<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the quarterly period ended September 30, 1997.
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from ..... to .......
Commission file number 1-8895
- - --------------------------------------------------------------------------------
HEALTH CARE PROPERTY INVESTORS, INC.
(Exact name of registrant as specified in its charter)
- - --------------------------------------------------------------------------------
Maryland 33-0091377
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
4675 MacArthur Court, 9th Floor
Newport Beach, CA 92660
(Address of principal executive offices)
(714) 221-0600
(Registrant's telephone number, including area code)
----------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: Yes [X] No[ ]
As of November 5, 1997 there were 28,778,819 shares of $1.00 par value
common stock outstanding.
<PAGE> 1
HEALTH CARE PROPERTY INVESTORS, INC.
INDEX
PART I. FINANCIAL INFORMATION
PAGE NO.
---------
Item 1. Financial Statements:
Consolidated Balance Sheets
September 30, 1997 and December 31, 1996. . . . . . . . . . . . . . 2
Consolidated Statements of Income
Nine Months and Three Months Ended September 30, 1997 and 1996. . . 3
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1997 and 1996 . . . . . . . . . . . 4
Notes to Consolidated Condensed Financial Statements. . . . . . . . 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . 12
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE> 2
HEALTH CARE PROPERTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
--------------- ---------------
<S> <S> <S>
ASSETS
Real Estate Investments
Buildings and Improvements $ 762,285 $ 693,586
Accumulated Depreciation (165,329) (147,860)
--------- ---------
596,956 545,726
Construction in Progress 17,471 7,905
Land 82,399 70,103
--------- ---------
696,826 623,734
Loans Receivable 112,422 112,227
Investments in and Advances to Partnerships 6,429 6,531
Other Assets 8,392 8,350
Cash and Cash Equivalents 3,020 2,811
--------- ---------
TOTAL ASSETS $ 827,089 $ 753,653
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank Notes Payable $ 7,400 $ ---
Senior Notes Payable 274,978 267,470
Convertible Subordinated Notes Payable 100,000 100,000
Mortgage Notes Payable 11,249 12,034
Accounts Payable, Accrued Liabilities and Deferred Income 24,751 19,739
Minority Interests in Partnerships 17,040 17,604
Stockholders' Equity:
Preferred Stock 57,810 ---
Common Stock 28,727 28,678
Additional Paid-In Capital 357,160 355,672
Cumulative Net Income 428,102 379,970
Cumulative Dividends (480,128) (427,514)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 391,671 336,806
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 827,089 $ 753,653
========= =========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
<PAGE> 3
HEALTH CARE PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------------- ---------------------------
1997 1996 1997 1996
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
REVENUE
Base Rental Income $ 23,567 $ 21,130 $ 68,337 $ 62,021
Additional Rental and Interest Income 5,208 4,839 15,821 15,389
Interest and Other Income 3,532 3,908 10,767 11,996
--------- --------- --------- ---------
32,307 29,877 94,925 89,406
--------- --------- --------- ---------
EXPENSE
Interest Expense 7,447 6,736 21,407 19,638
Depreciation/Non Cash Charges 6,521 5,863 19,056 16,825
Other Expenses 1,875 1,612 5,511 5,150
--------- --------- --------- ---------
15,843 14,211 45,974 41,613
--------- --------- --------- ---------
INCOME FROM OPERATIONS 16,464 15,666 48,951 47,793
Minority Interests (845) (638) (2,866) (2,573)
Gain on Sale of Real Estate Properties --- --- 2,047 ---
--------- --------- --------- ---------
NET INCOME 15,619 15,028 48,132 45,220
--------- --------- --------- ---------
DIVIDENDS TO PREFERRED STOCKHOLDERS 66 --- 66 ---
--------- --------- --------- ---------
NET INCOME APPLICABLE TO COMMON SHARES $ 15,553 $ 15,028 $ 48,066 $ 45,220
========= ========= ========= =========
NET INCOME PER COMMON SHARE $ 0.54 $ 0.52 $ 1.67 $ 1.58
========= ========= ========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING 28,721 28,667 28,711 28,644
========= ========= ========= =========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
<PAGE> 4
HEALTH CARE PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
---------------------------
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 48,132 $ 45,220
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Real Estate Depreciation 16,664 15,021
Non Cash Charges 2,392 1,804
Partnership Adjustments (552) (672)
Gain on Sale of Real Estate Properties (2,047) ---
Changes in:
Operating Assets (1,550) 963
Operating Liabilities 4,400 11,953
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 67,439 74,289
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Real Estate Properties (96,456) (103,762)
Proceeds from Sale of Real Estate Properties 8,624 ---
Advances Repaid by Partnerships --- 4,465
Other Investments and Loans 1,084 7,970
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (86,748) (91,327)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Change in Bank Notes Payable 7,400 (31,700)
Repayment of Senior Notes Payable (12,500) ---
Issuance of Senior Notes Payable 19,876 113,329
Cash Proceeds from Issuing Preferred Stock 57,810 ---
Cash Proceeds from Issuing Common Stock 416 1,304
Periodic Payments on Mortgages (722) (1,060)
Dividends Paid on Common Shares (52,548) (48,986)
Other Financing Activities (214) (640)
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 19,518 32,247
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 209 15,209
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,811 2,000
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,020 $ 17,209
========== ==========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
<PAGE> 5
HEALTH CARE PROPERTY INVESTORS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES
The unaudited financial information furnished herein, in the opinion of
management, reflects all adjustments that are necessary to state fairly the
financial position, the results of operations, and cash flows of Health Care
Property Investors, Inc. and its affiliated subsidiaries and partnerships (the
"Company"). The Company presumes that users of the interim financial
information herein have read or have access to the audited financial statements
and Management's Discussion and Analysis of Financial Condition and Results of
Operations for the preceding fiscal year ended December 31, 1996 and that the
adequacy of additional disclosures needed for a fair presentation, except in
regard to material contingencies, may be determined in that context.
Accordingly, footnotes and other disclosures that would substantially duplicate
the disclosures contained in the Company's most recent annual report on Form 10-
K to security holders have been omitted. The interim financial information
contained herein is not necessarily representative of a full year's operations
for various reasons including acquisitions, changes in rents, interest rates and
the timing of debt and equity financings. These same considerations apply to
all year-to-year comparisons.
Net Income Per Common Share
Net Income per common share is calculated by dividing Net Income applicable to
common shares by the weighted average common shares outstanding during the
period. There were 28,726,819 shares outstanding as of September 30, 1997.
Reclassifications
Reclassifications have been made for comparative financial statement
presentations.
(2) PREFERRED STOCK ISSUANCE
On September 26, 1997, the Company issued 2,400,000 shares of 7-7/8% Series A
Cumulative Redeemable Preferred Stock ("Preferred Stock") which generated net
proceeds of $57,810,000 (net of underwriters' discount and other offering
expenses). Dividends on the Preferred Stock are payable quarterly in arrears in
March, June, September and December, commencing with the quarter ending December
31, 1997. The Preferred Stock is not redeemable prior to September 30, 2002,
after which date the Preferred Stock may be redeemable at par ($25 per share or
$60,000,000 in the aggregate) any time for cash at the option of the Company.
The Preferred Stock has no stated maturity, will not be subject to any sinking
fund or mandatory redemption and is not convertible into any other securities of
the Company.
<PAGE> 6
(3) MAJOR OPERATORS
Listed below are the Company's major operators and the percentage of revenue
from these operators and their subsidiaries.
Percentage of
Operators Revenue Total Revenue
- - ------------ ------------- --------------
Vencor, Inc. ("Vencor") $ 17,637,000 18.6%
Emeritus Corporation 7,733,000 8.2
Beverly Enterprises, Inc. ("Beverly") 7,424,000 7.8
Horizon/CMS Healthcare Corporation ("Horizon") 7,409,000 7.8
Tenet Healthcare Corporation ("Tenet") 6,543,000 6.9
Columbia/HCA Healthcare Corp. 6,088,000 6.4
HealthSouth Corporation ("HealthSouth") 4,720,000 5.0
All of the leases with Tenet and Vencor and one lease with HealthSouth are
unconditionally guaranteed by Tenet. Those leases represent approximately 26.6%
of the Company's total revenue for the nine months ended September 30, 1997.
(4) STOCKHOLDERS' EQUITY
The following tabulation is a summary of the activity for the Stockholders'
Equity account for the nine months ended September 30, 1997 (amounts in
thousands):
<TABLE>
<CAPTION>
Preferred Stock Common Stock
----------------- ---------------------------------
Par Additional Total
Number of Number of Value Paid-In Cumulative Stockholders'
Shares Amount Shares Amount Capital Net Income Dividends Equity
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 --- $ --- 28,678 $28,678 $355,672 $379,970 $(427,514) $336,806
Issuance of Preferred Stock, Net 2,400 57,810 57,810
Issuance of Common Stock, Net 31 31 1,090 1,121
Exercise of Stock Options 18 18 398 416
Net Income 48,132 48,132
Dividends -- Common Shares (52,548) (52,548)
Dividends -- Preferred Shares (66) (66)
- - -----------------------------------------------------------------------------------------------------------------------------------
Balance, September 30, 1997 2,400 $ 57,810 28,727 $28,727 $357,160 $428,102 $(480,128) $391,671
===================================================================================================================================
</TABLE>
(5) COMMITMENTS
As of November 5, 1997, the Company has outstanding commitments on closed and
to-be-closed development transactions of approximately $54,000,000 and
$62,000,000, respectively. The Company is also committed to acquire
approximately $101,000,000 of existing health care facilities. The Company
expects that a significant portion of these commitments will be funded; however,
experience suggests that some committed transactions will not close.
Transactions do not close for various reasons including unsatisfied
pre-closing conditions, competitive financing sources, final negotiation
differences and the operator's inability to obtain required internal or
governmental approvals.
<PAGE> 7
(6) SUBSEQUENT EVENTS
On October 16, 1997 the Board of Directors declared a quarterly dividend of
$0.63 per common share payable on November 20, 1997, to stockholders of record
on the close of business on November 5, 1997.
The Board of Directors also declared a $0.519532 per share dividend on the
Preferred Stock. This preferred dividend is made up of the regular quarterly
preferred dividend of $0.492188 and $0.027344 for the five days the preferred
shares were outstanding during the third quarter of 1997. The preferred
dividend will be paid on December 31, 1997 to shareholders of record on the
close of business December 15, 1997.
<PAGE> 8
HEALTH CARE PROPERTY INVESTORS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The Company is in the business of acquiring health care facilities that it
leases on a long-term basis to health care providers. On a more limited basis,
the Company has provided mortgage financing on health care facilities. As of
September 30, 1997, the Company's portfolio of properties, including equity
investments, consisted of 229 facilities located in 38 states. These facilities
are comprised of 134 long-term care facilities, 66 congregate care and assisted
living facilities, 12 medical office buildings, seven acute care hospitals, six
rehabilitation facilities, three physician group practice clinics and one
psychiatric care facility. The gross acquisition price of the properties, which
includes partnership acquisitions, was approximately $1,005,000,000 at September
30, 1997.
The Company had commitments to purchase and construct health care facilities
totaling approximately $217,000,000 for funding during 1997 and 1998. The
Company expects that a significant portion of these commitments will be funded
but that a portion may not be funded (see Note (5) to the Consolidated Condensed
Financial Statements).
RESULTS OF OPERATIONS
Net Income for the three and nine months ended September 30, 1997 totaled
$15,619,000 or $0.54 per share of common stock and $48,132,000 or $1.67 per
share on revenues of $32,307,000 and $94,925,000, respectively. This compares
to Net Income of $15,028,000 or $0.52 per share of common stock and $45,220,000
or $1.58 per share on revenues of $29,877,000 and $89,406,000 for the same
periods in 1996. Net Income for the nine months ended September 30, 1997
included a $2,047,000 or $0.07 per share gain on the sale of real estate
properties. Net Income for the nine months ended September 30, 1996 included
$1,100,000 or $0.04 per share of non-recurring income from the early payoff of
a mortgage loan.
Base Rental Income for the three and nine months ended September 30, 1997
increased $2,437,000 and $6,316,000 to $23,567,000 and $68,337,000,
respectively, as compared to the same period in the prior year. The majority
of the increase in Base Rental Income was generated by new equity investments
of approximately $119,000,000 and $117,000,000 made during 1997 and 1996.
Additional Rental and Interest Income from the existing portfolio increased
by $369,000 and $1,532,000 for the three and nine months ended
September 30, 1997, respectively, after giving effect (for the nine month
period) to the $1,100,000 non-recurring income discussed in the prior paragraph.
These increases were offset by a reduction in Interest and Other Income for the
three and nine months ended September 30, 1997 of $376,000 and $1,229,000,
respectively, as a result of the payoff of certain mortgage loans.
<PAGE> 9
Interest Expense for the three and nine months ended September 30, 1997
increased $711,000 and $1,769,000 as a result of the issuance of long-term debt
discussed under Liquidity and Capital Resources, and higher short-term line
of credit balances. Depreciation/Non Cash Charges increased $658,000 and
$2,231,000 to $6,521,000 and $19,056,000 for the three and nine months ended
September 30, 1997, respectively, due primarily to new investments made during
1997 and 1996.
The Company believes that Funds From Operations ("FFO") is an important
supplemental measure of operating performance. Historical cost accounting for
real estate assets implicitly assumes that the value of real estate assets
diminishes predictably over time. Since real estate values instead have
historically risen and fallen with market conditions, presentations of operating
results for a real estate investment trust that uses historical cost accounting
for depreciation could be uninformative. The term FFO was designed by the real
estate investment trust industry to address this problem.
The Company has adopted the definition of FFO prescribed by the National
Association of Real Estate Investment Trusts ("NAREIT"). FFO is defined as net
income applicable to common shares (computed in accordance with generally
accepted accounting principles), excluding gains (or losses) from debt
restructuring and sales of property, plus real estate depreciation, and after
adjustments for unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are calculated to reflect FFO on
the same basis.
Below is a summary of the calculation of FFO:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------------- ---------------------------
1997 1996 1997 1996
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Net Income Applicable to Common Shares $ 15,553 $ 15,028 $ 48,066 $ 45,220
Real Estate Depreciation 5,692 5,261 16,664 15,021
Partnership Adjustments (168) (354) (552) (672)
Gain on Sale of Real Estate --- --- (2,047) ---
--------- --------- --------- ---------
$ 21,077 $ 19,935 $ 62,131 $ 59,569
========= ========= ========= =========
</TABLE>
FFO for the three and nine months ended September 30, 1997 increased $1,142,000
to $21,077,000 and $2,562,000 to $62,131,000, respectively. The increase is
attributable to increases in Base Rental Income and Additional Rental and
Interest Income, and offset by increases in Interest Expense and decreases in
Interest and Other Income which are discussed in more detail above.
FFO does not represent cash generated from operating activities in accordance
with generally accepted accounting principles, is not necessarily indicative of
cash available to fund cash needs and should not be considered as an alternative
to net income. FFO, as defined by the Company, may not be comparable to
similarly entitled items reported by other real estate investment trusts that do
not define it exactly as the NAREIT definition.
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed acquisitions through the sale of common stock,
preferred stock, the issuance of long-term debt, the assumption of mortgage
debt, the use of short-term bank lines and through internally generated cash
flows. Facilities under construction are generally financed by means of cash on
hand or short-term borrowings under the Company's existing bank lines. At the
completion of construction and commencement of the lease, short-term borrowings
used in the construction phase are generally refinanced with new long-term debt
or equity offerings.
On February 15, 1996, the Company issued $115,000,000 of 6.5% Unsecured Senior
Notes due 2006. During March and April 1997, the Company issued two ten year
$10,000,000 MTNs with coupon rates of 7.30% and 7.62%, respectively. During
June 1997, $12,500,000 in MTNs with coupon rates of 10.20% and 10.30% were
redeemed. On September 26, 1997, the Company issued $60,000,000, 7-7/8% Series
A Cumulative Redeemable Preferred Stock. The net proceeds of $57,810,000 were
utilized to pay down short-term borrowings under the Company's revolving line of
credit. At September 30, 1997, stockholders' equity in the Company totaled
$391,671,000 and the debt to equity ratio was 1.00 to 1. For the nine months
ended September 30, 1997, FFO (before interest expense) covered Interest Expense
3.90 to 1.
As of September 30, 1997, the Company had approximately $225,000,000 and
$130,975,000 available under its existing shelf registration statements for the
future issuance of debt and equity securities and for its Series B and Series C
Medium-Term Note programs, respectively. These amounts may be issued from time
to time in the future based on Company needs and then existing market
conditions. As of September 30, 1997, the Company also had $92,600,000
available on its $100,000,000 revolving line of credit. On October 22, 1997,
the Company renegotiated its line of credit with the bank group which now
includes seven domestic and international banks. Two revolving lines of credit
have been obtained, one for $100,000,000 which expires on October 22, 2002 and
one for $50,000,000 which expires on October 22, 1998. The Company's Senior
Notes and Convertible Subordinated Notes have been rated investment grade by
debt rating agencies since 1986. Current ratings are as follows:
Moody's Standard & Poor's Duff & Phelps
--------------------------------------------------
Senior Notes Baa1 BBB+ A-
Convertible
Subordinated Notes Baa2 BBB BBB+
Since inception in May 1985, the Company has recorded approximately $572,902,000
in cumulative FFO. Of this amount, a total of $480,062,000 has been distributed
to stockholders as dividends. The balance of $92,840,000 has been retained, and
has been an additional source of capital for the Company.
At September 30, 1997, the Company held approximately $38,500,000 in irrevocable
letters of credit from commercial banks to secure the obligations of many
lessees' lease and borrowers' loan obligations. The Company may draw upon the
letters of credit if there are any defaults under the leases and/or loans.
Amounts available under letters of credit change based upon facility operating
conditions and other factors and such changes may be material.
<PAGE> 11
The third quarter 1997 dividend of $0.62 per common share or $17,807,000 in the
aggregate was paid on August 20, 1997. Total dividends paid during the nine
months ended September 30, 1997 was $52,548,000 or 85% of FFO for the
corresponding period. The Company declared a fourth quarter dividend of $0.63
per common share or approximately $18,100,000 in the aggregate, to be paid on
November 20, 1997. The Company also declared a dividend of $1,247,000 on the
Preferred Stock, made up of the regular quarterly preferred dividend and the
five days the preferred shares were outstanding during the third quarter of
1997. The preferred dividend will be paid on December 31, 1997.
The Company has concluded a significant number of "facility rollover"
transactions in 1995, 1996 and 1997 on properties that have been under long-term
leases and mortgages. "Facility rollover" transactions principally include lease
renewals and renegotiations, exchanges, sales of properties, and, to a lesser
extent, payoffs on mortgage receivables. In 1995, the Company completed 20
facility rollovers including the sale of ten facilities with concurrent "seller
financing" for a gain of $23,550,000. The 1995 facility rollovers generated an
increase of $900,000 in FFO on an annualized basis. During the year ended
December 31, 1996, the Company completed or agreed in principle to complete 20
facility rollovers including the sale of nine facilities in Missouri and the
exchange of the Dallas Rehabilitation Institute for the HealthSouth Sunrise
Rehabilitation Hospital in Fort Lauderdale, Florida. The 1996 facility rollovers
resulted in a decrease of $1,200,000 in FFO on an annualized basis. As of
November 5, 1997, the Company has completed or agreed in principle to complete
ten facility rollovers which will generate a net decrease in FFO of $1,300,000
on an annualized basis. Through December 31, 1999, the Company has 59 more
facilities that are subject to lease expiration, mortgage maturities and
purchase options (which management believes may be exercised) which represent
24.7% of annualized revenues. The 1998 group includes 13, eight, and five long-
term care facilities leased to Vencor, Beverly and Horizon, respectively. The
13 Vencor facilities are not subject to purchase options in 1998. The Company
has completed certain facility rollovers earlier than the scheduled lease
expirations or mortgage maturities and will continue to pursue such
opportunities where it is advantageous to do so.
Management believes that the Company's liquidity and sources of capital are
adequate to finance its operations as well as its future investments in
additional facilities.
RECENT ACCOUNTING PRONOUNCEMENT
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement 128, "Earnings Per Share," the primary effect of which is to change
the way earnings per share is calculated and presented in the financial
statements. The Company is required to adopt FASB 128 in its December 31, 1997
financial statements and will be required to restate prior-period earnings per
share date to conform with the new statement. The new statement is not expected
to have a material effect on the Company's previously reported earnings per
share data.
<PAGE> 12
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
EX-27 Financial Data Schedule
10.29 Not Applicable
10.30 Not Applicable
10.36 Not Applicable
10.37 Revolving Credit Agreement dated as of October
22, 1997 amongst Health Care Property Investors, Inc., the
banks named therein and The Bank of New York
10.38 $50,000,000 Revolving Credit Agreement dated
as of October 22, 1997 amongst Health Care Property
Investors, Inc., the banks named therein and The Bank of New
York
10.41 Not Applicable
10.42 Not Applicable
10.45 Health Care Property Investors, Inc. Second
Amended and Restated Directors Deferred Compensation Plan
b) Reports on Form 8-K:
On September 23, 1997, the Company filed a Report on Form 8-K with
the Securities and Exchange Commission regarding the Purchase
Agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Morgan Stanley & Co. pursuant to which the
Company agreed to issue and sell up to 2,760,000 shares of the
Company's 7-7/8% Series A Cumulative Redeemable Preferred Stock.
<PAGE> 13
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 thereunto duly authorized.
Date: November 5, 1997 HEALTH CARE PROPERTY INVESTORS, INC.
(REGISTRANT)
/s/ James G. Reynolds
------------------------------------
James G. Reynolds
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ Devasis Ghose
------------------------------------
Devasis Ghose
Senior Vice President-Finance
and Treasurer
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT.
</LEGEND>
<CIK> 0000765880
<NAME> HEALTH CARE PROPERTY INVESTORS INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,020
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 862,155
<DEPRECIATION> 165,329
<TOTAL-ASSETS> 827,089
<CURRENT-LIABILITIES> 0
<BONDS> 393,627
0
57,810
<COMMON> 28,727
<OTHER-SE> 305,134
<TOTAL-LIABILITY-AND-EQUITY> 827,089
<SALES> 0
<TOTAL-REVENUES> 94,925
<CGS> 0
<TOTAL-COSTS> 21,922
<OTHER-EXPENSES> 5,511
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,407
<INCOME-PRETAX> 48,132
<INCOME-TAX> 0
<INCOME-CONTINUING> 48,132
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,132
<EPS-PRIMARY> 1.67
<EPS-DILUTED> 1.67
</TABLE>
REVOLVING CREDIT AGREEMENT
dated as of October 22, 1997
among
HEALTH CARE PROPERTY INVESTORS, INC.
THE BANKS NAMED HEREIN
AND
THE BANK OF NEW YORK
as Agent
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TABLE OF CONTENTS
RECITALS
ARTICLE I DEFINITIONS
Section 1.01. Definitions
ARTICLE II THE LOANS
Section 2.01. Committed Loans
Section 2.02. Procedure for Committed Loans
Section 2.03. Committed Notes
Section 2.04. Cancellation or Reduction of the Commitment
Section 2.05. Money Market Loans
Section 2.06. Procedure for Money Market Loans
Section 2.07. Funding of Money Market Loans
Section 2.08. Money Market Notes
Section 2.09. Certain Fees
Section 2.10. Optional Prepayment
ARTICLE III INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 3.01. Procedure for Interest Rate Determination
Section 3.02. Interest on ABR Loans
Section 3.03. Interest on Eurodollar Loans
Section 3.04. Conversion/Continuance
Section 3.05. Post Default Interest
Section 3.06. Maximum Interest Rate
ARTICLE IV DISBURSEMENT AND PAYMENT
Section 4.01. Pro Rata Treatment
Section 4.02. Method of Payment
Section 4.03. Compensation for Losses
Section 4.04. Withholding, Reserves and Additional Costs
Section 4.05. Unavailability
ARTICLE V REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties
ARTICLE VI CONDITIONS OF LENDING
Section 6.01. Conditions to the Availability of the Commitment
Section 6.02. Conditions to All Loans
ARTICLE VII COVENANTS
Section 7.01. Affirmative Covenants
Section 7.02. Negative Covenants
Section 7.03. Financial Covenants
ARTICLE VIII EVENTS OF DEFAULT
Section 8.01. Events of Default
ARTICLE IX THE AGENT AND THE BANKS
Section 9.01. The Agency and Co-Agency
Section 9.02. The Agent's Duties
Section 9.03. Sharing of Payment and Expenses
Section 9.04. The Agent's Liabilities
Section 9.05. The Agent as a Bank
Section 9.06. Bank Credit Decision
Section 9.07. Indemnification
Section 9.08. Successor Agent
ARTICLE X CONSENT TO JURISDICTION; JUDGMENT CURRENCY
Section 10.01. Consent to Jurisdiction
ARTICLE XI MISCELLANEOUS
Section 11.01. APPLICABLE LAW
Section 11.02. Set-off
Section 11.03. Expenses
Section 11.04. Amendments
Section 11.05. Cumulative Rights and No Waiver
Section 11.06. Notices
Section 11.07. Separability
Section 11.08. Assignments and Participations
Section 11.09. WAIVER OF JURY TRIAL
Section 11.10. Confidentiality
Section 11.11. Indemnity
Section 11.12. Extension of Termination Dates; Removal of Banks;
Substitutions of Banks
Section 11.13. Knowledge of the Company
Section 11.14. Execution in Counterparts
TESTIMONIUM
SIGNATURES
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EXHIBITS AND SCHEDULES
EXHIBIT A Form of Conversion/Continuance Request
EXHIBIT B Form of Committed Loan Request
EXHIBIT C Form of Money Market Notice
EXHIBIT D Form of Money Market Confirmation
EXHIBIT E Form of Committed Note
EXHIBIT F Form of Money Market Note
EXHIBIT G Form of Opinion of Latham & Watkins LLP
EXHIBIT H Form of Opinion of Ballard, Spahr, Andrews & Ingersoll
EXHIBIT I Form of Extension Letter
SCHEDULE 5.01(a) Subsidiaries and Joint Ventures of the Company
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REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT, dated as of October 22, 1997 (this
"Agreement"), among Health Care Property Investors, Inc., a Maryland corporation
(the "Company"), each of the banks identified on the signature pages hereof
(each, a "Bank" and, collectively, the "Banks"), The Bank of New York, as Agent
for the Banks (the "Agent"), and NationsBank of Texas, N.A. ("NationsBank"), as
Co-Agent:
W I T N E S S E T H:
WHEREAS, the Company has requested the Banks to lend up to
$100,000,000 to the Company on a revolving basis for general corporate purposes;
and
WHEREAS, the Company wishes to replace its current credit facility
under the Revolving Credit Agreement, dated as of March 31, 1994 (the "Prior
Credit Agreement"), among the Company, the banks named therein, and the Agent,
as agent, with the facility contemplated hereunder;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
(a) Terms Generally. The definitions ascribed to terms in this
Section 1.01 and elsewhere in this Agreement shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed
to be followed by the phrase "without limitation". The words "hereby",
"herein", "hereof", "hereunder" and words of similar import refer to this
Agreement as a whole (including any exhibits and schedules hereto) and not
merely to the specific section, paragraph or clause in which such word appears.
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all references to "dollars" or "$" shall be deemed
references to the lawful money of the United States of America.
(b) Accounting Terms. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided, however, that, for purposes
of determining compliance with any covenant set forth in Sections 7.02(a),
7.02(b), 7.02(c), 7.02(d) or 7.03 which requires financial computations, if any
such change in GAAP would have a material effect on such computations then such
terms shall be construed in accordance with GAAP as in effect on the date of
this Agreement applied on a basis consistent with the construction thereof
applied in preparing the Company's audited financial statements referred to in
Section 5.01(h). In the event there shall occur a change in GAAP which but for
the foregoing proviso would affect the computation used to determine compliance
with any covenant set forth in Sections 7.02(a), 7.02(b), 7.02(c) or 7.03 which
requires financial computations, the Company and the Banks agree to negotiate in
good faith in an effort to agree upon an amendment to this Agreement that will
permit compliance with such covenant to be determined by reference to GAAP as so
changed while affording the Banks the protection afforded by such covenant prior
to such change (it being understood, however, that such covenant shall remain in
full force and effect in accordance with its existing terms pending the
execution by the Company and the Banks of any such amendment).
(c) Other Terms. The following terms shall have the meanings
ascribed to them below or in the Sections of this Agreement indicated below:
"ABR Loans" shall mean Committed Loans which bear interest at a rate
based upon the Base Rate and in the manner set forth in Section 3.02.
"Administrative Fee" shall have the meaning ascribed to such term in
Section 2.09(b).
"Adverse Environmental Condition" shall mean any of the matters
referred to in clauses (i) or (ii) of the definition of Environmental Claim.
"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 another
Person if such first Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such other
Person, whether through ownership of stock, by contract or otherwise.
"Agency Fee" shall have the meaning ascribed to such term in Section
6.01(h).
"Agent" shall have the meaning given to such term in the preamble of
this Agreement and shall also include any successor agent hereunder.
"Applicable Margin" shall mean the margin set forth in the following
chart applicable to the Pricing Level then in effect:
Pricing Level Applicable Margin
------------- -----------------
I 0.2500%
II 0.3000%
III 0.4000%
IV 0.5000%
V 0.7500%
Subject to (I), (II) and (III) below, "Pricing Level I" shall be applicable for
so long as the rating of the Company's unsecured senior debt ("Senior Debt
Rating") is greater than or equal to A by Standard & Poor's Corporation ("S&P")
and greater than or equal to A2 by Moody's Investors Service, Inc. ("Moody's");
"Pricing Level II" shall be applicable for so long as the Senior Debt Rating is
greater than or equal to A- by S&P and greater than or equal to A3 by Moody's
and Pricing Level I is not applicable; "Pricing Level III" shall be applicable
for so long as the Senior Debt Rating is greater than or equal to BBB+ by S&P
and greater than or equal to Baa1 by Moody's and neither Pricing Level I nor II
is applicable; "Pricing Level IV" shall be applicable for so long as the Senior
Debt Rating is greater than or equal to BBB- by S&P and greater than or equal to
Baa3 by Moody's and neither Pricing Level I, II nor III is applicable; and
"Pricing Level V" shall be applicable for so long as neither Pricing Level I,
II, III nor IV is applicable.
Notwithstanding the foregoing, (I) in the event of a split rating as
between S&P and Moody's, and one or more of Fitch Investors Service, Inc.
("Fitch") and Duff & Phelps Inc. ("D&P" and, collectively with S&P, Moody's and
Fitch, the "Rating Agencies") then has or have a publicly available Senior Debt
Rating or Ratings for the Company, then the pricing level shall be determined by
either (i) the higher of the ratings of S&P and Moody's if either Fitch or D&P
have a rating corresponding to such higher rating of S&P or Moody's, or (ii) the
lower of the ratings of S&P and Moody's if neither Fitch nor D&P have a rating
corresponding to the higher of the ratings of S&P and Moody's; (II) in the event
that no Senior Debt Rating is made publicly available by S&P or Moody's and the
Company's senior subordinated unsecured debt rating ("Subordinated Debt Rating")
is made publicly available by S&P or Moody's, then for purposes of the foregoing
determinations the Senior Debt Rating shall be deemed to be equal to the
Subordinated Debt Rating plus one level (e.g., if S&P's Subordinated Debt Rating
is A-, then S&P's Senior Debt Rating shall be deemed to be A); and (III) in the
event that no Senior Debt Rating and no Subordinated Debt Rating are made
available by S&P or Moody's, then Pricing Level V above shall apply.
"Arranger" shall mean BNY Capital Markets, Inc.
"Bank" shall have the meaning given to such term in the preamble of
this Agreement and shall also include any other financial institution which
pursuant to the provisions hereof becomes a party to this Agreement.
"Base LIBOR" shall mean, with respect to any Interest Period for a
Eurodollar Loan, the rate per annum determined by the Agent to be the arithmetic
mean (rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%,
to the next higher 1/16 of 1%) of the respective rates of interest communicated
by the Reference Banks to the Agent as the rate at which U.S. dollar deposits
are offered to the Reference Banks by leading banks in the London interbank
deposits market at approximately 11:00 A.M., London time, on the second full
Business Day preceding the first day of such Interest Period in an amount
substantially equal to the respective Reference Amounts for a term equal to such
Interest Period.
"Base Rate" shall mean a fluctuating interest rate per annum as shall
be in effect from time to time, which rate per annum shall on any day be equal
to the higher of:
(a) the rate of interest publicly announced by the Agent from time to
time as its prime commercial loan rate in effect on such day; and
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1% of (i) 1/2 of 1% per annum
and (ii) the Federal Funds Rate.
"Borrowing Date" shall mean the date set forth in each Committed Loan
Request or Money Market Notice, as the case may be, as the date upon which the
Company desires to borrow Loans pursuant to the terms of this Agreement.
"Business Day" shall mean (i) with respect to any ABR Loan, any
payment of the Facility Fee or any Money Market Loan for which another meaning
for such term is not specified in the Money Market Notice, any day except a
Saturday, Sunday or other day on which commercial banks in New York City or Los
Angeles are authorized by law to close and (ii) with respect to any Eurodollar
Loan, any day on which commercial banks are open for domestic and international
business (including dealings in U.S. dollar deposits) in London, New York City
and Los Angeles.
"Capital Lease" shall mean, with respect to any Person, any obligation
of such Person to pay rent or other amounts under a lease with respect to any
property (whether real, personal or mixed) acquired or leased by such Person
that is required to be accounted for as a liability on a balance sheet of such
Person in accordance with GAAP.
"Capital Lease Obligations" shall mean the obligation of any Person to
pay rent or other amounts under a Capital Lease.
"Co-Agent" shall mean NationsBank and shall also include any successor
co-agent hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commitment" of any Bank shall mean, in the case of each Bank
(i) prior to any such Bank's Termination Date, the amount set forth opposite
such Bank's name under the heading "Commitment" on the signature pages hereof,
or set forth in the assignment agreement executed by such Bank if it is not a
Bank on the date hereof, as such amount may be adjusted from time to time
pursuant to assignments of such Bank and as such amount may be reduced from time
to time pursuant to Section 2.04 and (ii) after such Bank's Termination Date,
zero.
"Committed Loan Request" shall mean a request by the Company to borrow
Loans pursuant to the terms hereof, which shall be substantially in the form of
Exhibit B and shall specify, with respect to such requested Loans, (i) the
requested Borrowing Date, (ii) the aggregate amount of Loans which the Company
desires to borrow on such date, (iii) whether such requested Loans are to bear
interest as ABR Loans or Eurodollar Loans, and (iv) if the requested Loans are
to bear interest as Eurodollar Loans the requested term of the Interest Period
therefor.
"Committed Loans" shall mean, collectively, ABR Loans and Eurodollar
Loans made pursuant to Section 2.01 to 2.03 and outstanding hereunder from time
to time.
"Committed Notes" shall mean, collectively, the promissory notes of
the Company, each substantially in the form of Exhibit E.
"Compliance Date" shall mean each of the date of this Agreement, each
Borrowing Date, each Conversion/Continuance Date and the date of each delivery
by the Company of a certificate requiring the Company to certify as to the
accuracy of the representations and warranties contained in Article V.
"Consolidated Debt" shall mean Consolidated Total Liabilities less
(i) accounts payable and accrued expenses and (ii) minority interest in joint
ventures, each as set forth in the most recent financial statements delivered to
the Banks pursuant to this Agreement.
"Consolidated Depreciation/Non-Cash Charges" shall mean, at any date
of determination, "Depreciation/Non-Cash Charges" or the similar item,
determined on a consolidated basis for the Company and its subsidiaries, as
shown on the most recent consolidated statement of income for the Company and
its Subsidiaries which has been delivered to the Agent pursuant to
Section 7.01(a).
"Consolidated Funds from Operations" shall mean, for any period,
"Funds From Operations" or the similar item, determined on a consolidated basis
for the Company and its subsidiaries, as shown on the most recent consolidated
statements of cash flows for the Company and its subsidiaries which has been
delivered to the Agent pursuant to Section 7.01(a).
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of the Company and its subsidiaries, determined on a consolidated
basis, in accordance with GAAP with respect to all outstanding Indebtedness of
the Company and its subsidiaries, including all net costs under Interest Rate
Protection Agreements.
"Consolidated Net Income" shall mean, for any period, "Net Income" or
the similar item, determined on a consolidated basis for the Company and its
subsidiaries, as shown on the most recent consolidated statement of income for
the Company and its Subsidiaries which has been delivered to the Agent pursuant
to Section 7.01(a).
"Consolidated Senior Debt" shall mean (i) the Loans and (ii) all other
Consolidated Debt unless by the terms of the instrument creating or evidencing
such other Consolidated Debt it is provided that such Consolidated Debt is
subordinated in right of payment to the Loans.
"Consolidated Stockholders' Equity" shall mean, for any period, "Total
Stockholders' Equity" or the similar item, determined on a consolidated basis
for the Company and its subsidiaries, as shown on the most recent consolidated
balance sheet for the Company and its subsidiaries which has been delivered to
the Agent pursuant to Section 7.01(a).
"Consolidated Total Assets" shall mean, at any date of determination,
"Total Assets" or the similar item, determined on a consolidated basis for the
Company and its subsidiaries, as shown on the most recent consolidated balance
sheet for the Company and its subsidiaries which has been delivered to the Agent
pursuant to Section 7.01(a).
"Consolidated Total Liabilities" shall mean, at any date of
determination, "Total Liabilities and Stockholders Equity" or the similar item,
determined on a consolidated basis for the Company and its subsidiaries, as
shown on the most recent consolidated balance sheet for the Company and its
subsidiaries which has been delivered to the Agent pursuant to Section 7.01(a),
less Consolidated Stockholders Equity.
"Conversion/Continuance Date" shall mean the date on which a
conversion of interest rates on outstanding Loans, pursuant to a
Conversion/Continuance Request, shall take effect.
"Conversion/Continuance Request" shall mean a request by the Company
to convert or continue the interest rate on all or portions of outstanding Loans
pursuant to the terms hereof, which shall be substantially in the form of
Exhibit A and shall specify, with respect to such outstanding Loans, (i) the
requested Conversion/Continuance Date, which shall be not less than three
Business Days after the date of such Conversion/Continuance Request, (ii) the
aggregate amount of the Loans, from and after the Conversion/Continuance Date,
which are to bear interest as ABR Loans or Eurodollar Loans and (iii) if any
Loans are Eurodollar Loans, the term of the Interest Periods therefor, if any.
