPORATION
NORTHWEST HEALTHCARE, INC.
MEDISAVE PHARMACIES, INC.
HILLHAVEN OF CENTRAL FLORIDA, INC.
NATIONWIDE CARE, INC.
as Supporting Guarantors
With
PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent
----------------------------
PARENT GUARANTY
dated as of
August 15, 1996
----------------------------
==============================================================================
<PAGE>
PARENT GUARANTY
PARENT GUARANTY ("this Agreement"), dated as of August 15, 1996, by:
(a) ATRIA COMMUNITIES, INC., a Delaware corporation (herein,
together with its successors and assigns, the "Borrower");
(b) VENCOR, INC., a Delaware corporation and the record and
beneficial owner of more than 60% of all of the issued and outstanding
shares of Common Stock of the Borrower (herein, together with its
successors and assigns, the "Parent Guarantor"); and
(c) FIRST HEALTHCARE CORPORATION, a Delaware corporation,
NORTHWEST HEALTHCARE, INC., an Idaho corporation, MEDISAVE PHARMACIES,
INC., a Delaware corporation, HILLHAVEN OF CENTRAL FLORIDA, INC., a
Delaware corporation, and NATIONWIDE CARE, INC., an Indiana corporation
(each, together with its successors and assigns, a "Supporting
Guarantor" and collectively, the "Supporting Guarantors");
with PNC BANK, NATIONAL ASSOCIATION, a national banking association, as
Administrative Agent (herein, together with its successors and assigns in such
capacity, the "Administrative Agent") for itself and the other Lenders (defined
below), for the benefit of (i) the Administrative Agent, (ii) the Lenders from
time to time party to the Credit Agreement referred to below, and (iii) the
Interest Rate Creditors referred to below:
PRELIMINARY STATEMENTS:
(1) This Agreement is made pursuant to the Credit Agreement, dated as
of the date hereof (herein, as amended or otherwise modified from time to time,
the "Credit Agreement"), among the Borrower, the financial institutions named as
lenders therein, and the Administrative Agent, as agent for the Lenders (as
defined in the Credit Agreement), providing, among other things, for loans or
advances or other extensions of credit to or for the benefit of the Borrower of
up to $200,000,000, with such loans or advances being evidenced by promissory
notes (the "Notes", such term to include all notes and other securities issued
in exchange therefor or in replacement thereof), and is made to induce the
Lenders to make Loans to the Borrower, and to issue and participate in Letters
of Credit for the account of the Borrower or any of its Subsidiaries, pursuant
to the Credit Agreement.
(2) The Borrower may from time to time be party to one or more
Designated Interest Rate Agreements (as defined in the Credit Agreement). Any
institution that participates, and in each case their subsequent assigns, as a
counterparty to any Designated Interest Rate Agreement (collectively, the
"Interest Rate Creditors," and the Interest Rate Creditors together with the
Lenders, collectively the "Creditors"), shall benefit hereunder as herein
provided.
(3) This Agreement is made for the pro rata benefit of the
Administrative Agent and the Creditors to guarantee the payment of the principal
of and interest on the Notes and the payment and performance by the Borrower of
its obligations under the Credit Agreement, the other Credit Documents to which
the Borrower is a party and the Designated Interest Rate Agreements. This
Agreement is one of the Credit Documents referred to in the Credit Agreement.
(4) The Supporting Guarantors are entering into this Agreement to
guarantee the obligations of the Parent Guarantor hereunder, as set forth in
section 19 hereof.
NOW, THEREFORE, it is agreed as follows:
1
<PAGE>
1. Defined Terms. Certain capitalized terms used herein without
definition shall have the respective meanings specified in the Credit Agreement
and the other Credit Documents.
2. Guaranty by the Parent Guarantor, etc.
2.1. Required Payments. The Parent Guarantor hereby guarantees to the
Administrative Agent and the Creditors, for the ratable benefit of the
Administrative Agent and the Creditors, the due and punctual payment, when and
as the same shall become due and payable, of the following amounts, including
amounts that would become due but for the operation of the automatic stay under
section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a) (the "Required
Payments"):
(a) all amounts of principal becoming due and payable on the
DPP Revolving Loans in accordance with the terms thereof and of the
Credit Agreement, whether at stated maturity or as an installment or by
required prepayment or notice of optional prepayment or declaration of
acceleration or otherwise;
(b) all amounts of interest becoming due and payable on the
DPP Revolving Loans in accordance with the terms thereof and of the
Credit Agreement, including interest on any overdue principal and (to
the extent permitted by applicable law) on any overdue interest;
(c) all amounts payable by the Borrower to the Administrative
Agent or any Letter of Credit Issuer as reimbursement for any payment
or disbursement made by such Letter of Credit Issuer under any Letter
of Credit issued (or deemed issued) as contemplated by the Credit
Agreement, to the extent the same relates to Allocated DPP Letter of
Credit Outstandings;
(d) all other amounts payable by the Borrower to the
Administrative Agent, the Lenders and any Letter of Credit Issuer under
the Credit Agreement and the other Credit Documents which are related
to any of the foregoing; and
(e) with respect to all amounts payable by the Borrower to all
Interest Rate Creditors under all Designated Interest Rate Agreements,
the portion thereof, as reasonably determined by the Administrative
Agent at any time or from time to time (any such determination being
conclusive on all persons affected thereby, in the absence of manifest
error), which is equal to (i) a fraction the numerator of which is the
Allocated Measured DPP Swap Credit Exposure at such time, and the
denominator of which is the Aggregate Measured Swap Credit Exposure at
such time, times (ii) the aggregate of all amounts payable by the
Borrower to all Interest Rate Creditors under all Designated Interest
Rate Agreements.
Such guaranty is an absolute, unconditional, present and continuing guaranty of
payment and not of collectibility and is in no way conditioned or contingent
upon any attempt to collect from the Borrower, or any other action, occurrence
or circumstance whatsoever. If the Borrower shall fail to make any Required
Payment when and as the same shall become due and payable, the Parent Guarantor
shall forthwith make such Required Payment upon demand by the Administrative
Agent, in U. S. Dollars, in immediately available funds, directly to the
Administrative Agent, at its address specified in or pursuant to this Agreement,
or at such other place as the Administrative Agent shall direct, for application
as provided in section 27.
2.2. Maximum Guaranteed Amount. Notwithstanding any provisions of this
Agreement to the contrary, the maximum amount which the Parent Guarantor shall
be required to pay under section 2.1 hereof, together with any further amounts
or damages to which the Administrative Agent (on behalf of itself and the
Creditors) would be entitled for any breach by the Parent Guarantor of its
representations, warranties and covenants contained in sections 10, 11, 12, 13,
14, 15, 16 or 17 of this Agreement, specifically exclusive of any amounts or
damages to which the Administrative Agent (on behalf of itself and the
Creditors) would be entitled under sections 23, 24 and 26 of this Agreement,
shall be the amount identified below (the "Maximum Guaranteed Amount")
corresponding to the applicable period during which the Administrative Agent
shall have made demand upon the Parent Guarantor under section 2.1 hereof:
2
<PAGE>
<TABLE>
<CAPTION>
is made by the Administrative Agent Maximum Guaranteed Amount
- ----------------------------------- -------------------------
<S> <C>
On or prior to the first anniversary
of the Closing Date $100,000,000
Thereafter and on or prior to the
second anniversary of the
Closing Date $75,000,000
Thereafter and on or prior to the
third anniversary of the
Closing Date $50,000,000
Thereafter and on or prior to the
fourth anniversary of the
Closing Date $25,000,000
Thereafter $-0-
</TABLE>
; provided, however, that the Parent Guarantor may irrevocably elect, upon
written notice from the Parent Guarantor which is received by the Administrative
Agent prior to any date identified in the above table on which the Maximum
Guaranteed Amount is scheduled to reduce in amount, that the reduction so
scheduled to occur on such date shall not be effective and that the Parent
Guarantor elects either of the following: (i) that the Maximum Guaranteed Amount
shall not be reduced on such scheduled date of reduction, or (ii) that the
Maximum Guaranteed Amount shall be reduced on such scheduled date of reduction,
but by an amount less than the amount of the reduction scheduled to occur on
such date, specifying such lesser amount of reduction; and any such notice from
the Parent Guarantor shall specify any such election; and provided, further,
that no reduction in the Maximum Guaranteed Amount scheduled to take place in
accordance with the foregoing table shall become effective for any purpose
unless (A) during the entire 30-day period ending on any such scheduled date of
reduction, the sum of the aggregate outstanding DPP Revolving Loans, the
Allocated DPP Letter of Credit Outstandings and the Allocated Measured DPP Swap
Credit Exposure, is not greater than the amount to which the Maximum Guaranteed
Amount is scheduled to reduce on such date (taking into account any actions of
the Parent Guarantor pursuant to the preceding proviso), and (B) during the
period commencing 30 days prior to such scheduled date of reduction and ending
15 days prior to such scheduled date of reduction, the Borrower shall have
delivered to the Administrative Agent and the Managing Agent a written notice,
referring specifically to this section 2.2, advising the Administrative Agent
and the Managing Agent of the reduction in the Maximum Guaranteed Amount which
is scheduled to occur, and certifying that the condition specified in the
preceding clause (A) will be satisfied with reference to the scheduled reduction
in the Maximum Guaranteed Amount.
2.3. Early Termination of Guaranty of Required Payments. The guaranty
provided in section 2.1 will terminate, except with respect to any outstanding
demands by the Administrative Agent in respect thereof, at any time after the
third anniversary of the Closing Date if, at such time, each of the following
conditions is satisfied:
(a) the Borrower's ratio of Total Indebtedness to Total
Capitalization as of the end of the most recent fiscal period for which
financial statements have been delivered pursuant to section 7.1(a) or
(b) of the Credit Agreement, expressed as a percentage, is less than
60%;
(b) the Borrower's ratio of Total Indebtedness to EBITDA for the
most recent Testing Period for which financial statements have been
delivered pursuant to section 7.1(a) or (b) of the Credit Agreement, is
less than 3.50 to 1.00;
(c) the Borrower shall have delivered to the Administrative
Agent its financial statements pursuant to section 7.1(a) or (b) of the
Credit Agreement, together with the certificate referred to in section
7.1(e) of the Credit Agreement relating thereto, demonstrating to the
satisfaction of the Managing Agent that the conditions specified in
clauses (a) and (b) above have been satisfied;
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(d) the number of the individual properties in the Mature
Property Pool which are owned or leased by the Borrower or any of its
Subsidiaries shall be at least three times the number of individual
properties in the Development Property Pool;
(e) no Default or Event of Default shall have occurred and be
continuing, or would result from such termination; and
(f) no Change of Control shall have occurred.
In the event the Parent Guarantor believes such conditions are satisfied as
herein contemplated, it will so notify the Administrative Agent and the Managing
Agent in writing and will provide to the Administrative Agent and the Managing
Agent contemporaneously with any such notice such supporting materials upon
which such belief is based, and the Administrative Agent will promptly notify
the Creditors in writing of such notification by the Parent Guarantor and will
provide to the Creditors contemporaneously therewith copies of any such
supporting materials provided by the Parent Guarantor. Upon the Managing Agent's
determination that such conditions are satisfied as herein contemplated, it will
so notify the Administrative Agent, the Parent Guarantor and the Borrower in
writing (and the Administrative Agent shall promptly provide a copy of such
notice to the Creditors) and such termination shall be effective when such
notice is so given by the Managing Agent.
2.4. Subrogation. In the event the Parent Guarantor shall at any time
make any Required Payment, in the performance of its obligations to guarantee
payment thereof by the Borrower in accordance with the terms and provisions of
this Agreement, all rights of the Parent Guarantor for subrogation,
reimbursement, indemnity, contribution or otherwise against the Borrower in
respect thereof, together with all rights of the Parent Guarantor in any
collateral securing payment or performance obligations of the Borrower, shall in
all respects be subordinated and junior in right of payment to the indefeasible
payment in full of all Required Payments owed to the Administrative Agent and
the Creditors and all other Obligations of the Borrower under the Credit
Documents and the Designated Interest Rate Agreements; provided, however, that
to the extent any such right of subrogation, reimbursement, indemnity,
contribution or otherwise, or right in collateral, would constitute the Parent
Guarantor a creditor of the Borrower in respect thereof within the meaning of
section 547(b) of the Bankruptcy Code, as now in effect or hereafter amended, or
any comparable provisions of any successor statute, in the event a case
involving the Borrower shall at any time be commenced under the Bankruptcy Code,
as now in effect or hereafter amended, or any comparable provision of any
successor statute, the Parent Guarantor hereby irrevocably waives such right and
agrees that it will not assert, enforce or otherwise exercise any such right.
2.5. Reinstatement. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of,
or in respect of, any Required Payment is rescinded or must otherwise be
restored by the Administrative Agent or any Creditor, or any other creditor of
the Borrower, upon the bankruptcy or reorganization of the Borrower or
otherwise.
2.6. Guarantor Familiar with Borrower's Affairs, etc. The Parent
Guarantor confirms that it has executed and delivered this Agreement after
reviewing the terms and conditions of the Credit Agreement, this Agreement and
the other Credit Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Agreement. The Parent Guarantor confirms that it has made its own
independent investigation with respect to the Borrower's creditworthiness and is
not executing and delivering this Agreement in reliance on any representation or
warranty by the Administrative Agent or any Creditor or any other person acting
on behalf of the Administrative Agent or any Creditor as to such
creditworthiness. The Parent Guarantor expressly assumes all responsibilities to
remain informed of the financial condition of the Borrower and any circumstances
affecting (a) the Borrower's ability to perform its obligations under the Credit
Agreement, the other Credit Documents to which it is a party, and any Designated
Interest Rate Agreement, or (b) any collateral securing, or other guaranty
supporting, all or any part of the Borrower's payment and performance
obligations thereunder.
3. Subordination. The Parent Guarantor agrees that all Indebtedness
of the Borrower to the Parent Guarantor, whether now outstanding or hereafter
incurred or assumed and whether arising out of any prior loans or advances or
this Agreement or otherwise, in each case whether for principal, premium, if
any, or interest (all such Indebtedness being herein called "Subordinated
Indebtedness") shall be subordinate and junior in right of payment
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to all Indebtedness of the Borrower included in the Required Payments, all other
Obligations of the Borrower under the Credit Documents and all obligations under
any of the Designated Interest Rate Agreements, including any extensions,
modifications or renewals of any thereof and any amounts accruing after the
commencement of any proceeding of the character referred to in subdivision (b)
of this section 3 (all such Indebtedness being herein called "Senior
Indebtedness"), as follows:
(a) Unless and until all Senior Indebtedness shall have been paid
in full, the Borrower will not directly or indirectly purchase or
otherwise acquire any Subordinated Indebtedness, and the Borrower will
not make and neither the Parent Guarantor nor any other holder of
Subordinated Indebtedness will demand, accept or receive, any direct or
indirect payment (in cash, property, by set-off or otherwise) of or on
account of any Subordinated Indebtedness, and no such payment shall be
due, and neither the Parent Guarantor nor any other holder of
Subordinated Indebtedness will commence any action, suit or other
proceeding, or otherwise take any enforcement action, against the
Borrower with respect thereto; provided that nothing contained in this
subdivision (a) shall prevent the Borrower from making, or the Parent
Guarantor from accepting and receiving, any payment to the Parent
Guarantor on account of Subordinated Indebtedness if at the time of
such payment (i) no Default or Event of Default shall have occurred and
be continuing under the Credit Agreement or would result therefrom, and
(ii) the Administrative Agent shall not have given notice to the
Borrower and the Parent Guarantor that a Default or Event of Default
shall have occurred and be continuing under the Credit Agreement.
(b) In the event of any proceeding with respect to the Borrower or
any significant part of its properties or assets involving insolvency
or bankruptcy, including without limitation, any insolvency,
bankruptcy, receivership, liquidation, reorganization, readjustment,
composition, arrangement or other similar proceeding, or any such
proceeding by, among or on behalf of any of its creditors, as such, or
any proceeding for the voluntary liquidation, dissolution or other
winding up of the Borrower (whether or not involving insolvency or
bankruptcy proceedings) or any assignment for the benefit of its
creditors, or any other marshalling of its assets, then and in any such
event:
(i) all Senior Indebtedness shall first be paid in full
before any payment or distribution of any character, whether in
cash, securities or other property, shall be made on account of
any Subordinated Indebtedness;
(ii) payment or distribution of any character, whether in
cash, securities or other property, which would otherwise (but for
the terms of this section 3) be payable or deliverable in respect
of any Subordinated Indebtedness shall be paid or delivered
directly to the Administrative Agent or any Lender for application
as provided in the Credit Agreement, to the extent necessary to
pay all Senior Indebtedness in full;
(iii) the holders of Subordinated Indebtedness irrevocably
authorize and empower the Administrative Agent to demand, sue for,
collect and receive all such payments and distributions and
receipt therefor, and to file and prove all such claims and take
all such other action in the name of the holders of Subordinated
Indebtedness or otherwise as the Administrative Agent may
determine to be necessary or appropriate for the enforcement of
this Agreement; and
(iv) the holders of Subordinated Indebtedness will execute
and deliver to the Administrative Agent and each Creditor all such
further instruments confirming the above authorization, and all
such powers of attorney, proofs of claim, assignments of claim and
other instruments, and will, take all such other action, as may be
requested by the Administrative Agent or any Creditor in order to
enable the Administrative Agent and the Creditors to enforce all
claims upon or in respect of any such payment or distribution in
respect of Subordinated Indebtedness.
(c) If any payment or distribution of any character, whether
in cash, securities or other property, in respect of any Subordinated
Indebtedness (other than payments permitted pursuant to subdivision (a)
of this section 3) shall, despite the terms of this section 3, be
received by the Parent Guarantor or any other holder of Subordinated
Indebtedness before all Senior Indebtedness shall have been paid
in full, such payment or distribution shall be held in trust
for the benefit of the holders of Senior Indebtedness and shall
forthwith be paid
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over or delivered to the Administrative Agent, for application
as provided in the Credit Agreement, to the extent necessary to pay all
Senior Indebtedness in full.
(d) In the event that, notwithstanding any of the terms of this
section 3, any Subordinated Indebtedness is declared or otherwise
becomes due and payable under circumstances when neither the terms of
subdivision (a) nor of subdivision (b) of this section 3 are
applicable, neither the Parent Guarantor nor any other holder of
Subordinated Indebtedness shall be entitled to receive any payment
thereon until all Senior Indebtedness shall have been paid in full.
(e) Without limiting the effect of any of the other terms of this
section 3, during the continuance of any Event of Default no payment of
or on account of any Subordinated Indebtedness shall be made unless and
until all Senior Indebtedness shall have been paid in full.
(f) The Borrower will not execute and deliver, issue or give, and
neither the Parent Guarantor nor any other holder of Subordinated
Indebtedness will demand, accept or receive, any instrument or other
evidence of, or any security for, any Subordinated Indebtedness, except
that notwithstanding the foregoing the Borrower may issue to the Parent
Guarantor a single promissory note evidincing all Subordinated
Indebtedness owed to the Parent Guarantor if such promissory note
contains a legend, or has attached thereto an allonge, satisfactory in
form and substance to the Administrative Agent, indicating that the
indebtedness evidenced thereby has been subordinated to the Senior
Indebtedness in accordance with the provisions of this Agreement and
that any holder of such promissory note shall be bound by the
subordination provisions of this Agreement applicable to the
indebtedness evidenced by such promissory note.
(g) Upon payment in full of all Senior Indebtedness, the holders
of Subordinated Indebtedness shall be subrogated to the rights of the
holders of Senior Indebtedness to receive any further payments or
distributions in respect of the Senior Indebtedness, as and to the
extent provided in section 2.4.
(h) For the purposes of this section 3, Senior Indebtedness shall
not be deemed to have been paid in full unless and until the holders of
Senior Indebtedness shall have received cash or marketable securities,
taken at their then market value, or both, equal to the amount of such
Senior Indebtedness at the time outstanding.
(i) The Borrower and the Parent Guarantor will cause their
respective books of account, and those of any other holder of
Subordinated Indebtedness, to be marked in such manner as shall be
effective to give proper notice of the provisions of this section 3.
(j) Unless and until all Senior Indebtedness shall have been paid
in full, neither the Parent Guarantor nor any other holder of
Subordinated Indebtedness will assign or otherwise transfer, or in any
way encumber, any Subordinated Indebtedness or any interest therein,
without the prior written consent of the Administrative Agent, except
that all Subordinated Indebtedness at the time held by the Parent
Guarantor may be transferred to any corporation assuming the
obligations of the Parent Guarantor hereunder in connection with a
transaction permitted by section 12.
4. Certain Notices by the Borrower and the Administrative Agent.
Without diminishing in any respect any of the waivers contained in section 6, or
the absolute and unconditional nature of the obligations of the Parent Guarantor
under section 2 or under section 5:
(i) the Borrower agrees to give the Parent Guarantor prompt notice
of (A) any events which might affect any scheduled reduction in the
Maximum Guaranteed Amount pursuant to section 2.2 hereof; and (B) any
of the matters referred to in section 5, or any other events or
circumstances involving the Borrower, which could reasonably be
expected to be materially adverse to the interests of the Parent
Guarantor; and
(ii) if the Administrative Agent (A) believes that the Borrower
has failed to give the Parent Guarantor notice of any material
amendment to, or other material modification of, any of the
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Credit Documents, or (B) gives any formal written notice to the
Borrower concerning an Event of Default under the Credit Agreement, or
concerning an acceleration of the maturity of the Notes upon the
occurrence of an Event of Default under the Credit Agreement, then the
Administrative Agent shall use reasonable efforts to give reasonably
prompt notice thereof to the Parent Guarantor, but failure to give any
such notice shall not result in any monetary liability on the part of
the Administrative Agent.
5. Guarantor's Obligations Absolute, etc. The obligations of the Parent
Guarantor under sections 2.1, 2.4, 2.5 and 3 of this Agreement shall, except as
limited in section 2.2, (i) be absolute and unconditional, (ii) not be subject
to any counterclaim, setoff, deduction or defense based on any claim the Parent
Guarantor may have against the Borrower, the Administrative Agent, any Creditor,
or any of their respective Affiliates, and (iii) remain in full force and effect
without regard to, and shall not be released, suspended, abated, deferred,
reduced, discharged, terminated or otherwise affected by any circumstance or
occurrence whatsoever (whether or not the Parent Guarantor or any of its
Affiliates shall have any knowledge or notice thereof), including, without
limitation: (a) any renewal, extension, amendment or modification of or addition
or supplement to or deletion from the Credit Agreement, the Notes, any other
Credit Document, or any other instrument or agreement applicable to the Parent
Guarantor, the Borrower, or any other person, or any part thereof, or any
assignment, transfer or other disposition of any thereof; (b) any failure of the
Credit Agreement, the Notes, any other Credit Document, or any other instrument
or agreement applicable to the Parent Guarantor, the Borrower, or any other
person, to constitute the legal, valid and binding agreement or obligation of
any party thereto, enforceable in accordance with its terms; (c) any failure on
the part of the Borrower or any other person to perform or comply with any term
or provision of the Credit Agreement, the Notes, any other Credit Document, or
any such instrument or agreement; (d) any waiver, consent, extension, indulgence
or other action or inaction (including, without limitation, any lack of
diligence or failure to mitigate damages) under or in respect of the Credit
Agreement, the Notes, any other Credit Document, or any such instrument or
agreement, or any obligation or liability of the Borrower or any other person,
or any exercise or non-exercise of any right, power or remedy under or in
respect of the Credit Agreement, the Notes, any other Credit Document, or any
such instrument or agreement, or any such obligation or liability; (e) the
existence of any right of offset or banker's lien, or any failure to exercise
rights in respect thereof, or any release thereof; (f) any furnishing of any
additional security or any additional guaranty to the Administrative Agent or
any Creditor or any acceptance thereof or any release of any security or any
guaranty by the Administrative Agent or any Creditor; (g) any limitation on any
other person's liability or obligation under the Credit Agreement, the Notes,
any other Credit Document, or any such instrument or agreement or any such
obligation or liability or any termination, cancellation, commercial or other
frustration, invalidity, unenforceability or ineffectiveness, in whole or in
part, of the Credit Agreement, the Notes, any other Credit Document, or any such
instrument or agreement or any such obligation or liability or any term or
provision of any thereof; (h) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition, arrangement or other
similar proceeding relating to the Borrower or to any of its properties or
assets, or any such proceeding by, among or on behalf of any of its creditors,
as such, or any proceeding for the voluntary liquidation or dissolution or other
winding up of the Borrower, whether or not insolvency or bankruptcy proceedings,
or any assignment for the benefit of its creditors, or any other marshalling of
its assets, or any action taken by any trustee or receiver or by any court in
any such proceeding; (i) any disallowance or limitation of any claim of the
Administrative Agent or any Creditor, or any other person, in any such
proceeding; (j) any change in the ownership of all or any part of the capital
stock of the Borrower, or any merger or consolidation involving the Borrower or
any of its Affiliates, or any purchase, sale or lease by the Borrower or any of
its Affiliates of any assets; (k) any inability of the Borrower to create or
incur Subordinated Indebtedness, or the existence of any contractual or other
restriction upon the ability of the Borrower to issue and sell shares of its
capital stock, to purchase, sell, lease or otherwise dispose of assets, to incur
Indebtedness, or to otherwise conduct its business affairs; (l) any assignment,
transfer or other disposition, in whole or in part, by the Borrower or any other
person of its interest in any of the property subjected to the liens and
security interests created by the Security Documents; (m) any failure of any of
the Security Documents to effectively subject any property to the liens and
security interests purported to be created thereunder, or any failure of any
such liens or security interests to establish or maintain the priority over
other liens and security interests contemplated thereby; (n) any taking of or
any encumbrance on or interference with any use of or any damage to or
destruction of such property, or any part thereof or interest therein; or
(o) any other circumstance or occurrence, whether similar or dissimilar to any
of the foregoing.
6. Waiver. The Parent Guarantor unconditionally waives, to the
maximum extent permitted under any applicable law now or hereafter in effect,
insofar as its obligations under section 2.1, 2.4, 2.5 and 3 of this Agreement
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are concerned, (a) notice of any of the matters referred to in section 4 or
section 5, (b) all notices required by statute, rule of law or otherwise to
preserve any rights against the Parent Guarantor hereunder, including, without
limitation, any demand, presentment, proof or notice of non-payment of any
Required Payments or any Senior Indebtedness, and notice of any failure on the
part of the Borrower to perform or comply with any term or provision of the
Credit Agreement, the Notes, the other Credit Documents or any other agreement
or instrument to which the Borrower or any other person is a party, (c) any
right to the enforcement, assertion or exercise against the Borrower or against
any other person or any collateral of any right, power or remedy under or in
respect of the Credit Agreement, the Notes, the other Credit Documents or any
other agreement or instrument, and (d) any requirement that the Parent Guarantor
be joined as a party to any proceedings against the Borrower or any other person
for the enforcement of any term or provision of the Credit Agreement, the Notes,
the other Credit Documents or any other agreement or instrument.
7. Financial Statements and Other Information. The Parent Guarantor
will deliver to the Administrative Agent, in sufficient quantities for each
Lender (and the Administrative Agent shall promptly furnish to the Lenders the
copies thereof intended for the Lenders), so long as the Credit Agreement is in
effect and until such time as the Total Commitment has been terminated, no Notes
are outstanding and the Loans, together with interest, Fees and all other
Obligations under the Credit Documents, have been paid in full:
(a) within 45 days after the end of each of the first three
quarterly fiscal periods of each fiscal year, commencing with the first
such quarterly period ending on or after the date hereof, a condensed
consolidated balance sheet of the Parent Guarantor and its consolidated
subsidiaries as at the end of such period, and the related condensed
consolidated statements of income and cash flows of the Parent
Guarantor and its consolidated subsidiaries for such period, setting
forth in each case in comparative form figures for the corresponding
periods of the previous fiscal year, and certified, subject to changes
resulting from year-end audit adjustments, as fairly presenting the
consolidated financial position of the Parent Guarantor and its
consolidated subsidiaries as at the end of such period and the
consolidated results of their operations and cash flows for such period
in conformity with GAAP (except for the omission of any footnotes which
would be required under GAAP) consistently applied (except as noted
therein), by a responsible financial officer of the Parent Guarantor;
(b) within 90 days after the end of each fiscal year, commencing
with the first such fiscal year ending on or after the date hereof, a
consolidated balance sheet of the Parent Guarantor and its consolidated
subsidiaries as at the end of such year, and the related consolidated
statements of income, cash flows and of shareholders' equity of the
Parent Guarantor and its consolidated subsidiaries for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and accompanied by the
opinion thereon of independent public accountants of recognized
national standing selected by the Parent Guarantor, which opinion shall
state that such accountants audited such consolidated financial
statements in accordance with generally accepted auditing standards,
that such accountants believe that such audit provides a reasonable
basis for their opinion, and that in their opinion such consolidated
financial statements present fairly, in all material respects, the
consolidated financial position of the Parent Guarantor and its
consolidated subsidiaries as at the end of such fiscal year and the
consolidated results of their operations and cash flows for such fiscal
year in conformity with GAAP;
(c) together with each delivery of the consolidated financial
statements of the Parent Guarantor and its consolidated subsidiaries
pursuant to subdivision (a) or (b) above, a certificate of a
responsible financial or accounting officer the Parent Guarantor to the
effect that the signer has reviewed the relevant terms of the Credit
Agreement, this Agreement and the other Credit Documents, and has made
or caused to be made under his or her supervision an adequate review of
the transactions and condition of the Parent Guarantor and its
subsidiaries during the fiscal period covered by such financial
statements and as at the date of such certificate, and that such review
has not disclosed the existence, during such fiscal period or as at the
date of such certificate, of any condition or event which constitutes
or which, after notice or lapse of time or both, would constitute an
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
the Parent Guarantor has taken or is taking or proposes to take with
respect thereto, which certificate shall set forth the calculations
required to establish compliance with the provisions of section 14 and
(if the Parent Guarantor has notified the Administrative Agent that it
believes the conditions specified in section 2.3 have been satisfied so
as to entitle the Parent Guarantor to an early
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termination of this Agreement) any necessary information related to
establishing satisfaction of the conditions specified in section 2.3;
(d) unless the Parent Guarantor has an Investment Grade Rating,
together with each delivery of the consolidated financial statements of
the Parent Guarantor and its consolidated subsidiaries pursuant to
subdivision (b) above, a certificate of the independent public
accountants reporting thereon, stating whether or not their examination
has disclosed the existence, during the fiscal year covered by such
financial statements, of any condition or event which constitutes or
which, after notice or lapse of time or both, would constitute an Event
of Default and, if their examination has disclosed any such condition
or event, specifying the nature and period of existence thereof (it
being understood that such certificate may state that, in making their
examination, such accountants have not carried out or performed any
special procedures which are beyond the scope of generally accepted
auditing standards and procedures for examination of financial
statements);
(e) forthwith upon any principal officer of the Parent Guarantor
obtaining knowledge of any condition or event which constitutes or
which, after notice of lapse of time or both, would constitute an Event
of Default, an officers' certificate of the Parent Guarantor,
specifying the nature and period of existence thereof and what action
the Parent Guarantor has taken or is taking or proposes to take with
respect thereto;
(f) promptly after execution thereof, copies of any amendment to
its existing Credit Agreement, dated as of September 11, 1995, with the
banks named therein and Morgan Guaranty Trust Company of New York, as
Documentation Agent, and NationsBank, N.A. (Carolinas), as
Administrative Agent, as in effect on the Closing Date (as so in effect
on the Closing Date, and as the same may be amended, supplemented or
modified, or replaced with an agreement with substantially the same
bank group (whether in the same or a larger or smaller aggregate amount
of credit facilities), the "1995 Credit Agreement"), and copies of any
other credit agreement entered into after the Closing Date in
connection with a replacement or refinancing thereof (and any
amendments thereto); and
(g) promptly upon transmission thereof or other filing with the
SEC, copies of all registration statements (other than the exhibits
thereto and any registration statement on Form S-8 or its equivalent)
and annual, quarterly or current reports that the Parent Guarantor or
any of its Subsidiaries (other than the Borrower or any of its
Subsidiaries) files with the SEC; and
(h) with reasonable promptness, such other information or
documents (financial or otherwise) relating to the Parent Guarantor or
any of its Subsidiaries (other than the Borrower or any of its
Subsidiaries) as the Administrative Agent on its own behalf or on
behalf of the Required Lenders may reasonably request from time to
time.
As used herein, the term "Investment Grade Rating" means the publicly held
senior unsecured and unsupported debt securities of the Parent Guarantor have a
rating from Standard & Poor's Ratings Group, or its successor, of BBB- or
better, and a rating from Moody's Investors Service, Inc., or its successor, of
Baa3 or better, or the equivalent of such ratings if such rating agencies change
their terminology for such ratings.
8. Further Assurance, etc. The Borrower and the Parent Guarantor, at
their respective expense, will duly execute, acknowledge and deliver all such
instruments and take all such action as the Administrative Agent may reasonably
request in order to effectuate the purposes of this Agreement and to carry out
the terms hereof.
9. Consent to Performance by the Borrower. The Parent Guarantor, as
the record and beneficial owner of a majority of all of the issued and
outstanding shares of Common Stock of the Borrower, consents to and approves the
execution, delivery and performance by the Borrower of the Credit Agreement,
this Agreement and the other Credit Documents to which the Borrower is a party.
10. Representations and Warranties by the Parent Guarantor. The Parent
Guarantor represents and warrants to the Administrative Agent, for the benefit
of the Administrative Agent and the Creditors, that:
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(a) Organization, Standing, etc. The Parent Guarantor is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business and to enter into this
Agreement, to guarantee the Required Payments as herein provided, and
to carry out the terms hereof.
(b) Qualification. The Parent Guarantor is duly qualified and in
good standing as a foreign corporation authorized to do business in all
jurisdictions wherein the character of the properties owned by it or
the nature of the business carried on by it makes such qualification
necessary, except in such respects as do not and could not reasonably
be expected to, individually or in the aggregate, result in a Material
Adverse Effect.
(c) Ownership of Borrower Stock. The Parent Guarantor is at the
Closing Date the record and beneficial owner of 10,000,000 shares of
Common Stock of the Borrower.
(d) Authorization, Validity and Enforceability of Agreement, etc.
This Agreement has been duly authorized by all necessary corporate or
other organizational action on the part of the Parent Guarantor and
each Supporting Guarantor (no approval of the shareholders or partners
of the Parent Guarantor or any Supporting Guarantor, as the case may
be, being required), has been duly executed and delivered by a duly
authorized officer or officers of the Parent Guarantor and each
Supporting Guarantor (or a partner thereof, in the case of any
Supporting Guarantor which is a partnership), and constitutes the valid
and binding agreement or obligation of the Parent Guarantor and each
Supporting Guarantor, enforceable against the Parent Guarantor and each
Supporting Guarantor in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the rights
of creditors generally, or (ii) principles of equity (regardless of
whether such principles are considered in a proceeding at law or in
equity).
(e) Financial Statements; Changes, etc. The Parent Guarantor has
furnished to the Lenders complete and correct copies of (i) the audited
consolidated balance sheet of the Parent Guarantor and its consolidated
subsidiaries at December 31, 1995 and 1994, and the related audited
consolidated statements of operations, shareholders' equity and cash
flows for the three years in the period ended December 31, 1995,
together with the report thereon of Ernst & Young LLP, its independent
public accountants, as included in the Parent Guarantor's Form 10-K
filed with the SEC for the fiscal year ended December 31, 1995, and
(ii) its unaudited condensed consolidated statement of income for the
three months ended March 31, 1996 and 1995, its unaudited condensed
consolidated balance sheet at March 31, 1996 and December 31, 1995, and
its unaudited condensed consolidated statement of cash flows for the
three months ended March 31, 1996 and 1995, as included in the Parent
Guarantor's Form 10-Q filed with the SEC for the quarterly period ended
March 31, 1996. Such consolidated financial statements are complete and
correct, have been prepared in accordance with GAAP, consistently
applied (except as stated therein), and fairly present the consolidated
financial position of the Parent Guarantor and its consolidated
subsidiaries as at the respective dates indicated and the results of
their consolidated operations and cash flows for the respective periods
indicated. Since the date of the most recent audited balance sheet
furnished pursuant to this section 10(e), no condition has come into
existence which has had, or is reasonably likely to have, a Material
Adverse Effect.
(f) Tax Payments. The Parent Guarantor and its consolidated
subsidiaries have filed all United States Federal income tax returns
that are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by any
of them, except such taxes, if any, as are being contested in good
faith as to which reserves have been provided. The charges, accruals
and reserves on the books of the Parent Guarantor and its consolidated
subsidiaries in respect of taxes or other governmental charges are, in
the opinion of the Parent Guarantor, adequate.
