<PAGE> 1
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,
1999.
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, Suite 900
Newport Beach, California 92660
(Address of principal executive offices)
(949) 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 10, 1999 there were 51,498,049 shares of $1.00 par value
common stock outstanding.
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HEALTH CARE PROPERTY INVESTORS, INC.
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets
September 30, 1999 and December 31, 1998 ............................................... 2
Condensed Consolidated Statements of Income
Nine Months and Three Months Ended September 30, 1999 and 1998 ......................... 3
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1999 and 1998 ......................................... 4
Notes to Condensed Consolidated Financial Statements ................................... 5
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations .......................................... 11
PART II. OTHER INFORMATION
Signatures ............................................................................................. 23
</TABLE>
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HEALTH CARE PROPERTY INVESTORS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- -------------
<S> <C> <C>
ASSETS
Real Estate Investments
Buildings and Improvements $ 1,283,343 $ 1,143,077
Accumulated Depreciation (215,258) (190,941)
----------- -----------
1,068,085 952,136
Construction in Progress 9,293 26,938
Land 161,445 152,045
----------- -----------
1,238,823 1,131,119
Loans Receivable 187,461 154,363
Investments in and Advances to Joint Ventures 46,184 54,478
Other Assets 23,924 12,148
Cash and Cash Equivalents 8,199 4,504
----------- -----------
TOTAL ASSETS $ 1,504,591 $ 1,356,612
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank Notes Payable $ 100,500 $ 88,000
Senior Notes Payable 551,070 499,162
Convertible Subordinated Notes Payable Due 2000 100,000 100,000
Mortgage Notes Payable 60,596 21,883
Accounts Payable, Accrued Liabilities and Deferred Income 35,150 28,758
Minority Interests in Joint Ventures 39,400 23,390
Stockholders' Equity:
Preferred Stock 187,847 187,847
Common Stock 32,046 30,987
Additional Paid-In Capital 463,456 433,309
Cumulative Net Income 601,153 531,926
Cumulative Dividends (666,627) (588,650)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 617,875 595,419
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,504,591 $ 1,356,612
=========== ===========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition
and Results of Operations.
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HEALTH CARE PROPERTY INVESTORS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------- ------------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUE
Rental Income $ 43,259 $ 34,386 $ 128,245 $ 96,657
Tenant Reimbursements 2,323 825 6,394 1,768
Interest and Other Income 6,636 6,955 19,012 18,023
--------- --------- --------- ---------
52,218 42,166 153,651 116,448
--------- --------- --------- ---------
EXPENSE
Interest Expense 13,753 10,291 39,496 26,727
Depreciation/Noncash Charges 10,995 8,366 32,059 23,750
Facility Operating Expenses 4,136 1,466 11,894 3,211
Other Expenses 2,459 2,488 7,440 6,292
--------- --------- --------- ---------
31,343 22,611 90,889 59,980
--------- --------- --------- ---------
INCOME FROM OPERATIONS 20,875 19,555 62,762 56,468
Minority Interests (853) (889) (3,838) (3,109)
Gain on Sale of Real Estate Properties 10,151 6,230 10,303 6,742
--------- --------- --------- ---------
NET INCOME $ 30,173 $ 24,896 $ 69,227 $ 60,101
Dividends to Preferred Stockholders (4,109) (2,060) (12,328) (4,422)
--------- --------- --------- ---------
NET INCOME APPLICABLE TO COMMON SHARES $ 26,064 $ 22,836 $ 56,899 $ 55,679
========= ========= ========= =========
BASIC EARNINGS PER COMMON SHARE $ 0.81 $ 0.74 $ 1.80 $ 1.82
========= ========= ========= =========
DILUTED EARNINGS PER COMMON SHARE $ 0.80 $ 0.72 $ 1.80 $ 1.81
========= ========= ========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC . 32,045 30,965 31,590 30,666
========= ========= ========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 35,456 33,869 34,317 33,601
========= ========= ========= =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition
and Results of Operations.
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HEALTH CARE PROPERTY INVESTORS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
------------------------
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 69,227 $ 60,101
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Real Estate Depreciation 29,683 21,403
Non Cash Charges 2,158 2,301
Joint Venture Adjustments 1,329 233
Gain on Sale of Real Estate Properties (10,303) (6,742)
Changes in:
Operating Assets (2,832) (1,974)
Operating Liabilities 7,914 14,973
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 97,176 90,295
========= =========
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Real Estate, Gross (166,828) (185,594)
Assumption of Debt on Acquisition of Real Estate 40,856 5,065
Advances to Joint Ventures -- (36,583)
Proceeds from the Sale of Real Estate Properties 46,098 11,703
Other Investments and Loans (40,633) (21,248)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (120,507) (226,657)
========= =========
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Change in Bank Notes Payable 12,500 (66,900)
Repayment of Senior Notes Payable (10,000) (22,500)
Issuance of Senior Notes Payable 62,000 218,154
Cash Proceeds from Issuing Preferred Stock -- 130,037
Cash Proceeds from Issuing Common Stock 29,638 23,566
Increase (Decrease) in Minority Interests 15,948 (1,000)
Periodic Payments on Mortgages (2,008) (761)
Final Payments on Mortgages (344) --
Dividends Paid (77,977) (64,340)
Other Financing Activities (2,731) (951)
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 27,026 215,305
========= =========
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,695 78,943
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,504 4,084
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,199 $ 83,027
========= =========
CAPITALIZED INTEREST $ 1,305 $ 1,052
========= =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition
and Results of Operations.
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HEALTH CARE PROPERTY INVESTORS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES
We, the management of Health Care Property Investors, Inc., believe
that the unaudited financial information contained in this report reflects all
adjustments that are necessary to state fairly the financial position, the
results of operations, and cash flows of the Company. Unless the context
otherwise indicates, the Company or HCPI means Health Care Property Investors,
Inc. and its affiliated subsidiaries and joint ventures. We presume that users
of this interim financial information 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, 1998. Therefore, notes to the financial statements and other disclosures
that would repeat the disclosures contained in our most recent annual report to
security holders have been omitted. This interim financial information does not
necessarily represent a full year's operations for various reasons including
acquisitions and dispositions, changes in rents and interest rates, and the
timing of debt and equity financings.
Facility Operations:
Since November 1997, we have purchased ownership interests (ranging
from 50 to 100 percent) in 42 medical office buildings ("MOBs") that are
operated by independent property management companies on our behalf. We lease
these facilities to multiple tenants. Amounts recovered from tenants as
reimbursements of operating costs incurred under such leases are recorded as
Tenant Reimbursements. Expenses related to the operation of these facilities are
recorded as Facility Operating Expenses.
Reclassifications:
We have made reclassifications, where necessary, for comparative
financial statement presentations.
(2) MAJOR OPERATORS
As of September 30, 1999, we owned properties in 42 states operated by
85 operators. In addition, approximately 250 tenants conducted business in our
multi-tenant buildings. Listed below are our major operators, the number of
facilities operated by these operators, the annualized revenue as of September
30, 1999 and the percentage of annualized revenue, in each case, for the nine
months ended September 30, 1999, from these operators and their subsidiaries:
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<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Annualized Percentage of
Number of Revenue as of Annualized
Operators Facilities September 30, 1999 Revenue
- --------- ---------- ------------------ -------------
(Amounts in thousands)
<S> <C> <C> <C>
Beverly Enterprises Inc. ("Beverly") 27 $ 12,387 6.6%
HealthSouth Corporation ("HealthSouth") 6 11,902 6.3
Vencor, Inc. ("Vencor") 22 11,389 6.1
Emeritus Corporation ("Emeritus") 23 11,338 6.0
Columbia/HCA Healthcare Corp. ("Columbia") 12 10,317 5.5
Centennial Healthcare Corp. ("Centennial") 19 8,627 4.6
Tenet Healthcare Corporation ("Tenet") 2 7,776 4.1
</TABLE>
Certain facilities leased to operators listed above have been subleased to
other operators with the original lessees remaining liable on the leases. The
number of facilities, annualized revenue, and percentages of our total
annualized revenue applicable to these sublessees are not included above. The
percentage of our total annualized revenue on facilities leased to Vencor and
subleased to other operators was 2.5% as of September 30, 1999. As discussed in
more detail below, we have recourse to Tenet and Ventas, Inc. for rent
obligations under most Vencor leases.
All these major operators are subject to the informational filing
requirements of the Securities Exchange Act of 1934 and accordingly file
periodic financial statements on Form 10-K and Form 10-Q with the Securities and
Exchange Commission.
Vencor
On May 1, 1998, Vencor completed a spin-off transaction. As a result,
it became two publicly held entities--Ventas, Inc., a real estate company which
intends to qualify as a REIT, and Vencor, a health care company which at
September 30, 1999 leased 36 of HCPI's properties of which 14 are subleased to
other operators. On September 13, 1999, Vencor, Inc. filed for bankruptcy
protection. The Company has recourse to Ventas, Inc. and Tenet Healthcare
Corporation (see discussion under Tenet below) for most of the rents payable by
Vencor under its leases. All rents due to the Company subsequent to the filing
have been received.
Vencor has an obligation to pay rents due to the Company prior to
filing for bankruptcy protection. However, Vencor has the right to assume or
reject its leases with us. If Vencor assumes a lease it must do so pursuant to
the original contract terms, must cure all pre-petition and post-petition
defaults under the lease and provide adequate assurances of future performance.
If Vencor rejects a lease, it may stop paying rent and we may lease the property
to another operator. As of November 10, 1999, Vencor had made no proposals to
reject any of their current leases with the Company. We expect to collect
pre-bankruptcy receivables of $993,000 and future rents. However, we cannot
assure you that as a result of Vencor's bankruptcy filing we would be able to
recover all amounts due under our leases with Vencor, that we would be able to
promptly recover the premises or lease the property to another lessee or that
the rent we would receive from another lessee would equal amounts due under the
Vencor leases. We have recourse to Tenet for rents under all but five of the
Vencor leases, and on some leases we are receiving direct payment by sublessees
of Vencor, which may reduce the risk to us of not being able to collect on those
leases. However, we cannot assure you that the bankruptcy filing of Vencor would
not have a material adverse effect on our Net Income, Funds From Operations or
the market value
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of our common stock.
Tenet
Tenet is one of the nation's largest health care services companies,
providing a broad range of services through the ownership and management of
health care facilities. Tenet has historically guaranteed Vencor's leases.
During 1997 we reached an agreement with Tenet whereby Tenet agreed to forbear
or waive some renewal and purchase options and related rights of first refusal
on facilities leased to Vencor. As part of that same agreement, we only have
recourse to Tenet for the rent payments on the Vencor leases until the end of
their base term. Of the 36 leases for which we have recourse to Tenet, at
December 31, 1998, five expired during the nine months ended September 30, 1999.
The remaining 31 guaranteed leases expire during the next two years.
(3) REAL ESTATE INVESTMENTS AND DISPOSITIONS
During the nine months ended September 30, 1999, we acquired seven
clinics, one assisted living facility, 4 MOBs and an ownership interest in 15
additional MOBs for an aggregate investment of approximately $170,000,000.
During the nine months ended September 30, 1999, we sold six facilities
and ownership interests in four facilities, resulting in a net gain of
$10,303,000.
(4) STOCKHOLDERS' EQUITY
The following tabulation is a summary of the activity for the
Stockholders' Equity account for the nine months ended September 30, 1999
(amounts in thousands):
<TABLE>
<CAPTION>
Preferred Stock Common Stock
---------------- --------------------
Par Additional Total
Number of Number of Value Paid In Cumulative Cumulative Stockholders'
Shares Amount Shares Amount Capital Net Income Dividends Equity
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1998 7,785 $187,847 30,987 $30,987 $433,309 $531,926 $(588,650) $ 595,419
Issuance of Common Stock, Net 1,059 1,059 30,147 31,206
Net Income 69,227 69,227
Dividends Paid - Preferred Shares (12,328) (12,328)
Dividends Paid - Common Shares (65,649) (65,649)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance,
September 30, 1999 7,785 $187,847 32,046 $32,046 $463,456 $601,153 $(666,627) $ 617,875
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(5) EARNINGS PER COMMON SHARE
The Company adopted Statement of Financial Accounting Standards No.
128, Earnings Per Share, effective December 15, 1997. As a result, both basic
and diluted earnings per common share are presented for each of the quarters and
nine months ended September 30, 1999 and 1998. Prior to 1997, only basic
earnings per common share were disclosed. Basic earnings per common share is
computed
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<PAGE> 9
by dividing Net Income applicable to common shares by the weighted average
number of shares of common stock outstanding during the period. Diluted earnings
per common share is calculated including the effect of dilutive securities.