"Credit Documents" shall mean this Agreement and the Notes.
"Default" shall mean any event or circumstance which, with the giving
of notice or the passage of time, or both, would become an Event of Default.
"Environmental Claim" shall mean any notice, request for information,
action, claim, order, proceeding, demand or direction (conditional or otherwise)
based on, relating to or arising out of (i) any violation of any Environmental
Law by the Company or any person acting on behalf of the Company, or (ii) any
liabilities under any Environmental Law arising out of or otherwise in respect
of any act, omission, event, condition or circumstance existing or occurring in
connection with the Company, including without limitation liabilities relating
to the release of Hazardous Substances (whether on-site or off-site), any claim
by any third party (including, without limitation, tort suits for personal or
bodily injury, tangible or intangible property damage, damage to the
environment, nuisance and injunctive relief), fines, penalties or restrictions,
or the transportation, storage, treatment or disposal of any Hazardous
Substances.
"Environmental Law" means (i) any federal, state, foreign and local
law, statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, legal doctrine, order, judgment, decree, injunction,
requirement or agreement with any governmental entity, (x) relating to the
protection, preservation or restoration of the environment, (including, without
limitation, air, water vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or to human health or safety, or (y) the exposure to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous Substances, in each case
as amended and as now or hereafter in effect. The term Environmental Law
includes, without limitation, the federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act of 1972, the
federal Clean Air Act, the federal Clean Water Act, the federal Resource
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments thereto), the federal Solid Waste Disposal Act, the federal Toxic
Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act
and the Federal Occupational Safety and Health Act of 1970, each as amended and
as now or hereafter in effect, and (ii) any common law or equitable doctrine
(including, without limitation, injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose liability
or obligations for injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Hazardous Substance.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean a corporation, partnership or other
entity which is considered one employer with the Company under Section 4001 of
ERISA or Section 414(b), (c) or (m) of the Code.
"Eurodollar Loans" shall mean Committed Loans which bear interest at a
rate based upon Base LIBOR and in the manner set forth in Section 3.03.
"Eurodollar Reserve Percentage" shall mean for any day, that
percentage, expressed as a decimal, which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including any
marginal, supplemental or emergency reserve requirements) for a member bank of
the Federal Reserve System in New York City with deposits exceeding one billion
dollars in respect of eurocurrency funding liabilities. LIBOR shall be adjusted
automatically on and as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Event of Default" shall mean any of the events described in Section
8.01.
"Facility Fee" shall have the meaning ascribed to such term in Section
2.09(a).
"Facility Fee Rate" with respect to any Facility Fee payment shall
mean the facility fee rate set forth in the following chart applicable to the
Pricing Level (determined as set forth under "Applicable Margin" above) in
effect on the date on which such Facility Fee payment is due:
Pricing Level Facility Fee
------------- ------------
I 0.1250%
II 0.1500%
III 0.2000%
IV 0.2500%
V 0.3750%
"Federal Funds Rate" for any day shall mean the rate (rounded to the
nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, to the next higher
1/16 of 1%) on such day for Federal Funds as published in H.15(519), or any
successor publication, under the heading "Federal Funds (Effective)". In the
event that such rate or such publication is not published with respect to such
day the Federal Funds Rate on such day shall be the "Federal Funds/Effective
Rate" as posted by the Federal Reserve Bank of New York for that day in its
publication "Composite Closing Quotations for U.S. Government Securities". The
Federal Funds Rate for Saturdays, Sundays and any other day on which the Federal
Reserve Bank of New York is closed shall be the Federal Funds Rate as in effect
for the next preceding day for which such rates are published or posted, as the
case may be.
"GAAP" shall mean generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and pronounce
ments of the Financial Accounting Standards Board or in such other statements by
such other entities as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.
"Guarantee" by any person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (ii) to
purchase property, securities or services for the purpose of assuring the holder
of such Indebtedness of the payment of such Indebtedness, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have
meanings correlative to the foregoing).
"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.
"Hazardous Substance" means any substance presently or hereafter
listed, defined, designated or classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, under any Environmental Law, whether by type
or by quantity, including any substance containing any such substance as a
component. Hazardous Substance includes, without limitation, any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance, hazardous waste,
special waste or petroleum or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos containing material, urea formaldehyde
foam insulation, lead and polychlorinated biphenyl.
"Indebtedness" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (including all obligations, contingent or other
wise, of such Person in connection with letter of credit facilities, bankers'
acceptance facilities, Interest Rate Protection Agreements or other similar
facilities including currency swaps) other than indebtedness to trade creditors
and service providers incurred in the ordinary course of business, (b) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (c) all indebtedness created or arising under any condi
tional sale or other title retention agreement with respect to property acquired
by such Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), (d) all Capital Lease Obligations of such Person, (e) all
Indebtedness referred to in clauses (a), (b), (c) or (d) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, (f) all preferred
stock issued by such Person which is redeemable, prior to the full satisfaction
of the Company's obligations under the Credit Documents (including repayment in
full of the Loans and all interest accrued thereon), other than at the option of
such Person, valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends and (g) all Indebtedness of others
Guaranteed by such Person. For purposes of this Agreement, the amount of any
Indebtedness under clauses (c) and (e) shall be the lesser of (x) the principal
amount of such Indebtedness and (y) the value of the property subject to the
Lien referred to therein.
"Initial Loan" shall mean the first Loan which is made pursuant to the
terms hereof.
"Interest Period" shall mean each one, two, three or six-month period,
in the case of Eurodollar Loans; such period being the one selected by the
Company pursuant to Sections 2.02 or 3.04 hereof and commencing on the date the
relevant loan is made or the last day of the current Interest Period, as the
case may be.
"Interest Rate Protection Agreements" shall mean any interest rate
swap agreement, interest rate cap agreement or similar arrangement used by a
Person to fix or cap a floating rate of interest on Indebtedness to a negotiated
maximum rate or amount.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset and (b) the interest of a vendor or lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset.
"LIBOR" shall mean with respect to any Interest Period the rate per
annum (rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%,
to the next higher 1/16 of 1%) determined pursuant to the following formula:
Base LIBOR
LIBOR = (1 - Eurodollar Reserve Percentage)
"Loans" shall, collectively, mean the Committed Loans and the Money
Market Loans and, individually, any Committed Loan or any Money Market Loan.
"Material Adverse Change" shall mean a material adverse change in the
business, properties, condition (financial or otherwise) or operations of the
Company and its Subsidiaries, taken as a whole since December 31, 1996.
"Material Adverse Effect" shall mean (i) any material adverse effect
on the business, properties, condition (financial or otherwise) or operations of
the Company and its Subsidiaries taken as a whole, from and after the date of
any determination, (ii) any material adverse effect on the ability of the
Company to perform its obligations hereunder and under the Credit Documents, or
(iii) any adverse effect on the legality, validity, binding effect or
enforceability of this Agreement or any other Credit Document.
"Money Market Funding Date" shall mean the date specified in the Money
Market Notice as the date of funding for such Money Market Borrowing.
"Money Market Borrowing" shall mean one or more Money Market Loans
made to the Company by one or more of the Banks and of which the Agent is given
notice by a Money Market Notice.
"Money Market Confirmation" shall mean the notice, in substantially
the form of Exhibit D, pertaining to a Money Market Loan, and made pursuant to
Section 2.06(b), duly completed and executed and personally delivered or
transmitted by facsimile to the Company.
"Money Market Loan" shall mean a Loan that is made pursuant to
Sections 2.05 to 2.08.
"Money Market Notes" shall mean, collectively, the promissory notes of
the Company, each substantially in the form of Exhibit F.
"Money Market Notice" shall mean the notice made pursuant to
Section 2.06(a), duly completed and executed by the Company and the Banks
proposing to make Money Market Loans and personally delivered or transmitted to
the Agent.
"Notes" shall mean, collectively, the Committed Notes and the Money
Market Notes.
"Participant" shall have the meaning ascribed to such term in Section
11.08(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Encumbrances" shall mean (i) Liens for taxes not delinquent
or being contested in good faith and by appropriate proceedings and for which
adequate reserves (in accordance with GAAP) are being maintained, (ii) deposits
or pledges to secure obligations under workers' compensation, social security or
similar laws, or under unemployment insurance, (iii) deposits or pledges to
secure bids, tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the ordinary course of business, (iv) mechanics',
workers', materialmen's or other like Liens arising in the ordinary course of
business with respect to obligations which are not due or which are being
contested in good faith and (v) minor imperfections of title on real estate,
provided such imperfections do not render title unmarketable.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" shall mean an employee benefit plan as defined in Section 3(3)
of ERISA which is maintained or contributed to by the Company or an ERISA
Affiliate while such entity is an ERISA Affiliate.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (b) the Code, or (c) any applicable rule
or regulation under the Code, permit the Company to make payments hereunder for
the account of such Bank free of deduction or withholding for income or similar
taxes.
"Prior Credit Agreement" shall have the meaning set forth in the
second recital hereto.
"Pro Rata Share" shall mean, with respect to any Bank, the proportion
of such Bank's Commitment to the Total Commitment of all the Banks or, if the
Total Commitment shall have been canceled or reduced to $0 or expired, the
proportion of such Bank's then outstanding Committed Loans to the aggregate
amount of Committed Loans then outstanding.
"Reference Amount", with respect to any Reference Bank and Interest
Period, shall mean (a) if that Reference Bank is a Bank, the amount of that
Bank's Eurodollar Loan scheduled to be outstanding during that Interest Period,
or (b) if that Reference Bank is not a Bank, the amount scheduled to be
outstanding during that Interest Period of the Eurodollar Loan of the office or
affiliate of that Reference Bank that is a Bank, in each case, (i) without
taking into account any reduction in the amount of any Bank's Loan through any
assignment or transfer and (ii) rounded up to the nearest integral multiple of
$1,000,000.
"Reference Bank" shall mean each of The Bank of New York, NationsBank,
and Wells Fargo Bank, N.A.
"Required Banks" shall mean at any date Banks having at least 51% of
the Total Commitment or, if the Total Commitment has been canceled or
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"Single-Employer Plan" shall mean any Plan that is a single-employer
plan as defined in Section 4001(a)(15) of ERISA which is subject to the
provisions of Title IV of ERISA.
"Subsidiary" shall mean any Person of which or in which the Company
and its other Subsidiaries own directly or indirectly 50% or more of:
(a) the combined voting power of all classes of stock having general
voting power under ordinary circumstances to elect a majority of the board
of directors of such Person, if it is a corporation,
(b) the capital interest or profits interest of such Person, if it is
a partnership, joint venture or similar entity, or
(c) the beneficial interest of such Person, if it is a trust,
association or other unincorporated organization;
provided, however, that "Subsidiary" shall not include any such entity that the
Company does not control. For the purposes of this paragraph, the term
"control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting equity interests, by contract or
otherwise.
"Taxes" shall have the meaning ascribed to such term in Section
4.04(a).
"Termination Date" shall mean, with respect to any Bank, the earliest
to occur of (i) the fifth anniversary of the date of this Agreement or such
later date as may be agreed to by such Bank pursuant to Section 11.12 and
(ii) the date on which the obligations of such Bank to make loans hereunder
shall terminate pursuant to Section 8.01 or the Commitments shall be reduced to
zero pursuant to Section 2.04.
"Total Commitment" shall mean the aggregate Commitment of all the
Banks.
"Unmatured Surviving Obligations" shall mean, as of any date, any
obligations under this Agreement which are contingent and unliquidated and not
then due and payable on such date and which pursuant to the provisions of this
Agreement survive termination of this Agreement.
"Wholly owned Subsidiary" shall mean any Subsidiary all the equity
interests of which (other than directors' qualifying shares, if a corporation)
at the time are owned directly or indirectly by the Company and/or one or more
Wholly owned Subsidiaries of the Company.
ARTICLE II
THE LOANS
Section 2.01. Committed Loans. Prior to the Termination Date, and
subject to the terms and conditions of this Agreement, upon the request of the
Company, and upon the satisfaction by the Company or the waiver by each of the
Banks of each of the conditions precedent contained in Section 6.02, each of the
Banks, severally and not jointly with the other Banks, agrees to make one or
more Committed Loans to the Company from time to time in an aggregate principal
amount at any one time outstanding not to exceed its Commitment; provided,
however, that the sum of (i) the aggregate outstanding Committed Loans and
(ii) the aggregate outstanding Money Market Loans may not exceed the Total
Commitment.
Section 2.02. Procedure for Committed Loans. (a) The Company may
borrow Committed Loans by delivering a written Committed Loan Request to the
Agent on or before 12:00 P.M., New York City time, on the requested Borrowing
Date therefor, in the case of ABR Loans, or on the date not less than three
Business Days prior to the requested Borrowing Date therefor, in the case of
Eurodollar Loans. Committed Loans shall be in the minimum aggregate amount of
$1,000,000 or in integral multiples of $100,000 in excess thereof.
(b) Upon receipt of any Committed Loan Request from the Company, the
Agent shall forthwith give notice to each Bank of the substance thereof. Not
later than 2:00 P.M., New York time, on the Borrowing Date specified in such
Committed Loan Request, each Bank shall make available to the Agent in
immediately available funds at the office of the Agent at its address set forth
on the signature pages hereof, such Bank's Pro Rata Share of the requested
Committed Loans.
(c) Upon receipt by the Agent of all such funds and satisfaction by
the Company or waiver by each of the Banks of each of the conditions precedent
contained in Section 6.02, the Agent shall disburse to the Company on the
requested Borrowing Date the Committed Loans requested in such Committed Loan
Request. The Agent may, but shall not be required to, advance on behalf of any
Bank such Bank's Pro Rata Share of the Committed Loans on a Borrowing Date
unless such Bank shall have notified the Agent prior to such Borrowing Date that
it does not intend to make available its Pro Rata Share of such Committed Loans
on such date. If the Agent makes such advance, the Agent shall be entitled to
recover such amount on demand from the Bank on whose behalf such advance was
made, and if such Bank does not pay the Agent the amount of such advance on
demand, the Company shall promptly repay such amount to the Agent. Until such
amount is repaid to the Agent by such Bank or the Company, such advance shall be
deemed for all purposes to be a Loan made by the Agent. The Agent shall be
entitled to recover from the Bank or the Company, as the case may be, interest
on the amount advanced by it for each day from the Borrowing Date therefor until
repaid to the Agent, at a rate per annum equal to (i) the Federal Funds Rate,
for the five-day period beginning on the Borrowing Date, and (ii) the applicable
rate on the Loans made on the Borrowing Date for the period beginning on the
sixth day after the Borrowing Date.
(d) In lieu of delivering the written notice described above, the
Company may give the Agent telephonic notice of any request for borrowing by the
time required under this Section 2.02; provided that such telephonic notice
shall be confirmed by delivery of a written notice to the Agent by no later than
4:00 P.M., New York City time, on the date of such telephonic notice.
Section 2.03. Committed Notes. The Company's obligation to repay the
Committed Loans shall be evidenced by Committed Notes, one such Committed Note
payable to the order of each Bank. The Committed Note of each Bank shall (i) be
in the principal amount of such Bank's Commitment, (ii) be dated the date of the
initial Committed Loan and (iii) be stated to mature on the Termination Date as
such date may be extended hereunder and bear interest from its date until
maturity on the principal balance (from time to time outstanding thereunder)
payable at the rates and in the manner provided herein. Each Bank is authorized
to indicate upon the grid attached to its Committed Note all Committed Loans
made by it pursuant to this Agreement, interest elections and payments of prin
cipal and interest thereon. Such notations shall be presumptive as to the
aggregate unpaid principal amount of all Committed Loans made by such Bank, and
interest due thereon, but the failure by any Bank to make such notations or the
inaccuracy or incompleteness of any such notations shall not affect the
obligations of the Company hereunder or under the Committed Notes.
Section 2.04. Cancellation or Reduction of the Commitment. The
Company shall have the right, upon not less than three Business Days' written
notice to the Agent and upon payment of the Facility Fees accrued through the
date of such cancellation or reduction, with respect to the amount of the
cancellation or reduction, to cancel the Total Commitment in full or to reduce
the amount thereof; provided, however, that the Total Commitment may not be
canceled so long as any Loan remains outstanding; and provided, further, that
the amount of any partial reduction in the Total Commitment shall not exceed the
remainder of (i) the Total Commitment on such date minus (ii) the aggregate
outstanding principal amount of Committed Loans and Money Market Loans on such
date. Partial reductions of the Total Commitment shall be in the amount of
$5,000,000 or in integral multiples of $1,000,000 in excess thereof (or, if the
aggregate outstanding amount of Loans is less than $5,000,000, then all of such
lesser amount). All such cancellations or reductions shall be permanent.
Section 2.05. Money Market Loans. On the terms and subject to the
conditions of this Agreement, each Bank, severally and for itself alone, may
(but is not obligated to) make one or more Money Market Loans to the Company
from time to time on or after the date hereof and prior to such Bank's
Termination Date in amounts determined as indicated in the Money Market Notice
and for a term that, for each Money Market Loan, is not more than 270 days from
the date of funding of such Money Market Loan as provided in Section 2.07;
provided that the aggregate principal amount of all outstanding Loans shall not
at any time exceed the then Total Commitment.
Section 2.06. Procedure for Money Market Loans.
(a) Money Market Notice. The Company may, from time to time, approach
one or more of the Banks to determine whether such Bank or Banks will make one
or more Money Market Loans. The Company and any Bank or Banks shall, if each of
them in their sole discretion elects to do so, agree to enter into one or more
Money Market Loans as part of such proposed Money Market Borrowing on mutually
agreed-upon terms and notify the Agent by telephone, confirmed in writing by a
Money Market Notice, in the form of Exhibit C hereto, from the Company and the
Bank or Banks proposing to make Money Market Loans before 9:30 a.m. (Los Angeles
time) on the date of the funding of such Money Market Loan (the "Money Market
Funding Date"). Such Money Market Notice shall specify the amount of each Money
Market Loan that such Bank or Banks will make as part of such proposed Money
Market Borrowing (which amounts may, subject to the proviso in Section 2.05,
exceed each such Bank's Commitment), the Money Market Funding Date and the date
or dates of maturity thereof. At any time until 11:30 a.m., Los Angeles time,
on the Money Market Funding Date, the Agent may, but shall be under no
affirmative obligation to, notify any of the Banks proposing to make Money
Market Loans pursuant to such Money Market Notice or the Company that, taking
into consideration any other outstanding Committed Loan Request or Money Market
Notice, such Money Market Borrowing is or may, upon or after funding thereof, be
in excess of borrowing permitted by or otherwise be contrary to this Agreement
and, upon such notice from the Agent, if any, such Money Market Borrowing shall
be canceled and each of the Money Market Notice and the Money Market
Confirmation or Confirmations relating thereto shall be deemed withdrawn and
shall be of no effect.
(b) Money Market Confirmation. Each Money Market Loan shall be made
pursuant to a Money Market Confirmation in substantially the form of Exhibit D,
completed and transmitted from the Bank making such Money Market Loan to the
Company by facsimile or other method reasonably calculated to result in receipt
by the Company before funding. Upon funding of the loan, the Company shall be
bound by the terms specified in such Money Market Confirmation, which shall
include the information required to be set forth in the Money Market Notice as
well as the rate or rates of interest applicable to such Money Market Loan and
all other terms of such Money Market Loan, provided, that such Money Market
Confirmation may provide that certain specified terms of this Agreement
pertaining to ABR Loans or Eurodollar Loans are to apply to such Money Market
Borrowing.
(c) Reliance. The Agent may rely and act upon notice given by
telephone or in writing by individuals reasonably believed by the Agent to be
those designated to the Agent by the Company or by any Bank in writing from time
to time, without waiting for receipt of the Money Market Notice, and the Company
hereby agrees to indemnify and hold harmless the Agent from and against any and
all losses, costs, expenses, damages, claims, actions or other proceedings
relating to such reliance.
Section 2.07. Funding of Money Market Loans. No earlier than the
time specified in Section 2.06(a) for the Agent to give notice concerning
cancellation of the Money Market Borrowing (unless the Agent shall have earlier
informed each Bank making a Money Market Loan on such Money Market Funding Date
that it intends to give no such notice) and no later than 1:00 p.m. (Los Angeles
time) on the Money Market Funding Date, each Bank will make available the Money
Market Loan, if any, to be made by such Bank as part of the Money Market
Borrowing requested to be made on such date in the manner provided below. All
amounts shall be made available to the Company in Dollars and immediately
available funds at the Company's account specified in the relevant Notice of
Money Market Borrowing.
Section 2.08. Money Market Notes. The Money Market Loans of each
Bank shall be evidenced by a Money Market Note payable to the order of each
Bank. The Money Market Note of each Bank shall (i) be in the principal amount
of $100,000,000, or such amount less than $100,000,000 as the Company and such
Bank may agree,(ii) be dated not later than the date of the initial Money Market
Notice relating to a Money Market Loan made by such Bank and (iii) be stated to
mature on the Termination Date as such date may be extended hereunder and bear
interest from its date until maturity on the principal balance (from time to
time outstanding thereunder) payable at the rates and in the manner provided in
the applicable Money Market Confirmations. Each Bank is authorized to indicate
upon the grid attached to its Money Market Note all Money Market Loans made by
it pursuant to this Agreement, interest elections and payments of principal and
interest thereon. Such notations shall be presumptive as to the aggregate
unpaid principal amount of all Money Market Loans made by such Bank, and
interest due thereon, but the failure by any Bank to make such notations or the
inaccuracy or incompleteness of any such notations shall not affect the
obligations of the Company hereunder or under the Money Market Notes.
Section 2.09. Certain Fees. (a) The Company shall pay to the Agent
for the pro rata account of the Banks a fee (the "Facility Fee") equal to the
Facility Fee Rate per annum (on the basis of a 360-day year for the actual
number of days involved) on the daily average amount of the Total Commitment
during the quarter with respect to which such Facility Fee is being paid. Such
fee shall be payable in arrears on the last day of each calendar quarter,
commencing on the first such date after the date hereof, on any date that the
Total Commitment is canceled or reduced pursuant to Section 2.04 (but only with
respect to the amount of such cancellation or reduction) and on the Termination
Date.
(b) The Company shall pay to the Agent for its account an
administrative fee (the "Administrative Fee") pursuant to the commitment letter,
dated September 12, 1997, between the Company and the Agent or as may hereafter
be agreed to between the Agent and the Company.
Section 2.10. Optional Prepayment. The Company shall have the right,
on not less than three Business Days' written notice to the Agent in the case of
Eurodollar Loans, on not less than one Business Day's written notice to the
Agent in the case of ABR Loans, or such other written notice as may be agreed to
by the Company and the Bank making such Money Market Loan in the case of Money
Market Loans, to prepay Loans bearing interest on the same basis and having the
same Interest Periods, if any, in whole or in part, without premium or penalty,
in the aggregate principal amount of $1,000,000 or in integral multiples of
$250,000 in excess thereof (or, if the outstanding aggregate amount of such Loan
is less than $1,000,000, then all of such lesser amount), together with accrued
interest on the principal being prepaid to the date of prepayment and, in the
case of Eurodollar Loans, the amounts required by Section 4.03 or, in the case
of Money Market Loans, such other compensation as may be agreed to by the
Company and the Bank making such Money Market Loan. Subject to the terms and
conditions hereof, prepaid Loans may be reborrowed.
ARTICLE III
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 3.01. Procedure for Interest Rate Determination. (a) Unless
the Company shall request in a Committed Loan Request or in a
Conversion/Continuance Request that the Committed Loans (or portions thereof)
bear interest as Eurodollar Loans, the Committed Loans shall bear interest as
ABR Loans.
(b) Each Money Market Loan shall bear interest at the rate per annum
and subject to change or adjustment, if any, as agreed to by the Company and the
Bank making such Money Market Loan and as set forth in a Money Market
Confirmation.
Section 3.02. Interest on ABR Loans. Each ABR Loan shall bear
interest from the date of such ABR Loan until maturity thereof or until such ABR
Loan is repaid, or the beginning of any relevant Interest Period, as the case
may be, payable in arrears on the last day of each calendar quarter of each
year, commencing with the first such date after the date hereof, and on the date
such ABR Loan is repaid, at a rate per annum (on the basis of a 365- or 366-day
year for the actual number of days involved in the case of ABR Loans which
accrue interest based upon the Prime Rate and on the basis of a 360-day year for
the actual number of days involved in the case of ABR Loans which accrue
interest based upon the Federal Funds Rate) equal to the Base Rate in effect
from time to time, which rate shall change as and when said Base Rate shall
change.
Section 3.03. Interest on Eurodollar Loans. (a) Each Eurodollar
Loan shall bear interest from the date of such Eurodollar Loan until maturity
thereof or until such Loan is repaid, payable in arrears, with respect to
Interest Periods of three months or less, on the last day of such Interest
Period, and with respect to Interest Periods longer than three months, on the
day which is three months after the commencement of such Interest Period and on
the last day of such Interest Period, at a rate per annum (on the basis of a
360-day year for the actual number of days involved), determined by the Agent
with respect to each Interest Period with respect to Eurodollar Loans, equal to
the sum of (i) the Applicable Margin and (ii) LIBOR.
(b) The Interest Period for each Eurodollar Loan shall be selected by
the Company at least three Business Days prior to the beginning of such Interest
Period. If the Company fails to notify the Agent of the Interest Period for a
subsequent Eurodollar Loan at least three Business Days prior to the last day of
the then current Interest Period of an outstanding Eurodollar Loan, then such
outstanding Eurodollar Loan shall become an ABR Loan at the end of such current
Interest Period.
(c) Notwithstanding the foregoing: (i) if any Interest Period for a
Eurodollar Loan would otherwise end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Business Day; (ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and (iii) no Interest
Period for a Eurodollar Loan may extend beyond the Termination Date.
(d) Eurodollar Loans shall be made by each Bank from its branch or
affiliate identified as its Eurodollar Lending Office on the signature page
hereto, or such other branch or affiliate as it may hereafter designate to the
Company and the Agent as its Eurodollar Lending Office. A Bank shall not change
its Eurodollar Lending Office designation if it, at the time of the making of
such change, increases the amounts that would have been payable by the Company
to such Bank under this Agreement in the absence of such a change.
Section 3.04. Conversion/Continuance . (a) The Company may request,
by delivery to the Agent of a written Conversion/Continuance Request not less
than three Business Days prior to a requested Conversion/Continuance Date, that
all or portions of the outstanding Committed Loans (and any Money Market Loans
allowing the option described in this Section 3.04), in the aggregate amount of
$1,000,000 or in integral multiples of $100,000 in excess thereof (or, if the
aggregate amount of outstanding Loans is less than $1,000,000, then all such
lesser amount), to bear interest from and after the Conversion/Continuance Date
as either ABR Loans or Eurodollar Loans.
(b) Upon receipt of any such Conversion/Continuance Request from the
Company, the Agent shall forthwith give notice to each Bank of the substance
thereof. Effective on such Conversion/Continuance Date and upon payment by the
Company of the amounts, if any, required by Section 4.03, the Committed Loans or
portions thereof as to which the Conversion/Continuance Request was made shall
commence to accrue interest as set forth in this Article III for the interest
rate selected by the Company.
(c) In lieu of delivering the above described notice, the Company may
give the Agent telephonic notice hereunder by the required time under this
Section 3.04; provided that such telephonic notice shall be confirmed by
delivery of a written notice to the Agent by no later than 4:00 P.M., New York
City time, the date of such telephonic notice.
(d) To the extent agreed to by the Company and any Bank making a Money
Market Loan, such Money Market Loan may be continued as a Money Market Loan.
Section 3.05. Post Default Interest. Upon the occurrence and during
the continuation of an Event of Default, all Loans and any unpaid installment of
interest thereon shall bear interest at a rate per annum (on the basis of a 360-
day year for the actual number of days involved) equal to the sum of (i) 2% and
(ii) with respect to ABR Loans, the rate of interest then applicable to ABR
Loans, changing as and when said rate shall change; with respect to Eurodollar
Loans, the rate of interest applicable to each such Eurodollar Loan; and, with
respect to Money Market Loans, the agreed-upon rate of interest applicable to
such Money Market Loan, changing as and when said rate shall change if such rate
shall be subject to change. Interest payable pursuant to this Section 3.05
shall be payable on demand.
Section 3.06. Maximum Interest Rate. (a) Nothing in this Agreement
or the Notes shall require the Company to pay interest at a rate exceeding the
maximum rate permitted by applicable law. Neither this Section nor Section
11.01 is intended to limit the rate of interest payable for the account of any
Bank to the maximum rate permitted by the laws of the State of New York (or any
other applicable law) if a higher rate is permitted with respect to such Bank by
supervening provisions of U.S. Federal law.
(b) If the amount of interest payable for the account of any Bank on
any interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Article III, would exceed the
maximum amount permitted by applicable law to be charged by such Bank, the
amount of interest payable for its account on such interest payment date shall
automatically be reduced to such maximum permissible amount.
ARTICLE IV
DISBURSEMENT AND PAYMENT
Section 4.01. Pro Rata Treatment. Each payment of the Facility Fee
and each reduction of the Total Commitment shall be apportioned among the Banks
in proportion to each Bank's Pro Rata Share. Except as provided in Section 4.04
or 4.05, the Committed Notes or portions thereof as to which a
Conversion/Continuance Request has been made pursuant to Section 3.04 hereof
shall at all times bear interest on the same basis (as ABR Loans and Eurodollar
Loans) and the Interest Periods applicable thereto, if any, shall be of the same
duration.
Section 4.02. Method of Payment. (a) All payments of principal and
interest on Money Market Loans and under Money Market Notes shall be made
without set-off (i) to each of the Banks entitled thereto, for its account, or
(ii) if an Event of Default has occurred and is continuing, to the Agent for the
account of the Banks entitled thereto, in each case, in lawful money of the
United States and in immediately available funds at the office of such Bank
specified in the relevant Money Market Confirmation provided, that the Company
shall give the Agent notice, confirmed by the relevant Bank, of all payments or
prepayments of principal upon any Money Market Loans made directly to any Bank
on the same business day on which such payments are made.
(b) All other payments by the Company hereunder and under the
Committed Notes shall be made without set-off or counterclaim to the Agent, for
its account or for the account of the Bank or Banks entitled thereto, as the
case may be, in lawful money of the United States and in immediately available
funds at the office of the Agent on the date when due.
Section 4.03. Compensation for Losses. (a) Compensation. In the
event that (i) the Company makes a prepayment under Section 2.10 on a day other
than the last day of the Interest Period for the amount so prepaid, (ii) a
Conversion/Continuance Date selected pursuant to Section 3.04 falls on a day
other than the last day of the Interest Period for the amount as to which a
conversion is made, (iii) the Company revokes any notice given under
Section 2.02 requesting Eurodollar Loans, (iv) Eurodollar Loans or Money Market
Loans bearing interest on the basis of a similar variable interbank rate or
portions thereof are converted into ABR Loans pursuant to Section 4.05 on a day
other than the last day of the Interest Period for the Eurodollar Loans so
converted, or (v) the Eurodollar Loans or Money Market Loans bearing interest on
the basis of a similar variable interbank rate shall be declared to be due and
payable prior to the scheduled maturity thereof pursuant to Section 8.01, the
Company shall pay to each Bank promptly after its demand an amount which will
compensate such Bank for any costs and losses incurred by such Bank as a result
of such prepayment, conversion, declaration or revocation of notice in respect
of funds obtained for the purpose of making or maintaining such Bank's
Eurodollar Loans or Money Market Loans, as the case may be, or any part thereof.
Such compensation shall include an amount equal to the excess, if any, of
(i) the amount of interest which would have accrued on the amount so paid or
prepaid, or not borrowed or converted, for the period from the date of such
payment or prepayment or conversion or failure to borrow to the last day of such
Interest Period (or, in the case of a failure to borrow, the Interest Period
that would have commenced on the date of such failure to borrow) in each case at
the applicable rate of interest for such Loan provided for herein (excluding,
however, the Applicable Margin included therein) over (ii) the amount of
interest (as reasonably determined by such Bank) which would have accrued to
such Bank on such amount by placing such amount on deposit for a comparable
period with leading banks in the London interbank market.
(b) Certificate, Etc. Each Bank shall promptly notify the Company,
with a copy to the Agent, upon becoming aware that the Company may be required
to make any payment pursuant to this Section 4.03. When requesting payment
pursuant to this Section 4.03, each Bank shall provide to the Company, with a
copy to the Agent, a certificate, signed by an officer of such Bank, setting
forth the amount required to be paid by the Company to such Bank and the
computations made by such Bank to determine such amount. In the absence of
manifest error, such certificate shall be conclusive and binding on the Company
as to the amount so required to be paid by the Company to such Bank.
(c) Participants. Subject to Section 11.08(e), each Participant
shall be deemed a "Bank" for the purposes of this Section 4.03.
Section 4.04. Withholding, Reserves and Additional Costs.
(a) Withholding. To the extent permitted by law, all payments under this
Agreement and under the Notes (including payments of principal and interest)
shall be payable to each Bank free and clear of any and all present and future
taxes, levies, imposts, duties, deductions, withholdings, fees, liabilities and
similar charges (collectively, the "Taxes"); provided that "Taxes" shall not
include taxes imposed on or measured by the overall net income of any Bank by
the United States of America or any political subdivision or taxing authority
thereof or therein, or taxes on or measured by the overall net income of any
foreign office, branch or subsidiary of such Bank by any foreign country or
subdivision thereof in which such office, branch or subsidiary is doing
business. If any Taxes are required to be withheld or deducted from any amount
payable under this Agreement or any Note, then the amount payable under this
Agreement or such Note shall be increased to the amount which, after deduction
from such increased amount of all Taxes required to be withheld or deducted
therefrom, will yield to such Bank the amount stated to be payable under this
Agreement or such Note. The Company shall execute and deliver to any Bank upon
its request such further instruments as may be necessary or desirable to give
full force and effect to any such increase, including a new Note of the Company
to be issued in exchange for any Note theretofore issued. If any of the Taxes
specified in this Section 4.04(a) are paid by any Bank, the Company shall, not
later than 10 days after demand of such Bank, reimburse such Bank for such
payments, together with any interest, penalties and expenses incurred in
connection therewith, plus interest thereon commencing 10 days after such demand
at a rate per annum (based on a 360-day year for the actual number of days
involved) equal to the sum of 2% and the interest rate then applicable to ABR
Loans, changing as and when such rate shall change, from the date such payment
or payments are made by such Bank to the date of reimbursement by the Company;
provided, however, that the Company shall not be required to indemnify any Bank
or Participant for penalties and expenses that result from the gross negligence
or willful misconduct of such Bank or Participant. The Company shall deliver to
the Agent certificates or other valid vouchers for all Taxes or other charges
deducted from or paid with respect to payments made by the Company hereunder.
Notwithstanding the foregoing, the Company shall be entitled, to the extent it
is required to do so by law, to deduct or withhold (and shall not be required to
make payments as otherwise required in this Section on account of such
deductions or withholdings) income or other similar taxes imposed by the United
States of America from interest, fees or other amounts payable hereunder for the
account of any Bank other than a Bank (i) who is a U.S. Person for U.S. Federal
income tax purposes or (ii) who has the Prescribed Forms on file with the
Company for the applicable year to the extent deduction or withholding of such
taxes is not required as a result of such filing of such Prescribed Forms;
provided that if the Company shall so deduct or withhold any such taxes, it
shall provide a statement to the Agent and such Bank, setting forth the amount
of such taxes so deducted or withheld, the applicable rate and any other
information or documentation which such Bank may reasonably request for
assisting such Bank to obtain any allowable credits or deductions for the taxes
so deducted or withheld in the jurisdiction or jurisdictions in which such Bank
is subject to tax.
(b) Additional Costs. (i) If after the date hereof, any change in
any law or regulation or in the interpretation thereof by any court or
administrative or governmental authority charged with the administration thereof
or the enactment of any law or regulation shall either (1) impose, modify or
deem applicable any reserve, special deposit or similar requirement against the
Banks' Commitments or the Loans or (2) impose on any Bank any other condition
regarding this Agreement, its Commitment or the Loans and the result of any
event referred to in clause (1) or (2) of this clause (b) shall be to increase
the cost to any Bank of maintaining its Commitment or the Loans (which increase
in cost shall be calculated in accordance with each Bank's reasonable averaging
and attribution methods) by an amount which any such Bank deems to be material,
then, upon written demand by such Bank, the Company shall pay to such Bank
within 10 days of such written demand an amount equal to such increase in cost;
provided that in respect of any Loan, no such compensation shall be payable to
the extent that, in the reasonable opinion of such Bank, the interest rate on
the Loans has been adjusted to account for such increased cost. Such amount
shall bear interest, commencing 10 days after receipt by the Company of such
demand until payment in full thereof, at a rate per annum (based on a 360-day
year, for the actual number of days involved) equal to the sum of 2% and the
interest rate then applicable to ABR Loans, changing as and when such rate shall
change.
(ii) If any Bank shall have determined that the adoption of any
applicable law, rule, regulation or guideline 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 with the
interpretation or administration thereof (including any such adoption or change
made prior to the date hereof but not effective until after the date hereof), or
compliance by any Bank 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, has or would have the effect of reducing the rate of return
on capital for any such Bank or any corporation controlling such Bank as a
consequence of its obligations under this Agreement to a level below that which
such Bank or such corporation could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's or such corporation's
policies with respect to capital adequacy), then from time to time, not later
than 10 days after written demand by such Bank, the Company shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such
reduction, plus interest thereon commencing 10 days after receipt by the Company
of such written demand at a rate per annum (based on a 360-day year, for the
actual number of days involved) equal to the sum of 2% and the interest rate
then applicable to ABR Loans, changing as and when such rate shall change, from
the date of such demand by such Bank to the date of payment by the Company.
(c) Lending Office Designations. Before giving any notice to the
Company pursuant to this Section 4.04, each Bank shall, if possible, designate a
different lending office if such designation will avoid the need for giving such
notice and will not, in the judgment of such Bank, be otherwise disadvantageous
to such Bank.