(g) Litigation, etc. There is no action, suit or proceeding
pending against, or to the knowledge of the Parent Guarantor or any of
its consolidated subsidiaries threatened against or affecting, the
Parent Guarantor or any of its consolidated subsidiaries before any
court or arbitrator or any governmental body, agency or official (i) in
which there is a reasonable possibility of an adverse decision which
could have a Material Adverse Effect, except as disclosed in item 3
entitled "Legal Proceedings" in the Parent Guarantor's
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Form 10-K annual report for its fiscal year ended December 31, 1995,
filed with the SEC, or (ii) which in any manner questions this
Agreement.
(h) Compliance with Other Instruments, etc. The execution,
delivery and performance by the Parent Guarantor, the Borrower, or any
Supporting Guarantor, as the case may be, of this Agreement, the Credit
Agreement, the Notes, and the other Credit Documents to which it is a
party do not violate or result in any violation of or conflict with or
constitute a default under or result in the creation of, or impose any
obligation on the Parent Guarantor, the Borrower or any Supporting
Guarantor to create, any Lien, other than pursuant to the Security
Documents, on any of the Parent Guarantor's or its subsidiaries'
properties or assets pursuant to, any provision of the charter or by-
laws of the Parent Guarantor, or of any agreement, indenture or other
instrument, or of any license, permit or other authorization or of any
judgment, decree, order, law, statute, ordinance or governmental rule
or regulation applicable to the Parent Guarantor or any of its
subsidiaries.
(i) Governmental Consent, etc. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
governmental or public body or authority on the part of the Parent
Guarantor or any Supporting Guarantor, or consent, approval or
authorization of its shareholders (or partners, in the case of any
Supporting Guarantor which is a partnership), is required for the valid
execution, delivery or performance of this Agreement.
(j) Investment Company Act. The Parent Guarantor is not an
"investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
(k) Full Disclosure. All information heretofore furnished in
writing by the Parent Guarantor to the Administrative Agent or the
Documentation Agent for inclusion in the Information Memorandum or any
of the Agents or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby was, and all such
information hereafter furnished in writing by the Parent Guarantor to
any of the Agents or any Lender will be, true and accurate in every
material respect or based on reasonable estimates on the date as of
which such information is or was stated or certified. The Parent
Guarantor has disclosed to the Lenders in writing all facts which are
known to it and which have had or could reasonably be expected to have
a Material Adverse Effect.
11. Disposition of Indebtedness or Securities of the Borrower, etc.
The Parent Guarantor will not:
(a) except for the pledge of any Subordinated Indebtedness and
any shares of capital stock of the Borrower as security for obligations
under the 1995 Credit Agreement, and any sale, assignment or other
transfer of any thereof in connection with the enforcement of such
pledge (through judicial proceedings or otherwise):
(i) directly or indirectly sell, assign, pledge, transfer or
otherwise dispose of any Subordinated Indebtedness; or
(ii) directly or indirectly sell, assign, pledge, transfer or
otherwise dispose of any shares of capital stock of any class (or
any warrants, rights or options to acquire, or any securities
convertible into or exchangeable for, any such shares) of the
Borrower, under circumstances which would result in a Change of
Control, unless effective provision shall have been made for the
prepayment of all Obligations of the Borrower and for termination
of the Commitments of the Lenders under the Credit Agreement; or
(b) permit the Borrower, directly or indirectly, to issue or sell
any shares of its capital stock of any class (or any warrants, rights
or options to acquire, or any securities convertible into or
exchangeable for, any such shares), under circumstances which would
result in a Change of Control, unless effective provision shall have
been made for the prepayment of all Obligations of the Borrower and for
termination of the Commitments of the Lenders under the Credit
Agreement;
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provided that all the shares of capital stock of all classes (and all warrants,
rights and options to acquire, and all securities convertible into or
exchangeable for, any such shares) of the Borrower and all Subordinated
Indebtedness of the Borrower, at the time owned or held by the Parent Guarantor,
may be sold at the same time in connection with a transaction which meets all
the requirements of section 12.
12. Consolidation, Merger, Sale, etc. The Parent Guarantor will not
directly or indirectly consolidate with or merge into any other corporation,
limited liability company, partnership or other person, or permit any other
corporation, limited liability company, partnership or other person to
consolidate with or merge into it, or sell, lease, assign, transfer, abandon or
otherwise dispose of all or substantially all of its properties or assets,
except that the Parent Guarantor may consolidate with or merge into any other
corporation, or permit any other corporation to consolidate with or merge into
it, or sell or otherwise transfer all or substantially all of its properties and
assets, provided that,
(a) the acquiring or surviving person shall be a solvent
corporation organized and existing under the laws of the United States
of America, or any state thereof or the District of Columbia, and (if
other than the Parent Guarantor) shall prior to the effectiveness of
such transaction, execute and deliver to the Administrative Agent and
the Lenders an agreement by which such acquiring or surviving person
shall expressly and unconditionally assume all the obligations of the
Parent Guarantor hereunder, together with an opinion, satisfactory in
substance and form to the Administrative Agent, of counsel, reasonably
satisfactory to the Administrative Agent, of such acquiring or
surviving person, as to the due authorization, execution and delivery
and the enforceability of such agreement and as to such other matters
as the Administrative Agent may reasonably request;
(b) immediately prior to, and immediately after giving effect to,
such transaction (and such assumption), no Change of Control shall
exist, unless effective provision shall have been made for the
prepayment of all Obligations of the Borrower and for termination of
the Commitments of the Lenders under the Credit Agreement
contemporaneously with such Change of Control; and
(c) immediately prior to, and immediately after giving effect to,
such transaction (and such assumption), no condition or event shall
exist which constitutes or which, after notice or lapse of time or
both, would constitute an Event of Default.
No sale or transfer of properties or assets permitted by this section 12 shall
release the Parent Guarantor from any of its obligations hereunder.
13. Affirmative Covenants. The Parent Guarantor will comply with the
following covenants:
(a) Maintenance of Existence, Rights, etc. The Parent Guarantor
will, and will cause its Subsidiaries to, preserve, renew and keep in
full force and effect its corporate existence and its rights,
privileges, licenses and franchises necessary or desirable in the
normal conduct of its business; provided, that nothing in this section
13(a) shall prohibit (i) any merger or consolidation not prohibited by
section 12, (ii) the termination of the corporate existence of any
Subsidiary if (A) the Parent Guarantor determines that such termination
is in its best interest and (B) such termination is not adverse in any
material respect to the Lenders, or (iii) the loss of any rights,
privileges, licenses and franchises if the loss thereof, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(b) Compliance with Laws, etc. The Parent Guarantor will comply,
and cause each of its Subsidiaries to comply, in all material respects
with all applicable laws, ordinances, rules, regulations and
requirements of governmental authorities (including Environmental Laws
and ERISA and the rules and regulations thereunder), except where (i)
the necessity of compliance therewith is being contested in good faith
by appropriate proceedings, in which case adequate and reasonable
reserves will be established in accordance with GAAP, or (ii) failures
to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(c) Insurance. The Parent Guarantor will maintain, and cause each
of its Subsidiaries to maintain, insurance with responsible insurance
companies or associations in such amounts and against such
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risks as is usually carried by owners of similar businesses and
properties in the same general area in which it operates.
(d) Books and Records. The Parent Guarantor will keep proper books
of record and account in which entries in conformity with generally
accepted accounting principles (and all legal requirements) shall be
made of all dealings and transactions in relation to their businesses
and activities.
(e) Payment of Taxes, etc. The Parent Guarantor will pay and
discharge, and will cause each Subsidiary of the Parent Guarantor to
pay and discharge, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges or levies imposed upon it
or upon it or upon its property, and (ii) all lawful claims which, if
unpaid, (x) might by law become a Lien upon its property or (y) would
otherwise be reasonably likely to have a Material Adverse Effect;
provided, however, that neither the Parent Guarantor nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge, levy or claim which is being contested in good
faith by proper proceedings and as to which appropriate reserves have
been provided.
(f) Additional Supporting Guarantors. In the event that any
present or future Subsidiary of the Parent Guarantor, other than the
Supporting Guarantors, becomes a co-borrower or guarantor under the
1995 Credit Agreement, the Parent Guarantor will immediately (i) notify
the Administrative Agent thereof in writing, with reference to this
provision, (ii) include in such notice an offer to cause such
Subsidiary to become a Supporting Guarantor hereunder, and (iii)
provide contemporaneously with such notice a supplement to this
Agreement, satisfactory in form and substance to the Administrative
Agent, duly executed by such Subsidiary of the Parent Guarantor and by
the Parent Guarantor and each Supporting Guarantor, pursuant to which
such Subsidiary shall become a Supporting Guarantor hereunder and be
and become bound by all of the representations, warranties covenants
and provisions hereof applicable to any Supporting Guarantor. Unless
the Administrative Agent acting upon the instructions of the Required
Lenders elects upon written notice to the Parent Guarantor that any
such supplement be ineffective, this Agreement shall be considered
supplemented by any such supplement and such Subsidiary shall become a
Supporting Guarantor hereunder as provided therein.
14. Financial Covenants. The Parent Guarantor will comply with the
following covenants:
(a) Leverage Covenant in 1995 Credit Agreement. The Parent
Guarantor will comply with the covenant contained in Section 5.17 of
the 1995 Credit Agreement.
(b) Separate Leverage Covenant. The Parent Guarantor will maintain
at the end of each Fiscal Quarter (a "Quarterly Measurement Date"), the
ratio of (x) Consolidated Debt for Borrowed Money to (y) Consolidated
EBITDA for the four consecutive Fiscal Quarters then ended not in
excess of 3.50 to 1.00. For purposes of calculating the foregoing ratio
at any Quarterly Measuring Date, if any corporation or other entity
shall have been acquired by any of the Combined Companies during the
relevant period of four consecutive Fiscal Quarters, Consolidated
EBITDA for such period shall be calculated as if such corporation or
other entity had been acquired at the beginning of such period, to the
extent that the relevant financial information with respect to it for
the portion of such period prior to such acquisition can be determined
with reasonable accuracy. As used in this Agreement, the terms "Fiscal
Quarters", "Combined Companies", "Consolidated Debt for Borrowed
Money", "Consolidated EBITDA", "Consolidated Net Worth" and "Debt",
shall have the same meanings as are ascribed to such terms in the 1995
Credit Agreement as in effect on the Closing Date, without giving
effect to any subsequent modification or termination thereof.
15. Negative Pledge. The Parent Guarantor will not:
(i) permit any Subsidiary of the Parent Guarantor (other than the
Borrower and its Subsidiaries) to create, incur or suffer to exist any
Lien upon or with respect to any of its property, whether now owned or
hereafter acquired, or assign any right to receive income, in each case
to secure or provide for the payment of any Consolidated Debt for
Borrowed Money, other than:
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(A) (1) Liens created prior to the Closing Date pursuant to
any document securing obligations under the 1995 Credit Agreement;
(2) the Project Mortgages (as defined in the 1995 Credit Agreement
as in effect on the Closing Date); and (3) Liens on equity
interests in and, debt obligations owed by, any Principal
Subsidiary (as defined in the 1995 Credit Agreement as in effect
on the Closing Date) required to be pledged as security for
obligations under the 1995 Credit Agreement pursuant to
contractual obligations not substantially more onerous to the
Parent Guarantor than those contained in Section 3(C) of the
Security Agreement, dated as of September 11, 1995, in favor of
the Collateral Agent under the 1995 Credit Agreement, as in effect
on the Closing Date;
(B) Liens existing on September 28, 1995 (other than Liens
permitted by clause (A) above) securing Debt outstanding on
September 28, 1995 in an aggregate principal amount not exceeding
$200,000,000;
(C) any Lien existing on any asset prior to the acquisition
thereof by the Parent Guarantor or such Subsidiary and not created
in contemplation of such acquisition;
(D) any Lien existing on any asset of any person at the time
such person becomes a Subsidiary of the Parent Guarantor or merges
into the Parent Guarantor or any of its Subsidiaries; provided
that such Lien was not created in contemplation of such event;
(E) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of
acquiring or constructing such asset, provided that such Lien
attaches to such asset concurrently with or within 180 days after
the acquisition or completion of construction thereof and attaches
to no other asset other than such asset so financed;
(F) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by
the foregoing clauses (A) through (E), provided that the principal
amount of such Debt is not increased and such Debt is not secured
by any additional assets;
(G) Permitted Encumbrances (as defined in the 1995
Credit Agreement, as in effect on the Closing Date);
(H) Liens arising in the ordinary course of business (other
than Liens of the types described in the definition of "Permitted
Encumbrances") which (i) do not secure Debt, (ii) do not secure
any single obligation (or series of related obligations) in an
amount exceeding $5,000,000; provided that the limitation in this
clause (ii) shall not apply to Liens securing worker's
compensation, unemployment insurance and other types of social
security, and (iii) do not in the aggregate materially detract
from the value of the assets of the Parent Guarantor and its
Subsidiaries, taken as a whole, or materially impair the use
thereof in the operation of their business;
(I) other Liens securing Debt of the Parent Guarantor not
exceeding $25,000,000 in aggregate outstanding principal amount;
and
(J) other Liens securing Debt of Subsidiaries not exceeding
$25,000,000 in aggregate outstanding principal amount; or
(ii) itself create, incur or suffer to exist any Lien upon or with
respect to any of its property, whether now owned or hereafter
acquired, or assign any right to receive income, in each case to secure
or provide for the payment of any Consolidated Debt for Borrowed Money
owed pursuant to the 1995 Credit Agreement, other than:
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(A) Liens on certain Indiana properties, and any other
properties, stock, securities, interests or other assets, granted
as security for obligations under the 1995 Credit Agreement prior
to the Closing Date, including any extensions or renewals
thereof); and
(B) Liens on equity interests in and, debt obligations owed
by, any Principal Subsidiary (as defined in the 1995 Credit
Agreement as in effect on the Closing Date) required to be pledged
as security for obligations under the 1995 Credit Agreement
pursuant to contractual obligations not substantially more onerous
to the Parent Guarantor than those contained in Section 3(C) of
the Security Agreement, dated as of September 11, 1995, in favor
of the Collateral Agent under the 1995 Credit Agreement, as in
effect on the Closing Date,
without making effective provision, and the Parent Guarantor in such case will
make or cause to be made effective provision, whereby the Required Payments and
the obligations of the Parent Guarantor hereunder shall be secured by such Lien
equally and ratably with any and all other indebtedness or obligations thereby
secured.
16. Senior Indebtedness. The Parent Guarantor will at all times ensure
that (i) the claims of the Administrative Agent and the Creditors hereunder will
not be subordinate to, and will in all respects at least rank pari passu with,
the claims of every other senior unsecured creditor of the Parent Guarantor, and
(ii) any indebtedness subordinated in any manner to the claims of any other
senior unsecured creditor of the Parent Guarantor will be subordinated in like
manner to the claims of the Administrative Agent and the Creditors hereunder.
17. Loans or Advances to the Borrower by Supporting Guarantors, etc.
The Parent Guarantor will not permit any of the Supporting Guarantors, or any of
its or their Subsidiaries or Affiliates, other than Subsidiaries of the
Borrower, to make or have outstanding at any time any loan or advance to the
Borrower unless such loan or advance is subordinated to the Senior Indebtedness
in accordance with subordination provisions to the same effect as is provided in
section 3 hereof.
18. No Assignment by the Borrower. Without the prior written consent
of the Administrative Agent, the Borrower will not sell, mortgage, pledge,
transfer or otherwise dispose of or encumber all or any part of its rights under
this Agreement, except for the Liens provided in the Security Documents.
19. Guaranty by the Supporting Guarantors; Deferral of
Enforcement,etc.
19.1. Joint and Several Guaranty. Each Supporting Guarantor hereby,
jointly and severally, unconditionally guarantees, for the benefit of the
Administrative Agent and the Creditors, the full and punctual payment of the
obligations of the Parent Guarantor under this Agreement. Upon failure by the
Parent Guarantor to pay punctually any such amount, each Supporting Guarantor
shall forthwith on demand by the Administrative Agent pay the amount not so
paid, in U. S. Dollars, in immediately available funds, directly to the
Administrative Agent, at its address specified in or pursuant to this Agreement,
or at such other place as the Administrative Agent shall direct, for application
as provided in section 27.
19.2. Guaranty Obligations Absolute, etc. The obligations of the
Supporting Guarantors under this section 19 shall be unconditional and absolute
and, without limiting the generality of the foregoing shall not be released,
discharged or otherwise affected by the occurrence, one or more times, of any of
the following:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect to any obligation of the Parent Guarantor under this
Agreement, by operation of law or otherwise:
(ii) any modification or amendment of or supplement to this
Agreement, the Credit Agreement, any other Credit Document, or any
other agreement or instrument referred to herein;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for any obligation of the Borrower under the
Credit Agreement, any Note or any other Credit Document or of the
Parent Guarantor hereunder;
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(iv) any change in the corporate existence, structure or
ownership of the Parent Guarantor or any Subsidiary or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the
Parent Guarantor or any Subsidiary or its assets or any resulting
release or discharge of any obligation of the Parent Guarantor or any
Subsidiary contained in this Agreement or any other agreement or
instrument referred to herein;
(v) the existence of any claim, set-off or other rights which
any Supporting Guarantor may have at any time against the Parent
Guarantor, any Subsidiary of the Parent Guarantor, the Borrower, the
Administrative Agent, any Creditor 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;
(vi) any invalidity or unenforceability relating to or against
the Parent Guarantor for any reason of this Agreement, or any provision
of applicable law or regulation purporting to prohibit the payment by
the Parent Guarantor of any obligations in respect of this Agreement;
or
(vii) any other act or omission to act or delay of any kind by
the Borrower, the Administrative Agent, any Creditor or any other
person or any other circumstance whatsoever which might, but for the
provisions of this section, constitute a legal or equitable discharge
of a Supporting Guarantor's obligations under this section.
19.3. Reinstatement. The Supporting Guarantors' obligations under this
section shall remain in full force and effect until the obligations of the
Parent Guarantor hereunder shall have terminated in accordance with the terms
and provisions of this Agreement. If at any time any payment of any of the
obligations of the Parent Guarantor hereunder is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Parent Guarantor, the Supporting Guarantors' obligations under this section with
respect to such payment shall be reinstated at such time as though such payment
had been due but not made at such time.
19.4. Waiver. Each Supporting Guarantor 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 the Parent Guarantor or any other person, or against any collateral or
guaranty of any other person.
19.5. Subrogation. Until the indefeasible payment in full of all of the
obligations of the Parent Guarantor under this Agreement and the termination of
this Agreement in accordance with the terms and provisions hereof, no Supporting
Guarantor shall have any rights, by operation of law or otherwise, upon making
any payment under this section to be subrogated to the rights of the payee
against the Parent Guarantor with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by the Parent Guarantor in respect
thereof.
19.6. Amounts Due Even if Acceleration of Guaranteed Obligations
Stayed. In the event that acceleration of the time for payment of any amount
payable by the Parent Guarantor under this Agreement is stayed upon insolvency,
bankruptcy or reorganization of the Parent Guarantor, all such amounts otherwise
subject to acceleration under the terms of this Agreement shall nonetheless by
payable by the Supporting Guarantors under this section forthwith on demand by
the Administrative Agent.
19.7. Contribution. Each Supporting Guarantor, in addition to the
subrogation rights it shall have against the Parent Guarantor under applicable
law as a result of any payment it makes hereunder, shall also have a right of
contribution against all other Supporting Guarantors in respect of any such
payment pro rata among same based on their respective net fair value as
enterprises, provided any such right of contribution shall be subject and
subordinate to the prior payment in full of the obligations of the Parent
Guarantor under this Agreement (and such Supporting Guarantor's obligations in
respect thereof).
19.8. Deferral of Enforcement; Pro Rata Sharing, etc. The guaranty
obligations of the Supporting Guarantors under this section 19 shall not be
enforced unless one or more Significant Credit Events shall have occurred and be
continuing.
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19.9. Certain Definitions. As used in this section 19:
"Corresponding Vencor Guaranty" means any guaranty or
guaranties entered into by the Supporting Guarantors, as the same may
be amended or modified from time to time, in connection with and as a
guaranty of obligations under the Parent Guarantor's 1995 Credit
Agreement, which guaranty or guaranties contain substantially identical
provisions to those contained in section 19.8 through section 19.13.
"Significant Credit Event" means:
(i) the Parent Guarantor, any Supporting Guarantor or the
Borrower commences a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or
consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or makes a general assignment
for the benefit of creditors, or fails generally to pay its debts
as they become due, or takes any corporate action to authorize
any of the foregoing; or
(ii) an involuntary case or other proceeding is commenced
against the Parent Guarantor, any Supporting Guarantor or the
Borrower seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an
order for relief shall be entered against the Parent Guarantor,
any Supporting Guarantor or the Borrower under the Federal
bankruptcy laws as now or hereafter in effect; or
(iii) all amounts outstanding under either the Credit
Agreement or the 1995 Credit Agreement shall have become due
and payable upon the final maturity thereof or by reason of
acceleration; or
(iv) the Parent Guarantor's Required Banks (as such term is
defined in the 1995 Credit Agreement) have signed and delivered
to the Administrative Agent a certificate stating that (x) an
event of default under the 1995 Credit Agreement has occurred and
is continuing, and (y) the Parent Guarantor's Required Banks have
determined that the credit facility provided under the 1995
Credit Agreement is in a "workout"; or
(v) the Borrower's Required Lenders (as such term is defined
in the Credit Agreement) have signed and delivered to the
Administrative Agent under the Parent Guarantor's 1995 Credit
Agreement a certificate stating that (x) an event of default
under the Borrower's Credit Agreement has occurred and is
continuing, and (y) the Borrower's Required Lenders have
determined that the credit facility provided under the Borrower's
Credit Agreement is in a "workout".
19.10. Fraudulent Transfer Laws. It is the desire and intent of each
Supporting Guarantor and the Creditors that this Agreement shall be enforced to
the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which enforcement is sought. If and to the extent that the
obligations of any Supporting Guarantor under this Agreement would, in the
absence of this sentence, be adjudicated to be invalid or unenforceable because
of any applicable state or federal law relating to fraudulent conveyances or
transfers, then the amount of such Supporting Guarantor's liability hereunder in
respect of the obligations of the Parent Guarantor guaranteed hereunder shall be
deemed to be reduced ab initio to that maximum amount which would be permitted
without causing such Supporting Guarantor's obligations hereunder to be so
invalidated; provided that if, at the time of enforcement of this Agreement
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against any Supporting Guarantor or any Corresponding Vencor Guaranty against
any Supporting Guarantor which is a party thereto, the amount payable under this
Agreement by such Supporting Guarantor or the Corresponding Vencor Guaranty of
such Supporting Guarantor is limited by this section 19.10 or the corresponding
provision of the Corresponding Vencor Guaranty, as the case may be, then the
amounts payable by such Supporting Guarantor under both this Agreement and the
Corresponding Vencor Guaranty shall be limited so that the maximum amount
payable under each of this Agreement and the Corresponding Vencor Guaranty is
proportional to the respective aggregate amount guaranteed under this Agreement
or such Corresponding Vencor Guaranty (without regard to the limits under this
section 19.10 or the substantially identical provision of the Corresponding
Vencor Guaranty), as the case may be, when the Significant Credit Event that
exists at the time of enforcement occurred (or if two or more Significant Credit
Events exist at the time of enforcement, when the earlier of such Significant
Credit Events occurred).
19.11. Pro Rata Payments. Each Supporting Guarantor agrees that, if it
makes any payments upon enforcement of either this Agreement or the
Corresponding Vencor Guaranty of such Supporting Guarantor, it will make a pro
rata payment under the other of this Agreement or such Corresponding Vencor
Guaranty so that (i) the payments under this Agreement and the Corresponding
Vencor Guaranty of such Supporting Guarantor are concurrent and (ii) the total
amount paid by such Supporting Guarantor under each of this Agreement and its
Corresponding Vencor Guaranty is proportional to the aggregate amount guaranteed
under this Agreement or such Corresponding Vencor Guaranty, as the case may be
(without regard to the limits under section 19.10 or the substantially identical
provisions of the Corresponding Vencor Guaranty) when the Significant Credit
Event that exists at the time of enforcement occurred (or if two or more
Significant Credit Events exist at the time of enforcement, when the earlier of
such Significant Credit Events occurred).
19.12. Provisions Intended to Benefit. The provisions of sections 19.8
through 19.13 are intended for the benefit of the beneficiaries of any
Corresponding Vencor Guaranty and shall be directly enforceable by them.
19.13. Corresponding Vencor Guaranty. Each Corresponding Vencor
Guaranty contains provisions substantially identical to the provisions of
sections 19.8 through this section 19.13, which provisions are intended for the
benefit of the beneficiaries of this Agreement and shall be enforceable directly
by them. No Supporting Guarantor will permit such provisions to be terminated,
amended, waived or otherwise changed without the prior written consent of the
Required Lenders.
20. Survival of Agreements, etc. All agreements, representations and
warranties of the Borrower and the Parent Guarantor hereunder shall be deemed to
have been relied upon by the Administrative Agent and the Creditors and shall
survive the execution and delivery of this Agreement, the making of the Loans,
the issue and delivery of the Notes, any disposition thereof by any holder
thereof, and any investigation at any time made by the Administrative Agent or
any Creditor or on its or their behalf. All statements contained in any
certificate or other document delivered to the Administrative Agent or any
Creditor by or on behalf of the Borrower or the Parent Guarantor pursuant hereto
or pursuant to the Credit Agreement or any other Credit Document or otherwise
specifically for use in connection with the transactions contemplated thereby
shall constitute representations and warranties by the Parent Guarantor
hereunder, made as of the respective dates specified therein or, if no date is
specified, as of the respective dates furnished to the Administrative Agent or
any Creditor. Certain sections of this Agreement provide expressly that the
agreements and obligations of the Parent Guarantor thereunder survive
termination of this Agreement.
21. Termination. Upon the earlier of (i) reduction of the Maximum
Guaranteed Amount to zero as provided in section 2.2 and satisfaction by the
Parent Guarantor of any then outstanding demands for payment under section 2.1
hereof, (ii) the termination of this Agreement in accordance with section 2.3
hereof, and (iii) the date after which the Total Commitment and all Designated
Interest Rate Agreements shall have been terminated, no DPP Revolving Loans
shall be outstanding, no Allocated DPP Letter of Credit Outstandings shall
exist, the payment (or the making of provision satisfactory to the
Administrative Agent for the payment) of all other amounts included in the
Required Payments, and no claims in respect of any guaranty payment due under
this Agreement shall be outstanding against the Parent Guarantor or any
Supporting Guarantor hereunder, then this Agreement shall terminate and the
Administrative Agent, at the request and expense of the Parent Guarantor or the
Borrower, will execute and deliver to the Borrower and the Parent Guarantor a
proper instrument or instruments acknowledging the satisfaction and termination
of this Agreement, and will duly assign, transfer and deliver to the Borrower or
as the Borrower may direct all of the rights and moneys at the time held by the
Administrative Agent hereunder for which there has been no provision for
application
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<PAGE>
to the Notes, any other amounts included in the Required Payments or the
performance of any obligations guaranteed pursuant to section 2.1. Certain
sections of this Agreement provide expressly that the agreements and obligations
of the Parent Guarantor thereunder survive termination of this Agreement.
22. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given when delivered or mailed or
registered or certified first class mail, postage prepaid, addressed (i) if to
the Administrative Agent, at the address of the Administrative Agent specified
in or pursuant to the Credit Agreement, or (ii) if to any Lender, at its address
specified in or pursuant to the Credit Agreement, or (iii) if to any other
Creditor, at such address as such Creditor shall have furnished to the Borrower
and the Administrative Agent in writing, or (iv) if to the Borrower, at the
address of the Borrower specified in or pursuant to the Credit Agreement, or (v)
if to the Parent Guarantor, at 3300 Providian Center, 400 West Market Street,
Louisville, Kentucky 40202, attention: Rich Lechleiter, Vice President Finance
(facsimile: (502) 596-4099), or at such other address as the Parent Guarantor
shall have furnished to the Administrative Agent and each Creditor in writing,
or (vi) if to any Supporting Guarantor, to it in care of the Parent Guarantor,
at the address of the Parent Guarantor provided herein.
23. Net Payments. (a) All payments made by the Parent Guarantor
hereunder will be made without setoff, counterclaim or other defense. All such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding, except as provided in the second succeeding
sentence, any tax, imposed on or measured by the net income or net profits of a
Creditor pursuant to the laws of the jurisdiction under which such Creditor is
organized or the jurisdiction in which the principal office or applicable
lending office of such Creditor is located or any subdivision thereof or
therein) and all interest, penalties or similar liabilities with respect to such
non excluded taxes, levies imposts, duties, fees, assessments or other charges
(all such nonexcluded taxes levies, imposts, duties, fees assessments or other
charges being referred to collectively as "Taxes"). If any Taxes are so levied
or imposed, the Parent Guarantor agrees to pay the full amount of such Taxes and
such additional amounts as may be necessary so that every payment of all amounts
due hereunder, after withholding or deduction for or on account of any Taxes
will not be less than the amount provided for herein. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Parent Guarantor
agrees to reimburse each Creditor, upon the written request of such Creditor for
taxes imposed on or measured by the net income or profits of such Creditor
pursuant to the laws of the jurisdiction in which such Creditor is organized or
in which the principal office or applicable lending office of such Creditor is
located or under the laws of any political subdivision or taxing authority of
any such jurisdiction in which the principal office or applicable lending office
of such Creditor is located and for any withholding of income or similar taxes
imposed by the United States of America as such Creditor shall determine are
payable by, or withheld from, such Creditor in respect of such amounts so paid
to or on behalf of such Creditor pursuant to the preceding sentence and in
respect of any amounts paid to or on behalf of such Creditor pursuant to this
sentence. The Parent Guarantor will furnish to the Administrative Agent within
45 days after the date the payment of any Taxes, or any withholding or deduction
on account thereof, is due pursuant to applicable law certified copies of tax
receipts, or other evidence satisfactory to the Creditor, evidencing such
payment by the Parent Guarantor. The Parent Guarantor will indemnify and hold
harmless the Administrative Agent and each Creditor, and reimburse the
Administrative Agent or such Creditor upon its written request, for the amount
of any Taxes so levied or imposed and paid or withheld by such Creditor.
(b) Without prejudice to the survival of any other agreement of the
Parent Guarantor hereunder, the agreements and obligations of the Parent
Guarantor contained in this section shall survive the payment in full of the
principal of and interest on the Notes and termination of this Agreement.
24. Costs and Expenses of Enforcement, etc. The Parent Guarantor
will pay on demand all costs and expenses (including counsel fees and expenses)
in connection with the enforcement (whether through negotiations of proposed
modifications of any of the Credit Documents, legal proceedings or otherwise)
against the Parent Guarantor or any Supporting Guarantor of this Agreement,
including, without limitation, counsel fees and expenses in connection with the
enforcement of rights under this section. Without prejudice to the survival of
any other agreement of the Parent Guarantor hereunder, the agreements and
obligations of the Parent Guarantor contained in this section shall survive the
payment in full of the principal of and interest on the Notes and termination of
this Agreement.
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25. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request of the
Required Lenders specified by section 9.2 of the Credit Agreement to authorize
the Administrative Agent to declare the Notes due and payable pursuant to the
provisions of section 9.2 of the Credit Agreement, or the acceleration of the
Notes upon the occurrence of an Event of Default specified in section 9.1(e) of
the Credit Agreement, each Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Parent Guarantor or any Supporting Guarantor
against any and all of the obligations of the Parent Guarantor or any such
Supporting Guarantor now or hereafter existing under this Agreement, whether or
not such Lender shall have made any demand under the Credit Agreement or any
other Credit Document and although such obligations may be unmatured. Each
Lender will promptly notify the Parent Guarantor or any applicable Supporting
Guarantor, as the case may be, 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 rights of each Lender under this
section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
26. Interest on Overdue Amounts. If any payment required to be made
by the Parent Guarantor or any Supporting Guarantor hereunder is not paid when
due, the Parent Guarantor or the applicable Supporting Guarantor, as the case
may be, will pay interest, on demand, on the overdue amount from the due date to
the date the same is paid in full at a rate per annum equal to the Base Rate in
effect from time to time under the Credit Agreement plus the sum of (i) 2% per
annum and (ii) the Applicable DPP Base Rate Margin then in effect for DPP
Revolving Loans which are Base Rate Loans.
27. Application of Guaranty Payments, etc. (a) The payments by the
Parent Guarantor under section 2.1 and by any Supporting Guarantor under section
19, and any amounts recovered by the Administrative Agent in respect of any such
payment obligations in connection with any enforcement of this Agreement, shall
be applied by the Administrative Agent as follows:
(i) first, to the payment or reimbursement of all costs and
expenses of the Administrative Agent in enforcing payment thereof, to
the extent not theretofore reimbursed by the Parent Guarantor
hereunder;
(ii) second, to the extent proceeds remain after the
application pursuant to preceding clause (i), an amount equal to the
outstanding Required Payments to the Creditors shall be paid to the
Creditors as provided in section 27(c) with each Creditor receiving an
amount equal to its outstanding Required Payments or, if the proceeds
are insufficient to pay in full all such Required Payments, its Pro
Rata Share of the amount remaining to be distributed; and
(iii) third, to the extent remaining after the application
pursuant to the preceding clauses (i) and (ii) or following the
termination of this Agreement pursuant to section 21 hereof, to the
Parent Guarantor or the Supporting Guarantors, as applicable, or to
whomever may be lawfully entitled to receive such payment.
(b) For purposes of this Agreement, "Pro Rata Share" shall mean, when
calculating a Creditor's portion of any distribution or amount, the amount
(expressed as a percentage) equal to a fraction the numerator of which is the
then outstanding amount of the relevant Required Payments owed such Creditor and
the denominator of which is the then outstanding amount of all Required
Payments.
(c) All payments required to be made to the (i) Lenders hereunder shall
be made to the Administrative Agent for the account of the respective Lenders
and (ii) Interest Rate Creditors hereunder shall be made to the paying agent
under the applicable Designated Interest Rate Agreement or, in the case of
Designated Interest Rate Agreements without a paying agent, directly to the
applicable Interest Rate Creditor.
(d) For purposes of applying payments received in accordance with this
section 27, the Administrative Agent shall be entitled to rely upon any Interest
Rate Creditor for determination (which each Interest Rate Creditor agrees to
provide upon request to the Administrative Agent) of the outstanding Interest
Rate Obligations owed to such Interest Rate Creditor. Unless it has actual
knowledge (including by way of written notice from a Creditor) to the contrary,
the
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<PAGE>
Administrative Agent, in acting hereunder, shall be entitled to assume that no
Designated Interest Rate Agreements or Required Payments with respect thereto
are in existence.
28. Jury Trial Waiver. The Parent Guarantor, the Borrower, each
Supporting Guarantor and the Administrative Agent (on behalf of itself and the
Creditors, by its acceptance hereof) each hereby irrevocably waives all right to
a trial by jury in any action, proceeding or counterclaim arising out of or
relating to this Agreement, the other Credit Documents, any other agreements or
instruments referred to herein, or the transactions contemplated hereby or
thereby.
29. Waiver; Amendment. (a) None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Administrative Agent (with the consent of
the Required Lenders or, to the extent required by section 12.12 of the Credit
Agreement, all of the Lenders), provided, however, that no such change, waiver,
modification or variance shall be made to section 27 hereof or this section 29
without the consent of each Creditor adversely affected thereby, provided
further that any change, waiver, modification or variance affecting the rights
and benefits of a single Class of Creditors (and not all Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors of
such Class of Secured Creditors. For the purpose of this Agreement, the term
"Class" shall mean each class of Creditors, i.e., whether (x) the Lenders as
holders of the Required Payments in respect of the Credit Documents or (y) the
Interest Rate Creditors as holders of the Required Payments in respect of the
Designated Interest Rate Agreements. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Lenders as holders of the Required Payments in respect of the Credit Documents,
the Required Lenders and (y) with respect to the Interest Rate Creditors as
holders of the Required Payments in respect of the Designated Interest Rate
Agreements, the holders of 51% of all obligations constituting Required Payments
outstanding from time to time under the Designated Interest Rate Agreements.
30. Kentucky Notice of Guaranteed Amount and Termination Date. For
purposes of Kentucky Revised Statutes ss. 371.065, it is hereby declared and
agreed, without, however, increasing, expanding, extending or otherwise changing
or affecting any of the rights or obligations of the Parent Guarantor or any
Supporting Guarantor under the other provisions of this Agreement, that the
maximum principal amount of indebtedness guaranteed hereunder, exclusive of
interest, fees, and charges and costs of collecting guaranteed indebtedness, is
$100,000,000, and that the termination date of the guaranty obligations
hereunder is December 31, 2003.