Options to purchase shares of common stock that had an exercise price in excess
of the average market price of the common stock during the period were not
included because they are not dilutive.
(Amounts in thousands except per share amounts)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
----------------------------------- ------------------------------------
Per Share Per Share
September 30, 1999 Income Shares Amount Income Shares Amount
- ----------------------------------------- ----------- --------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
BASIC EARNINGS PER COMMON SHARE:
Net Income Applicable to Common Shares $26,064 32,045 $0.81 $56,899 31,590 $1.80
===== =====
Dilutive Options -- 41 -- 82
Interest and Amortization Applicable to
Convertible Debt 1,599 2,645 4,798 2,645
Non Managing Member Units 532 725 -- --
======= ====== ======= ======
DILUTED EARNINGS PER COMMON SHARE:
Net Income Applicable to Common
Shares Plus Assumed Conversions $28,195 35,456 $0.80 $61,697 34,317 $1.80
===== =====
September 30, 1998
- -----------------------------------------
BASIC EARNINGS PER COMMON SHARE:
Net Income Applicable to Common Shares $22,836 30,965 $0.74 $55,679 30,666 $1.82
===== =====
Dilutive Options -- 142 -- 172
Interest and Amortization Applicable to
Convertible Debt 1,599 2,645 4,798 2,645
Non Managing Member Units 77 117 230 118
======= ====== ======= ======
DILUTED EARNINGS PER COMMON SHARE:
Net Income Applicable to Common
Shares Plus Assumed Conversions $24,512 33,869 $0.72 $60,707 33,601 $1.81
===== =====
</TABLE>
(6) FUNDS FROM OPERATIONS
Effective in 1998, the Statement of Financial Accounting Standards No.
131, Disclosures about Segments of an Enterprise, requires that we report
information about our operations on the same basis that is used internally to
measure performance.
We believe that Funds From Operations ("FFO") is our most important
internal supplemental measure of operating performance. Because the historical
cost accounting convention used for real estate assets requires straight-line
depreciation (except on land) such accounting presentation implies that the
value of real estate assets diminishes predictably over time. Because 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 less informative. The term
FFO was designed by the real estate investment trust industry to address this
problem.
The Company 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 real
estate related
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amortization, 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.
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.
Below are summaries of the calculation of FFO (all amounts in
thousands):
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------- ----------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Income Applicable to Common Shares $ 26,064 $ 22,836 $ 56,899 $ 55,679
Real Estate Depreciation and Amortization 10,196 7,512 29,683 21,403
Joint Venture Adjustments 437 189 1,329 233
Gain on Sale of Real Estate Properties (10,151) (6,230) (10,303) (6,742)
-------- -------- -------- --------
Funds From Operations $ 26,546 $ 24,307 $ 77,608 $ 70,573
======== ======== ======== ========
</TABLE>
(7) COMMITMENTS
As of November 10, 1999, the Company has acquired real estate
properties and has outstanding commitments to fund development of health care
facilities of approximately $37,000,000.
The Company is also committed to acquire approximately $15,000,000 of
existing health care real estate. The Company expects that a significant portion
of these commitments will be funded; however, experience suggests that some
committed transactions will not close. The letters of intent representing such
commitments permit either party to elect not to go forward with the transaction
under various circumstances. We may not close committed transactions for various
reasons including unsatisfied pre-closing conditions, competitive financing
sources, final negotiation differences or the operator's inability to obtain
required internal or governmental approvals.
(8) NEW PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Statement 133 is
effective for fiscal years beginning after June 15, 2000, although earlier
implementation is allowed.
We have not yet quantified the impact of adopting Statement 133 on our
financial statements and have not determined the timing or method of our
adoption of Statement 133. However, the effect is not expected to be material.
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(9) SUBSEQUENT EVENTS
On November 4, 1999, American Health Properties, Inc. ("AHE") merged
with and into HCPI ("the Merger") in a stock-for-stock transaction, approved by
the stockholders of both companies, with Health Care Property Investors being
the surviving corporation. AHE was a real estate investment trust specializing
in health care facilities with a portfolio of 68 health care properties in 22
states. Under the terms of the merger agreement, each share of AHE common stock
was converted into the right to receive 0.78 share of HCPI's common stock and
each outstanding share of AHE's 8.60% cumulative redeemable preferred stock,
Series B (represented by depository shares) was converted as discussed below
into shares of HCPI 8.60% Series C cumulative redeemable preferred stock (also
represented by depository shares) redeemable at HCPI's option on and after
October 27, 2002. The Merger resulted in the issuance of approximately
19,491,735 shares of HCPI's common stock and 40,000 shares of HCPI's Series C
cumulative redeemable preferred stock with a liquidation preference of $100
million. Additionally, HCPI assumed $325 million of AHE's debt upon consummation
of the Merger. The transaction will be treated as a purchase for financial
accounting purposes. As a result of the Merger, HCPI owns interests in 424
health care properties in 43 states.
On November 2, 1999, HCPI obtained new senior revolving credit
facilities totaling $310,000,000. The new credit facilities became effective on
November 4, 1999 upon consummation of the Merger. These facilities include a
$207,000,000 line which expires after four years and a $103,000,000 line which
expires November 2000. A portion of the proceeds of these facilities was used to
refinance the Company's existing revolving credit facility of $90,000,000 and
$71,000,000 of AHE's revolving credit facilities outstanding immediately prior
to the Merger. As of November 10, 1999, the Company had $133,500,000 in
available borrowings under the new revolving credit facilities.
On October 8, 1999 the Board of Directors declared a quarterly dividend
of $0.71 per common share payable on November 19, 1999, to shareholders of
record on the close of business on October 21, 1999.
The Board of Directors also declared a cash dividend of $0.492188 per
share on its Series A cumulative preferred stock and $0.54375 per share on its
Series B cumulative preferred stock. These dividends will be paid on December
31, 1999 to shareholders of record as of the close of business on December 15,
1999.
On November 3, 1999, the Board of Directors declared a cash dividend,
effective upon the consummation of the merger with American Health Properties,
Inc., of $53.75 per share (representing dividends from August 30, 1999 to
November 30, 1999) for every share of the Company's 8.60% Series C cumulative
redeemable preferred stock ($.5375 per depositary share representing 1/100th of
a share of Series C preferred stock) to be issued in connection with the merger.
This dividend is payable on November 30, 1999 to holders of record of the Series
C preferred stock on November 15, 1999. Also on November 3, 1999, the Board of
Directors declared a cash dividend, effective upon the consummation of the
merger, of $17.9167 per share (representing dividends from December 1 to
December 31, 1999) for every share of the Series C preferred stock ($.179167 per
depositary share representing 1/100th of a share of Series C preferred stock).
This dividend is payable on December 31, 1999 to holders of record of the Series
C preferred stock on December 15, 1999.
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<PAGE> 12
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
we lease on a long-term basis to health care providers. On a more limited basis,
we have provided mortgage financing on health care facilities. As of September
30, 1999, the Company's portfolio of properties, including equity investments,
consisted of 352 facilities located in 42 states. These facilities are comprised
of 157 long-term care facilities, 80 congregate care and assisted living
facilities, 46 physician group practice clinics, 54 medical office buildings,
eight acute care hospitals, six freestanding rehabilitation facilities and one
psychiatric care facility. The gross investment in the properties, which
includes joint venture acquisitions, was approximately $1.7 billion at September
30, 1999.
We have commitments to purchase and construct health care facilities
totaling approximately $52,000,000 which are expected to fund during 1999 and
2000. We expect that a significant portion of these commitments will be funded
but that a portion may not be funded (see Note (7) to the Condensed Consolidated
Financial Statements).
On November 4, 1999, the Company completed a merger with American
Health Properties in a stock-for-stock transaction (see Note (9) to the
Condensed Consolidated Financial Statements).
RESULTS OF OPERATIONS
Net Income applicable to common shares for the three and nine months
ended September 30, 1999 totaled $26,064,000 and $56,899,000 or $0.81 and $1.80
of basic earnings per share on revenue of $52,218,000 and $153,651,000,
respectively. This compares to $22,836,000 and $55,679,000 or $0.74 and $1.82 of
basic earnings per share on revenue of $42,166,000 and $116,448,000 for the same
periods in 1998. Net Income applicable to common shares for the three months
ended September 30, 1999 and September 30, 1998 included a $10,151,000 or $0.32
per share and $6,230,000 or $0.20 per share gain on the sale of real estate
properties, respectively, and the nine months ended September 30, 1999 and 1998
included a $10,303,000 or $0.33 per share and $6,742,000 or $0.22 per share gain
on sale of real estate properties, respectively.
Rental Income and Tenant Reimbursements for the three and nine months
ended September 30, 1999 increased $10,371,000 and $36,214,000 to $45,582,000
and $134,639,000, respectively, as compared to the same period in the prior
year. The majority of the increase in Rental Income was generated by new
investments of approximately $147,000,000 and $458,000,000 made during 1999 and
1998. Interest and Other Income for the three and nine months ended September
30, 1999 decreased $319,000 and increased $989,000 to $6,636,000 and
$19,012,000, respectively, primarily from growth in the lending portfolio offset
but the divestiture of certain partnership interests during the three months
ended September 30, 1999. There were $4,136,000 and $11,894,000 in related
Facility Operating Expenses during the three and nine months ended September 30,
1999 compared to $1,466,000 and $3,211,000 during the three and nine months
ended September 30, 1998 resulting from additional multi-tenant leases under
which the Company is responsible for operating expenses of the leased facility.
-11-
<PAGE> 13
Interest Expense for the three and nine months ended September 30, 1999
increased $3,462,000 and $12,769,000, respectively. The increase is primarily
the result of an increase in short-term borrowings used to fund the acquisitions
made during the fourth quarter of 1998 and the nine months ended September 30,
1999 and interest related to the MOPPRS senior debt issuance during June 1998.
The increase in Depreciation/Non Cash Charges for the three and nine months
ended September 30, 1999 of $2,629,000 and $8,309,000 to $10,995,000 and
$32,059,000, respectively, is the direct result of the new investments made
during 1999 and 1998.
We believe that FFO is an important supplemental measure of operating
performance. FFO for the nine months ended September 30, 1999 increased
$2,239,000 to $26,546,000 as compared to the same period in the prior year. The
increase is attributable to increases in Rental Income, and Interest and Other
Income, as offset by increases in Interest Expense and Facility Operating
Expenses, which are discussed 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 we defined it, may not be comparable to
similarly entitled items reported by other real estate investment trusts that do
not use the NAREIT definition.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed acquisitions through the sale of common and
preferred stock, issuance of long-term debt, assumption of mortgage debt, 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 our 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, including Medium Term Notes
("MTNs"), or with equity offerings.
MTN FINANCINGS
The following table summarizes the MTN financing activities during 1998
and 1999:
<TABLE>
<CAPTION>
AMOUNT
DATE MATURITY COUPON RATE ISSUED/(REDEEMED
- --------------------- -------- ------------- -------------------
<S> <C> <C> <C>
February 1998 -- 9.88% $ (10,000,000)
March 1998 5 years 6.66% 20,000,000
April-November 1998 -- 6.10%-9.70% (17,500,000)
November 1998 3-8 years 7.30%-7.88% 28,000,000
February 1999 5 years 6.92% 25,000,000
April 1999 5 years 7.00%-7.48% 37,000,000
May 1999 -- 10.55%-10.57% (10,000,000)
</TABLE>
SENIOR DEBT OFFERINGS
During June 1998, the Company issued $200 million of 6.875% MandatOry
Par Put Remarketed Securities ("MOPPRS") due June 8, 2015 which are subject to
mandatory tender on June 8, 2005. We
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<PAGE> 14
received total proceeds of approximately $203,000,000 (including the present
value of a put option associated with the debt) which was used to repay
borrowings under our revolving lines of credit. The weighted average cost of the
debt including the amortization of the option and offering expenses is 6.77%.
The MOPPRS are senior, unsecured obligations of the Company.
-13-
<PAGE> 15
EQUITY OFFERINGS
Since January 1998, HCPI has completed three equity offerings,
summarized in the table below:
<TABLE>
<CAPTION>
SHARES
DATE ISSUANCE ISSUED EQUITY RAISED NET PROCEEDS
- -------------------- ----------------------------------- ------------ --------------- ----------------
<S> <C> <C> <C> <C>
April 1998 Common Stock at $33.2217/share to 698,752 $ 23,200,000 $ 23,000,000
a Unit Investment Trust
September 1998 8.70% Series B Cumulative 5,385,000 $135,000,000 $130,000,000
Redeemable Preferred Stock
May 1999 Common Stock at $31.4375/share 1,000,000 $ 31,400,000 $ 29,600,000
</TABLE>
HCPI used the net proceeds from the equity offerings to pay down or pay
off short-term borrowings under its revolving lines of credit. HCPI invested any
excess funds in short-term investments until they were needed for acquisitions
or development.