(d) Certificate, Etc. Each Bank shall promptly notify the Company,
with a copy to the Agent, upon becoming aware that the Company may be required
to make any payment pursuant to this Section 4.04. When requesting payment
pursuant to this Section 4.04, each Bank shall provide to the Company, with a
copy to the Agent, a certificate, signed by an officer of such Bank, setting
forth the amount required to be paid by the Company to such Bank and the
computations made by such Bank to determine such amount. Determinations and
allocations by such Bank for purposes of this Section 4.04 shall be conclusive,
provided that such determinations and allocations are made on a reasonable basis
and are mathematically accurate. Allocations shall not be deemed reasonable
unless made ratably, to the extent practicable, to all of the affected Bank's
assets, commitments, activities or other relevant aspects of such Bank's
business. In the absence of manifest error, such certificate shall be
conclusive and binding on the Company as to the amount so required to be paid by
the Company to such Bank.
(e) Participants. Subject to Section 11.08(e), each Participant
shall be deemed a "Bank" for the purposes of this Section 4.04.
Section 4.05. Unavailability. If at any time any Bank shall have
determined in good faith (which determination shall be conclusive) that the
making or maintenance of all or any part of such Bank's Eurodollar Loans has
been made impracticable or unlawful because of compliance by such Bank in good
faith with any law or guideline or interpretation or administration thereof by
any official body charged with the interpretation or administration thereof or
with any request or directive of such body (whether or not having the effect of
law), because U.S. dollar deposits in the amount and requested maturity of such
Eurodollar Loans are not available to the Bank in the London Eurodollar
interbank market, or because of any other reason, then the Agent, upon
notification to it of such determination by such Bank, shall forthwith advise
the other Banks and the Company thereof. Upon such date as shall be specified
in such notice and until such time as the Agent, upon notification to it by such
Bank, shall notify the Company and the other Banks that the circumstances
specified by it in such notice no longer apply, (i) notwithstanding any other
provision of this Agreement, such Eurodollar Loans of such Bank shall automati
cally and without requirement of notice by the Company be converted to ABR Loans
and (ii) the obligation of only such Bank to allow borrowing, elections and
renewals of Eurodollar Loans shall be suspended, and, if the Company shall
request in a Committed Loan Request or Conversion/Continuance Request that such
Bank make a Eurodollar Loan, the loan requested to be made by such Bank shall
instead be made as an ABR Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties.
As of each Compliance Date, the Company represents and warrants to the Banks
that:
(a) Subsidiaries. At the date hereof, the Company has no
Subsidiaries and is a participant in no joint ventures other than as listed on
Schedule 5.01(a).
(b) Good Standing and Power. The Company is duly organized and
validly existing and in good standing under the laws of the State of Maryland;
and the Company has the power to own its property and to carry on its business
as now being conducted and is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties owned or
leased by it therein or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified or to be in
good standing, individually or in the aggregate, would not have a Material
Adverse Effect. Each of the corporate Subsidiaries of the Company are
corporations, each duly organized and validly existing, under the laws of the
jurisdiction of its incorporation; each other Subsidiary is an entity duly
organized and validly existing under the laws of the jurisdiction of its
organization; and each Subsidiary has the power to own its property and to carry
on its business as now being conducted and is duly qualified to do business and
is in good standing in each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be so
organized, existing, qualified, or to be in good standing, individually or in
the aggregate, would not have a Material Adverse Effect.
(c) Corporate Authority. The Company has full corporate power and
authority to execute, deliver and perform its obligations under each of the
Credit Documents, to make the borrowings contemplated hereby, and to execute and
deliver the Notes and to incur the obligations provided for herein and therein,
all of which have been duly authorized by all proper and necessary corporate
action. No consent or approval of stockholders is required as a condition to
the validity or performance by the Company of its obligations under any of the
Credit Documents.
(d) Authorizations. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from Governmental
Authorities and other Persons which are necessary for the borrowing hereunder,
the execution and delivery of the Credit Documents, the performance by the
Company of its obligations hereunder and thereunder have been effected or
obtained and are in full force and effect.
(e) Binding Agreements. This Agreement constitutes, and the Notes,
when executed and delivered pursuant hereto for value received will constitute,
the valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(f) Litigation. There are no proceedings pending or, so far as the
officers of the Company know, proceedings or investigations threatened before
any court or arbitrator or before or by any Governmental Authority which, in any
one case or in the aggregate, if determined adversely to the interests of the
Company or any of its Subsidiaries, would have a Material Adverse Effect or
relates to any Credit Document or the lending transactions contemplated hereby
and thereby.
(g) No Conflicts. There is no statute, regulation, rule, order or
judgment, and no provision of any material agreement or instrument binding on
the Company or any of its Subsidiaries, or affecting their respective properties
and no provision of the certificate of incorporation, by-laws, governing
partnership agreement or other organizational document of the Company or any of
its Subsidiaries, which would prohibit, conflict with or in any way prevent the
execution, delivery, or performance of the terms of the Credit Documents or the
incurrence of the obligations provided for herein and therein, or result in or
require the creation or imposition of any Lien on any of the Company's or its
Subsidiaries' properties as a consequence of the execution, delivery and
performance of any Credit Document or the lending transactions contemplated
hereby and thereby.
(h) Financial Condition. (i) The consolidated balance sheet of the
Company and its Subsidiaries as of December 31, 1996, together with consolidated
statements of income, stockholders' equity and cash flows for the fiscal year
then ended, certified by Arthur Andersen & Co., heretofore delivered to the
Agent and the Banks, fairly present the consolidated financial condition of the
Company and its Subsidiaries and the results of their operations as of the dates
and for the periods referred to and have been prepared in accordance with GAAP
consistently applied throughout the periods involved. As of the date hereof,
there are no material liabilities, direct or indirect, fixed or contingent, of
the Company or any of its Subsidiaries as of the dates of such balance sheet
which are not reflected therein or in the notes thereto.
(ii) The unaudited consolidated balance sheets of the Company and its
Subsidiaries as of March 31, 1997, and June 30, 1997, together with unaudited
and consolidated statements of income for the three month and six month periods
then ended and the unaudited statements of cash flows for the three months and
six months, respectively, then ended, heretofore delivered to the Agent and the
Banks, fairly present the consolidated financial condition of the Company and
its Subsidiaries and the results of their operations as of the dates and for the
periods referred to and have been prepared in accordance with GAAP consistently
applied throughout the periods involved, subject to the omission or curtailment
of footnotes. As of the date hereof, there are no material liabilities, direct
or indirect, fixed or contingent, of the Company and any of its Subsidiaries as
of the dates of such balance sheets which are not reflected therein or in the
notes thereto.
(iii) There has been no Material Adverse Change.
(iv) Since December 31, 1996, there has not occurred any fact, event or
condition which could have a Material Adverse Effect.
(i) Taxes. The Company and each of its Subsidiaries has filed or
caused to be filed all tax returns which are required to be filed and has paid
all taxes required to be shown to be due and payable on said returns or on any
assessment made against it or any of its property and all other taxes,
assessments, fees, liabilities, penalties or other charges imposed on it or any
of its property by any Governmental Authority, except for any taxes,
assessments, fees, liabilities, penalties or other charges (x) which are being
contested in good faith and for which adequate reserves (in accordance with
GAAP) have been established or (y) of which the failure to file or pay would
not, individually or in the aggregate, be material and adverse to the Company
and its Subsidiaries taken as a whole.
(j) Use of Proceeds. The proceeds of the Loans will be used by the
Company for general corporate purposes.
(k) Margin Regulations. No part of the proceeds of any Loan will be
used to purchase or carry, or to reduce or retire or refinance any credit
incurred to purchase or carry, or extend credit to others for the purpose of pur
chasing or carrying, any "margin stock" as defined in Regulation G or Regulation
U of the Board of Governors of the Federal Reserve System.
(l) No Material Misstatements. All written information relating to
the Company and its Subsidiaries heretofore delivered by the Company and its
Subsidiaries to the Agent or any Bank in connection with the Credit Documents is
complete and correct in all material respects for the purposes for which such
information was delivered.
(m) Title to Properties; Possession Under Leases. The Company and
its Subsidiaries each have good and marketable title to, or valid leasehold
interests in, all properties and assets reflected on the consolidated balance
sheet of the Company as of December 31, 1996, referred to in Section 5.01(h),
except for (x) such properties and assets as have been disposed of in the
ordinary course of business or as would have been permitted by this Agreement if
then in effect since the date of such financial statements, (y) minor defects in
title that do not interfere with the ability of the Company or any of such
Subsidiaries to conduct its business as now conducted and (z) such other items
as would not, individually or in the aggregate, be material and adverse to the
Company and its Subsidiaries taken as a whole. All such assets and properties
are free and clear of all Liens, except Liens permitted pursuant to this
Agreement.
(n) Leases. Except as could not, in any one case individually or all
cases in the aggregate, have a Material Adverse Effect, (i) there are no renewal
or extension options applicable to any lease to which the Company or any
Subsidiary is a party; (ii) to the Company's knowledge, no condition exists
which, with the giving of notice or the passage of time, or both, would permit
any lessee to cancel its obligations under any lease to which the Company or any
Subsidiary is a party; (iii) the Company has received no notice that any lessee
intends to cease operations at any leased property prior to the expiration of
the term of the applicable lease (other than temporarily due to casualty,
remodeling, renovation or any similar cause); and (iv) to the Company's
knowledge, none of the lessees or their sub-lessees, if any, under any of the
leases to which the Company or any Subsidiary is a party is the subject of any
bankruptcy, reorganizations, insolvency or similar proceeding.
(o) Conduct of Business. At the date hereof, the Company and its
Subsidiaries hold all authorizations, consents, approvals, registrations,
franchises, licenses and permits, with or from Governmental Authorities and
other Persons as are required or necessary for them to own their properties and
conduct their business as now conducted, except for any authorizations,
consents, approvals, registrations, franchises, licenses and permits, of which
the failure to hold would not, individually or in the aggregate, be material and
adverse to the Company and its Subsidiaries taken as a whole.
(p) Compliance with Laws and Charter Documents. Neither the Company
nor any Subsidiary thereof is in violation of (a) any law, statute, rule,
regulation or order of any Governmental Authority (including Environmental Laws)
applicable to it or its properties or assets or (b) its certificate of incorpor
ation, by-laws, governing partnership agreement or other organizational
document, except for any such violation as would not, individually or in the
aggregate, be material and adverse to the Company and its Subsidiaries taken as
a whole.
(q) ERISA. (i) Neither the Company nor any ERISA Affiliate has
engaged in a non-exempt prohibited transaction (as defined in Section 4975 of
the Code or Section 406 of ERISA).
(ii) Except those items that would not, individually or in the
aggregate, be material and adverse to the Company and its Subsidiaries taken as
a whole, no Single-Employer Plan had an accumulated funding deficiency, whether
or not waived, as of the last day of the most recent fiscal year of such Plan
ended prior to the date hereof and neither the Company nor any ERISA Affiliate
is (A) required to give security to any Single-Employer Plan pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, or (B) subject to a lien
in favor of such a Plan under Section 302(f) of ERISA.
(iii) Except those items that would not, individually or in the
aggregate, be material to the Company and its Subsidiaries taken as a whole, no
liability under Sections 4062, 4063, 4064 OR 4069 of ERISA has been or is
expected by the Company to be incurred by the Company or any ERISA Affiliate
with respect to any Single-Employer Plan and neither the Company nor any ERISA
Affiliate has incurred or expects to incur any withdrawal liability with respect
to any Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA).
(iv) Except those items that would not, individually or in the
aggregate, be material to the Company and its Subsidiaries taken as a whole,
under each Single-Employer Plan, as of the last day of the most recent plan year
ended prior to the date hereof, the actuarially determined present value of all
benefit liabilities (as determined on the basis of the actuarial assumptions
contained in the Plan's most recent actuarial valuation) did not exceed the fair
market value of the asset of such Plan by more than $1,000,000, and there has
been no material change in the financial condition of the Plan since the last
day of the most recent plan year.
(v) Insofar as the representations and warranties of the Company and
its ERISA Affiliates contained in clauses (i) and (ii) above relate to any Plan
which is a multiemployer plan, such representations and warranties are made to
the best knowledge of the Company and its ERISA Affiliates. As used in this
Section, (A) "accumulated funding deficiency" shall have the meaning assigned to
such term in Section 412 of the Code and Section 302 of ERISA; (ii)
"multiemployer plan" and "plan year" shall have the respective meanings assigned
to such terms in Section 3 of ERISA; (C) "benefit liabilities" shall have the
meaning assigned to such term in Section 4001 of ERISA; (D) "taxable period"
shall have the meaning assigned to such term in Section 4975 of the Code; and
(E) "withdrawal liability" shall have the meaning assigned to such term in
Part 1 of Subtitle E of Title IV of ERISA.
(r) Not an Investment Company. Neither the Company nor any of its
Subsidiaries is or, after giving effect to the transactions contemplated hereby
will be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(s) Environmental Matters. Except as could not, individually or in
the aggregate, have a Material Adverse Effect, (i) the businesses as presently
or formerly engaged in by the Company and its Subsidiaries are and have been
conducted in compliance in all material respects with all applicable
Environmental Laws, including, without limitation, having required permits,
licenses and other approvals and authorizations, during the time the Company and
its Subsidiaries engaged in such businesses, (ii) the properties presently or
formerly owned or operated by the Company and its Subsidiaries (including,
without limitation, soil, groundwater or surface water on, under or adjacent to
the properties, and buildings thereon) (the "Properties) do not, to the
Company's knowledge, contain any Hazardous Substance in violation of applicable
Environmental Law (provided, however, that with respect to Properties formerly
owned or operated by the Company or any Subsidiary, such representation is
limited to the period the Company or such Subsidiary owned or operated such
Properties), (iii) the Company has not received any notices, demand letters or
request for information from any Federal, state, local or foreign governmental
entity or any third party indicating that the Company may be in violation of any
Environmental Law in connection with the ownership or operation of the Company's
businesses, (iv) there are no civil, criminal or administrative actions, suits,
demands, claims, hearings, investigations or proceedings pending or, to the
Company's knowledge, threatened against the Company or any Subsidiary with
respect to the Company or any Subsidiary or the Properties relating to any
violation, or alleged violation, of, or liability under, any Environmental Law,
(v) no reports have been filed, or, to the Company's knowledge, are required to
be filed, by the Company or any Subsidiary concerning the release of any
Hazardous Substance or the threatened or actual violation of any Environmental
Law on or at the Properties, (vi) to the Company's knowledge, no Hazardous
Substance has been disposed of, transferred, released or transported from any of
the Properties during the time such Property was owned or operated by the
Company or its Subsidiaries in violation of applicable Environmental Law as in
effect at the time of said activities, (vii) there have been no environmental
investigations, studies, audits, tests, reviews or other analyses conducted by
or which are in the possession of the Company relating to the Company or any
Subsidiary or the Properties which have not been delivered to the Banks prior to
the date hereof, (viii) there are no underground storage tanks on, in or under
any of the Properties and no underground storage tanks have been closed or
removed from any Properties which are or have been in the ownership of the
Company or any Subsidiary (provided, however, that with respect to Properties
formerly owned or operated by the Company or any Subsidiary, the representations
in this subsection (viii) are limited to the period the Company owned or
operated such Properties), (ix) there is no friable asbestos present in any
Property presently owned or operated by the Company or any Subsidiary, and no
asbestos has been removed from any Property while such Property was owned or
operated by the Company, (x) none of the Properties has been used at any time by
the Company or any Subsidiary as a sanitary landfill or hazardous waste disposal
site and (xi) neither the Company nor any Subsidiary has incurred, and, to the
Company's knowledge, none of the Properties are presently subject to, any
material liabilities (fixed or contingent) relating to any suit, settlement,
court order, administrative order, judgment or claim asserted or arising under
any Environmental Law.
(t) Insurance. All of the properties (other than properties leased
to other Persons) and operations of the Company and its Subsidiaries of a
character usually insured by companies of established reputation engaged in the
same or a similar business similarly situated are adequately insured, by
financially sound and reputable insurers, against loss or damage of the kinds
and in amounts customarily insured against by such Persons, and the Company and
its Subsidiaries carry, with such insurers in customary amounts, such other
insurance as is usually carried by companies of established reputation engaged
in the same or a similar business similarly situated.
ARTICLE VI
CONDITIONS OF LENDING
Section 6.01. Conditions to the Availability of the Commitment. The
obligations of each Bank hereunder are subject to, and the Banks' Commitment
shall not become available until the date on which, each of the following
conditions precedent shall have been satisfied or waived in writing by each of
the Banks, and upon such satisfaction or waiver each Bank will give a written
confirmation of the same to the Company on request:
(a) Credit Agreement. The Agent shall have received this Agreement
duly executed and delivered by each of the Banks and the Company.
(b) Notes. The Agent on behalf of each Bank shall have received
Committed Notes in the principal amounts equal to each such Bank's Commitment,
and Money Market Notes in the principal amounts equal to the Total Commitment,
each duly executed and delivered by the Company.
(c) Good Standing Certificates. The Agent on behalf of the Banks
shall have received from the Company copies of good standing certificates, dated
within five (5) days prior to the date hereof, confirming the Company's
representation as to good standing in Section 5.01(b).
(d) Secretary's Certificate. The Agent on behalf of the Banks shall
have received from the Company a certificate from the Secretary or Assistant
Secretary of the Company, dated as of the date hereof, (i) certifying the
incumbency of the officers executing the Credit Documents and all related
documentation, (ii) attaching and certifying the resolutions of the Board of
Directors of the Company relating to the execution, delivery and performance of
this Agreement, and (iii) attaching and certifying the Articles of Incorporation
and By-laws of the Company.
(e) Opinion of Company Counsel. The Agent shall have received a
favorable written opinion, dated the date hereof, of Latham & Watkins, special
counsel for the Company, in substantially the form of Exhibit G, and of Ballard,
Spahr, Andrews & Ingersoll, special Maryland counsel for the Company, in
substantially the form of Exhibit H.
(f) Other Documents. The Agent shall have received such other
certificates and documents as the Agent and the Banks reasonably may require.
(g) Litigation. There shall not be pending or threatened any action
or proceeding before any court or administrative agency relating to the lending
transactions contemplated by this Agreement or any Note which, in the judgment
of the Agent or any Bank, could materially impair the ability of the Company to
perform its obligations hereunder or thereunder.
(h) Agency Fee. The Agent shall have received an Agency Fee (the
"Agency Fee"), which is due and payable on the date hereof pursuant to a letter
agreement, dated the date hereof, between the Company and the Agent.
(i) Termination of Prior Credit Agreement. The Agent shall have
received evidence satisfactory to the Agent that the Prior Credit Agreement
shall have been terminated and be of no further force and effect and any and all
amounts outstanding thereunder or otherwise payable pursuant thereto shall have
been paid.
(j) Cancellation of Loans. The Agent shall have received evidence
satisfactory to the Agent that all existing loans with any of the Banks shall
have been terminated or canceled and all amounts outstanding thereunder or
otherwise payable pursuant thereto shall have been paid.
Section 6.02. Conditions to All Loans. The obligations of each Bank
in connection with each Loan (including the Initial Loan) are subject to the
conditions precedent that, on the date of each such Loan and after giving effect
thereto, each of the following conditions precedent shall have been satisfied or
waived in writing by each Bank, and upon such satisfaction or waiver each Bank
will give a written confirmation of the same to the Company on request:
(a) Committed Loan Request/Money Market Notice. (1) For each
Committed Loan, the Agent shall have received a Committed Loan Request in
substantially the form of Exhibit B. (2) For each Money Market Borrowing, the
Agent shall have received a Money Market Notice in substantially the form of
Exhibit C and the Company shall have acknowledged a Money Market Confirmation in
substantially the form of Exhibit D.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing, and the Agent shall have received from the Company a
certificate to that effect signed by an authorized officer of the Company.
(c) Representations and Warranties; Covenants. The representations
and warranties contained in Article V (other than representations and warranties
that speak as of a specific date) shall be true and correct with the same effect
as though such representations and warranties had been made at the time of such
Loan, and the Agent shall have received from the Company a certificate to that
effect signed by an authorized officer of the Company.
ARTICLE VII
COVENANTS
Section 7.01. Affirmative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and all reimbursement obligations
and performance of all other obligations of the Company hereunder (other than
Unmatured Surviving Obligations), the Company will:
(a) Financial Statements; Compliance Certificates. Furnish to the
Agent and to each Bank (i) as soon as available, but in no event more than 60
days following the end of each fiscal quarter, copies of all consolidated
quarterly balance sheets, income statements and other financial statements and
reports of the Company and its Subsidiaries, prepared in a format and in scope
consistent with the financial statements and reports of the Company referenced
in Section 5.01(h), (ii) as soon as available, but in no event more than
105 days following the end of each fiscal year, a copy of the annual
consolidated audit report and financial statements relating to the Company and
its Subsidiaries, certified by Arthur Andersen & Co., one of the other "Big Six"
accounting firms or another independent certified public accountant reasonably
satisfactory to the Agent, prepared in a format and in scope consistent with the
December 31, 1996 financial statements and reports of the Company referenced in
Section 5.01(h), (iii) as soon as available, but in no event later than 60 days
following the end of each fiscal year, an annual forecast for the then-current
fiscal year, prepared in a manner and in the form of the forecast provided on
the date of this Agreement or in such other form as is reasonably acceptable to
the Agent and the Required Banks, (iv) together with each of the financial
statements delivered pursuant to clauses (i) and (ii) of this Section 7.01(a), a
certificate of the Chief Financial Officer of the Company stating whether as of
the last date of such financial statements any event or circumstance exists
which constitutes a Default or Event of Default and, if so, stating the facts
with respect thereto, together with calculations, where applicable, which
establish the Company's (and where applicable, each of the Company's
Subsidiaries') compliance therewith, (v) promptly upon receipt thereof, copies
of any reports and management letters submitted to the Company or any of its
Subsidiaries or their accountants in connection with any annual or interim audit
of the books of the Company or its Subsidiaries, together with the responses
thereto, if any, and (vi) such additional information, reports or statements as
the Agent and the Banks from time to time may reasonably request.
(b) Taxes. Pay and discharge, and cause each of its Subsidiaries to
pay and discharge, all taxes, assessments and governmental charges upon it, its
income and its properties prior to the date on which penalties are attached
thereto, (i) unless and to the extent that (x) such taxes, assessments and
governmental charges shall be contested in good faith and by appropriate
proceedings by the Company or such Subsidiary, as the case may be, (y) adequate
reserves (in accordance with GAAP) are maintained by the Company or such
Subsidiary, as the case may be, with respect thereto, and (z) any failure to pay
and discharge such taxes, assessments and governmental charges could not have a
Material Adverse Effect or (ii) unless and to the extent that any failure to pay
and discharge such taxes, individually or in the aggregate, would not be
material and adverse to the Company and its Subsidiaries taken as a whole.
(c) Corporate Existence. Except as permitted by Section 7.02(d) or
(e), maintain, and cause each of its Subsidiaries to maintain, its existence in
good standing and qualify and remain qualified to do business in each
jurisdiction in which the character of the properties owned or leased by it
therein or in which the transaction of its business is such that the failure to
maintain such existence or to qualify would have a Material Adverse Effect.
(d) Maintenance of Records. Will maintain, and will cause each of
its Subsidiaries to maintain, complete and accurate books and records in which
full and correct entries in conformity with GAAP shall be made of all dealings
and transactions in its respective business and activities.
(e) Inspection. Permit, and cause each of its Subsidiaries to
permit, the Agent and the Banks to have one or more of their officers and
employees, or any other Person designated by the Agent or the Banks, visit and
inspect any of the properties of the Company and its Subsidiaries (upon
reasonable request and notice and in accordance with the agreement, if any,
relating to any such property) and to examine the minute books, books of account
and other records of the Company and its Subsidiaries and make copies thereof or
extracts therefrom, and discuss its affairs, finances and accounts with its
officers and, at the request of the Agent or the Banks, with the Company's
independent accountants, during normal business hours and at such other
reasonable times and as often as the Agent or the Banks reasonably may desire.
(f) Conduct of Business. Engage in as its principal business
investing in health care related facilities in the United States.
(g) Notification of Defaults and Adverse Developments. Notify the
Agent (i) promptly, and in any event not later than five Business Days after the
discovery by any officer of the Company of the occurrence of any Default or
Event of Default; (ii) promptly, and in any event not later than five Business
Days after the discovery by any officer of the Company of the occurrence of a
Material Adverse Change; (iii) promptly, and in any event not later than ten
Business Days after the discovery by any officer of the Company of any material
litigation or proceedings that are instituted or (to the knowledge of any
officer of the Company) threatened against the Company or its Subsidiaries or
any of their respective assets and (iv) promptly, and in any event not later
than five Business Days after the discovery by any officer of the Company of the
occurrence of each and every event which would be an event of default (or an
event which with the giving of notice or lapse of time or both would be an event
of default) under any Indebtedness of the Company or any of its Subsidiaries in
a principal amount in excess of $5,000,000, such notice to include the names and
addresses of the holders of such Indebtedness and the amount thereof. Upon
receipt of any such notice of default or adverse development, the Agent shall
forthwith give notice to each Bank of the details thereof.
(h) Notice of ERISA Events. Within 10 days after the Company or any
ERISA Affiliates knows that any of the events described in the succeeding two
sentences have occurred and such occurrence or occurrences, individually or in
the aggregate, could be material and adverse to the Company and its Subsidiaries
taken as a whole, the Company shall furnish to the Agent a statement signed by a
senior officer of the Company describing such event in reasonable detail and the
action, if any, proposed to be taken with respect thereto. The events referred
to in the preceding sentence are, with respect to any Single-Employer Plan:
(i) any reportable event described in Section 4043 of ERISA, other than a
reportable event for which the 30-day notice requirement has been waived by the
PBGC; (ii) the filing with any affected party as such term is defined in
Section 4001 of ERISA of a notice of intent to terminate the Plan; (iii) receipt
of notice of an application by the PBGC to institute proceedings to terminate
the Plan pursuant to Section 4042 of ERISA; (iv) withdrawal from or termination
of the Plan during a plan year for which the Company or any ERISA Affiliate is
or would be subject to liability under Sections 4063 or 4064 of ERISA;
(v) cessation of operations by the Company or any ERISA Affiliate at a facility
under the circumstances described in Section 4062(e) of ERISA; (vi) adoption of
an amendment to a Plan which is a Single-Employer Plan which would require
security to be given to the Plan pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; and (vii) failure by the Company or any ERISA Affiliate to
make payment to a Single-Employer Plan which would give rise to a lien in favor
of the Plan under Section 302(f) of ERISA. Such events shall also include
receipt of notice of withdrawal liability pursuant to Section 4202 of ERISA.
(i) Environmental Matters. (i) Comply, and cause its Subsidiaries to
comply, in all material respects with all applicable Environmental Laws, (ii)
notify the Agent promptly after receiving notice or becoming aware of any
Adverse Environmental Condition or Environmental Claims that could have a
Material Adverse Effect, and (iii) promptly forward to Agent a copy of any
Environmental Claim, order, notice, permit, application, or any other com
munication or report received by Company or any of its Subsidiaries in
connection with any such matters as they may affect such premises, if material.
(j) Insurance on Leased Properties. Use its, and cause its
Subsidiaries to use their, commercially reasonable best efforts to ensure that
each lessee of a property owned in whole or in part, directly or indirectly, by
the Company or any Subsidiary, and each mortgagor of a property on which the
Company or any Subsidiary holds a mortgage, has, and until the Termination Date
will keep, in place adequate insurance which names the Company or such
Subsidiary as a loss payee. For the purposes of the preceding sentence
"adequate insurance" shall mean insurance, with financially sound and reputable
insurers in such amounts and insuring against such risks as are customarily
maintained by similar businesses.
(k) Further Assurances. The Company agrees to do all acts and
things, as may be required by law or as, in the reasonable judgement of the
Agent, may be necessary or advisable to carry out the intent and purpose of this
Agreement.
Section 7.02. Negative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and all reimbursement obligations
and performance of all other obligations of the Company hereunder (other than
Unmatured Surviving Obligations), the Company will not:
(a) Secured Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness of the Company secured by mortgages, encumbrances or Liens,
except Indebtedness secured by mortgages, encumbrances or Liens which, together
with the Indebtedness of the Subsidiaries permitted under Section 7.02(b)(ii),
does not exceed 30% of Consolidated Total Assets, provided, however, that the
amount of any such secured Indebtedness that is used to repay unsecured
Indebtedness of the Company and its Subsidiaries (other than Indebtedness to the
Banks hereunder) shall not exceed 20% of Consolidated Total Assets.
(b) Subsidiary Indebtedness. Permit any Subsidiary to create, incur,
assume or suffer to exist any Indebtedness, except (i) Indebtedness to the
Company or any other Subsidiary, or (ii) Indebtedness which, together with
outstanding Indebtedness of the Company permitted under Section 7.02(a) and all
outstanding Indebtedness of other Subsidiaries, does not exceed 30% of
Consolidated Total Assets.
(c) Mortgages and Pledges. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien of any kind upon or in any of its property or assets, whether now owned
or hereafter acquired, other than (i) Permitted Encumbrances and (ii) Liens
granted in order to secure Indebtedness permitted under Section 7.02(a) or
Section 7.02(b); provided, however, that the aggregate value of property subject
to Liens granted pursuant to clause (ii) (exclusive of Liens to secure
Indebtedness pursuant to Section 7.02(b)(i)) shall not exceed 30% of Total
Consolidated Assets.
(d) Merger, Consolidation or Acquisition of Assets. Enter into any
merger or consolidation or acquire all or substantially all of the assets of any
person, firm, joint venture or corporation, or permit any Subsidiary so to do,
except that: (i) a Wholly-owned Subsidiary may be merged or consolidated with
one or more other Wholly-owned Subsidiaries or into the Company; (ii) the
Company or any Subsidiary may merge, consolidate or acquire assets in the
ordinary course of its business; (iii) the Company may be merged or consolidated
with other entities so long as: (A) the Company is the surviving corporation of
such merger or consolidation; (B) at the time of such merger or consolidation
and immediately after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing; and (C) the surviving corporation is
engaged substantially in the same line of business as the Company; and (iv) the
Company or any Subsidiary may acquire any interest in any person, firm, joint
venture or corporation so long as (A) the amount of the total consideration
(including any Indebtedness or liabilities incurred or assumed in connection
therewith) paid in connection with such merger or consolidation of such acquired
interest is not greater than 10% of Consolidated Stockholders' Equity,
determined according to the last financial statements delivered pursuant to
Section 7.01(a) and (B) the acquired entity is engaged in substantially the same
line of business as the Company.
(e) Sales of Assets. Sell, lease or otherwise dispose of all or any
substantial part of its assets, or permit any Subsidiary so to do, other than in
the ordinary course of the Company's business or as otherwise expressly
permitted hereunder.
(f) Loans and Investments. Purchase or acquire the obligations or
stock of, or any other interest in, or make loans or advances to, any Person, or
permit any Subsidiary so to do, except (i) securities issued or fully guaranteed
or insured by the United States Government or any agency thereof and backed by
the full faith and credit of the United States having a maturity of not more
than one year from the date of acquisition; (ii) marketable obligations issued
by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year of the
date of acquisition thereof and, at the time of acquisition, rated at least A by
S&P or A by Moody's; (iii) repurchase agreements, tax exempt investments,
certificates of deposit, time deposits, Eurodollar time deposits or bankers'
acceptances issued by (x) any Bank, (y) any United States commercial bank having
combined capital and surplus of not less than $100,000,000 and having commercial
paper rated at least A-1 by S&P or P-1 by Moody's or (z) any other bank having
an ICBA Bank Analysis of B or better; (iv) certificates of deposit in an amount
less than or equal to $100,000 in the aggregate issued by any other bank insured
by the Federal Deposit Insurance Corporation; (v) commercial paper or bankers'
acceptances of an issuer rated at least A-1 by S&P or P-1 by Moody's; (vi) money
market funds invested in one or more of (i) through (v) above; (vii) loans to
and investments by the Company in any Subsidiary or loans from any Subsidiary to
the Company; and (viii) any such loans or investments made in the ordinary
course of the Company's or a Subsidiary's business.
(g) Transactions with Affiliates. Enter into any transactions,
including without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate, or permit any Subsidiary so to do,
except in the ordinary course of and pursuant to the reasonable requirements of
its business and upon fair and reasonable terms no less favorable to the Company
or such Subsidiary, as the case may be, than could be obtained in an arm's
length transaction with a person not an Affiliate.
(h) Stock and Equity Interests of Subsidiaries. Sell or otherwise
dispose of any shares of capital stock or other equity interests of any
Subsidiary (except (x) in connection with a merger or consolidation of a Wholly
owned Subsidiary permitted by Section 7.02(d) or with the dissolution of any
Subsidiary or (y) a sale in accordance with Section 7.02(e) of any equity
interest in any Subsidiary that is not material to the Company and its
Subsidiaries taken as a whole) or permit any Subsidiary to issue any additional
shares of its capital stock or other equity interests except pro rata to its
stockholders or equity holders.
(i) Environmental Matters. Violate any Environmental Law or incur
any liabilities under any Environmental Law, except to the extent that any such
violation or incurrence could not have a Material Adverse Effect.
Section 7.03. Financial Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and all reimbursement obligations
and performance of all other obligations of the Company hereunder (other than
Unmatured Surviving Obligations),
(a) Consolidated Stockholders' Equity. The Company will maintain
Consolidated Stockholders' Equity of not less than $235,000,000.
(b) Consolidated Senior Debt to Consolidated Stockholders' Equity
Ratio. The Company will maintain a ratio of Consolidated Senior Debt to
Consolidated Stockholders' Equity of not greater than 1.50:1.00.
(c) Consolidated Debt to Consolidated Stockholders' Equity Ratio.
The Company will maintain a ratio of Consolidated Debt to Consolidated
Stockholders' Equity of not greater than 2.00:1.00.
(d) Interest Coverage Ratio. The Company will not permit the ratio
of (i) the sum of Consolidated Funds from Operations and Consolidated Interest
Expense to (ii) Consolidated Interest Expense for the four quarter period ending
on the last day of each fiscal quarter to be less than 2.25:1.00.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01. Events of Default. If one or more of the following
events (each, an "Event of Default") shall occur:
(a) Default shall be made in the payment of any installment of
principal of any Committed Note or Money Market Note when due and payable,
whether at maturity, by notice of intention to prepay or otherwise; or
default shall be made in the payment of any installment of interest upon
any Note when due and payable, and such default shall have continued for
five days; or
(b) Default shall be made in the payment of the Facility Fee or any
other fee or amount payable hereunder when due and payable and such default
shall have continued for five days; or
(c) Default shall be made in the due observance or performance of any
term, covenant, or agreement contained in Section 7.01(g) or in Section
7.03; or
(d) Default shall be made in the due observance or performance of any
other term, covenant or agreement contained in this Agreement, and such
default shall have continued unremedied for a period of 30 days after any
officer of the Company becomes aware, or should have become aware, of such
default; or
(e) Any representation or warranty made or deemed made by the Company
herein or any statement or representation made in any certificate or report
delivered by or on behalf of the Company in connection herewith or in
connection with any Note shall prove to have been false or misleading in
any material respect when made; or
(f) Any obligation (other than its obligation hereunder) of the
Company or any of its Subsidiaries for the payment of Indebtedness in
excess of $5,000,000 is not paid when due or within any grace period for
the payment therefor or becomes or is declared to be due and payable prior
to the expressed maturity thereof, or there shall have occurred an event
which, with the giving of notice or lapse of time, or both, would cause any
such obligation to become, or allow any such obligation to be declared to
be, due and payable; or
(g) An involuntary case or other proceeding shall be commenced
against the Company or any Subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any applicable
Federal or State bankruptcy, insolvency, reorganization or similar law now
or hereafter in effect or seeking the appointment of a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed, or an order or decree
approving or ordering any of the foregoing shall be entered and continued
unstayed and in effect, in any such event, for a period of 60 days; or
(h) The commencement by the Company or any of its Subsidiaries of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by any of them to the entry of a decree or order for relief in
respect of the Company or any of its Subsidiaries in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against any of them, or the
filing by any of them of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by any of them to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any of its
Subsidiaries or any substantial part of their respective property, or the
making by any of them of an assignment for the benefit of creditors, or the
admission by any of them in writing of inability to pay their debts
generally as they become due, or the taking of corporate action by the
Company or any of its Subsidiaries in furtherance of any such action; or
(i) One or more judgments against the Company or any of its
Subsidiaries or attachments against its property, which in the aggregate
exceed $5,000,000, or the operation or result of which could be to
interfere materially and adversely with the conduct of the business of the
Company or any of its Subsidiaries, remain unpaid, unstayed on appeal,
undischarged, unbonded, or undismissed for a period of 60 days; or
(j) With respect to any Single-Employer Plan, any of the following
shall occur: (A) the filing with any affected party as such term is
defined in Section 4001 of ERISA of a notice of intent to terminate the
Plan, or receipt of notice of an application by the PBGC to institute
proceedings to terminate the Plan pursuant to Section 4042 of ERISA; in
each case, if the amount of unfunded benefit liabilities, as such term is
defined in Section 4001(a)(18) of ERISA, of the Plan as of the date such
event occurs is more than $5,000,000, (B) the Company or any ERISA
Affiliate incurs liability under Sections 4062(e), 4063 or 4064 of ERISA in
an amount in excess of $5,000,000, (C) an amendment is adopted to the Plan
which would require security to be given to the Plan pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA in an amount in
excess of $5,000,000, or (D) the Company or any ERISA Affiliate fails to
make a payment to the Plan which would give rise to a lien in favor of the
Plan under Section 302(f) of ERISA in an amount in excess of $5,000,000; or
(k) Any court or governmental or regulatory authority shall have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which prohibits, enjoins
or otherwise restricts in a manner that would have a Material Adverse
Effect on any of the lending transactions contemplated under the Credit
Documents; or
(l) The Company fails to maintain its status as a "real estate
investment trust", as such term is defined in the Code;
then (i) upon the happening of any of the foregoing Events of Default, the
obligation of the Banks to make any further Loans under this Agreement shall
terminate upon declaration to that effect delivered by the Agent or the Required
Banks to the Company and (ii) upon the happening of any of the foregoing Events
of Default which shall be continuing, the Notes shall become and be immediately
due and payable upon declaration to that effect delivered by the Agent or the
Required Banks to the Company; provided that upon the happening of any event
specified in Section 8.01(g) or (h), the Notes shall become immediately due and
payable and the obligation of the Banks to make any further Loans hereunder
shall terminate without declaration or other notice to the Company. The Company
expressly waives any presentment, demand, protest or other notice of any kind.