31. Miscellaneous. This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. If any term or provision of this Agreement or
any application thereof shall be held to be invalid, illegal or unenforceable,
the remainder of this Agreement and any other application of such term or
provision shall not be affected thereby. Any term or provision of this Agreement
may be amended, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of such amendment, waiver,
discharge or termination is sought, entered into as provided in section 29. No
Lender or other Creditor shall have any power to amend, discharge or terminate
this Agreement, all such actions being within the powers of the Administrative
Agent (acting on behalf of the Lenders and other Creditors pursuant to the terms
and provisions of the Credit Agreement and section 30 hereof). No waiver by any
Creditor, as such, of any obligations of the Borrower or the Parent Guarantor or
any Supporting Guarantor shall be binding on any other Creditor or the
Administrative Agent. No delay or failure on the part of the Administrative
Agent, any Lender or any other Creditor to exercise any power or right hereunder
shall operate as a waiver thereof, nor as an acquiesence in any default or
breach of any term or provision of this Agreement, nor shall any single or
partial exercise of any power or right preclude any other or further exercise
thereof, or the exercise of any other power or right. The Parent Guarantor and
each Supporting Guarantor each hereby approves each and every determination, in
the absence of manifest error, of amounts payable by the Borrower under the
Credit Agreement, the Notes, the other Credit Documents and any Designated
Interest Rate Agreement, whether made by the Administrative Agent, any Lender,
any other Creditor or by a third person used for the purpose of making such
determination. Each and every Default and Event of Default under the Credit
Agreement and each and every default in payment or performance of any
obligation, covenant or agreement of the Borrower under any Credit Document or
Designated Interest Rate Agreement, shall give rise to a separate claim and
cause of action hereunder, and separate claims or suits may be made and brought,
as the case may be, hereunder as each such Default, Event of Default or default
occurs. The obligations of the Parent Guarantor and the Supporting Guarantors
set forth in this Agreement constitute full recourse obligations of the Parent
Guarantor and the Supporting Guarantors. The powers,
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rights and remedies herein provided or otherwise available under applicable
law are cumulative, may be exercised singly or cumulatively, and are not
exclusive of any other rights or remedies provided by law. The Lenders and any
other Creditor are third party beneficiaries of this Agreement, but any legal
proceedings or other enforcement actions on behalf of any Lender or other
Creditor against the Parent Guarantor or any Supporting Guarantor with respect
to this Agreement shall be undertaken and maintained by the Administrative
Agent, acting on behalf and for the ratable benefit of the Administrative Agent,
the Lenders and any other Creditors, with the proceeds of any such proceedings
or enforcement actions to be applied as provided section 27 hereof and after
such application as provided in the Credit Agreement or the applicable
Designated Interest Rate Agreement, as the case may be. This Agreement
supersedes all prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof. This Agreement
shall be construed and enforced in accordance with and governed by the laws of
the Commonwealth of Kentucky. The headings in this Agreement are for
purposes of reference only and shall not limit or define the meaning hereof.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
[The balance of this page is intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
ATRIA COMMUNITIES, INC.
By: /s/ J. Timothy Wesley
-------------------------------
Chief Financial Officer
VENCOR, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
FIRST HEALTHCARE CORPORATION
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
NORTHWEST HEALTHCARE, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
MEDISAVE PHARMACIES, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
HILLHAVEN OF CENTRAL FLORIDA, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
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NATIONWIDE CARE, INC.
By: /s/ James H. Gillenwater, Jr.
-------------------------------
Vice President
PNC BANK, NATIONAL ASSOCIATION, as
Administrative Agent
By: /s/ Edward J. Weisto
-------------------------------
Vice President
24
<PAGE>
EXHIBIT 5
================================================================================
THE SUBSIDIARIES OF ATRIA COMMUNITIES, INC. NAMED HEREIN
With
PNC BANK, NATIONAL ASSOCIATION
as Administration Agent
-------------------
SUBSIDIARY GUARANTY
dated as of
August 15, 1996
-------------------
================================================================================
<PAGE>
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY, dated as of August 15, 1996 (as amended, modified
or supplemented from time to time, "this Guaranty"), made by each of the
undersigned (each, together with its successors and assigns, a "Guarantor" and
collectively, the "Guarantors"), with PNC BANK, NATIONAL ASSOCIATION, a national
banking association, as Administrative Agent (herein, together with its
successors and assigns in such capacity, the "Administrative Agent") for itself
and the other Lenders (defined below), for the benefit of (i) the Administrative
Agent, (ii) the Lenders from time to time party to the Credit Agreement referred
to below, and (iii) the Interest Rate Creditors referred to below:
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement (as defined below) shall be used herein as therein
defined.
(2) This Guaranty is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified from time to time, the
"Credit Agreement"), among Atria Communities, Inc., a Delaware corporation
(herein, together with its successors and assigns, the "Borrower"), the
financial institutions named as lenders therein, and the Administrative Agent,
as agent for the Lenders (as defined in the Credit Agreement), providing, among
other things, for loans or advances or other extensions of credit to or for the
benefit of the Borrower of up to $200,000,000, with such loans or advances being
evidenced by promissory notes (the "Notes", such term to include all notes and
other securities issued in exchange therefor or in replacement thereof).
(3) The Borrower may from time to time be party to one or more
Designated Interest Rate Agreements (as defined in the Credit Agreement). Any
institution that participates, and in each case their subsequent assigns, as a
counterparty to any Designated Interest Rate Agreement (collectively, the
"Interest Rate Creditors," and the Interest Rate Creditors together with the
Lenders, collectively the "Creditors"), shall benefit hereunder as herein
provided. This Guaranty is made for the pro rata benefit of the Administrative
Agent and the Creditors to guarantee the payment of the principal of and
interest on the Notes and the payment and performance by the Borrower of its
obligations under the Credit Agreement, the other Credit Documents to which the
Borrower is a party and the Designated Interest Rate Agreements. This Guaranty
is one of the Credit Documents referred to in the Credit Agreement.
(4) Each Guarantor is a direct or indirect Subsidiary of the Borrower.
(5) It is a condition to the making of Loans and the issuance of and
participation in, Letters of Credit under the Credit Agreement that each
Guarantor shall have executed and delivered this Guaranty.
(6) Each Guarantor will obtain benefits from the incurrence of Loans
by, and the issuance of Letters of Credit to, the Borrower under the Credit
Agreement and, accordingly, desires to execute this Guaranty in order to satisfy
the conditions described in the preceding paragraph and to induce the Lenders to
make Loans to, and to issue and participate in Letters of Credit for the account
of, the Borrower or any of its Subsidiaries.
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Administrative Agent and the Creditors and hereby covenants
and agrees with the Administrative Agent and each Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees:
(i) to the Lenders the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of (x)
the principal of and interest on the Notes issued by, and the Loans
made to, the Borrower under the Credit Agreement and all reimbursement
obligations and Unpaid Drawings with respect
<PAGE>
to Letters of Credit issued under the Credit Agreement and (y) all
other obligations (including obligations which, but for any automatic
stay under section 362(a) of the Bankruptcy Code, would become due)
and liabilities owing by the Borrower to the Lenders under the Credit
Agreement (including, without limitation, indemnities, Fees and
interest thereon) now existing or hereafter incurred under, arising
out of or in connection with the Credit Agreement or any other Credit
Document and the due performance and compliance with the terms of the
Credit Documents by the Borrower (all such principal, interest,
liabilities and obligations being herein collectively called the
"Credit Document Obligations"); and
(ii) to each Interest Rate Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for any
automatic stay under section 362(a) of the Bankruptcy Code, would
become due) and liabilities owing by the Borrower under any Designated
Interest Rate Agreement, whether now in existence or hereafter arising,
and the due performance and compliance by the Borrower with all terms,
conditions and agreements contained therein (all such obligations and
liabilities, the "Interest Rate Obligations", and the Interest Rate
Obligations together with the Credit Document Obligations, collectively
the "Guaranteed Obligations").
Each Guarantor understands, agrees and confirms that the Creditors may enforce
this Guaranty up to the full amount of the Guaranteed Obligations against any
Guarantor without proceeding against any other Guarantor, the Borrower, against
any security for the Guaranteed Obligations, or under any other guaranty
covering all or a portion of the Guaranteed Obligations. All payments by each
Guarantor under this Guaranty shall be made on the same basis as payments by the
Borrower under sections 4.3 and 4.4 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally, unconditionally
and irrevocably, guarantees the payment of any and all Guaranteed Obligations of
the Borrower to the Creditors whether or not due or payable by the Borrower upon
the occurrence in respect of the Borrower of any of the events specified in
section 9.1(e) of the Credit Agreement, and unconditionally and irrevocably,
jointly and severally, promises to pay such Guaranteed Obligations to the
Administrative Agent, for the benefit of the Administrative Agent and the
Creditors, on demand, in lawful money of the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other person, and the liability of each Guarantor hereunder
shall not be affected or impaired by (i) any direction as to application of
payment by the Borrower or by any other person, (ii) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
person as to the indebtedness of the Borrower, (iii) any payment on or in
reduction of any such other guaranty or undertaking, (iv) any dissolution,
termination or increase, decrease or change in personnel by the Borrower or (v)
any payment made to any Creditor on the indebtedness which any Creditor repays
to the Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each Guarantor
waives any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding.
4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against each Guarantor
whether or not action is brought against any other Guarantor, any other
guarantor or the Borrower and whether or not any other Guarantor, any other
guarantor of the Borrower or the Borrower be joined in any such action or
actions.
5. Each Guarantor hereby waives notice of acceptance of this Guaranty
and notice of any liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the
Administrative Agent or any other Creditor against, and any other notice to, any
party liable thereon (including such Guarantor or any other guarantor of the
Borrower).
6. Any Creditor may at any time and from time to time without the
consent of or notice to, any Guarantor, without incurring responsibility to such
Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder upon or without any terms or conditions and in whole or in part (but,
in each case, in accordance with the Credit Agreement or the Designated Interest
Rate Agreement, as the case may be):
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<PAGE>
(i) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew or alter, any of the
Guaranteed Obligations, any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the guaranty
herein made shall apply to the Guaranteed Obligations as so changed,
extended, renewed or altered;
(ii) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(iii) exercise or refrain from exercising any rights against
the Borrower or others or otherwise act or refrain from acting;
(iv) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower to
creditors of the Borrower;
(v) apply any sums by whomsoever paid or whomsoever realized
to any liability or liabilities of the Borrower to the Creditors
regardless of what liabilities of the Borrower remain unpaid;
(vi) consent to or waive any breach of, or any act, omission
or default under, any of the Credit Documents or any of the instruments
or agreements referred to therein, or otherwise amend, modify or
supplement any of the Credit Documents or any of such other instruments
or agreements; and/or
(vii) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to this Guaranty, and this Guaranty shall be primary, absolute
and unconditional notwithstanding the occurrence of any event or the existence
of any other circumstances which might constitute a legal or equitable discharge
of a surety or guarantor except payment in full of the Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of the
Administrative Agent or any Creditor in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein expressly specified are cumulative and not
exclusive of any rights or remedies which any Creditor would otherwise have. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor to
any other further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any Creditor to any other or further action
in any circumstances without notice or demand. It is not necessary for the
Administrative Agent or any Creditor to inquire into the capacity or powers of
the Borrower or any of its Subsidiaries or the officers, directors, partners or
agents acting or purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
9. Any Indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the Indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred so requests, shall
be collected, enforced and received by such Guarantor as trustee for the
Creditors and be paid over to the Creditors on account of the Indebtedness of
the Borrower to the Creditors, but without affecting or impairing in any manner
the liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Guarantor of any note or negotiable instrument
evidencing any Indebtedness of the Borrower to such Guarantor, such Guarantor
shall mark such note or negotiable instrument with a legend that the same is
subject to this subordination.
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10. (a) Each Guarantor waives any right (except as shall be required by
applicable statute and cannot be waived) to require the Administrative Agent or
any of the Creditors to: (i) proceed against the Borrower, any other Guarantor,
any other guarantor of the Borrower or any other party; (ii) proceed against or
exhaust any security held from the Borrower, any other Guarantor any other
guarantor of the Borrower or any other party; or (iii) pursue any other remedy
in the Administrative Agent's or the Creditors' power whatsoever. Each Guarantor
waives, to the extent permitted by applicable law, any defense based on or
arising out of any defense of the Borrower, any other Guarantor, any other
guarantor of the Borrower or any other party other than payment in respect of
the Guaranteed Obligations or that the Guaranteed Obligations are not yet due
and payable, including, without limitation, any defense based on or arising out
of the disability of the Borrower, any other Guarantor, any other guarantor of
the Borrower or any other person, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in respect of the Guaranteed
Obligations. The Creditors may, at their election, foreclose on any security
held by the Administrative Agent, the Collateral Agent or the other Creditors by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Administrative Agent
or the Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Guaranteed Obligations have been
paid.
(b) Each Guarantor waives, to the extent permitted by applicable law,
all presentments, demands for performance, protests and notices, including,
without limitation, notices of nonperformance, notices of protest, notices of
dishonor, notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional indebtedness. Each Guarantor assumes
all responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks which such Guarantor assumes and incurs hereunder, and
agrees that the Administrative Agent and the Creditors shall have no duty to
advise any Guarantor of information known to them regarding such circumstances
or risks.
(c) Until such time as the Guaranteed Obligations have been paid in
full in cash or Cash Equivalents, each Guarantor hereby waives all rights of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under section 509 of the Bankruptcy Code, or otherwise) to
the claims of the Creditors against the Borrower, any other Guarantor or any
other guarantor of the Guaranteed Obligations and all contractual, statutory or
common law rights of reimbursement, contribution or indemnity from the Borrower
or any other Guarantor which it may at any time otherwise have as a result of
this Guaranty.
11. If and to the extent that any Guarantor makes any payment to any
Creditor or to any other person pursuant to or in respect of this Guaranty, any
claim which such Guarantor may have against the Borrower by reason thereof shall
be subject and subordinate to the prior payment in full of the Guaranteed
Obligations to each Creditor.
12. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitment and when no Letter of
Credit or Note remains outstanding and all Guaranteed Obligations have been paid
in full, such Guarantor shall take, or will refrain from taking, as the case may
be, all actions that are necessary to be taken or not taken so that no violation
of any provision, covenant or agreement contained in section 7 or 8 of the
Credit Agreement, and so that no Default or Event of Default, is caused by the
actions of such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay, to the
extent not paid pursuant to section 12.1 of the Credit Agreement, all reasonable
out-of-pocket costs and expenses of each Creditor in connection with the
enforcement of this Guaranty and any amendment, waiver or consent relating
hereto (including, without limitation, the reasonable fees and disbursements of
counsel employed by the Administrative Agent or any of the Creditors).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns, and shall inure to the benefit of the Administrative
Agent and the Creditors and their successors and assigns to the extent permitted
under the Credit Agreement (or any Designated Interest Rate Agreement, in the
case of an Interest Rate Creditor).
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the Required
Lenders (or to the extent required by section 12.12 of the Credit
4
<PAGE>
Agreement, with the written consent of each Lender) and each Guarantor affected
thereby (it being understood that the addition or release of any Guarantor
hereunder shall not constitute a change, waiver, discharge or termination
affecting any Guarantor other than the Guarantor so added or released).
16. Each Guarantor acknowledges that an executed (or conformed) copy of
each of the Credit Documents has been made available to its principal executive
officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of an Event of Default (such term to mean any "Event of
Default" as defined in the Credit Agreement or any payment default under any
Designated Interest Rate Agreement after any applicable grace period), each
Creditor is hereby authorized at any time or from time to time, without notice
to such Guarantor or to any other person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Creditor
to or for the credit or the account of such Guarantor, against and on account of
the obligations and liabilities of such Guarantor to such Creditor under this
Guaranty, irrespective of whether or not such Creditor shall have made any
demand hereunder and although said obligations, liabilities, deposits or claims,
or any of them, shall be contingent or unmatured. Each Creditor agrees to
promptly notify the relevant Guarantor after any such set off and application,
provided, however that the failure to give such notice shall not affect the
validity of such set off and application.
18. All notices requests, demands or other communications pursuant
hereto shall be made in writing (including telegraphic, telex, facsimile
transmission or cable communication) and mailed, telegraphed, telexed,
transmitted, cabled or delivered, if to any Guarantor, at the address specified
beneath its signature hereto; if to any Creditor, as provided in the Credit
Agreement; or in any case at such other address as any of the persons listed
above may hereafter notify the others in writing. All such notices and
communication shall be mailed, telegraphed, telexed, facsimile transmitted, or
cabled or sent by overnight courier, and shall be effective when received.
19. If claim is ever made upon any Creditor for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of the Borrower, and such Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE CREDITORS
AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE COMMONWEALTH OF KENTUCKY. Any legal action or
proceeding with respect to this Guaranty may be brought in the Jefferson Circuit
Court, Louisville, Kentucky, or of the United States of America for the Western
District of Kentucky, and, by execution and delivery of this Guaranty, each
Guarantor hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each
Guarantor hereby irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered mail, return receipt requested, to each Guarantor
at its address set forth opposite its signature below, such service to become
effective 30 days after such mailing, or such earlier time as may be provided by
applicable law. Nothing herein shall affect the right of the Administrative
Agent or any of the Creditors to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against each Guarantor
in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guaranty or any other
Credit Document brought in the courts referred to in section 20(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that such action or proceeding brought in any such court has been brought
in an inconvenient forum.
5
<PAGE>
(c) Each Guarantor, the Administrative Agent and each Creditor hereby
irrevocably waives all rights to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Guaranty, the other Credit
Documents or the transactions contemplated hereby or thereby.
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of section 8.2 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Lenders (or all Lenders
if required by section 12.12 of the Credit Agreement)) and the proceeds of such
sale, disposition or liquidation are applied, to the extent applicable, in
accordance with the provisions of the Credit Agreement, such Guarantor shall be
released from this Guaranty and this Guaranty shall, as to each such Guarantor
or Guarantors, terminate, and have no further force or effect (it being
understood and agreed that the sale of one or more persons that own, directly or
indirectly, all of the capital stock or partnership interests of any Guarantor
shall be deemed to be a sale of such Guarantor for the purposes of this section
21).
22. Each Guarantor, in addition to the subrogation rights it shall have
against the Borrower under applicable law as a result of any payment it makes
hereunder, shall also have a right of contribution against all other Guarantors
in respect of any such payment pro rata among same based on their respective net
fair value as enterprises, provided any such right of contribution shall be
subject and subordinate to the prior payment in full of the Guaranteed
Obligations (and such Guarantor's obligations in respect thereof). It is the
desire and intent of each Guarantor and the Creditors that this Guaranty shall
be enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. If and to the
extent that the obligations of any Guarantor under this Guaranty would, in the
absence of this sentence, be adjudicated to be invalid or unenforceable because
of any applicable state or federal law relating to fraudulent conveyances or
transfers, then the amount of such Guarantor's liability hereunder in respect of
the Guaranteed Obligations shall be deemed to be reduced ab initio to that
maximum amount which would be permitted without causing such Guarantor's
obligations hereunder to be so invalidated.
23. The Creditors agree that this Guaranty may be enforced only by the
action of the Administrative Agent, acting upon the instructions of the Required
Lenders, and that no Creditor shall have any right individually to seek to
enforce or to enforce this Guaranty or to realize upon the security to be
granted by the Security Documents, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent or the
Collateral Agent for the benefit of the Creditors upon the terms of this
Guaranty and the Security Documents. The Creditors further agree that this
Guaranty may not be enforced against any director, officer or employee of any
Guarantor.
24. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense except as provided herein.
================================================================================
Kentucky Notice of Guaranteed Amount and Termination Date
SEE SECTION 25 BELOW.
================================================================================
25. For purposes of Kentucky Revised Statutes a. 371.065, it is hereby
declared and agreed, without, however, increasing, expanding, extending or
otherwise changing or affecting any of the rights or obligations of any
Guarantor under the other provisions of this Guaranty, that the maximum
principal amount of indebtedness guaranteed hereunder, exclusive of interest,
fees, and charges and costs of collecting guaranteed indebtedness, is
$200,000,000, and that the termination date of the guaranty obligations
hereunder is December 31, 2003.
26. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
* * *
6
<PAGE>
7
<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
LANTANA PARTNERS, LTD.,
as a Guarantor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 a Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
a: (502) 596-4160
PHILLIPPE ENTERPRISES, INC.,
as a Guarantor
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 a Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
8
<PAGE>
HILLHAVEN PROPERTIES, LTD.,
as a Guarantor
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
CASTLE GARDENS RETIREMENT CENTER,
as a Guarantor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
9
<PAGE>
HILLCREST RETIREMENT CENTER, LTD.,
as a Guarantor
By: FAIRVIEW LIVING CENTERS, INC.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
SANDY RETIREMENT CENTER LIMITED
PARTNERSHIP,
as a Guarantor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
10
<PAGE>
TOPEKA RETIREMENT CENTER, LTD.,
as a Guarantor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
EVERGREEN WOODS, LTD.,
as a Guarantor
By: ATRIA COMMUNITIES, INC.,
a General Partner
By: /s/ J. Timothy Wesley
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
11
<PAGE>
FAIRVIEW LIVING CENTERS, INC.,
as a Guarantor
By: /s/ James H. Gillenwater, Jr.
---------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
TWENTY-NINE HUNDRED ASSOCIATES, LTD.,
as a Guarantor
By: TWENTY-NINE HUNDRED CORPORATION,
a General Partner
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
12
<PAGE>
TWENTY-NINE HUNDRED CORPORATION,
as a Guarantor
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
WOODHAVEN PARTNERS, LTD.,
as a Guarantor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
13
<PAGE>
TUCSON RETIREMENT CENTER LIMITED
PARTNERSHIP,
as a Guarantor
By: HILLHAVEN PROPERTIES, LTD.,
a General Partner
By: /s/ James H. Gillenwater, Jr.
------------------------------
Vice President
Address:
c/o Atria Communities, Inc.
3300 Providian Center
400 West Market Street
Louisville, Kentucky 40202
Attn.: Chief Financial Officer
Fax: (502) 596-4160
Accepted and Agreed to:
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By: /s/ Edward J. Weisto
------------------------------
Vice President
14
<PAGE>
EXHIBIT 6
FUTURE ADVANCE MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
This Future Advance Mortgage, Assignment of Leases and
Security Agreement (as amended, modified, or supplemented from time to time,
"this Mortgage") is made as of August 15, 1996, by ATRIA COMMUNITIES, INC., a
Delaware corporation (hereinafter, together with its successors and assigns,
called the "Company"), whose address is 3300 Providian Center, 400 West Market
Street, Louisville, Kentucky 40202, in favor of PNC BANK, NATIONAL ASSOCIATION,
a national banking association, as collateral agent (herein, together with its
successors and assigns in such capacity, the "Collateral Agent"), for the
benefit of the Secured Creditors (as defined below), whose address is One PNC
Plaza, Fifth Avenue and Wood Street, Pittsburgh, Pennsylvania 15265 (attention:
C. David Cook, Senior Vice President, Mail Stop: P1-POPP-06-3):
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined in the
Credit Agreement (as defined below) shall be used herein as therein defined.
(2) This Mortgage is made pursuant to the Credit Agreement,
dated as of the date hereof (herein, as amended or otherwise modified from time
to time, the "Credit Agreement"), among Atria Communities, Inc., a Delaware
corporation (herein, together with its successors and assigns, the "Borrower"),
the financial institutions named as lenders therein, and the Administrative
Agent, as agent for the Lenders (as defined in the Credit Agreement), providing,
among other things, for loans or advances or other extensions of credit to or
for the benefit of the Borrower of up to $200,000,000, with such loans or
advances being evidenced by promissory notes (the "Notes", such term to include
all notes and other securities issued in exchange therefor or in replacement
thereof).
(3) The Borrower may from time to time be party to one or more
Designated Interest Rate Agreements (as defined in the Credit Agreement). Any
institution that participates, and in each case its subsequent assigns, as a
counterparty to any Designated Interest Rate Agreement (collectively, the
"Interest Rate Creditors," and the Interest Rate Creditors together with the
Lenders, collectively the "Secured Creditors"), shall benefit hereunder as
herein provided.
(4) Pursuant to the Subsidiary Guaranty, each Subsidiary
Guarantor has jointly and severally guaranteed to the Secured Creditors the
payment when due of the Guaranteed Obligations (as defined in the Subsidiary
Guaranty).
(5) It is a condition precedent to the making of Loans and the
issuance of, and participation in, Letters of Credit under the Credit Agreement
that the Company shall have executed and delivered to the Collateral Agent this
Mortgage.
(6) The Company desires to execute this Mortgage to satisfy
the conditions described in the preceding paragraph.
NOW, THEREFORE, in consideration of the sum of $1.00, and other
good and valuable consideration, the receipt, sufficiency and adequacy of which
are hereby acknowledged, received to the Company's full satisfaction from the
Collateral Agent, and in consideration of the payments or loans or advances or
other credit facilities made or to be made hereafter to or for the benefit of
the Borrower by the Secured Creditors, the Company DOES HEREBY MORTGAGE, CONVEY
AND WARRANT unto the Collateral Agent, its successors and assigns, the real
property situated in the City of Indianapolis, Marion County, Indiana, described
in Exhibit 1 attached hereto and made a part hereof by reference;
<PAGE>
2
TOGETHER WITH all rights and easements now and/or hereafter
created which are appurtenant to the real property described in Exhibit 1,
including but not limited to those rights and easements more fully identified
thereon, if any; and
TOGETHER WITH all rights and leasehold interests under the
leases, if any (the "Leases"), described in the instruments identified in
Exhibit 1, attached hereto and made a part hereof by reference; and
TOGETHER WITH all and singular right, title and interest,
including any after-acquired title or reversion, in and to all other ways,
easements, streets, alleys, passages, water, water courses, riparian rights,
rights, liberties and privileges thereof, if any, and in any way appertaining
thereto; and
TOGETHER WITH all rents, royalties, revenues, incomes, issues
and profits accruing and to accrue therefrom; and
TOGETHER WITH all buildings and improvements of every kind and
description now or hereafter erected or placed thereon and all materials
intended for construction, reconstruction, alteration and repairs of such
improvements now or hereafter erected thereon, all of which materials shall be
deemed to be included within the property subject to this Mortgage immediately
upon the delivery thereof to the Premises (as hereinafter defined); all fixtures
and articles of personal property now or hereafter owned by the Company and
attached to, or located on, and used in the operation or management of the
Premises, including but not limited to all machinery, cranes, motors, elevators,
fittings, radiators, furniture, furnishings, apparatus, awnings, shades, blinds,
office equipment, carpeting and other furnishings, and all plumbing, heating,
lighting, ventilating, refrigerating, incinerating, air-conditioning and
sprinkler equipment and fixtures and appurtenances thereto; and all renewals or
replacements thereof, proceeds therefrom, or articles in substitution therefor,
whether or not the same are or shall be attached to such building or buildings
in any manner; it being mutually agreed that all the aforesaid property owned by
the Company and placed by it on the Premises shall, so far as permitted by law,
be deemed to be fixtures and a part of the realty, security for the Indebtedness
(hereafter defined) secured by this Mortgage and, as to the balance of the
property aforesaid, this Mortgage is hereby deemed to be as well a security
agreement for the purpose of creating hereby a security interest in such
property, securing the Indebtedness, for the benefit of the Collateral Agent and
the other holders from time to time of the Indebtedness secured hereby; and
TOGETHER WITH all leases, written or oral, and all agreements for
use or occupancy of all or any portion of the Real Property, together with any
and all extensions and renewals thereof and any and all further leases,
subleases, lettings or agreements (including subleases thereof and tenancies
following attornment) upon or covering use or occupancy of all or any part of
the Real Property (all such leases, agreements, subleases, and tenancies
sometimes collectively referred to herein as the "Tenant Leases" and sometimes
individually as a "Lease"); and
TOGETHER WITH all of the rents, income, receipts, revenues,
issues and profits now due or which may become due or to which Borrower may now
or hereafter (including during the period of redemption, if any, following
foreclosure of this Mortgage become entitled or may demand or claim, arising or
issuing from or out of the Tenant Leases or from or out of the Real Property or
any part thereof, including but not limited to: security deposits, minimum
rents, additional rents, parking rents, deficiency rents and liquidated damages
following default by the tenants thereunder, any premium payable by any tenant
upon the exercise of a cancellation privilege contained in its Lease; all
proceeds payable under any policy of insurance covering loss of rents resulting
from untenantability caused by destruction or damage to the Improvements; any
and all rights and claims of any kind which Borrower has or hereafter may have
against the tenants under the Tenant Leases and any subtenants and other
occupants of the Real Property; any award granted Borrower after the date hereof
in any court proceeding involving any tenant in any bankruptcy, insolvency, or
reorganization proceedings in any state or federal court; and any and all
payments made by any tenant in lieu of rent (any and all such moneys, rights and
claims identified in this paragraph referred to herein sometimes as the "Rents"
and sometimes as the "Rent"); and
TOGETHER WITH all proceeds of all insurance now or hereafter
carried by, or payable to, Borrower with respect to the Premises, or otherwise
now or hereafter payable with respect to any loss or damage of the Premises, and
all claims or demands with respect thereto; and
<PAGE>
3
TOGETHER WITH all right, title, and interest of the Company in
and to any management agreement pertaining to the Premises and all cash payments
to be made to or for the account of Borrower pursuant thereto and any other
proceeds thereof; and
TOGETHER WITH all right, title and interest of the Company in and
to any leases for equipment now or hereafter located at or used in connection
with the Premises, including without limitation all leases for office equipment,
maintenance and operating equipment, recreational equipment and fixtures,
telephone equipment, furniture, and furnishings; and
TOGETHER WITH all permits, licenses and franchises, and all
contract rights and other intangibles now or hereafter owned by the Company and
relating to the ownership, construction, use, operation, occupancy, or
development of the Premises, including, without limitation, any plans,
specifications, and drawings pertaining to the development thereof, and
contracts with architects and contractors; and
TOGETHER WITH all awards and other compensation heretofore or
hereafter to be made to the present and all subsequent owners of the property
subject to this Mortgage for any taking by eminent domain, either permanent or
temporary, of all or any part of the Premises or any easement or appurtenance
thereof, including severance and consequential damage and change in grade of
streets, which such awards and compensation are hereby assigned to the
Collateral Agent subject to the provisions of Section 15 hereof; the Company
hereby appoints the Collateral Agent its Attorney-in-Fact, coupled with an
interest, and authorizes, directs and empowers such Attorney, at the option of
such Attorney, on behalf of the Company and its successors or assigns to collect
and receive the proceeds thereof, to give proper receipts and acquittances
therefor (but not to adjust or compromise the claim) and, after deducting
reasonable expenses of collection but subject to the provisions of Section 15
hereof, to apply the net proceeds without penalty or premium as a credit upon
any portion, as selected by the Collateral Agent, of the Indebtedness secured
hereby, notwithstanding the fact that the amount owing thereon may not then be
due and payable or that such Indebtedness is otherwise adequately secured; and
TOGETHER WITH all rights and interests in any real property
(including leaseholds), located in the County and State in which the Premises is
located, which is or may be used for the operation of assisted living and/or
independent living communities operated or managed by the Company or any of its
Affiliates, hereafter acquired by the Company.
It is also agreed that if any of the property herein mortgaged is
of a nature so that a security interest therein can be perfected under the
Uniform Commercial Code, this Mortgage shall constitute a security agreement and
the Borrower agrees to execute, deliver and file or refile any financing
statement, continuation statement, or other instruments the Collateral Agent may
require from time to time to perfect or renew such security interest under the
Uniform Commercial Code. This Mortgage shall be effective as a financing
statement filed as a fixture filing with respect to all fixtures included within
the Premises and is to be filed for record in the Office of the County Recorder
where the Premises (including such fixtures) are situated. The mailing address
of the Borrower is set forth at the beginning of this Mortgage and the address
of the Collateral Agent from which information concerning the security interest
may be obtained is the address of the Collateral Agent set forth at the
beginning of this Mortgage.
The property, interests and rights hereinabove mentioned, whether
owned in fee or held under lease, is hereinafter referred to as the "Real
Property" to the extent that the same is realty, and as the "Personal Property
Collateral" to the extent that the same is personalty. The Real Property and the
Personal Property Collateral are collectively referred to herein as the
"Property Covered by this Mortgage", except where Real Property and Collateral
are specifically referred to.
TO HAVE AND TO HOLD the Property Covered by this Mortgage with
the appurtenances thereunto belonging unto the Collateral Agent, its successors
and assigns, forever, for the purposes and uses herein set forth, until such
time as all of the Indebtedness and obligations secured hereby shall have been
paid in full.
The Company covenants with the Collateral Agent, its successors
and assigns, that at and until the ensealing of these presents: (i) the Company
is well seized of and has a good and indefeasible estate in fee simple in the
Real Property (other than the Real Property represented by the Leases), has a
valid and subsisting leasehold estate in each of the properties covered by the
Leases, has good title to the Personal Property Collateral, and has good right
to
<PAGE>
4
mortgage, warrant, bargain, sell and convey, and create a security interest in,
the Property Covered by this Mortgage in manner and form as above written; (ii)
the Company will warrant and defend the Property Covered by this Mortgage with
the appurtenances thereunto belonging to the Collateral Agent, its successors
and assigns, forever against all lawful claims, and demands whatsoever; (iii)
the Property Covered by this Mortgage is free and clear of all liens and
encumbrances except only those listed in Exhibit 2, attached hereto and made a
part hereof by reference; (iv) the Property Covered by this Mortgage and the
intended use thereof by the Company comply to the best of the Company's
knowledge with all applicable restrictive covenants, zoning ordinances and
building codes and flood disaster laws, and, to the extent that noncompliance
therewith would materially adversely affect the ability of the Company to
conduct its business on the Property Covered by this Mortgage, or the value or
marketability of the Property Covered by this Mortgage, all applicable
occupational, health and environmental and other applicable laws, rules and
regulations of any other governmental authority whatsoever; and (v) the Company
will execute, acknowledge and deliver all necessary assurances to the Collateral
Agent of the title to the Property Covered by this Mortgage as provided above.
The conditions of this Mortgage are such that the Company has
executed and delivered this Mortgage for the purpose of securing the performance
of its covenants and agreements contained herein and in any agreement or
instrument made by it with respect to any Indebtedness secured hereby and to
secure the payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due),
but not necessarily in the order set forth, of the following indebtedness,
liabilities and obligations, now existing or hereafter arising, ratably:
(a) the aggregate principal amount of $200,000,000, with interest
thereon, as evidenced by the Notes, maturing on or prior to
August 31, 2000 (unless such date is extended as provided in the
Credit Agreement); and principal and interest on the Notes shall
be payable as set forth therein and in the Credit Agreement;
(b) all reimbursement obligations in respect of Letters of Credit
issued for the account of the Borrower or any of its Subsidiaries
pursuant to the Credit Agreement;
(c) all obligations, liabilities and indebtedness of the Borrower
under any Designated Interest Rate Agreement;
(d) all sums expended or advanced by or on behalf of the Collateral
Agent pursuant to any term or provision of this Mortgage or any
other agreement or instrument relating to or securing any of the
foregoing;
(e) all advances or disbursements of the Collateral Agent with
respect to the Property Covered by this Mortgage for the payment
of taxes, levies, assessments, insurance, insurance premiums or
costs incurred in the protection of the Property Covered by this
Mortgage; and
(f) all (i) other liabilities, obligations and indebtedness of the
Borrower (or the Company, if the Company is not the Borrower)
incurred under, arising out of or in connection with the Credit
Agreement and the other Credit Documents to which any such person
is a party (including without limitation (x) in the case of the
Borrower, all such obligations and indebtedness of the Borrower
under the Credit Agreement and (y) in the case of the Company (if
the Company is not the Borrower), all such obligations and
indebtedness under the Guaranty to which such Company is a party
which relate to any of the foregoing), and the due performance
and compliance by the Borrower and the Company (if the Company is
not the Borrower) with all of the terms, conditions and
agreements contained in the Credit Agreement and such other
Credit Documents (all such obligations and liabilities under this
clause (i), together with liabilities and obligations referred to
in the foregoing clauses (a) and (b) above to the extent related
thereto, being herein collectively called the "Credit Document
Obligations"); and (ii) other obligations and liabilities of the
Borrower and the Company (if the Company is not the Borrower)
incurred under, arising out of or in connection with any
Designated Interest Rate Agreement with any of the Secured
Creditors including, in the case of the Company (if the Company
is not the Borrower), all obligations of the Company under the
Subsidiary Guaranty in respect of any Designated Interest Rate
Agreement, and the due performance and compliance by the Borrower
and the Company (if the Company is not the Borrower) with all of
the terms, conditions and agreements
<PAGE>
5
contained therein (all such obligations and liabilities under
this clause (ii), together with the liabilities and obligations
referred to in the foregoing clause (c) above to the extent
related thereto, being herein collectively called the "Interest
Rate Obligations"); but only to the extent that the total unpaid
indebtedness, liabilities and obligations referred to in this
clause (f) and the preceding clauses (a) through (e), in the
aggregate, exclusive of the interest thereon, does not exceed the
maximum amount specified in this Mortgage, which is $200,000,000;
(all of such indebtedness, liabilities and obligations being collectively
referred to hereinafter as the "Indebtedness"), and as security for the payment
of the Indebtedness, the Company has granted to the Collateral Agent hereunder a
lien against the Property Covered by this Mortgage. In accordance with the
provisions of the Notes, the whole of the principal sum thereof then unpaid may
be declared and become due and payable upon demand or upon the occurrence of an
Event of Default hereunder or under the Credit Agreement. This Mortgage is given
for the purpose of creating a lien on the Property Covered by this Mortgage and
expressly is to secure the Indebtedness, ratably, including but not limited to
future advances, whether such advances are obligatory or to be made at the
option of the Lenders or otherwise, to the same extent as if such future
advances were made on the date of the execution of this Mortgage. The total
amount of the Indebtedness may decrease or increase from time to time and the
Lenders may hereafter, as described in this Mortgage, at any time after this
Mortgage is delivered to the County Recorder for record, make additional loans
or advances to the Borrower or otherwise make credit facilities (including
Letters of Credit) available for the account of the Borrower or any of its
Subsidiaries; provided, however, that the total unpaid balance secured at any
one time shall not exceed $250,000,000, plus interest thereon and any
disbursements made for the payment of taxes, levies or insurance on the Property
Covered by this Mortgage with interest on such disbursements. Any such further
loans or advances or credit facilities, with interest, shall be secured by this
Mortgage. All advances made hereunder or under the Credit Agreement or any of
the other Credit Documents and any modifications, extensions or renewals of any
of the Indebtedness are and shall be made in accordance with the provisions of
Indiana Code 32-8-11-9.