At September 30, 1999, stockholders' equity totaled $617,875,000 and
the debt to equity ratio was 1.31 to 1.00. For the nine months ended September
30, 1999, FFO (before interest expense) covered Interest Expense 3.0 to 1.0.
AVAILABLE FINANCING SOURCES
During June 1998, the Company registered $600,000,000 of debt and
equity securities under a shelf registration statement filed with the Securities
and Exchange Commission. As of November 10, 1999 we had approximately
$397,000,000 remaining on shelf filings for future financings. Of that amount,
we had approximately $110,000,000 available under our MTN senior debt programs.
We may issue securities under our universal shelf, including under our MTN
programs, up to these amounts from time to time in the future based on Company
needs and then existing market conditions. As of November 10, 1999, the Company
had $133,500,000 in available borrowings under its new $310,000,000 revolving
credit facility (See Note (9) to the Condensed Consolidated Financial
Statements). Since 1986 the debt rating agencies have rated our Senior Notes and
Convertible Subordinated Notes investment grade. Current ratings are as follows:
<TABLE>
<CAPTION>
Moody's Standard & Poor's Duff & Phelps
------- ----------------- -------------
<S> <C> <C> <C>
Senior Notes Baa2 BBB+ BBB+
Convertible Subordinated
Notes and Redeemable
Preferred Stock Baa3 BBB BBB
</TABLE>
Since inception in May 1985, the Company has recorded approximately
$768,077,000 in cumulative FFO. Of this amount, we have distributed a total of
$644,520,000 to stockholders as dividends on common stock. We have retained the
balance of $123,557,000 and used it as an additional source of capital.
-14-
<PAGE> 16
At November 10, 1999, the Company held approximately $42,900,000 in
irrevocable letters of credit from commercial banks to secure the obligations of
many lessees' lease and borrowers' loan obligations. We may draw upon the
letters of credit if there are any defaults under the leases and/or loans.
Amounts available under letters of credit could change based upon facility
operating conditions and other factors and such changes may be material.
We paid the third quarter 1999 dividend of $0.70 per common share or
$22,400,000 in the aggregate on August 20, 1999. Total dividends paid during the
nine months ended September 30, 1999, as a percentage of FFO was 85%. The
Company declared a fourth quarter dividend of $0.71 per common share or
approximately $22,750,000 in the aggregate, payable on November 19, 1999.
Management believes that HCPI's liquidity and sources of capital are
adequate to finance its operations as well as its future investments in
additional facilities.
FACILITY ROLLOVERS
HCPI has concluded a significant number of "facility rollover"
transactions since 1995 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. The annualized impact was to increase FFO in 1995 by
$900,000 and decrease FFO in each of the years 1996 through 1999 by $1,200,000,
$1,600,000, $3,100,000 and $3,200,000, respectively. Total rollovers were 20
facilities, 20 facilities, 12 facilities, 44 facilities and 21 facilities in
each of the years 1995 - 1999.
Between November 10, 1999 and December 31, 2000, HCPI has nine
facilities that are subject to lease expiration and mortgage maturities. The
facilities remaining which are subject to lease expiration and mortgage
maturities during the remaining period in 1999 and 2000 aggregate 2.8% of
annualized revenue.
During 1997, HCPI reached agreement with Tenet (the holder of
substantially all of the option rights of the Vencor leases) whereby Tenet
agreed to waive renewal and purchase options, and related rights of first
refusal, on up to 51 facilities. As part of these agreements, HCPI has the right
to continue to own the facilities. HCPI paid Tenet $5,000,000 in cash,
accelerated the purchase option on two acute care hospitals leased to Tenet, and
reduced Tenet's guarantees on the facilities leased to Vencor. Leases on 20 of
those 51 facilities had expiration dates through December 31, 2000. HCPI has
increased rents on five of the facilities with leases that have already expired
during 1998, and believes it will be able to increase rents on other facilities
whose lease terms expire through 2001. However, there can be no assurance that
HCPI will be able to realize any increased rents on future rollovers.
INTERNAL GROWTH
For the three and nine months ended September 30, 1999, the Company had
internal same facility rent growth of approximately $518,000 and $1,412,000
or 2.5% of prior period rents in its portfolio, respectively.
TENANT ISSUES
We have discussed issues regarding Vencor in Note (2) to the financial
statements. In addition, a number of other nursing home operators have also
been adversely affected by the decrease in Medicare reimbursements following the
adoption of the Prospective Payment System. As discussed in our Annual Report on
Form 10K for the year ended December 31, 1998, during the first quarter of 1999
certain of
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<PAGE> 17
these operators were put on credit watch with negative implications.
Subsequently, three of our operators (other than Vencor discussed separately)
have filed for bankruptcy protection: Texas Health Enterprises, Inc. filed on
August 3, 1999; Sun Healthcare Group filed on October 14, 1999; and Lenox
Healthcare, Inc. filed on November 3, 1999. Collectively, these operators
represented less than 4.8% of our annualized revenues for the period ended
September 30, 1999 and no one of these operators represented more than 1.8% of
annualized revenues for that same period. Giving effect to our merger with
American Health Properties, these operators represented less than 3.0% of
annualized revenue on a pro forma basis for the period ended September 30, 1999.
In addition, because facilities operated by these operators are performing well,
we believe the financial impact to HCPI of the bankruptcies by these tenants
will be minimal.
YEAR 2000 ISSUE
The Year 2000 issue is the result of widely used computer programs that
identify the year by two digits, rather than by four. It is believed that
continued use of these programs may result in widespread computer-generated
malfunctions and miscalculations beginning in the year 2000, when the digits
"00" are interpreted as "1900." Those miscalculations could cause disruption of
operations including the temporary inability to process transactions such as
invoices for payment. Those computer programs that identify the year based on
all four digits are considered "Year 2000 compliant." The statements in the
following section include "Year 2000 readiness disclosure" within the meaning of
the Year 2000 Information and Readiness Disclosure Act of 1998.
Status of Year 2000 Issues with HCPI's Own Information Technology Systems and
Non-IT Systems
Our primary use of information technology ("IT") is in our financial
accounting systems, billing and collection systems and other information
management software. We have been working with our computer consultants to test
and continually upgrade our management information systems. We have reasonable
assurance from our vendors, outside computer consultants and through our own
testing that our financial and other information systems are Year 2000
compliant. During 1998 and 1999, we inventoried our information technology
systems (including workstations, servers and software applications) and have
obtained the latest upgrades and patches from our vendors that would result in
all of our systems being Year 2000 compliant. The cost to bring the management
information systems into Year 2000 compliance has not been material. By
September 30, 1999, we had completed Y2K testing of our financial accounting
system. The test included mirroring the current environment, posting December
1999 transactions, closing of the year 1999, posting January 2000 transactions
and posting transactions in the leap year February 29, 2000. Upon completion of
the testing, we found no Y2K issues.
Our operations are conducted out of our corporate offices in Newport
Beach, California where we use and are exposed to non-IT systems such as those
contained in embedded micro-processors in telephone and voicemail systems,
elevators, heating, ventilation and air conditioning (HVAC) systems, lighting
timers, security systems, and other property operational control systems. We
believe that we do not have significant exposure to Year 2000 issues with
respect to our non-IT systems contained in embedded chips used in our corporate
offices. While any disruption in services at our corporate offices due to
failure of non-IT systems may be inconvenient and disruptive to normal
day-to-day activities, it is not expected to have a materially adverse effect on
our financial performance or operations.
-16-
<PAGE> 18
Exposure to Third Parties' Year 2000 Issues
Because we believe our own accounting and information systems are Year
2000 compliant, we do not feel there will be material disruption to our
transaction processing on January 1, 2000. However, we depend upon our tenants
for rents and cash flows, our financial institutions for availability of working
capital and capital markets financing and our transfer agent to maintain and
track investor information. As health care providers, our operators, lessees and
mortgagors rely on critical clinical systems, medical devices and equipment in
the delivery of patient care; failures in those systems as a result of Year 2000
issues could have a material adverse effect on their results of operations or
expose them to liability. Furthermore, our operators, lessees and mortgagors are
dependent on a variety of third parties, including insurance companies, HMOs and
other private payors, governmental agencies that administer Medicaid and
Medicare claims processing and reimbursement, utilities that provide
electricity, water, natural gas and communications services and vendors of
medical supplies, pharmaceuticals, medical devices and equipment, all of whom
must also adequately address the Year 2000 issue. If our primary lessees and
mortgagors are not Year 2000 compliant, or if they face disruptions in their
cash flows due to Year 2000 issues, we could face significant temporary
disruptions in our cash flows after that date. These disruptions could be
exacerbated if the commercial banks that process our cash receipts and
disbursements and our lending institutions are not Year 2000 compliant.
Furthermore, to the extent there are broad market disruptions as a result of
widespread Year 2000 issues, our access to the capital markets to raise cash for
investing activity could be impaired.
To address this concern, during the second quarter of 1998, we
commenced a written survey of all of our major tenants, Bank of New York in its
capacity as agent under our credit facilities, and as common stock Transfer
Agent and Trustee under our senior debt indenture, each other lender under our
credit facility, our primary investment banker for our capital raising
activities, and our independent public accountants and primary outside legal
counsel. The survey asked each respondent to assess its exposure to Year 2000
issues and asked what preparations each has made to deal with the Year 2000
issue with respect to both information technology and non-IT systems. In
addition, we asked each respondent to inform us about their exposure to third
party vendors, customers and payers who may not be Year 2000 compliant.
Through this process we have been informed in writing by approximately
95% of those surveyed that they believe that they have computer systems that are
or will be Year 2000 compliant by the end of 1999. All continue to assess their
own exposure to the issue. However neither we nor our lessees and mortgagors can
be assured that the third parties upon which our operators, lessees and
mortgagors depend will accomplish adequate remediation of their Year 2000
issues, nor that the federal and state governments, upon which they rely for
Medicare and Medicaid revenue, will be in compliance in a timely manner.
We are in the process of assessing our exposure to failures of embedded
microprocessors contained in elevators, electrical and HVAC systems, security
systems and the breakdown of other non-IT systems due to the Year 2000 issue at
the properties operated by our tenants. Under a significant portion of our
leases, we are not responsible for the cost to repair such items and are
indemnified by the tenants for losses caused by their operations on the
property. For the managed medical office buildings where we are responsible for
the building operations, we had the management companies inventory and assess
the building systems and our IT systems. The management companies represented to
us that they have implemented extensive Y2K compliance programs; as such, we
believe that the costs of repairs will
-17-
<PAGE> 19
be immaterial and any such costs will be expensed as incurred. We believe that
these buildings will beY2K compliant by the end of 1999.
Risks of Year 2000 Issues
Our exposure to the Year 2000 issue depends primarily on the readiness
of our significant tenants and commercial banks, who in turn, are dependent upon
suppliers, payers and other external parties, all of which is outside our
control. We believe the most reasonably likely worst case scenario faced by us
as a result of the Year 2000 issue is the possibility that reimbursement delays
caused by a failure of federal and state welfare programs responsible for
Medicare and Medicaid could adversely affect our tenants' cash flow, resulting
in their temporary inability to meet their obligations under our leases.
Depending upon the severity of any reimbursement delays and the financial
strength of any particular operator, the operations of our tenants could be
materially adversely affected, which in turn could have a material adverse
effect on our results of operations.
In September 1998, the General Accounting Office reported that the
Health Care Financing Administration, which runs Medicare, is behind schedule in
taking steps to deal with the Year 2000 issue and that it is highly unlikely
that all of the Medicare systems will be compliant in time to ensure the
delivery of uninterrupted benefits and services into the year 2000. The General
Accounting Office also reported in November 1998 that, based upon its survey of
the states, the District of Columbia and three territories, less than 16% of the
automated systems used by state and local government to administer Medicaid are
reported to be Year 2000 compliant. We do not know at this time whether there
will in fact be a disruption of Medicare or Medicaid reimbursements to our
lessees and mortgagors and we are therefore unable to determine at this time
whether the Year 2000 issue will have a material adverse effect on us or its
future operations.
Merger Properties
As of November 4, 1999, the merger with American Health Properties was
completed. The operations of that company will be transferred to our own systems
prior to December 31, 1999. (See Status of Year 2000 Issues with HCPI's Own
Information Technology Systems and Non-IT Systems for a discussion of our Y2K
readiness.)