ARTICLE IX
THE AGENT AND THE BANKS
Section 9.01. The Agency and Co-Agency. (a) Each Bank appoints The
Bank of New York as its Agent hereunder and irrevocably authorizes the Agent to
take such action on its behalf and to exercise such powers hereunder as are
specifically delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental hereto, and the Agent hereby accepts such
appointment subject to the terms hereof. The relationship between the Agent and
the Banks shall be that of agent and principal only and nothing herein shall be
construed to constitute the Agent a trustee for any Bank nor to impose on the
Agent duties or obligations other than those expressly provided for herein.
(b) Each Bank appoints NationsBank as the Co-Agent hereunder and the
Co-Agent hereby accepts such appointment subject to the terms hereof. The Co-
Agent, as such, shall have no duties or obligations whatsoever under this
Agreement or any Loan Document or any other document or any matter related
hereto or thereto, but shall nevertheless be entitled to all of the indemnities
and other protection afforded to the Administrative Agent under this Article IX.
Section 9.02. The Agent's Duties. The Agent shall promptly forward
to each Bank copies, or notify each Bank as to the contents, of all notices and
other communications received from the Company pursuant to the terms of this
Agreement and the Notes and, in the event that the Company fails to pay when due
the principal of or interest on any Loan, the Agent shall promptly give notice
thereof to the Banks. As to any other matter not expressly provided for herein
or therein, the Agent shall have no duty to act or refrain from acting with
respect to the Company, except upon the instructions of the Required Banks. The
Agent shall not be bound by any waiver, amendment, supplement, or modification
of this Agreement or any Note which affects its duties hereunder and thereunder,
unless it shall have given its prior written consent thereto. The Agent shall
have no duty to ascertain or inquire as to the performance or observance of any
of the terms, conditions, covenants or agreements binding on the Company
pursuant to this Agreement or any Note nor shall it be deemed to have knowledge
of the occurrence of any Default or Event of Default (other than a failure of
the Company to pay when due the principal or interest on any Loan), unless it
shall have received written notice from the Company or a Bank specifying such
Default or Event of Default and stating that such notice is a "Notice of
Default".
Section 9.03. Sharing of Payment and Expenses. All funds for the
account of the Banks received by the Agent in respect of payments made by the
Company pursuant to, or from any Person on account of, this Agreement or any
Note shall be distributed forthwith by the Agent among the Banks, in like
currency and funds as received, ratably in proportion to their respective
interests therein. In the event that any Bank shall receive from the Company or
any other source any payment of, on account of, or for or under this Agreement
or any Note (whether received pursuant to the exercise of any right of set-off,
banker's lien, realization upon any security held for or appropriated to such
obligation or otherwise as permitted by law) other than in proportion to its Pro
Rata Share, then such Bank shall purchase from each other Bank so much of its
interest in obligations of the Company as shall be necessary in order that each
Bank shall share such payment with each of the other Banks in proportion to each
Bank's Pro Rata Share; provided that no Bank shall purchase any interest of any
Bank that does not, to the extent that it may lawfully do so, set-off against
the balance of any deposit accounts maintained with it the obligations due to it
under this Agreement. In the event that any purchasing Bank shall be required
to return any excess payment received by it, the purchase shall be rescinded and
the purchase price restored to the extent of such return, but without interest.
Section 9.04. The Agent's Liabilities. Each of the Banks and the
Company agrees that (i) neither the Agent in such capacity nor any of its
officers or employees shall be liable for any action taken or omitted to be
taken by any of them hereunder except for its or their own gross negligence or
wilful misconduct, (ii) neither the Agent in such capacity nor any of its
officers or employees shall be liable for any action taken or omitted to be
taken by any of them in good faith in reliance upon the advice of counsel,
independent public accountants or other experts selected by the Agent, and (iii)
the Agent in such capacity shall be entitled to rely upon any notice, consent,
certificate, statement or other document (including any telegram, cable, telex,
facsimile or telephone transmission) believed by it to be genuine and correct
and to have been signed and/or sent by the proper Persons.
Section 9.05. The Agent as a Bank. The Agent shall have the same
rights and powers hereunder as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" or "Banks", unless the
context otherwise indicated, include the Agent in its individual capacity. The
Agent may, without any liability to account, maintain deposits or credit
balances for, invest in, lend money to and generally engage in any kind of
banking business with the Company or any Subsidiary or affiliate of the Company
as if it were any other Bank and without any duty to account therefor to the
other Banks.
Section 9.06. Bank Credit Decision. Neither the Agent nor any of its
officers or employees has any responsibility for, gives any guaranty in respect
of, nor makes any representation to the Banks as to, (i) the condition, finan
cial or otherwise, of the Company or any Subsidiary thereof or the truth of any
representation or warranty given or made herein or in any other Credit Document,
or in connection herewith or therewith or (ii) the validity, execution, suffic
iency, effectiveness, construction, adequacy, enforceability or value of this
Agreement or any other Credit Document or any other document or instrument
related hereto or thereto. Except as specifically provided herein and in the
other Credit Documents to which the Agent is a party, the Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Bank with any credit or other information with respect to the operations,
business, property, condition or creditworthiness of the Company or any of its
Subsidiaries, whether such information comes into the Agent's possession on or
before the date hereof or at any time thereafter. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other Bank,
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will independently and without reliance upon the Agent or
any other Bank, 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 this Agreement or any Note.
Section 9.07. Indemnification. Each Bank agrees (which agreement
shall survive payment of the Loans and the Notes) to indemnify the Agent, to the
extent not reimbursed by the Company, ratably in accordance with their
respective Commitments, from and against any and all liabilities, obligations,
losses, claims, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Credit Document, or any action taken or omitted
to be taken by the Agent hereunder or thereunder; provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the gross negligence or wilful misconduct of the Agent or any of its
officers or employees. Without limiting the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Agent in such
capacity in connection with the preparation, execution or enforcement of, or
legal advice in respect of rights or responsibilities under, this Agreement or
any Note or any amendments or supplements hereto or thereto, to the extent that
the Agent is not reimbursed for such expenses by the Company.
Section 9.08. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Company. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required Banks
and shall have accepted such appointment within 30 days after the resigning
Agent's giving of notice of resignation, or the Required Banks' giving notice of
removal, as the case may be, the resigning Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigned or removed Agent, and the resigned or
removed Agent shall be discharged from its duties and obligations under this
Agreement. After any Agent's resignation hereunder as Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
ARTICLE X
CONSENT TO JURISDICTION; JUDGMENT CURRENCY
Section 10.01. Consent to Jurisdiction. The Company hereby
irrevocably submits to the non-exclusive jurisdiction of the State of New York
for the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Agreement and each Note. The Company hereby appoints CT
Corporation System, Inc., with offices on the date hereof at 1633 Broadway, New
York, New York 10019, as its authorized agent on whom process may be served in
any action which may be instituted against it by the Agent or the Banks in any
state or federal court in the Borough of Manhattan, The City of New York,
arising out of or relating to any Loan or this Agreement and each Note. Service
of process upon such authorized agent and written notice of such service to the
Company shall be deemed in every respect effective service of process upon the
Company, and the Company hereby irrevocably consents to the jurisdiction of any
such court in any such action and to the laying of venue in the Borough of
Manhattan, The City of New York. The Company hereby irrevocably waives any
objection to the laying of the venue of any such suit, action or proceeding
brought in the aforesaid courts and hereby irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Notwithstanding the foregoing, nothing herein shall in any
way affect the right of the Agent or any Bank to bring any action arising out of
or relating to the Loans or this Agreement and each Note in any competent court
elsewhere having jurisdiction over the Company or its property.
ARTICLE XI
MISCELLANEOUS
Section 11.01. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
UNITED STATES OF AMERICA.
Section 11.02. Set-off. Each Bank is authorized to set off and apply
any and all deposits at any time held by such Bank against obligations of the
Company under the Credit Documents.
Section 11.03. Expenses. The Company agrees to pay (i) all
reasonable out-of-pocket fees and expenses of the Agent and the Arranger
(including the reasonable out-of-pocket fees and expenses of Sullivan &
Cromwell, as counsel to the Agent and the Arranger) in connection with the
preparation and negotiation of this Agreement and the other Credit Documents,
any amendments, supplements or modifications hereto or thereto, in each case
whether or not the transactions contemplated hereby or thereby are consummated
and in connection with the consummation of the transactions contemplated hereby
or thereby (ii) all reasonable out-of-pocket fees and expenses incurred by the
Agent and any Bank, including reasonable out-of pocket fees and disbursements of
counsel, in connection with the execution, administration and enforcement of any
provisions of this Agreement, the Notes or any amendment or supplement hereto or
thereto and (iii) all reasonable out-of-pocket fees and expenses of the Agent
and the Arranger, including reasonable out-of-pocket fees and disbursements of
counsel, in connection with the syndication of the Loans. The Company shall pay
any transfer taxes, documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of this Agreement
or the Notes.
Section 11.04. Amendments. Any provision of this Agreement or the
Notes may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Company and the Required Banks (and, if the rights
or duties of the Agent are affected thereby, by the Agent); provided that no
such amendment, waiver or modification shall, unless signed by all the Banks,
(i) increase or decrease the Commitment of any Bank, subject any Bank to any
additional obligation or change the several nature or the obligations of each
Bank, (ii) reduce the principal of or rate of interest on any Loan (other than
interest payable pursuant to Section 3.05) or any fees hereunder, (iii) except
as otherwise provided in Section 11.12, postpone the date fixed for any payment
of principal of or interest on any Loan or any fees hereunder or for any
reduction or termination of any Commitment, (iv) except as otherwise may result
from actions taken in accordance with Section 11.12, change the percentage of
any of the Commitments or of the aggregate unpaid principal amount of the Notes,
or the number of Banks, which shall be required for the Banks or any of them to
take any action under this Section or any other provision of this Agreement, or
(v) amend or waive the provisions of Article IV or of this Section 11.04.
Section 11.05. Cumulative Rights and No Waiver. Each and every right
granted to the Agent and the Banks hereunder or under any other document
delivered hereunder or in connection herewith, or allowed them by law or equity,
shall be cumulative and may be exercised from time to time. No failure on the
part of the Agent or any Bank to exercise, and no delay in exercising, any right
will operate as a waiver thereof, nor will any single or partial exercise by the
Agent or any Bank of any right preclude any other or future exercise thereof or
the exercise of any other right.
Section 11.06. Notices. Any communication, demand or notice to be
given hereunder or with respect to the Notes will be duly given when delivered
in writing or by telecopy to a party at its address as indicated below, except
that notices from the Company pursuant to Sections 2.02 or 2.06 will not be
effective until received by the Agent.
A communication, demand or notice given pursuant to this Section 11.06
shall be addressed:
If to the Company, at
MacArthur Court
9th Floor
Newport Beach, California 92660
Telecopy: (714) 221-0607
Attention: Treasurer
with copies to:
Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, California 90071
Telecopy: (213) 891-8763
Attention: Glen B. Collyer
If to the Agent, at its address as indicated on the signature pages
hereof, with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Telecopy: (213) 683-0457
Attention: Alison S. Ressler
If to any Bank, at its address as indicated on the signature pages
hereof.
Unless otherwise provided to the contrary herein, any notice which is
required to be given in writing pursuant to the terms of this Agreement may be
given by telex, telecopy or facsimile transmission.
Section 11.07. Separability. In case any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
Section 11.08. Assignments and Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Company and the Banks and
their respective successors and assigns, except that the Company may not assign
any of its rights hereunder without the prior written consent of the Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. Each Bank agrees to give to the Company, with a copy
to the Agent, prior written notice of any grant of a participating interest
hereunder, which notice shall include the name of the Participant and the amount
of the interest being granted. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Company and the Agent, such Bank shall remain responsible for the performance of
its obligations hereunder, and the Company and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Company
hereunder including the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such participation agreement
may provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clauses (i) through (vi), inclusive, of
Section 11.04 without the consent of the Participant. Subject to
Section 11.08(e), the Company agrees that each Participant shall be entitled to
the benefits of Sections 4.03, 4.04 and 11.04 with respect to its participating
interest. An assignment or other transfer which is not permitted by clause (c)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this clause (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an instrument executed by
such Assignee and such transferor Bank, with (and subject to) the signed consent
of the Company and the Agent (which consent shall not be unreasonably withheld);
provided, however, any such assignment shall be in the minimum aggregate amount
of $10,000,000; provided, further, that the foregoing consent requirement shall
not be applicable in the case of, and this subsection (c) shall not restrict, an
assignment or other transfer by any Bank to an affiliate of such Bank or to a
Federal Reserve Bank. Upon (i) execution and delivery of such an instrument,
(ii) payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee and
(iii) payment by the transferee Bank or transferor Bank to the Agent of an
administrative fee in the amount of $1,500, such Assignee shall be a Bank party
to this Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Company shall make appropriate arrangements so that, if
required, new Notes are issued to the Assignee.
(d) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 4.03 or 4.04 than
such Bank would have been entitled to receive with respect to the rights trans
ferred, unless such transfer is made with the Company's prior written consent or
by reason of the provisions of Section 4.04 requiring such Bank to designate a
different lending office under certain circumstances or at a time when the
circumstances giving rise to such payment did not exist.
(e) No Participant of any Bank shall be entitled to receive any
greater payment under Section 4.03, Section 4.04 or Section 11.04 than such Bank
would have been entitled to receive if it had not granted a participation to
such Participant.
Section 11.09. WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT AND EACH
OF THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT, THE NOTES OR THE RELATIONSHIPS ESTABLISHED HEREUNDER.
Section 11.10. Confidentiality. Except as may be required to enforce
the rights and duties established hereunder, the parties hereto shall preserve
in a confidential manner all information received from the other pursuant to
this Agreement, the Notes and the transactions contemplated hereunder and
thereunder, and shall not disclose such information except to those persons with
which a confidential relationship is maintained (including regulators,
affiliates, legal counsel, accountants, or designated agents), or where required
by law.
Section 11.11. Indemnity. The Company agrees to indemnify the Agent
and each of the Banks and their respective directors, officers, employees and
agents (each such person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages and liabilities of
any party other than the Company and related expenses, including reasonable
counsel fees and expenses incurred by or asserted against any Indemnitee arising
out of, in any way connected with, or as a result of (i) the execution or
delivery of this Agreement or any Note or any agreement or instrument
contemplated hereby or thereby, the performance by the parties thereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions and the other transactions contemplated hereby or thereby, (ii) the
use of the proceeds of the Loans or (iii) any claim, litigation, investigation,
or proceeding relating to any of the foregoing, whether or not any Indemnitee is
a party thereto and notwithstanding that any claim, proceeding, investigation or
litigation relating to any such losses, claims, damages, liabilities or expenses
is or was brought by a shareholder, creditor, employee or officer of the
Company; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of any Indemnitee.
The provisions of this Section 11.11 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the reduction or cancellation of the Commitment,
the invalidity or unenforceability of any term or provision of this Agreement or
any Note, or any investigation made by or on behalf of the Banks. All amounts
due under this Section 11.11 shall be payable in immediately available funds
upon written demand therefor.
Section 11.12. Extension of Termination Dates; Removal of Banks;
Substitutions of Banks. (a) The Company may at its option, request all the
Banks then party to this Agreement to extend their scheduled Termination Dates
by one calendar year by means of a letter in substantially the form of Exhibit
I, addressed to each such Bank and the Agent. Not later than 30 days after
receipt of the request to extend the Termination Dates, each such Bank electing
(in its sole discretion) so to extend its scheduled Termination Date shall
execute and deliver counterparts of such letter to the Company and the Agent,
whereupon (unless Banks with an aggregate percentage of the Total Commitment in
excess of 25% decline to extend their respective scheduled Termination Dates, in
which event the Agent shall notify all the Banks thereof), such Bank's scheduled
Termination Date shall be extended to October 1 of the year immediately
succeeding such Bank's then-current scheduled Termination Date.
(b) With respect to any Bank which has declined to extend such Bank's
scheduled Termination Date and Banks with an aggregate percentage of the Total
Commitment not in excess of 25% have not declined to extend their respective
Termination Dates, the Company may in its discretion, upon not less than 30
days' prior written notice to the Agent and each Bank, remove such Bank as a
party hereto. Each such notice shall specify the date of such removal (which
shall be a Business Day), which shall thereupon become the scheduled Termination
Date for such Bank.
(c) In the event that any Bank does not extend its scheduled
Termination Date pursuant to subsection (a) above or is the subject of a notice
of removal pursuant to subsection (b) above, then, at any time prior to the
Termination Date for such Bank (a "Terminating Bank"), the Company may, at its
option, arrange to have one or more other financial institutions acceptable to
the Agent (which may be a Bank or Banks and each of which shall herein be called
a "Successor Bank") succeed to all or a percentage of the Terminating Bank's
outstanding Loans, if any, and rights under this Agreement and assume all or a
like percentage (as the case may be) of such Terminating Bank's Commitment and
other obligations hereunder, as if (i) in the case of any Bank electing not to
extend its scheduled Termination Date pursuant to subsection (a) above, such
Successor Bank had extended its scheduled Termination Date pursuant to such
subsection (a) and (ii) in the case of any Bank that is the subject of a notice
of removal pursuant to subsection (b) above, no such notice of removal had been
given by the Company. Such succession and assumption shall be effected by means
of one or more agreements supplemental to this Agreement among the Terminating
Bank, the Successor Bank, the Company and the Agent. On and as of the effective
date of each such supplemental agreement, each Successor Bank party thereto
shall be and become a Bank for all purposes of this Agreement and to the same
extent as any other Bank hereunder and shall be bound by and entitled to the
benefits of this Agreement in the same manner as any other Bank.
(d) On the Termination Date for any Terminating Bank, such
Terminating Bank's Commitment shall terminate and, except to the extent assigned
pursuant to subsection (c) above, the Company shall pay in full all of such
Terminating Bank's Loans and all other amounts payable to such Bank hereunder,
including any amounts payable pursuant to Section 4.3 on account of such
payment.
(e) To the extent that all or a portion of any Terminating Bank's
obligations are not assumed pursuant to subsection (c) above, the Total
Commitment shall be reduced on the applicable Termination Date and each Bank's
percentage of the reduced Total Commitment shall be revised pro rata to reflect
such Terminating Bank's absence.
Section 11.13. Knowledge of the Company. As used in this Agreement,
knowledge of the Company shall mean to the best of any officer's knowledge,
after a reasonable investigation.
Section 11.14. Execution in 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 the counterparts shall together constitute one and the same
instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
HEALTH CARE PROPERTY INVESTORS, INC.
By:/s/ Devasis Ghose
--------------------
Name: Devasis Ghose
Title: Senior Vice President
THE BANK OF NEW YORK,
as Agent for the Banks
By:/s/ Jonathan Rollins
----------------------
Name: Jonathan Rollins
Title: Assistant Vice President
Address for Notices:
One Wall Street
18th Floor
New York, NY 10286
Attn:
Fax:
With a copy to:
The Bank of New York
10990 Wilshire Boulevard
Suite 1700
Los Angeles, CA 90024
Attn:
Fax:
<PAGE>
Commitment: $25,000,000 THE BANK OF NEW YORK
as a Bank
By: /s/ Jonathan Rollins
-----------------------
Name: Jonathan Rollins
Title: Assistant Vice
President
Address for Notices:
One Wall Street
18th Floor
New York, NY 10286
Attn:
Fax:
With a copy to:
The Bank of New York
10990 Wilshire Boulevard
Suite 1700
Los Angeles, CA 90024
Attn:
Fax:
Eurodollar Lending Office:
One Wall Street
18th Floor
New York, NY 10286
Attn:
Fax:
<PAGE>
Commitment: $10,000,000 THE SUMITOMO BANK, LIMITED
as a Bank
By: /s/ Goro Hirai
------------------
Name: Goro Hirai
Title: Bank General Manager
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
<PAGE>
Commitment: $10,000,000 BANK OF MONTREAL
as a Bank
By:/s/ Peter W. Steelman
---------------------
Name: Peter W. Steelman
Title: Director
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
<PAGE>
Commitment: $10,000,000 KREDIETBANK, N.V.
as a Bank
By: /s/ Tod R. Angus
---------------------
Name: Tod R. Angus
Title: Vice President
By: /s/ Michael V. Curran
----------------------
Name: Michael V. Curran
Title: Vice President
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
<PAGE>
Commitment: $15,000,000 WELLS FARGO BANK
as a Bank
By:/s/ Stephen R. Watt
----------------------
Name: Stephen R. Watt
Title: Vice President
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
<PAGE>
Commitment: $10,000,000 Bank of Hawaii
as a Bank
By:/s/ Robert M. Wheeler III
--------------------------
Name: Robert M. Wheeler III
Title:Vice President
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
<PAGE>
Commitment: $20,000,000 NATIONSBANK OF TEXAS, N.A.
as a Bank
By:/s/ Keith Fern
-------------------
Name: Keith Fern
Title: Vice President
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
<PAGE>
EXHIBIT A
FORM OF CONVERSION/CONTINUANCE REQUEST
[Dated as provided
in Section 3.04]
The Bank of New York
c/o The Bank of New York Representative Office
10990 Wilshire Boulevard, Suite 1700
Los Angeles, California 90024
Attn: ____________________
Health Care Property Investors, Inc. (the "Company") hereby gives
notice of its intention to [convert/continue] [$___________] [the entire
outstanding amount] of its [ABR Loans] [Eurodollar Loans] with an Interest
Period of ____ days and ending on __________, ____] [to/as] [ABR Loans]
[Eurodollar Loans], pursuant to the Revolving Credit Agreement, dated as of
October 22, 1997, among the Company, the Banks, The Bank of New York, as Agent
and NationsBank of Texas, N.A., as Co-Agent(as amended, supplemented or
otherwise modified from time to time, the "Agreement"), such
[conversion/continuance] to be effective as of ___________, ____. [The Interest
Period for the Eurodollar Loans shall be _____ days.]
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF COMMITTED LOAN REQUEST
[Dated as provided
in Section 2.02]
The Bank of New York
c/o Bank of New York Representative Office
10990 Wilshire Boulevard, Suite 1700
Los Angeles, California 90024
Attn: ____________________
Health Care Property Investors, Inc. (the "Company") hereby gives
notice of its intention to borrow $____________ of Loans on _________, ____
pursuant to the Revolving Credit Agreement, dated as of October 22, 1997, among
the Company, the Banks, The Bank of New York, as Agent and NationsBank of Texas,
N.A., as Co-Agent (as amended, supplemented or otherwise modified from time to
time, the "Agreement").
The Company hereby confirms that the amounts of Loans and Money Market
Loans outstanding on the date hereof is as follows:
Total Commitment $__________
Outstanding Committed Loans $__________
Outstanding Money Market Loans $__________
Availability $__________
The Company also hereby confirms that each of the representations and
warranties (other than the representations and warranties that speak as of a
specific date) contained in Article V of the Agreement is true and correct on
the date hereof and, after giving effect to this borrowing, will be true and
correct on the proposed borrowing date as though such representation or warranty
had originally been made on such dates. No Default or Event of Default has
occurred and is continuing, nor will any such event occur as a result of this
borrowing.
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF MONEY MARKET NOTICE
[Dated as provided
in Section 2.06(a)]
The Bank of New York, as Agent
c/o Bank of New York Representative Office
10990 Wilshire Boulevard, Suite 1700
Los Angeles, California 90024
Attn: ____________________
Pursuant to the Revolving Credit Agreement, dated as of October 22,
1997, among Health Care Property Investors, Inc. (the "Company"), the banks
named therein, The Bank of New York, as Agent, and NationsBank of Texas, N.A.,
as Co-Agent (as amended, supplemented or otherwise modified from time to time,
the "Agreement"), the Company and the banks named below hereby give notice of
their agreement to complete a Money Market Borrowing consisting of the Money
Market Loans described below.
Money Market Funding Date:
[Duplicate for each Money Market Loan:]
Bank:
Principal Amount:
Maturity:
Aggregate Principal Amount:
The Company also hereby confirms, for the benefit of the Agent and the
Bank making such Money Market Loan, if such bank so requires, that each of the
representations and warranties (other than the representations and warranties
that speak as of a specific date) contained in Article V of the Agreement is
true and correct on the date hereof and, after giving effect to this borrowing,
will be true and correct on the proposed borrowing date as though such
representation or warranty had originally been made on such dates. No Default
or Event of Default has occurred and is continuing, nor will any such event
occur as a result of this borrowing.
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
Exhibit D
Form of Money Market Confirmation
[Date]
Health Care Property Investors, Inc.
10990 Wilshire Boulevard
Suite 1200
Los Angeles, California 90024
Attention:____________
Ladies and Gentlemen:
This instrument constitutes a Money Market Confirmation under, and as
defined by, the $100,000,000 Revolving Credit Agreement, dated as of October 22,
1997 (as amended, modified or supplemented, the "Credit Agreement") among Health
Care Property Investors, Inc. (the "Company"), The Bank of New York, in its
individual corporate capacity and as Agent, and certain financial institutions
referred to therein. Terms not otherwise expressly set forth herein shall have
the meanings set forth in the Credit Agreement.
The undersigned Bank hereby confirms to the Company that the Bank has
agreed to make, and the Company has agreed to accept, [a] Money Market Loan[s]
as follows:
..
[Money Market Loan no. ___*]
(a) Principal Amount:
(b) Funding Date:
(c) Loan Period (not to exceed 270 days):
(d) Interest Rate:
By acknowledgement of this Confirmation and acceptance of funds
pursuant to the Money Market Loan, the Company confirms that [(i) each of the
representations and warranties (other than the representations and warranties
that speak as of a specific date) contained in Article V of the Agreement is
true and correct on the date hereof and, after giving effect to this borrowing,
will be true and correct on the proposed borrowing date as though such
representation or warranty had originally been made on such dates and (ii)] no
Default or Event of Default has occurred and is continuing, nor will any such
event occur as a result of this borrowing.
[NAME OF BANK]
By: __________________________
Name:
Title:
Acknowledged and accepted:
HEALTH CARE PROPERTY INVESTORS, INC.
By: __________________________
Name:
Title:
<PAGE>
EXHIBIT E
FORM OF COMMITTED NOTE
$__________ ___________, 1997
HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation (the
"Company"), for value received, hereby promises to pay on the Termination Date
to the order of (the "Bank"), at the office of The Bank of
New York, as Agent, at One Wall Street, 22nd Floor, New York, New York 10286, in
lawful money of the United States, the principal sum of $__________, or if less,
the aggregate unpaid principal amount of all Committed Loans made by the Bank to
the Company pursuant to the Agreement (hereinafter defined), without relief from
valuation and appraisement laws.
This Note shall bear interest, and such interest shall be payable, as
set forth in the Agreement for ABR Loans and Eurodollar Loans. Upon the
occurrence and during the continuation of an Event of Default, this Note shall
bear interest at the default rate pursuant to Section 3.05 of the Agreement.
Except as otherwise provided in the Agreement, with respect to
Eurodollar Loans, if interest or principal on the Loan evidenced by this Note
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day, and interest
shall be payable thereon at the rate herein specified during such extension.
This Note is one of the Committed Notes referred to in a Revolving
Credit Agreement, dated as of October 22, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Agreement"), among the Company, the
Banks, The Bank of New York, as Agent, and NationsBank of Texas, N.A. as Co-
Agent, and is subject to prepayment in whole or in part and its maturity is
subject to acceleration upon the terms provided in the Agreement. Unless
otherwise defined herein, capitalized terms used herein shall have the
respective meanings specified in the Agreement.
The Bank is hereby authorized to record on the schedule annexed
hereto, and any continuation sheets which the Bank may attach hereto, (i) the
date and amount of each Committed Loan made by the Bank, (ii) the character
thereof as an ABR Loan, a Eurodollar Loan or a combination thereof, (iii) the
interest rate (without regard to the Applicable Margin and Interest Period (if
any) applicable to each Eurodollar Loan), and (iv) the date and amount of each
conversion of, and each payment or prepayment of principal of, any such
Committed Loan. No failure to record or any error in so recording shall affect
the obligation of the Company to repay the Committed Loans, together with
interest thereon, as provided in the Agreement, and the outstanding principal
balance of the Committed Loans made by the Lender as set forth in such schedule
shall be presumed correct absent manifest error.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
All Committed Loans made by the Bank to the Company pursuant to the
Agreement and all payments of principal hereof and interest thereon may be
indicated by the Bank upon the grid attached hereto which is a part of this
Note. Such notations shall be presumptive as to the aggregate unpaid principal
amount of and interest on all Loans made by the Bank pursuant to the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
Loan and Payments of Principal and Interest
<TABLE>
<CAPTION>
Interest Interest Name of
Method Period (if Amount of Unpaid Amount of Person
Amount (ABR or (Eurodollar Principal Principal Interest Making
Date of Loan Eurodollar) Loan) Paid Balances Paid Notation
- - ----- -------- ----------- ------------ --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
EXHIBIT F
FORM OF MONEY MARKET NOTE
$____________ ___________, 1997
HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation (the
"Company"), for value received, hereby promises to pay on the Termination Date
to the order of
(the "Bank"), at the office of the Bank, located at
____________________________________, in lawful money of the United States, the
principal sum of $100,000,000, or if less, the aggregate unpaid principal amount
of all Money Market Loans made by the Bank to the Company pursuant to the
Agreement (hereinafter defined), without relief from valuation and appraisement
laws.
This Note shall bear interest, and such interest shall be payable, as
set forth in the Money Market Confirmations given by the Bank to the Company
pursuant to the Agreement. Upon the occurrence and during the continuation of
an Event of Default, this Note shall bear interest at the default rate pursuant
to Section 3.05 of the Agreement.
Except as otherwise provided in the Agreement, if interest or
principal on the Loan evidenced by this Note becomes due and payable on a day
which is not a Business Day, the maturity thereof shall be extended to
the next succeeding Business Day, and interest shall be payable thereon at the
rate herein specified during such extension.
This Note is one of the Money Market Notes referred to in a Revolving
Credit Agreement, dated as of October 22, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Agreement"), among the Company, the
Banks, The Bank of New York, as Agent, and NationsBank of Texas, N.A., as Co-
Agent, and is subject to prepayment in whole or in part and its maturity is
subject to acceleration upon the terms provided in the Agreement. Unless
otherwise defined herein, capitalized terms used herein shall have the
respective meanings specified in the Agreement.
The Bank is hereby authorized to record on the schedule annexed
hereto, and any continuation sheets which the Bank may attach hereto, (i) the
date and amount of each Money Market Loan made by the Bank, (ii) loan period of
such Money Market Loan, (iii) the characterization of the Money Market Loan,
including any election to compute amounts payable on such Money Market Loan by
reference to amounts payable on an ABR Loan or a Eurodollar Loan under the
Agreement, (iv) the interest rate (without regard to the Applicable Margin and
Interest Period (if any) applicable to any Money Market Loan), and (v) the date
and amount of each payment or prepayment of principal of and (to the extent
permitted pursuant to applicable Money Market Confirmations) each conversion of,
any such Money Market Loan. No failure to record or any error in so recording
shall affect the obligation of the Company to repay the Money Market Loans,
together with interest thereon, as provided in the Agreement, and the
outstanding principal balance of the Money Market Loans made by the Lender as
set forth in such schedule shall be presumed correct absent manifest error.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
All Money Market Loans made by the Bank to the Company pursuant to the
Agreement and all payments of principal hereof and interest thereon may be
indicated by the Bank upon the grid attached hereto which is a part of this
Note. Such notations shall be presumptive as to the aggregate unpaid principal
amount of and interest on all Money Market Loans made by the Bank pursuant to
the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
Loan and Payments of Principal and Interest
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
______________________________________________________________________________
________________________________________________________________________________
<PAGE>
EXHIBIT G
Form of Opinion of Latham & Watkins LLP
<PAGE>
EXHIBIT H
Form of Opinion of Ballard, Spahr, Andrews & Ingersoll
<PAGE>
EXHIBIT I
Form of Extension Letter
__________, ____
The Bank of New York, as Agent
c/o Bank of New York Representative Office
10990 Wilshire Boulevard, Suite 1700
Los Angeles, California 90024
[Names and addresses of other Banks]
Reference is made to the Revolving Credit Agreement, dated as of
October 22, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Agreement"), among Health Care Property Investors, Inc. (the
"Company"), the banks named therein, The Bank of New York, as Agent, and
NationsBank of Texas, N.A. as Co-Agent. Terms herein not otherwise defined
shall have the meanings set forth in the Agreement.
Pursuant to Section 11.12 of the Agreement, the Company hereby
requests all the Banks then party to this Agreement to extend their scheduled
Termination Dates by one calendar year.
The Company confirms (i) that each of the representations and
warranties (other than the representations and warranties that speak as of a
specific date) contained in Article V of the Agreement is true and correct on
the date hereof and, after giving effect to this extension, will be true and
correct on the date upon which the extension will be effective as though such
representation or warranty had originally been made on such dates and (ii) no
Default or Event of Default has occurred and is continuing, nor will any such
event occur as a result of this extension.
Very truly yours,
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
* Duplicate as necessary for Banks making more than one Money Market Loan
pursuant to a Money Market Borrowing.
$50,000,000
REVOLVING CREDIT AGREEMENT
dated as of October 22, 1997
among
HEALTH CARE PROPERTY INVESTORS, INC.,
THE BANKS NAMED HEREIN
AND
THE BANK OF NEW YORK
as Agent
<PAGE>
TABLE OF CONTENTS
RECITALS 1
ARTICLE I DEFINITIONS
Section 1.01. Definitions
ARTICLE II THE LOANS
Section 2.01. Committed Loans
Section 2.02. Procedure for Committed Loans
Section 2.03. Committed Notes
Section 2.04. Cancellation or Reduction of the Commitment
Section 2.05. Money Market Loans
Section 2.06. Procedure for Money Market Loans
Section 2.07. Funding of Money Market Loans
Section 2.08. Money Market Notes
Section 2.09. Certain Fees
Section 2.10. Optional Prepayment
ARTICLE III INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 3.01. Procedure for Interest Rate Determination
Section 3.02. Interest on ABR Loans
Section 3.03. Interest on Eurodollar Loans
Section 3.04. Conversion/Continuance
Section 3.05. Post Default Interest
Section 3.06. Maximum Interest Rate
ARTICLE IV DISBURSEMENT AND PAYMENT
Section 4.01. Pro Rata Treatment
Section 4.02. Method of Payment
Section 4.03. Compensation for Losses
Section 4.04. Withholding, Reserves and Additional Costs
Section 4.05. Unavailability
ARTICLE V REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties
ARTICLE VI CONDITIONS OF LENDING
Section 6.01. Conditions to the Availability of the Commitment
Section 6.02. Conditions to All Loans
ARTICLE VII COVENANTS
Section 7.01. Affirmative Covenants
Section 7.02. Negative Covenants
Section 7.03. Financial Covenants
ARTICLE VIII EVENTS OF DEFAULT
Section 8.01. Events of Default
ARTICLE IX THE AGENT AND THE BANKS
Section 9.01. The Agency and Co-Agency
Section 9.02. The Agent's Duties
Section 9.03. Sharing of Payment and Expenses
Section 9.04. The Agent's Liabilities
Section 9.05. The Agent as a Bank
Section 9.06. Bank Credit Decision
Section 9.07. Indemnification
Section 9.08. Successor Agent
ARTICLE X CONSENT TO JURISDICTION; JUDGMENT CURRENCY
Section 10.01. Consent to Jurisdiction
ARTICLE XI MISCELLANEOUS
Section 11.01. APPLICABLE LAW
Section 11.02. Set-off
Section 11.03. Expenses
Section 11.04. Amendments
Section 11.05. Cumulative Rights and No Waiver
Section 11.06. Notices
Section 11.07. Separability
Section 11.08. Assignments and Participations
Section 11.09. WAIVER OF JURY TRIAL
Section 11.10. Confidentiality
Section 11.11. Indemnity
Section 11.12. Extension of Termination Dates; Removal ofBanks;
Substitutions of Banks
Section 11.13. Knowledge of the Company
Section 11.14. Execution in Counterparts
TESTIMONIUM
SIGNATURES
<PAGE>
EXHIBITS AND SCHEDULES
EXHIBIT A Form of Conversion/Continuance Request
EXHIBIT B Form of Committed Loan Request
EXHIBIT C Form of Money Market Notice
EXHIBIT D Form of Money Market Confirmation
EXHIBIT E Form of Committed Note
EXHIBIT F Form of Money Market Note
EXHIBIT G Form of Opinion of Latham & Watkins LLP
EXHIBIT H Form of Opinion of Ballard, Spahr, Andrews & Ingersoll
EXHIBIT I Form of Extension Letter
SCHEDULE 5.01(a) Subsidiaries and Joint Ventures of the Company
<PAGE>
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT, dated as of October 22, 1997 (this
"Agreement"), among Health Care Property Investors, Inc., a Maryland corporation
(the "Company"), each of the banks identified on the signature pages hereof
(each, a "Bank" and, collectively, the "Banks"), The Bank of New York, as Agent
for the Banks (the "Agent"), and NationsBank of Texas, N.A. ("NationsBank"), as
Co-Agent:
W I T N E S S E T H:
WHEREAS, the Company has requested the Banks to lend up to $50,000,000
to the Company on a revolving basis for general corporate purposes; and
WHEREAS, the Company wishes to replace its current credit facility
under the Revolving Credit Agreement, dated as of March 31, 1994 (the "Prior
Credit Agreement"), among the Company, the banks named therein, and the Agent,
as agent, with the facility contemplated hereunder;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
(a) Terms Generally. The definitions ascribed to terms in this
Section 1.01 and elsewhere in this Agreement shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed
to be followed by the phrase "without limitation". The words "hereby",
"herein", "hereof", "hereunder" and words of similar import refer to this
Agreement as a whole (including any exhibits and schedules hereto) and not
merely to the specific section, paragraph or clause in which such word appears.
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all references to "dollars" or "$" shall be deemed
references to the lawful money of the United States of America.