Simultaneously with the execution of this Mortgage, the Company,
as additional security for the payment of the Indebtedness, has sold,
transferred and assigned to the Collateral Agent, its successors and assigns, as
collateral security, all of its right, title and interest in and to certain
equipment and other property by separate instrument entitled Security Agreement
(herein, as amended or otherwise modified from time to time, the "Security
Agreement"). Any breach or default by the Company under the provisions of the
Security Agreement shall constitute a default hereunder.
PROVIDED, NEVERTHELESS, that if the Indebtedness shall be paid in
full when due, and if all of the provisions of the Credit Agreement, the other
Credit Documents and the Designated Interest Rate Agreements shall be timely
performed and observed, then the lien of this Mortgage and the interest of the
Collateral Agent in the Property Covered by this Mortgage shall be released at
the cost of the Company, but shall, except as otherwise provided herein, remain
in full force and effect.
The Company, intending to bind its successors and assigns,
hereby covenants and agrees with the Collateral Agent, its successors and
assigns, as follows:
1. The Company (if it is the Borrower) shall pay the Notes
issued by it according to their tenor and effect when due and owing and keep and
perform or cause to be kept and performed all covenants, agreements, conditions
and stipulations contained in such Notes or binding on the Borrower under the
Credit Agreement, any of the other Credit Documents, or any Designated Interest
Rate Agreement. The Company (if it is not the Borrower) will duly keep and
perform all covenants, agreements, conditions and stipulations binding on the
Company under the Subsidiary Guaranty or any of the other Credit Documents to
which it is a party. The Company hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Indebtedness and this
Mortgage and any requirement that the Collateral Agent or other holder of any of
the Indebtedness secured hereby protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any other person, or any collateral, or pursue any other
remedy in the power of the Collateral Agent or other holder of any of the
Indebtedness secured hereby.
2. The Company shall maintain each of the Leases in full
force and effect and shall duly and punctually perform all of its obligations
thereunder.
<PAGE>
6
3. In order more fully to protect the security of this
Mortgage, the Company shall, subject to any provisions of the Leases requiring
payment of such amounts thereunder, pay to the Collateral Agent, in addition to
any amounts otherwise payable by the Company hereunder in respect of the
Indebtedness hereby secured, and concurrently therewith but not less frequently
than monthly (on the first day of each month) until the Indebtedness is fully
paid, the following sums:
(a) A sum equal to one-twelfth (1/12) of the estimated annual
cost of all taxes, assessments and levies levied on the Real Property
and one-twelfth (1/12) of the annual insurance premiums required to
keep the buildings, fixtures and equipment of the Real Property insured
as required by Section 10 hereof against loss or damage for the benefit
of, with loss payable to, and in the manner and amount approved by, the
Collateral Agent, which monthly payments shall be credited to an escrow
account, held by the Collateral Agent, without interest accruing
thereon, from which the Collateral Agent shall pay each of the such
particular items. The amount of the estimated monthly payment under
this section may be adjusted from time to time so that the amount
deposited by the Company shall approximate the total sum required
annually for such taxes, assessments, levies and insurance premiums.
This adjustment shall be made on the demand of the Collateral Agent and
any deficiencies shall be paid by the Company upon the Collateral
Agent's demand. If funds in the escrow account are insufficient to pay
any taxes, assessments, levies or insurance premiums and the Company
has failed, refused or neglected to pay the same as they become due,
the Collateral Agent may, but shall have no obligation to, pay the same
plus any interest or penalties due thereon. Any such amount so paid by
the Collateral Agent shall be added to the Indebtedness forthwith with
interest at the rate specified in the proviso of Section 1.8(c) of the
Credit Agreement (hereinafter referred to as the "Default Rate"). No
later than ten days prior to the date when any installment of taxes and
assessments is due, without penalty, interest, or delinquency, the
Company shall present to the Collateral Agent the bill for any such
installment of taxes and assessments and the Collateral Agent shall
immediately draw a check on the escrow account, payable to the
appropriate governmental authority, for the amount of such installment
(to the extent such funds exist in the escrow account), and shall
deliver such check to the Company. Upon receipt of such check by the
Company, the Company shall pay and discharge the same, the Company
shall submit to the Collateral Agent evidence of the due and punctual
payment of such taxes, assessments, reassessments and other
governmental charges as the Collateral Agent may require. Any
deficiency in the fixed amount of any such aggregate monthly payment
not paid as required shall constitute an Event of Default under this
Mortgage. In the event of a sale of the Property Covered by this
Mortgage, but without it being considered a waiver of any rights
contained in Section 6 hereof, any such funds then on deposit with the
Collateral Agent, automatically and without necessity of further notice
or written assignment, shall be transferred to and held thereafter for
the account of the new owner to be applied in accordance with the
foregoing; provided, however, that in the event there are any defaults
hereunder at the time of a sale of the Property Covered by this
Mortgage, such funds may be used by the Collateral Agent to satisfy
such defaults. Any excess funds accumulated remaining after payment of
the items therein mentioned shall be credited to subsequent monthly
payments of the same nature required hereunder, but if any such item
shall exceed the estimate therefor, the Company shall upon demand
forthwith make good the deficiency. Failure to do so before the due
date of such item shall be a default hereunder. If the Property Covered
by this Mortgage are sold under foreclosure or are otherwise acquired
by the Collateral Agent after default, any remaining balance of the
above accumulations shall, at the option of the Collateral Agent, be
credited to the principal secured by this Mortgage as of the date such
estates are acquired. The Company will also pay all taxes and
assessments or charges which may be levied on the Indebtedness secured
hereby or the interest therein excepting the federal income tax imposed
under the laws of the United States and excepting state franchise and
state income taxes. Any assessment which is payable in installments at
the application of the Company shall, nevertheless, for the purposes of
this section, be deemed due and payable by the Company in its entirety
on the day the first installment becomes due or payable or a lien,
unless the written approval of the Collateral Agent is obtained for any
such installment payments of assessments.
(b) Notwithstanding the provisions of Section 3.(a) above, (i)
the Company shall have the right to contest in good faith any of such
taxes and assessments upon posting with the Collateral Agent sufficient
security, reasonably satisfactory to the Collateral Agent, for the
payment thereof, with interest, costs and penalties, under written
agreement conditioning payment of such contested taxes and assessments
upon the resolution of such contest, or prior thereto if the
continuance of such contest shall put the Property Covered by this
Mortgage or any part thereof in jeopardy of tax sale or forfeiture; and
(ii) so long as there exists no default in the payment of the
Indebtedness or in the performance of any obligation, covenant or
agreement herein
<PAGE>
7
contained or contained in the Notes or any other agreement between the
Company or the Company and the Collateral Agent, the Company may make
such payments of insurance premiums, taxes, assessments, levies, and
other charges directly and without making the payments to the escrow
account contemplated by Section 3.(a) above, but in the event of any
such failure or default, the provisions set forth above providing for
payments to such escrow account shall be fully applicable and in full
force and effect.
4. If at any time the United States or the State or
Commonwealth in which the Real Property is located or any of their subdivisions
having jurisdiction shall levy, assess or charge any tax (including, without
limitation, documentary stamp or intangible tax), assessment or imposition upon
this Mortgage, the Notes, Letters of Credit, or the credit or Indebtedness
secured hereby or the interest of the Collateral Agent in the Real Property or
upon the Collateral Agent by reason of or as holder of any of the foregoing,
then the Indebtedness and the accrued interest thereon shall be and become due
and payable at the election of the Collateral Agent; provided, however, that
such election and the right to elect shall be unavailing if the Company lawfully
may pay for such stamps or such tax, including interest and penalties thereon,
to or for the benefit of the Collateral Agent and the other holders of the
Indebtedness, and the Company elects to pay and does, in fact, pay when payable,
for all such stamps or such tax, as the case may be, including interest and
penalties thereon, prior to any such election by the Collateral Agent. The
Company further agrees to deliver to the Collateral Agent, at any time, upon
demand, evidence of citizenship and such other evidence as may be required by
any government agency having jurisdiction in order to determine whether the
obligation secured hereby is subject to or exempt from any such tax or any other
governmental filing or reporting requirement.
5. Except for such encumbrances as may be described in
Exhibit 2 or as to which the Collateral Agent has otherwise specifically
consented in or pursuant to Section 6 below, the Company shall keep the Property
Covered by this Mortgage free and clear from all mechanics liens and statutory
liens of every kind other than taxes and permitted assessments which may be a
lien but not yet due and payable and the Company will not voluntarily create or
permit to be created or filed against their respective interests in the Property
Covered by this Mortgage, or suffer to exist, any mortgage lien or other lien or
liens inferior or superior to the lien of this Mortgage (other than the lien or
liens for real estate taxes and assessments not yet due and payable) or if
filed, the Company will have the same discharged of record either by payment,
the bonding thereof or other lawful means within 30 days after notice of filing
and further, that the Company will keep and maintain the same free from all
claims of all persons supplying labor, materials or services which will enter
into or otherwise contribute to the construction of any and all buildings now
being erected or which hereafter may be erected on the Real Property,
notwithstanding by whom such labor or materials may have been contracted;
provided, however, that the Company shall have the right to contest in good
faith any such mechanics' lien or statutory lien upon posting with the
Collateral Agent sufficient security satisfactory to the Collateral Agent, for
the payment thereof, with interest, costs and penalties, under written agreement
conditioning payment of such contested mechanics' lien or statutory lien upon
the resolution of such contest, or prior thereto if the continuance of such
contest or litigation shall put the Property Covered by this Mortgage or any
part thereof in jeopardy of foreclosure sale or forfeiture for such lien.
6. (a) The Company agrees that the Company shall not (i)
sell, encumber (including, without limitation, by means of subordinate mortgage
or lien upon the Property Covered by this Mortgage or any part thereof or
interest therein), assign, lease or dispose of the Property Covered by this
Mortgage or any part thereof or interest therein, except in accordance with, and
to the extent permitted by, the terms and provisions of the Credit Agreement, or
(ii) amend, modify, terminate or surrender any Lease if the effect thereof would
be to materially reduce the value of all properties then included within the
Mature Property Pool, as defined in the Credit Agreement, or result in a default
under any of the provisions of the Credit Agreement, or (iii) enter into any
contract or agreement to do anything prohibited by clause (i) or (ii) of this
Section 6.(a), expressly including, without limitation, any land contract,
lease/purchase, lease/option or option agreement without, in each such case,
first obtaining the written consent of the Collateral Agent; except, however,
that the Company shall have the right, without such consent, to remove and
dispose of, free from the lien of this Mortgage, such personalty and equipment
as from time to time may become worn out or obsolete, provided that (A) such
removal is not prohibited by the Security Agreement or the Credit Agreement or
the other Credit Documents; (B) simultaneously with or prior to such removal,
such equipment shall, if required in order to continue operations on the
Property Covered by this Mortgage at the same level of activity as prior to such
removal, be replaced with equipment of like kind and quality, free from any
security interest, lien or encumbrance not permitted under the provisions of the
Credit Agreement or the other Credit Documents, and by such removal, the Company
shall be deemed to have subjected the replacement equipment to the lien of this
Mortgage or the Security Agreement, as the case may be; and (C) any net cash
proceeds received from such disposition (not otherwise applied to the purchase
of such replacement
<PAGE>
8
equipment) shall, if required pursuant to the provisions of the Credit Agreement
and the Security Agreement, be promptly paid over to the Collateral Agent to be
applied to the Indebtedness in such manner as may be provided in the Credit
Agreement or the other Credit Documents. Any lease not actually approved by the
Collateral Agent, shall, at the option of the Collateral Agent, be null and void
and shall not grant any rights in the Property Covered by this Mortgage or any
part thereof to the tenant named therein. In the event title to the Property
Covered by this Mortgage, or any part thereof or interest therein becomes vested
in a person or persons not approved by the Collateral Agent, the Indebtedness or
any portion thereof held by any holder shall become due and payable in full at
the option of such holder or holders thereof. In the event the Company's
interest in the Property Covered by this Mortgage, or any part thereof, becomes
vested in such person or persons other than the Company, the Collateral Agent
may, without notice to the Company deal with such successor or successors in
interest with reference to this Mortgage and the obligations hereunder in the
same manner as with the Company, without in any way releasing, discharging or
otherwise affecting the Company's liability hereunder, or the Indebtedness or
obligations hereby secured.
(b) The consent of the Collateral Agent required under this
Section 6 may be refused by the Collateral Agent in its sole discretion or may
be predicated upon any terms, conditions and covenants deemed advisable or
necessary in the sole discretion of the Collateral Agent, including but not
limited to the right to change the interest rate, date of maturity or payments
of principal and/or interest due under the Notes, in accordance with the terms
and provisions of the Credit Agreement applicable to changes of such nature, to
require payment of any amounts as additional consideration as a transfer fee or
otherwise and to require assumption of the Notes and this Mortgage.
7. The Company shall keep and maintain in all material
respects all buildings and improvements (including fixtures) and all apparatus
and personal property owned by the Company now or hereafter situated on the
Property Covered by this Mortgage at all times in good order, condition and
repair, ordinary wear and tear excepted, and no buildings or substantial
improvements on the Property Covered by this Mortgage shall be altered or
demolished or removed by the Company without the prior written consent of the
Collateral Agent (which shall not be unreasonably withheld, provided that the
proposed alterations shall not materially and adversely affect the value of the
Property Covered by this Mortgage or the utility of the Property Covered by this
Mortgage for the purposes to which the same are presently devoted); provided,
further, however, the Company may make alterations to the Property Covered by
this Mortgage (including structural or material alterations to the buildings or
improvements thereon) without such consent if such alterations do not materially
reduce the value of all properties then included within the Mature Property
Pool, as defined in the Credit Agreement, or result in a default under any of
the provisions of the Credit Agreement. Notwithstanding the foregoing, the
Company shall advise the Collateral Agent of any intended alterations to the
Property Covered by this Mortgage which, in the aggregate, will cost more than
$1,000,000 regardless of whether the consent of the Collateral Agent is required
with respect thereto. In the event the Collateral Agent's consent is required,
the Company in requesting such consent shall submit to the Collateral Agent
plans and specifications for such alterations and a cost estimate prepared by
the registered architect reasonably satisfactory to the Collateral Agent.
8. The Company hereby acknowledges that the Indebtedness was
incurred in good faith for full value received.
9. The Company warrants and represents that:
(a) The Company is not now in default under any instruments or
obligations relating to the Real Property and no party has asserted any
claim of default against the Company relating to the Real Property.
(b) The execution and performance of this Mortgage and the
consummation of the transactions hereby contemplated will not result in
any breach of, or constitute a default under, any mortgage, lease, bank
loan, credit agreement, trust indenture or other instrument to which
the Company is a party or by which it or any of its property
(including, without limitation, the Real Property) may be bound or
affected, nor do any such instruments impose or contemplate any
obligations which are or may be inconsistent with any other obligations
imposed on the Company under any other instrument heretofore or
hereafter delivered by the Company.
(c) As of the date hereof, there are no actions, suits or
proceedings (including, without limitation, any condemnation or
bankruptcy proceedings) pending or threatened against or affecting the
Company or the Real Property, or which may adversely affect the
validity or enforceability of this Mortgage, at law or in equity, or
before or by any governmental authority, except as disclosed in writing
to the Lenders prior to the date of
<PAGE>
9
execution and delivery hereof as contemplated by the terms and
provisions of the Credit Agreement and the other Credit Documents, and
the Company is not in default with respect to any writ, injunction,
decree or demand of any court or any governmental authority affecting
the Real Property.
(d) All contracts, franchises, governmental approvals, and
licenses required in order for the Company to conduct its business and
maintain and operate the Property Covered by this Mortgage in
compliance with applicable law and reasonable commercial practice are
in full force and effect, and the Property Covered by this Mortgage
currently is being operated in compliance with all applicable legal
requirements in all material effects.
(e) The Real Property is not "property" as defined in the
Indiana Responsible Property Transfer Law (Indiana Code 13-7-22.5)
("IRPTL") and no disclosure document is required to be given by the
Company to the Collateral Agent under the IRPTL in connection with the
execution, delivery and recordation of this Mortgage.
10. (a) The Company shall keep the improvements on the Real
Property insured by a policy or policies of All Risk Replacement Cost Insurance
against loss or damage by fire, flood and such other hazards, casualties and
contingencies (including, but not limited to, extended coverage, vandalism and
malicious mischief), in an amount of not less than the greater of (i) the full
insurable value of the Real Property, or (ii) the amount necessary so that
neither the Collateral Agent nor the Company shall be deemed a co-insurer of a
loss, and for such length of time, as shall be required by the Collateral Agent,
for the benefit of the Collateral Agent, as its interests may appear, and shall
place and keep with the Collateral Agent a copy thereof and an original
certificate thereof. The Company will also maintain flood insurance, if
required, pursuant to a designation of the area in which the Real Property is
located as flood prone or a flood risk area, as defined by the Flood Disaster
Protection Act of 1973, as amended, in an amount of not less than the greater of
(A) the sum of the Indebtedness or (B) the amount necessary so that neither the
Collateral Agent nor the Company shall be deemed a co-insurer of a loss, as well
as comply with any additional requirements of the National Flood Insurance
Program as set forth in such Act. In the event flood insurance in the required
amount is not available, flood insurance in the maximum amount available shall
be obtained.
(b) The Company shall maintain for the mutual benefit of the
Collateral Agent and the Company general public liability insurance against
claims for personal injury, death or property damage occurring upon, in or about
the Real Property or any elevators therein and on, in or about the adjoining
streets and passageways, such insurance to afford protection to the limits of
not less than those then customarily carried with respect to premises similar in
construction, general location, use and occupancy to the Real Property, but in
no event less than a single limit amount of $5,000,000. All of such insurance
shall be primary and non-contributing with any insurance which may be carried by
the Collateral Agent.
(c) In the event such coverage is provided as part of a
blanket policy, then in such event the amount of the coverage specifically
applicable to the Real Property shall be stated on the face of the policy. All
insurance policies, to the extent of its interest, are to be for the benefit of
and first payable in case of loss to the Collateral Agent as first mortgagee
without contribution and the Company shall deliver to the Collateral Agent a
copy of any renewal or replacement policies and original certificates thereof to
the Collateral Agent at its office in Pittsburgh, Pennsylvania, or at such other
place or to such other party as the Collateral Agent may, from time to time,
designate in writing, before the date of such expiration or termination of any
existing policy.
(d) All insurance policies required by this Section 10 shall
contain an express provision or endorsement which states the substance of the
following in a manner acceptable to the Collateral Agent: "The policy of
insurance shall not be cancelled, permitted to lapse by reason of non-renewal,
altered, changed, amended or modified, nor shall any coverage therein be
reduced, deleted, amended, modified, changed, or cancelled by either the party
named as the insured, or the insurance company issuing this policy, without at
least 30 days prior written notice having been given to PNC Bank, National
Association, as collateral agent."
(e) In the event of a loss under any policy of insurance
maintained pursuant to Section 10.(a) which is in excess of $1,000,000, the
Company shall not adjust or compromise such loss without the prior consent of
Collateral Agent; provided, however, that if there then exists an Event of
Default, the Collateral Agent is authorized and empowered, at its option and
without the need for consent of the Company, to adjust or compromise any loss
covered
<PAGE>
10
by any such insurance policies on the Property Covered by this Mortgage, and to
collect and receive the proceeds therefrom. In all events, all amounts
recoverable under any policy of insurance maintained pursuant to Section 10.(a)
are hereby assigned to the Collateral Agent, which, after deducting from such
proceeds any expenses incurred by it in the collection or handling thereof,
shall apply the net proceeds, at its option, in any one or more of the following
ways:
(i) apply the same or any part thereof upon the Indebtedness, whether
the Indebtedness be then matured or unmatured, in the manner and
order of priority set forth in Section 22, or if any of the
Indebtedness is not then due and payable, in such other manner
and order of priority as the Collateral Agent may in its
discretion elect;
(ii) use the same or any part thereof to fulfill any of the covenants
contained herein as the Collateral Agent may determine;
(iii) use the same or any part thereof to replace and restore the
Property Covered by this Mortgage to a condition satisfactory
to the Collateral Agent; or
(iv) release the same or any part thereof to the Company.
The Collateral Agent is hereby irrevocably appointed by the Company as attorney
for the Company to assign any policy to itself or its nominees in the event of
the foreclosure of this Mortgage. In the event of foreclosure of this Mortgage,
or other transfer of title of the Property Covered by this Mortgage in lieu of
foreclosure, all right, title and interest of the Company in and to any
insurance policies then in force shall pass to the purchaser or grantee thereof.
(f) Notwithstanding the provisions of Section 10.(e), unless
there then exists an Event of Default, in the event of damage to the Property
Covered by this Mortgage, the Collateral Agent shall make the net proceeds of
insurance covering such damage available to the Company for restoration of the
Property Covered by this Mortgage.
(g) Notwithstanding the provisions of Section 10.(e), unless
there then exists an Event of Default, in the event of destruction or damage to
the Property Covered by this Mortgage, the loans evidenced by the Notes shall be
prepaid, within ten days of such damage or destruction, in an aggregate amount
equal to the amount determined for the Property Covered by this Mortgage on the
basis of the multiple (i.e. 5, 4.75 or 4) reflected in the maximum ratio
contained in section 8.12(a) of the Credit Agreement applicable at the time
(even if such section 8.12(a) shall no longer be in effect, having been
superseded by section 8.12(b) of the Credit Agreement), times the Cash Flow from
Operations, as defined in the Credit Agreement for the Property Covered by this
Mortgage immediately prior to such damage or destruction. If the loans have been
prepaid as aforesaid and there exists no Event of Default, the net proceeds of
insurance shall be released to the Company. If the loans have not been prepaid
as aforesaid and there exists no Event of Default, the net proceeds of insurance
received by the Collateral Agent shall be applied first to satisfy the
prepayment obligations of this Section 10.(g) with any remaining balance
released to the Company. Upon receipt of such prepayment, and provide there then
exists no Event of Default, the Company shall be entitled to have this Mortgage
released of record. If there exists an Event of Default, then, notwithstanding
prepayment having been made as required in this Section 10.(g), the Collateral
Agent shall be entitled to apply the net proceeds of insurance as provided in
Section 10.(e).
11. (a) The term "Hazardous Materials," as used in this
Mortgage, shall mean any (i) hazardous wastes and/or toxic chemicals, materials,
substances or wastes as defined by the Environmental Laws set forth in
Subsection 11.(b); (ii) any "oil", as defined by the Clean Water Act (as defined
in Subsection 11.(b) below), as amended from time to time, and regulations
promulgated thereunder (including crude oil or any fraction thereof); (iii) any
substance, the presence of which is prohibited, regulated or controlled by any
other applicable federal or state or local laws, regulations, statutes or
ordinances now in force or hereafter enacted relating to waste disposal or
environmental protection with respect to the exposure to, or manufacture,
possession, presence, use, generation, storage, transportation, treatment,
release, emission, discharge, disposal, abatement, cleanup, removal, remediation
or handling; (iv) any asbestos or asbestos containing materials, polychlorinated
biphenyls ("PCBs") in the form of electrical equipment, fluorescent light
fixtures with ballasts, cooling oils or any other form, urea formaldehyde,
atmospheric radon at levels over four picocuries per cubic liter; (v) any solid,
liquid, gaseous or thermal irritant or contaminant, such as smoke, vapor, soot,
fumes, alkalis, acids, chemicals, pesticides, herbicides, sewage, industrial
sludge or other similar wastes, (vi) industrial, nuclear or medical by-products;
and (vii) underground storage tanks (whether filled or unfilled). As used
herein, the term
<PAGE>
11
"Hazardous Materials" does not include (A) immaterial quantities of automotive
motor oil leaked inadvertently from vehicles in the ordinary course of the
operation of the Real Property and cleaned up in accordance with reasonable
property management procedures and any applicable law, (B) immaterial quantities
of substances customarily and prudently used in the cleaning and maintenance of
the Real Property in accordance with any applicable law, (C) unused medical
supplies maintained for use in the ordinary course of business of the Property
Covered by this Mortgage, or (D) used medical supplies and infectious wastes to
the extent they are stored in accordance with all applicable laws pending
disposal off-site.
(b) The term "Environmental Laws," as used in this Section 11,
shall mean all present and future laws, statutes, ordinances, rules,
regulations, orders, and determinations of any governmental authority,
pertaining to health, protection of the environment, natural resources,
conservation, wildlife, waste management, regulation of activities involving
Hazardous Materials, and pollution, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act
("Superfund" or "CERCLA"), 42 U.S.C. SS. 9601 et seq., the Superfund Amendments
and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. SS. 9601(20)(D), the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. SS. 6901 et seq., the
Federal Water Pollution Control Act, as amended by the Clean Water Act (the
"Clean Water Act"), 33 U.S.C. SS. 1251 et seq., the Clean Air Act ("CAA"), 42
U.S.C. SS. 7401 et seq., and the Toxic Substances Control Act, 15 U.S.C.
SS. 2601 et seq., as amended from time to time.
(c) The Company shall, and the Company shall cause all
employees, agents, contractors, and tenants of the Company and any other persons
present on or occupying the Real Property to, keep and maintain the Real
Property, including the soil and ground water thereof, in compliance with, and
not cause or permit the Real Property, including the soil and ground water
thereof, to be in violation of any Environmental Laws. Neither the Company nor
any employees, agents, contractors, or tenants of the Company or any other
persons occupying or present on the Real Property shall use, generate,
manufacture, store or dispose on, under or about the Real Property or transport
to or from the Real Property any Hazardous Materials.
(d) The Company immediately shall advise Collateral Agent in
writing of: (i) any notices from any governmental or quasi-governmental agency
or authority of violation or potential violation of any Environmental Law
received by the Company; (ii) any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened pursuant
to any Environmental Law; (iii) all claims made or threatened by any third party
against the Company or the Real Property relating to damage, contribution, cost
recovery compensation, loss or injury resulting from any Hazardous Materials
(the matters set forth in clauses (i), (ii) and (iii) above are hereinafter
referred to as "Hazardous Materials Claims"); and (iv) discovery by the Company
of any occurrence or condition on any real property adjoining or in the vicinity
of the Real Property that could cause the Real Property to become contaminated
by or with Hazardous Materials. Collateral Agent shall have the right but not
the obligation to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Hazardous Materials
Claims and to have its reasonable attorneys' and consultants' fees in connection
therewith paid by the Company upon demand.
(e) The Company shall be solely responsible for, and shall
indemnify, defend, and hold harmless Collateral Agent, its directors, officers,
employees, agents, successors and assigns from and against, any loss, damage,
cost, expense or liability of whatever kind or nature, known or unknown,
contingent or otherwise, directly or indirectly arising out of or attributable
to the use, generation, storage, release, threatened release, discharge,
disposal, or presence (whether prior to or after the date of this Mortgage) of
Hazardous Materials on, in, under or about the Real Property (whether by the
Company, a predecessor in title, any tenant, or any employees, agents,
contractor or subcontractors of any of the foregoing or any third persons at any
time occupying or present on the Real Property), including, without limitation:
(i) personal injury; (ii) death; (iii) damage to property; (iv) all
consequential damages; (v) the cost of any required or necessary repair, cleanup
or detoxification of the Real Property, including the soil and ground water
thereof, and the preparation and implementation of any closure, remedial or
other required plans; (vi) damage to any natural resources; and (vii) all
reasonable costs and expenses incurred by Collateral Agent in connection with
the foregoing clauses (i) through (vi), including but not limited to reasonable
attorneys' and consultants' fees; provided, however, that nothing contained in
this Section shall be deemed to preclude the Company from seeking
indemnification from, or otherwise proceeding against, any third party
including, without limitation, any tenant or predecessor in title to the Real
Property. The covenants, agreements, and indemnities set forth in this Section
shall be binding upon the Company and its successors and assigns, and shall
survive each of repayment of the Indebtedness, foreclosure of the Property
Covered by this Mortgage, and the Company granting a deed in lieu of foreclosure
of the Property Covered by this Mortgage. Any costs or expenses incurred by
Collateral Agent for which the Company is responsible or for which the Company
<PAGE>
12
has indemnified Collateral Agent shall be paid to Collateral Agent on demand,
with interest at the default rate specified in the Credit Agreement from the
date incurred by Collateral Agent until paid in full, and shall be secured
hereby. Without Collateral Agent's prior written consent, the Company shall not
enter into any settlement agreement, consent decree, or other compromise in
respect to any Hazardous Material Claims
(f) In the event Collateral Agent reasonably determines that
an investigation of the Real Property for the presence of Hazardous Materials
(an "Environmental Audit") is necessary in order to maintain the value of the
Collateral Agent's security in the Property Covered by this Mortgage, the
Company shall retain, upon Collateral Agent's request, or Collateral Agent may
retain directly, at the sole cost and expense of the Company, a licensed
geologist, industrial hygienist or an environmental consultant (referred to
hereinafter as the "Consultant") acceptable to Collateral Agent to conduct the
Environmental Audit. Collateral Agent's determination to require an
Environmental Audit shall be deemed reasonable at any time there is Default
under any of the Loan Documents or in the event that Collateral Agent has
received notice of the likely existence of Hazardous Materials upon or in the
Real Property. The Environmental Audit shall be performed in a manner reasonably
calculated to discover the presence of Hazardous Materials contamination taking
into consideration the known uses of the Real Property and property in the
vicinity of the Real Property and any factors unique to the Real Property. If
the Company shall fail to pay for or obtain an Environmental Audit as provided
for herein, Collateral Agent may, but shall not be obligated to, obtain the
Environmental Audit, and the Company immediately and without demand shall repay
all costs and expenses incurred by Collateral Agent in connection therewith,
with interest at the default rate specified in the Note from the date of such
payments or advances until paid in full, and such sums so advanced or expended,
with interest as aforesaid, shall be secured hereby.
(g) The Company shall cooperate with the Consultant and allow
entry and access to all portions of the Real Property for the purpose of
Consultant's investigation. the Company shall comply, at its sole cost and
expense, with all recommendations contained in the Environmental Audit
reasonably required to bring the Real Property into compliance with all
Environmental Laws and any recommendation for additional testing and studies to
detect the quantity and types of Hazardous Materials present, if Collateral
Agent requires the implementation of the same.
12. (a) The Company hereby does agree that the Real Property
shall at all times strictly comply to the extent applicable with the
requirements of the Americans with Disabilities Act of 1990, the Fair Housing
Amendments Act of 1988, all state and local laws and ordinances related to
handicapped access and all rules, regulations, and orders issued pursuant
thereto including, without limitation, the Americans with Disabilities Act
Accessibility Guidelines for Buildings and Facilities (collectively, "Access
Laws").
(b) The Company does hereby agree to give prompt notice to
Collateral Agent of the receipt by the Company of any complaints related to
violation of any Access Laws and of the commencement of any proceedings or
investigations which relate to compliance with applicable Access Laws.
13. In the event the Company shall fail to comply with any or
all of its covenants, agreements, conditions and stipulations herein set forth,
then the Collateral Agent shall after notice to the Company be and hereby is
authorized and empowered at its option, but without legal obligation to do so,
to pay or perform the same without waiver of any other remedy. In addition, the
Collateral Agent is authorized and empowered at its option, but without legal
obligation to do so, to enter, or have its agents enter, the Property Covered by
this Mortgage whenever necessary for the purpose of inspecting the Property
Covered by this Mortgage and curing any default hereunder. The Company agrees
that the Collateral Agent shall thereupon have a claim against the Company for
all sums paid by the Collateral Agent for such defaults so cured, together with
a lien upon the Property Covered by this Mortgage for the sum so paid plus
interest at the Default Rate.
14. The Company shall not commit waste upon the Property
Covered by this Mortgage or suffer waste to be committed thereon. The Company
will keep the Property Covered by this Mortgage in good order and repair and in
compliance in all material respects with any law, regulation, ordinance or
contract affecting the Property Covered by this Mortgage and, from time to time,
make all needful and proper replacements so that buildings, fixtures, machinery
and appurtenances included in or on the Property Covered by this Mortgage and
useful to the ownership and operation of the Property Covered by this Mortgage
will at all times be in good condition, fit and proper for the respective
purposes for which they were erected or installed. The Company shall observe and
comply with all conditions and requirements necessary to preserve and extend any
and all material rights, licenses, permits (including but not limited to zoning
variances, special exceptions and non-conforming uses), privileges, franchises
and concessions which are applicable to
<PAGE>
13
the Property Covered by this Mortgage or which have been granted to or
contracted for by the Company in connection with any existing or presently
contemplated use of the Property Covered by this Mortgage and shall obtain and
keep in full force and effect all necessary governmental and municipal approvals
as may be necessary from time to time to comply in all material respects with
all mining, environmental and other requirements and with any and all conditions
attached to the insurance relating to the Property Covered by this Mortgage and
the condition thereof.
15. The Company will give the Collateral Agent immediate
notice of the actual or threatened commencement of any proceedings under eminent
domain affecting all or any part of the Property Covered by this Mortgage or any
easement therein or appurtenance thereof, including severance and consequential
damage and change in grade of streets, and will deliver to the Collateral Agent
copies of any and all papers served in connection with any such proceedings.
Except as provided in subsection (a) below, the Company agrees that all awards
heretofore or hereafter made by any public or quasi-public authority to the
present and all subsequent owners of the Property Covered by this Mortgage by
virtue of an exercise of the right of eminent domain by such authority,
including any award for taking of title, possession or right of access to a
public way, or for any change of grade or streets affecting the Property Covered
by this Mortgage, are, subject to the terms and provisions of the Leases, to the
extent applicable thereto, hereby assigned to the Collateral Agent and the
Collateral Agent at its option is hereby authorized, directed and empowered to
collect and receive the proceeds of any such awards from the authorities making
the same and to give proper receipts therefor. After deducting from such
proceeds any expenses incurred by the Collateral Agent in the collection or
handling thereof, the Collateral Agent shall apply the net proceeds as follows:
(a) In the event of such a taking which the Collateral Agent
determines, in its discretion, will not result in a temporary or
permanent reduction in the Cash Flow from Operations, as defined in the
Credit Agreement for the Property Covered by this Mortgage, immediately
prior to such taking, and provided no default exists under the terms of
this Mortgage, the Collateral Agent shall make the net proceeds of the
taking available to the Company for restoration of the Property Covered
by this Mortgage provided that the Company furnishes evidence to the
Collateral Agent satisfactory to the Collateral Agent that the Company
has the balance, if any, of funds necessary to complete restoration of
the Property Covered by this Mortgage in accordance with plans and
specifications approved by the Collateral Agent (which cost of
restoration may be established by the certificate of an architect
reasonably satisfactory to the Collateral Agent). If the net proceeds
are less than $250,000, the Collateral Agent shall turn over the entire
net award to the Company for restoration, and the Company agrees to
restore the Property Covered by this Mortgage. If the net proceeds are
$250,000 or more, the Collateral Agent shall hold such net award and
any additional funds of the Company required to complete the
restoration in trust and make such funds and proceeds available to the
Company for the restoration and repair of the Property Covered by this
Mortgage to a condition reasonably equivalent to their original
condition and in accordance with plans and specifications approved in
advance by the Collateral Agent. Such funds and proceeds shall be
disbursed from time to time in an amount equal to the value of the work
in place less a 10% retainage upon verification by the Company and the
Collateral Agent of the amount and propriety of the work done and upon
receipt by the Collateral Agent of executed partial lien waivers from
all materialmen, contractors and subcontractors for such disbursement
and otherwise in accordance with the Collateral Agent's usual disbursal
procedures for construction loans. Final settlement shall be made when
the Collateral Agent is satisfied that the damaged portion of the
Property Covered by this Mortgage has been restored in accordance with
plans and specifications previously approved by the Collateral Agent
and upon receipt of final lien waivers from all materialmen,
contractors and subcontractors engaged in such repair or restoration.