American Health Properties had conducted Year 2000 compliance of their
lessees and operators and concluded that their lessees would be compliant. In
addition, the management companies that manage their multi-tenant medical office
buildings represented to them that they had implemented extensive Year 2000
compliance programs. To the best of our knowledge, we believe that such lessees
and multi-tenant buildings will be Year 2000 compliant.
Contingency Plans
If there are severe disruptions in our cash flow as a result of
disruptions in our tenants' or mortgagors' cash flow, we may be forced to slow
our investment activity, or seek additional liquidity from our lenders.
Readers are cautioned that most of the statements contained in the
"Year 2000 Issue" paragraphs are forward looking and should be read in
conjunction with HCPI's disclosures under the heading "Cautionary Language
Regarding Forward Looking Statements" set forth below.
-18-
<PAGE> 20
Cautionary Language Regarding Forward Looking Statements
Statements in this Quarterly Report that are not historical factual
statements are "forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. The statements include, among other
things, statements regarding the intent, belief or expectations of HCPI and its
officers and can be identified by the use of terminology such as "may", "will",
"expect", "believe", "intend", "plan", "estimate", "should" and other comparable
terms or the negative thereof. In addition, HCPI, through its senior management,
from time to time makes forward looking oral and written public statements
concerning HCPI's expected future operations and other developments.
Shareholders and investors are cautioned that, while forward looking statements
reflect HCPI's good faith beliefs and best judgment based upon current
information, they are not guarantees of future performance and are subject to
known and unknown risks and uncertainties. Actual results may differ materially
from the expectations contained in the forward looking statements as a result of
various factors. Such factors include:
(a) Legislative, regulatory, or other changes in the healthcare industry
at the local, state or federal level which increase the costs of or
otherwise affect the operations of HCPI's lessees;
(b) Changes in the reimbursement available to HCPI's lessees and
mortgagors by governmental or private payors, including changes in
Medicare and Medicaid payment levels, availability and cost of third
party insurance coverage; such as those contained in the Balanced
Budget Act of 1997, which contains extensive changes to the Medicare
and Medicaid programs intended to significantly reduce the projected
amount of increase in Medicare spending. In particular, the Budget
Act's limitation on reimbursable costs and reductions in payment
incentives and capital related payments as well as the recently
implemented prospective payment system, which is expected to decrease
reimbursements to skilled nursing homes, may have an adverse effect on
the operator revenues at the Company's rehabilitation and long-term
acute care facilities;
(c) Competition for lessees and mortgagors, including with respect to new
leases and mortgages and the renewal or rollover of existing leases;
(d) Competition for the acquisition and financing of health care
facilities;
(e) The ability of HCPI's lessees and mortgagors to operate HCPI's
properties in a manner sufficient to maintain or increase revenues and
to generate sufficient income to make rent and loan payments;
(f) Risks associated with HCPI's multi-tenant medical office buildings,
such as lower than expected occupancy levels, a downturn in market
lease rates for medical office space or higher than expected costs
associated with the maintenance and operation of the such facilities;
(g) Changes in national or regional economic conditions, including changes
in interest rates and the availability and cost of capital to HCPI;
and
(h) General uncertainty inherent in the Year 2000 issue, particularly the
uncertainty of the Year 2000 readiness of third parties who are
material to HCPI's business, such as public or private healthcare
reimbursers, over whom HCPI has no control with the result that HCPI
cannot ensure its ability to timely and cost-effectively avert or
resolve problems associated with the Year 2000 issue that may affect
its operations and business.
DISCLOSURES ABOUT MARKET RISK
-19-
<PAGE> 21
HCPI is exposed to market risks related to fluctuations in interest
rates on its mortgage loans receivable and on its debt instruments. The
following discussion and table presented below are provided to address the risks
associated with potential changes in HCPI's interest rate environment.
HCPI provides mortgage loans to operators of healthcare facilities in
the normal course of business. All of the mortgage loans receivable have fixed
interest rates or interest rates with periodic fixed increases. Therefore, the
mortgage loans receivable are all considered to be fixed rate loans, and the
current interest rate (the lowest rate) is used in the computation of market
risk provided in the table below if material.
HCPI generally borrows on its short-term bank lines of credit to
complete acquisition transactions. These borrowings are then repaid using
proceeds from subsequent long-term debt and equity offerings. HCPI may also
assume mortgage notes payable already in place as part of an acquisition
transaction. As of September 30, 1999, HCPI has two mortgage notes payable with
variable interest rates and the remaining mortgage notes payable have fixed
interest rates or interest rates with fixed periodic increases. HCPI's senior
notes and convertible debt are at fixed rates. The variable rate loans are at
interest rates at or below the current prime rate of 8.25%, and fluctuations are
tied to the prime rate or to a rate currently below the prime rate.
Fluctuation in the interest rate environment will not impact HCPI's
future earnings and cash flows on its fixed rate debt until that debt matures
and must be replaced or refinanced. Interest rate changes will affect the fair
value of the fixed rate instruments. Conversely, changes in interest rates on
variable rate debt would change the future earnings and cash flows of HCPI, but
not affect the fair value on those instruments. Assuming a one percentage point
increase in the interest rate related to the variable rate debt including the
mortgage notes payable and the bank lines of credit, and assuming no change in
the outstanding balance as of September 30, 1999, interest expense for the
coming year would increase by approximately $1,229,000. Approximately 20% of the
increase in interest expense related to the bank lines of credit, or $246,000,
would be capitalized into construction projects.
The principal amount and the average interest rates for the mortgage
loans receivable and debt categorized by the final maturity dates are presented
in the table below. Certain of the mortgage loans receivable and certain of the
debt securities, excluding the convertible debentures, require periodic
principal payments prior to the final maturity date. The fair value estimates
for the mortgage loans receivable are based on the estimates of management and
on rates currently prevailing for comparable loans. The fair market value
estimates for debt securities are based on discounting future cash flows
utilizing current rates offered to HCPI for debt of the same type and remaining
maturity.
<TABLE>
<CAPTION>
|-----------------------------MATURITY------------------------------|
----------------------------------------------------------------------------------
FAIR
1999 2000 2001 2002 2003 THEREAFTER TOTAL VALUE
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Mortgage Loans Receivable -- $16,125 $2,655 $151,946 $170,726 $176,011
Weighted Average Interest Rate 13.55% 10.12% 9.90% 10.25%
LIABILITIES
Variable Rate Debt:
Bank Notes Payable 100,500 100,500 100,500
Weighted Average Interest Rate 5.38% 5.38%
Mortgage Notes Payable 2,767 2,560 12,250 4,846 22,423 21,177
</TABLE>
-20-
<PAGE> 22
<TABLE>
<CAPTION>
|-----------------------------MATURITY------------------------------|
----------------------------------------------------------------------------------
FAIR
1999 2000 2001 2002 2003 THEREAFTER TOTAL VALUE
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Weighted Average Interest Rate 7.75% 7.75% 7.54% 5.75% 7.20%
Fixed Rate Debt:
Senior Notes Payable 5,000 10,000 13,000 17,000 31,000 475,070 551,070 518,236
Weighted Average Interest Rate 8.81% 8.87% 7.88% 8.40% 7.09% 6.89% 7.05%
Convertible Subordinated Notes Payable 100,000 100,000 98,596
Weighted Average Interest Rate 6.00% 6.00%
Mortgage Notes Payable 423 37,749 38,172 37,467
Weighted Average Interest Rate 9.00% 8.30% 8.32%
</TABLE>
HCPI does not believe that the future market rate risks related to the
above securities will have a material impact on HCPI or the results of its
future operations. Readers are cautioned that most of the statements contained
in these "Disclosures about Market Risk" paragraphs are forward looking and
should be read in conjunction with HCPI's disclosures under the heading
"Cautionary Language Regarding Forward Looking Statements" set forth above.
-21-
<PAGE> 23
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
2.1 Agreement and Plan of Merger, dated as of August 4,
1999, between Health Care Property Investors, Inc. and
American Health Properties, Inc. (incorporated herein
by reference to exhibit 2.1 to Health Care Property
Investors, Inc.'s current report on form 8-K (file no.
001-08895) dated August 4, 1999).
3.1 Articles of restatement of Health Care Property
Investors, Inc. (incorporated herein by reference to
exhibit 3.1 to our annual report on form 10-K (file no.
001-08895) for the year ending December 31, 1994).
3.2 Second amended and restated bylaws of Health Care
Property Investors, Inc. (incorporated herein by
reference to exhibit 3.2 of our quarterly report on
form 10-Q (file no. 001-08895) for the period ended
March 31, 1999).
4.1 Articles Supplementary establishing and fixing the
rights and preferences of the 8.60% Series C Cumulative
Redeemable Preferred Stock (incorporated herein by
reference to exhibit 2.1 to our current report on form
8-K (file no. 001-08895), dated August 4, 1999).
4.2 Form of Deposit Agreement (including form of Depositary
Receipt with respect to the Depositary Shares, each
representing one-one hundredth of a share of Health
Care Property Investors, Inc. 8.60% Cumulative
Redeemable Preferred Stock, Series C) dated as of
November 4, 1999 by and among Health Care Property
Investors, Inc., ChaseMellon Shareholder Services,
L.L.C. and the holders from time to time of the
Depositary Shares described therein (incorporated
herein by reference to exhibit 4 to our form 8-A (file
no. 001-08895) filed with the Commission on November 4,
1999).
4.3 Indenture dated as of January 15, 1997 between American
Health Properties, Inc. and The Bank of New York, as
trustee (incorporated herein by reference to exhibit
4.1 to American Health Properties, Inc.'s current
report on form 8-K (file no. 001-09381) dated January
21, 1997).
4.4 First Supplemental Indenture, dated as of November 4,
1999, between Health Care Property Investors, Inc. and
The Bank of New York, as trustee.
10.1 First Amendment to Second Amended and Restated
Directors Stock Incentive Plan effective as of November
3, 1999.
10.2 Second Amendment to Second Amended and Restated
Directors Deferred Compensation Plan effective as of
November 3, 1999.
10.3 First Amendment to Second Amended and Restated Stock
Incentive Plan effective as of November 3, 1999.
10.4 Revolving Credit Agreement, dated as of November 3,
1999, among Health Care Property Investors, Inc., each
of the banks identified on the signature pages hereof,
The Bank of New York, as agent for the banks and as
issuing bank, and Bank of America, N.A. and Wells Fargo
Bank, N.A., as co-documentation agents, with BNY
Capital Markets, Inc., as lead arranger and Book
Manager.
10.5 364-Day Revolving Credit Agreement, dated as of
November 3, 1999 among Health Care Property Investors,
Inc., each of the banks identified on the signature
pages hereof, The Bank of New York, as agent for the
banks, and Bank of America, N.A. and Wells Fargo Bank,
N.A., as co-documentation agents, with BNY Capital
Markets, Inc., as lead arranger and book manager.
27 Financial Data Schedule
b) Reports on Form 8-K:
HCPI filed a Current Report on Form 8-K dated August 4, 1999,
reporting the signing of a definitive merger agreement
between American Health Properties and HCPI.
HCPI filed a Current Report on Form 8-K dated November 4,
1999, reporting the completion of the merger between American
Health Properties and HCPI.
-22-
<PAGE> 24
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 12, 1999 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)
-23-
<PAGE> 25
ATTACHED EXHIBITS
4.4 First Supplemental Indenture, dated as of November 4, 1999, between
Health Care Property Investors, Inc. and The Bank of New York, as
trustee.
10.1 First Amendment to Second Amended and Restated Directors Stock
Incentive Plan effective as of November 3, 1999.
10.2 Second Amendment to Second Amended and Restated Directors Deferred
Compensation Plan effective as of November 3, 1999.
10.3 First Amendment to Second Amended and Restated Stock Incentive Plan
effective as of November 3, 1999.
10.4 Revolving Credit Agreement, dated as of November 3, 1999, among Health
Care Property Investors, Inc., each of the banks identified on the
signature pages hereof, The Bank of New York, as agent for the banks
and as issuing bank, and Bank of America, N.A. and Wells Fargo Bank,
N.A., as co-documentation agents, with BNY Capital Markets, Inc., as
lead arranger and Book Manager.
10.5 364-Day Revolving Credit Agreement, dated as of November 3, 1999 among
Health Care Property Investors, Inc., each of the banks identified on
the signature pages hereof, The Bank of New York, as agent for the
banks, and Bank of America, N.A. and Wells Fargo Bank, N.A., as
co-documentation agents, with BNY Capital Markets, Inc., as lead
arranger and book manager.
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 4.4
HEALTH CARE PROPERTY INVESTORS, INC.