(b) Accounting Terms. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided, however, that, for purposes
of determining compliance with any covenant set forth in Sections 7.02(a),
7.02(b), 7.02(c), 7.02(d) or 7.03 which requires financial computations, if any
such change in GAAP would have a material effect on such computations then such
terms shall be construed in accordance with GAAP as in effect on the date of
this Agreement applied on a basis consistent with the construction thereof
applied in preparing the Company's audited financial statements referred to in
Section 5.01(h). In the event there shall occur a change in GAAP which but for
the foregoing proviso would affect the computation used to determine compliance
with any covenant set forth in Sections 7.02(a), 7.02(b), 7.02(c) or 7.03 which
requires financial computations, the Company and the Banks agree to negotiate in
good faith in an effort to agree upon an amendment to this Agreement that will
permit compliance with such covenant to be determined by reference to GAAP as so
changed while affording the Banks the protection afforded by such covenant prior
to such change (it being understood, however, that such covenant shall remain in
full force and effect in accordance with its existing terms pending the
execution by the Company and the Banks of any such amendment).
(c) Other Terms. The following terms shall have the meanings
ascribed to them below or in the Sections of this Agreement indicated below:
"ABR Loans" shall mean Committed Loans which bear interest at a rate
based upon the Base Rate and in the manner set forth in Section 3.02.
"Administrative Fee" shall have the meaning ascribed to such term in
Section 2.09(b).
"Adverse Environmental Condition" shall mean any of the matters
referred to in clauses (i) or (ii) of the definition of Environmental Claim.
"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 another
Person if such first Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such other
Person, whether through ownership of stock, by contract or otherwise.
"Agency Fee" shall have the meaning ascribed to such term in Section
6.01(h).
"Agent" shall have the meaning given to such term in the preamble of
this Agreement and shall also include any successor agent hereunder.
"Applicable Margin" shall mean the margin set forth in the following
chart applicable to the Pricing Level then in effect:
Pricing Level Applicable Margin
------------- -----------------
I 0.3000%
II 0.3500%
III 0.4500%
IV 0.5625%
V 0.8500%
Subject to (I), (II) and (III) below, "Pricing Level I" shall be applicable for
so long as the rating of the Company's unsecured senior debt ("Senior Debt
Rating") is greater than or equal to A by Standard & Poor's Corporation ("S&P")
and greater than or equal to A2 by Moody's Investors Service, Inc. ("Moody's");
"Pricing Level II" shall be applicable for so long as the Senior Debt Rating is
greater than or equal to A- by S&P and greater than or equal to A3 by Moody's
and Pricing Level I is not applicable; "Pricing Level III" shall be applicable
for so long as the Senior Debt Rating is greater than or equal to BBB+ by S&P
and greater than or equal to Baa1 by Moody's and neither Pricing Level I nor II
is applicable; "Pricing Level IV" shall be applicable for so long as the Senior
Debt Rating is greater than or equal to BBB- by S&P and greater than or equal to
Baa3 by Moody's and neither Pricing Level I, II nor III is applicable; and
"Pricing Level V" shall be applicable for so long as neither Pricing Level I,
II, III nor IV is applicable.
Notwithstanding the foregoing, (I) in the event of a split rating as
between S&P and Moody's, and one or more of Fitch Investors Service, Inc.
("Fitch") and Duff & Phelps Inc. ("D&P" and, collectively with S&P, Moody's and
Fitch, the "Rating Agencies") then has or have a publicly available Senior Debt
Rating or Ratings for the Company, then the pricing level shall be determined by
either (i) the higher of the ratings of S&P and Moody's if either Fitch or D&P
have a rating corresponding to such higher rating of S&P or Moody's, or (ii) the
lower of the ratings of S&P and Moody's if neither Fitch nor D&P have a rating
corresponding to the higher of the ratings of S&P and Moody's; (II) in the event
that no Senior Debt Rating is made publicly available by S&P or Moody's and the
Company's senior subordinated unsecured debt rating ("Subordinated Debt Rating")
is made publicly available by S&P or Moody's, then for purposes of the foregoing
determinations the Senior Debt Rating shall be deemed to be equal to the
Subordinated Debt Rating plus one level (e.g., if S&P's Subordinated Debt Rating
is A-, then S&P's Senior Debt Rating shall be deemed to be A); and (III) in the
event that no Senior Debt Rating and no Subordinated Debt Rating are made
available by S&P or Moody's, then Pricing Level V above shall apply.
"Arranger" shall mean BNY Capital Markets, Inc.
"Bank" shall have the meaning given to such term in the preamble of
this Agreement and shall also include any other financial institution which
pursuant to the provisions hereof becomes a party to this Agreement.
"Base LIBOR" shall mean, with respect to any Interest Period for a
Eurodollar Loan, the rate per annum determined by the Agent to be the arithmetic
mean (rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%,
to the next higher 1/16 of 1%) of the respective rates of interest communicated
by the Reference Banks to the Agent as the rate at which U.S. dollar deposits
are offered to the Reference Banks by leading banks in the London interbank
deposits market at approximately 11:00 A.M., London time, on the second full
Business Day preceding the first day of such Interest Period in an amount
substantially equal to the respective Reference Amounts for a term equal to such
Interest Period.
"Base Rate" shall mean a fluctuating interest rate per annum as shall
be in effect from time to time, which rate per annum shall on any day be equal
to the higher of:
(a) the rate of interest publicly announced by the Agent from time to
time as its prime commercial loan rate in effect on such day; and
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1% of (i) 1/2 of 1% per annum
and (ii) the Federal Funds Rate.
"Borrowing Date" shall mean the date set forth in each Committed Loan
Request or Money Market Notice, as the case may be, as the date upon which the
Company desires to borrow Loans pursuant to the terms of this Agreement.
"Business Day" shall mean (i) with respect to any ABR Loan, any
payment of the Facility Fee or any Money Market Loan for which another meaning
for such term is not specified in the Money Market Notice, any day except a
Saturday, Sunday or other day on which commercial banks in New York City or Los
Angeles are authorized by law to close and (ii) with respect to any Eurodollar
Loan, any day on which commercial banks are open for domestic and international
business (including dealings in U.S. dollar deposits) in London, New York City
and Los Angeles.
"Capital Lease" shall mean, with respect to any Person, any obligation
of such Person to pay rent or other amounts under a lease with respect to any
property (whether real, personal or mixed) acquired or leased by such Person
that is required to be accounted for as a liability on a balance sheet of such
Person in accordance with GAAP.
"Capital Lease Obligations" shall mean the obligation of any Person to
pay rent or other amounts under a Capital Lease.
"Co-Agent" shall mean NationsBank and shall also include any successor
co-agent hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commitment" of any Bank shall mean, in the case of each Bank
(i) prior to any such Bank's Termination Date, the amount set forth opposite
such Bank's name under the heading "Commitment" on the signature pages hereof,
or set forth in the assignment agreement executed by such Bank if it is not a
Bank on the date hereof, as such amount may be adjusted from time to time
pursuant to assignments of such Bank and as such amount may be reduced from time
to time pursuant to Section 2.04 and (ii) after such Bank's Termination Date,
zero.
"Committed Loan Request" shall mean a request by the Company to borrow
Loans pursuant to the terms hereof, which shall be substantially in the form of
Exhibit B and shall specify, with respect to such requested Loans, (i) the
requested Borrowing Date, (ii) the aggregate amount of Loans which the Company
desires to borrow on such date, (iii) whether such requested Loans are to bear
interest as ABR Loans or Eurodollar Loans, and (iv) if the requested Loans are
to bear interest as Eurodollar Loans the requested term of the Interest Period
therefor.
"Committed Loans" shall mean, collectively, ABR Loans and Eurodollar
Loans made pursuant to Section 2.01 to 2.03 and outstanding hereunder from time
to time.
"Committed Notes" shall mean, collectively, the promissory notes of
the Company, each substantially in the form of Exhibit E.
"Compliance Date" shall mean each of the date of this Agreement, each
Borrowing Date, each Conversion/Continuance Date and the date of each delivery
by the Company of a certificate requiring the Company to certify as to the
accuracy of the representations and warranties contained in Article V.
"Consolidated Debt" shall mean Consolidated Total Liabilities less
(i) accounts payable and accrued expenses and (ii) minority interest in joint
ventures, each as set forth in the most recent financial statements delivered to
the Banks pursuant to this Agreement.
"Consolidated Depreciation/Non-Cash Charges" shall mean, at any date
of determination, "Depreciation/Non-Cash Charges" or the similar item,
determined on a consolidated basis for the Company and its subsidiaries, as
shown on the most recent consolidated statement of income for the Company and
its Subsidiaries which has been delivered to the Agent pursuant to
Section 7.01(a).
"Consolidated Funds from Operations" shall mean, for any period,
"Funds From Operations" or the similar item, determined on a consolidated basis
for the Company and its subsidiaries, as shown on the most recent consolidated
statements of cash flows for the Company and its subsidiaries which has been
delivered to the Agent pursuant to Section 7.01(a).
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of the Company and its subsidiaries, determined on a consolidated
basis, in accordance with GAAP with respect to all outstanding Indebtedness of
the Company and its subsidiaries, including all net costs under Interest Rate
Protection Agreements.
"Consolidated Net Income" shall mean, for any period, "Net Income" or
the similar item, determined on a consolidated basis for the Company and its
subsidiaries, as shown on the most recent consolidated statement of income for
the Company and its Subsidiaries which has been delivered to the Agent pursuant
to Section 7.01(a).
"Consolidated Senior Debt" shall mean (i) the Loans and (ii) all other
Consolidated Debt unless by the terms of the instrument creating or evidencing
such other Consolidated Debt it is provided that such Consolidated Debt is
subordinated in right of payment to the Loans.
"Consolidated Stockholders' Equity" shall mean, for any period, "Total
Stockholders' Equity" or the similar item, determined on a consolidated basis
for the Company and its subsidiaries, as shown on the most recent consolidated
balance sheet for the Company and its subsidiaries which has been delivered to
the Agent pursuant to Section 7.01(a).
"Consolidated Total Assets" shall mean, at any date of determination,
"Total Assets" or the similar item, determined on a consolidated basis for the
Company and its subsidiaries, as shown on the most recent consolidated balance
sheet for the Company and its subsidiaries which has been delivered to the Agent
pursuant to Section 7.01(a).
"Consolidated Total Liabilities" shall mean, at any date of
determination, "Total Liabilities and Stockholders Equity" or the similar item,
determined on a consolidated basis for the Company and its subsidiaries, as
shown on the most recent consolidated balance sheet for the Company and its
subsidiaries which has been delivered to the Agent pursuant to Section 7.01(a),
less Consolidated Stockholders Equity.
"Conversion/Continuance Date" shall mean the date on which a
conversion of interest rates on outstanding Loans, pursuant to a
Conversion/Continuance Request, shall take effect.
"Conversion/Continuance Request" shall mean a request by the Company
to convert or continue the interest rate on all or portions of outstanding Loans
pursuant to the terms hereof, which shall be substantially in the form of
Exhibit A and shall specify, with respect to such outstanding Loans, (i) the
requested Conversion/Continuance Date, which shall be not less than three
Business Days after the date of such Conversion/Continuance Request, (ii) the
aggregate amount of the Loans, from and after the Conversion/Continuance Date,
which are to bear interest as ABR Loans or Eurodollar Loans and (iii) if any
Loans are Eurodollar Loans, the term of the Interest Periods therefor, if any.
"Credit Documents" shall mean this Agreement and the Notes.
"Default" shall mean any event or circumstance which, with the giving
of notice or the passage of time, or both, would become an Event of Default.
"Environmental Claim" shall mean any notice, request for information,
action, claim, order, proceeding, demand or direction (conditional or otherwise)
based on, relating to or arising out of (i) any violation of any Environmental
Law by the Company or any person acting on behalf of the Company, or (ii) any
liabilities under any Environmental Law arising out of or otherwise in respect
of any act, omission, event, condition or circumstance existing or occurring in
connection with the Company, including without limitation liabilities relating
to the release of Hazardous Substances (whether on-site or off-site), any claim
by any third party (including, without limitation, tort suits for personal or
bodily injury, tangible or intangible property damage, damage to the
environment, nuisance and injunctive relief), fines, penalties or restrictions,
or the transportation, storage, treatment or disposal of any Hazardous
Substances.
"Environmental Law" means (i) any federal, state, foreign and local
law, statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, legal doctrine, order, judgment, decree, injunction,
requirement or agreement with any governmental entity, (x) relating to the
protection, preservation or restoration of the environment, (including, without
limitation, air, water vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or to human health or safety, or (y) the exposure to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous Substances, in each case
as amended and as now or hereafter in effect. The term Environmental Law
includes, without limitation, the federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act of 1972, the
federal Clean Air Act, the federal Clean Water Act, the federal Resource
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments thereto), the federal Solid Waste Disposal Act, the federal Toxic
Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act
and the Federal Occupational Safety and Health Act of 1970, each as amended and
as now or hereafter in effect, and (ii) any common law or equitable doctrine
(including, without limitation, injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose liability
or obligations for injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Hazardous Substance.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean a corporation, partnership or other
entity which is considered one employer with the Company under Section 4001 of
ERISA or Section 414(b), (c) or (m) of the Code.
"Eurodollar Loans" shall mean Committed Loans which bear interest at a
rate based upon Base LIBOR and in the manner set forth in Section 3.03.
"Eurodollar Reserve Percentage" shall mean for any day, that
percentage, expressed as a decimal, which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including any
marginal, supplemental or emergency reserve requirements) for a member bank of
the Federal Reserve System in New York City with deposits exceeding one billion
dollars in respect of eurocurrency funding liabilities. LIBOR shall be adjusted
automatically on and as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Event of Default" shall mean any of the events described in Section
8.01.
"Facility Fee" shall have the meaning ascribed to such term in Section
2.09(a).
"Facility Fee Rate" with respect to any Facility Fee payment shall
mean the facility fee rate set forth in the following chart applicable to the
Pricing Level (determined as set forth under "Applicable Margin" above) in
effect on the date on which such Facility Fee payment is due:
Pricing Level Facility Fee
------------- --------------
I 0.0750%
II 0.1000%
III 0.1500%
IV 0.1875%
V 0.2750%
"Federal Funds Rate" for any day shall mean the rate (rounded to the
nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, to the next higher
1/16 of 1%) on such day for Federal Funds as published in H.15(519), or any
successor publication, under the heading "Federal Funds (Effective)". In the
event that such rate or such publication is not published with respect to such
day the Federal Funds Rate on such day shall be the "Federal Funds/Effective
Rate" as posted by the Federal Reserve Bank of New York for that day in its
publication "Composite Closing Quotations for U.S. Government Securities". The
Federal Funds Rate for Saturdays, Sundays and any other day on which the Federal
Reserve Bank of New York is closed shall be the Federal Funds Rate as in effect
for the next preceding day for which such rates are published or posted, as the
case may be.
"GAAP" shall mean generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and pronounce
ments of the Financial Accounting Standards Board or in such other statements by
such other entities as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.
"Guarantee" by any person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (ii) to
purchase property, securities or services for the purpose of assuring the holder
of such Indebtedness of the payment of such Indebtedness, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have
meanings correlative to the foregoing).
"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.
"Hazardous Substance" means any substance presently or hereafter
listed, defined, designated or classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, under any Environmental Law, whether by type
or by quantity, including any substance containing any such substance as a
component. Hazardous Substance includes, without limitation, any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance, hazardous waste,
special waste or petroleum or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos containing material, urea formaldehyde
foam insulation, lead and polychlorinated biphenyl.
"Indebtedness" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (including all obligations, contingent or other
wise, of such Person in connection with letter of credit facilities, bankers'
acceptance facilities, Interest Rate Protection Agreements or other similar
facilities including currency swaps) other than indebtedness to trade creditors
and service providers incurred in the ordinary course of business, (b) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (c) all indebtedness created or arising under any condi
tional sale or other title retention agreement with respect to property acquired
by such Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), (d) all Capital Lease Obligations of such Person, (e) all
Indebtedness referred to in clauses (a), (b), (c) or (d) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, (f) all preferred
stock issued by such Person which is redeemable, prior to the full satisfaction
of the Company's obligations under the Credit Documents (including repayment in
full of the Loans and all interest accrued thereon), other than at the option of
such Person, valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends and (g) all Indebtedness of others
Guaranteed by such Person. For purposes of this Agreement, the amount of any
Indebtedness under clauses (c) and (e) shall be the lesser of (x) the principal
amount of such Indebtedness and (y) the value of the property subject to the
Lien referred to therein.
"Initial Loan" shall mean the first Loan which is made pursuant to the
terms hereof.
"Interest Period" shall mean each one, two, three or six-month period,
in the case of Eurodollar Loans; such period being the one selected by the
Company pursuant to Sections 2.02 or 3.04 hereof and commencing on the date the
relevant loan is made or the last day of the current Interest Period, as the
case may be.
"Interest Rate Protection Agreements" shall mean any interest rate
swap agreement, interest rate cap agreement or similar arrangement used by a
Person to fix or cap a floating rate of interest on Indebtedness to a negotiated
maximum rate or amount.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset and (b) the interest of a vendor or lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset.
"LIBOR" shall mean with respect to any Interest Period the rate per
annum (rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%,
to the next higher 1/16 of 1%) determined pursuant to the following formula:
Base LIBOR
LIBOR = (1 - Eurodollar Reserve Percentage)
"Loans" shall, collectively, mean the Committed Loans and the Money
Market Loans and, individually, any Committed Loan or any Money Market Loan.
"Material Adverse Change" shall mean a material adverse change in the
business, properties, condition (financial or otherwise) or operations of the
Company and its Subsidiaries, taken as a whole since December 31, 1996.
"Material Adverse Effect" shall mean (i) any material adverse effect
on the business, properties, condition (financial or otherwise) or operations of
the Company and its Subsidiaries taken as a whole, from and after the date of
any determination, (ii) any material adverse effect on the ability of the
Company to perform its obligations hereunder and under the Credit Documents, or
(iii) any adverse effect on the legality, validity, binding effect or
enforceability of this Agreement or any other Credit Document.
"Money Market Funding Date" shall mean the date specified in the Money
Market Notice as the date of funding for such Money Market Borrowing.
"Money Market Borrowing" shall mean one or more Money Market Loans
made to the Company by one or more of the Banks and of which the Agent is given
notice by a Money Market Notice.
"Money Market Confirmation" shall mean the notice, in substantially
the form of Exhibit D, pertaining to a Money Market Loan, and made pursuant to
Section 2.06(b), duly completed and executed and personally delivered or
transmitted by facsimile to the Company.
"Money Market Loan" shall mean a Loan that is made pursuant to
Sections 2.05 to 2.08.
"Money Market Notes" shall mean, collectively, the promissory notes of
the Company, each substantially in the form of Exhibit F.
"Money Market Notice" shall mean the notice made pursuant to
Section 2.06(a), duly completed and executed by the Company and the Banks
proposing to make Money Market Loans and personally delivered or transmitted to
the Agent.
"Notes" shall mean, collectively, the Committed Notes and the Money
Market Notes.
"Participant" shall have the meaning ascribed to such term in Section
11.08(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Encumbrances" shall mean (i) Liens for taxes not delinquent
or being contested in good faith and by appropriate proceedings and for which
adequate reserves (in accordance with GAAP) are being maintained, (ii) deposits
or pledges to secure obligations under workers' compensation, social security or
similar laws, or under unemployment insurance, (iii) deposits or pledges to
secure bids, tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the ordinary course of business, (iv) mechanics',
workers', materialmen's or other like Liens arising in the ordinary course of
business with respect to obligations which are not due or which are being
contested in good faith and (v) minor imperfections of title on real estate,
provided such imperfections do not render title unmarketable.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" shall mean an employee benefit plan as defined in Section 3(3)
of ERISA which is maintained or contributed to by the Company or an ERISA
Affiliate while such entity is an ERISA Affiliate.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (b) the Code, or (c) any applicable rule
or regulation under the Code, permit the Company to make payments hereunder for
the account of such Bank free of deduction or withholding for income or similar
taxes.
"Prior Credit Agreement" shall have the meaning set forth in the
second recital hereto.
"Pro Rata Share" shall mean, with respect to any Bank, the proportion
of such Bank's Commitment to the Total Commitment of all the Banks or, if the
Total Commitment shall have been canceled or reduced to $0 or expired, the
proportion of such Bank's then outstanding Committed Loans to the aggregate
amount of Committed Loans then outstanding.
"Reference Amount", with respect to any Reference Bank and Interest
Period, shall mean (a) if that Reference Bank is a Bank, the amount of that
Bank's Eurodollar Loan scheduled to be outstanding during that Interest Period,
or (b) if that Reference Bank is not a Bank, the amount scheduled to be
outstanding during that Interest Period of the Eurodollar Loan of the office or
affiliate of that Reference Bank that is a Bank, in each case, (i) without
taking into account any reduction in the amount of any Bank's Loan through any
assignment or transfer and (ii) rounded up to the nearest integral multiple of
$1,000,000.
"Reference Bank" shall mean each of The Bank of New York, NationsBank,
and Wells Fargo Bank, N.A.
"Required Banks" shall mean at any date Banks having at least 51% of
the Total Commitment or, if the Total Commitment has been canceled or
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"Single-Employer Plan" shall mean any Plan that is a single-employer
plan as defined in Section 4001(a)(15) of ERISA which is subject to the
provisions of Title IV of ERISA.
"Subsidiary" shall mean any Person of which or in which the Company
and its other Subsidiaries own directly or indirectly 50% or more of:
(a) the combined voting power of all classes of stock having general
voting power under ordinary circumstances to elect a majority of the board
of directors of such Person, if it is a corporation,
(b) the capital interest or profits interest of such Person, if it is
a partnership, joint venture or similar entity, or
(c) the beneficial interest of such Person, if it is a trust,
association or other unincorporated organization;
provided, however, that "Subsidiary" shall not include any such entity that the
Company does not control. For the purposes of this paragraph, the term
"control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting equity interests, by contract or
otherwise.
"Taxes" shall have the meaning ascribed to such term in Section
4.04(a).
"Termination Date" shall mean, with respect to any Bank, the earliest
to occur of (i) the three hundred and sixty-fourth day after the date of this
Agreement or such later date as may be agreed to by such Bank pursuant to
Section 11.12 and (ii) the date on which the obligations of such Bank to make
loans hereunder shall terminate pursuant to Section 8.01 or the Commitments
shall be reduced to zero pursuant to Section 2.04.
"Total Commitment" shall mean the aggregate Commitment of all the
Banks.
"Unmatured Surviving Obligations" shall mean, as of any date, any
obligations under this Agreement which are contingent and unliquidated and not
then due and payable on such date and which pursuant to the provisions of this
Agreement survive termination of this Agreement.
"Wholly owned Subsidiary" shall mean any Subsidiary all the equity
interests of which (other than directors' qualifying shares, if a corporation)
at the time are owned directly or indirectly by the Company and/or one or more
Wholly owned Subsidiaries of the Company.
ARTICLE II
THE LOANS
Section 2.01. Committed Loans. Prior to the Termination Date, and
subject to the terms and conditions of this Agreement, upon the request of the
Company, and upon the satisfaction by the Company or the waiver by each of the
Banks of each of the conditions precedent contained in Section 6.02, each of the
Banks, severally and not jointly with the other Banks, agrees to make one or
more Committed Loans to the Company from time to time in an aggregate principal
amount at any one time outstanding not to exceed its Commitment; provided,
however, that the sum of (i) the aggregate outstanding Committed Loans and
(ii) the aggregate outstanding Money Market Loans may not exceed the Total
Commitment.
Section 2.02. Procedure for Committed Loans. (a) The Company may
borrow Committed Loans by delivering a written Committed Loan Request to the
Agent on or before 12:00 P.M., New York City time, on the requested Borrowing
Date therefor, in the case of ABR Loans, or on the date not less than three
Business Days prior to the requested Borrowing Date therefor, in the case of
Eurodollar Loans. Committed Loans shall be in the minimum aggregate amount of
$1,000,000 or in integral multiples of $100,000 in excess thereof.
(b) Upon receipt of any Committed Loan Request from the Company, the
Agent shall forthwith give notice to each Bank of the substance thereof. Not
later than 2:00 P.M., New York time, on the Borrowing Date specified in such
Committed Loan Request, each Bank shall make available to the Agent in
immediately available funds at the office of the Agent at its address set forth
on the signature pages hereof, such Bank's Pro Rata Share of the requested
Committed Loans.
(c) Upon receipt by the Agent of all such funds and satisfaction by
the Company or waiver by each of the Banks of each of the conditions precedent
contained in Section 6.02, the Agent shall disburse to the Company on the
requested Borrowing Date the Committed Loans requested in such Committed Loan
Request. The Agent may, but shall not be required to, advance on behalf of any
Bank such Bank's Pro Rata Share of the Committed Loans on a Borrowing Date
unless such Bank shall have notified the Agent prior to such Borrowing Date that
it does not intend to make available its Pro Rata Share of such Committed Loans
on such date. If the Agent makes such advance, the Agent shall be entitled to
recover such amount on demand from the Bank on whose behalf such advance was
made, and if such Bank does not pay the Agent the amount of such advance on
demand, the Company shall promptly repay such amount to the Agent. Until such
amount is repaid to the Agent by such Bank or the Company, such advance shall be
deemed for all purposes to be a Loan made by the Agent. The Agent shall be
entitled to recover from the Bank or the Company, as the case may be, interest
on the amount advanced by it for each day from the Borrowing Date therefor until
repaid to the Agent, at a rate per annum equal to (i) the Federal Funds Rate,
for the five-day period beginning on the Borrowing Date, and (ii) the applicable
rate on the Loans made on the Borrowing Date for the period beginning on the
sixth day after the Borrowing Date.
(d) In lieu of delivering the written notice described above, the
Company may give the Agent telephonic notice of any request for borrowing by the
time required under this Section 2.02; provided that such telephonic notice
shall be confirmed by delivery of a written notice to the Agent by no later than
4:00 P.M., New York City time, on the date of such telephonic notice.
Section 2.03. Committed Notes. The Company's obligation to repay the
Committed Loans shall be evidenced by Committed Notes, one such Committed Note
payable to the order of each Bank. The Committed Note of each Bank shall (i) be
in the principal amount of such Bank's Commitment, (ii) be dated the date of the
initial Committed Loan and (iii) be stated to mature on the Termination Date as
such date may be extended hereunder and bear interest from its date until
maturity on the principal balance (from time to time outstanding thereunder)
payable at the rates and in the manner provided herein. Each Bank is authorized
to indicate upon the grid attached to its Committed Note all Committed Loans
made by it pursuant to this Agreement, interest elections and payments of prin
cipal and interest thereon. Such notations shall be presumptive as to the
aggregate unpaid principal amount of all Committed Loans made by such Bank, and
interest due thereon, but the failure by any Bank to make such notations or the
inaccuracy or incompleteness of any such notations shall not affect the
obligations of the Company hereunder or under the Committed Notes.
Section 2.04. Cancellation or Reduction of the Commitment. The
Company shall have the right, upon not less than three Business Days' written
notice to the Agent and upon payment of the Facility Fees accrued through the
date of such cancellation or reduction, with respect to the amount of the
cancellation or reduction, to cancel the Total Commitment in full or to reduce
the amount thereof; provided, however, that the Total Commitment may not be
canceled so long as any Loan remains outstanding; and provided, further, that
the amount of any partial reduction in the Total Commitment shall not exceed the
remainder of (i) the Total Commitment on such date minus (ii) the aggregate
outstanding principal amount of Committed Loans and Money Market Loans on such
date. Partial reductions of the Total Commitment shall be in the amount of
$5,000,000 or in integral multiples of $1,000,000 in excess thereof (or, if the
aggregate outstanding amount of Loans is less than $5,000,000, then all of such
lesser amount). All such cancellations or reductions shall be permanent.
Section 2.05. Money Market Loans. On the terms and subject to the
conditions of this Agreement, each Bank, severally and for itself alone, may
(but is not obligated to) make one or more Money Market Loans to the Company
from time to time on or after the date hereof and prior to such Bank's
Termination Date in amounts determined as indicated in the Money Market Notice
and for a term that, for each Money Market Loan, is not more than 270 days from
the date of funding of such Money Market Loan as provided in Section 2.07;
provided that the aggregate principal amount of all outstanding Loans shall not
at any time exceed the then Total Commitment.
Section 2.06. Procedure for Money Market Loans.
(a) Money Market Notice. The Company may, from time to time, approach
one or more of the Banks to determine whether such Bank or Banks will make one
or more Money Market Loans. The Company and any Bank or Banks shall, if each of
them in their sole discretion elects to do so, agree to enter into one or more
Money Market Loans as part of such proposed Money Market Borrowing on mutually
agreed-upon terms and notify the Agent by telephone, confirmed in writing by a
Money Market Notice, in the form of Exhibit C hereto, from the Company and the
Bank or Banks proposing to make Money Market Loans before 9:30 a.m. (Los Angeles
time) on the date of the funding of such Money Market Loan (the "Money Market
Funding Date"). Such Money Market Notice shall specify the amount of each Money
Market Loan that such Bank or Banks will make as part of such proposed Money
Market Borrowing (which amounts may, subject to the proviso in Section 2.05,
exceed each such Bank's Commitment), the Money Market Funding Date and the date
or dates of maturity thereof. At any time until 11:30 a.m., Los Angeles time,
on the Money Market Funding Date, the Agent may, but shall be under no
affirmative obligation to, notify any of the Banks proposing to make Money
Market Loans pursuant to such Money Market Notice or the Company that, taking
into consideration any other outstanding Committed Loan Request or Money Market
Notice, such Money Market Borrowing is or may, upon or after funding thereof, be
in excess of borrowing permitted by or otherwise be contrary to this Agreement
and, upon such notice from the Agent, if any, such Money Market Borrowing shall
be canceled and each of the Money Market Notice and the Money Market
Confirmation or Confirmations relating thereto shall be deemed withdrawn and
shall be of no effect.
(b) Money Market Confirmation. Each Money Market Loan shall be made
pursuant to a Money Market Confirmation in substantially the form of Exhibit D,
completed and transmitted from the Bank making such Money Market Loan to the
Company by facsimile or other method reasonably calculated to result in receipt
by the Company before funding. Upon funding of the loan, the Company shall be
bound by the terms specified in such Money Market Confirmation, which shall
include the information required to be set forth in the Money Market Notice as
well as the rate or rates of interest applicable to such Money Market Loan and
all other terms of such Money Market Loan, provided, that such Money Market
Confirmation may provide that certain specified terms of this Agreement
pertaining to ABR Loans or Eurodollar Loans are to apply to such Money Market
Borrowing.
(c) Reliance. The Agent may rely and act upon notice given by
telephone or in writing by individuals reasonably believed by the Agent to be
those designated to the Agent by the Company or by any Bank in writing from time
to time, without waiting for receipt of the Money Market Notice, and the Company
hereby agrees to indemnify and hold harmless the Agent from and against any and
all losses, costs, expenses, damages, claims, actions or other proceedings
relating to such reliance.
Section 2.07. Funding of Money Market Loans. No earlier than the
time specified in Section 2.06(a) for the Agent to give notice concerning
cancellation of the Money Market Borrowing (unless the Agent shall have earlier
informed each Bank making a Money Market Loan on such Money Market Funding Date
that it intends to give no such notice) and no later than 1:00 p.m. (Los Angeles
time) on the Money Market Funding Date, each Bank will make available the Money
Market Loan, if any, to be made by such Bank as part of the Money Market
Borrowing requested to be made on such date in the manner provided below. All
amounts shall be made available to the Company in Dollars and immediately
available funds at the Company's account specified in the relevant Notice of
Money Market Borrowing.
Section 2.08. Money Market Notes. The Money Market Loans of each
Bank shall be evidenced by a Money Market Note payable to the order of each
Bank. The Money Market Note of each Bank shall (i) be in the principal amount
of $50,000,000, or such amount less than $50,000,000 as the Company and such
Bank may agree,(ii) be dated not later than the date of the initial Money Market
Notice relating to a Money Market Loan made by such Bank and (iii) be stated to
mature on the Termination Date as such date may be extended hereunder and bear
interest from its date until maturity on the principal balance (from time to
time outstanding thereunder) payable at the rates and in the manner provided in
the applicable Money Market Confirmations. Each Bank is authorized to indicate
upon the grid attached to its Money Market Note all Money Market Loans made by
it pursuant to this Agreement, interest elections and payments of principal and
interest thereon. Such notations shall be presumptive as to the aggregate
unpaid principal amount of all Money Market Loans made by such Bank, and
interest due thereon, but the failure by any Bank to make such notations or the
inaccuracy or incompleteness of any such notations shall not affect the
obligations of the Company hereunder or under the Money Market Notes.
Section 2.09. Certain Fees. (a) The Company shall pay to the Agent
for the pro rata account of the Banks a fee (the "Facility Fee") equal to the
Facility Fee Rate per annum (on the basis of a 360-day year for the actual
number of days involved) on the daily average amount of the Total Commitment
during the quarter with respect to which such Facility Fee is being paid. Such
fee shall be payable in arrears on the last day of each calendar quarter,
commencing on the first such date after the date hereof, on any date that the
Total Commitment is canceled or reduced pursuant to Section 2.04 (but only with
respect to the amount of such cancellation or reduction) and on the Termination
Date.
(b) The Company shall pay to the Agent for its account an
administrative fee (the "Administrative Fee") pursuant to the commitment letter,
dated September 12, 1997, between the Company and the Agent or as may hereafter
be agreed to between the Agent and the Company.
Section 2.10. Optional Prepayment. The Company shall have the right,
on not less than three Business Days' written notice to the Agent in the case of
Eurodollar Loans, on not less than one Business Day's written notice to the
Agent in the case of ABR Loans, or such other written notice as may be agreed to
by the Company and the Bank making such Money Market Loan in the case of Money
Market Loans, to prepay Loans bearing interest on the same basis and having the
same Interest Periods, if any, in whole or in part, without premium or penalty,
in the aggregate principal amount of $1,000,000 or in integral multiples of
$250,000 in excess thereof (or, if the outstanding aggregate amount of such Loan
is less than $1,000,000, then all of such lesser amount), together with accrued
interest on the principal being prepaid to the date of prepayment and, in the
case of Eurodollar Loans, the amounts required by Section 4.03 or, in the case
of Money Market Loans, such other compensation as may be agreed to by the
Company and the Bank making such Money Market Loan. Subject to the terms and
conditions hereof, prepaid Loans may be reborrowed.
ARTICLE III
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 3.01. Procedure for Interest Rate Determination. (a) Unless
the Company shall request in a Committed Loan Request or in a
Conversion/Continuance Request that the Committed Loans (or portions thereof)
bear interest as Eurodollar Loans, the Committed Loans shall bear interest as
ABR Loans.
(b) Each Money Market Loan shall bear interest at the rate per annum
and subject to change or adjustment, if any, as agreed to by the Company and the
Bank making such Money Market Loan and as set forth in a Money Market
Confirmation.
Section 3.02. Interest on ABR Loans. Each ABR Loan shall bear
interest from the date of such ABR Loan until maturity thereof or until such ABR
Loan is repaid, or the beginning of any relevant Interest Period, as the case
may be, payable in arrears on the last day of each calendar quarter of each
year, commencing with the first such date after the date hereof, and on the date
such ABR Loan is repaid, at a rate per annum (on the basis of a 365- or 366-day
year for the actual number of days involved in the case of ABR Loans which
accrue interest based upon the Prime Rate and on the basis of a 360-day year for
the actual number of days involved in the case of ABR Loans which accrue
interest based upon the Federal Funds Rate) equal to the Base Rate in effect
from time to time, which rate shall change as and when said Base Rate shall
change.
Section 3.03. Interest on Eurodollar Loans. (a) Each Eurodollar
Loan shall bear interest from the date of such Eurodollar Loan until maturity
thereof or until such Loan is repaid, payable in arrears, with respect to
Interest Periods of three months or less, on the last day of such Interest
Period, and with respect to Interest Periods longer than three months, on the
day which is three months after the commencement of such Interest Period and on
the last day of such Interest Period, at a rate per annum (on the basis of a
360-day year for the actual number of days involved), determined by the Agent
with respect to each Interest Period with respect to Eurodollar Loans, equal to
the sum of (i) the Applicable Margin and (ii) LIBOR.
(b) The Interest Period for each Eurodollar Loan shall be selected by
the Company at least three Business Days prior to the beginning of such Interest
Period. If the Company fails to notify the Agent of the Interest Period for a
subsequent Eurodollar Loan at least three Business Days prior to the last day of
the then current Interest Period of an outstanding Eurodollar Loan, then such
outstanding Eurodollar Loan shall become an ABR Loan at the end of such current
Interest Period.
(c) Notwithstanding the foregoing: (i) if any Interest Period for a
Eurodollar Loan would otherwise end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Business Day; (ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and (iii) no Interest
Period for a Eurodollar Loan may extend beyond the Termination Date.
(d) Eurodollar Loans shall be made by each Bank from its branch or
affiliate identified as its Eurodollar Lending Office on the signature page
hereto, or such other branch or affiliate as it may hereafter designate to the
Company and the Agent as its Eurodollar Lending Office. A Bank shall not change
its Eurodollar Lending Office designation if it, at the time of the making of
such change, increases the amounts that would have been payable by the Company
to such Bank under this Agreement in the absence of such a change.
Section 3.04. Conversion/Continuance. (a) The Company may request,
by delivery to the Agent of a written Conversion/Continuance Request not less
than three Business Days prior to a requested Conversion/Continuance Date, that
all or portions of the outstanding Committed Loans (and any Money Market Loans
allowing the option described in this Section 3.04), in the aggregate amount of
$1,000,000 or in integral multiples of $100,000 in excess thereof (or, if the
aggregate amount of outstanding Loans is less than $1,000,000, then all such
lesser amount), to bear interest from and after the Conversion/Continuance Date
as either ABR Loans or Eurodollar Loans.
(b) Upon receipt of any such Conversion/Continuance Request from the
Company, the Agent shall forthwith give notice to each Bank of the substance
thereof. Effective on such Conversion/Continuance Date and upon payment by the
Company of the amounts, if any, required by Section 4.03, the Committed Loans or
portions thereof as to which the Conversion/Continuance Request was made shall
commence to accrue interest as set forth in this Article III for the interest
rate selected by the Company.
(c) In lieu of delivering the above described notice, the Company may
give the Agent telephonic notice hereunder by the required time under this
Section 3.04; provided that such telephonic notice shall be confirmed by
delivery of a written notice to the Agent by no later than 4:00 P.M., New York
City time, the date of such telephonic notice.