Any such funds remaining after such restoration shall be released to
the Company.
(b) In the event of such a taking which the Collateral Agent
determines, in its discretion, will result in a temporary or permanent
reduction in the Cash Flow from Operations, as defined in the Credit
Agreement for the Property Covered by this Mortgage, immediately prior
to such taking, the loans evidenced by the Notes shall be prepaid,
within 30 days of such taking, in aggregate amount equal to the amount
determined for the Property Covered by this Mortgage on the basis of
the multiple (i.e. 5, 4.75 or 4) reflected in the maximum ratio
contained in section 8.12(a) of the Credit Agreement applicable at the
time (even if such section 8.12(a) shall no longer be in effect, having
been superseded by section 8.12(b) of the Credit Agreement), times the
Cash Flow from Operations, as defined in the Credit Agreement for the
Property Covered by this Mortgage immediately prior to such taking. If
the loans have been prepaid as aforesaid and there exists no Event of
Default, the net proceeds shall be released to the Company. If the
loans have not been prepaid as aforesaid and there exists no Event of
Default, the net proceeds of condemnation received by the
<PAGE>
14
Collateral Agent shall be applied first to satisfy the prepayment
obligations of this Section 15.(b) with any remaining balance released
to the Company. If there exists an Event of Default, then,
notwithstanding prepayment having been made as required in this Section
15.(b), the Collateral Agent shall be entitled to apply the net
proceeds of insurance as provided in Section 15.(c). Upon receipt of
such prepayment, and provide there then exists no Event of Default, the
Company shall be entitled to have this Mortgage released of record.
(c) If an Event of Default exists at the time of any such
taking, the Collateral Agent may apply the net award, at its option, in
any one or more of the following ways:
(i) apply the same or any part thereof upon the
Indebtedness, whether the Indebtedness be then matured or
unmatured, in the manner and order of priority set forth in
Section 22, or if any of the Indebtedness is not then due and
payable, in such other manner and order of priority as the
Collateral Agent may in its discretion elect;
(ii) use the same or any part thereof to fulfill any of
the covenants contained herein as the Collateral Agent may
determine;
(iii) use the same or any part thereof to replace or
restore the Property Covered by this Mortgage to a condition
satisfactory to the Collateral Agent; or
(iv) release the same or any part thereof to the Company.
The Company hereby covenants and agrees to and with the Collateral Agent, upon
the request of the Collateral Agent to make, execute and deliver any and all
assignments and other instruments sufficient for the purpose of assigning all
such awards to the Collateral Agent, free and clear and discharged of any and
all encumbrances of any kind or nature whatsoever except as above stated.
16. In the event an action shall be instituted to foreclose
this Mortgage, or prior to foreclosure but after default, the Collateral Agent
shall be entitled to the appointment of a receiver of the rents, issues and
profits of the Property Covered by this Mortgage as a matter of right, with
power to collect the rents, issues and profits of the Property Covered by this
Mortgage due and becoming due during the period of default and/or the pendency
of such foreclosure suit to and including the date of confirmation of the sale
under such foreclosure and during the redemption period, if any, after such
confirmation, such rents, issues and profits being hereby expressly assigned and
pledged as security for the payment of the Indebtedness secured by this Mortgage
without regard to the value of the Property Covered by this Mortgage or the
solvency of any person or persons liable for the payment of the Indebtedness and
regardless of whether the Collateral Agent has an adequate remedy at law. The
Company for itself and for any subsequent owner hereby waives any and all
defenses to the application for a receiver as above provided and hereby
specifically consents to such appointment, but nothing herein contained is to be
construed to deprive the holder of this Mortgage of any other right or remedy or
privilege it may now have under the law to have a receiver appointed. The
provision for the appointment of a receiver and the assignment of such rents,
issues and profits is made an express condition upon which the Loans hereby
secured are made. In such event, the court shall at once on application of the
Collateral Agent or its attorney in such action, appoint a receiver to take
immediate possession of, manage and control the Property Covered by this
Mortgage, for the benefit of the holder or holders of the Indebtedness and of
any other parties in interest, with power to collect the rents, issues and
profits of the Property Covered by this Mortgage during the pendency of such
action, and to apply the same toward the payment of the several obligations
herein mentioned and described, notwithstanding that the same or any part
thereof is occupied by the Company or any other person. The rights and remedies
herein provided for shall be deemed to be cumulative and in addition to and not
in limitation of those provided by law and if there be no receiver so appointed,
the Collateral Agent itself may proceed to collect the rents, issues and profits
from the Property Covered by this Mortgage. From any such rents, issues, and
profits collected by the receiver or by the Collateral Agent prior to a
foreclosure sale, there shall be deducted the cost of collection thereof and the
expenses of operation of the Property Covered by this Mortgage, including but
not limited to real estate commissions, receiver's fee and the reasonable fees
attorney, if any, and the Collateral Agent's attorney's fees, if permitted by
law, and court costs, the remainder to be applied against the Indebtedness. In
the event the rents, issues and profits are not adequate to pay all tax and
other expenses of operation, the Collateral Agent may, but is not obligated to,
advance to any receiver the amounts necessary to operate, maintain and repair,
if necessary, the Property Covered by this Mortgage and any such amounts so
advanced, together with interest thereon at the Default Rate from and after the
date of advancement,
<PAGE>
15
shall be secured by this Mortgage and have the same priority of collection as
the principal of the Indebtedness secured hereby.
17. No sale of the Property Covered by this Mortgage, no
forbearance on the part of the Collateral Agent, no extension of the time for
the payment of the Indebtedness and no change in the terms of the payment
thereof consented to by the Collateral Agent shall in any way whatsoever operate
to release, discharge, modify, change or affect the original liability of the
Company hereunder or the original liability of the Borrower or any other obligor
under any of the Indebtedness, either in whole or in part. No waiver by the
Collateral Agent of any breach of any covenant of the Company herein contained
shall be construed as a waiver of any subsequent breach of the same or any other
covenant herein contained. The failure of the Collateral Agent to exercise the
option for acceleration of maturity and/or foreclosure (including sale under
power of sale hereunder) following any default as aforesaid or to exercise any
other option granted to the Collateral Agent hereunder in any one or more
instances, or the acceptance by the Collateral Agent of partial payments
hereunder shall not constitute a waiver of any such default, nor extend or
affect the grace period, if any, but such option shall remain continuously in
force with respect to any unremedied or uncured default. Acceleration of
maturity once claimed hereunder by the Collateral Agent may, at the option of
the Collateral Agent, be rescinded by written acknowledgement to that effect by
the Collateral Agent, but the tender and acceptance of partial payments alone
shall not in any way affect or rescind such acceleration of maturity, or extend
or affect the grace period, if any. the Collateral Agent may pursue any of its
rights without first exhausting its rights hereunder and all rights, powers and
remedies conferred upon the Collateral Agent herein are in addition to each and
every right which the Collateral Agent may have hereunder at law or equity and
may be enforced concurrently therewith.
18. If any action or proceeding be commenced, to which action
or proceeding the Collateral Agent is made a party by reason of the execution of
this Mortgage or the Indebtedness, or in which it becomes necessary to defend or
uphold the lien of this Mortgage, or the priority thereof or possession of the
Property Covered by this Mortgage, or otherwise to perfect the security
hereunder, or in any suit, action, legal proceeding or dispute of any kind in
which the Collateral Agent is made a party or appears as party plaintiff or
defendant, affecting the interest created herein, or the Property Covered by
this Mortgage, including, but not limited to, bankruptcy, probate and
administration proceedings, foreclosure of this Mortgage or any condemnation
action involving the Property Covered by this Mortgage, all sums paid by the
Collateral Agent for the expense of any litigation to prosecute and defend the
rights and liens created hereby shall be paid by the Company, to the extent
permitted by applicable law, together with interest thereon from the date of
payment at the Default Rate. Any such sum and the interest thereon shall be
immediately due and payable upon demand and be secured hereby, having the
benefit of the lien hereby created, as a part hereof and its priority.
19. This Mortgage is hereby deemed to be as well a security
agreement, within the meaning of the Uniform Commercial Code, for the purpose of
creating hereby a security interest securing the Indebtedness in and to the
Personal Property Collateral. Without derogating any of the provisions of this
Mortgage, the Company by this Mortgage:
(a) grants to the Collateral Agent a security interest in all of
the Company's right, title and interest in and to all Personal
Property Collateral, including, but not limited to, the items
referred to above, together with all additions, accessions and
substitutions and all similar property hereafter acquired and
used or obtained for use on, or in connection with, the Real
Property; the proceeds of the Personal Property Collateral are
intended to be secured hereby; provided, however, that such
intent shall never constitute an expressed or implied consent
on the part of the Collateral Agent to the sale of any or all
Personal Property Collateral except as provided in Section 6;
(b) agrees that the security interest hereby granted by this
Mortgage shall secure the payment of the Indebtedness;
(c) agrees not to sell, convey, mortgage or grant a security
interest in, or otherwise dispose of or encumber, any of the
Personal Property Collateral or any of the Company's right,
title or interest therein without first securing the
Collateral Agent's written consent, except as provided in
Section 6; the Collateral Agent may, at its sole option,
require the Company to apply the proceeds from the disposition
of the Personal Property Collateral in reduction of the
Indebtedness secured hereby, except as provided in
Section 6.(a);
<PAGE>
16
(d) agrees that if any of the Company's rights in the Personal
Property Collateral are voluntarily or involuntarily
transferred, whether by sale, creation of a security interest,
attachment, levy, garnishment or other judicial process,
without the written consent of the Collateral Agent, such
transfer shall constitute a default by the Company under the
terms of this Mortgage except as otherwise provided in
Section 6;
(e) agrees that upon or after the occurrence of any default
hereunder which is not remedied within the applicable grace
periods contained herein, the Collateral Agent may, with or
without notice to the Company, exercise its rights to declare
the Indebtedness secured by the security interest created
hereby immediately due and payable, in which case the
Collateral Agent shall have all rights and remedies granted by
law and more particularly the Uniform Commercial Code,
including, but not limited to, the right to take possession of
the Personal Property Collateral, and for this purpose may
enter upon any premises on which any or all of the Personal
Property Collateral is situated, without being deemed guilty
of trespass and without liability for damages thereby
occasioned, and take possession of and operate the Personal
Property Collateral or remove it therefrom; the Collateral
Agent shall have the further right to take any action it deems
necessary, appropriate or desirable, at its option and in its
discretion, to repair, refurbish or otherwise prepare the
Personal Property Collateral for sale, lease or other use or
disposition and to sell at public or private sales or
otherwise dispose of, lease or utilize the Personal Property
Collateral and any part thereof in any manner authorized or
permitted by law and to apply the proceeds thereof toward
payment of any costs and expenses, including reasonable
attorneys' fees and legal expenses, to the extent permitted by
law, thereby incurred by the Collateral Agent and toward
payment of the Indebtedness and all other indebtedness
described in this Mortgage, in such order and manner as may be
provided in Section 22 of this Mortgage or in the event such
provisions are not applicable in such order and manner as the
Collateral Agent may elect;
(f) authorizes the Collateral Agent to file, in the jurisdiction
where this Mortgage will be given effect, financing statements
covering the Personal Property Collateral and at the request
of the Collateral Agent, the Company shall join the Collateral
Agent in executing one or more of such financing statements
pursuant to the Uniform Commercial Code in a form satisfactory
to the Collateral Agent and the Company shall pay the cost of
filing the same in all public offices at any time and from
time to time wherever the Collateral Agent deems filing or
recording of any financing statements or of this Mortgage to
be desirable or necessary; and
(g) acknowledges that the Company, as of the date hereof, has
joined the Collateral Agent in the execution of two Uniform
Commercial Code financing statements, one to be filed with the
Secretary of State of the State or Commonwealth in which the
Real Property is located and the other to be filed with the
Recorder of the County in which the Real Property is located.
20. Each remedy or right of the Collateral Agent shall not be
exclusive of but shall be in addition to every other remedy or right now or
hereafter existing at law or in equity. No delay in the exercise or omission to
exercise any remedy or right accruing on any default shall impair any such
remedy or right or be construed to be a waiver of any such default or
acquiescence therein, nor shall it affect any subsequent default of the same or
of a different nature. Every such remedy or right may be exercised concurrently
or independently and when and as often as may be deemed expedient by the
Collateral Agent.
21. If more than one property, lot, parcel, estate or interest
is covered by this Mortgage, and if this Mortgage is foreclosed upon, or
judgment is entered upon any obligation secured hereby, execution may be made
upon any one or more of the properties, lots, parcels, estates or interests and
not upon the others, or upon all of the same, either together or separately, and
at different times or at the same time, and execution sales may likewise be
conducted separately or concurrently, in each case at the Collateral Agent's
election.
22. (a) In case of (i) foreclosure of this Mortgage in any
court of law or equity, whether or not any order or decree shall have been
entered therein, and to the extent permitted by law, a reasonable sum shall be
allowed for attorney's fees of the Collateral Agent in such proceedings, for
stenographer's fees and for all moneys expended for documentary evidence and the
cost of a complete abstract of title and title report for the purpose of such
foreclosure, such sums to be secured by the lien hereunder, and, to the extent
permitted by law, there shall be included in any judgment
<PAGE>
17
or decree foreclosing this Mortgage and be paid out of such rents, issues and
profits or out of the proceeds of any sale made in pursuance of any such
judgment or decree, or (ii) any other realization by the Collateral Agent upon
or with respect to the Property Covered by this Mortgage or any part or portion
thereof, the proceeds thereof shall be applied as follows:
(A) first, to the payment or reimbursement of the Collateral
Agent for all costs and expenses of such suit or suits or other
enforcement activities of the Collateral Agent, including, but not
limited to, the costs of advertising, sale and conveyance, including
attorneys', solicitors' and stenographers' fees, if permitted by law,
outlays for documentary evidence and the cost of such abstract,
examination of title and title report;
(B) second, to the extent proceeds remain after the
application pursuant to preceding clause (A), to reimburse the
Collateral Agent for all moneys advanced by the Collateral Agent, if
any, for any purpose authorized in this Mortgage with interest at the
Default Rate;
(C) third, to the extent proceeds remain after the application
pursuant to preceding clause (B), an amount equal to the outstanding
Indebtedness owed to the Secured Creditors shall be paid to the Secured
Creditors as provided in Section 22.(c) with each Secured Creditor
receiving an amount equal to its outstanding Indebtedness or, if the
proceeds are insufficient to pay in full all such Indebtedness, its Pro
Rata Share of the amount remaining to be distributed; and
(D) fourth, to the extent remaining after the application
pursuant to the preceding clauses (A), (B) and (C), to the Company or
to whomever may be lawfully entitled to receive such payment.
(b) For purposes of this Mortgage, "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, the amount (expressed as a percentage) equal to a fraction the numerator
of which is the then outstanding amount of the relevant Indebtedness owed such
Secured Creditor which is secured hereby and the denominator of which is the
then outstanding amount of all Indebtedness secured hereby.
(c) All payments required to be made to the (i) Lenders
hereunder shall be made to the Administrative Agent for the account of the
respective Lenders and (ii) Interest Rate Creditors hereunder shall be made to
the paying agent under the applicable Designated Interest Rate Agreement or, in
the case of Designated Interest Rate Agreements without a paying agent, directly
to the applicable Interest Rate Creditor.
(d) For purposes of applying payments received in accordance
with this Section 22, the Collateral Agent shall be entitled to rely upon (i)
the Administrative Agent for a determination (which the Administrative Agent
agrees to provide upon request to the Collateral Agent) of the outstanding
Credit Document Obligations and (ii) upon any Interest Rate Creditor for
determination (which each Interest Rate Creditor agrees to provide upon request
to the Collateral Agent) of the outstanding Interest Rate Obligations owed to
such Interest Rate Creditor. Unless it has actual knowledge (including by way of
written notice from a Secured Creditor) to the contrary, the Administrative
Agent under the Credit Agreement, in furnishing information pursuant to the
preceding sentence, and the Collateral Agent, in acting hereunder, shall be
entitled to assume that (x) no Credit Document Obligations other than principal,
interest and regularly accruing fees are owing to any Lender and (y) no
Designated Interest Rate Agreements or Interest Rate Obligations with respect
thereto are in existence.
(e) It is understood that the Company shall remain liable to
the extent of any deficiency between (x) the amount of the proceeds of the
Property Covered by this Mortgage and the amount of the sum referred to in
clauses (A) and (B) of Section 22.(a) and (y) the aggregate outstanding amount
of the Indebtedness.
23. The Collateral Agent, in making any payment herein and
hereby authorized in the place and stead of the Company (a) relating to taxes,
assessments, water rates, sewer rentals and other governmental or municipal
charges, fines, impositions or liens asserted against the Property Covered by
this Mortgage, may do so according to any bill, statement or estimate procured
from the appropriate public authority without inquiry into the validity thereof;
or (b) relating to any adverse title, lien, statement of lien, encumbrance,
claim or charge, shall be the sole judge of the validity of same; or (c)
otherwise relating to any purpose herein and hereby authorized, but not
enumerated in this section, may do so whenever, in its good faith judgment and
discretion, such payment shall seem necessary or desirable to protect the full
security intended to be created by this Mortgage. In connection with any such
payment, the Collateral Agent, at its
<PAGE>
18
option, may and is hereby authorized to obtain a continuation report of title
prepared by a title insurance company, the cost and expenses of which shall be
repayable by the Company upon demand and shall be secured hereby.
24. Should the proceeds of any Loans made by any Lender to the
Company, the repayment of which is hereby secured, or any part thereof, or any
amount paid out or advanced by the Collateral Agent or any Lender, be used
directly or indirectly to pay off, discharge or satisfy, in whole or in part,
any prior lien or encumbrance upon the Property Covered by this Mortgage or any
part thereof, then the Collateral Agent shall be subrogated to such other liens
or encumbrances and upon any additional security held by the holder thereof and
shall have the benefit of the priority of all of the same.
25. The Company agrees, without affecting the liability of any
person for payment of the Indebtedness or affecting the lien of this Mortgage
upon the Property Covered by this Mortgage or any part thereof (other than
persons or property explicitly released as a result of the exercise by the
Collateral Agent of its rights and privileges hereunder), that the Collateral
Agent, without notice, and without regard to the consideration, if any, paid
therefor, and notwithstanding the existence at that time of any inferior liens
thereon, may release as to itself and this Mortgage any part of the security
described herein or any person liable for any Indebtedness secured hereby,
without in any way affecting the priority of the lien of this Mortgage to the
full extent of the Indebtedness remaining unpaid hereunder upon any part of the
security not expressly released and may agree with any party obligated on the
Indebtedness or having any interest in the security described herein to extend
the time for payment of any part or all of the Indebtedness secured hereby. Such
agreement shall not, in any way, release or impair the lien hereof, but shall
extend the lien hereof as against the title of all parties having any interest
in such security which interest is subject to such lien. In the event the
Collateral Agent: (a) releases, as aforesaid, any part of the security described
herein or any person liable for any Indebtedness secured hereby, (b) grants an
extension of time for any payments of the debt secured hereby, (c) takes other
or additional security for the payment thereof, or (d) waives or fails to
exercise any right granted herein, in the Notes or in any related agreement, no
such act or omission shall release the Company, subsequent purchasers of all or
any part of the Property Covered by this Mortgage, any maker or surety of the
Notes or any party to this Mortgage or any related agreement under any covenant
therein, or preclude the Collateral Agent from exercising any right, power of
privilege herein granted or intended to be granted in the event of any other
default then made or any subsequent default.
26. If at any time the United States of America shall require
internal revenue stamps to be affixed to any of the Notes or any other
Indebtedness, the Company will pay (or cause the Borrower, if the Company is not
the Borrower) for the same with any interest or penalties imposed in connection
herewith.
27. To the extent services are required of the Collateral
Agent's counsel after the date hereof, which are normally incident to the
closing, amendment, alteration, and enforcement of this Mortgage, and all
provisions herein contained, the Company shall, to the extent permitted by law,
pay the reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Company.
28. The Company agrees at all time to cause this Mortgage, and
each amendment or modification hereof or supplement hereto, and financing
statements covering personal property (and continuation statements in respect
thereof), if necessary or appropriate under the Uniform Commercial Code, as in
effect in the jurisdiction in which the Real Property is located, and all
assignments of leases, to be recorded, registered and filed, and kept recorded,
registered and filed, in such manner and in such places as appropriate, and
shall comply with all applicable statutes and regulations in order to establish,
preserve and protect the security and priority of this Mortgage, and such
assignments and the rights of the Collateral Agent thereunder. The Company shall
pay, or cause to be paid, all taxes, fees and other charges incurred in
connection with such recording, registration, filing and compliance.
29. The Company acknowledges that it has received from the
Collateral Agent without charge a true and correct copy of this Mortgage.
30. The Collateral Agent and its successors and assigns shall
be entitled to all of the benefits of the indemnification provisions of the
Credit Agreement and the other Credit Documents. All of the terms and provisions
of Section 12.1 of the Credit Agreement (including any defined terms used
therein) are by this reference thereto hereby incorporated into this Mortgage
for the benefit of the Collateral Agent and its successors and assigns as fully
as if written out at length herein, and any references in such section of the
Credit to the "Borrower" shall be deemed to refer to, and constitute obligations
of, the Company (if the Company is not the Borrower).
<PAGE>
19
31. Neither this Mortgage, the Credit Agreement, the Notes,
any other Indebtedness secured hereby, any of the other Credit Documents, or any
of the Designated Interest Rate Agreements, are intended or shall be construed
as creating a partnership or joint venture between the Company, on the one hand,
and the Collateral Agent or any other holder of any of the Indebtedness, on the
other hand; and the relationship of the Company and the Collateral Agent
hereunder shall solely be that of borrower and collateral agent for Secured
Creditors.
32. At the option of the Collateral Agent, this Mortgage shall
become subject and subordinate in whole or in part (but not in respect to the
priority of entitlement to insurance proceeds or any award in condemnation) to
any or all leases and/or subleases of all or any part of the Property Covered by
this Mortgage upon the execution by the Collateral Agent and recording thereof,
at any time hereafter, in the appropriate recorder's office, a unilateral
declaration to that effect.
33. To the extent permitted by law with respect to the
Indebtedness secured hereby or any renewals or extensions thereof, the Company
waives and renounces any and all homestead and exemption rights, as well as the
benefit of all valuation and appraisement privileges, and also moratoriums under
or by virtue of the constitution and laws of the jurisdiction in which the Real
Property is located or any other state or of the United States, now existing or
hereafter enacted.
34. All the covenants hereof shall run with the land. Nothing
herein contained nor any transaction related hereto shall be construed or shall
so operate, either presently or prospectively, to require the Company to pay
interest at a rate greater than is now lawful in such case to contract for, but
shall require payment of interest only to the extent of such lawful rate.
35. The Company shall execute, acknowledge and deliver any and
all such further acts, conveyances, documents, mortgages and assurances as the
Collateral Agent may reasonably require for accomplishing the purpose hereof
forthwith upon the request of the Collateral Agent, whether in writing or
otherwise. The Company, within ten days upon request by mail, shall furnish a
written statement duly acknowledged of the amount due upon this Mortgage and the
Indebtedness (both unpaid principal and accrued interest) and whether any offset
or defenses exist against the Indebtedness, and any other information which
might reasonably be requested in connection with the sale of the Indebtedness,
or any portion thereof or interest therein, to any third party, or an audit of
the Collateral Agent, and which may be relied on for such purposes.
36. Wherever notices may appropriately be given under this
Mortgage, such notices shall be in writing and shall always be treated as having
adequately been given if:
(a) when intended for the Company, five days after dispatch by
Registered or Certified Mail return receipt requested, addressed to the
mailing address, as set out herein or to such other address or to such
other person, as the Company may from time to time, designate in
writing; or
(b) when intended for the Collateral Agent, five days after
dispatch by Registered or Certified Mail return receipt requested,
addressed to the mailing address of the Collateral Agent as set out
herein or to such other address or to such other person as the
Collateral Agent may from time to time designate in writing.
37. Whenever used, the singular number shall include the
plural, the plural the singular and the use of any gender shall include all
genders. All of the covenants and agreements of "Company" herein contained are
joint and several. All of the covenants and agreements herein contained shall
bind the parties hereto and the benefits and advantages thereof shall also inure
to their respective heirs, executors, administrators, successors and permitted
assigns.
38. Any of the following occurrences or acts shall constitute
an event of default under this Mortgage ("Event of Default"): (a) the Borrower
fails to pay any of its Notes or any installment thereof or interest thereon
when due or when declared due, subject to any applicable grace period provided
therein; (b) an Event of Default under and as defined in the Credit Agreement
shall have occurred; (c) the Company (regardless of the pendency of any
bankruptcy, reorganization, receivership, insolvency or other proceedings, at
law, in equity or before any administrative tribunal, which have or might have
the effect of preventing the Company from complying with the terms of this
Mortgage), shall fail to observe or perform any of the Company's covenants,
agreements or obligations under this Mortgage and, other than defaults in the
observance or performance of its obligations under Section 10 hereof, such
<PAGE>
20
failure shall continue for 30 days after notice; (d) a default shall occur and
continue to exist after the expiration of any applicable grace period under any
other document, agreement or instrument between the Borrower or any Subsidiary
Guarantor and the Collateral Agent or any Secured Creditor, with respect to any
of the Indebtedness; (e) any representation contained herein or in the Credit
Agreement or the Notes or made (or deemed made) by the Borrower or any
Subsidiary Guarantor to the Collateral Agent or any of the Secured Creditors in
connection with any of the Indebtedness shall prove to be untrue in any material
respect on the date as of which made or deemed made; (f) the filing by the
Company of a notice limiting the maximum principal amount secured by this
Mortgage to an amount less than that specified in the future advance provisions
of this Mortgage; or (g) the Borrower or any Guarantor of any part of the
Indebtedness or any other obligation of the Borrower shall file a voluntary
petition in bankruptcy or be adjudicated a bankrupt or insolvent, or the
Borrower or any such Guarantor shall file any petition or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any present or
future federal, state or other statute, law or regulation relating to
bankruptcy, insolvency or other relief for debtors or protection for creditors,
or the seeking, or the consenting by the Borrower or any such Guarantor to or
acquiescing in the appointment of any trustee, receiver, conservator or
liquidator of the Borrower or any such Guarantor, as the case may be, or of all
or any substantial part of the Property Covered by this Mortgage or any or all
of the rents, issues or profits thereof, or the making of any general assignment
for the benefit of creditors, or the admission in writing of its inability to
pay its debts generally as they become due, or the entry by a court of competent
jurisdiction of any order, judgment or decree, which is not dismissed within 60
days thereafter, approving a petition filed against the Borrower or any such
Guarantor seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future Federal,
state or other statute, law or regulation relating to bankruptcy, insolvency or
other relief for debtors or protection for creditors, or the appointment, which
appointment is not dismissed within 60 days thereafter, of any trustee,
receiver, conservator or liquidator of the Borrower or any such Guarantor, as
the case may be, or of all or any substantial part of the Property Covered by
this Mortgage or of any or all of the rents, issues and profits thereof without
the consent or acquiescence of the Collateral Agent.
39. Upon any Event of Default or any default by the Company as
provided herein or in any other instrument evidencing or securing any of the
Indebtedness then, in any of said events, at the option of the Collateral Agent
(or, as may be provided in any instrument pursuant to which any such
Indebtedness is created, at the option of any holder of any such Indebtedness),
the whole or any applicable portion of the Indebtedness secured hereby shall
become immediately due and payable, although the period specified for the
payment thereof may not have expired, anything hereinbefore or in the Notes
contained to the contrary notwithstanding and thereupon or at any time during
the existence of such Event of Default or default, the Collateral Agent may
proceed to foreclose this Mortgage or otherwise pursue any other right or remedy
herein provided or otherwise available under applicable law.
40. The obligations of the Company under this Mortgage shall
be absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation:
(A) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from other Credit Documents, or
any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof;
(B) any waiver, consent, extension, indulgence or other action
or inaction under or in respect of any such agreement or instrument or
this Mortgage except as expressly provided in such renewal, extension,
amendment, modification, addition, supplement, assignment or transfer;
(C) any furnishing of any additional security to the
Collateral Agent or its assignee or any acceptance thereof or any
release of any security by the Collateral Agent or its assignee;
(D) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof; or
(E) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to the Borrower, any Subsidiary Guarantor or any Subsidiary of any
thereof,
<PAGE>
21
or any action taken with respect to this Mortgage by any trustee or
receiver, or by any court, in any such proceeding, whether or not the
Company shall have notice or knowledge of any of the foregoing.
41. Any provision of this Mortgage which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
42. THIS MORTGAGE AND THE RIGHTS AND OBLIGATIONS OF THE
COMPANY AND THE COLLATERAL AGENT HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE COMMONWEALTH OF KENTUCKY EXCEPT TO THE EXTENT
THAT THE LAWS OF THE JURISDICTION IN WHICH THE REAL PROPERTY IS LOCATED
MANDATORILY APPLY.
43. (a) After the termination of the Total Commitment and all
Designated Interest Rate Agreements, when no Note nor Letter of Credit is
outstanding and when all Loans and other Obligations have been paid in full,
this Mortgage shall terminate, and the Collateral Agent, at the request and
expense of the Company, will execute and deliver to the Company a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Mortgage, and will duly assign, transfer and deliver to the relevant Assignor
(without recourse and without any representation or warranty) such of the
Personal Property Collateral as may be in the possession of the Collateral Agent
and as has not theretofore been sold or otherwise applied or released pursuant
to this Mortgage.
(b) So long as no payment default on any of the Indebtedness
is in existence or would exist after the application of proceeds as provided
below, the Collateral Agent shall, at the request of the Company, release any or
all of the Property Covered by this Mortgage, provided that (x) such release is
permitted by the terms of the Credit Agreement (it being agreed for such
purposes that a release will be deemed "permitted by the terms of the Credit
Agreement" if the proposed transaction constitutes an exception contained in
Section 8.2 of the Credit Agreement) or otherwise has been approved in writing
by the Required Lenders and (y) the proceeds of such Collateral are to be
applied as required pursuant to the Credit Agreement or any consent or waiver
entered into with respect thereto.
(c) At any time that the Company desires that the Collateral
Agent take any action to give effect to any release of any or all of the
Property Covered by this Mortgage pursuant to the foregoing Section 43.(a) or
Section 43.(b), it shall deliver to the Collateral Agent a certificate signed by
a principal executive officer stating that the release of the respective portion
of or all of the Property Covered by this Mortgage is permitted pursuant to
Section 43.(a) or Section 43.(b). In the event that any part of the Property
Covered by this Mortgage is released as provided in Section 43.(b), the
Collateral Agent, at the request and expense of the Company, will duly release
such part of the Property Covered by this Mortgage and assign, transfer and
deliver to the Company (without recourse and without any representation or
warranty) such of the part of the Property Covered by this Mortgage as is then
being (or has been) so sold and as may be in the possession of the Collateral
Agent and has not theretofore been released pursuant to this Mortgage. The
Collateral Agent shall have no liability whatsoever to any Secured Creditor as
the result of any release of all or any part of the Property Covered by this
Mortgage by it as permitted by this section. Upon any release of all or any part
of the Property Covered by this Mortgage pursuant to Section 43.(a) or Section
43.(b), none of the Collateral Agent or any of the Secured Creditors shall have
any continuing right or interest in the same, or the proceeds thereof.
44. None of the terms and conditions of this Mortgage may be
changed, waived, modified or varied in any manner whatsoever unless in writing
duly signed by the Company and the Collateral Agent (with the consent of the
Required Lenders or, to the extent required by Section 12.12 of the Credit
Agreement, all of the Lenders), provided, however, that no such change, waiver,
modification or variance shall be made to Section 22 hereof or this Section 44
without the consent of each Secured Creditor adversely affected thereby,
provided further that any change, waiver, modification or variance affecting the
rights and benefits of a single Class of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors of such Class of Secured Creditors. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Lenders as holders of the Credit Document Obligations or (y) the
Interest Rate Creditors as holders of the Interest Rate Obligations. For the
purpose of this Agreement, the term "Requisite Creditors" of any Class shall
mean each of (x) with respect to the Credit Document Obligations, the Required
Lenders and (y) with respect to the
<PAGE>
22
Interest Rate Obligations, the holders of 51% of all obligations outstanding
from time to time under the Designated Interest Rate Agreements.
45. By accepting the benefits of this Agreement, each Secured
Creditor acknowledges and agrees that the rights and obligations of the
Collateral Agent shall be as set forth in Section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in Section 44 of this
Mortgage or Section 12.12 of the Credit Agreement, this Section 45, and the
duties and obligations of the Collateral Agent set forth in this Section 45, may
not be amended or modified without the consent of the Collateral Agent.
46. The Company and the Collateral Agent each hereby
irrevocably waives all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Mortgage or the transactions
contemplated hereby.
47. IT IS SPECIFICALLY AGREED that time is of the essence with
respect to this Mortgage and that the waiver of the rights or options, or
obligations secured hereby, shall not at any time thereafter be held to be
abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Indebtedness secured hereby,
is not required to be given.
NOW, THEREFORE, the condition of this Mortgage is: That if the
Company or any other person primarily liable thereon shall pay the Indebtedness
owed to the Secured Creditors and the Collateral Agent and any other holders of
any of the Indebtedness and perform the covenants and agreements of the Company
arising from such Indebtedness and if the Company shall perform all of the
Company's covenants and agreements herein contained, then this Mortgage and the
estate hereby granted shall be void and shall be released by the Collateral
Agent in accordance with the provisions hereof respecting satisfaction and
termination, at the cost and expense of the Company; otherwise the same shall
remain in full force and virtue in law. In case of failure of the Collateral
Agent to promptly so release this Mortgage, all claims for statutory penalties
and damages are hereby waived.
IN WITNESS WHEREOF, the Company has caused this Mortgage to be
executed and delivered as of the date first set forth above.
ATRIA COMMUNITIES, INC., a Delaware
corporation
By: /s/ J. Timothy Wesley
_____________________________
J. Timothy Wesley,
Chief Financial Officer and Vice President
of Development
Attest: /s/ Nancy C. Chiles
_____________________
Print Name: Nancy C. Chiles
Title: Director of Finance
<PAGE>
23
COMMONWEALTH OF KENTUCKY )
) SS.:
COUNTY OF JEFFERSON )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above named ATRIA COMMUNITIES, INC., a Delaware corporation, by J.
Timothy Wesley, its Chief Financial Officer and Vice President of Development,
who acknowledged that he did sign the foregoing instrument and that the same is
the free act and deed of said corporation and the free act and deed of him
personally and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Louisville, Kentucky, this 26th the day of August, 1996.
----
/s/ Teri L. Barnett
______________________________
Notary Public
This Instrument Prepared By:
Richard L. Reppert, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
<PAGE>
EXHIBIT 1
TO FUTURE ADVANCE MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
616 - Heritage at Wildwood
File: 96M12953
96180347
Situated in the County of Marion, State of Indiana, identified as follows:
Lots Numbered 50, 51 and 52 "Warren Terrace", an Addition to the City of
Indianapolis, the plat of which is recorded in Plat Book 22, page 28, in the
Office of the Recorder of Marion County, Indiana.
EXCEPT, that part of Lot Numbered 52 conveyed to the State of Indiana being
described as follows:
Beginning at the Northeast corner of said Lot 52; thence Southerly along the
East line of said Lot, 57.2 feet; thence South 85 degrees 33 minutes West, 18.5
feet; thence North 30 degrees 59 minutes West, 68.1 feet to a point on the North
line of said Lot; thence Easterly along the North line of said Lot, 53.3 feet to
the point of beginning.
<PAGE>
EXHIBIT 2
TO FUTURE ADVANCE MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
Permitted Encumbrances
1. Any liens thereon for taxes, assessments, charges, excises, levies and other
governmental charges which are not due and payable.
2. Zoning ordinances, if any.
3. Easement to Northern Indiana Power Company dated August 22, 1923 and recorded
November 5, 1923 in Miscellaneous Record 142, page 532.
4. Commitments Concerning The Use Or Development Of Real Estate recorded
March 18, 1992, as Instrument No. 92-31051.
5. Easements for public utilities and drainage over 5 foot strip in rear of lots
as reserved in Restrictive Covenants Warren Terrace Addition dated August 26,
1940 and recorded January 20, 1941 in Miscellaneous Record 318, page 309, as
shown on plat of subdivision recorded in Plat Book 22, page 28, and as shown
on survey certified May 20, 1996, by Evan J. Evans, R.L.S. #910024, of
Schneider Engineering Corporation, Project No. 01-96-024.