AND
THE BANK OF NEW YORK,
Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of November 4, 1999
to
INDENTURE
Dated as of January 15, 1997
FIRST SUPPLEMENTAL INDENTURE, dated as of November 4, 1999, between
HEALTH CARE PROPERTY INVESTORS, INC., a Maryland corporation (the "Company"),
and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the
"Trustee"). Capitalized terms used and not otherwise defined herein shall have
the respective meanings assigned to them in the Indenture referenced below.
W I T N E S S E T H :
WHEREAS, American Health Properties, Inc., a Delaware corporation
("AHP") and the Trustee have heretofore executed and delivered a certain
Indenture, dated as of January 15, 1997 (the "Indenture"), relating to AHP's
Securities;
WHEREAS, the Company and AHP have heretofore executed and delivered a
certain Agreement and Plan of Merger, dated as of August 4, 1999 (the "Merger
Agreement"), pursuant to which AHP will be merged (the "Merger") with and into
the Company, with the Company as the surviving corporation;
WHEREAS, Section 801 of the Indenture permits AHP to merge with or into
another Person if certain terms and conditions are satisfied;
WHEREAS, Section 801(1) of the Indenture provides, among other things,
that in the case of any such merger, the Person into which AHP is merged shall
expressly assume, by a supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of
the principal of and any
<PAGE> 2
premium and interest on all the Securities and the performance or observance of
every covenant of the Indenture on the part of AHP to be performed or observed;
WHEREAS, Section 802 of the Indenture provides that upon any merger in
accordance with Section 801 of the Indenture, the successor Person into which
AHP is merged shall succeed to, and be substituted for, and may exercise every
right and power of, AHP under the Indenture with the same effect as if such
successor Person had been named as AHP in the Indenture, and thereafter the
predecessor Person shall be relieved of all obligations and covenants under the
Indenture and the Securities;
WHEREAS, Section 901 of the Indenture provides, among other things,
that, without the consent of any Holders, the Company, as successor to AHP, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more supplemental indentures, in form satisfactory
to the Trustee, to evidence the succession of another Person to AHP and the
assumption by any such successor of the covenants of AHP contained in the
Indenture and in the Securities;
WHEREAS, the execution and delivery of this First Supplemental Indenture
has been authorized by a Board Resolution of the Company, and by the Trustee;
and
WHEREAS, pursuant to Section 801(4) of the Indenture, the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating the Merger and this First Supplemental Indenture comply with
Article Eight of the Indenture and that all conditions precedent contained in
the Indenture provided for relating to the Merger have been complied with.
NOW, THEREFORE, each party, intending to be legally bound hereby, agrees
as follows for the benefit of the other parties and for the equal and ratable
benefit of all holders of the Securities:
ARTICLE ONE
ASSUMPTION OF OBLIGATIONS
SECTION 101. The Company hereby assumes, as of the Effective Time (as
defined in the Merger Agreement), the due and punctual payment of the principal
of and any premium and interest on all the Securities and the performance or
observance of every covenant of the Indenture on the part of AHP to be performed
or observed and agrees to be bound by all provisions of the Indenture applicable
to AHP.
2
<PAGE> 3
ARTICLE TWO
AMENDMENTS
SECTION 201. All references to "American Health Properties, Inc."
contained in the Indenture (including any exhibit, annex or attachment thereto,
but excluding the signature page) are hereby deleted and references to "Health
Care Property Investors, Inc." are inserted in lieu thereof.
ARTICLE THREE
MISCELLANEOUS
SECTION 301. Except to the extent specifically provided therein, no
provision of this First Supplemental Indenture or any future supplemental
indenture is intended to modify, and the parties do hereby adopt and confirm,
the provisions of Section 318(c) of the Trust Indenture Act of 1939, as amended,
which amend and supersede provisions of the Indenture, as amended by this First
Supplemental Indenture.
SECTION 302. Nothing in this First Supplemental Indenture is intended to
or shall provide any rights to any parties other than those expressly
contemplated by this First Supplemental Indenture.
SECTION 303. This First Supplemental Indenture shall be governed by and
construed in accordance with the law of the State of New York, but without
regard to principles of conflicts of laws.
SECTION 304. This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
SECTION 305. Except as expressly modified hereby, all the provisions of
the Indenture are and shall continue to be in full force and effect.
SECTION 306. This First Supplemental Indenture shall become a legally
effective and binding instrument upon the later of (i) execution and delivery
hereof by the parties hereto and (ii) the Effective Time.
[signature page follows]
3
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the day and year first
above written.
HEALTH CARE PROPERTY
INVESTORS, INC., as
successor to American Health
Properties, Inc.
By:
-----------------------------------
Name: Edward J. Henning
Title: Senior Vice President, General Counsel
and Corporate Secretary
THE BANK OF NEW YORK, as Trustee
By:
-----------------------------------
Name: Walter Gitlin
Title: Vice President
S-1
<PAGE> 1
EXHIBIT 10.1
FIRST AMENDMENT TO
THE HEALTH CARE PROPERTY INVESTORS, INC.
SECOND AMENDED AND RESTATED
DIRECTORS STOCK INCENTIVE PLAN
Health Care Property Investors, Inc., a Maryland corporation (the
"Company"), had adopted by written consent the Second Amended and Restated
Directors Stock Incentive Plan (the "Plan"), effective as of April 23, 1997.
In order to amend the Plan to reflect certain changes with respect to
the exercisability of options subsequent to a Change of Control, this Amendment
to the Plan has been adopted by a written consent of the Board of Directors of
the Company, effective as of November 3, 1999.
1. Section 6(e) of the Plan shall be amended and restated in its
entirety as follows:
"(e) Options which have been granted but have not yet otherwise
become exercisable shall become exercisable immediately if, after a Change of
Control, a Director is (a) removed from the Board during the Director's term of
election that included the date of a Change of Control, or (b) not re-elected
immediately following expiration of the term that included the date of a Change
of Control. In addition, notwithstanding any other provision of this Plan, (i)
with respect to grants of Options on or after November 3, 1999 which are
outstanding on the date of a Change of Control, such Options, to the extent then
exercisable (including Options which become exercisable by a Change of Control),
shall not expire until the later of the date specified in the Director's stock
option agreement or the third anniversary after the date the Director ceases to
be a Director and (ii) with respect to Options which are outstanding as of
November 3, 1999 with an exercise price which equals or exceeds the Fair Market
Value of the Common Stock as of November 3, 1999, such Options shall be amended,
and are hereby amended, to provide that the Options continue to be exercisable
after a Change of Control pursuant to the terms set forth in the preceding
clause; provided, however, that in no event shall such Options be exercisable
more than ten (10) years from the Date of Grant. Furthermore, with respect to
any Options granted before November 3, 1999 with an exercise price which is less
than the Fair Market Value of the Common Stock as of November 3, 1999, the Board
may, in its sole discretion, amend any or all of the Options to provide that
such Options continue to be exercisable after a Change of Control pursuant to
the terms set forth in this Section 6(e)."
<PAGE> 1
EXHIBIT 10.2
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"), had adopted by written consent the Second Amended and Restated
Director Deferred Compensation Plan (the "Plan") and the First Amendment to the
Plan, both effective as of the termination of the Retirement Plan for Outside
Directors (the "Retirement Plan").
In order to clarify certain provisions of the Plan and to expressly
provide for the administration of the Plan by the Compensation Committee of the
Board of Directors (the "Committee"), this Amendment to the Plan has been
adopted by a written consent of the Committee, effective as of November 3, 1999.
1. Section 3(f)(ii) shall be amended and restated as follows:
"(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. In reallocating any amounts from Interest Rate Accounts to Stock
Credit Accounts or vice versa, the number of Common Stock units and the value of
the Common Stock units to be reallocated shall be determined based upon the
Average Closing Price of the Common Stock determined as of the effective date of
the reallocation."
2. Section 9 shall be renumbered Section 10 and a new Section 9
shall be added as follows:
"9. Administration.
(a) Committee Duties and Powers. The Committee shall conduct the
general administration of the Plan in accordance with the Plan and shall have
all necessary power and authority to carry out that function. Among its
necessary powers and duties are the following:
(i) To delegate all or part of its function to others
and to revoke any such delegation.
<PAGE> 2
(ii) To interpret the Plan for purpose of the
administration and application of the Plan, in a manner not inconsistent
with the Plan or applicable law and to amend or revoke any such
interpretation.
(iii) To determine questions of eligibility of
Participants and their entitlement to benefits.
(b) Limitations Upon Powers. The Plan shall be uniformly and
consistently administered, interpreted and applied with regard to all
Participants in similar circumstances. The Plan shall be administered,
interpreted and applied fairly and equitably and in accordance with the
specified purposes of the Plan.
(c) Indemnification. The Company shall pay or reimburse
Committee members for all expenses incurred by such Committee members in, and
shall indemnify and hold them harmless from, all claims, liabilities and costs
(including reasonable attorneys' fees) arising out of the good faith performance
of their duties under the Plan."
2
<PAGE> 1
EXHIBIT 10.3
FIRST AMENDMENT TO
THE HEALTH CARE PROPERTY INVESTORS, INC.
SECOND AMENDED AND RESTATED
STOCK INCENTIVE PLAN
Health Care Property Investors, Inc., a Maryland corporation (the
"Company"), had adopted by written consent the Second Amended and Restated Stock
Incentive Plan (the "Plan"), effective as of April 23, 1997.
In order to amend the Plan to reflect certain changes with respect to
the exercisability of options subsequent to a Change in Control, this Amendment
to the Plan has been adopted by a written consent of the Compensation Committee
of the Board of Directors of the Company, effective as of November 3, 1999.
1. Section 8(b) of the Plan shall be amended by replacing the first
sentence with the following sentences:
"Despite the provisions of Section 8(a), upon a Change in Control
(as defined below) all Incentive Awards then outstanding under the Plan will be
fully vested and exercisable and all restrictions will immediately cease, unless
provisions are made in connection with such transaction for the continuance of
the Plan and the assumption or the substitution for such Incentive Awards of new
incentive awards covering the stock of a successor employer corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to the number and
kind of shares and prices. In addition, (i) subject to the preceding sentence
with respect to grants of Options on or after November 3, 1999 which are
outstanding on the date of a Change in Control, such Options, to the extent then
exercisable (including Options which become exercisable by a Change in Control),
shall not expire until the later of the date specified in the Participant's
stock option agreement or the third anniversary after the date of the
Participant's termination of employment with the Company and (ii) all Options
outstanding as of November 3, 1999 with an exercise price which equals or
exceeds the Fair Market Value of the Common Stock as of November 3, 1999 shall
be amended, and are hereby amended, to provide that such Options continue to be
exercisable after a Change of Control pursuant to the terms set forth in the
preceding clause; provided, however, that in no event shall such Options be
exercisable more than ten (10) years from the Date of Grant. Furthermore, with
respect to Options granted before November 3, 1999 with an exercise price which
is less than the Fair Market Value of the Common Stock as of November 3, 1999,
the Committee may, in its sole discretion, amend any or all of such Options to
provide that the Options continue to be exercisable after a Change in Control
pursuant to the terms set forth in this Section 6(e)."