(d) To the extent agreed to by the Company and any Bank making a Money
Market Loan, such Money Market Loan may be continued as a Money Market Loan.
Section 3.05. Post Default Interest. Upon the occurrence and during
the continuation of an Event of Default, all Loans and any unpaid installment of
interest thereon shall bear interest at a rate per annum (on the basis of a 360-
day year for the actual number of days involved) equal to the sum of (i) 2% and
(ii) with respect to ABR Loans, the rate of interest then applicable to ABR
Loans, changing as and when said rate shall change; with respect to Eurodollar
Loans, the rate of interest applicable to each such Eurodollar Loan; and, with
respect to Money Market Loans, the agreed-upon rate of interest applicable to
such Money Market Loan, changing as and when said rate shall change if such rate
shall be subject to change. Interest payable pursuant to this Section 3.05
shall be payable on demand.
Section 3.06. Maximum Interest Rate. (a) Nothing in this Agreement
or the Notes shall require the Company to pay interest at a rate exceeding the
maximum rate permitted by applicable law. Neither this Section nor Section
11.01 is intended to limit the rate of interest payable for the account of any
Bank to the maximum rate permitted by the laws of the State of New York (or any
other applicable law) if a higher rate is permitted with respect to such Bank by
supervening provisions of U.S. Federal law.
(b) If the amount of interest payable for the account of any Bank on
any interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Article III, would exceed the
maximum amount permitted by applicable law to be charged by such Bank, the
amount of interest payable for its account on such interest payment date shall
automatically be reduced to such maximum permissible amount.
ARTICLE IV
DISBURSEMENT AND PAYMENT
Section 4.01. Pro Rata Treatment. Each payment of the Facility Fee
and each reduction of the Total Commitment shall be apportioned among the Banks
in proportion to each Bank's Pro Rata Share. Except as provided in Section 4.04
or 4.05, the Committed Notes or portions thereof as to which a
Conversion/Continuance Request has been made pursuant to Section 3.04 hereof
shall at all times bear interest on the same basis (as ABR Loans and Eurodollar
Loans) and the Interest Periods applicable thereto, if any, shall be of the same
duration.
Section 4.02. Method of Payment. (a) All payments of principal and
interest on Money Market Loans and under Money Market Notes shall be made
without set-off (i) to each of the Banks entitled thereto, for its account, or
(ii) if an Event of Default has occurred and is continuing, to the Agent for the
account of the Banks entitled thereto, in each case, in lawful money of the
United States and in immediately available funds at the office of such Bank
specified in the relevant Money Market Confirmation, provided that the Company
shall give the Agent notice, confirmed by the relevant Bank, of all payments or
prepayments of principal upon any Money Market Loans made directly to any Bank
on the same business day on which such payments are made.
(b) All other payments by the Company hereunder and under the
Committed Notes shall be made without set-off or counterclaim to the Agent, for
its account or for the account of the Bank or Banks entitled thereto, as the
case may be, in lawful money of the United States and in immediately available
funds at the office of the Agent on the date when due.
Section 4.03. Compensation for Losses. (a) Compensation. In the
event that (i) the Company makes a prepayment under Section 2.10 on a day other
than the last day of the Interest Period for the amount so prepaid, (ii) a
Conversion/Continuance Date selected pursuant to Section 3.04 falls on a day
other than the last day of the Interest Period for the amount as to which a
conversion is made, (iii) the Company revokes any notice given under
Section 2.02 requesting Eurodollar Loans, (iv) Eurodollar Loans or Money Market
Loans bearing interest on the basis of a similar variable interbank rate or
portions thereof are converted into ABR Loans pursuant to Section 4.05 on a day
other than the last day of the Interest Period for the Eurodollar Loans so
converted, or (v) the Eurodollar Loans or Money Market Loans bearing interest on
the basis of a similar variable interbank rate shall be declared to be due and
payable prior to the scheduled maturity thereof pursuant to Section 8.01, the
Company shall pay to each Bank promptly after its demand an amount which will
compensate such Bank for any costs and losses incurred by such Bank as a result
of such prepayment, conversion, declaration or revocation of notice in respect
of funds obtained for the purpose of making or maintaining such Bank's
Eurodollar Loans or Money Market Loans, as the case may be, or any part thereof.
Such compensation shall include an amount equal to the excess, if any, of
(i) the amount of interest which would have accrued on the amount so paid or
prepaid, or not borrowed or converted, for the period from the date of such
payment or prepayment or conversion or failure to borrow to the last day of such
Interest Period (or, in the case of a failure to borrow, the Interest Period
that would have commenced on the date of such failure to borrow) in each case at
the applicable rate of interest for such Loan provided for herein (excluding,
however, the Applicable Margin included therein) over (ii) the amount of
interest (as reasonably determined by such Bank) which would have accrued to
such Bank on such amount by placing such amount on deposit for a comparable
period with leading banks in the London interbank market.
(b) Certificate, Etc. Each Bank shall promptly notify the Company,
with a copy to the Agent, upon becoming aware that the Company may be required
to make any payment pursuant to this Section 4.03. When requesting payment
pursuant to this Section 4.03, each Bank shall provide to the Company, with a
copy to the Agent, a certificate, signed by an officer of such Bank, setting
forth the amount required to be paid by the Company to such Bank and the
computations made by such Bank to determine such amount. In the absence of
manifest error, such certificate shall be conclusive and binding on the Company
as to the amount so required to be paid by the Company to such Bank.
(c) Participants. Subject to Section 11.08(e), each Participant
shall be deemed a "Bank" for the purposes of this Section 4.03.
Section 4.04. Withholding, Reserves and Additional Costs.
(a) Withholding. To the extent permitted by law, all payments under this
Agreement and under the Notes (including payments of principal and interest)
shall be payable to each Bank free and clear of any and all present and future
taxes, levies, imposts, duties, deductions, withholdings, fees, liabilities and
similar charges (collectively, the "Taxes"); provided that "Taxes" shall not
include taxes imposed on or measured by the overall net income of any Bank by
the United States of America or any political subdivision or taxing authority
thereof or therein, or taxes on or measured by the overall net income of any
foreign office, branch or subsidiary of such Bank by any foreign country or
subdivision thereof in which such office, branch or subsidiary is doing
business. If any Taxes are required to be withheld or deducted from any amount
payable under this Agreement or any Note, then the amount payable under this
Agreement or such Note shall be increased to the amount which, after deduction
from such increased amount of all Taxes required to be withheld or deducted
therefrom, will yield to such Bank the amount stated to be payable under this
Agreement or such Note. The Company shall execute and deliver to any Bank upon
its request such further instruments as may be necessary or desirable to give
full force and effect to any such increase, including a new Note of the Company
to be issued in exchange for any Note theretofore issued. If any of the Taxes
specified in this Section 4.04(a) are paid by any Bank, the Company shall, not
later than 10 days after demand of such Bank, reimburse such Bank for such
payments, together with any interest, penalties and expenses incurred in
connection therewith, plus interest thereon commencing 10 days after such demand
at a rate per annum (based on a 360-day year for the actual number of days
involved) equal to the sum of 2% and the interest rate then applicable to ABR
Loans, changing as and when such rate shall change, from the date such payment
or payments are made by such Bank to the date of reimbursement by the Company;
provided, however, that the Company shall not be required to indemnify any Bank
or Participant for penalties and expenses that result from the gross negligence
or willful misconduct of such Bank or Participant. The Company shall deliver to
the Agent certificates or other valid vouchers for all Taxes or other charges
deducted from or paid with respect to payments made by the Company hereunder.
Notwithstanding the foregoing, the Company shall be entitled, to the extent it
is required to do so by law, to deduct or withhold (and shall not be required to
make payments as otherwise required in this Section on account of such
deductions or withholdings) income or other similar taxes imposed by the United
States of America from interest, fees or other amounts payable hereunder for the
account of any Bank other than a Bank (i) who is a U.S. Person for U.S. Federal
income tax purposes or (ii) who has the Prescribed Forms on file with the
Company for the applicable year to the extent deduction or withholding of such
taxes is not required as a result of such filing of such Prescribed Forms;
provided that if the Company shall so deduct or withhold any such taxes, it
shall provide a statement to the Agent and such Bank, setting forth the amount
of such taxes so deducted or withheld, the applicable rate and any other
information or documentation which such Bank may reasonably request for
assisting such Bank to obtain any allowable credits or deductions for the taxes
so deducted or withheld in the jurisdiction or jurisdictions in which such Bank
is subject to tax.
(b) Additional Costs. (i) If after the date hereof, any change in
any law or regulation or in the interpretation thereof by any court or
administrative or governmental authority charged with the administration thereof
or the enactment of any law or regulation shall either (1) impose, modify or
deem applicable any reserve, special deposit or similar requirement against the
Banks' Commitments or the Loans or (2) impose on any Bank any other condition
regarding this Agreement, its Commitment or the Loans and the result of any
event referred to in clause (1) or (2) of this clause (b) shall be to increase
the cost to any Bank of maintaining its Commitment or the Loans (which increase
in cost shall be calculated in accordance with each Bank's reasonable averaging
and attribution methods) by an amount which any such Bank deems to be material,
then, upon written demand by such Bank, the Company shall pay to such Bank
within 10 days of such written demand an amount equal to such increase in cost;
provided that in respect of any Loan, no such compensation shall be payable to
the extent that, in the reasonable opinion of such Bank, the interest rate on
the Loans has been adjusted to account for such increased cost. Such amount
shall bear interest, commencing 10 days after receipt by the Company of such
demand until payment in full thereof, at a rate per annum (based on a 360-day
year, for the actual number of days involved) equal to the sum of 2% and the
interest rate then applicable to ABR Loans, changing as and when such rate shall
change.
(ii) If any Bank shall have determined that the adoption of any
applicable law, rule, regulation or guideline 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 with the
interpretation or administration thereof (including any such adoption or change
made prior to the date hereof but not effective until after the date hereof), or
compliance by any Bank 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, has or would have the effect of reducing the rate of return
on capital for any such Bank or any corporation controlling such Bank as a
consequence of its obligations under this Agreement to a level below that which
such Bank or such corporation could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's or such corporation's
policies with respect to capital adequacy), then from time to time, not later
than 10 days after written demand by such Bank, the Company shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such
reduction, plus interest thereon commencing 10 days after receipt by the Company
of such written demand at a rate per annum (based on a 360-day year, for the
actual number of days involved) equal to the sum of 2% and the interest rate
then applicable to ABR Loans, changing as and when such rate shall change, from
the date of such demand by such Bank to the date of payment by the Company.
(c) Lending Office Designations. Before giving any notice to the
Company pursuant to this Section 4.04, each Bank shall, if possible, designate a
different lending office if such designation will avoid the need for giving such
notice and will not, in the judgment of such Bank, be otherwise disadvantageous
to such Bank.
(d) Certificate, Etc. Each Bank shall promptly notify the Company,
with a copy to the Agent, upon becoming aware that the Company may be required
to make any payment pursuant to this Section 4.04. When requesting payment
pursuant to this Section 4.04, each Bank shall provide to the Company, with a
copy to the Agent, a certificate, signed by an officer of such Bank, setting
forth the amount required to be paid by the Company to such Bank and the
computations made by such Bank to determine such amount. Determinations and
allocations by such Bank for purposes of this Section 4.04 shall be conclusive,
provided that such determinations and allocations are made on a reasonable basis
and are mathematically accurate. Allocations shall not be deemed reasonable
unless made ratably, to the extent practicable, to all of the affected Bank's
assets, commitments, activities or other relevant aspects of such Bank's
business. In the absence of manifest error, such certificate shall be
conclusive and binding on the Company as to the amount so required to be paid by
the Company to such Bank.
(e) Participants. Subject to Section 11.08(e), each Participant
shall be deemed a "Bank" for the purposes of this Section 4.04.
Section 4.05. Unavailability. If at any time any Bank shall have
determined in good faith (which determination shall be conclusive) that the
making or maintenance of all or any part of such Bank's Eurodollar Loans has
been made impracticable or unlawful because of compliance by such Bank in good
faith with any law or guideline or interpretation or administration thereof by
any official body charged with the interpretation or administration thereof or
with any request or directive of such body (whether or not having the effect of
law), because U.S. dollar deposits in the amount and requested maturity of such
Eurodollar Loans are not available to the Bank in the London Eurodollar
interbank market, or because of any other reason, then the Agent, upon
notification to it of such determination by such Bank, shall forthwith advise
the other Banks and the Company thereof. Upon such date as shall be specified
in such notice and until such time as the Agent, upon notification to it by such
Bank, shall notify the Company and the other Banks that the circumstances
specified by it in such notice no longer apply, (i) notwithstanding any other
provision of this Agreement, such Eurodollar Loans of such Bank shall automati
cally and without requirement of notice by the Company be converted to ABR Loans
and (ii) the obligation of only such Bank to allow borrowing, elections and
renewals of Eurodollar Loans shall be suspended, and, if the Company shall
request in a Committed Loan Request or Conversion/Continuance Request that such
Bank make a Eurodollar Loan, the loan requested to be made by such Bank shall
instead be made as an ABR Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties.
As of each Compliance Date, the Company represents and warrants to the Banks
that:
(a) Subsidiaries. At the date hereof, the Company has no
Subsidiaries and is a participant in no joint ventures other than as listed on
Schedule 5.01(a).
(b) Good Standing and Power. The Company is duly organized and
validly existing and in good standing under the laws of the State of Maryland;
and the Company has the power to own its property and to carry on its business
as now being conducted and is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties owned or
leased by it therein or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified or to be in
good standing, individually or in the aggregate, would not have a Material
Adverse Effect. Each of the corporate Subsidiaries of the Company are
corporations, each duly organized and validly existing, under the laws of the
jurisdiction of its incorporation; each other Subsidiary is an entity duly
organized and validly existing under the laws of the jurisdiction of its
organization; and each Subsidiary has the power to own its property and to carry
on its business as now being conducted and is duly qualified to do business and
is in good standing in each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be so
organized, existing, qualified, or to be in good standing, individually or in
the aggregate, would not have a Material Adverse Effect.
(c) Corporate Authority. The Company has full corporate power and
authority to execute, deliver and perform its obligations under each of the
Credit Documents, to make the borrowings contemplated hereby, and to execute and
deliver the Notes and to incur the obligations provided for herein and therein,
all of which have been duly authorized by all proper and necessary corporate
action. No consent or approval of stockholders is required as a condition to
the validity or performance by the Company of its obligations under any of the
Credit Documents.
(d) Authorizations. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from Governmental
Authorities and other Persons which are necessary for the borrowing hereunder,
the execution and delivery of the Credit Documents, the performance by the
Company of its obligations hereunder and thereunder have been effected or
obtained and are in full force and effect.
(e) Binding Agreements. This Agreement constitutes, and the Notes,
when executed and delivered pursuant hereto for value received will constitute,
the valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(f) Litigation. There are no proceedings pending or, so far as the
officers of the Company know, proceedings or investigations threatened before
any court or arbitrator or before or by any Governmental Authority which, in any
one case or in the aggregate, if determined adversely to the interests of the
Company or any of its Subsidiaries, would have a Material Adverse Effect or
relates to any Credit Document or the lending transactions contemplated hereby
and thereby.
(g) No Conflicts. There is no statute, regulation, rule, order or
judgment, and no provision of any material agreement or instrument binding on
the Company or any of its Subsidiaries, or affecting their respective properties
and no provision of the certificate of incorporation, by-laws, governing
partnership agreement or other organizational document of the Company or any of
its Subsidiaries, which would prohibit, conflict with or in any way prevent the
execution, delivery, or performance of the terms of the Credit Documents or the
incurrence of the obligations provided for herein and therein, or result in or
require the creation or imposition of any Lien on any of the Company's or its
Subsidiaries' properties as a consequence of the execution, delivery and
performance of any Credit Document or the lending transactions contemplated
hereby and thereby.
(h) Financial Condition. (i) The consolidated balance sheet of the
Company and its Subsidiaries as of December 31, 1996, together with consolidated
statements of income, stockholders' equity and cash flows for the fiscal year
then ended, certified by Arthur Andersen & Co., heretofore delivered to the
Agent and the Banks, fairly present the consolidated financial condition of the
Company and its Subsidiaries and the results of their operations as of the dates
and for the periods referred to and have been prepared in accordance with GAAP
consistently applied throughout the periods involved. As of the date hereof,
there are no material liabilities, direct or indirect, fixed or contingent, of
the Company or any of its Subsidiaries as of the dates of such balance sheet
which are not reflected therein or in the notes thereto.
(ii) The unaudited consolidated balance sheets of the Company and its
Subsidiaries as of March 31, 1997, and June 30, 1997, together with unaudited
and consolidated statements of income for the three month and six month periods
then ended and the unaudited statements of cash flows for the three months and
six months, respectively, then ended, heretofore delivered to the Agent and the
Banks, fairly present the consolidated financial condition of the Company and
its Subsidiaries and the results of their operations as of the dates and for the
periods referred to and have been prepared in accordance with GAAP consistently
applied throughout the periods involved, subject to the omission or curtailment
of footnotes. As of the date hereof, there are no material liabilities, direct
or indirect, fixed or contingent, of the Company and any of its Subsidiaries as
of the dates of such balance sheets which are not reflected therein or in the
notes thereto.
(iii) There has been no Material Adverse Change.
(iv) Since December 31, 1996, there has not occurred any fact, event or
condition which could have a Material Adverse Effect.
(i) Taxes. The Company and each of its Subsidiaries has filed or
caused to be filed all tax returns which are required to be filed and has paid
all taxes required to be shown to be due and payable on said returns or on any
assessment made against it or any of its property and all other taxes,
assessments, fees, liabilities, penalties or other charges imposed on it or any
of its property by any Governmental Authority, except for any taxes,
assessments, fees, liabilities, penalties or other charges (x) which are being
contested in good faith and for which adequate reserves (in accordance with
GAAP) have been established or (y) of which the failure to file or pay would
not, individually or in the aggregate, be material and adverse to the Company
and its Subsidiaries taken as a whole.
(j) Use of Proceeds. The proceeds of the Loans will be used by the
Company for general corporate purposes.
(k) Margin Regulations. No part of the proceeds of any Loan will be
used to purchase or carry, or to reduce or retire or refinance any credit
incurred to purchase or carry, or extend credit to others for the purpose of pur
chasing or carrying, any "margin stock" as defined in Regulation G or Regulation
U of the Board of Governors of the Federal Reserve System.
(l) No Material Misstatements. All written information relating to
the Company and its Subsidiaries heretofore delivered by the Company and its
Subsidiaries to the Agent or any Bank in connection with the Credit Documents is
complete and correct in all material respects for the purposes for which such
information was delivered.
(m) Title to Properties; Possession Under Leases. The Company and
its Subsidiaries each have good and marketable title to, or valid leasehold
interests in, all properties and assets reflected on the consolidated balance
sheet of the Company as of December 31, 1996, referred to in Section 5.01(h),
except for (x) such properties and assets as have been disposed of in the
ordinary course of business or as would have been permitted by this Agreement if
then in effect since the date of such financial statements, (y) minor defects in
title that do not interfere with the ability of the Company or any of such
Subsidiaries to conduct its business as now conducted and (z) such other items
as would not, individually or in the aggregate, be material and adverse to the
Company and its Subsidiaries taken as a whole. All such assets and properties
are free and clear of all Liens, except Liens permitted pursuant to this
Agreement.
(n) Leases. Except as could not, in any one case individually or all
cases in the aggregate, have a Material Adverse Effect, (i) there are no renewal
or extension options applicable to any lease to which the Company or any
Subsidiary is a party; (ii) to the Company's knowledge, no condition exists
which, with the giving of notice or the passage of time, or both, would permit
any lessee to cancel its obligations under any lease to which the Company or any
Subsidiary is a party; (iii) the Company has received no notice that any lessee
intends to cease operations at any leased property prior to the expiration of
the term of the applicable lease (other than temporarily due to casualty,
remodeling, renovation or any similar cause); and (iv) to the Company's
knowledge, none of the lessees or their sub-lessees, if any, under any of the
leases to which the Company or any Subsidiary is a party is the subject of any
bankruptcy, reorganizations, insolvency or similar proceeding.
(o) Conduct of Business. At the date hereof, the Company and its
Subsidiaries hold all authorizations, consents, approvals, registrations,
franchises, licenses and permits, with or from Governmental Authorities and
other Persons as are required or necessary for them to own their properties and
conduct their business as now conducted, except for any authorizations,
consents, approvals, registrations, franchises, licenses and permits, of which
the failure to hold would not, individually or in the aggregate, be material and
adverse to the Company and its Subsidiaries taken as a whole.
(p) Compliance with Laws and Charter Documents. Neither the Company
nor any Subsidiary thereof is in violation of (a) any law, statute, rule,
regulation or order of any Governmental Authority (including Environmental Laws)
applicable to it or its properties or assets or (b) its certificate of incorpor
ation, by-laws, governing partnership agreement or other organizational
document, except for any such violation as would not, individually or in the
aggregate, be material and adverse to the Company and its Subsidiaries taken as
a whole.
(q) ERISA. (i) Neither the Company nor any ERISA Affiliate has
engaged in a non-exempt prohibited transaction (as defined in Section 4975 of
the Code or Section 406 of ERISA).
(ii) Except those items that would not, individually or in the
aggregate, be material and adverse to the Company and its Subsidiaries taken as
a whole, no Single-Employer Plan had an accumulated funding deficiency, whether
or not waived, as of the last day of the most recent fiscal year of such Plan
ended prior to the date hereof and neither the Company nor any ERISA Affiliate
is (A) required to give security to any Single-Employer Plan pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, or (B) subject to a lien
in favor of such a Plan under Section 302(f) of ERISA.
(iii) Except those items that would not, individually or in the
aggregate, be material to the Company and its Subsidiaries taken as a whole, no
liability under Sections 4062, 4063, 4064 OR 4069 of ERISA has been or is
expected by the Company to be incurred by the Company or any ERISA Affiliate
with respect to any Single-Employer Plan and neither the Company nor any ERISA
Affiliate has incurred or expects to incur any withdrawal liability with respect
to any Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA).
(iv) Except those items that would not, individually or in the
aggregate, be material to the Company and its Subsidiaries taken as a whole,
under each Single-Employer Plan, as of the last day of the most recent plan year
ended prior to the date hereof, the actuarially determined present value of all
benefit liabilities (as determined on the basis of the actuarial assumptions
contained in the Plan's most recent actuarial valuation) did not exceed the fair
market value of the asset of such Plan by more than $1,000,000, and there has
been no material change in the financial condition of the Plan since the last
day of the most recent plan year.
(v) Insofar as the representations and warranties of the Company and
its ERISA Affiliates contained in clauses (i) and (ii) above relate to any Plan
which is a multiemployer plan, such representations and warranties are made to
the best knowledge of the Company and its ERISA Affiliates. As used in this
Section, (A) "accumulated funding deficiency" shall have the meaning assigned to
such term in Section 412 of the Code and Section 302 of ERISA; (ii)
"multiemployer plan" and "plan year" shall have the respective meanings assigned
to such terms in Section 3 of ERISA; (C) "benefit liabilities" shall have the
meaning assigned to such term in Section 4001 of ERISA; (D) "taxable period"
shall have the meaning assigned to such term in Section 4975 of the Code; and
(E) "withdrawal liability" shall have the meaning assigned to such term in
Part 1 of Subtitle E of Title IV of ERISA.
(r) Not an Investment Company. Neither the Company nor any of its
Subsidiaries is or, after giving effect to the transactions contemplated hereby
will be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(s) Environmental Matters. Except as could not, individually or in
the aggregate, have a Material Adverse Effect, (i) the businesses as presently
or formerly engaged in by the Company and its Subsidiaries are and have been
conducted in compliance in all material respects with all applicable
Environmental Laws, including, without limitation, having required permits,
licenses and other approvals and authorizations, during the time the Company and
its Subsidiaries engaged in such businesses, (ii) the properties presently or
formerly owned or operated by the Company and its Subsidiaries (including,
without limitation, soil, groundwater or surface water on, under or adjacent to
the properties, and buildings thereon) (the "Properties) do not, to the
Company's knowledge, contain any Hazardous Substance in violation of applicable
Environmental Law (provided, however, that with respect to Properties formerly
owned or operated by the Company or any Subsidiary, such representation is
limited to the period the Company or such Subsidiary owned or operated such
Properties), (iii) the Company has not received any notices, demand letters or
request for information from any Federal, state, local or foreign governmental
entity or any third party indicating that the Company may be in violation of any
Environmental Law in connection with the ownership or operation of the Company's
businesses, (iv) there are no civil, criminal or administrative actions, suits,
demands, claims, hearings, investigations or proceedings pending or, to the
Company's knowledge, threatened against the Company or any Subsidiary with
respect to the Company or any Subsidiary or the Properties relating to any
violation, or alleged violation, of, or liability under, any Environmental Law,
(v) no reports have been filed, or, to the Company's knowledge, are required to
be filed, by the Company or any Subsidiary concerning the release of any
Hazardous Substance or the threatened or actual violation of any Environmental
Law on or at the Properties, (vi) to the Company's knowledge, no Hazardous
Substance has been disposed of, transferred, released or transported from any of
the Properties during the time such Property was owned or operated by the
Company or its Subsidiaries in violation of applicable Environmental Law as in
effect at the time of said activities, (vii) there have been no environmental
investigations, studies, audits, tests, reviews or other analyses conducted by
or which are in the possession of the Company relating to the Company or any
Subsidiary or the Properties which have not been delivered to the Banks prior to
the date hereof, (viii) there are no underground storage tanks on, in or under
any of the Properties and no underground storage tanks have been closed or
removed from any Properties which are or have been in the ownership of the
Company or any Subsidiary (provided, however, that with respect to Properties
formerly owned or operated by the Company or any Subsidiary, the representations
in this subsection (viii) are limited to the period the Company owned or
operated such Properties), (ix) there is no friable asbestos present in any
Property presently owned or operated by the Company or any Subsidiary, and no
asbestos has been removed from any Property while such Property was owned or
operated by the Company, (x) none of the Properties has been used at any time by
the Company or any Subsidiary as a sanitary landfill or hazardous waste disposal
site and (xi) neither the Company nor any Subsidiary has incurred, and, to the
Company's knowledge, none of the Properties are presently subject to, any
material liabilities (fixed or contingent) relating to any suit, settlement,
court order, administrative order, judgment or claim asserted or arising under
any Environmental Law.
(t) Insurance. All of the properties (other than properties leased
to other Persons) and operations of the Company and its Subsidiaries of a
character usually insured by companies of established reputation engaged in the
same or a similar business similarly situated are adequately insured, by
financially sound and reputable insurers, against loss or damage of the kinds
and in amounts customarily insured against by such Persons, and the Company and
its Subsidiaries carry, with such insurers in customary amounts, such other
insurance as is usually carried by companies of established reputation engaged
in the same or a similar business similarly situated.
ARTICLE VI
CONDITIONS OF LENDING
Section 6.01. Conditions to the Availability of the Commitment. The
obligations of each Bank hereunder are subject to, and the Banks' Commitment
shall not become available until the date on which, each of the following
conditions precedent shall have been satisfied or waived in writing by each of
the Banks, and upon such satisfaction or waiver each Bank will give a written
confirmation of the same to the Company on request:
(a) Credit Agreement. The Agent shall have received this Agreement
duly executed and delivered by each of the Banks and the Company.
(b) Notes. The Agent on behalf of each Bank shall have received
Committed Notes in the principal amounts equal to each such Bank's Commitment,
and Money Market Notes in the principal amounts equal to the Total Commitment,
each duly executed and delivered by the Company.
(c) Good Standing Certificates. The Agent on behalf of the Banks
shall have received from the Company copies of good standing certificates, dated
within five (5) days prior to the date hereof, confirming the Company's
representation as to good standing in Section 5.01(b).
(d) Secretary's Certificate. The Agent on behalf of the Banks shall
have received from the Company a certificate from the Secretary or Assistant
Secretary of the Company, dated as of the date hereof, (i) certifying the
incumbency of the officers executing the Credit Documents and all related
documentation, (ii) attaching and certifying the resolutions of the Board of
Directors of the Company relating to the execution, delivery and performance of
this Agreement, and (iii) attaching and certifying the Articles of Incorporation
and By-laws of the Company.
(e) Opinion of Company Counsel. The Agent shall have received a
favorable written opinion, dated the date hereof, of Latham & Watkins, special
counsel for the Company, in substantially the form of Exhibit G, and of Ballard,
Spahr, Andrews & Ingersoll, special Maryland counsel for the Company, in
substantially the form of Exhibit H.
(f) Other Documents. The Agent shall have received such other
certificates and documents as the Agent and the Banks reasonably may require.
(g) Litigation. There shall not be pending or threatened any action
or proceeding before any court or administrative agency relating to the lending
transactions contemplated by this Agreement or any Note which, in the judgment
of the Agent or any Bank, could materially impair the ability of the Company to
perform its obligations hereunder or thereunder.
(h) Agency Fee. The Agent shall have received an Agency Fee (the
"Agency Fee"), which is due and payable on the date hereof pursuant to a letter
agreement, dated the date hereof, between the Company and the Agent.
(i) Termination of Prior Credit Agreement. The Agent shall have
received evidence satisfactory to the Agent that the Prior Credit Agreement
shall have been terminated and be of no further force and effect and any and all
amounts outstanding thereunder or otherwise payable pursuant thereto shall have
been paid.
(j) Cancellation of Loans. The Agent shall have received evidence
satisfactory to the Agent that all existing loans with any of the Banks shall
have been terminated or canceled and all amounts outstanding thereunder or
otherwise payable pursuant thereto shall have been paid.
Section 6.02. Conditions to All Loans. The obligations of each Bank
in connection with each Loan (including the Initial Loan) are subject to the
conditions precedent that, on the date of each such Loan and after giving effect
thereto, each of the following conditions precedent shall have been satisfied or
waived in writing by each Bank, and upon such satisfaction or waiver each Bank
will give a written confirmation of the same to the Company on request:
(a) Committed Loan Request/Money Market Notice. (1) For each
Committed Loan, the Agent shall have received a Committed Loan Request in
substantially the form of Exhibit B. (2) For each Money Market Borrowing, the
Agent shall have received a Money Market Notice in substantially the form of
Exhibit C and the Company shall have acknowledged a Money Market Confirmation in
substantially the form of Exhibit D.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing, and the Agent shall have received from the Company a
certificate to that effect signed by an authorized officer of the Company.
(c) Representations and Warranties; Covenants. The representations
and warranties contained in Article V (other than representations and warranties
that speak as of a specific date) shall be true and correct with the same effect
as though such representations and warranties had been made at the time of such
Loan, and the Agent shall have received from the Company a certificate to that
effect signed by an authorized officer of the Company.
ARTICLE VII
COVENANTS
Section 7.01. Affirmative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and all reimbursement obligations
and performance of all other obligations of the Company hereunder (other than
Unmatured Surviving Obligations), the Company will:
(a) Financial Statements; Compliance Certificates. Furnish to the
Agent and to each Bank (i) as soon as available, but in no event more than 60
days following the end of each fiscal quarter, copies of all consolidated
quarterly balance sheets, income statements and other financial statements and
reports of the Company and its Subsidiaries, prepared in a format and in scope
consistent with the financial statements and reports of the Company referenced
in Section 5.01(h), (ii) as soon as available, but in no event more than
105 days following the end of each fiscal year, a copy of the annual
consolidated audit report and financial statements relating to the Company and
its Subsidiaries, certified by Arthur Andersen & Co., one of the other "Big Six"
accounting firms or another independent certified public accountant reasonably
satisfactory to the Agent, prepared in a format and in scope consistent with the
December 31, 1996 financial statements and reports of the Company referenced in
Section 5.01(h), (iii) as soon as available, but in no event later than 60 days
following the end of each fiscal year, an annual forecast for the then-current
fiscal year, prepared in a manner and in the form of the forecast provided on
the date of this Agreement or in such other form as is reasonably acceptable to
the Agent and the Required Banks, (iv) together with each of the financial
statements delivered pursuant to clauses (i) and (ii) of this Section 7.01(a), a
certificate of the Chief Financial Officer of the Company stating whether as of
the last date of such financial statements any event or circumstance exists
which constitutes a Default or Event of Default and, if so, stating the facts
with respect thereto, together with calculations, where applicable, which
establish the Company's (and where applicable, each of the Company's
Subsidiaries') compliance therewith, (v) promptly upon receipt thereof, copies
of any reports and management letters submitted to the Company or any of its
Subsidiaries or their accountants in connection with any annual or interim audit
of the books of the Company or its Subsidiaries, together with the responses
thereto, if any, and (vi) such additional information, reports or statements as
the Agent and the Banks from time to time may reasonably request.
(b) Taxes. Pay and discharge, and cause each of its Subsidiaries to
pay and discharge, all taxes, assessments and governmental charges upon it, its
income and its properties prior to the date on which penalties are attached
thereto, (i) unless and to the extent that (x) such taxes, assessments and
governmental charges shall be contested in good faith and by appropriate
proceedings by the Company or such Subsidiary, as the case may be, (y) adequate
reserves (in accordance with GAAP) are maintained by the Company or such
Subsidiary, as the case may be, with respect thereto, and (z) any failure to pay
and discharge such taxes, assessments and governmental charges could not have a
Material Adverse Effect or (ii) unless and to the extent that any failure to pay
and discharge such taxes, individually or in the aggregate, would not be
material and adverse to the Company and its Subsidiaries taken as a whole.
(c) Corporate Existence. Except as permitted by Section 7.02(d) or
(e), maintain, and cause each of its Subsidiaries to maintain, its existence in
good standing and qualify and remain qualified to do business in each
jurisdiction in which the character of the properties owned or leased by it
therein or in which the transaction of its business is such that the failure to
maintain such existence or to qualify would have a Material Adverse Effect.
(d) Maintenance of Records. Will maintain, and will cause each of
its Subsidiaries to maintain, complete and accurate books and records in which
full and correct entries in conformity with GAAP shall be made of all dealings
and transactions in its respective business and activities.
(e) Inspection. Permit, and cause each of its Subsidiaries to
permit, the Agent and the Banks to have one or more of their officers and
employees, or any other Person designated by the Agent or the Banks, visit and
inspect any of the properties of the Company and its Subsidiaries (upon
reasonable request and notice and in accordance with the agreement, if any,
relating to any such property) and to examine the minute books, books of account
and other records of the Company and its Subsidiaries and make copies thereof or
extracts therefrom, and discuss its affairs, finances and accounts with its
officers and, at the request of the Agent or the Banks, with the Company's
independent accountants, during normal business hours and at such other
reasonable times and as often as the Agent or the Banks reasonably may desire.
(f) Conduct of Business. Engage in as its principal business
investing in health care related facilities in the United States.
(g) Notification of Defaults and Adverse Developments. Notify the
Agent (i) promptly, and in any event not later than five Business Days after the
discovery by any officer of the Company of the occurrence of any Default or
Event of Default; (ii) promptly, and in any event not later than five Business
Days after the discovery by any officer of the Company of the occurrence of a
Material Adverse Change; (iii) promptly, and in any event not later than ten
Business Days after the discovery by any officer of the Company of any material
litigation or proceedings that are instituted or (to the knowledge of any
officer of the Company) threatened against the Company or its Subsidiaries or
any of their respective assets and (iv) promptly, and in any event not later
than five Business Days after the discovery by any officer of the Company of the
occurrence of each and every event which would be an event of default (or an
event which with the giving of notice or lapse of time or both would be an event
of default) under any Indebtedness of the Company or any of its Subsidiaries in
a principal amount in excess of $5,000,000, such notice to include the names and
addresses of the holders of such Indebtedness and the amount thereof. Upon
receipt of any such notice of default or adverse development, the Agent shall
forthwith give notice to each Bank of the details thereof.
(h) Notice of ERISA Events. Within 10 days after the Company or any
ERISA Affiliates knows that any of the events described in the succeeding two
sentences have occurred and such occurrence or occurrences, individually or in
the aggregate, could be material and adverse to the Company and its Subsidiaries
taken as a whole, the Company shall furnish to the Agent a statement signed by a
senior officer of the Company describing such event in reasonable detail and the
action, if any, proposed to be taken with respect thereto. The events referred
to in the preceding sentence are, with respect to any Single-Employer Plan:
(i) any reportable event described in Section 4043 of ERISA, other than a
reportable event for which the 30-day notice requirement has been waived by the
PBGC; (ii) the filing with any affected party as such term is defined in
Section 4001 of ERISA of a notice of intent to terminate the Plan; (iii) receipt
of notice of an application by the PBGC to institute proceedings to terminate
the Plan pursuant to Section 4042 of ERISA; (iv) withdrawal from or termination
of the Plan during a plan year for which the Company or any ERISA Affiliate is
or would be subject to liability under Sections 4063 or 4064 of ERISA;
(v) cessation of operations by the Company or any ERISA Affiliate at a facility
under the circumstances described in Section 4062(e) of ERISA; (vi) adoption of
an amendment to a Plan which is a Single-Employer Plan which would require
security to be given to the Plan pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; and (vii) failure by the Company or any ERISA Affiliate to
make payment to a Single-Employer Plan which would give rise to a lien in favor
of the Plan under Section 302(f) of ERISA. Such events shall also include
receipt of notice of withdrawal liability pursuant to Section 4202 of ERISA.
(i) Environmental Matters. (i) Comply, and cause its Subsidiaries to
comply, in all material respects with all applicable Environmental Laws, (ii)
notify the Agent promptly after receiving notice or becoming aware of any
Adverse Environmental Condition or Environmental Claims that could have a
Material Adverse Effect, and (iii) promptly forward to Agent a copy of any
Environmental Claim, order, notice, permit, application, or any other com
munication or report received by Company or any of its Subsidiaries in
connection with any such matters as they may affect such premises, if material.
(j) Insurance on Leased Properties. Use its, and cause its
Subsidiaries to use their, commercially reasonable best efforts to ensure that
each lessee of a property owned in whole or in part, directly or indirectly, by
the Company or any Subsidiary, and each mortgagor of a property on which the
Company or any Subsidiary holds a mortgage, has, and until the Termination Date
will keep, in place adequate insurance which names the Company or such
Subsidiary as a loss payee. For the purposes of the preceding sentence
"adequate insurance" shall mean insurance, with financially sound and reputable
insurers in such amounts and insuring against such risks as are customarily
maintained by similar businesses.