6. Building setback lines, shown on the plat recorded in Plat Book 22, page 28
and set forth in Restrictive Covenants Warren Terrace Addition recorded
January 20, 1941 in Miscellaneous Record 318, page 309 and in Supplemental
Amendments to Restrictive Covenants of Warren Terrace Addition recorded
July 7, 1941 in Miscellaneous Record 324, page 370.
7. Commitments Concerning The Use Or Development Of Real Estate dated August 23,
1993 and recorded September 1, 1993 as Instrument No. 1993-0127391.
<PAGE>
When recorded, mail to:
Richard L. Reppert, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Exhibit 7
- --------------------------------------------------------------------------------
FUTURE ADVANCE DEED OF TRUST, FIXTURE FILING,
AND ASSIGNMENT OF LEASES AND RENTS AND
SECURITY AGREEMENT
This Future Advance Deed of Trust, Fixture Filing, Assignment of
Leases and Rents and Security Agreement (as amended, modified, or supplemented
from time to time, "this Deed of Trust") is granted as of August 15, 1996, by
ATRIA COMMUNITIES, INC., a Delaware corporation, as trustor (hereinafter,
together with its successors and assigns, called the "Company"), whose address
is 3300 Providian Center, 400 West Market Street, Louisville, Kentucky 40202, to
TRANSNATION TITLE INSURANCE COMPANY, a corporation qualified to do business in
Arizona, having an address at 234 North Central Avenue, Suite 670, Phoenix,
Arizona 85004, as trustee ("Trustee"), for the benefit of PNC BANK, NATIONAL
ASSOCIATION, a national banking association, acting as collateral agent (herein,
together with its successors and assigns in such capacity, the "Collateral
Agent" for the Secured Creditors (as defined below) pursuant to the Credit
Agreement (as defined below), whose address is One PNC Plaza, Fifth Avenue and
Wood Street, Pittsburgh, Pennsylvania 15265 (attention: C. David Cook, Senior
Vice President, Mail Stop: P1-POPP-06-3),:
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined in the
Credit Agreement (as defined below) shall be used herein as therein defined.
(2) This Deed of Trust is made pursuant to the Credit
Agreement, dated as of the date hereof (herein, as amended or otherwise modified
from time to time, the "Credit Agreement"), among Atria Communities, Inc., a
Delaware corporation (herein, together with its successors and assigns, the
"Borrower"), the financial institutions named as lenders therein, and the
Administrative Agent, as agent for the Lenders (as defined in the Credit
Agreement), providing, among other things, for loans or advances or other
extensions of credit to or for the benefit of the Borrower of up to
$200,000,000, with such loans or advances being evidenced by promissory notes
(the "Notes", such term to include all notes and other securities issued in
exchange therefor or in replacement thereof).
(3) The Borrower may from time to time be party to one or more
Designated Interest Rate Agreements (as defined in the Credit Agreement). Any
institution that participates, and in each case its subsequent assigns, as a
counterparty to any Designated Interest Rate Agreement (collectively, the
"Interest Rate Creditors," and the Interest Rate Creditors together with the
Lenders, collectively the "Secured Creditors"), shall benefit hereunder as
herein provided. The Secured Creditors and their addresses appear on Annex I
attached hereto and made a part hereof.
(4) Pursuant to the Subsidiary Guaranty, each Subsidiary
Guarantor has jointly and severally guaranteed to the Secured Creditors the
payment when due of the Guaranteed Obligations (as defined in the Subsidiary
Guaranty).
(5) It is a condition precedent to the making of Loans and the
issuance of, and participation in, Letters of Credit under the Credit Agreement
that the Company shall have executed and delivered to the Collateral Agent this
Deed of Trust.
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2
(6) The Company desires to execute this Deed of Trust to
satisfy the conditions described in the preceding paragraph and to secure.the
performance of its covenants and agreements contained herein and in any
agreement or instrument made by it with respect to any Indebtedness secured
hereby and to secure the payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due), but not necessarily in the order set forth, of the following indebtedness,
liabilities and obligations, now existing or hereafter arising, ratably
(including any modifications or replacements thereof):
(a) the aggregate principal amount of $200,000,000, with interest
thereon, as evidenced by the Notes, maturing on or prior to August
31, 2000 (unless such date is extended as provided in the Credit
Agreement); and principal and interest on the Notes shall be
payable as set forth therein and in the Credit Agreement;
(b) all reimbursement obligations in respect of Letters of Credit
issued for the account of the Borrower or any of its Subsidiaries
pursuant to the Credit Agreement;
(c) all obligations, liabilities and indebtedness of the Borrower under
any Designated Interest Rate Agreement;
(d) all sums expended or advanced by or on behalf of the Collateral
Agent pursuant to any term or provision of this Deed of Trust or
any other agreement or instrument relating to or securing any of
the foregoing;
(e) all advances or disbursements of the Collateral Agent with respect
to the Property Covered by this Deed of Trust for the payment of
taxes, levies, assessments, insurance, insurance premiums or costs
incurred in the protection of the Property Covered by this Deed of
Trust; and
(f) all (i) other liabilities, obligations and indebtedness of the
Borrower (or the Company, if the Company is not the Borrower)
incurred under, arising out of or in connection with the Credit
Agreement and the other Credit Documents to which any such person
is a party (including without limitation (x) in the case of the
Borrower, all such obligations and indebtedness of the Borrower
under the Credit Agreement and (y) in the case of the Company (if
the Company is not the Borrower), all such obligations and
indebtedness under the Guaranty to which such Company is a party
which relate to any of the foregoing), and the due performance and
compliance by the Borrower and the Company (if the Company is not
the Borrower) with all of the terms, conditions and agreements
contained in the Credit Agreement and such other Credit Documents
(all such obligations and liabilities under this clause (i),
together with liabilities and obligations referred to in the
foregoing clauses (a) and (b) above to the extent related thereto,
being herein collectively called the "Credit Document
Obligations"); and (ii) other obligations and liabilities of the
Borrower and the Company (if the Company is not the Borrower)
incurred under, arising out of or in connection with any Designated
Interest Rate Agreement with any of the Secured Creditors
including, in the case of the Company (if the Company is not the
Borrower), all obligations of the Company under the Subsidiary
Guaranty in respect of any Designated Interest Rate Agreement, and
the due performance and compliance by the Borrower and the Company
(if the Company is not the Borrower) with all of the terms,
conditions and agreements contained therein (all such obligations
and liabilities under this clause (ii), together with the
liabilities and obligations referred to in the foregoing clause (c)
above to the extent related thereto, being herein collectively
called the "Interest Rate Obligations"); but only to the extent
that the total unpaid indebtedness, liabilities and obligations
referred to in this clause (f) and the preceding clauses (a)
through (e), in the aggregate, exclusive of the interest thereon,
does not exceed the maximum amount specified in this Deed of Trust,
which is $200,000,000;
(all of such indebtedness, liabilities and obligations being collectively
referred to hereinafter as the "Indebtedness"). Interest included within the
Indebtedness shall accrue at a variable rate.
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3
NOW, THEREFORE, in consideration of the sum of $1.00, and other good
and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Company's full satisfaction from the
Collateral Agent, and in consideration of the payments or loans or advances or
other credit facilities made or to be made hereafter to or for the benefit of
the Borrower by the Secured Creditors, the Company does give, grant, bargain,
sell, warrant, alien, demise, release, convey, assign, transfer, mortgage,
hypothecate, deposit, pledge, set over and grant a security interest in and
confirms to Trustee, in trust with power of sale, for the benefit and security
of Collateral Agent and its successors and assigns, the real property situated
in the City of Tucson, Pima County, Arizona, described in Exhibit 1 attached
hereto and made a part hereof by reference;
TOGETHER WITH all rights and easements now and/or hereafter created
which are appurtenant to the real property described in Exhibit 1, including but
not limited to those rights and easements more fully identified thereon, if any;
and
TOGETHER WITH all rights and leasehold interests under the leases, if
any (the "Leases"), described in the instruments identified in Exhibit 1,
attached hereto and made a part hereof by reference; and
TOGETHER WITH all and singular right, title and interest, including
any after-acquired title or reversion, in and to all other ways, easements,
streets, alleys, passages, water, water courses, riparian rights, rights,
liberties and privileges thereof, if any, and in any way appertaining thereto;
and
TOGETHER WITH all rents, royalties, revenues, incomes, issues and
profits accruing and to accrue therefrom; and
TOGETHER WITH all buildings and improvements of every kind and
description now or hereafter erected or placed thereon and all materials
intended for construction, reconstruction, alteration and repairs of such
improvements now or hereafter erected thereon, all of which materials shall be
deemed to be included within the property subject to this Deed of Trust
immediately upon the delivery thereof to the Premises (as hereinafter defined);
all fixtures and articles of personal property now or hereafter owned by the
Company and attached to, or located on, and used in the operation or management
of the Premises, including but not limited to all machinery, cranes, motors,
elevators, fittings, radiators, furniture, furnishings, apparatus, awnings,
shades, blinds, office equipment, carpeting and other furnishings, and all
plumbing, heating, lighting, ventilating, refrigerating, incinerating,
air-conditioning and sprinkler equipment and fixtures and appurtenances thereto;
and all renewals or replacements thereof, proceeds therefrom, or articles in
substitution therefor, whether or not the same are or shall be attached to such
building or buildings in any manner; it being mutually agreed that all the
aforesaid property owned by the Company and placed by it on the Premises shall,
so far as permitted by law, be deemed to be fixtures and a part of the realty,
security for the Indebtedness (hereafter defined) secured by this Deed of Trust
and, as to the balance of the property aforesaid, this Deed of Trust is hereby
deemed to be as well a security agreement for the purpose of creating hereby a
security interest in such property, securing the Indebtedness, for the benefit
of the Collateral Agent and the other holders from time to time of the
Indebtedness secured hereby; and
TOGETHER WITH all leases, written or oral, and all agreements for use
or occupancy of all or any portion of the Real Property, together with any and
all extensions and renewals thereof and any and all further leases, subleases,
lettings or agreements (including subleases thereof and tenancies following
attornment) upon or covering use or occupancy of all or any part of the Real
Property (all such leases, agreements, subleases, and tenancies sometimes
collectively referred to herein as the "Tenant Leases" and sometimes
individually as a "Lease"); and
TOGETHER WITH all of the rents, income, receipts, revenues, issues and
profits now due or which may become due or to which Borrower may now or
hereafter (including during the period of redemption, if any, following
foreclosure of this Deed of Trust become entitled or may demand or claim,
arising or issuing from or out of the Tenant Leases or from or out of the Real
Property or any part thereof, including but not limited to: security deposits,
minimum rents, additional rents, parking rents, deficiency rents and liquidated
damages following default by the tenants thereunder, any premium payable by any
tenant upon the exercise of a cancellation privilege contained in its Lease; all
proceeds payable under any policy of insurance covering loss of rents resulting
from untenantability caused by destruction or damage to the Improvements; any
and all rights and claims of any kind which Borrower has or hereafter may have
against the tenants under the Tenant Leases and any subtenants and other
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4
occupants of the Real Property; any award granted Borrower after the date hereof
in any court proceeding involving any tenant in any bankruptcy, insolvency, or
reorganization proceedings in any state or federal court; and any and all
payments made by any tenant in lieu of rent (any and all such moneys, rights and
claims identified in this paragraph referred to herein sometimes as the "Rents"
and sometimes as the "Rent"); and
TOGETHER WITH all proceeds of all insurance now or hereafter carried
by, or payable to, Borrower with respect to the Premises, or otherwise now or
hereafter payable with respect to any loss or damage of the Premises, and all
claims or demands with respect thereto; and
TOGETHER WITH all right, title, and interest of the Company in and to
any management agreement pertaining to the Premises and all cash payments to be
made to or for the account of Borrower pursuant thereto and any other proceeds
thereof; and
TOGETHER WITH all right, title and interest of the Company in and to
any leases for equipment now or hereafter located at or used in connection with
the Premises, including without limitation all leases for office equipment,
maintenance and operating equipment, recreational equipment and fixtures,
telephone equipment, furniture, and furnishings; and
TOGETHER WITH all permits, licenses and franchises, and all contract
rights and other intangibles now or hereafter owned by the Company and relating
to the ownership, construction, use, operation, occupancy, or development of the
Premises, including, without limitation, any plans, specifications, and drawings
pertaining to the development thereof, and contracts with architects and
contractors; and
TOGETHER WITH all awards and other compensation heretofore or
hereafter to be made to the present and all subsequent owners of the property
subject to this Deed of Trust for any taking by eminent domain, either permanent
or temporary, of all or any part of the Premises or any easement or appurtenance
thereof, including severance and consequential damage and change in grade of
streets, which such awards and compensation are hereby assigned to the
Collateral Agent subject to the provisions of Section 18 hereof; the Company
hereby appoints the Collateral Agent its Attorney-in-Fact, coupled with an
interest, and authorizes, directs and empowers such Attorney, at the option of
such Attorney, on behalf of the Company and its successors or assigns to collect
and receive the proceeds thereof, to give proper receipts and acquittances
therefor (but not to adjust or compromise the claim) and, after deducting
reasonable expenses of collection but subject to the provisions of Section 18
hereof, to apply the net proceeds without penalty or premium as a credit upon
any portion, as selected by the Collateral Agent, of the Indebtedness secured
hereby, notwithstanding the fact that the amount owing thereon may not then be
due and payable or that such Indebtedness is otherwise adequately secured; and
TOGETHER WITH all rights and interests in any real property (including
leaseholds), located in the County and State in which the Premises is located,
which is or may be used for the operation of assisted living and/or independent
living communities operated or managed by the Company or any of its Affiliates,
hereafter acquired by the Company.
It is also agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under the Uniform
Commercial Code as adopted in Arizona (the "Uniform Commercial Code"), this Deed
of Trust shall constitute a security agreement and the Borrower agrees to
execute, deliver and file or refile any financing statement, continuation
statement, or other instruments the Collateral Agent may require from time to
time to perfect or renew such security interest under the Uniform Commercial
Code. This Deed of Trust shall be effective as a financing statement filed as a
fixture filing with respect to all fixtures included within the Premises and is
to be filed for record in the Office of the County Recorder where the Premises
(including such fixtures) are situated. The mailing address of the Borrower is
set forth at the beginning of this Deed of Trust and the address of the
Collateral Agent from which information concerning the security interest may be
obtained is the address of the Collateral Agent set forth at the beginning of
this Deed of Trust.
The property, interests and rights hereinabove mentioned, whether
owned in fee or held under lease, is hereinafter referred to as the "Real
Property" to the extent that the same is realty, and as the "Personal Property
Collateral" to the extent that the same is personalty. The Real Property and the
Personal Property
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5
Collateral are collectively referred to herein as the "Property Covered by this
Deed of Trust", except where Real Property and Collateral are specifically
referred to.
TO HAVE AND TO HOLD the Property Covered by this Deed of Trust, real
and personal, with the appurtenances thereunto belonging unto the Trustee and
its successors and assigns, in fee simple, forever, for the benefit of the
Collateral Agent for the purposes and uses herein set forth, until such time as
all of the Indebtedness and obligations secured hereby shall have been paid in
full.
The Company covenants with the Trustee, its successors and assigns,
that at and until the ensealing of these presents: (iii) the Company is well
seized of and has a good and indefeasible estate in fee simple in the Real
Property (other than the Real Property represented by the Leases), has a valid
and subsisting leasehold estate in each of the properties covered by the Leases,
has good title to the Personal Property Collateral, and has good right to
bargain, sell and convey, and create a security interest in, the Property
Covered by this Deed of Trust in manner and form as above written; (iv) the
Company will warrant and defend the Property Covered by this Deed of Trust with
the appurtenances thereunto belonging to the Trustee, its successors and
assigns, forever against all lawful claims, and demands whatsoever; (v) the
Property Covered by this Deed of Trust is free and clear of all liens and
encumbrances except only those listed in Exhibit 2, attached hereto and made a
part hereof by reference; (vi) the Property Covered by this Deed of Trust and
the intended use thereof by the Company comply to the best of the Company's
knowledge with all applicable restrictive covenants, zoning ordinances and
building codes and flood disaster laws, and, to the extent that noncompliance
therewith would materially adversely affect the ability of the Company to
conduct its business on the Property Covered by this Deed of Trust, or the value
or marketability of the Property Covered by this Deed of Trust, all applicable
occupational, health and environmental and other applicable laws, rules and
regulations of any other governmental authority whatsoever; and (vii) the
Company will execute, acknowledge and deliver all necessary assurances to the
Trustee of the title to the Property Covered by this Deed of Trust as provided
above.
This Deed of Trust is granted as security for the payment of the
Indebtedness. In accordance with the provisions of the Notes, the whole of the
principal sum thereof then unpaid may be declared and become due and payable
upon demand or upon the occurrence of an Event of Default hereunder or under the
Credit Agreement. This Deed of Trust is given for the purpose of creating a lien
on the Property Covered by this Deed of Trust and expressly is to secure the
Indebtedness, ratably, including but not limited to future advances, whether
such advances are obligatory or to be made at the option of the Lenders or
otherwise, to the same extent as if such future advances were made on the date
of the execution of this Deed of Trust. The total amount of the Indebtedness may
decrease or increase from time to time and the Lenders may hereafter, as
described in this Deed of Trust, at any time after this Deed of Trust is
delivered to the County Recorder for record, make additional loans or advances
to the Borrower or otherwise make credit facilities (including Letters of
Credit) available for the account of the Borrower or any of its Subsidiaries;
provided, however, that the total unpaid balance secured at any one time shall
not exceed $200,000,000, plus interest thereon and any disbursements made for
the payment of taxes, levies, or insurance on, or any other cost incurred by
Beneficiary to protect its interest in, the Property Covered by this Deed of
Trust with interest on such disbursements. Any such further loans or advances or
credit facilities, with interest, shall be secured by this Deed of Trust.
Simultaneously with the execution of this Deed of Trust, the Company,
as additional security for the payment of the Indebtedness, has sold,
transferred and assigned to the Collateral Agent, its successors and assigns, as
collateral security, all of its right, title and interest in and to certain
equipment and other property by separate instrument entitled Security Agreement
(herein, as amended or otherwise modified from time to time, the "Security
Agreement"). Any breach or default by the Company under the provisions of the
Security Agreement shall constitute a default hereunder.
UPON THE TERMS AND SUBJECT TO THE CONDITIONS that are hereinafter set
forth; PROVIDED, HOWEVER, that if the Company pays or causes to be paid to
Lenders all sums secured hereby in the manner provided in the Credit Agreement,
the other Credit Documents, and in this Deed of Trust and does keep and perform
every obligation, term, covenant, condition and warranty contained in the Credit
Agreement, the other Credit Documents, and in this Deed of Trust, then and in
such case the estate, right, title and interest of Trustee in and to the
Property Covered by this Deed of Trust shall cease, and upon proof being given
to the satisfaction of the Collateral Agent that the Indebtedness has been paid
or satisfied in accordance with its terms, and upon payment of
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6
all fees, costs, charges and liabilities chargeable to or incurred by Trustee or
otherwise provided for in this Deed of Trust and upon payment of any other sums
secured by this Deed of Trust, then this and the estate hereby granted and
conveyed shall be released at the sole expense of Borrower.
The Company, intending to bind its successors and assigns, hereby
covenants and agrees as follows:
1. The Company (if it is the Borrower) shall pay the Notes issued
by it according to their tenor and effect when due and owing and keep and
perform or cause to be kept and performed all covenants, agreements, conditions
and stipulations contained in such Notes or binding on the Borrower under the
Credit Agreement, any of the other Credit Documents, or any Designated Interest
Rate Agreement. The Company (if it is not the Borrower) will duly keep and
perform all covenants, agreements, conditions and stipulations binding on the
Company under the Subsidiary Guaranty or any of the other Credit Documents to
which it is a party. The Company hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Indebtedness and this
Deed of Trust and any requirement that the Collateral Agent or other holder of
any of the Indebtedness secured hereby protect, secure, perfect or insure any
security interest or lien or any property subject thereto or exhaust any right
or take any action against any other person, or any collateral, or pursue any
other remedy in the power of the Collateral Agent or other holder of any of the
Indebtedness secured hereby.
2. (a) To facilitate payment and performance of the Indebtedness, the
Company hereby absolutely transfers and assigns to Collateral Agent all right,
title and interest of the Company in and to the Leases and the Rents. In
furtherance of this assignment, and not in lieu hereof, Collateral Agent may
require a separate assignment of rents and leases covering one or more of the
Leases; the terms of all such assignments are incorporated herein by reference.
(b) The Company hereby authorizes and directs the lessees and tenants
under the Leases that, upon written notice from Collateral Agent, all Rents
shall be paid directly to Collateral Agent as they become due. The Company
hereby relieves the lessees and tenants from any liability to the Company by
reason of the payment of the Rents to Collateral Agent. Nevertheless, the
Company shall be entitled to collect the Rents until Collateral Agent notifies
the lessees and tenants in writing to pay the Rents to Collateral Agent.
Collateral Agent is hereby authorized to give such notification upon the
occurrence of an Event of Default and at any time thereafter while such Event of
Default is continuing. Receipt and application of the Rents by Collateral Agent
shall not constitute a waiver of any right of Collateral Agent under this Deed
of Trust or applicable law, shall not cure any Event of Default hereunder, and
shall not invalidate or affect any act done in connection with such Event of
Default, including, without limitation, any trustee's sale or foreclosure
proceeding.
(c) All Rents collected by the Company shall be applied in the
following manner:
First, to the payment of all taxes and lien assessments levied against
the Property Covered by this Deed of Trust, where provision for paying such is
not otherwise made;
Second, to the payment of ground rents (if any) payable with respect
to the Property Covered by this Deed of Trust;
Third, to the payment of any amounts due and owing under the
Indebtedness;
Fourth, to the payment of current operating costs and expenses
(including repairs, maintenance and necessary acquisitions of property and
expenditures for capital improvements) arising in connection with the Property
Covered by this Deed of Trust;
Fifth, to the Company or its designee.
All rents collected by Collateral Agent may be applied to the items above listed
in any manner that Collateral Agent deems advisable and without regard to the
aforestated priorities.
(d) The Company represents and warrants that: (i) the Leases are in
full force and effect and have not been modified or amended; (ii) the Rents have
not been waived, discounted, compromised, setoff or paid more
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7
than one month in advance; (iii) there are no other assignments, transfers,
pledges or encumbrances of any Leases or Rents; and (iv) neither the Company nor
the lessees and tenants are in default under the Leases.
(e) The Company shall (i) fulfill or perform each and every term,
covenant and provision of the Leases to be fulfilled or performed by the lessor
thereunder; (ii) give prompt notice to Collateral Agent of any notice received
by the Company of default thereunder or of any alleged default thereunder,
together with a complete copy of any such notice; and (iii) enforce, short of
termination thereof, the performance or observance of each and every term,
covenant and provision of each Lease to be performed or observed by the lessees
and tenants thereunder.
(f) The Company, without the prior written consent of Collateral
Agent, shall not: (i) cancel, modify or alter, or accept the surrender of, any
Lease; (ii) assign, transfer, pledge or encumber, the whole or any part of the
Leases and Rents to anyone other than Collateral Agent; (iii) accept any Rents
more than one month in advance of the accrual thereof; (iv) do or permit
anything to be done, the doing of which, or omit or refrain from doing anything,
the omission of which, could be a breach or default under the terms of any Lease
or a basis for termination thereof; or (v) enter into any new tenant leases.
(g) Collateral Agent does not assume and shall not be liable for any
obligation of the lessor under any of the Leases and all such obligations shall
continue to rest upon the Company as though this assignment had not been made.
Collateral Agent shall not be liable for the failure or inability to collect any
Rents.
(h) Neither the Assignment of Rents and Leases contained herein or in
any separate assignment nor the exercise by Collateral Agent of any of its
rights or remedies thereunder or in connection therewith, prior to Collateral
Agent obtaining actual possession of the Property Covered by this Deed of Trust
as provided herein, shall constitute Collateral Agent a "mortgagee in
possession" or otherwise make Collateral Agent responsible or liable in any
manner with respect to the Property Covered by this Deed of Trust or the
occupancy, operation or use thereof. In the event Collateral Agent obtains
actual possession of the Property Covered by this Deed of Trust as provided
herein, Collateral Agent shall have the rights, and Collateral Agent's liability
shall be limited, as provided herein.
3. The Company shall maintain each of the Leases in full force and
effect and shall duly and punctually perform all of its obligations thereunder.
4. In order more fully to protect the security of this Deed of
Trust, the Company shall, subject to any provisions of the Leases requiring
payment of such amounts thereunder, pay to the Collateral Agent, in addition to
any amounts otherwise payable by the Company hereunder in respect of the
Indebtedness hereby secured, and concurrently therewith but not less frequently
than monthly (on the first day of each month) until the Indebtedness is fully
paid, the following sums:
(a) A sum equal to one-twelfth (1/12) of the estimated annual cost
of all taxes, assessments and levies levied on the Real Property and one-
twelfth (1/12) of the annual insurance premiums required to keep the
buildings, fixtures and equipment of the Real Property insured as required
by Section 11 hereof against loss or damage for the benefit of, with loss
payable to, and in the manner and amount approved by, the Collateral Agent,
which monthly payments shall be credited to an escrow account, held by the
Collateral Agent, without interest accruing thereon, from which the
Collateral Agent shall pay each of the such particular items. The amount of
the estimated monthly payment under this section may be adjusted from time
to time so that the amount deposited by the Company shall approximate the
total sum required annually for such taxes, assessments, levies and
insurance premiums. This adjustment shall be made on the demand of the
Collateral Agent and any deficiencies shall be paid by the Company upon the
Collateral Agent's demand. If funds in the escrow account are insufficient
to pay any taxes, assessments, levies or insurance premiums and the Company
has failed, refused or neglected to pay the same as they become due, the
Collateral Agent may, but shall have no obligation to, pay the same plus
any interest or penalties due thereon. Any such amount so paid by the
Collateral Agent shall be added to the Indebtedness forthwith with interest
at the rate specified in the proviso of Section 1.8(c) of the Credit
Agreement (hereinafter referred to as the "Default Rate"). No later than
ten days prior to the date when any installment of taxes and assessments is
due, without penalty, interest, or delinquency, the Company shall present
to the Collateral Agent the bill for any such installment of taxes and
assessments and the Collateral Agent shall immediately draw a check on the
escrow account, payable to the appropriate governmental authority, for the
amount of
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8
such installment (to the extent such funds exist in the escrow account),
and shall deliver such check to the Company. Upon receipt of such check by
the Company, the Company shall pay and discharge the same, the Company
shall submit to the Collateral Agent evidence of the due and punctual
payment of such taxes, assessments, reassessments and other governmental
charges as the Collateral Agent may require. Any deficiency in the fixed
amount of any such aggregate monthly payment not paid as required shall
constitute an Event of Default under this Deed of Trust. In the event of a
sale of the Property Covered by this Deed of Trust, but without it being
considered a waiver of any rights contained in Section 7 hereof, any such
funds then on deposit with the Collateral Agent, automatically and without
necessity of further notice or written assignment, shall be transferred to
and held thereafter for the account of the new owner to be applied in
accordance with the foregoing; provided, however, that in the event there
are any defaults hereunder at the time of a sale of the Property Covered by
this Deed of Trust, such funds may be used by the Collateral Agent to
satisfy such defaults. Any excess funds accumulated remaining after payment
of the items therein mentioned shall be credited to subsequent monthly
payments of the same nature required hereunder, but if any such item shall
exceed the estimate therefor, the Company shall upon demand forthwith make
good the deficiency. Failure to do so before the due date of such item
shall be a default hereunder. If the Property Covered by this Deed of Trust
are sold under foreclosure or are otherwise acquired by the Collateral
Agent after default, any remaining balance of the above accumulations
shall, at the option of the Collateral Agent, be credited to the principal
secured by this Deed of Trust as of the date such estates are acquired. The
Company will also pay all taxes and assessments or charges which may be
levied on the Indebtedness secured hereby or the interest therein excepting
the federal income tax imposed under the laws of the United States and
excepting state franchise and state income taxes. Any assessment which is
payable in installments at the application of the Company shall,
nevertheless, for the purposes of this section, be deemed due and payable
by the Company in its entirety on the day the first installment becomes due
or payable or a lien, unless the written approval of the Collateral Agent
is obtained for any such installment payments of assessments.
(b) Notwithstanding the provisions of Section 4.(a) above, (i) the
Company shall have the right to contest in good faith any of such taxes and
assessments upon posting with the Collateral Agent sufficient security,
reasonably satisfactory to the Collateral Agent, for the payment thereof,
with interest, costs and penalties, under written agreement conditioning
payment of such contested taxes and assessments upon the resolution of such
contest, or prior thereto if the continuance of such contest shall put the
Property Covered by this Deed of Trust or any part thereof in jeopardy of
tax sale or forfeiture; and (ii) so long as there exists no default in the
payment of the Indebtedness or in the performance of any obligation,
covenant or agreement herein contained or contained in the Notes or any
other agreement between the Company or the Company and the Collateral
Agent, the Company may make such payments of insurance premiums, taxes,
assessments, levies, and other charges directly and without making the
payments to the escrow account contemplated by Section 4.(a) above, but in
the event of any such failure or default, the provisions set forth above
providing for payments to such escrow account shall be fully applicable and
in full force and effect.
5. If at any time the United States or the State or Commonwealth in
which the Real Property is located or any of their subdivisions having
jurisdiction shall levy, assess or charge any tax (including, without
limitation, documentary stamp or intangible tax), assessment or imposition upon
this Deed of Trust, the Notes, Letters of Credit, or the credit or Indebtedness
secured hereby or the interest of the Collateral Agent in the Real Property or
upon the Collateral Agent by reason of or as holder of any of the foregoing,
then the Indebtedness and the accrued interest thereon shall be and become due
and payable at the election of the Collateral Agent; provided, however, that
such election and the right to elect shall be unavailing if the Company lawfully
may pay for such stamps or such tax, including interest and penalties thereon,
to or for the benefit of the Collateral Agent and the other holders of the
Indebtedness, and the Company elects to pay and does, in fact, pay when payable,
for all such stamps or such tax, as the case may be, including interest and
penalties thereon, prior to any such election by the Collateral Agent. The
Company further agrees to deliver to the Collateral Agent, at any time, upon
demand, evidence of citizenship and such other evidence as may be required by
any government agency having jurisdiction in order to determine whether the
obligation secured hereby is subject to or exempt from any such tax or any other
governmental filing or reporting requirement.
6. Except for such encumbrances as may be described in Exhibit 2 or
as to which the Collateral Agent has otherwise specifically consented in or
pursuant to Section 7 below, the Company shall keep the
<PAGE>
9
Property Covered by this Deed of Trust free and clear from all mechanics liens
and statutory liens of every kind other than taxes and permitted assessments
which may be a lien but not yet due and payable and the Company will not
voluntarily create or permit to be created or filed against their respective
interests in the Property Covered by this Deed of Trust, or suffer to exist, any
mortgage lien or other lien or liens inferior or superior to the lien of this
Deed of Trust (other than the lien or liens for real estate taxes and
assessments not yet due and payable) or if filed, the Company will have the same
discharged of record either by payment, the bonding thereof or other lawful
means within 30 days after notice of filing and further, that the Company will
keep and maintain the same free from all claims of all persons supplying labor,
materials or services which will enter into or otherwise contribute to the
construction of any and all buildings now being erected or which hereafter may
be erected on the Real Property, notwithstanding by whom such labor or materials
may have been contracted; provided, however, that the Company shall have the
right to contest in good faith any such mechanics' lien or statutory lien upon
posting with the Collateral Agent sufficient security, satisfactory to the
Collateral Agent, for the payment thereof, with interest, costs and penalties,
under written agreement conditioning payment of such contested mechanics' lien
or statutory lien upon the resolution of such contest, or prior thereto if the
continuance of such contest or litigation shall put the Property Covered by this
Deed of Trust or any part thereof in jeopardy of foreclosure sale or forfeiture
for such lien.
7. (a) The Company agrees that the Company shall not (i) sell,
encumber (including, without limitation, by means of subordinate mortgage or
lien upon the Property Covered by this Deed of Trust or any part thereof or
interest therein), assign, lease or dispose of the Property Covered by this Deed
of Trust or any part thereof or interest therein, except in accordance with, and
to the extent permitted by, the terms and provisions of the Credit Agreement, or
(ii) amend, modify, terminate or surrender any Lease if the effect thereof would
be to materially reduce the value of all properties then included within the
Mature Property Pool, as defined in the Credit Agreement, or result in a default
under any of the provisions of the Credit Agreement, or (iii) enter into any
contract or agreement to do anything prohibited by clause (i) or (ii) of this
Section 7.(a), expressly including, without limitation, any land contract,
lease/purchase, lease/option or option agreement without, in each such case,
first obtaining the written consent of the Collateral Agent; except, however,
that the Company shall have the right, without such consent, to remove and
dispose of, free from the lien of this Deed of Trust, such personalty and
equipment as from time to time may become worn out or obsolete, provided that
(A) such removal is not prohibited by the Security Agreement or the Credit
Agreement or the other Credit Documents; (B) simultaneously with or prior to
such removal, such equipment shall, if required in order to continue operations
on the Property Covered by this Deed of Trust at the same level of activity as
prior to such removal, be replaced with equipment of like kind and quality, free
from any security interest, lien or encumbrance not permitted under the
provisions of the Credit Agreement or the other Credit Documents, and by such
removal, the Company shall be deemed to have subjected the replacement equipment
to the lien of this Deed of Trust or the Security Agreement, as the case may be;
and (C) any net cash proceeds received from such disposition (not otherwise
applied to the purchase of such replacement equipment) shall, if required
pursuant to the provisions of the Credit Agreement and the Security Agreement,
be promptly paid over to the Collateral Agent to be applied to the Indebtedness
in such manner as may be provided in the Credit Agreement or the other Credit
Documents. Any lease not actually approved by the Collateral Agent, shall, at
the option of the Collateral Agent, be null and void and shall not grant any
rights in the Property Covered by this Deed of Trust or any part thereof to the
tenant named therein. In the event title to the Property Covered by this Deed of
Trust, or any part thereof or interest therein becomes vested in a person or
persons not approved by the Collateral Agent, the Indebtedness or any portion
thereof held by any holder shall become due and payable in full at the option of
such holder or holders thereof. In the event the Company's interest in the
Property Covered by this Deed of Trust, or any part thereof, becomes vested in
such person or persons other than the Company, the Collateral Agent may, without
notice to the Company deal with such successor or successors in interest with
reference to this Deed of Trust and the obligations hereunder in the same manner
as with the Company, without in any way releasing, discharging or otherwise
affecting the Company's liability hereunder, or the Indebtedness or obligations
hereby secured.
(b) The consent of the Collateral Agent required under this Section 7
may be refused by the Collateral Agent in its sole discretion or may be
predicated upon any terms, conditions and covenants deemed advisable or
necessary in the sole discretion of the Collateral Agent, including but not
limited to the right to change the interest rate, date of maturity or payments
of principal and/or interest due under the Notes, in accordance with the terms
and provisions of the Credit Agreement applicable to changes of such nature, to
require payment of any amounts as additional consideration as a transfer fee or
otherwise and to require assumption of the Notes and this Deed of Trust.
<PAGE>
10
8. The Company shall keep and maintain in all material respects all
buildings and improvements (including fixtures) and all apparatus and personal
property owned by the Company now or hereafter situated on the Property Covered
by this Deed of Trust at all times in good order, condition and repair, ordinary
wear and tear excepted, and no buildings or substantial improvements on the
Property Covered by this Deed of Trust shall be altered or demolished or removed
by the Company without the prior written consent of the Collateral Agent (which
shall not be unreasonably withheld, provided that the proposed alterations shall
not materially and adversely affect the value of the Property Covered by this
Deed of Trust or the utility of the Property Covered by this Deed of Trust for
the purposes to which the same are presently devoted); provided, further,
however, the Company may make alterations to the Property Covered by this Deed
of Trust (including structural or material alterations to the buildings or
improvements thereon) without such consent if such alterations do not materially
reduce the value of all properties then included within the Mature Property
Pool, as defined in the Credit Agreement, or result in a default under any of
the provisions of the Credit Agreement. Notwithstanding the foregoing, the
Company shall advise the Collateral Agent of any intended alterations to the
Property Covered by this Deed of Trust which, in the aggregate, will cost more
than $1,000,000 regardless of whether the consent of the Collateral Agent is
required with respect thereto. In the event the Collateral Agent's consent is
required, the Company in requesting such consent shall submit to the Collateral
Agent plans and specifications for such alterations and a cost estimate prepared
by the registered architect reasonably satisfactory to the Collateral Agent.
9. The Company hereby acknowledges that the Indebtedness was
incurred in good faith for full value received.