<PAGE> 1
EXHIBIT 10.4
$207,000,000
REVOLVING CREDIT AGREEMENT
dated as of November 3, 1999
among
HEALTH CARE PROPERTY INVESTORS, INC.,
THE BANKS NAMED HEREIN
THE BANK OF NEW YORK
as Agent and Issuing Bank
and
BANK OF AMERICA, N.A. and WELLS FARGO BANK, N.A.
as Co-Documentation Agents
---------------------------------------------
FIRST UNION NATIONAL BANK
as Managing Agent
BNY CAPITAL MARKETS, INC.
as Lead Arranger and Book Manager
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I. DEFINITIONS................................................................................1
Section 1.1. Definitions............................................................1
ARTICLE II. THE LOANS................................................................................14
Section 2.1. Committed Loans.......................................................14
Section 2.2. Procedure for Committed Loans.........................................14
Section 2.3. Committed Notes.......................................................15
Section 2.4. Cancellation or Reduction of the Commitment...........................15
Section 2.5. Negotiated Rate Loans.................................................16
Section 2.6. Procedure for Negotiated Rate Loans...................................16
Section 2.7. Funding of Negotiated Rate Loans......................................16
Section 2.8. Negotiated Rate Notes.................................................17
Section 2.9. Competitive Bid Loans.................................................17
Section 2.10. Procedure for Competitive Bid Loans...................................17
Section 2.11. Funding of Competitive Bid Loans......................................19
Section 2.12. Competitive Bid Notes.................................................19
Section 2.13. Certain Fees..........................................................20
Section 2.14. Optional Prepayment...................................................20
ARTICLE III. LETTERS OF CREDIT.......................................................................21
Section 3.1. Letters of Credit.....................................................21
ARTICLE IV. INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.............................................25
Section 4.1. Procedure for Interest Rate Determination.............................25
Section 4.2. Interest on ABR Loans and Competitive Bid Loans.......................25
Section 4.3. Interest on Eurodollar Loans..........................................25
Section 4.4. Conversion/Continuance................................................26
Section 4.5. Post Default Interest.................................................26
Section 4.6. Maximum Interest Rate.................................................27
ARTICLE V. DISBURSEMENT AND PAYMENT..................................................................27
Section 5.1. Pro Rata Treatment....................................................27
Section 5.2. Method of Payment.....................................................27
Section 5.3. Compensation for Losses...............................................27
Section 5.4. Withholding, Additional Costs and Capital Adequacy....................28
Section 5.5. Unavailability........................................................31
Section 5.6. Additional Costs in Respect of Letters of Credit......................31
Section 5.7. Commercial Practices in Respect of Letters of Credit..................32
ARTICLE VI. REPRESENTATIONS AND WARRANTIES...........................................................32
Section 6.1. Representations and Warranties........................................32
ARTICLE VII. CONDITIONS OF LENDING...................................................................39
Section 7.1. Conditions to the Availability of the Commitment......................39
Section 7.2. Conditions to All Loans and Letters of Credit.........................40
ARTICLE VIII. COVENANTS..............................................................................41
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 8.1. Affirmative Covenants...................................................41
Section 8.2. Negative Covenants......................................................43
Section 8.3. Financial Covenants.....................................................45
ARTICLE IX. EVENTS OF DEFAULT........................................................................46
Section 9.1. Events of Default......................................................46
ARTICLE X. THE AGENT AND THE BANKS...................................................................48
Section 10.1. The Agency and Co-Agency................................................48
Section 10.2. The Agent's Duties......................................................49
Section 10.3. Sharing of Payment and Expenses.........................................49
Section 10.4. The Agent's Liabilities.................................................49
Section 10.5. The Agent as a Bank.....................................................50
Section 10.6. Bank Credit Decision....................................................50
Section 10.7. Indemnification.........................................................50
Section 10.8. Successor Agent.........................................................51
ARTICLE XI. CONSENT TO JURISDICTION..................................................................51
Section 11.1. Consent to Jurisdiction.................................................51
ARTICLE XII. MISCELLANEOUS...........................................................................52
Section 12.1. Applicable Law..........................................................52
Section 12.2. Set-off.................................................................52
Section 12.3. Expenses................................................................52
Section 12.4. Amendments..............................................................52
Section 12.5. Cumulative Rights and No Waiver.........................................52
Section 12.6. Notices.................................................................53
Section 12.7. Separability............................................................53
Section 12.8. Assignments and Participations..........................................53
Section 12.9. Waiver of Jury Trial....................................................54
Section 12.10. Confidentiality.........................................................55
Section 12.11. Indemnity...............................................................55
Section 12.12. Extension of Termination Dates; Removal of Banks; Substitutions
of Banks..............................................................55
Section 12.13. Increase of Commitments.................................................56
Section 12.14. Knowledge of the Company................................................57
Section 12.15. Execution in Counterparts...............................................57
</TABLE>
ii
<PAGE> 4
EXHIBITS AND SCHEDULES
EXHIBIT A Form of Conversion/Continuance Request
EXHIBIT B Form of Committed Loan Request
EXHIBIT C Form of Committed Note
EXHIBIT D Form of Negotiated Rate Confirmation
EXHIBIT E Form of Negotiated Rate Note
EXHIBIT F Form of Competitive Bid Request
EXHIBIT G Form of Competitive Bid
EXHIBIT H Form of Competitive Bid Note
EXHIBIT I Form of Opinion of Latham & Watkins
EXHIBIT J Form of Opinion of Ballard Spahr Andrews & Ingersoll, LLP
EXHIBIT K Form of Extension Letter
EXHIBIT L Form of Letter of Credit Notice
SCHEDULE 6.1(a)......Subsidiaries and Joint Ventures of the Company
SCHEDULE 9.1(f)......Indebtedness
iii
<PAGE> 5
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT, dated as of November 3, 1999 (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 as Issuing Bank, and Bank of America, N.A. and
Wells Fargo Bank, N.A., as Co-Documentation Agents, with BNY Capital Markets,
Inc., as Lead Arranger and Book Manager:
W I T N E S S E T H:
WHEREAS, the Company has requested the Banks to lend up to
$207,000,000 to the Company on a revolving basis to refinance certain existing
indebtedness, to finance the acquisition of American Health Properties, Inc., a
Delaware corporation ("AHPI"), and for other general corporate purposes;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions.
(a) Terms Generally. The definitions ascribed to terms in this
SECTION and elsewhere in this Agreement shall apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The words "hereby", "herein", "hereof",
"hereunder" and words of similar import refer to this Agreement as a whole
(including any exhibits and schedules hereto) and not merely to the specific
section, paragraph or clause in which such word appears. All references herein
to Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, (i) all references to "dollars" or "$" shall be deemed references to the
lawful money of the United States of America, and (ii) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or other modifications set forth
herein).
(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 SECTION
8.2(a), 8.2(b), 8.2(c), 8.2(d) or 8.3 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
<PAGE> 6
Agreement applied on a basis consistent with the construction thereof applied in
preparing the Company's audited financial statements referred to in SECTION
6.1(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 SECTION 8.2(a), 8.2(b), 8.2(c) or 8.3 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 4.2.
"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.
"Agent" shall have the meaning given to such term in the preamble
of this Agreement and shall also include any successor agent hereunder.
"Agreement" shall have the meaning given to such term in the
preamble.
"AHPI" shall have the meaning given to such term in the preamble.
"AHPI Merger Documents" shall mean the Agreement and Plan of
Merger, dated as of August 4, 1999, between the Company and AHPI, and each
agreement, instrument or other document executed or delivered in connection
therewith.
"Applicable Margin" shall mean the margin set forth in the
following chart applicable to the Pricing Level then in effect:
<TABLE>
<CAPTION>
APPLICABLE
PRICING LEVEL MARGIN
------------- ----------
<S> <C>
I 0.6750%
II 0.7500%
III 0.9500%
IV 1.0250%
V 1.1000%
</TABLE>
2
<PAGE> 7
<TABLE>
<CAPTION>
APPLICABLE
PRICING LEVEL MARGIN
------------- ----------
<S> <C>
VI 1.4250%
</TABLE>
Subject to clauses (i), (ii) and (iii) below, "Pricing Level I" shall be
applicable for so long as the rating of the Company's unsecured (non-credit
enhanced) senior long term debt ("Senior Debt Rating") is greater than or equal
to A by Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc., or any successor thereto ("S&P"), or greater than or equal to
A2 by Moody's Investors Service, Inc., or any successor thereto ("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 or 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 or
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 or greater than or equal to
Baa2 by Moody's and none of Pricing Level I, II or III is applicable; "Pricing
Level V" shall be applicable for so long as the Senior Debt Rating is greater
than or equal to BBB- by S&P or greater than or equal to Baa3 by Moody's and
none of Pricing Level I, II, III or IV is applicable; and "Pricing Level VI"
shall be applicable for so long as none of Pricing Level I, II, III, IV or V is
applicable.
Notwithstanding the foregoing, (i) in the event of a split rating
as between S&P and Moody's by more than one equivalent rating level, then the
Pricing Level shall be determined by a rating that is one rating higher than the
lower of the two ratings; (ii) in the event that no Senior Debt Rating is made
available by S&P and Moody's and the Company's senior subordinated unsecured
debt rating is made available by S&P or Moody's, then for purposes of the
foregoing determinations the Senior Debt Rating shall be deemed to be one rating
higher than such subordinated unsecured debt rating (e.g., if such subordinated
unsecured debt rating by S&P is A-, then the Senior Debt Rating by S&P shall be
deemed to be A); and (iii) in the event that no Senior Debt Rating and no such
subordinated unsecured debt rating are made available by S&P and Moody's, then
Pricing Level VI above shall apply.
"Assignee" shall have the meaning given to such term in SECTION
12.8(c).
"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 and, as
appropriate, the Issuing Bank.
"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.
3
<PAGE> 8
"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, Negotiated Rate Confirmation or Competitive Bid Request, 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
Letter of Credit, any payment of the Facility Fee, any Negotiated Rate Loan or
any Competitive Bid Loan, 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.
"Change of Control" shall mean (i) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person(s) and/or
group(s) (within the meaning of the Securities Exchange Act of 1934 and the
rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof), of shares representing 35% or more of the aggregate ordinary
voting power or economic interests represented by the issued and outstanding
equity securities of the Company on a fully diluted basis or (ii) during any
period of up to 24 consecutive months, commencing after the date hereof,
individuals who at the beginning of such 24-month period were directors of the
Company (together with any new directors whose election or nomination for
election to the board of directors of the Company was approved by 66% of the
directors who were either in office at the beginning of such period or whose
election or nomination for election to the board of directors of the Company was
previously so approved) shall cease for any reason (other than due to death or
disability or, in addition to the foregoing, in the case of directors in office
on the date hereof, retirement in the ordinary course or pursuant to contractual
agreements in effect on the date hereof) to constitute a majority of the board
of directors of the Company.
"Co-Documentation Agents" shall mean Bank of America, N.A. and
Wells Fargo Bank, N.A., and shall also include any successor co-documentation
agent(s) hereunder.
4
<PAGE> 9
"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 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 2.4 or 12.12 or increased pursuant to SECTION 12.13 and (ii)
on or after such Bank's Termination Date, zero.
"Committed Loan Request" shall mean a request by the Company to
borrow Committed Loans pursuant to the terms hereof, which shall be
substantially in the form of EXHIBIT B and shall specify, with respect to such
requested Committed Loans, (i) the requested Borrowing Date, (ii) the aggregate
amount of Committed Loans which the Company desires to borrow on such date,
(iii) whether such requested Committed Loans are to bear interest as ABR Loans
or Eurodollar Loans and (iv) if the requested Committed 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 SECTIONS 2.1 to 2.3 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 C.
"Company" shall have the meaning given to such term in the
preamble.
"Competitive Bid" shall mean an offer by a Bank to make a
Competitive Bid Loan pursuant to SECTIONS 2.9 to 2.12, substantially in the form
of EXHIBIT G.
"Competitive Bid Borrowing" shall mean a Competitive Bid Loan or
a group of Competitive Bid Loans made on the same date and as to which a single
term is in effect as specified in a Competitive Bid Request.
"Competitive Bid Loan" shall mean a Loan that is made pursuant to
SECTIONS 2.9 to 2.12 and outstanding hereunder.
"Competitive Bid Notes" shall mean, collectively, the promissory
notes of the Company, each substantially in the form of EXHIBIT H.
"Competitive Bid Rate" shall have the meaning given to such term
in SECTION 2.10(b).
"Competitive Bid Request" shall mean a request by the Company for
Competitive Bids pursuant to SECTIONS 2.9 to 2.12, substantially in the form of
EXHIBIT F.
"Compliance Date" shall mean each of the Effective Date, each
Borrowing Date, each Conversion/Continuance Date, the date of issuance or
renewal of each Letter of Credit and
5
<PAGE> 10
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 VI.
"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 Funds from Operations" shall mean, for any period,
"Funds From Operations" or the similar item, determined on a consolidated basis
for the Company and the Subsidiaries, as shown on the most recent consolidated
statements of cash flows for the Company and the Subsidiaries which has been
delivered to the Agent pursuant to SECTION 8.1(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 the Subsidiaries, determined on a consolidated
basis, in accordance with GAAP with respect to all outstanding Indebtedness of
the Company and the Subsidiaries, including all net costs under Interest Rate
Protection Agreements.
"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 the Subsidiaries, as shown on the most recent
consolidated balance sheet for the Company and the Subsidiaries which has been
delivered to the Agent pursuant to SECTION 8.1(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 the Subsidiaries, as shown on the most recent
consolidated balance sheet for the Company and the Subsidiaries which has been
delivered to the Agent pursuant to SECTION 8.1(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 the Subsidiaries, as
shown on the most recent consolidated balance sheet for the Company and the
Subsidiaries which has been delivered to the Agent pursuant to SECTION 8.1(a),
less Consolidated Stockholders' Equity.
"Conversion/Continuance Date" shall mean the date on which a
conversion of interest rates on outstanding Committed 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 Committed Loans pursuant to the terms hereof, which shall be
substantially in the form of EXHIBIT A and shall specify, with respect to such
outstanding Committed Loans, (i) the requested Conversion/Continuance Date,
which shall be not less than three Business Days after the date of such
Conversion/Continuance
6
<PAGE> 11
Request, (ii) the aggregate amount of the Committed Loans, from and after the
Conversion/Continuance Date, which are to bear interest as ABR Loans or
Eurodollar Loans and (iii) if any Committed Loans are Eurodollar Loans, the term
of the Interest Periods therefor, if any.