(k) Further Assurances. The Company agrees to do all acts and
things, as may be required by law or as, in the reasonable judgement of the
Agent, may be necessary or advisable to carry out the intent and purpose of this
Agreement.
Section 7.02. Negative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and all reimbursement obligations
and performance of all other obligations of the Company hereunder (other than
Unmatured Surviving Obligations), the Company will not:
(a) Secured Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness of the Company secured by mortgages, encumbrances or Liens,
except Indebtedness secured by mortgages, encumbrances or Liens which, together
with the Indebtedness of the Subsidiaries permitted under Section 7.02(b)(ii),
does not exceed 30% of Consolidated Total Assets, provided, however, that the
amount of any such secured Indebtedness that is used to repay unsecured
Indebtedness of the Company and its Subsidiaries (other than Indebtedness to the
Banks hereunder) shall not exceed 20% of Consolidated Total Assets.
(b) Subsidiary Indebtedness. Permit any Subsidiary to create, incur,
assume or suffer to exist any Indebtedness, except (i) Indebtedness to the
Company or any other Subsidiary, or (ii) Indebtedness which, together with
outstanding Indebtedness of the Company permitted under Section 7.02(a) and all
outstanding Indebtedness of other Subsidiaries, does not exceed 30% of
Consolidated Total Assets.
(c) Mortgages and Pledges. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien of any kind upon or in any of its property or assets, whether now owned
or hereafter acquired, other than (i) Permitted Encumbrances and (ii) Liens
granted in order to secure Indebtedness permitted under Section 7.02(a) or
Section 7.02(b); provided, however, that the aggregate value of property subject
to Liens granted pursuant to clause (ii) (exclusive of Liens to secure
Indebtedness pursuant to Section 7.02(b)(i)) shall not exceed 30% of Total
Consolidated Assets.
(d) Merger, Consolidation or Acquisition of Assets. Enter into any
merger or consolidation or acquire all or substantially all of the assets of any
person, firm, joint venture or corporation, or permit any Subsidiary so to do,
except that: (i) a Wholly-owned Subsidiary may be merged or consolidated with
one or more other Wholly-owned Subsidiaries or into the Company; (ii) the
Company or any Subsidiary may merge, consolidate or acquire assets in the
ordinary course of its business; (iii) the Company may be merged or consolidated
with other entities so long as: (A) the Company is the surviving corporation of
such merger or consolidation; (B) at the time of such merger or consolidation
and immediately after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing; and (C) the surviving corporation is
engaged substantially in the same line of business as the Company; and (iv) the
Company or any Subsidiary may acquire any interest in any person, firm, joint
venture or corporation so long as (A) the amount of the total consideration
(including any Indebtedness or liabilities incurred or assumed in connection
therewith) paid in connection with such merger or consolidation of such acquired
interest is not greater than 10% of Consolidated Stockholders' Equity,
determined according to the last financial statements delivered pursuant to
Section 7.01(a) and (B) the acquired entity is engaged in substantially the same
line of business as the Company.
(e) Sales of Assets. Sell, lease or otherwise dispose of all or any
substantial part of its assets, or permit any Subsidiary so to do, other than in
the ordinary course of the Company's business or as otherwise expressly
permitted hereunder.
(f) Loans and Investments. Purchase or acquire the obligations or
stock of, or any other interest in, or make loans or advances to, any Person, or
permit any Subsidiary so to do, except (i) securities issued or fully guaranteed
or insured by the United States Government or any agency thereof and backed by
the full faith and credit of the United States having a maturity of not more
than one year from the date of acquisition; (ii) marketable obligations issued
by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year of the
date of acquisition thereof and, at the time of acquisition, rated at least A by
S&P or A by Moody's; (iii) repurchase agreements, tax exempt investments,
certificates of deposit, time deposits, Eurodollar time deposits or bankers'
acceptances issued by (x) any Bank, (y) any United States commercial bank having
combined capital and surplus of not less than $100,000,000 and having commercial
paper rated at least A-1 by S&P or P-1 by Moody's or (z) any other bank having
an ICBA Bank Analysis of B or better; (iv) certificates of deposit in an amount
less than or equal to $100,000 in the aggregate issued by any other bank insured
by the Federal Deposit Insurance Corporation; (v) commercial paper or bankers'
acceptances of an issuer rated at least A-1 by S&P or P-1 by Moody's; (vi) money
market funds invested in one or more of (i) through (v) above; (vii) loans to
and investments by the Company in any Subsidiary or loans from any Subsidiary to
the Company; and (viii) any such loans or investments made in the ordinary
course of the Company's or a Subsidiary's business.
(g) Transactions with Affiliates. Enter into any transactions,
including without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate, or permit any Subsidiary so to do,
except in the ordinary course of and pursuant to the reasonable requirements of
its business and upon fair and reasonable terms no less favorable to the Company
or such Subsidiary, as the case may be, than could be obtained in an arm's
length transaction with a person not an Affiliate.
(h) Stock and Equity Interests of Subsidiaries. Sell or otherwise
dispose of any shares of capital stock or other equity interests of any
Subsidiary (except (x) in connection with a merger or consolidation of a Wholly
owned Subsidiary permitted by Section 7.02(d) or with the dissolution of any
Subsidiary or (y) a sale in accordance with Section 7.02(e) of any equity
interest in any Subsidiary that is not material to the Company and its
Subsidiaries taken as a whole) or permit any Subsidiary to issue any additional
shares of its capital stock or other equity interests except pro rata to its
stockholders or equity holders.
(i) Environmental Matters. Violate any Environmental Law or incur
any liabilities under any Environmental Law, except to the extent that any such
violation or incurrence could not have a Material Adverse Effect.
Section 7.03. Financial Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and all reimbursement obligations
and performance of all other obligations of the Company hereunder (other than
Unmatured Surviving Obligations),
(a) Consolidated Stockholders' Equity. The Company will maintain
Consolidated Stockholders' Equity of not less than $235,000,000.
(b) Consolidated Senior Debt to Consolidated Stockholders' Equity
Ratio. The Company will maintain a ratio of Consolidated Senior Debt to
Consolidated Stockholders' Equity of not greater than 1.50:1.00.
(c) Consolidated Debt to Consolidated Stockholders' Equity Ratio.
The Company will maintain a ratio of Consolidated Debt to Consolidated
Stockholders' Equity of not greater than 2.00:1.00.
(d) Interest Coverage Ratio. The Company will not permit the ratio
of (i) the sum of Consolidated Funds from Operations and Consolidated Interest
Expense to (ii) Consolidated Interest Expense for the four quarter period ending
on the last day of each fiscal quarter to be less than 2.25:1.00.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01. Events of Default. If one or more of the following
events (each, an "Event of Default") shall occur:
(a) Default shall be made in the payment of any installment of
principal of any Committed Note or Money Market Note when due and payable,
whether at maturity, by notice of intention to prepay or otherwise; or
default shall be made in the payment of any installment of interest upon
any Note when due and payable, and such default shall have continued for
five days; or
(b) Default shall be made in the payment of the Facility Fee or any
other fee or amount payable hereunder when due and payable and such default
shall have continued for five days; or
(c) Default shall be made in the due observance or performance of any
term, covenant, or agreement contained in Section 7.01(g) or in Section
7.03; or
(d) Default shall be made in the due observance or performance of any
other term, covenant or agreement contained in this Agreement, and such
default shall have continued unremedied for a period of 30 days after any
officer of the Company becomes aware, or should have become aware, of such
default; or
(e) Any representation or warranty made or deemed made by the Company
herein or any statement or representation made in any certificate or report
delivered by or on behalf of the Company in connection herewith or in
connection with any Note shall prove to have been false or misleading in
any material respect when made; or
(f) Any obligation (other than its obligation hereunder) of the
Company or any of its Subsidiaries for the payment of Indebtedness in
excess of $5,000,000 is not paid when due or within any grace period for
the payment therefor or becomes or is declared to be due and payable prior
to the expressed maturity thereof, or there shall have occurred an event
which, with the giving of notice or lapse of time, or both, would cause any
such obligation to become, or allow any such obligation to be declared to
be, due and payable; or
(g) An involuntary case or other proceeding shall be commenced
against the Company or any Subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any applicable
Federal or State bankruptcy, insolvency, reorganization or similar law now
or hereafter in effect or seeking the appointment of a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed, or an order or decree
approving or ordering any of the foregoing shall be entered and continued
unstayed and in effect, in any such event, for a period of 60 days; or
(h) The commencement by the Company or any of its Subsidiaries of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by any of them to the entry of a decree or order for relief in
respect of the Company or any of its Subsidiaries in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against any of them, or the
filing by any of them of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by any of them to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any of its
Subsidiaries or any substantial part of their respective property, or the
making by any of them of an assignment for the benefit of creditors, or the
admission by any of them in writing of inability to pay their debts
generally as they become due, or the taking of corporate action by the
Company or any of its Subsidiaries in furtherance of any such action; or
(i) One or more judgments against the Company or any of its
Subsidiaries or attachments against its property, which in the aggregate
exceed $5,000,000, or the operation or result of which could be to
interfere materially and adversely with the conduct of the business of the
Company or any of its Subsidiaries, remain unpaid, unstayed on appeal,
undischarged, unbonded, or undismissed for a period of 60 days; or
(j) With respect to any Single-Employer Plan, any of the following
shall occur: (A) the filing with any affected party as such term is
defined in Section 4001 of ERISA of a notice of intent to terminate the
Plan, or receipt of notice of an application by the PBGC to institute
proceedings to terminate the Plan pursuant to Section 4042 of ERISA; in
each case, if the amount of unfunded benefit liabilities, as such term is
defined in Section 4001(a)(18) of ERISA, of the Plan as of the date such
event occurs is more than $5,000,000, (B) the Company or any ERISA
Affiliate incurs liability under Sections 4062(e), 4063 or 4064 of ERISA in
an amount in excess of $5,000,000, (C) an amendment is adopted to the Plan
which would require security to be given to the Plan pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA in an amount in
excess of $5,000,000, or (D) the Company or any ERISA Affiliate fails to
make a payment to the Plan which would give rise to a lien in favor of the
Plan under Section 302(f) of ERISA in an amount in excess of $5,000,000; or
(k) Any court or governmental or regulatory authority shall have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which prohibits, enjoins
or otherwise restricts in a manner that would have a Material Adverse
Effect on any of the lending transactions contemplated under the Credit
Documents; or
(l) The Company fails to maintain its status as a "real estate
investment trust", as such term is defined in the Code;
then (i) upon the happening of any of the foregoing Events of Default, the
obligation of the Banks to make any further Loans under this Agreement shall
terminate upon declaration to that effect delivered by the Agent or the Required
Banks to the Company and (ii) upon the happening of any of the foregoing Events
of Default which shall be continuing, the Notes shall become and be immediately
due and payable upon declaration to that effect delivered by the Agent or the
Required Banks to the Company; provided that upon the happening of any event
specified in Section 8.01(g) or (h), the Notes shall become immediately due and
payable and the obligation of the Banks to make any further Loans hereunder
shall terminate without declaration or other notice to the Company. The Company
expressly waives any presentment, demand, protest or other notice of any kind.
ARTICLE IX
THE AGENT AND THE BANKS
Section 9.01. The Agency and Co-Agency. (a) Each Bank appoints The
Bank of New York as its Agent hereunder and irrevocably authorizes the Agent to
take such action on its behalf and to exercise such powers hereunder as are
specifically delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental hereto, and the Agent hereby accepts such
appointment subject to the terms hereof. The relationship between the Agent and
the Banks shall be that of agent and principal only and nothing herein shall be
construed to constitute the Agent a trustee for any Bank nor to impose on the
Agent duties or obligations other than those expressly provided for herein.
(b) Each Bank appoints NationsBank as the Co-Agent hereunder and the
Co-Agent hereby accepts such appointment subject to the terms hereof. The Co-
Agent, as such, shall have no duties or obligations whatsoever under this
Agreement or any Loan Document or any other document or any matter related
hereto or thereto, but shall nevertheless be entitled to all of the indemnities
and other protection afforded to the Administrative Agent under this Article IX.
Section 9.02. The Agent's Duties. The Agent shall promptly forward
to each Bank copies, or notify each Bank as to the contents, of all notices and
other communications received from the Company pursuant to the terms of this
Agreement and the Notes and, in the event that the Company fails to pay when due
the principal of or interest on any Loan, the Agent shall promptly give notice
thereof to the Banks. As to any other matter not expressly provided for herein
or therein, the Agent shall have no duty to act or refrain from acting with
respect to the Company, except upon the instructions of the Required Banks. The
Agent shall not be bound by any waiver, amendment, supplement, or modification
of this Agreement or any Note which affects its duties hereunder and thereunder,
unless it shall have given its prior written consent thereto. The Agent shall
have no duty to ascertain or inquire as to the performance or observance of any
of the terms, conditions, covenants or agreements binding on the Company
pursuant to this Agreement or any Note nor shall it be deemed to have knowledge
of the occurrence of any Default or Event of Default (other than a failure of
the Company to pay when due the principal or interest on any Loan), unless it
shall have received written notice from the Company or a Bank specifying such
Default or Event of Default and stating that such notice is a "Notice of
Default".
Section 9.03. Sharing of Payment and Expenses. All funds for the
account of the Banks received by the Agent in respect of payments made by the
Company pursuant to, or from any Person on account of, this Agreement or any
Note shall be distributed forthwith by the Agent among the Banks, in like
currency and funds as received, ratably in proportion to their respective
interests therein. In the event that any Bank shall receive from the Company or
any other source any payment of, on account of, or for or under this Agreement
or any Note (whether received pursuant to the exercise of any right of set-off,
banker's lien, realization upon any security held for or appropriated to such
obligation or otherwise as permitted by law) other than in proportion to its Pro
Rata Share, then such Bank shall purchase from each other Bank so much of its
interest in obligations of the Company as shall be necessary in order that each
Bank shall share such payment with each of the other Banks in proportion to each
Bank's Pro Rata Share; provided that no Bank shall purchase any interest of any
Bank that does not, to the extent that it may lawfully do so, set-off against
the balance of any deposit accounts maintained with it the obligations due to it
under this Agreement. In the event that any purchasing Bank shall be required
to return any excess payment received by it, the purchase shall be rescinded and
the purchase price restored to the extent of such return, but without interest.
Section 9.04. The Agent's Liabilities. Each of the Banks and the
Company agrees that (i) neither the Agent in such capacity nor any of its
officers or employees shall be liable for any action taken or omitted to be
taken by any of them hereunder except for its or their own gross negligence or
wilful misconduct, (ii) neither the Agent in such capacity nor any of its
officers or employees shall be liable for any action taken or omitted to be
taken by any of them in good faith in reliance upon the advice of counsel,
independent public accountants or other experts selected by the Agent, and (iii)
the Agent in such capacity shall be entitled to rely upon any notice, consent,
certificate, statement or other document (including any telegram, cable, telex,
facsimile or telephone transmission) believed by it to be genuine and correct
and to have been signed and/or sent by the proper Persons.
Section 9.05. The Agent as a Bank. The Agent shall have the same
rights and powers hereunder as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" or "Banks", unless the
context otherwise indicated, include the Agent in its individual capacity. The
Agent may, without any liability to account, maintain deposits or credit
balances for, invest in, lend money to and generally engage in any kind of
banking business with the Company or any Subsidiary or affiliate of the Company
as if it were any other Bank and without any duty to account therefor to the
other Banks.
Section 9.06. Bank Credit Decision. Neither the Agent nor any of its
officers or employees has any responsibility for, gives any guaranty in respect
of, nor makes any representation to the Banks as to, (i) the condition, finan
cial or otherwise, of the Company or any Subsidiary thereof or the truth of any
representation or warranty given or made herein or in any other Credit Document,
or in connection herewith or therewith or (ii) the validity, execution, suffic
iency, effectiveness, construction, adequacy, enforceability or value of this
Agreement or any other Credit Document or any other document or instrument
related hereto or thereto. Except as specifically provided herein and in the
other Credit Documents to which the Agent is a party, the Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Bank with any credit or other information with respect to the operations,
business, property, condition or creditworthiness of the Company or any of its
Subsidiaries, whether such information comes into the Agent's possession on or
before the date hereof or at any time thereafter. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other Bank,
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will independently and without reliance upon the Agent or
any other Bank, 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 this Agreement or any Note.
Section 9.07. Indemnification. Each Bank agrees (which agreement
shall survive payment of the Loans and the Notes) to indemnify the Agent, to the
extent not reimbursed by the Company, ratably in accordance with their
respective Commitments, from and against any and all liabilities, obligations,
losses, claims, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Credit Document, or any action taken or omitted
to be taken by the Agent hereunder or thereunder; provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the gross negligence or wilful misconduct of the Agent or any of its
officers or employees. Without limiting the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Agent in such
capacity in connection with the preparation, execution or enforcement of, or
legal advice in respect of rights or responsibilities under, this Agreement or
any Note or any amendments or supplements hereto or thereto, to the extent that
the Agent is not reimbursed for such expenses by the Company.
Section 9.08. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Company. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required Banks
and shall have accepted such appointment within 30 days after the resigning
Agent's giving of notice of resignation, or the Required Banks' giving notice of
removal, as the case may be, the resigning Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigned or removed Agent, and the resigned or
removed Agent shall be discharged from its duties and obligations under this
Agreement. After any Agent's resignation hereunder as Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
ARTICLE X
CONSENT TO JURISDICTION; JUDGMENT CURRENCY
Section 10.01. Consent to Jurisdiction. The Company hereby
irrevocably submits to the non-exclusive jurisdiction of the State of New York
for the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Agreement and each Note. The Company hereby appoints CT
Corporation System, Inc., with offices on the date hereof at 1633 Broadway, New
York, New York 10019, as its authorized agent on whom process may be served in
any action which may be instituted against it by the Agent or the Banks in any
state or federal court in the Borough of Manhattan, The City of New York,
arising out of or relating to any Loan or this Agreement and each Note. Service
of process upon such authorized agent and written notice of such service to the
Company shall be deemed in every respect effective service of process upon the
Company, and the Company hereby irrevocably consents to the jurisdiction of any
such court in any such action and to the laying of venue in the Borough of
Manhattan, The City of New York. The Company hereby irrevocably waives any
objection to the laying of the venue of any such suit, action or proceeding
brought in the aforesaid courts and hereby irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Notwithstanding the foregoing, nothing herein shall in any
way affect the right of the Agent or any Bank to bring any action arising out of
or relating to the Loans or this Agreement and each Note in any competent court
elsewhere having jurisdiction over the Company or its property.
ARTICLE XI
MISCELLANEOUS
Section 11.01. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
UNITED STATES OF AMERICA.
Section 11.02. Set-off. Each Bank is authorized to set off and apply
any and all deposits at any time held by such Bank against obligations of the
Company under the Credit Documents.
Section 11.03. Expenses. The Company agrees to pay (i) all
reasonable out-of-pocket fees and expenses of the Agent and the Arranger
(including the reasonable out-of-pocket fees and expenses of Sullivan &
Cromwell, as counsel to the Agent and the Arranger) in connection with the
preparation and negotiation of this Agreement and the other Credit Documents,
any amendments, supplements or modifications hereto or thereto, in each case
whether or not the transactions contemplated hereby or thereby are consummated
and in connection with the consummation of the transactions contemplated hereby
or thereby (ii) all reasonable out-of-pocket fees and expenses incurred by the
Agent and any Bank, including reasonable out-of pocket fees and disbursements of
counsel, in connection with the execution, administration and enforcement of any
provisions of this Agreement, the Notes or any amendment or supplement hereto or
thereto and (iii) all reasonable out-of-pocket fees and expenses of the Agent
and the Arranger, including reasonable out-of-pocket fees and disbursements of
counsel, in connection with the syndication of the Loans. The Company shall pay
any transfer taxes, documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of this Agreement
or the Notes.
Section 11.04. Amendments. Any provision of this Agreement or the
Notes may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Company and the Required Banks (and, if the rights
or duties of the Agent are affected thereby, by the Agent); provided that no
such amendment, waiver or modification shall, unless signed by all the Banks,
(i) increase or decrease the Commitment of any Bank, subject any Bank to any
additional obligation or change the several nature or the obligations of each
Bank, (ii) reduce the principal of or rate of interest on any Loan (other than
interest payable pursuant to Section 3.05) or any fees hereunder, (iii) except
as otherwise provided in Section 11.12, postpone the date fixed for any payment
of principal of or interest on any Loan or any fees hereunder or for any
reduction or termination of any Commitment, (iv) except as otherwise may result
from actions taken in accordance with Section 11.12, change the percentage of
any of the Commitments or of the aggregate unpaid principal amount of the Notes,
or the number of Banks, which shall be required for the Banks or any of them to
take any action under this Section or any other provision of this Agreement, or
(v) amend or waive the provisions of Article IV or of this Section 11.04.
Section 11.05. Cumulative Rights and No Waiver. Each and every right
granted to the Agent and the Banks hereunder or under any other document
delivered hereunder or in connection herewith, or allowed them by law or equity,
shall be cumulative and may be exercised from time to time. No failure on the
part of the Agent or any Bank to exercise, and no delay in exercising, any right
will operate as a waiver thereof, nor will any single or partial exercise by the
Agent or any Bank of any right preclude any other or future exercise thereof or
the exercise of any other right.
Section 11.06. Notices. Any communication, demand or notice to be
given hereunder or with respect to the Notes will be duly given when delivered
in writing or by telecopy to a party at its address as indicated below, except
that notices from the Company pursuant to Sections 2.02 or 2.06 will not be
effective until received by the Agent.
A communication, demand or notice given pursuant to this Section 11.06
shall be addressed:
If to the Company, at
MacArthur Court
9th Floor
Newport Beach, California 92660
Telecopy: (714) 221-0607
Attention: Treasurer
with copies to:
Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, California 90071
Telecopy: (213) 891-8763
Attention: Glen B. Collyer
If to the Agent, at its address as indicated on the signature pages
hereof, with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Telecopy: (213) 683-0457
Attention: Alison S. Ressler
If to any Bank, at its address as indicated on the signature pages
hereof.
Unless otherwise provided to the contrary herein, any notice which is
required to be given in writing pursuant to the terms of this Agreement may be
given by telex, telecopy or facsimile transmission.
Section 11.07. Separability. In case any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
Section 11.08. Assignments and Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Company and the Banks and
their respective successors and assigns, except that the Company may not assign
any of its rights hereunder without the prior written consent of the Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. Each Bank agrees to give to the Company, with a copy
to the Agent, prior written notice of any grant of a participating interest
hereunder, which notice shall include the name of the Participant and the amount
of the interest being granted. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Company and the Agent, such Bank shall remain responsible for the performance of
its obligations hereunder, and the Company and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Company
hereunder including the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such participation agreement
may provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clauses (i) through (vi), inclusive, of
Section 11.04 without the consent of the Participant. Subject to
Section 11.08(e), the Company agrees that each Participant shall be entitled to
the benefits of Sections 4.03, 4.04 and 11.04 with respect to its participating
interest. An assignment or other transfer which is not permitted by clause (c)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this clause (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an instrument executed by
such Assignee and such transferor Bank, with (and subject to) the signed consent
of the Company and the Agent (which consent shall not be unreasonably withheld);
provided, however, any such assignment shall be in the minimum aggregate amount
of $10,000,000; provided, further, that the foregoing consent requirement shall
not be applicable in the case of, and this subsection (c) shall not restrict, an
assignment or other transfer by any Bank to an affiliate of such Bank or to a
Federal Reserve Bank. Upon (i) execution and delivery of such an instrument,
(ii) payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee and
(iii) payment by the transferee Bank or transferor Bank to the Agent of an
administrative fee in the amount of $1,500, such Assignee shall be a Bank party
to this Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Company shall make appropriate arrangements so that, if
required, new Notes are issued to the Assignee.
(d) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 4.03 or 4.04 than
such Bank would have been entitled to receive with respect to the rights trans
ferred, unless such transfer is made with the Company's prior written consent or
by reason of the provisions of Section 4.04 requiring such Bank to designate a
different lending office under certain circumstances or at a time when the
circumstances giving rise to such payment did not exist.
(e) No Participant of any Bank shall be entitled to receive any
greater payment under Section 4.03, Section 4.04 or Section 11.04 than such Bank
would have been entitled to receive if it had not granted a participation to
such Participant.
Section 11.09. WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT AND EACH
OF THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT, THE NOTES OR THE RELATIONSHIPS ESTABLISHED HEREUNDER.
Section 11.10. Confidentiality. Except as may be required to enforce
the rights and duties established hereunder, the parties hereto shall preserve
in a confidential manner all information received from the other pursuant to
this Agreement, the Notes and the transactions contemplated hereunder and
thereunder, and shall not disclose such information except to those persons with
which a confidential relationship is maintained (including regulators,
affiliates, legal counsel, accountants, or designated agents), or where required
by law.
Section 11.11. Indemnity. The Company agrees to indemnify the Agent
and each of the Banks and their respective directors, officers, employees and
agents (each such person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages and liabilities of
any party other than the Company and related expenses, including reasonable
counsel fees and expenses incurred by or asserted against any Indemnitee arising
out of, in any way connected with, or as a result of (i) the execution or
delivery of this Agreement or any Note or any agreement or instrument
contemplated hereby or thereby, the performance by the parties thereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions and the other transactions contemplated hereby or thereby, (ii) the
use of the proceeds of the Loans or (iii) any claim, litigation, investigation,
or proceeding relating to any of the foregoing, whether or not any Indemnitee is
a party thereto and notwithstanding that any claim, proceeding, investigation or
litigation relating to any such losses, claims, damages, liabilities or expenses
is or was brought by a shareholder, creditor, employee or officer of the
Company; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of any Indemnitee.
The provisions of this Section 11.11 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the reduction or cancellation of the Commitment,
the invalidity or unenforceability of any term or provision of this Agreement or
any Note, or any investigation made by or on behalf of the Banks. All amounts
due under this Section 11.11 shall be payable in immediately available funds
upon written demand therefor.
Section 11.12. Extension of Termination Dates; Removal of Banks;
Substitutions of Banks. (a) The Company may at its option, request all the
Banks then party to this Agreement to extend their scheduled Termination Dates
by 364 calendar days by means of a letter in substantially the form of Exhibit
I, addressed to each such Bank and the Agent. Not later than 30 days after
receipt of the request to extend the Termination Dates, each such Bank electing
(in its sole discretion) so to extend its scheduled Termination Date shall
execute and deliver counterparts of such letter to the Company and the Agent,
whereupon (unless Banks with an aggregate percentage of the Total Commitment in
excess of 25% decline to extend their respective scheduled Termination Dates, in
which event the Agent shall notify all the Banks thereof), such Bank's scheduled
Termination Date shall be extended by 364 calendar days so as to fall in October
of the year immediately succeeding such Bank's then-current scheduled
Termination Date.
(b) With respect to any Bank which has declined to extend such Bank's
scheduled Termination Date and Banks with an aggregate percentage of the Total
Commitment not in excess of 25% have not declined to extend their respective
Termination Dates, the Company may in its discretion, upon not less than 30
days' prior written notice to the Agent and each Bank, remove such Bank as a
party hereto. Each such notice shall specify the date of such removal (which
shall be a Business Day), which shall thereupon become the scheduled Termination
Date for such Bank.
(c) In the event that any Bank does not extend its scheduled
Termination Date pursuant to subsection (a) above or is the subject of a notice
of removal pursuant to subsection (b) above, then, at any time prior to the
Termination Date for such Bank (a "Terminating Bank"), the Company may, at its
option, arrange to have one or more other financial institutions acceptable to
the Agent (which may be a Bank or Banks and each of which shall herein be called
a "Successor Bank") succeed to all or a percentage of the Terminating Bank's
outstanding Loans, if any, and rights under this Agreement and assume all or a
like percentage (as the case may be) of such Terminating Bank's Commitment and
other obligations hereunder, as if (i) in the case of any Bank electing not to
extend its scheduled Termination Date pursuant to subsection (a) above, such
Successor Bank had extended its scheduled Termination Date pursuant to such
subsection (a) and (ii) in the case of any Bank that is the subject of a notice
of removal pursuant to subsection (b) above, no such notice of removal had been
given by the Company. Such succession and assumption shall be effected by means
of one or more agreements supplemental to this Agreement among the Terminating
Bank, the Successor Bank, the Company and the Agent. On and as of the effective
date of each such supplemental agreement, each Successor Bank party thereto
shall be and become a Bank for all purposes of this Agreement and to the same
extent as any other Bank hereunder and shall be bound by and entitled to the
benefits of this Agreement in the same manner as any other Bank.
(d) On the Termination Date for any Terminating Bank, such
Terminating Bank's Commitment shall terminate and, except to the extent assigned
pursuant to subsection (c) above, the Company shall pay in full all of such
Terminating Bank's Loans and all other amounts payable to such Bank hereunder,
including any amounts payable pursuant to Section 4.3 on account of such
payment.
(e) To the extent that all or a portion of any Terminating Bank's
obligations are not assumed pursuant to subsection (c) above, the Total
Commitment shall be reduced on the applicable Termination Date and each Bank's
percentage of the reduced Total Commitment shall be revised pro rata to reflect
such Terminating Bank's absence.
Section 11.13. Knowledge of the Company. As used in this Agreement,
knowledge of the Company shall mean to the best of any officer's knowledge,
after a reasonable investigation.
Section 11.14. Execution in 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 the counterparts shall together constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
HEALTH CARE PROPERTY INVESTORS, INC.
By: /s/ Devasis Ghose
--------------------------
Name: Devasis Ghose
Title: Senior Vice President
THE BANK OF NEW YORK,
as Agent for the Banks
By: /s/ Jonathan Rollins
--------------------------
Name: Jonathan Rollins
Title: Assistant Vice President
Address for Notices:
One Wall Street
18th Floor
New York, NY 10286
Attn:
Fax:
With a copy to:
The Bank of New York
10990 Wilshire Boulevard
Suite 1700
Los Angeles, CA 90024
Attn:
Fax:
Commitment: $10,000,000 THE BANK OF NEW YORK
as a Bank
By: /s/ Jonathan Rollins
--------------------------
Name: Jonathan Rollins
Title: Assistant Vice
President
Address for Notices:
One Wall Street
18th Floor
New York, NY 10286
Attn:
Fax:
With a copy to:
The Bank of New York
10990 Wilshire Boulevard
Suite 1700
Los Angeles, CA 90024
Attn:
Fax:
Eurodollar Lending Office:
One Wall Street
18th Floor
New York, NY 10286
Attn:
Fax:
Commitment: $5,000,000 THE SUMITOMO BANK, LIMITED
as a Bank
By: /s/ Goro Hirai
--------------------------
Name: Goro Hirai
Title: Bank General Manager
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
Commitment: $5,000,000 BANK OF MONTREAL
as a Bank
By:/s/ Peter W. Steelman
--------------------------
Name: Peter W. Steelman
Title: Director
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
Commitment: $5,000,000 KREDIETBANK, N.V.
as a Bank
By: /s/ Tod R. Angus
--------------------------
Name: Tod R. Angus
Title: Vice President
By: /s/ Michael V. Curran
--------------------------
Name: Michael V. Curran
Title: Vice President
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
Commitment: $10,000,000 WELLS FARGO BANK
as a Bank
By:/s/ Stephen R. Watt
-------------------------
Name: Stephen R. Watt
Title: Vice President
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
Commitment: $5,000,000 Bank of Hawaii
as a Bank
By:/s/ Robert M. Wheeler III
--------------------------
Name: Robert M. Wheeler III
Title:Vice President
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
Commitment: $10,000,000 NATIONSBANK OF TEXAS, N.A.
as a Bank
By:/s/ Keith Fern
--------------------------
Name: Keith Fern
Title: Vice President
Address for Notices:
Attn:
Fax:
With a copy to:
Attn:
Fax:
Eurodollar Lending Office:
Attn:
Fax:
<PAGE>
EXHIBIT A
FORM OF CONVERSION/CONTINUANCE REQUEST
[Dated as provided
in Section 3.04]
The Bank of New York
c/o The Bank of New York Representative Office
10990 Wilshire Boulevard, Suite 1700
Los Angeles, California 90024
Attn: __________________
Health Care Property Investors, Inc. (the "Company") hereby gives
notice of its intention to [convert/continue] [$___________] [the entire
outstanding amount] of its [ABR Loans] [Eurodollar Loans] with an Interest
Period of ____ days and ending on __________, ____] [to/as] [ABR Loans]
[Eurodollar Loans], pursuant to the $50,000,000 Revolving Credit Agreement,
dated as of October 22, 1997, among the Company, the Banks, The Bank of New
York, as Agent and NationsBank of Texas, N.A., as Co-Agent(as amended,
supplemented or otherwise modified from time to time, the "Agreement"), such
[conversion/continuance] to be effective as of ___________, ____. [The Interest
Period for the Eurodollar Loans shall be _____ days.]
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF COMMITTED LOAN REQUEST
[Dated as provided
in Section 2.02]
The Bank of New York
c/o Bank of New York Representative Office
10990 Wilshire Boulevard, Suite 1700
Los Angeles, California 90024
Attn: ____________________
Health Care Property Investors, Inc. (the "Company") hereby gives
notice of its intention to borrow $____________ of Loans on _________, ____
pursuant to the $50,000,000 Revolving Credit Agreement, dated as of October 22,
1997, among the Company, the Banks, The Bank of New York, as Agent and
NationsBank of Texas, N.A., as Co-Agent (as amended, supplemented or otherwise
modified from time to time, the "Agreement").
The Company hereby confirms that the amounts of Loans and Money Market
Loans outstanding on the date hereof is as follows:
Total Commitment $__________
Outstanding Committed Loans $__________
Outstanding Money Market Loans $__________
Availability $__________
The Company also hereby confirms that each of the representations and
warranties (other than the representations and warranties that speak as of a
specific date) contained in Article V of the Agreement is true and correct on
the date hereof and, after giving effect to this borrowing, will be true and
correct on the proposed borrowing date as though such representation or warranty
had originally been made on such dates. No Default or Event of Default has
occurred and is continuing, nor will any such event occur as a result of this
borrowing.
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF MONEY MARKET NOTICE
[Dated as provided
in Section 2.06(a)]
The Bank of New York, as Agent
c/o Bank of New York Representative Office
10990 Wilshire Boulevard, Suite 1700
Los Angeles, California 90024
Attn: ____________________
Pursuant to the $50,000,000 Revolving Credit Agreement, dated as of
October 22, 1997, among Health Care Property Investors, Inc. (the "Company"),
the banks named therein, The Bank of New York, as Agent, and NationsBank of
Texas, N.A., as Co-Agent (as amended, supplemented or otherwise modified from
time to time, the "Agreement"), the Company and the banks named below hereby
give notice of their agreement to complete a Money Market Borrowing consisting
of the Money Market Loans described below.
Money Market Funding Date:
[Duplicate for each Money Market Loan:]
Bank:
Principal Amount:
Maturity:
Aggregate Principal Amount:
The Company also hereby confirms, for the benefit of the Agent and the
Bank making such Money Market Loan, if such bank so requires, that each of the
representations and warranties (other than the representations and warranties
that speak as of a specific date) contained in Article V of the Agreement is
true and correct on the date hereof and, after giving effect to this borrowing,
will be true and correct on the proposed borrowing date as though such
representation or warranty had originally been made on such dates. No Default
or Event of Default has occurred and is continuing, nor will any such event
occur as a result of this borrowing.
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
Exhibit D
Form of Money Market Confirmation
[Date]
Health Care Property Investors, Inc.
10990 Wilshire Boulevard
Suite 1200
Los Angeles, California 90024
Attention:____________
Ladies and Gentlemen:
This instrument constitutes a Money Market Confirmation under, and as
defined by, the $50,000,000 Revolving Credit Agreement, dated as of October 22,
1997 (as amended, modified or supplemented, the "Credit Agreement") among Health
Care Property Investors, Inc. (the "Company"), The Bank of New York, in its
individual corporate capacity and as Agent, and certain financial institutions
referred to therein. Terms not otherwise expressly set forth herein shall have
the meanings set forth in the Credit Agreement.
The undersigned Bank hereby confirms to the Company that the Bank has
agreed to make, and the Company has agreed to accept, [a] Money Market Loan[s]
as follows:
..
[Money Market Loan no. ___*]
(a) Principal Amount:
(b) Funding Date:
(c) Loan Period (not to exceed 270 days):
(d) Interest Rate:
By acknowledgement of this Confirmation and acceptance of funds
pursuant to the Money Market Loan, the Company confirms that [(i) each of the
representations and warranties (other than the representations and warranties
that speak as of a specific date) contained in Article V of the Agreement is
true and correct on the date hereof and, after giving effect to this borrowing,
will be true and correct on the proposed borrowing date as though such
representation or warranty had originally been made on such dates and (ii)] no
Default or Event of Default has occurred and is continuing, nor will any such
event occur as a result of this borrowing.
[NAME OF BANK]
By: __________________________
Name:
Title:
Acknowledged and accepted:
HEALTH CARE PROPERTY INVESTORS, INC.
By: __________________________
Name:
Title:
<PAGE>
EXHIBIT E
FORM OF COMMITTED NOTE
$__________ ___________, 1997
HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation (the
"Company"), for value received, hereby promises to pay on the Termination Date
to the order of (the "Bank"), at the office of The Bank of
New York, as Agent, at One Wall Street, 22nd Floor, New York, New York 10286, in
lawful money of the United States, the principal sum of $__________, or if less,
the aggregate unpaid principal amount of all Committed Loans made by the Bank to
the Company pursuant to the Agreement (hereinafter defined), without relief from
valuation and appraisement laws.
This Note shall bear interest, and such interest shall be payable, as
set forth in the Agreement for ABR Loans and Eurodollar Loans. Upon the
occurrence and during the continuation of an Event of Default, this Note shall
bear interest at the default rate pursuant to Section 3.05 of the Agreement.
Except as otherwise provided in the Agreement, with respect to
Eurodollar Loans, if interest or principal on the Loan evidenced by this Note
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day, and interest
shall be payable thereon at the rate herein specified during such extension.