10. The Company warrants and represents that:
(a) The Company is not now in default under any instruments or
obligations relating to the Real Property and no party has asserted any
claim of default against the Company relating to the Real Property.
(b) The execution and performance of this Deed of Trust and the
consummation of the transactions hereby contemplated will not result in any
breach of, or constitute a default under, any mortgage, lease, bank loan,
credit agreement, trust indenture or other instrument to which the Company
is a party or by which it or any of its property (including, without
limitation, the Real Property) may be bound or affected, nor do any such
instruments impose or contemplate any obligations which are or may be
inconsistent with any other obligations imposed on the Company under any
other instrument heretofore or hereafter delivered by the Company.
(c) As of the date hereof, there are no actions, suits or
proceedings (including, without limitation, any condemnation or bankruptcy
proceedings) pending or threatened against or affecting the Company or the
Real Property, or which may adversely affect the validity or enforceability
of this Deed of Trust, at law or in equity, or before or by any
governmental authority, except as disclosed in writing to the Lenders prior
to the date of execution and delivery hereof as contemplated by the terms
and provisions of the Credit Agreement and the other Credit Documents, and
the Company is not in default with respect to any writ, injunction, decree
or demand of any court or any governmental authority affecting the Real
Property.
(d) All contracts, franchises, governmental approvals, and licenses
required in order for the Company to conduct its business and maintain and
operate the Property Covered by this Deed of Trust in compliance with
applicable law and reasonable commercial practice are in full force and
effect, and the Property Covered by this Deed of Trust currently is being
operated in compliance with all applicable legal requirements in all
material effects.
(e) The Real Property is not used principally or primarily for
farming or agricultural purposes.
11. (a) The Company shall keep the improvements on the Real Property
insured by a policy or policies of All Risk Replacement Cost Insurance against
loss or damage by fire, flood and such other hazards, casualties and
contingencies (including, but not limited to, extended coverage, vandalism and
malicious mischief), in an amount of not less than the greater of (i) the full
insurable value of the Real Property, or (ii) the amount
<PAGE>
11
necessary so that neither the Collateral Agent nor the Company shall be deemed a
co-insurer of a loss, and for such length of time, as shall be required by the
Collateral Agent, for the benefit of the Collateral Agent, as its interests may
appear, and shall place and keep with the Collateral Agent a copy thereof and an
original certificate thereof. The Company will also maintain flood insurance, if
required, pursuant to a designation of the area in which the Real Property is
located as flood prone or a flood risk area, as defined by the Flood Disaster
Protection Act of 1973, as amended, in an amount of not less than the greater of
(A) the sum of the Indebtedness or (B) the amount necessary so that neither the
Collateral Agent nor the Company shall be deemed a co-insurer of a loss, as well
as comply with any additional requirements of the National Flood Insurance
Program as set forth in such Act. In the event flood insurance in the required
amount is not available, flood insurance in the maximum amount available shall
be obtained.
(b) The Company shall maintain for the mutual benefit of the
Collateral Agent and the Company general public liability insurance against
claims for personal injury, death or property damage occurring upon, in or about
the Real Property or any elevators therein and on, in or about the adjoining
streets and passageways, such insurance to afford protection to the limits of
not less than those then customarily carried with respect to premises similar in
construction, general location, use and occupancy to the Real Property, but in
no event less than a single limit amount of $5,000,000. All of such insurance
shall be primary and non-contributing with any insurance which may be carried by
the Collateral Agent.
(c) In the event such coverage is provided as part of a blanket
policy, then in such event the amount of the coverage specifically applicable to
the Real Property shall be stated on the face of the policy. All insurance
policies, to the extent of its interest, are to be for the benefit of and first
payable in case of loss to the Collateral Agent as first mortgagee without
contribution and the Company shall deliver to the Collateral Agent a copy of any
renewal or replacement policies and original certificates thereof to the
Collateral Agent at its office in Pittsburgh, Pennsylvania, or at such other
place or to such other party as the Collateral Agent may, from time to time,
designate in writing, before the date of such expiration or termination of any
existing policy.
(d) All insurance policies required by this Section 11 shall contain
an express provision or endorsement which states the substance of the following
in a manner acceptable to the Collateral Agent: "The policy of insurance shall
not be cancelled, permitted to lapse by reason of non-renewal, altered, changed,
amended or modified, nor shall any coverage therein be reduced, deleted,
amended, modified, changed, or cancelled by either the party named as the
insured, or the insurance company issuing this policy, without at least 30 days
prior written notice having been given to PNC Bank, National Association, as
collateral agent."
(e) In the event of a loss under any policy of insurance maintained
pursuant to Section 11.(a) which is in excess of $1,000,000, the Company shall
not adjust or compromise such loss without the prior consent of Collateral
Agent; provided, however, that if there then exists an Event of Default, the
Collateral Agent is authorized and empowered, at its option and without the need
for consent of the Company, to adjust or compromise any loss covered by any such
insurance policies on the Property Covered by this Deed of Trust, and to collect
and receive the proceeds therefrom. In all events, all amounts recoverable under
any policy of insurance maintained pursuant to Section 11.(a) are hereby
assigned to the Collateral Agent, which, after deducting from such proceeds any
expenses incurred by it in the collection or handling thereof, shall apply the
net proceeds, at its option, in any one or more of the following ways:
(i) apply the same or any part thereof upon the Indebtedness, whether the
Indebtedness be then matured or unmatured, in the manner and order of
priority set forth in Section 25, or if any of the Indebtedness is not
then due and payable, in such other manner and order of priority as
the Collateral Agent may in its discretion elect;
(ii) use the same or any part thereof to fulfill any of the covenants
contained herein as the Collateral Agent may determine;
(iii) use the same or any part thereof to replace and restore the Property
Covered by this Deed of Trust to a condition satisfactory to the
Collateral Agent; or
(iv) release the same or any part thereof to the Company.
<PAGE>
12
The Collateral Agent is hereby irrevocably appointed by the Company as attorney
for the Company to assign any policy to itself or its nominees in the event of
the foreclosure of this Deed of Trust. In the event of foreclosure of this Deed
of Trust, or other transfer of title of the Property Covered by this Deed of
Trust in lieu of foreclosure, all right, title and interest of the Company in
and to any insurance policies then in force shall pass to the purchaser or
grantee thereof.
(f) Notwithstanding the provisions of Section 11.(e), unless there
then exists an Event of Default, in the event of damage to the Property Covered
by this Deed of Trust, the Collateral Agent shall make the net proceeds of
insurance covering such damage available to the Company for restoration of the
Property Covered by this Deed of Trust.
(g) Notwithstanding the provisions of Section 11.(e), unless there
then exists an Event of Default, in the event of destruction or damage to the
Property Covered by this Deed of Trust, the loans evidenced by the Notes shall
be prepaid, within ten days of such damage or destruction, in an aggregate
amount equal to the amount determined for the Property Covered by this Deed of
Trust on the basis of the multiple (i.e. 5, 4.75 or 4) reflected in the maximum
ratio contained in section 8.12(a) of the Credit Agreement applicable at the
time (even if such section 8.12(a) shall no longer be in effect, having been
superseded by section 8.12(b) of the Credit Agreement), times the Cash Flow from
Operations, as defined in the Credit Agreement for the Property Covered by this
Deed of Trust immediately prior to such damage or destruction. If the loans have
been prepaid as aforesaid and there exists no Event of Default, the net proceeds
of insurance shall be released to the Company. If the loans have not been
prepaid as aforesaid and there exists no Event of Default, the net proceeds of
insurance received by the Collateral Agent shall be applied first to satisfy the
prepayment obligations of this Section 11.(g) with any remaining balance
released to the Company. Upon receipt of such prepayment, and provide there then
exists no Event of Default, the Company shall be entitled to have this Deed of
Trust released of record. If there exists an Event of Default, then,
notwithstanding prepayment having been made as required in this Section 11.(g),
the Collateral Agent shall be entitled to apply the net proceeds of insurance as
provided in Section 11.(e).
12. (a) The term "Hazardous Materials," as used in this Deed of
Trust, shall mean any (i) hazardous wastes and/or toxic chemicals, materials,
substances or wastes as defined by the Environmental Laws set forth in
Subsection 2.(a); (ii) any "oil", as defined by the Clean Water Act (as defined
in Subsection 2.(a), 12.(b) below), as amended from time to time, and
regulations promulgated thereunder (including crude oil or any fraction
thereof); (iii) any substance, the presence of which is prohibited, regulated or
controlled by any other applicable federal or state or local laws, regulations,
statutes or ordinances now in force or hereafter enacted relating to waste
disposal or environmental protection with respect to the exposure to, or
manufacture, possession, presence, use, generation, storage, transportation,
treatment, release, emission, discharge, disposal, abatement, cleanup, removal,
remediation or handling; (iv) any asbestos or asbestos containing materials,
polychlorinated biphenyls ("PCBs") in the form of electrical equipment,
fluorescent light fixtures with ballasts, cooling oils or any other form, urea
formaldehyde, atmospheric radon at levels over four picocuries per cubic liter;
(v) any solid, liquid, gaseous or thermal irritant or contaminant, such as
smoke, vapor, soot, fumes, alkalis, acids, chemicals, pesticides, herbicides,
sewage, industrial sludge or other similar wastes, (vi) industrial, nuclear or
medical by-products; and (vii) underground storage tanks (whether filled or
unfilled). As used herein, the term "Hazardous Materials" does not include (A)
immaterial quantities of automotive motor oil leaked inadvertently from vehicles
in the ordinary course of the operation of the Real Property and cleaned up in
accordance with reasonable property management procedures and any applicable
law, (B) immaterial quantities of substances customarily and prudently used in
the cleaning and maintenance of the Real Property in accordance with any
applicable law, (C) unused medical supplies maintained for use in the ordinary
course of business of the Property Covered by this Deed of Trust, or (D) used
medical supplies and infectious wastes to the extent they are stored in
accordance with all applicable laws pending disposal off-site.
(b) The term "Environmental Laws," as used in this Section 12, shall
mean all present and future laws, statutes, ordinances, rules, regulations,
orders, and determinations of any governmental authority, pertaining to health,
protection of the environment, natural resources, conservation, wildlife, waste
management, regulation of activities involving Hazardous Materials, and
pollution, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act ("Superfund" or "CERCLA"), 42 U.S.C.
[ss] 9601 et seq., the Superfund Amendments and Reauthorization Act of 1986
-- ---
("SARA"), 42 U.S.C. (s) 9601(20)(D), the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. (s) 6901 et seq., the Federal Water Pollution Control Act,
as -- ---
<PAGE>
13
amended by the Clean Water Act (the "Clean Water Act"), 33 U.S.C. (s) 1251
et seq., the Clean Air Act ("CAA"), 42 U.S.C. (s) 7401 et seq., and the Toxic
- -- --- -- ---
Substances Control Act, 15 U.S.C. (s) 2601 et seq., as amended from time to
-- ---
time.
(c) The Company shall, and the Company shall cause all employees,
agents, contractors, and tenants of the Company and any other persons present on
or occupying the Real Property to, keep and maintain the Real Property,
including the soil and ground water thereof, in compliance with, and not cause
or permit the Real Property, including the soil and ground water thereof, to be
in violation of any Environmental Laws. Neither the Company nor any employees,
agents, contractors, or tenants of the Company or any other persons occupying or
present on the Real Property shall use, generate, manufacture, store or dispose
on, under or about the Real Property or transport to or from the Real Property
any Hazardous Materials.
(d) The Company immediately shall advise Collateral Agent in writing
of: (i) any notices from any governmental or quasi-governmental agency or
authority of violation or potential violation of any Environmental Law received
by the Company; (ii) any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened pursuant
to any Environmental Law; (iii) all claims made or threatened by any third party
against the Company or the Real Property relating to damage, contribution, cost
recovery compensation, loss or injury resulting from any Hazardous Materials
(the matters set forth in clauses (i), (ii) and (iii) above are hereinafter
referred to as "Hazardous Materials Claims"); and (iv) discovery by the Company
of any occurrence or condition on any real property adjoining or in the vicinity
of the Real Property that could cause the Real Property to become contaminated
by or with Hazardous Materials. Collateral Agent shall have the right but not
the obligation to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Hazardous Materials
Claims and to have its reasonable attorneys' and consultants' fees in connection
therewith paid by the Company upon demand.
(e) The Company shall be solely responsible for, and shall indemnify,
defend, and hold harmless Collateral Agent, its directors, officers, employees,
agents, successors and assigns from and against, any loss, damage, cost, expense
or liability of whatever kind or nature, known or unknown, contingent or
otherwise, directly or indirectly arising out of or attributable to the use,
generation, storage, release, threatened release, discharge, disposal, or
presence (whether prior to or after the date of this Deed of Trust) of Hazardous
Materials on, in, under or about the Real Property (whether by the Company, a
predecessor in title, any tenant, or any employees, agents, contractor or
subcontractors of any of the foregoing or any third persons at any time
occupying or present on the Real Property), including, without limitation: (i)
personal injury; (ii) death; (iii) damage to property; (iv) all consequential
damages; (v) the cost of any required or necessary repair, cleanup or
detoxification of the Real Property, including the soil and ground water
thereof, and the preparation and implementation of any closure, remedial or
other required plans; (vi) damage to any natural resources; and (vii) all
reasonable costs and expenses incurred by Collateral Agent in connection with
the foregoing clauses (i) through (vi), including but not limited to reasonable
attorneys' and consultants' fees; provided, however, that nothing contained in
this Section shall be deemed to preclude the Company from seeking
indemnification from, or otherwise proceeding against, any third party
including, without limitation, any tenant or predecessor in title to the Real
Property. The covenants, agreements, and indemnities set forth in this Section
shall be binding upon the Company and its successors and assigns, and shall
survive each of repayment of the Indebtedness, foreclosure of the Property
Covered by this Deed of Trust, and the Company granting a deed in lieu of
foreclosure of the Property Covered by this Deed of Trust. Any costs or expenses
incurred by Collateral Agent for which the Company is responsible or for which
the Company has indemnified Collateral Agent shall be paid to Collateral Agent
on demand, with interest at the default rate specified in the Credit Agreement
from the date incurred by Collateral Agent until paid in full, and shall be
secured hereby. Without Collateral Agent's prior written consent, the Company
shall not enter into any settlement agreement, consent decree, or other
compromise in respect to any Hazardous Material Claims
(f) In the event Collateral Agent reasonably determines that an
investigation of the Real Property for the presence of Hazardous Materials (an
"Environmental Audit") is necessary in order to maintain the value of the
Collateral Agent's security in the Property Covered by this Deed of Trust, the
Company shall retain, upon Collateral Agent's request, or Collateral Agent may
retain directly, at the sole cost and expense of the Company, a licensed
geologist, industrial hygienist or an environmental consultant (referred to
hereinafter as the "Consultant") acceptable to Collateral Agent to conduct the
Environmental Audit. Collateral Agent's determination to require an
Environmental Audit shall be deemed reasonable at any time there is Default
under any of the Loan Documents or
<PAGE>
14
in the event that Collateral Agent has received notice of the likely existence
of Hazardous Materials upon or in the Real Property. The Environmental Audit
shall be performed in a manner reasonably calculated to discover the presence of
Hazardous Materials contamination taking into consideration the known uses of
the Real Property and property in the vicinity of the Real Property and any
factors unique to the Real Property. If the Company shall fail to pay for or
obtain an Environmental Audit as provided for herein, Collateral Agent may, but
shall not be obligated to, obtain the Environmental Audit, and the Company
immediately and without demand shall repay all costs and expenses incurred by
Collateral Agent in connection therewith, with interest at the default rate
specified in the Note from the date of such payments or advances until paid in
full, and such sums so advanced or expended, with interest as aforesaid, shall
be secured hereby.
(g) The Company shall cooperate with the Consultant and allow entry
and access to all portions of the Real Property for the purpose of Consultant's
investigation. the Company shall comply, at its sole cost and expense, with all
recommendations contained in the Environmental Audit reasonably required to
bring the Real Property into compliance with all Environmental Laws and any
recommendation for additional testing and studies to detect the quantity and
types of Hazardous Materials present, if Collateral Agent requires the
implementation of the same.
13. Without obtaining the prior written consent of Collateral Agent,
the Company shall not consent to, or vote in favor of, the inclusion of all or
any part of the Property Covered by this Deed of Trust in any Community
Facilities District formed pursuant to the Community Facilities District Act,
A.R.S. Section 48- 701, et seq., as amended from time to time. The Company shall
-- ---
immediately give notice to Collateral Agent of any notification or advice that
the Company may receive from any municipality or other third party of any intent
or proposal to include all or any part of the Property Covered by this Deed of
Trust in a Community Facilities District. Collateral Agent shall have the right
to file a written objection to the inclusion of all or any part of the Property
Covered by this Deed of Trust in a Community Facilities District, either in its
own name or in the name of the Company, and to appear at, and participate in,
any hearing with respect to the formation of any such district.
14. Collateral Agent shall have, and is hereby granted by the
Company with a warranty of further assurances, the irrevocable power to appoint
a substitute trustee or trustees hereunder and to remove any or all trustees
hereunder from time to time without notice, unless required by applicable law,
and without specifying any reason therefor, by filing for record a deed of
appointment in the office in which this Deed of Trust is recorded. Such power of
removal and appointment may be exercised as often and whenever Collateral Agent
deems it advisable, and the exercise of such power, no matter how often, shall
not result in an exhaustion of such power. Upon the recordation of each such
deed of appointment or removal, each trustee so appointed shall become fully
vested with identically the same title and estate in and to the Property Secured
by this Instrument and with all the identical rights, powers, trusts and duties
of his predecessor or predecessors in the Property Covered by this Deed of
Trust, as if originally named as a Trustee hereunder. Whenever in this Deed of
Trust reference is made to Trustee, such reference shall be construed to mean
the trustee or trustees for the time being, whether the original or any
successor Trustee. All title, estate, rights, powers, trusts and duties
hereunder given, appertaining to or devolving upon Trustee shall be in each
Trustee if there is more than one then serving hereunder, so that any action
hereunder or purporting to be hereunder of either one of the original or any
successor trustees shall for all purposes be considered to be, and shall be as
effective as, the action of all trustees. The substitution of one trustee shall
be sufficient even if in replacement of more than one trustee.
15. (a) The Company hereby does agree that the Real Property shall
at all times strictly comply to the extent applicable with the requirements of
the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of
1988, all state and local laws and ordinances related to handicapped access and
all rules, regulations, and orders issued pursuant thereto including, without
limitation, the Americans with Disabilities Act Accessibility Guidelines for
Buildings and Facilities (collectively, "Access Laws").
(b) The Company does hereby agree to give prompt notice to
Collateral Agent of the receipt by the Company of any complaints related to
violation of any Access Laws and of the commencement of any proceedings or
investigations which relate to compliance with applicable Access Laws.
16. In the event the Company shall fail to comply with any or all of
its covenants, agreements, conditions and stipulations herein set forth, then
the Collateral Agent shall after notice to the Company be and hereby
<PAGE>
15
is authorized and empowered at its option, but without legal obligation to do
so, to pay or perform the same without waiver of any other remedy. In addition,
the Collateral Agent is authorized and empowered at its option, but without
legal obligation to do so, to enter, or have its agents enter, the Property
Covered by this Deed of Trust whenever necessary for the purpose of inspecting
the Property Covered by this Deed of Trust and curing any default hereunder. The
Company agrees that the Collateral Agent shall thereupon have a claim against
the Company for all sums paid by the Collateral Agent for such defaults so
cured, together with a lien upon the Property Covered by this Deed of Trust for
the sum so paid plus interest at the Default Rate.
17. The Company shall not commit waste upon the Property Covered by
this Deed of Trust or suffer waste to be committed thereon. The Company will
keep the Property Covered by this Deed of Trust in good order and repair and in
compliance in all material respects with any law, regulation, ordinance or
contract affecting the Property Covered by this Deed of Trust and, from time to
time, make all needful and proper replacements so that buildings, fixtures,
machinery and appurtenances included in or on the Property Covered by this Deed
of Trust and useful to the ownership and operation of the Property Covered by
this Deed of Trust will at all times be in good condition, fit and proper for
the respective purposes for which they were erected or installed. The Company
shall observe and comply with all conditions and requirements necessary to
preserve and extend any and all material rights, licenses, permits (including
but not limited to zoning variances, special exceptions and non-conforming
uses), privileges, franchises and concessions which are applicable to the
Property Covered by this Deed of Trust or which have been granted to or
contracted for by the Company in connection with any existing or presently
contemplated use of the Property Covered by this Deed of Trust and shall obtain
and keep in full force and effect all necessary governmental and municipal
approvals as may be necessary from time to time to comply in all material
respects with all mining, environmental and other requirements and with any and
all conditions attached to the insurance relating to the Property Covered by
this Deed of Trust and the condition thereof.
18. The Company will give the Collateral Agent immediate notice of
the actual or threatened commencement of any proceedings under eminent domain
affecting all or any part of the Property Covered by this Deed of Trust or any
easement therein or appurtenance thereof, including severance and consequential
damage and change in grade of streets, and will deliver to the Collateral Agent
copies of any and all papers served in connection with any such proceedings.
Except as provided in subsection (a) below, the Company agrees that all awards
heretofore or hereafter made by any public or quasi-public authority to the
present and all subsequent owners of the Property Covered by this Deed of Trust
by virtue of an exercise of the right of eminent domain by such authority,
including any award for taking of title, possession or right of access to a
public way, or for any change of grade or streets affecting the Property Covered
by this Deed of Trust, are, subject to the terms and provisions of the Leases,
to the extent applicable thereto, hereby assigned to the Collateral Agent and
the Collateral Agent at its option is hereby authorized, directed and empowered
to collect and receive the proceeds of any such awards from the authorities
making the same and to give proper receipts therefor. After deducting from such
proceeds any expenses incurred by the Collateral Agent in the collection or
handling thereof, the Collateral Agent shall apply the net proceeds as follows:
(a) In the event of such a taking which the Collateral Agent
determines, in its discretion, will not result in a temporary or permanent
reduction in the Cash Flow from Operations, as defined in the Credit
Agreement for the Property Covered by this Deed of Trust, immediately prior
to such taking, and provided no default exists under the terms of this Deed
of Trust, the Collateral Agent shall make the net proceeds of the taking
available to the Company for restoration of the Property Covered by this
Deed of Trust provided that the Company furnishes evidence to the
Collateral Agent satisfactory to the Collateral Agent that the Company has
the balance, if any, of funds necessary to complete restoration of the
Property Covered by this Deed of Trust in accordance with plans and
specifications approved by the Collateral Agent (which cost of restoration
may be established by the certificate of an architect reasonably
satisfactory to the Collateral Agent). If the net proceeds are less than
$250,000, the Collateral Agent shall turn over the entire net award to the
Company for restoration, and the Company agrees to restore the Property
Covered by this Deed of Trust. If the net proceeds are $250,000 or more,
the Collateral Agent shall hold such net award and any additional funds of
the Company required to complete the restoration in trust and make such
funds and proceeds available to the Company for the restoration and repair
of the Property Covered by this Deed of Trust to a condition reasonably
equivalent to their original condition and in accordance with plans and
specifications approved in advance by the Collateral Agent. Such funds and
proceeds shall be disbursed from time to time in an amount equal to the
value of the work in place less a 10% retainage upon
<PAGE>
16
verification by the Company and the Collateral Agent of the amount and
propriety of the work done and upon receipt by the Collateral Agent of
executed partial lien waivers from all materialmen, contractors and
subcontractors for such disbursement and otherwise in accordance with the
Collateral Agent's usual disbursal procedures for construction loans. Final
settlement shall be made when the Collateral Agent is satisfied that the
damaged portion of the Property Covered by this Deed of Trust has been
restored in accordance with plans and specifications previously approved by
the Collateral Agent and upon receipt of final lien waivers from all
materialmen, contractors and subcontractors engaged in such repair or
restoration. Any such funds remaining after such restoration shall be
released to the Company.
(b) In the event of such a taking which the Collateral Agent
determines, in its discretion, will result in a temporary or permanent
reduction in the Cash Flow from Operations, as defined in the Credit
Agreement for the Property Covered by this Deed of Trust, immediately prior
to such taking, the loans evidenced by the Notes shall be prepaid, within
30 days of such taking, in an aggregate amount equal to the amount
determined for the Property Covered by this Deed of Trust on the basis of
the multiple (i.e. 5, 4.75 or 4) reflected in the maximum ratio contained
in section 8.12(a) of the Credit Agreement applicable at the time (even if
such section 8.12(a) shall no longer be in effect, having been superseded
by section 8.12(b) of the Credit Agreement), times the Cash Flow from
Operations, as defined in the Credit Agreement for the Property Covered by
this Deed of Trust immediately prior to such taking. If the loans have been
prepaid as aforesaid and there exists no Event of Default, the net proceeds
shall be released to the Company. If the loans have not been prepaid as
aforesaid and there exists no Event of Default, the net proceeds of
condemnation received by the Collateral Agent shall be applied first to
satisfy the prepayment obligations of this Section 18.(b) with any
remaining balance released to the Company. If there exists an Event of
Default, then, notwithstanding prepayment having been made as required in
this Section 18.(b), the Collateral Agent shall be entitled to apply the
net proceeds of insurance as provided in Section 18.(c). Upon receipt of
such prepayment, and provide there then exists no Event of Default, the
Company shall be entitled to have this Deed of Trust released of record.
(c) If an Event of Default exists at the time of any such taking,
the Collateral Agent may apply the net award, at its option, in any one or
more of the following ways:
(i) apply the same or any part thereof upon the Indebtedness,
whether the Indebtedness be then matured or unmatured, in the manner
and order of priority set forth in Section 25, or if any of the
Indebtedness is not then due and payable, in such other manner and
order of priority as the Collateral Agent may in its discretion elect;
(ii) use the same or any part thereof to fulfill any of the
covenants contained herein as the Collateral Agent may determine;
(iii) use the same or any part thereof to replace or restore
the Property Covered by this Deed of Trust to a condition satisfactory
to the Collateral Agent; or
(iv) release the same or any part thereof to the Company.
The Company hereby covenants and agrees to and with the Collateral Agent, upon
the request of the Collateral Agent to make, execute and deliver any and all
assignments and other instruments sufficient for the purpose of assigning all
such awards to the Collateral Agent, free and clear and discharged of any and
all encumbrances of any kind or nature whatsoever except as above stated.
19. In the event an action shall be instituted to foreclose this
Deed of Trust, or prior to foreclosure but after default, the Collateral Agent
shall be entitled to the appointment of a receiver of the rents, issues and
profits of the Property Covered by this Deed of Trust as a matter of right, with
power to collect the rents, issues and profits of the Property Covered by this
Deed of Trust due and becoming due during the period of default and/or the
pendency of such foreclosure suit to and including the date of confirmation of
the sale under such foreclosure and during the redemption period, if any, after
such confirmation, such rents, issues and profits being hereby expressly
assigned and pledged as security for the payment of the Indebtedness secured by
this Deed of Trust without regard to the value of the Property Covered by this
Deed of Trust or the solvency of any person or persons liable
<PAGE>
17
for the payment of the Indebtedness and regardless of whether the Collateral
Agent has an adequate remedy at law. The Company for itself and for any
subsequent owner hereby waives any and all defenses to the application for a
receiver as above provided and hereby specifically consents to such appointment,
but nothing herein contained is to be construed to deprive the holder of this
Deed of Trust of any other right or remedy or privilege it may now have under
the law to have a receiver appointed. The provision for the appointment of a
receiver and the assignment of such rents, issues and profits is made an express
condition upon which the Loans hereby secured are made. In such event, the court
shall at once on application of the Collateral Agent or its attorney in such
action, appoint a receiver to take immediate possession of, manage and control
the Property Covered by this Deed of Trust, for the benefit of the holder or
holders of the Indebtedness and of any other parties in interest, with power to
collect the rents, issues and profits of the Property Covered by this Deed of
Trust during the pendency of such action, and to apply the same toward the
payment of the several obligations herein mentioned and described,
notwithstanding that the same or any part thereof is occupied by the Company or
any other person. The rights and remedies herein provided for shall be deemed to
be cumulative and in addition to and not in limitation of those provided by law
and if there be no receiver so appointed, the Collateral Agent itself may
proceed to collect the rents, issues and profits from the Property Covered by
this Deed of Trust. From any such rents, issues, and profits collected by the
receiver or by the Collateral Agent prior to a foreclosure sale, there shall be
deducted the cost of collection thereof and the expenses of operation of the
Property Covered by this Deed of Trust, including but not limited to real estate
commissions, receiver's fee and the reasonable fees of its attorney, if any, and
the Collateral Agent's attorney's fees, if permitted by law, and court costs,
the remainder to be applied against the Indebtedness. In the event the rents,
issues and profits are not adequate to pay all tax and other expenses of
operation, the Collateral Agent may, but is not obligated to, advance to any
receiver the amounts necessary to operate, maintain and repair, if necessary,
the Property Covered by this Deed of Trust and any such amounts so advanced,
together with interest thereon at the Default Rate from and after the date of
advancement, shall be secured by this Deed of Trust and have the same priority
of collection as the principal of the Indebtedness secured hereby.
20. No sale of the Property Covered by this Deed of Trust, no
forbearance on the part of the Collateral Agent, no extension of the time for
the payment of the Indebtedness and no change in the terms of the payment
thereof consented to by the Collateral Agent shall in any way whatsoever operate
to release, discharge, modify, change or affect the original liability of the
Company hereunder or the original liability of the Borrower or any other obligor
under any of the Indebtedness, either in whole or in part. No waiver by the
Collateral Agent of any breach of any covenant of the Company herein contained
shall be construed as a waiver of any subsequent breach of the same or any other
covenant herein contained. The failure of the Collateral Agent to exercise the
option for acceleration of maturity and/or foreclosure (including sale under
power of sale hereunder) following any default as aforesaid or to exercise any
other option granted to the Collateral Agent hereunder in any one or more
instances, or the acceptance by the Collateral Agent of partial payments
hereunder shall not constitute a waiver of any such default, nor extend or
affect the grace period, if any, but such option shall remain continuously in
force with respect to any unremedied or uncured default. Acceleration of
maturity once claimed hereunder by the Collateral Agent may, at the option of
the Collateral Agent, be rescinded by written acknowledgement to that effect by
the Collateral Agent, but the tender and acceptance of partial payments alone
shall not in any way affect or rescind such acceleration of maturity, or extend
or affect the grace period, if any. the Collateral Agent may pursue any of its
rights without first exhausting its rights hereunder and all rights, powers and
remedies conferred upon the Collateral Agent herein are in addition to each and
every right which the Collateral Agent may have hereunder at law or equity and
may be enforced concurrently therewith.
21. If any action or proceeding be commenced, to which action or
proceeding the Collateral Agent is made a party by reason of the execution of
this Deed of Trust or the Indebtedness, or in which it becomes necessary to
defend or uphold the lien of this Deed of Trust, or the priority thereof or
possession of the Property Covered by this Deed of Trust, or otherwise to
perfect the security hereunder, or in any suit, action, legal proceeding or
dispute of any kind in which the Collateral Agent is made a party or appears as
party plaintiff or defendant, affecting the interest created herein, or the
Property Covered by this Deed of Trust, including, but not limited to,
bankruptcy, probate and administration proceedings, foreclosure of this Deed of
Trust or any condemnation action involving the Property Covered by this Deed of
Trust, all sums paid by the Collateral Agent for the expense of any litigation
to prosecute and defend the rights and liens created hereby shall be paid by the
Company, to the extent permitted by applicable law, together with interest
thereon from the date of payment at the Default Rate. Any such sum and the
interest thereon shall be immediately due and payable upon demand and be secured
hereby, having the benefit of the lien hereby created, as a part hereof and its
priority.
<PAGE>
18
22. This Deed of Trust is hereby deemed to be as well a security
agreement, within the meaning of the Uniform Commercial Code, for the purpose of
creating hereby a security interest securing the Indebtedness in and to the
Personal Property Collateral. Without derogating any of the provisions of this
Deed of Trust, the Company by this Deed of Trust:
(a) grants to the Collateral Agent a security interest in all of the
Company's right, title and interest in and to all Personal Property
Collateral, including, but not limited to, the items referred to
above, together with all additions, accessions and substitutions and
all similar property hereafter acquired and used or obtained for use
on, or in connection with, the Real Property; the proceeds of the
Personal Property Collateral are intended to be secured hereby;
provided, however, that such intent shall never constitute an
expressed or implied consent on the part of the Collateral Agent to
the sale of any or all Personal Property Collateral except as provided
in Section 7;
(b) agrees that the security interest hereby granted by this Deed of Trust
shall secure the payment of the Indebtedness;
(c) agrees not to sell, convey, mortgage or grant a security interest in,
or otherwise dispose of or encumber, any of the Personal Property
Collateral or any of the Company's right, title or interest therein
without first securing the Collateral Agent's written consent, except
as provided in Section 7; the Collateral Agent may, at its sole
option, require the Company to apply the proceeds from the disposition
of the Personal Property Collateral in reduction of the Indebtedness
secured hereby, except as provided in Section 7.(a);
(d) agrees that if any of the Company's rights in the Personal Property
Collateral are voluntarily or involuntarily transferred, whether by
sale, creation of a security interest, attachment, levy, garnishment
or other judicial process, without the written consent of the
Collateral Agent, such transfer shall constitute a default by the
Company under the terms of this Deed of Trust except as otherwise
provided in Section 7;
(e) agrees that upon or after the occurrence of any default hereunder
which is not remedied within the applicable grace periods contained
herein, the Collateral Agent may, with or without notice to the
Company, exercise its rights to declare the Indebtedness secured by
the security interest created hereby immediately due and payable, in
which case the Collateral Agent shall have all rights and remedies
granted by law and more particularly the Uniform Commercial Code,
including, but not limited to, the right to take possession of the
Personal Property Collateral, and for this purpose may enter upon any
premises on which any or all of the Personal Property Collateral is
situated, without being deemed guilty of trespass and without
liability for damages thereby occasioned, and take possession of and
operate the Personal Property Collateral or remove it therefrom; the
Collateral Agent shall have the further right to take any action it
deems necessary, appropriate or desirable, at its option and in its
discretion, to repair, refurbish or otherwise prepare the Personal
Property Collateral for sale, lease or other use or disposition and to
sell at public or private sales or otherwise dispose of, lease or
utilize the Personal Property Collateral and any part thereof in any
manner authorized or permitted by law and to apply the proceeds
thereof toward payment of any costs and expenses, including reasonable
attorneys' fees and legal expenses, to the extent permitted by law,
thereby incurred by the Collateral Agent and toward payment of the
Indebtedness and all other indebtedness described in this Deed of
Trust, in such order and manner as may be provided in Section 25 of
this Deed of Trust or in the event such provisions are not applicable
in such order and manner as the Collateral Agent may elect;
(f) authorizes the Collateral Agent to file, in the jurisdiction where
this Deed of Trust will be given effect, financing statements covering
the Personal Property Collateral and at the request of the Collateral
Agent, the Company shall join the Collateral Agent in executing one or
more of such financing statements pursuant to the Uniform Commercial
Code in a form satisfactory to the Collateral Agent and the Company
shall pay the cost of filing the same in all public offices at any
time and from time to time wherever the Collateral Agent deems filing
or recording of any financing statements or of this Deed of Trust to
be desirable or necessary; and
<PAGE>
19
(g) acknowledges that the Company, as of the date hereof, has joined the
Collateral Agent in the execution of two Uniform Commercial Code
financing statements, one to be filed with the Secretary of State of
the State or Commonwealth in which the Real Property is located and
the other to be filed with the Recorder of the County in which the
Real Property is located.
23. Each remedy or right of the Collateral Agent shall not be
exclusive of but shall be in addition to every other remedy or right now or
hereafter existing at law or in equity. No delay in the exercise or omission to
exercise any remedy or right accruing on any default shall impair any such
remedy or right or be construed to be a waiver of any such default or
acquiescence therein, nor shall it affect any subsequent default of the same or
of a different nature. Every such remedy or right may be exercised concurrently
or independently and when and as often as may be deemed expedient by the
Collateral Agent.