"Credit Documents" shall mean this Agreement, the Notes and the
Letters of Credit.
"Effective Date" shall have the meaning given to such term in
SECTION 7.1.
"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 liabilities relating to the
release of Hazardous Substances (whether on-site or off-site), any claim by any
third party (including 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" shall mean (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, (a) relating
to the protection, preservation or restoration of the environment, (including
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 (b) 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 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 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.
7
<PAGE> 12
"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 4.3.
"Eurodollar Lending Office" shall have the meaning given to such
term in SECTION 4.3(d).
"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 have the meaning given to such term in
SECTION 9.1.
"Face Amount" shall mean, with respect to any Letter of Credit,
at any time, the sum of (i) the maximum amount available to be drawn under such
Letter of Credit at such time (assuming compliance at such time with all
conditions to drawing) plus (ii) the aggregate amount of all payments made by
the Issuing Bank thereunder that have not yet been reimbursed by or on behalf of
the Company at such time.
"Facility Fee" shall have the meaning given to such term in
SECTION 2.13(a).
"Facility Fee Rate" shall mean, with respect to any Facility Fee
payment, 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:
<TABLE>
<CAPTION>
PRICING LEVEL FACILITY FEE
<S> <C>
I 0.2000%
II 0.2500%
III 0.3000%
IV 0.3500%
V 0.4000%
VI 0.4500%
</TABLE>
"Federal Funds Rate" shall mean, for any day, 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
8
<PAGE> 13
"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
pronouncements 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" shall mean 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 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.
"Increasing Bank" shall have the meaning given to such term in
SECTION 12.13.
"Indebtedness" of any Person shall mean, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (including all obligations, contingent or
otherwise, 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,
(ii) all obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
9
<PAGE> 14
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), (iv) all Capital Lease Obligations of such Person,
(v) all Indebtedness referred to in clauses (i), (ii), (iii) or (iv) 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,
(vi) 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
(vii) all Indebtedness of others Guaranteed by such Person. For purposes of this
Agreement, the amount of any Indebtedness under clauses (iii) and (v) shall be
the lesser of (a) the principal amount of such Indebtedness and (b) the value of
the property subject to the Lien referred to therein.
"Indemnitee" shall have the meaning given to such term in SECTION
12.11.
"Initial Loan" shall mean the first Loan which is made pursuant
to the terms of this Agreement.
"Initial Transactions" shall mean the following transactions
consummated on or before the Effective Date: (i) the merger of AHPI into the
Company pursuant to the AHPI Merger Documents in effect on the Effective Date,
and (ii) the payment in full of all Indebtedness (together with all accrued and
unpaid interest, fees and other unpaid sums) under, and the cancellation or
termination of, each of the following documents (together with the cancellation
or termination of any and all Liens securing the same): (a) each of the Amended
and Restated $135,000,000 Revolving Credit Agreement and the Amended and
Restated $45,000,000 Revolving Credit Agreement, dated as of October 22, 1997,
among the Company, the banks named therein, and The Bank of New York, as agent,
(b) the Credit Agreement, dated as of December 23, 1993, among AHPI, the lenders
party thereto and Wells Fargo Bank, N.A., as administrative agent, and (c) all
agreements, instruments and other documents executed or delivered in connection
with any of the foregoing.
"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 SECTION 2.2 or 4.4 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.
"Issuing Bank" shall mean The Bank of New York, or any successor
to the duties, obligations and rights of The Bank of New York, in its capacity
as issuer of Letters of Credit hereunder.
"Lead Arranger and Book Manager" shall mean BNY Capital Markets,
Inc.
10
<PAGE> 15
"Letter of Credit" shall have the meaning given to such term in
SECTION 3.1.
"Letter of Credit Commitment" shall have the meaning given to
such term in SECTION 3.1(a).
"Letter of Credit Fee" shall have the meaning given to such term
in SECTION 3.1(i).
"Letter of Credit Notice" shall have the meaning given to such
term in SECTION 3.1(c).
"Lien" shall mean, with respect to any asset, (i) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset and (ii) 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, the
Negotiated Rate Loans and the Competitive Bid Loans and, individually, any
Committed Loan, any Negotiated Rate Loan or any Competitive Bid Loan.
"Material Adverse Change" shall mean a material adverse change in
the business, properties, condition (financial or otherwise) or operations of
the Company and the Subsidiaries, taken as a whole, in each case determined on a
pro forma basis after giving effect to the Initial Transactions, from that
reflected in the financial statements referred to in SECTION 6.1(h)(iii).
"Material Adverse Effect" shall mean (i) any material adverse
effect on the business, properties, condition (financial or otherwise) or
operations of the Company and the 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 other Credit
Documents, or (iii) any adverse effect on the legality, validity, binding effect
or enforceability of this Agreement or any other Credit Document.
"Negotiated Rate Borrowing" shall mean one or more Negotiated
Rate Loans made to the Company by one or more of the Banks and of which the
Agent is given notice by a Negotiated Rate Confirmation.
"Negotiated Rate Confirmation" shall mean the notice, in
substantially the form of EXHIBIT D, pertaining to a Negotiated Rate Loan, and
made pursuant to SECTION 2.6, duly completed and executed and personally
delivered or transmitted by facsimile to the Company.
"Negotiated Rate Funding Date" shall mean the date specified in
the Negotiated Rate Confirmation as the date of funding for the relevant
Negotiated Rate Borrowing.
11
<PAGE> 16
"Negotiated Rate Loan" shall mean a Loan that is made pursuant to
SECTIONS 2.5 to 2.8.
"Negotiated Rate Notes" shall mean, collectively, the promissory
notes of the Company, each substantially in the form of EXHIBIT E.
"Notes" shall mean, collectively, the Committed Notes, the
Negotiated Rate Notes and the Competitive Bid Notes.
"Participant" shall have the meaning given to such term in
SECTION 12.8(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 (i) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (ii) the Code, or (iii) 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.
"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 zero or
expired, the proportion of such Bank's then outstanding Committed Loans to the
aggregate amount of Committed Loans then outstanding.
"Properties" shall have the meaning given to such term in SECTION
6.1(s).
12
<PAGE> 17
"Reference Amount" shall mean, with respect to any Reference Bank
and Interest Period, (i) if that Reference Bank is a Bank, the amount of that
Bank's Eurodollar Loan scheduled to be outstanding during that Interest Period
or (ii) 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 either case, (a) without
taking into account any reduction in the amount of any Bank's Loan through any
assignment or transfer and (b) rounded up to the nearest integral multiple of
$1,000,000.
"Reference Bank" shall mean each of The Bank of New York, Bank of
America, N.A. and Wells Fargo Bank, N.A.
"Reimbursement Obligations" shall mean, collectively, the
obligations of the Company in respect of Letters of Credit then outstanding
under SECTION 3.1(g) to reimburse the Issuing Bank in respect of any drawing
under a Letter of Credit.
"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 and having shares (in accordance with SECTION 3.1(d))
in the then aggregate Face Amount of all issued and outstanding Letters of
Credit evidencing or representing at least 51% of the then aggregate unpaid
principal amount of the Loans and the then aggregate Face Amount of all issued
and outstanding Letters of Credit.
"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.
"Successor Bank" shall have the meaning given to such term in
SECTION 12.12(c).
"Taxes" shall have the meaning given to such term in SECTION
5.4(a).
13
<PAGE> 18
"Terminating Bank" shall have the meaning given to such term in
SECTION 12.12(c).
"Termination Date" shall mean, with respect to any Bank, the
earlier to occur of (i) the fourth anniversary of the date of this Agreement or
such later date as may be agreed to by such Bank pursuant to SECTION 12.12 and
(ii) the date on which the obligations of such Bank to make loans hereunder
shall terminate pursuant to SECTION 9.1 or the Commitments shall be reduced to
zero pursuant to SECTION 2.4.
"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.
"Utilization Fee" shall have the meaning given to such term in
SECTION 2.13(b).
"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 2.1. 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 contained in SECTION 7.2, 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 principal amount of outstanding Committed Loans, (ii) the
aggregate principal amount of outstanding Negotiated Rate Loans, (iii) the
aggregate principal amount of outstanding Competitive Bid Loans and (iv) the
aggregate Face Amount of issued and outstanding Letters of Credit may not exceed
the Total Commitment.
Section 2.2. Procedure for Committed Loans. (a) The Company may borrow
Committed Loans by delivering a written Committed Loan Request to the Agent (i)
at or before 11:00 a.m., New York City time, on the requested Borrowing Date
therefor, in the case of ABR Loans, or (ii) at or before 12:00 noon, New York
City time, 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 City time, on the Borrowing Date specified in
such Committed Loan Request, each
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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 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) in the case of the Bank, (1) the Federal Funds Rate, for the
five-day period beginning on the Borrowing Date, and (2) the applicable rate on
the Loans made on the Borrowing Date, for the period beginning on the sixth day
after the Borrowing Date, and (ii) in the case of the Company, the applicable
rate on the Loans made on 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; provided that such telephonic notice shall be
confirmed by delivery of a written Committed Loan Request to the Agent by no
later than 3:00 p.m., New York City time, on the date of such telephonic notice.
Section 2.3. 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
principal 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 2.4. 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
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any Loan or Letter of Credit remains outstanding or any Reimbursement Obligation
remains unpaid; 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 sum of the aggregate outstanding
principal amount of all Committed Loans, Negotiated Rate Loans and Competitive
Bid Loans on such date plus (ii) the aggregate Face Amount of all issued and
outstanding Letters of Credit 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 all
Loans is less than $5,000,000, then all of such lesser amount). All such
cancellations or reductions shall be permanent.
Section 2.5. Negotiated Rate 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 Negotiated Rate Loans to the Company
from time to time on or after the Effective Date and prior to such Bank's
Termination Date in amounts determined as indicated in the Negotiated Rate
Confirmation and for a term that, for each Negotiated Rate Loan, is not less
than one day nor more than 270 days from the date of funding of such Negotiated
Rate Loan as provided in SECTION 2.7; provided that the sum of (i) the aggregate
principal amount of all outstanding Loans plus (ii) the aggregate Face Amount of
all issued and outstanding Letters of Credit shall not at any time exceed the
then Total Commitment.
Section 2.6. Procedure for Negotiated Rate Loans. 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 Negotiated Rate 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 Negotiated Rate Loans as part of such proposed
Negotiated Rate Borrowing on mutually agreed-upon terms and notify the Agent by
delivering a written Negotiated Rate Confirmation from the Company and the Bank
or Banks proposing to make Negotiated Rate Loans before 12:30 p.m. (New York
City time) on the date of the funding of such Negotiated Rate Loan, which shall
be a Business Day (the "Negotiated Rate Funding Date"). Such Negotiated Rate
Confirmation shall specify the amount of each Negotiated Rate Loan that such
Bank or Banks will make as part of such proposed Negotiated Rate Borrowing
(which amounts may, subject to the proviso in SECTION 2.5, exceed each such
Bank's Commitment), the Negotiated Rate Funding Date, the date or dates of
maturity thereof, which date or dates may not occur after the Termination Date,
the rate or rates of interest applicable thereto and all other terms thereof.
Each Negotiated Rate Loan shall be made pursuant to a Negotiated Rate
Confirmation. In lieu of delivering the written Negotiated Rate Confirmation
described above, the Company may give the Agent telephonic notice of any
Negotiated Rate Borrowing by the time required under this clause (a), provided
that such telephonic notice shall be confirmed by delivery of a written
Negotiated Rate Confirmation to the Agent by no later than 2:00 p.m., New York
City time, on the date of such telephonic notice.
Section 2.7. Funding of Negotiated Rate Loans. No later than 2:00 p.m.
(New York City time) on the Negotiated Rate Funding Date, each Bank will make
available to the Agent in dollars and immediately available funds at the office
of the Agent at its address set forth on the signature pages hereof the
Negotiated Rate Loan, if any, to be made by such Bank as part of the Negotiated
Rate Borrowing to be made on such date in the manner provided above. Upon
receipt by the Agent of all such funds, the Agent shall disburse to the Company
on such date such Negotiated Rate Loan in like funds at the Company's account
specified in the relevant
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Negotiated Rate Confirmation. The Agent may, but shall not be required to,
advance on behalf of any Bank such Bank's Negotiated Rate Loan 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 such Negotiated Rate Loan 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 Negotiated Rate 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) in the case
of the Bank, (1) the Federal Funds Rate, for the five-day period beginning on
the Borrowing Date, and (2) the applicable rate on the Loans made on the
Borrowing Date, for the period beginning on the sixth day after the Borrowing
Date, and (ii) in the case of the Company, the applicable rate on the Loans made
on the Borrowing Date.
Section 2.8. Negotiated Rate Notes. The Negotiated Rate Loans of each
Bank shall be evidenced by a Negotiated Rate Note payable to the order of each
Bank. The Negotiated Rate Note of each Bank shall (i) be in the principal amount
of $207,000,000, or such amount less than $207,000,000 as the Company and such
Bank may agree, (ii) be dated not later than the date of the initial Negotiated
Rate Confirmation relating to a Negotiated Rate 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 herein and in the applicable Negotiated Rate Confirmations.
Each Bank is authorized to indicate upon the grid attached to its Negotiated
Rate Note all Negotiated Rate 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 Negotiated Rate 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 Negotiated Rate Notes.
Section 2.9. Competitive Bid Loans. On the terms and subject to the
conditions of this Agreement, from time to time on or after the Effective Date
and prior to the Termination Date, the Company may (but is not obligated to)
make requests for Competitive Bids for Competitive Bid Loans and may (but is not
obligated to) accept Competitive Bids and borrow Competitive Bid Loans for a
term that, for each Competitive Bid Loan, is not less than seven days nor more
than 270 days from the Borrowing Date of such Competitive Bid Loan; provided
that the sum of (i) the aggregate principal amount of all outstanding Loans plus
(ii) the aggregate Face Amount of all issued and outstanding Letters of Credit
shall not at any time exceed the then Total Commitment.
Section 2.10. Procedure for Competitive Bid Loans.
(a) Competitive Bid Requests. To request Competitive Bids, the
Company shall deliver a written Competitive Bid Request to the Agent not later
than 1:00 p.m., New York City time, on the date not less than one Business Day
prior to the Borrowing Date of the
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proposed Competitive Bid Borrowing; provided that (i) the Company may not submit
more than one Competitive Bid Request on the same day and (ii) in lieu of
delivering the written Competitive Bid Request described above, the Company may
give the Agent telephonic notice of any request for Competitive Bids by the time
required under this clause (a), provided, further, that such telephonic notice
shall be confirmed by delivery of a written Competitive Bid Request to the Agent
by no later than 3:00 p.m., New York City time, on the date of such telephonic
notice. Each such Competitive Bid Request shall specify the aggregate amount of
the requested Competitive Bid Borrowing, the proposed Borrowing Date of such
Competitive Bid Borrowing, which shall be a Business Day, the date of maturity
of the Competitive Bid Loans that are requested to be made as part of such
Competitive Bid Borrowing, which date shall be a Business Day occurring on or
before the Termination Date, and the Company's account to which funds are to be
disbursed. Promptly following receipt of a Competitive Bid Request in accordance
with this SECTION, the Agent shall notify the Banks of the details thereof by
facsimile, inviting the Banks to submit Competitive Bids.
(b) Competitive Bids. Each Bank may in its sole and absolute
discretion make one or more Competitive Bids to the Company in response to a
Competitive Bid Request. Each Competitive Bid by a Bank must be substantially in
the form of EXHIBIT G and must be received by the Agent by facsimile not later
than 11:30 a.m., New York City time, on the proposed Borrowing Date of such
Competitive Bid Borrowing. Competitive Bids that do not conform substantially to
the form of EXHIBIT G may be rejected by the Agent, and the Agent shall notify
the applicable Bank as promptly as practicable. Each Competitive Bid shall
specify (i) the principal amount (which shall be the amount of $5,000,000 or in
integral multiples of $1,000,000 in excess thereof and which may equal the
entire principal amount of the Competitive Bid Borrowing requested by the
Company) of the Competitive Bid Loan or Loans that the Bank is willing to make,
(ii) the rate of interest (the "Competitive Bid Rate") at which the Bank is
prepared to make such Loan (expressed as a percentage rate per annum in the form
of a decimal to no more than four decimal places) and (iii) the term applicable
to each such Competitive Bid Loan and the date of maturity of such Competitive
Bid Loan.
(c) Acceptance/Rejections of Competitive Bids. The Agent shall
promptly notify the Company by facsimile of the Competitive Bid Rate and the
principal amount specified in each Competitive Bid and the identity of the Bank
that shall have made such Competitive Bid. Subject only to the provisions of
this paragraph, the Company may in its sole and absolute discretion accept or
reject any Competitive Bid. The Company shall notify the Agent by telephone,
confirmed by facsimile in a form approved by the Agent, whether and to what
extent it has decided to accept or reject each Competitive Bid not later than
12:30 p.m., New York City time, on the proposed Borrowing Date of the
Competitive Bid Borrowing; provided that (i) the failure of the Company to give
such notice shall be deemed to be a rejection of each Competitive Bid, (ii) the
Company shall not accept a Competitive Bid made at a particular Competitive Bid
Rate if the Company rejects a Competitive Bid made at a lower Competitive Bid
Rate, (iii) the aggregate amount of the Competitive Bids accepted by the Company
shall not exceed the aggregate amount of the requested Competitive Bid Borrowing
specified in the related Competitive Bid Request, (iv) to the extent necessary
to comply with clause (iii) above, the Company may accept Competitive Bids at
the same Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each Competitive Bid and (v) except pursuant to
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clause (iv) above, no Competitive Bid shall be accepted for a Competitive Bid
Loan unless such Competitive Bid Loan is in the amount of $5,000,000 or in
integral multiples of $1,000,000 in excess thereof; provided, further, that if a
Competitive Bid Loan must be in an amount less than $5,000,000 because of the
provisions of clause (iv) above, such Competitive Bid Loan may be for an amount
of $1,000,000 or any integral multiple in excess thereof, and in calculating the
pro rata allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by the
Company. A notice given by the Company pursuant to this paragraph shall be
irrevocable.
(d) Competitive Bid Confirmation. The Agent shall promptly notify
each bidding Bank by facsimile whether or not its Competitive Bid has been
accepted (and, if so, the amount and Competitive Bid Rate so accepted), and each
successful bidder will thereupon become bound, on the terms and subject to the
conditions of this Agreement, to make the Competitive Bid Loan in respect of
which its Competitive Bid has been accepted.
(e) Competitive Bids by the Agent. If the Agent shall elect to
submit a Competitive Bid in its capacity as a Bank, it shall submit such
Competitive Bid directly to the Company at least one quarter of an hour earlier
than the time by which the other Banks are required to submit their Competitive
Bids to the Agent pursuant to paragraph (b) of this SECTION.
Section 2.11. Funding of Competitive Bid Loans. No later than 2:00 p.m.,
New York City time, on the relevant Borrowing Date, each Bank will make
available to the Agent in dollars and immediately available funds at the office
of the Agent at its address set forth on the signature pages hereof, each
Competitive Bid Loan, if any, to be made by such Bank as part of the Competitive
Bid Borrowing to be made on such date in the manner provided above. Upon receipt
by the Agent of all such funds, the Agent shall disburse to the Company on such
date such Competitive Bid Loan in like funds at the Company's account specified
in the relevant Competitive Bid Request. The Agent may, but shall not be
required to, advance on behalf of any Bank such Bank's Competitive Bid Loan 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 such Competitive Bid
Loan 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 Competitive Bid 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) in the case
of the Bank, (1) the Federal Funds Rate, for the five-day period beginning on
the Borrowing Date, and (2) the applicable rate on the Loans made on the
Borrowing Date, for the period beginning on the sixth day after the Borrowing
Date, and (ii) in the case of the Company, the applicable rate on the Loans made
on the Borrowing Date.
Section 2.12. Competitive Bid Notes. The Competitive Bid Loans of each
Bank shall be evidenced by a Competitive Bid Note payable to the order of each
Bank. The Competitive Bid Note of each Bank shall (i) be in the principal amount
of $207,000,000, (ii) be dated not later
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than the date of the initial Competitive Bid 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 herein. Each Bank is authorized to indicate upon the grid attached to
its Competitive Bid Note all Competitive Bid 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 Competitive Bid 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 Competitive Bid Notes.
Section 2.13. Certain Fees. (a) The Company shall pay to the Agent for
the pro rata account of the Banks during the period from and including the
Effective Date through but excluding the Termination Date 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 Effective Date, on any date
that the Total Commitment is canceled or reduced pursuant to SECTION 2.4 (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 the pro rata account
of the Banks during the period from and including the Effective Date through but
excluding the Termination Date, a fee (the "Utilization Fee") equal to (i)
0.125% per annum (on the basis of a 360-day year for the actual number of days
involved) on the daily amount during such period of the sum of (1) the aggregate
unpaid principal amount of all Committed Loans and the aggregate Face Amount of
all issued and outstanding Letters of Credit plus (2) the aggregate unpaid
principal amount of all committed loans under the 364-Day Revolving Credit
Agreement, dated as of November 3, 1999, among the Borrower, the banks named
therein and The Bank of New York, as agent, provided that such sum is greater
than 50% of the sum of the Total Commitments on such day and the total
commitments to make committed or similar loans under such 364-Day Revolving
Credit Agreement on such day, multiplied by (ii) a fraction, the numerator of
which is the sum of the aggregate unpaid principal amount on such day of all
Committed Loans and the aggregate Face Amount on such day of all issued and
outstanding Letters of Credit and the denominator of which is the sum of items
(1) and (2) above. 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, and
on the Termination Date.
(c) The Company shall pay to each of the Agent and the Banks, for
its account, fees payable in the amounts and at the times separately agreed upon
between the Company and the Agent or such Bank, as the case may be.
Section 2.14. 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, and on not less than one Business Day's written notice to the
Agent, in the case of ABR Loans, Negotiated Rate Loans and Competitive Bid
Loans, to prepay Loans that, in the case of all Loans other than Negotiated Rate
Loans, bear interest on the same basis and having the same Interest Periods, if
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any, or terms, as the case may be, 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 unpaid principal 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,
the amounts required by SECTION 5.3 and, in the case of Negotiated Rate Loans,
such other compensation as may be agreed to by the Company and the Bank making
such Negotiated Rate Loan and as to which the Company and such Bank shall have
promptly notified the Agent; provided that the Company shall not have the right
to prepay any Negotiated Rate Loan or any Competitive Bid Loan without the prior
written consent of the Bank making such Negotiated Rate Loan or such Competitive
Bid Loan, as the case may be. Subject to the terms and conditions hereof,
prepaid Loans may be reborrowed.
ARTICLE III.
LETTERS OF CREDIT
Section 3.1. Letters of Credit. Subject to the terms and conditions
hereof, the Issuing Bank shall issue letters of credit (each, a "Letter of
Credit") for the account of the Company.
(a) The commitment hereunder of the Issuing Bank to issue or
renew Letters of Credit (the "Letter of Credit Commitment") shall be equal to
the lesser of (i) $50,000,000 and (ii) the difference between the Total
Commitment less the sum of the aggregate outstanding principal amount of all
Loans on such date.
(b) The Letters of Credit (i) shall have an aggregate Face Amount
not in excess of the Letter of Credit Commitment, (ii) may, at the sole option
of the Issuing Bank, be renewable if so requested by the Company using the form
for such request then in general use by the Issuing Bank and (iii) shall have an
expiration date no later than the earlier of (1) 365 days after the date of
issuance thereof and (2) five Business Days prior to the Termination Date.
(c) The Company shall, no later than 2:00 p.m., New York City
time, on the date not less than three Business Days (or such lesser period to
which the Issuing Bank may agree in writing) before the date on which issuance
or renewal of a Letter of Credit is desired, give the Agent written notice
substantially in the form of EXHIBIT L (effective upon receipt) (a "Letter of
Credit Notice") specifying the date on which each Letter of Credit is to be
issued or renewed, the requested expiration date thereof and the stated amount
thereof, and attaching a proposed form of such letter of credit or other
applicable form accompanied by a completed form of application for issuance or
renewal of a letter of credit, using such standard form as shall then be in
general use by the Issuing Bank. Upon receipt of such notice, the Agent shall
notify the Issuing Bank and each Bank of the contents thereof. Notwithstanding
the foregoing, in lieu of delivering the written notice described above, the
Company may give the Agent and the Issuing Bank telephonic notice of any request
for the issuance or renewal of a Letter of Credit by the time required under
this clause (c), provided, further, that such telephonic notice shall be
confirmed by delivery of a written Letter of Credit Notice to the Agent and the
Issuing Bank by no later than 4:00 p.m., New York City time, on the date of such
telephonic notice.
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(d) Upon the date of issuance or renewal of each Letter of
Credit, the Issuing Bank shall be deemed, without further action by any party
hereto, to have sold to each