This Note is one of the Committed Notes referred to in a $50,000,000
Revolving Credit Agreement, dated as of October 22, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Agreement"), among
the Company, the Banks, The Bank of New York, as Agent, and NationsBank of
Texas, N.A. as Co-Agent, and is subject to prepayment in whole or in part and
its maturity is subject to acceleration upon the terms provided in the
Agreement. Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
The Bank is hereby authorized to record on the schedule annexed
hereto, and any continuation sheets which the Bank may attach hereto, (i) the
date and amount of each Committed Loan made by the Bank, (ii) the character
thereof as an ABR Loan, a Eurodollar Loan or a combination thereof, (iii) the
interest rate (without regard to the Applicable Margin and Interest Period (if
any) applicable to each Eurodollar Loan), and (iv) the date and amount of each
conversion of, and each payment or prepayment of principal of, any such
Committed Loan. No failure to record or any error in so recording shall affect
the obligation of the Company to repay the Committed Loans, together with
interest thereon, as provided in the Agreement, and the outstanding principal
balance of the Committed Loans made by the Lender as set forth in such schedule
shall be presumed correct absent manifest error.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
All Committed Loans made by the Bank to the Company pursuant to the
Agreement and all payments of principal hereof and interest thereon may be
indicated by the Bank upon the grid attached hereto which is a part of this
Note. Such notations shall be presumptive as to the aggregate unpaid principal
amount of and interest on all Loans made by the Bank pursuant to the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
Loan and Payments of Principal and Interest
<TABLE>
<CAPTION>
Interest Interest Name of
Method Period (if Amount of Unpaid Amount of Person
Amount (ABR or (Eurodollar Principal Principal Interest Making
Date of Loan Eurodollar) Loan) Paid Balances Paid Notation
- - ----- -------- ----------- ------------ --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
EXHIBIT F
FORM OF MONEY MARKET NOTE
$____________ ___________, 1997
HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation (the
"Company"), for value received, hereby promises to pay on the Termination Date
to the order of
(the "Bank"), at the office of the Bank, located at
____________________________________, in lawful money of the United States, the
principal sum of $50,000,000, or if less, the aggregate unpaid principal amount
of all Money Market Loans made by the Bank to the Company pursuant to the
Agreement (hereinafter defined), without relief from valuation and appraisement
laws.
This Note shall bear interest, and such interest shall be payable, as
set forth in the Money Market Confirmations given by the Bank to the Company
pursuant to the Agreement. Upon the occurrence and during the continuation of
an Event of Default, this Note shall bear interest at the default rate pursuant
to Section 3.05 of the Agreement.
Except as otherwise provided in the Agreement, if interest or
principal on the Loan evidenced by this Note becomes due and payable on a day
which is not a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and interest shall be payable thereon at the rate
herein specified during such extension.
This Note is one of the Money Market Notes referred to in the
$50,000,000 Revolving Credit Agreement, dated as of October 22, 1997 (as
amended, supplemented or otherwise modified from time to time, the "Agreement"),
among the Company, the Banks, The Bank of New York, as Agent, and NationsBank of
Texas, N.A., as Co-Agent, and is subject to prepayment in whole or in part and
its maturity is subject to acceleration upon the terms provided in the
Agreement. Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
The Bank is hereby authorized to record on the schedule annexed
hereto, and any continuation sheets which the Bank may attach hereto, (i) the
date and amount of each Money Market Loan made by the Bank, (ii) loan period of
such Money Market Loan, (iii) the characterization of the Money Market Loan,
including any election to compute amounts payable on such Money Market Loan by
reference to amounts payable on an ABR Loan or a Eurodollar Loan under the
Agreement, (iv) the interest rate (without regard to the Applicable Margin and
Interest Period (if any) applicable to any Money Market Loan), and (v) the date
and amount of each payment or prepayment of principal of and (to the extent
permitted pursuant to applicable Money Market Confirmations) each conversion of,
any such Money Market Loan. No failure to record or any error in so recording
shall affect the obligation of the Company to repay the Money Market Loans,
together with interest thereon, as provided in the Agreement, and the
outstanding principal balance of the Money Market Loans made by the Lender as
set forth in such schedule shall be presumed correct absent manifest error.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
All Money Market Loans made by the Bank to the Company pursuant to the
Agreement and all payments of principal hereof and interest thereon may be
indicated by the Bank upon the grid attached hereto which is a part of this
Note. Such notations shall be presumptive as to the aggregate unpaid principal
amount of and interest on all Money Market Loans made by the Bank pursuant to
the Agreement.
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
<PAGE>
Loan and Payments of Principal and Interest
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
EXHIBIT G
Form of Opinion of Latham & Watkins LLP
<PAGE>
EXHIBIT H
Form of Opinion of Ballard, Spahr, Andrews & Ingersoll
<PAGE>
EXHIBIT I
Form of Extension Letter
__________, ____
The Bank of New York, as Agent
c/o Bank of New York Representative Office
10990 Wilshire Boulevard, Suite 1700
Los Angeles, California 90024
[Names and addresses of other Banks]
Reference is made to the $50,000,000 Revolving Credit Agreement, dated
as of October 22, 1997 (as amended, supplemented or otherwise modified from time
to time, the "Agreement"), among Health Care Property Investors, Inc. (the
"Company"), the banks named therein, The Bank of New York, as Agent, and
NationsBank of Texas, N.A. as Co-Agent. Terms herein not otherwise defined
shall have the meanings set forth in the Agreement.
Pursuant to Section 11.12 of the Agreement, the Company hereby
requests all the Banks then party to this Agreement to extend their scheduled
Termination Dates by 364 calendar days.
The Company confirms (i) that each of the representations and
warranties (other than the representations and warranties that speak as of a
specific date) contained in Article V of the Agreement is true and correct on
the date hereof and, after giving effect to this extension, will be true and
correct on the date upon which the extension will be effective as though such
representation or warranty had originally been made on such dates and (ii) no
Default or Event of Default has occurred and is continuing, nor will any such
event occur as a result of this extension.
Very truly yours,
HEALTH CARE PROPERTY INVESTORS, INC.
By:_______________________
Name:
Title:
*Duplicate as necessary for Banks making more than one Money Market Loan
pursuant to a Money Market Borrowing.
HEALTH CARE PROPERTY INVESTORS, INC.
SECOND AMENDED AND RESTATED
DIRECTOR DEFERRED COMPENSATION PLAN
ELIGIBILITY. Each member of the Board of Directors (the "Board") of Health
Care Property Investors, Inc. (the "Company") who is not an employee of the
Company (a "Director") shall be eligible to participate in this Second Amended
and Restated Director Deferred Compensation Plan of the Company (the "Plan"),
pursuant to the terms and conditions described herein.
PARTICIPATION.
(a) DEFERRED COMPENSATION. At any time, a Director may elect to
participate in the Plan by directing that all or any portion of the compensation
which the Director may thereafter earn for services as a Director (including the
Director's retainer and any fees payable for services as a member of a committee
of the Board) shall be credited to an account or accounts subject to the terms
of the Plan. Any Director who elects to participate in the Plan is hereinafter
referred to as a "Participant".
(i) A Director's election to defer the Director's fees shall
be in the form of a document, similar to Exhibit A-1 attached, executed by a
Director and shall become effective at the first day of the fiscal quarter
beginning immediately following the date on which the Company receives such
notice, or on the first day of such later fiscal quarter as may be designated in
the notice of election to defer compensation. "Fiscal quarter" shall mean any
quarter of the fiscal year adopted by the Company for reporting its financial
condition and operating results.
(ii) A Director's election to defer compensation under the
Plan shall continue in effect until the Director ceases to be a Director, or
until the date the Director terminates such election, in whole or in part, by
written notice filed with the Company. Any such termination, in whole or in
part, shall become effective at the close of the fiscal quarter ending
immediately following the date on which the Company receives such notice, or at
the end of such later fiscal quarter as may be designated in the notice of
termination.
(iii) A Participant who has filed an election to terminate
deferrals of compensation under the Plan may thereafter file an election to
recommence such deferrals with respect to any future compensation earned by him
for services to the Company or any subsidiary thereof pursuant to the foregoing
provisions of the Plan.
(b) ACCRUED RETIREMENT BENEFITS. Upon termination of the
Company's Retirement Plan for Outside Directors (the "Retirement Plan") with the
approval of the Board and the consent of each participant therein and the
concurrent adoption of the Second Amended and Restated Directors Stock Incentive
Plan by the Company's stockholders, all accrued benefits (the "Retirement
Amount") for each Director who was formerly a participant in the Retirement Plan
shall be credited to accounts under this Plan and subject to the terms of this
Plan. Upon such termination of the Retirement Plan and crediting of accounts
under this Plan, no further benefits will accrue under the Retirement Plan and
no Director shall have any rights thereunder. Each Director who was formerly a
participant in the Retirement Plan shall make an election directing that his
Retirement Amount be allocated to an account or accounts under this Plan. Such
allocation election shall be made by the delivery to the Company by such
Director of a written allocation substantially in the form of Exhibit A-2
attached, and shall become effective upon the approval of the Committee in its
sole discretion and as of the date of such approval. "Committee" shall mean the
Compensation Committee of the Board (or another committee of the Board assuming
the functions of the Committee under this Plan), which shall consist solely of
two members appointed by and holding office at the pleasure of the Board, each
of whom is both an "outside director" for purposes of Section 162(m) of the Code
and a "non-employee director" as defined by Rule 16b-3 under the Securities
Exchange Act of 1934 ("Rule 16b-3"). The Committee may include more than two
members appointed by the Board so long as such additional members are "outside
directors" for purposes of Section 162(m) of the Code and are either a "non-
employee director" as defined by Rule 16b-3 or, if not a "non-employee director"
at the time of any Incentive Award grant, such director otherwise satisfies an
exemption under Rule 16b-3.
1. INTEREST RATE ACCOUNTS AND STOCK CREDIT ACCOUNTS.
(a) DEFERRED COMPENSATION ACCOUNTS: Upon electing to defer
compensation under the Plan, each Participant shall designate the amount of such
compensation which shall be credited to the Participant's "Deferred Compensation
Interest Rate Account" or "Deferred Compensation Stock Credit Account" (the
Deferred Compensation Interest Rate Accounts and Deferred Compensation Stock
Credit Accounts are sometimes hereinafter referred to collectively as the
"Deferred Compensation Accounts") as follows:
(i) DEFERRED COMPENSATION INTEREST RATE ACCOUNTS: The
Participant's Deferred Compensation Interest Rate Account shall be credited, as
of the date on which the Participant would otherwise have been entitled to
receive such deferred compensation, with the amount of compensation directed to
be deferred and credited to the Participant's Deferred Compensation Interest
Rate Account.
(ii) DEFERRED COMPENSATION STOCK CREDIT ACCOUNTS: The
Participant's Deferred Compensation Stock Credit Account shall be credited, as
of the first payment date for regular quarterly dividends paid to holders of the
Company's Common Stock ("Common Stock") following when the Participant would
otherwise have been entitled to receive such deferred compensation, with a
number of units equal to the number of shares of Common Stock (including
fractions of units reflecting fractions of shares) that could have been
purchased at the average of the closing price of Common Stock (as reported in
The Wall Street Journal, "Closing Price") on each business day during the
immediately preceding 10 business days (the "Average Closing Price") with the
amount of compensation directed to be deferred and credited to Participant's
Deferred Compensation Stock Credit Account.
(b) RETIREMENT BENEFITS ACCOUNTS: Upon the transfer of the
accrued benefits under the Retirement Plan as provided in Section 2(b) above,
each Director who was formerly a participant in the Retirement Plan shall
designate that their Retirement Amount shall be credited to either or both of
the Participant's "Retirement Benefits Interest Rate Account" or "Retirement
Benefits Stock Credit Account" (the Retirement Benefits Interest Rate Accounts
and the Retirement Benefits Stock Credit Accounts are sometimes collectively
referred to herein as the "Retirement Benefits Accounts") as follows:
(i) RETIREMENT BENEFITS INTEREST RATE ACCOUNTS: Each
Director who was formerly a participant in the Retirement Plan shall have
credited to his Retirement Benefits Interest Rate Account all or such portion of
the Retirement Amount as shall be designated by such Director in his allocation
election.
(ii) RETIREMENT BENEFITS STOCK CREDIT ACCOUNTS: Each
Director who was formerly a participant in the Retirement Plan shall have
credited to his Retirement Benefits Stock Credit Account, as of the date of
approval by the Committee of such Director's written allocation as provided in
Section 2(b), with a number of units equal to the number of shares of Common
Stock (including fractions of units reflecting fractions of shares) that could
have been purchased at the average of the Closing Price on each business day
during the 10 business days immediately preceding the date of such allocation
with such portion of the Retirement Amount as shall be designated by such
Director in his allocation election.
(c) THE PLAN ACCOUNTS: The Deferred Compensation Accounts and the
Retirement Benefits Accounts (sometimes collectively referred to herein as the
"Plan Accounts") shall be held by the Company in its general funds, shall be
credited to an account or accounts, as applicable, in the name of each
participant and shall earn a rate of return as described herein.
(d) THE INTERST RATE ACCOUNTS: The Deferred Compensation Interest
Rate Accounts and the Retirement Benefits Interest Rate Accounts (sometimes
collectively referred to herein as, the "Interest Rate Accounts") shall, based
on the Participant's Interest Rate Account balance at the beginning of each
fiscal quarter, be credited at the end of each fiscal quarter with an interest
equivalent to be calculated quarterly on the basis of one quarter of the
percentage rate which is equal to one point below the prime interest rate
charged by Bank of New York on the last day of the fiscal quarter or such other
rate as may be set from time to time by the Compensation Committee.
(e) THE STOCK CREDIT ACCOUNTS: The Deferred Compensation Stock
Credit Accounts and the Retirement Benefits Stock Credit Accounts (sometimes
collectively referred to herein as, the "Stock Credit Accounts") shall:
(i) As of the date any dividend is paid to holders of Common
Stock, the Participant's Stock Credit Account shall also be credited with an
additional number of units equal to the number of shares of Common Stock
(including fractions of units reflecting fractions of shares) that could have
been purchased at the Average Closing Price of Common Stock as of such date with
the dividend paid on the number of shares of Common Stock to which the
Participant's Stock Credit Account is then equivalent (but not taking into
account any units credited the same day pursuant to Sections 3(a)(ii) and
(b)(ii)). In case of any dividends paid in property, the dividend shall be
deemed to be the fair market value of the property at the time of distribution
of the dividend, as determined by the Committee.
(ii) If at any time the number of outstanding shares of
Common Stock shall be increased as the result of any stock dividend, subdivision
or reclassification of shares, the number of shares of Common Stock to which
each Participant's Stock Credit Account is equivalent shall be increased in the
same proportion as the outstanding number of shares of Common Stock is
increased, or if the number of outstanding shares of Common Stock shall at any
time be decreased as the result of any combination or reclassification of
shares, the number of shares of Common Stock to which each Participant's Stock
Credit Account is equivalent shall be decreased in the same proportion as the
outstanding number of shares of Common Stock is decreased. In the event the
Company shall at any time be consolidated with or merged into any other
corporation and holders of the Company's Common Stock receive common shares of
the resulting or surviving corporation, there shall be credited to each
Participant's Stock Credit Account, in place of the shares then credited
thereto, a stock equivalent determined by multiplying the number of common
shares of stock given in exchange for a share of Common Stock upon such
consolidation or merger, by the number of shares of Common Stock to which the
Participant's account is then equivalent. If in such a consolidation or merger,
holders of the Company's Common Stock shall receive any consideration other than
common shares of the resulting or surviving corporation, the Committee shall
determine the appropriate change in Participants' accounts.
(iii) At any given time, the cash equivalent balance of a
Participant's Stock Credit Account shall be determined by multiplying the number
of credited units in the Participant's Stock Credit Account by the Average
Closing Price as of such date for such shares of stock.
(f) ALLOCATION BETWEEN INTERST RATE ACCOUNTS AND STOCK CREDIT
ACCOUNTS:
(i) Participant's Deferred Compensation Accounts under the
Plan prior to the effective date of this second amendment and restatement of the
Plan shall continue to be held in each Participant's Deferred Compensation
Interest Rate Account or Deferred Compensation Stock Credit Account, as the case
may be, until such time as the Participant may elect to have all or part of such
amounts reallocated as provided herein.
(ii) Participants may at any time file with the Company an
election to reallocate all or any portion of amounts credited to Plan Accounts
from Interest Rate Accounts to Stock Credit Accounts or vice versa. Such
reallocation shall be made by the delivery to the Company by the Participant of
a written election, substantially in the form of Exhibit A-3 attached, executed
by the Participant which shall become effective (1) only upon the approval of
the Committee in its sole discretion and (2) as of the first day of the fiscal
quarter beginning immediately following the date on which the Committee approves
such election or the beginning of such later fiscal quarter as may be designated
in the notice.
(iii) Participants may at any time by written notice filed
with the Company change the account to which future deferrals shall be credited.
Any such change shall become effective on the first day of the fiscal quarter
beginning immediately following the date on which the Company receives such
notice, or at the beginning of any later fiscal quarter as may be designated in
such notice.
4. EVENTS CAUSING DISTRIBUTION OF DEFERRED COMPENSATION ACCOUNTS. A
Participant's Deferred Compensation Accounts shall become distributable upon the
first to occur of any of the following events:
(a) The termination of the Participant's membership on the Board;
(b) The death of the Participant;
(c) The total and permanent incapacity of the Participant, due to
physical impairment or legally established mental incompetence, to perform the
usual duties of a member of the Board, which disability shall be determined on
the basis of (i) medical evidence by a licensed physician designated by the
Company or (ii) evidence that the Participant has become entitled to receive
primary benefits as a disabled employee under the Social Security Act in effect
on the date of such disability;
(d) The occurrence of an unforeseeable emergency caused by
accident, illness or other causes beyond the control of the Participant which
results, in the sole judgment of the Committee, in substantial hardship to the
Participant. Any distribution pursuant to this Section 4(d) shall be in an
amount not greater than the amount necessary, in the sole judgment of the
Committee, to alleviate any hardship caused to the Participant by reason of such
emergency; or
(e) Such earlier date as may be specified by the Participant at
the time he elects to participate in the Plan.
5. EVENTS CAUSING DISTRIBUTION OF RETIREMENT BENEFITS ACCOUNTS.
(a) A Participant's Retirement Benefits Accounts shall become
distributable upon the first to occur of any of the following events:
(i) The death of the Participant;
(ii) Retirement from the Board if such Participant has:
(A) reached age sixty (60) and completed fifteen (15)
full years of service as a Board member, or
(B) reached age sixty five (65) and completed five (5)
full years of service as a Board member; or
(iii) The total and permanent incapacity of the Participant,
due to physical impairment or legally established mental incompetence, to
perform the usual duties of a member of the Board, which disability shall be
determined on the basis of (i) medical evidence by a licensed physician
designated by the Company or (ii) evidence that the Participant has become
entitled to receive primary benefits as a disabled employee under the Social
Security Act in effect on the date of such disability.
(b) If after a Change of Control, a Director is (a) removed from
the Board during a term that included the date of a Change of Control, or (b)
not re-elected immediately following the expiration of a term that included the
date of a Change of Control, the Retirement Benefits Accounts shall be payable
immediately in a lump sum, effective as of the date of such termination or
unsuccessful election. "Change of Control" shall be deemed to occur if:
(i) any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power of the
Company's then outstanding securities. For purposes of this Plan, (A) the term
"Person" is used as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); provided,
however, that unless this Plan provides to the contrary, the term shall not
include the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, and (B) the term
"Beneficial Owner" shall have the meaning given to such term in Rule 13d-3 under
the Exchange Act;
(ii) during any period of two consecutive
years (not including any period prior to the execution of this Plan),
individuals who at the beginning of such period constitute the Board, and any
new director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in Sections
5(b)(i), (iii) or (iv)) whose election by the Board or nomination for election
by the Company's stockholders was approved by a vote of at least two-thirds ( )
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved (hereinafter referred to as "Continuing Directors"), cease for any
reason to constitute at least a majority thereof;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (or other entity), other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 66- % of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no Person acquires more than 25% of the combined voting power of the
Company's then outstanding securities shall not constitute a Change in Control;
or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
6. FORM OF DISTRIBUTION OF DEFERRED COMPENSATION ACCOUNTS.
(a) INTEREST RATE ACCOUNT: Deferred compensation credited to the
Deferred Compensation Interest Rate Account, together with accumulated interest,
will be distributed to the Participant in 36 approximately equal monthly
payments, unless the Committee, in its sole discretion, determines, upon written
request of the Participant, that payment shall be made over a shorter period, in
a lump sum, or in a partial lump sum with the remainder to be distributed in 36
approximately equal monthly payments. The amount of each distribution payment
shall be equal to the balance in such Interest Rate Account of as of such
payment date multiplied by a fraction, the numerator of which is one, and the
denominator of which is the number of installments yet to be paid to the
Participant.
Payment shall commence 30 days after the occurrence of the event
causing distribution, with interest continuing to accrue pursuant to Section
3(d) hereof until the full amount of deferred compensation in the Deferred
Compensation Interest Rate Account is paid.
(b) STOCK CREDIT ACCOUNT: Distribution of a Participant's
Deferred Compensation Stock Credit Account shall be made in cash to the
Participant in 36 approximately equal monthly payments, unless the Committee, in
its sole discretion, determines, upon written request of the Participant, that
payment shall be made over a shorter period, in a lump sum, or in a partial lump
sum with the remainder to be distributed in 36 approximately equal monthly
payments. The amount of each distribution payment shall be the cash equivalent
equal to the Average Closing Price as of such payment date multiplied by the
number of credited shares to be distributed for such payment. The number of
credited units to be distributed shall equal the credited unit balance of the
Participant's Deferred Compensation Stock Credit Account multiplied by a
fraction, the numerator of which is one, and the denominator of which is the
number of installments yet to be paid to the Participant.
Payment shall commence 30 days after the occurrence of the event
causing distribution. The number of credited units distributed as a cash
equivalent payment to the Participant shall be debited from the Participant's
Deferred Compensation Stock Credit Account balance, and the Deferred
Compensation Stock Credit Account shall continue to accrue pursuant to Section
3(e) hereof until the full amount of deferred compensation in the Deferred
Compensation Stock Credit Account is paid.
7. FORM OF DISTRIBUTION OF RETIREMENT BENEFITS ACCOUNTS.
(a) INTEREST RATE ACCOUNT: Amounts credited to the Retirement
Benefits Interest Rate Account, together with accumulated interest, will be
distributed to the Participant in 10 approximately equal annual payments. The
amount of each distribution payment shall be equal to the balance in such
Interest Rate Account of as of such payment date multiplied by a fraction, the
numerator of which is one, and the denominator of which is the number of
installments yet to be paid to the Participant.
Payment shall commence 30 days after the occurrence of the event
causing distribution, with interest continuing to accrue pursuant to Section
3(d) hereof until the full amount in the Retirement Benefits Interest Rate
Account is paid.
(b) STOCK CREDIT ACCOUNT: Distribution of a Participant's
Retirement Benefits Stock Credit Account shall be made in cash to the
Participant in 10 approximately equal annual payments. The amount of each
distribution payment shall be the cash equivalent equal to the Average Closing
Price as of such payment date multiplied by the number of credited units to be
distributed for such payment. The number of credited units to be distributed
shall equal the credited unit balance of the Participant's Retirement Benefits
Stock Credit Account multiplied by a fraction, the numerator of which is one,
and the denominator of which is the number of installments yet to be paid to the
Participant.
Payment shall commence 30 days after the occurrence of the event
causing distribution. The number of credited units distributed as a cash
equivalent payment to the Participant shall be debited from the Participant's
Retirement Benefits Stock Credit Account balance, and the Retirement Benefits
Stock Credit Account shall continue to accrue pursuant to Section 3(e) hereof
until the full amount in the Retirement Benefits Stock Credit Account is paid.
8. DESIGNATION OF BENEFICIARY. Each Participant may designate, by a
form similar to Exhibit B attached, a beneficiary to receive distribution of the
Participant's Plan Accounts if the Participant is not living when any portion of
such compensation becomes distributable. If the Participant fails to designate
a beneficiary, or if the Participant's designated beneficiary does not survive
until the time when any portion of the Participant's Plan Accounts becomes
distributable, such portion of the Participant's Deferred Compensation Accounts
shall be paid in a lump sum to the Participant's estate within 120 days
immediately following the date of the Participant's death and such portion of
the Participant's Retirement Benefits Plans shall be paid in accordance with
Section 7 to the Participant's estate.
9. MISCELLANEOUS.
(a) The Participant's Plan Accounts under the Plan shall not be
assignable by the Participant and shall not be subject to attachment, lien,
levy, or other creditors' rights under state or Federal law.
(b) All funds or assets, together with all interest, accumulations
and increments thereon, of the Plan Accounts of all Participants shall remain
the funds and assets of the Company, and shall be subject to the Company's
absolute ownership and control until the time when such funds or assets are
distributed in accordance herewith. The obligation of the Company to
Participants hereunder is a contractual obligation only, and the Participants
shall have no preferred or specific interest, by way of trust, escrow, annuity
or otherwise, in and to any specific assets or funds of the Company.
(c) Copies of the Plan and any and all amendments thereto shall be
made available to eligible Participants at all reasonable times at the office of
the Corporate Secretary of the Company. All notices to the Company hereunder
shall be filed with the Corporate Secretary of the Company.
(d) The Plan may be amended prospectively, from time to time, by
the Committee, and the interest rate applicable hereunder may be increased or
decreased prospectively (including with respect to amounts of compensation
previously deferred by the Participants) by the Committee as provided in Section
3(d) hereof, but no amendment shall, in any event, be made to the Plan which
would reduce the amounts already earned by any Participant or change the date or
provisions for distribution of such amounts, unless the Participant consents in
writing to such amendment insofar as the amendment affects the Participant.
The foregoing Second Amended and Restated Director Deferred
Compensation Plan is approved by the Board of Directors of the Company on behalf
of the Company as of March 11, 1997, and shall be effective as of April 23,
1997.
/s/ Kenneth B. Roath
__________________________
Kenneth B. Roath
Chairman and Director
/s/ Orville L. Melby
__________________________
Orville L. Melby
Director and Chairman of the
Compensation Committee
/s/ Edward J. Henning
__________________________
Edward J. Henning
Corporate Secretary
EXHIBIT A-1
HEALTH CARE PROPERTY INVESTORS, INC.
NOTICE OF ELECTION TO DEFER COMPENSATION
Pursuant to the terms of the Second Amended and Restated Director Deferred
Compensation Plan (the "Plan") of Health Care Property Investors, Inc. (the
"Company") adopted by unanimous written consent of the Board of Directors as of
March 11, 1997, I hereby elect to defer compensation, as specified below, under
the Plan. Capitalized terms not defined herein shall have the meaning described
in the Plan.
I hereby elect to defer __________ (enter "all" or "none" or state dollar
amount or state percentage) that will hereafter be payable to me as a member of
the Board of Directors on and after _________________________. Of such deferred
amount, __________ (enter "all" or "none" or state dollar amount or state
percentage) shall be credited to my Deferred Compensation Interest Rate Account,
the remainder, if any, shall be credited to my Deferred Compensation Stock
Credit Account, as provided for in Section 2(a) of the Plan.
These elections shall continue in effect until such time as I file a
written notice with the Corporate Secretary of the Company, or I cease to be
eligible to participate in the Plan.
In the event of my death, all amounts deferred pursuant to this Plan,
together with accumulated earnings, less any amounts paid out from my account,
shall be payable in full to my named beneficiary, if he or she survives me, or
to my estate 120 days following the date of my death.
I hereby specify _________________________ (enter date or the words "no
date") as an "Event Causing Distribution" in connection with Section 4(e) of the
Plan and no compensation shall be deferred after such date.
__________________ _____________________________
Date Signature of Director
_____________________________
Print: Name
_____________________________
Social Security Number
__________________ _____________________________
Date Spouses's Signature
_____________________________
Print: Name
Received:
__________________ _____________________________
Date , Corporate Secretary
EXHIBIT A-2
HEALTH CARE PROPERTY INVESTORS, INC.
INITIAL ELECTION OF BENEFITS ACCOUNTS AMOUNTS
Pursuant to the terms of the Second Amended and Restated Director Deferred
Compensation Plan (the "Plan") of Health Care Property Investors, Inc. (the
"Company") adopted by unanimous written consent of the Board of Directors as of
March 11, 1997, I hereby consent to (1) the valuation of my accrued benefits
under the Company's Retirement Plan for Outside Directors (the "Retirement
Plan") in the amount of ____________, and (2), effective upon the stockholders'
approval of the amendments to the Company's Amended and Restated Directors Stock
Incentive Plan proposed in the proxy for the annual meeting of April 23, 1997,
the transfer of my accrued benefits under the Retirement Plan to my Retirement
Benefits Accounts under the Plan and the amendments to the Amended and Restated
Director Deferred Compensation Plan, as memorialized in the Plan.
Of such accrued benefits amount, __________ (enter "all" or "none" or
state dollar amount or state percentage) shall be credited to my Retirement
Benefits Interest Rate Account, the remainder, if any, shall be credited to my
Retirement Benefits Stock Credit Account, as provided for in Section 2(b) of the
Plan.
This election shall continue in effect until such time as I file a written
notice with the Corporate Secretary of the Company, or I cease to be eligible to
participate in the Plan.
________________ ____________________________
Date Signature of Director
____________________________
Print: Name
____________________________
Social Security Number
____________________________
Spouses's Signature
____________________________
Print: Name
Received:
_______________ ____________________________
Date , Corporate Secretary
EXHIBIT A-3
HEALTH CARE PROPERTY INVESTORS, INC.
NOTICE OF ELECTION TO TRANSFER DEFERRED COMPENSATION
OR BENEFITS ACCOUNTS AMOUNTS
Pursuant to the terms of the Second Amended and Restated Director Deferred
Compensation Plan (the "Plan") of Health Care Property Investors, Inc. (the
"Company") adopted by unanimous written consent of the Board of Directors as of
March 11, 1997, I hereby elect to reallocate the crediting of my account balance
in the Plan. Of the amounted credited to my ___ Deferred Compensation Accounts
or ___ Retirement Benefits Accounts (check one) under the Plan, __________
(enter "all" or "none" or state dollar amount or state percentage) shall be
invested in the Interest Rate Account, the remainder, if any, shall be invested
in the Stock Credit Account, as provided for in Section 3 of the Plan. All
transferred amounts shall be subject to the terms and conditions of the Plan.
______________ ____________________________
Date Signature of Director
____________________________
Print: Name
____________________________
Social Security Number
____________________________
Spouses's Signature
____________________________
Print: Name
Received:
________________ ____________________________
Date , Corporate Secretary
EXHIBIT B
HEALTH CARE PROPERTY INVESTORS, INC.
BENEFICIARY DESIGNATION
SECOND AMENDED AND RESTATED
DIRECTOR DEFERRED COMPENSATION PLAN
I designate the following beneficiary or beneficiaries to receive payment,
in the event of my death, of my interest in any Plan Accounts (as defined in the
Plan) heretofore or hereafter payable to me pursuant to Health Care Property
Investors, Inc.'s Second Amended and Restated Director Deferred Compensation
Plan (please see "Instructions for Naming the Beneficiary" that accompany this
form):
PRIMARY BENEFICIARY
OR BENEFICIARIES AGE RELATIONSHIP ADDRESS
SUCCESSOR BENEFICIARY
OR BENEFICIARIES AGE RELATIONSHIP ADDRESS
I reserve the right to change any beneficiary from time to time by filing
with the Company a new election on this form.
I agree that the last designation received by the Company prior to my death
shall control any testamentary or other disposition I may make; however, if a
former spouse is one of the beneficiaries named above but is not my spouse at
the time of my death, such designation shall be deemed revoked. I acknowledge
that this designation is subject to laws in the state of my residence. I
further agree that the Company may make a lump sum payment to the legal
representative of my estate if there is any question as to the right of any
beneficiary to take hereunder, and the Company, its directors, the Compensation
Committee and any member thereof, and any employee of the Company, shall have no
further liability with respect hereto.
__________ ____________________________
Date Signature of Director
____________________________
Print: Name
__________ ____________________________
Date Spouse's Signature
____________________________
Print: Name
FIRST AMENDMENT TO THE
HEALTH CARE PROPERTY INVESTORS, INC.
SECOND AMENDED AND RESTATED
DIRECTOR DEFERRED COMPENSATION PLAN
Health Care Property Investors, Inc., a Maryland corporation (the
"Company"), has adopted by written consent the Second Amended and Restated
Director Deferred Compensation Plan (the "Plan") effective as of the termination
of the Retirement Plan for Outside Directors (the "Retirement Plan").
In order to amend the Plan to reflect certain changes in the events and
duration of distribution of the retirement benefits accumulated under the
Retirement Plan, this Amendment to the Plan has been adopted by a written
consent of the Board of Directors of the Company, effective as of the
termination of the Retirement Plan.
1. Section 5(a)(ii) of the Plan is amended to read, in its entirety, as
follows:
(ii) Retirement from the Board; or
2. The first paragraph of Section 7(a) of the Plan is amended to read, in
its entirety, as follows:
(a) INTEREST RATE ACCOUNT: Amounts credited to the
Retirement Benefits Interest Rate Account, together with accumulated interest,
will be distributed to the Participant in a lump sum or in any number of
approximately equal annual installments, in either case as set forth in such
Participant's election in the form set forth as Exhibit A-2 hereof. In the case
of distributions to be made in installments, the amount of each distribution
payment shall be equal to the balance in such Interest Rate Account of as of
such payment date multiplied by a fraction, the numerator of which is one, and
the denominator of which is the number of installments yet to be paid to the
Participant.
3. The first paragraph of Section 7(b) of the Plan is amended to read, in
its entirety, as follows:
(b) STOCK CREDIT ACCOUNT: Distribution of a Participant's
Retirement Benefits Stock Credit Account shall be made in cash to the
Participant in a lump sum or in any number of approximately equal annual
installments, in either case as set forth in such Participant's election in the
form set forth as Exhibit A-2 hereof. In the case of distributions to be made
in installments, the amount of each distribution payment shall be the cash
equivalent equal to the Average Closing Price as of such payment date multiplied
by the number of credited units to be distributed for such payment. The number
of credited units to be distributed shall equal the credited unit balance of the
Participant's Retirement Benefits Stock Credit Account multiplied by a fraction,
the numerator of which is one, and the denominator of which is the number of
installments yet to be paid to the Participant.
4. The first paragraph of Exhibit A-2 of the Plan is amended to read, in
its entirety, as follows:
Pursuant to the terms of the Second Amended and Restated Director Deferred
Compensation Plan (the "Plan") of Health Care Property Investors, Inc. (the
"Company") adopted by unanimous written consent of the Board of Directors as of
March 11, 1997, I hereby consent to (1) the valuation of my accrued benefits
under the Company's Retirement Plan for Outside Directors (the "Retirement
Plan") as set forth beside my name on Attachment I attached hereto, and (2),
effective upon the stockholders' approval of the amendments to the Company's
Amended and Restated Directors Stock Incentive Plan proposed in the proxy for
the annual meeting of April 23, 1997, the transfer of my accrued benefits under
the Retirement Plan to my Retirement Benefits Accounts under the Plan and the
amendments to the Amended and Restated Director Deferred Compensation Plan, as
memorialized in the Plan.
5. Exhibit A-2 of the Plan is amended to add a paragraph after the second
full paragraph that shall read as follows:
I hereby specify that my accrued benefits under the Retirement Plan be paid
in ___ a lump sum or ___ (check the box or enter a number) annual installments
in connection with Sections 5 and 7 of the Plan.
SECOND AMENDMENT TO THE
HEALTH CARE PROPERTY INVESTORS, INC.
SECOND AMENDED AND RESTATED
DIRECTOR DEFERRED COMPENSATION PLAN
Health Care Property Investors, Inc., a Maryland corporation (the
"Company"), has adopted by written consent the Second Amended and Restated
Director Deferred Compensation Plan as amended by that First Amendment to the
Second Amended and Restated Director Deferred Compensation Plan (the "Plan").
In order to amend the Plan to provide for more level payouts and to change
the frequency for which elections to transfer amounts between the interest rate
account and the dividend account can be made, this Amendment to the Plan has
been adopted by the Board of Directors of the Company as of July 17, 1997.
1. Sections 3(f)(ii) and (iii) of the Plan are amended to read, in their
entirety, as follows:
(ii) Participants may at any time, but not more often than
once during any six (6) month period, file with the Company an election to
reallocate all or any portion of amounts credited to Plan Accounts from Interest
Rate Accounts to Stock Credit Accounts or vice versa. Such reallocation shall
be made by the delivery to the Company by the Participant of a written election,
substantially in the form of Exhibit A-3 attached, executed by the Participant
which shall become effective (1) only upon the approval of the Committee in its
sole discretion and (2) as of the first day of the fiscal quarter beginning
immediately following the date on which the Committee approves such election or
the beginning of such later fiscal quarter as may be designated in the notice.
(iii) Participants may at any time, but not more often than
once during any six (6) month period, by written notice filed with the Company
change the account to which future deferrals shall be credited. Any such change
shall become effective on the first day of the fiscal quarter beginning
immediately following the date on which the Company receives such notice, or at
the beginning of any later fiscal quarter as may be designated in such notice.
2. The first paragraph of Section 7(a) of the Plan is amended to read, in
its entirety, as follows:
(a) INTEREST RATE ACCOUNT: Amounts credited to the Retirement
Benefits Interest Rate Account, together with accumulated interest, will be
distributed to the Participant in a lump sum or in any number of approximately
equal quarterly installments, in either case as set forth in such Participant s
election in the form set forth as Exhibit A-2 hereof. In the case of
distributions to be made in installments, the amount of each distribution
payment shall be calculated to produce, utilizing reasonable assumptions
concerning applicable interest rates and to the extent reasonably possible,
equal payments over the distribution period.
3. The first paragraph of Section 7(b) of the Plan is amended to read, in
its entirety, as follows:
(b) STOCK CREDIT ACCOUNT: Distribution of a Participant s
Retirement Benefits Stock Credit Account shall be made in cash to the
Participant in a lump sum or in any number of approximately equal quarterly
installments, in either case as set forth in such Participant s election in the
form set forth as Exhibit A-2 hereof. In the case of distributions to be made
in installments, the amount of each distribution payment shall be the cash
equivalent equal to the Average Closing Price as of such payment date multiplied
by the number of credited units to be distributed for such payment. The number
of credited units to be distributed shall be calculated to produce, utilizing
reasonable assumptions concerning stock price and dividend rates and to the
extent reasonably possible, equal credited units over the distribution period.