24. Upon an Event of Default, to the extent permitted by any
applicable law of Arizona, Collateral Agent personally, or by the Trustee, or by
their respective agents or attorneys, and without becoming a mortgagee-in-
possession, may enter into and upon all or any part of the Real Property, and
each and every part thereof, and may exclude the Company, its agents, and
servants wholly therefrom, and having and holding the same, may use, operate,
manage and control the Security or any part thereof and conduct the business
thereof, either personally or by its superintendents, managers, agents,
servants, attorneys or receivers; and upon such entry, Collateral Agent, at the
expense of the Company, may, at Collateral Agent's sole option, insure the same;
and likewise, from time to time, at the expense of the Company, Collateral Agent
may make all necessary or proper repairs, renewals and replacements and such
useful alterations, additions, betterments and improvements thereto and thereon
as to Collateral Agent may seem advisable; and in every such case Collateral
Agent shall have the right to manage and operate the Security and to carry on
the business thereof and exercise all rights and powers of the Company with
respect thereto either in the name of the Company or otherwise as it shall deem
best; and after deducting the expenses of conducting the business thereof and of
all maintenance, repairs, renewals, replacements, alterations, additions,
betterments and improvements necessary to operate the Improvements for their
intended purposes and amounts necessary to pay for taxes, assessments, insurance
and prior or other proper charges upon the Security or any part thereof, as well
as reasonable compensation for the services of Collateral Agent and Trustee, and
for all attorneys, consultants, agents, clerks, servants and other parties
employed by Collateral Agent or Trustee, Collateral Agent shall apply the moneys
arising as aforesaid to the Liabilities in such manner and at such times as
Collateral Agent shall determine in its sole discretion, when and as the same
shall become payable and/or to the payment of any other sums required to be paid
by the Company under this Deed of Trust.
25. (a) Upon an Event of Default, to the extent permitted by any
applicable law of Arizona, Collateral Agent may, with or without entry,
personally or by its agents or attorneys, insofar as applicable:
(i) Request the Trustee to sell the Property Covered by this Deed of
Trust or any part thereof pursuant to the procedures provided by law at one
or more sales as an entity or in parcels, and at such time and place upon
such terms and after such notice thereof as may be required or permitted by
law; and/or
(ii) Institute an action of judicial foreclosure on this Deed of Trust
or institute other proceedings according to law for the foreclosure hereof,
and may prosecute the same to judgment, execution and sale for the
collection of the Entire Indebtedness, and all interest with respect
thereto, together with all taxes and insurance premiums advanced by
Collateral Agent and other sums payable by the Company hereunder, and all
fees, costs and expenses of such proceedings, including reasonable
attorneys' fees and expenses; and/or
(iii) Take such steps to protect and enforce its rights whether by
action, suit or proceeding in equity or at law for the specific performance
of any covenant, condition or agreement in the Loan Documents or in and of
the execution of any power herein granted, or for any foreclosure
hereunder, or for the enforcement of any other appropriate legal or
equitable remedy or otherwise as Collateral Agent shall elect; and/or
(iv) Exercise in respect of the Property Covered by this Deed of Trust
consisting of personal property or fixtures, or both, all of the rights and
remedies available to a secured party upon default under the applicable
provisions of the Uniform Commercial Code in effect in the State. The
Company, however, agrees that all property of every nature and description,
whether real or personal, covered by this Deed of
<PAGE>
20
Trust, together with all personal property used on or in connection with
the Premises or any business conducted thereon by the Company and covered
by separate security agreements, is encumbered as one unit, that this Deed
of Trust and such security interests, at Collateral Agent option, may be
foreclosed or sole in the same proceeding, and that all property encumbered
(both realty and personalty), at Collateral Agent's option, may be sold as
such in one unit as a going business, subject to the provisions of
applicable law.
(b) To the extent permitted by law of Arizona, the Trustee may
postpone from time to time any sale by them to be made under or by virtue of
this Deed of Trust by postponement at the time and place appointed for such sale
or for such postponed sale or sales; and, except as otherwise provided by any
applicable provision of law, the Trustee, without further notice or publication,
may make such sale at the time and place to which the same shall be so
postponed.
(c) Upon the completion of any sale or sales made by the Trustee
under or by virtue of this Deed of Trust, Trustee shall execute and deliver to
the accepted purchaser or purchasers a good and sufficient instrument, or good
and sufficient instruments, conveying, assigning and transferring all estate,
right, title and interest in and to the property and rights sold. The Trustee
shall make all the necessary conveyances, assignments, transfers and deliveries
of any part of the Property Covered by this Deed of Trust and rights so sold and
for that purpose the Trustee may execute all necessary instruments of
conveyance, assignment and transfer. Any such sale or sales made under or by
virtue of this Section 25, whether made under the power of sale herein granted
or under or by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale, shall operate to divest all the estate, right, title,
interest, claim and demand whatsoever, whether at law or in equity, of the
Company in and to the properties, interests and rights so sold, and shall be a
perpetual bar both at law and in equity against the Company and against any and
all persons claiming or who may claim the same, or any part thereof from,
through or under the Company.
(d) Upon any sale, whether under the power of sale hereby given or
by virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, except as required by law, it shall not be necessary for the Trustee or
any public officer acting under execution or order of court to have present or
constructive possession of any of the Property Covered by this Deed of Trust.
(e) The recitals contained in any conveyance made by the Trustee to
any purchaser at any sale made pursuant hereto or under applicable law shall be
conclusive evidence of the matters therein stated, and all prerequisites to such
sale shall be presumed to have been satisfied and performed.
(f) The receipt by Trustee of the purchase money paid at any such
sale, or the receipt by any other person authorized to receive the same, shall
be sufficient discharge therefor to any purchaser of the property or any part
thereof, sold as aforesaid, and no such purchaser, or his representatives,
grantees or assigns, after paying such purchase money and receiving such
receipt, shall be bound to see to the application of such purchase money, or any
part thereof, or be bound to inquire as to the authorization, necessity,
expediency or regularity of any such sale.
(g) In case the liens or the Property Covered by this Deed of Trust
interests hereunder shall be foreclosed by Trustee's sale or by other judicial
or non-judicial action, the purchaser at any such sale shall receive, as an
incident to his ownership, the right to immediate possession of the property
purchased, and if the Company or the Company's successors shall hold possession
of said property, or any part thereof, subsequent to foreclosure, the Company or
the Company's successors (except tenants who have entered into subordination,
non-disturbance and attornment agreements with Collateral Agent) shall be
considered as tenants at sufferance of the purchaser at foreclosure sale, and
anyone occupying the property after demand made for possession thereof shall be
guilty of forcible detainer and shall be subject to eviction and removal,
forcible or otherwise, with or without process of law, and all damages by reason
thereof are hereby expressly waived to the extent permitted by law.
(h) Should any Event of Default occur hereunder, any expenses
incurred by Collateral Agent in prosecuting, resolving, or settling the claim of
Collateral Agent shall become an additional "liability" of the Company and part
of the Indebtedness secured hereby.
<PAGE>
21
(i) In the event a foreclosure hereunder shall be commenced by
Collateral Agent, to the extent permitted by any applicable law of Arizona,
Collateral Agent may at any time before the sale abandon the suit, and may then
institute suit for the acceleration of the Note and for the foreclosure of the
liens and the Property Covered by this Deed of Trust interest hereof. If
Collateral Agent should institute a suit for the acceleration of the Note and
for a foreclosure of the liens and the Property Covered by this Deed of Trust
interest hereof, it may at any time before the entry of a final judgment in said
suit dismiss the same and proceed to sell the Property Covered by this Deed of
Trust, or any part thereof, in accordance with the provisions of this Deed of
Trust.
(j) The purchase money proceeds or avails of any sale made under or by
virtue of this Deed of Trust, together with any other sums which then may be
held by Collateral Agent under this Deed of Trust, whether under the provisions
of this Section 25 or otherwise, shall be applied in accordance with the laws of
Arizona, and to the extent not inconsistent, as follows:
(A) first, to the payment or reimbursement of the Collateral Agent for
all costs and expenses of such suit or suits or other enforcement
activities of the Collateral Agent, including, but not limited to, the
costs of advertising, sale and conveyance, including attorneys',
solicitors' and stenographers' fees, if permitted by law, outlays for
documentary evidence and the cost of such abstract, examination of title
and title report;
(B) second, to the extent proceeds remain after the application
pursuant to preceding clause (A), to reimburse the Collateral Agent for all
moneys advanced by the Collateral Agent, if any, for any purpose authorized
in this Deed of Trust with interest at the Default Rate;
(C) third, to the extent proceeds remain after the application
pursuant to preceding clause (B), an amount equal to the outstanding
Indebtedness owed to the Secured Creditors shall be paid to the Secured
Creditors as provided in Section 25.(1) with each Secured Creditor
receiving an amount equal to its outstanding Indebtedness or, if the
proceeds are insufficient to pay in full all such Indebtedness, its Pro
Rata Share of the amount remaining to be distributed; and
(D) fourth, to the extent remaining after the application pursuant to
the preceding clauses (A), (B) and (C), to the Company or to whomever may
be lawfully entitled to receive such payment.
(k) For purposes of this Deed of Trust, "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount, the
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then outstanding amount of the relevant Indebtedness owed such Secured
Creditor which is secured hereby and the denominator of which is the then
outstanding amount of all Indebtedness secured hereby.
(l) All payments required to be made to the (i) Lenders hereunder
shall be made to the Administrative Agent for the account of the respective
Lenders and (ii) Interest Rate Creditors hereunder shall be made to the paying
agent under the applicable Designated Interest Rate Agreement or, in the case of
Designated Interest Rate Agreements without a paying agent, directly to the
applicable Interest Rate Creditor.
(m) For purposes of applying payments received in accordance with this
Section 25, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent for a determination (which the Administrative Agent agrees
to provide upon request to the Collateral Agent) of the outstanding Credit
Document Obligations and (ii) upon any Interest Rate Creditor for determination
(which each Interest Rate Creditor agrees to provide upon request to the
Collateral Agent) of the outstanding Interest Rate Obligations owed to such
Interest Rate Creditor. Unless it has actual knowledge (including by way of
written notice from a Secured Creditor) to the contrary, the Administrative
Agent under the Credit Agreement, in furnishing information pursuant to the
preceding sentence, and the Collateral Agent, in acting hereunder, shall be
entitled to assume that (x) no Credit Document Obligations other than principal,
interest and regularly accruing fees are owing to any Lender and (y) no
Designated Interest Rate Agreements or Interest Rate Obligations with respect
thereto are in existence.
<PAGE>
22
(n) It is understood that the Company shall remain liable to the
extent of any deficiency between (x) the amount of the proceeds of the Property
Covered by this Deed of Trust and the amount of the sum referred to in clauses
(A) and (B) of Section ? and (y) the aggregate outstanding amount of the
Indebtedness.
(o) The Company shall pay all costs and expenses, including without
limitation costs of title searches and title policy commitments, Uniform
Commercial Code searches, court costs and reasonable attorneys' fees, incurred
by Collateral Agent in enforcing payment and performance of the Indebtedness or
in exercising the rights and remedies of Collateral Agent hereunder. All such
costs and expenses shall be secured by this Deed of Trust and by all other lien
and security documents securing the Indebtedness. In the event of any court
proceedings, court costs and attorneys' fees shall be set by the court and not
by jury and shall be included in any judgment obtained by Collateral Agent.
(p) In any action by Collateral Agent to recover a deficiency judgment
for any balance due under the Note upon the foreclosure of this Deed of Trust or
in any action to recover the Indebtedness or Indebtedness secured hereby, and as
a material inducement to making the loan evidenced by the Note, the Company
acknowledges and agrees that the successful bid amount made at any judicial or
non-judicial foreclosure sale, if any, shall be conclusively deemed to
constitute the fair market value of the Premises, that such bid amount shall be
binding against the Company in any proceeding seeking to determine or contest
the fair market value of the Premises. The Company hereby waives and
relinquishes any right to have the fair market value of the Premises determined
by a judge or jury in any action seeking a deficiency judgment or any action on
the Indebtedness secured hereby, including, without limitation, a hearing to
determine fair market value pursuant to A.R.S. (s) 12-1566, (s) 33-814, (s)
33-725, or (s) 33-727.
(q) Upon any sale made under or by virtue of this Section 25, whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Lender may bid
for and acquire the Property Covered by this Deed of Trust or any part thereof
and in lieu of paying cash therefor may make settlement for the purchase price
by crediting upon the indebtedness of Borrower secured by this Deed of Trust the
gross sales price.
26. The Collateral Agent, in making any payment herein and hereby
authorized in the place and stead of the Company (a) relating to taxes,
assessments, water rates, sewer rentals and other governmental or municipal
charges, fines, impositions or liens asserted against the Property Covered by
this Deed of Trust, may do so according to any bill, statement or estimate
procured from the appropriate public authority without inquiry into the validity
thereof; or (b) relating to any adverse title, lien, statement of lien,
encumbrance, claim or charge, shall be the sole judge of the validity of same;
or (c) otherwise relating to any purpose herein and hereby authorized, but not
enumerated in this section, may do so whenever, in its good faith judgment and
discretion, such payment shall seem necessary or desirable to protect the full
security intended to be created by this Deed of Trust. In connection with any
such payment, the Collateral Agent, at its option, may and is hereby authorized
to obtain a continuation report of title prepared by a title insurance company,
the cost and expenses of which shall be repayable by the Company upon demand and
shall be secured hereby.
27. Should the proceeds of any Loans made by any Lender to the
Company, the repayment of which is hereby secured, or any part thereof, or any
amount paid out or advanced by the Collateral Agent or any Lender, be used
directly or indirectly to pay off, discharge or satisfy, in whole or in part,
any prior lien or encumbrance upon the Property Covered by this Deed of Trust or
any part thereof, then the Collateral Agent shall be subrogated to such other
liens or encumbrances and upon any additional security held by the holder
thereof and shall have the benefit of the priority of all of the same.
28. The Company agrees, without affecting the liability of any person
for payment of the Indebtedness or affecting the lien of this Deed of Trust upon
the Property Covered by this Deed of Trust or any part thereof (other than
persons or property explicitly released as a result of the exercise by the
Collateral Agent of its rights and privileges hereunder), that the Collateral
Agent, without notice, and without regard to the consideration, if any, paid
therefor, and notwithstanding the existence at that time of any inferior liens
thereon, may release as to itself and this Deed of Trust any part of the
security described herein or any person liable for any Indebtedness secured
hereby, without in any way affecting the priority of the lien of this Deed of
Trust to the full extent of the Indebtedness remaining unpaid hereunder upon any
part of the security not expressly released and may agree with
<PAGE>
23
any party obligated on the Indebtedness or having any interest in the security
described herein to extend the time for payment of any part or all of the
Indebtedness secured hereby. Such agreement shall not, in any way, release or
impair the lien hereof, but shall extend the lien hereof as against the title of
all parties having any interest in such security which interest is subject to
such lien. In the event the Collateral Agent: (a) releases, as aforesaid, any
part of the security described herein or any person liable for any Indebtedness
secured hereby, (b) grants an extension of time for any payments of the debt
secured hereby, (c) takes other or additional security for the payment thereof,
or (d) waives or fails to exercise any right granted herein, in the Notes or in
any related agreement, no such act or omission shall release the Company,
subsequent purchasers of all or any part of the Property Covered by this Deed of
Trust, any maker or surety of the Notes or any party to this Deed of Trust or
any related agreement under any covenant therein, or preclude the Collateral
Agent from exercising any right, power of privilege herein granted or intended
to be granted in the event of any other default then made or any subsequent
default.
29. If at any time the United States of America shall require internal
revenue stamps to be affixed to any of the Notes or any other Indebtedness, the
Company will pay (or cause the Borrower, if the Company is not the Borrower) for
the same with any interest or penalties imposed in connection herewith.
30. To the extent services are required of the Collateral Agent's
counsel after the date hereof, which are normally incident to the closing,
amendment, alteration, and enforcement of this Deed of Trust, and all provisions
herein contained, the Company shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Company.
31. The Company agrees at all time to cause this Deed of Trust, and
each amendment or modification hereof or supplement hereto, and financing
statements covering personal property (and continuation statements in respect
thereof), if necessary or appropriate under the Uniform Commercial Code, as in
effect in the jurisdiction in which the Real Property is located, and all
assignments of leases, to be recorded, registered and filed, and kept recorded,
registered and filed, in such manner and in such places as appropriate, and
shall comply with all applicable statutes and regulations in order to establish,
preserve and protect the security and priority of this Deed of Trust, and such
assignments and the rights of the Collateral Agent thereunder. The Company shall
pay, or cause to be paid, all taxes, fees and other charges incurred in
connection with such recording, registration, filing and compliance.
32. The Company acknowledges that it has received from the Collateral
Agent without charge a true and correct copy of this Deed of Trust.
33. The Collateral Agent and its successors and assigns shall be
entitled to all of the benefits of the indemnification provisions of the Credit
Agreement and the other Credit Documents. All of the terms and provisions of
Section 12.1 of the Credit Agreement (including any defined terms used therein)
are by this reference thereto hereby incorporated into this Deed of Trust for
the benefit of the Collateral Agent and its successors and assigns as fully as
if written out at length herein, and any references in such section of the
Credit to the "Borrower" shall be deemed to refer to, and constitute obligations
of, the Company (if the Company is not the Borrower).
34. Neither this Deed of Trust, the Credit Agreement, the Notes, any
other Indebtedness secured hereby, any of the other Credit Documents, or any of
the Designated Interest Rate Agreements, are intended or shall be construed as
creating a partnership or joint venture between the Company, on the one hand,
and the Collateral Agent or any other holder of any of the Indebtedness, on the
other hand; and the relationship of the Company and the Collateral Agent
hereunder shall solely be that of borrower and collateral agent for Secured
Creditors.
35. At the option of the Collateral Agent, this Deed of Trust shall
become subject and subordinate in whole or in part (but not in respect to the
priority of entitlement to insurance proceeds or any award in condemnation) to
any or all leases and/or subleases of all or any part of the Property Covered by
this Deed of Trust upon the execution by the Collateral Agent and recording
thereof, at any time hereafter, in the appropriate recorder's office, a
unilateral declaration to that effect.
36. To the extent permitted by law with respect to the Indebtedness
secured hereby or any renewals or extensions thereof, the Company waives and
renounces any and all homestead and exemption rights, as
<PAGE>
24
well as the benefit of all valuation and appraisement privileges, and also
moratoriums under or by virtue of the constitution and laws of the jurisdiction
in which the Real Property is located or any other state or of the United
States, now existing or hereafter enacted.
37. All the covenants hereof shall run with the land. Nothing herein
contained nor any transaction related hereto shall be construed or shall so
operate, either presently or prospectively, to require the Company to pay
interest at a rate greater than is now lawful in such case to contract for, but
shall require payment of interest only to the extent of such lawful rate.
38. The Company shall execute, acknowledge and deliver any and all
such further acts, conveyances, documents, mortgages and assurances as the
Collateral Agent may reasonably require for accomplishing the purpose hereof
forthwith upon the request of the Collateral Agent, whether in writing or
otherwise. The Company, within ten days upon request by mail, shall furnish a
written statement duly acknowledged of the amount due upon this Deed of Trust
and the Indebtedness (both unpaid principal and accrued interest) and whether
any offset or defenses exist against the Indebtedness, and any other information
which might reasonably be requested in connection with the sale of the
Indebtedness, or any portion thereof or interest therein, to any third party, or
an audit of the Collateral Agent, and which may be relied on for such purposes.
39. Wherever notices may appropriately be given under this Deed of
Trust, such notices shall be in writing and shall always be treated as having
adequately been given if:
(a) when intended for the Company, five days after dispatch by
Registered or Certified Mail return receipt requested, addressed to the
mailing address, as set out herein or to such other address or to such
other person, as the Company may from time to time, designate in writing;
or
(b) when intended for the Collateral Agent, five days after dispatch
by Registered or Certified Mail return receipt requested, addressed to the
mailing address of the Collateral Agent as set out herein or to such other
address or to such other person as the Collateral Agent may from time to
time designate in writing.
40. Whenever used, the singular number shall include the plural, the
plural the singular and the use of any gender shall include all genders. All of
the covenants and agreements of "Company" herein contained are joint and
several. All of the covenants and agreements herein contained shall bind the
parties hereto and the benefits and advantages thereof shall also inure to their
respective heirs, executors, administrators, successors and permitted assigns.
41. Any of the following occurrences or acts shall constitute an event
of default under this Deed of Trust ("Event of Default"): (a) the Borrower fails
to pay any of its Notes or any installment thereof or interest thereon when due
or when declared due, subject to any applicable grace period provided therein;
(b) an Event of Default under and as defined in the Credit Agreement shall have
occurred; (c) the Company (regardless of the pendency of any bankruptcy,
reorganization, receivership, insolvency or other proceedings, at law, in equity
or before any administrative tribunal, which have or might have the effect of
preventing the Company from complying with the terms of this Deed of Trust),
shall fail to observe or perform any of the Company's covenants, agreements or
obligations under this Deed of Trust and, other than defaults in the observance
or performance of its obligations under Section 11 hereof, such failure shall
continue for 30 days after notice; (d) a default shall occur and continue to
exist after the expiration of any applicable grace period under any other
document, agreement or instrument between the Borrower or any Subsidiary
Guarantor and the Collateral Agent or any Secured Creditor, with respect to any
of the Indebtedness; (e) any representation contained herein or in the Credit
Agreement or the Notes or made (or deemed made) by the Borrower or any
Subsidiary Guarantor to the Collateral Agent or any of the Secured Creditors in
connection with any of the Indebtedness shall prove to be untrue in any material
respect on the date as of which made or deemed made; (f) the filing by the
Company of a notice limiting the maximum principal amount secured by this Deed
of Trust to an amount less than that specified in the future advance provisions
of this Deed of Trust; or (g) the Borrower or any Guarantor of any part of the
Indebtedness or any other obligation of the Borrower shall file a voluntary
petition in bankruptcy or be adjudicated a bankrupt or insolvent, or the
Borrower or any such Guarantor shall file any petition or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any present or
future federal, state or other
<PAGE>
25
statute, law or regulation relating to bankruptcy, insolvency or other relief
for debtors or protection for creditors, or the seeking, or the consenting by
the Borrower or any such Guarantor to or acquiescing in the appointment of any
trustee, receiver, conservator or liquidator of the Borrower or any such
Guarantor, as the case may be, or of all or any substantial part of the Property
Covered by this Deed of Trust or any or all of the rents, issues or profits
thereof, or the making of any general assignment for the benefit of creditors,
or the admission in writing of its inability to pay its debts generally as they
become due, or the entry by a court of competent jurisdiction of any order,
judgment or decree, which is not dismissed within 60 days thereafter, approving
a petition filed against the Borrower or any such Guarantor seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future Federal, state or other statute,
law or regulation relating to bankruptcy, insolvency or other relief for debtors
or protection for creditors, or the appointment, which appointment is not
dismissed within 60 days thereafter, of any trustee, receiver, conservator or
liquidator of the Borrower or any such Guarantor, as the case may be, or of all
or any substantial part of the Property Covered by this Deed of Trust or of any
or all of the rents, issues and profits thereof without the consent or
acquiescence of the Collateral Agent.
42. Upon any Event of Default or any default by the Company as
provided herein or in any other instrument evidencing or securing any of the
Indebtedness then, in any of said events, at the option of the Collateral Agent
(or, as may be provided in any instrument pursuant to which any such
Indebtedness is created, at the option of any holder of any such Indebtedness),
the whole or any applicable portion of the Indebtedness secured hereby shall
become immediately due and payable, although the period specified for the
payment thereof may not have expired, anything hereinbefore or in the Notes
contained to the contrary notwithstanding.
43. The obligations of the Company under this Deed of Trust shall be
absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation:
(A) any renewal, extension, amendment or modification of, or addition
or supplement to or deletion from other Credit Documents, or any other
instrument or agreement referred to therein, or any assignment or transfer
of any thereof;
(B) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Deed of Trust except as expressly provided in such renewal, extension,
amendment, modification, addition, supplement, assignment or transfer;
(C) any furnishing of any additional security to the Collateral Agent
or its assignee or any acceptance thereof or any release of any security by
the Collateral Agent or its assignee;
(D) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof;
or
(E) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
the Borrower, any Subsidiary Guarantor or any Subsidiary of any thereof, or
any action taken with respect to this Deed of Trust by any trustee or
receiver, or by any court, in any such proceeding, whether or not the
Company shall have notice or knowledge of any of the foregoing.
44. Any provision of this Deed of Trust which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
45. THIS DEED OF TRUST AND THE RIGHTS AND OBLIGATIONS OF THE COMPANY
AND THE COLLATERAL AGENT HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE COMMONWEALTH OF KENTUCKY EXCEPT TO THE EXTENT
<PAGE>
26
THAT THE LAWS OF THE JURISDICTION IN WHICH THE REAL PROPERTY IS LOCATED
MANDATORILY APPLY.
46. (a) After the termination of the Total Commitment and all
Designated Interest Rate Agreements, when no Note nor Letter of Credit is
outstanding and when all Loans and other Obligations have been paid in full,
this Deed of Trust shall terminate, and the Collateral Agent, at the request and
expense of the Company, will execute and deliver to the Company a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Deed of Trust, and will duly assign, transfer and deliver to the relevant
Assignor (without recourse and without any representation or warranty) such of
the Personal Property Collateral as may be in the possession of the Collateral
Agent and as has not theretofore been sold or otherwise applied or released
pursuant to this Deed of Trust.
(b) So long as no payment default on any of the Indebtedness is in
existence or would exist after the application of proceeds as provided below,
the Collateral Agent shall, at the request of the Company, release any or all of
the Property Covered by this Deed of Trust, provided that (x) such release is
permitted by the terms of the Credit Agreement (it being agreed for such
purposes that a release will be deemed "permitted by the terms of the Credit
Agreement" if the proposed transaction constitutes an exception contained in
Section 8.2 of the Credit Agreement) or otherwise has been approved in writing
by the Required Lenders and (y) the proceeds of such Collateral are to be
applied as required pursuant to the Credit Agreement or any consent or waiver
entered into with respect thereto.
(c) At any time that the Company desires that the Collateral Agent
take any action to give effect to any release of any or all of the Property
Covered by this Deed of Trust pursuant to the foregoing Section 46.(a) or
Section 46.(b), it shall deliver to the Collateral Agent a certificate signed by
a principal executive officer stating that the release of the respective portion
of or all of the Property Covered by this Deed of Trust is permitted pursuant to
Section 46.(a) or Section 46.(b). In the event that any part of the Property
Covered by this Deed of Trust is released as provided in Section 46.(b), the
Collateral Agent, at the request and expense of the Company, will duly release
such part of the Property Covered by this Deed of Trust and assign, transfer and
deliver to the Company (without recourse and without any representation or
warranty) such of the part of the Property Covered by this Deed of Trust as is
then being (or has been) so sold and as may be in the possession of the
Collateral Agent and has not theretofore been released pursuant to this Deed of
Trust. The Collateral Agent shall have no liability whatsoever to any Secured
Creditor as the result of any release of all or any part of the Property Covered
by this Deed of Trust by it as permitted by this section. Upon any release of
all or any part of the Property Covered by this Deed of Trust pursuant to
Section 46.(a) or Section 46.(b), none of the Collateral Agent or any of the
Secured Creditors shall have any continuing right or interest in the same, or
the proceeds thereof.
47. None of the terms and conditions of this Deed of Trust may be
changed, waived, modified or varied in any manner whatsoever unless in writing
duly signed by the Company and the Collateral Agent (with the consent of the
Required Lenders or, to the extent required by Section 12.12 of the Credit
Agreement, all of the Lenders), provided, however, that no such change, waiver,
modification or variance shall be made to Section 25 hereof or this Section 47
without the consent of each Secured Creditor adversely affected thereby,
provided further that any change, waiver, modification or variance affecting the
rights and benefits of a single Class of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors of such Class of Secured Creditors. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Lenders as holders of the Credit Document Obligations or (y) the
Interest Rate Creditors as holders of the Interest Rate Obligations. For the
purpose of this Agreement, the term "Requisite Creditors" of any Class shall
mean each of (x) with respect to the Credit Document Obligations, the Required
Lenders and (y) with respect to the Interest Rate Obligations, the holders of
51% of all obligations outstanding from time to time under the Designated
Interest Rate Agreements.
48. By accepting the benefits of this Agreement, each Secured Creditor
acknowledges and agrees that the rights and obligations of the Collateral Agent
shall be as set forth in Section 11 of the Credit Agreement. Notwithstanding
anything to the contrary contained in Section 47 of this Deed of Trust or
Section 12.12 of the Credit Agreement, this Section 48, and the duties and
obligations of the Collateral Agent set forth in this Section 48, may not be
amended or modified without the consent of the Collateral Agent.
<PAGE>
27
49. The Company and the Collateral Agent each hereby irrevocably
waives all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Deed of Trust or the transactions
contemplated hereby.
50. IT IS SPECIFICALLY AGREED that time is of the essence with respect
to this Deed of Trust and that the waiver of the rights or options, or
obligations secured hereby, shall not at any time thereafter be held to be
abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Indebtedness secured hereby,
is not required to be given.
IN WITNESS WHEREOF, the Company has caused this Deed of Trust to be
executed and delivered as of the date first set forth above.
ATRIA COMMUNITIES, INC., a Delaware
corporation
By: /s/ J. Timothy Wesley
------------------------------
J. Timothy Wesley
Chief Financial Officer and Vice President
of Development
Attest: /s/ Nancy C. Chiles
-------------------------
<PAGE>
28
COMMONWEALTH OF KENTUCKY )
) SS.:
COUNTY OF JEFFERSON )
This instrument was acknowledged before me on the 26th day of August,
____
1996 by J. Timothy Wesley, Chief Financial Officer and Vice President of
Development of ATRIA COMMUNITIES, INC., a Delaware corporation, on behalf of
said ATRIA COMMUNITIES, INC.
/s/ Teri L. Barnett
------------------------------
Notary Public
My commission expires:
----------
This Instrument Prepared By:
Richard L. Reppert, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
<PAGE>
ANNEX I
NAMES AND ADDRESSES OF LENDERS
PNC Bank, National Association
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
National City Bank of Kentucky
101 South Fifth Street
Louisville Regional Division--8th Floor
Louisville, Kentucky 40202
PNC Bank, Kentucky, Inc.
500 West Jefferson Street
Louisville, Kentucky 40202
Toronto Dominion (Texas), Inc.
909 Fannin Street, 17th Floor
Houston, Texas 77010
Bank One, Kentucky, NA
416 West Jefferson Street
Louisville, Kentucky 40202
NationsBank, N.A.
100 North Tryon Street
Charlotte, North Carolina 28255
Fleet National Bank
Fleet Center
75 State Street
Boston, Massachusetts 02109-1810
The Bank of New York
One Wall Street
22nd Floor
New York, New York 10286
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260-0060
AmSouth Bank of Alabama
1900 Fifth Avenue North
Sonat 7th Floor
Birmingham, Alabama 35203
<PAGE>
2
U. S. Bank of Washington, National Association
1420 Fifth Avenue
National Corporate Banking, 11th Floor
Seattle, Washington 98101
First American National Bank
First American Center
Nashville, Tennessee 37237
<PAGE>
EXHIBIT 1
TO FUTURE ADVANCE DEED OF TRUST, FIXTURE FILING, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
PARCEL I:
Lot 6, Block 13, MOUNTAIN VIEW ACRE FARMS, Pima County, Arizona, according to
the plat of record in the office of the Pima County Recorder in Book 4 of Maps
and Plats at page 22;
Except any portion lying within Pima Street as shown on map recorded in Book 5
of Road Maps at page 22; and
Except that part conveyed to the City of Tucson in Docket 1639 at page 550; and
Further Except all that part described as follows:
Beginning at the point of intersection of a line parallel with and 180 feet
Easterly from the West line of said Lot 6, with the South right-of-way line of
Pima Street as conveyed to the City of Tucson, by Deed recorded in said
Recorder's Office in Docket 1639 at page 550, which South right-of-way line of
Pima Street is 15 feet Southerly from and parallel with the North line of said
Lot 6;
Thence North 89 degrees 51 minutes 15 seconds West, along said South
right-of-way line of Pima Street, a distance of 124.79 feet to a point of curve;
Thence Southwesterly along said right-of-way line, and along the arc of a curve
to the left, having a radius of 25 feet, through a central angle of 90 degrees,
28 minutes 45 seconds, a distance of 39.48 feet to a point of tangent in the
East right-of-way line of Craycroft Road as conveyed to the City of Tucson by
said Deed recorded in Docket 1639, at page 550, which East right-of-way line of
Craycroft Road is 30 feet Easterly from and parallel with the West line of said
Lot 6;
Thence South 0 degrees 20 minutes 00 seconds East, along the East right-of-way
line of Craycroft Road, a distance of 124.79 feet to a point in a line parallel
with and 165 feet Southerly from the North line of said Lot 6;
Thence South 89 degrees 51 minutes 15 seconds East parallel with said North line
of Lot 6, a distance of 150.00 feet to a point;
Thence North 0 degrees 20 minutes 00 seconds West, parallel with the West line
of said Lot 6, a distance of 150.00 feet to the Point of Beginning; and
Further Except that portion conveyed to the City of Tucson, a municipal
corporation by Quit Claim Deed recorded in Docket 8888 at page 54 described as
follows:
All that portion of Lot 6 in Block 13 of MOUNTAIN VIEW ACRE FARMS, a subdivision
of Pima County, Arizona, as per the map or plat thereof recorded in the office
of the Recorder of said County in Book 4 of Maps and Plats at page 22, described
as follows:
Beginning at the intersection of a line parallel with and 180.00 feet Easterly
of the West line of Lot 6, with a line parallel with and 15.00 feet Southerly of
the North line of said Lot, being a point on the South line of Pima Street as
widened by that certain instrument of record in said County Recorder's office in
Docket 1639 at page 550;
Thence South 89 degrees 56 minutes 55 seconds East, along said South line, 32.59
feet to a point on the East line of Lot 6;
Thence South 00 degrees 05 minutes 42 seconds East, along said East line, 0.73
feet;
<PAGE>
2
Thence North 89 degrees 46 minutes 36 seconds West, a distance of 32.59 feet to
a point which bears South 00 degrees 25 minutes 31 seconds East, a distance of
0.63 feet from the Point of Beginning;
Thence North 00 degrees 25 minutes 31 seconds West, a distance of 0.63 feet to
the Point of Beginning.
Parcel II:
Lots 3, 4 and 5 in Block 13 of MOUNTAIN VIEW ACRE FARMS, Pima County, Arizona,
according to the plat of record in the office of the Pima County Recorder in
Book 4 of Maps and Plats at page 22.
And Except from Lot 5, any portion thereof that lies within the following
described property:
Beginning at the Southwest corner of said Block 13;
Thence Northerly along the West line of said Block 13, a distance of 606.2 feet
to the Northwest corner thereof;
Thence Easterly along the North line of said Block 13, a distance of 692.6 feet
to the Northeast corner thereof;
Thence Southerly along the East line of said Block 13, a distance of 39.93 feet
to a point of curve;
Thence Northwesterly along a curve concave to the Southwest and having a radius
of 25.00 feet a distance of 39.20 feet to a point of tangent on a line parallel
with and distant 15.00 feet Southerly from the North line of said Block 13;
Thence Westerly along said last mentioned parallel line, through Lots 10, 9, 8,
7 and 6 in said Block 13, a distance of 612.38 feet to a point of curve;
Thence Southwesterly along a curve concave to the Southeast and having a radius
of 25.00 feet, a distance of 39.48 feet to a point of tangent on a line parallel
with and distant 30.00 feet Easterly from the West line of said Block 13;
Thence Southerly along said last mentioned parallel line, through Lots 6 and 5
in said Block 13, a distance of 541.07 feet to a point of curve;
Thence Southeasterly along a curve concave to the Northeast and having a radius
of 25.00 feet, a distance of 39.12 feet to a point of tangent on the Southerly
line of said Block 13, said point being distant 54.85 feet Easterly from the
Southwest corner of said Block 13;
Thence Westerly along the South line of said Block 13, a distance of 54.85 feet
to the Point of Beginning.
<PAGE>
EXHIBIT 2
TO FUTURE ADVANCE DEED OF TRUST, FIXTURE FILING, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
Permitted Encumbrances
1. Reservations contained in the Patent from the United States of America,
recorded September 25, 1914, in Book 59 of Deeds, page 157.
2. Easement to Tucson Gas, Electric Light & Power Company recorded in
Docket 2130, page 597 and partial release by Tucson Gas & Electric
Company, an Arizona corporation, recorded in Docket 5376, page 67.
3. Easement to Tucson Gas, Electric Light & Power Company recorded in
Docket 2405, page 239.
4. Easement to Tucson Gas, Electric Light & Power Company recorded in
Docket 2405, page 240.
5. Right of Way Easement to Mountain States Telephone and Telegraph Company
for telephone and telegraph lines and matters incident thereto as set
forth in Docket 5306, page 165.
6. Easement to Tucson Gas & Electric Company, a Corporation, recorded in
Docket 5342, page 663.
7. Terms and Conditions of Memorandum of Lease dated December 19, 1989 and
recorded March 1, 1990 in Docket 8735, page 565, with the Laundry Man.
8. Multiple Dwelling Unit Cable Access Agreement with Cox Cable Tucson,
Inc., recorded September 22, 1992 in Docket 9381, page 716 and
re-recorded April 19, 1996 in Docket 10277, page 763.
9. Any liens thereon for taxes, assessments, charges, excises, levies and
other governmental charges which are not due and payable.
10. Zoning ordinances, if any.
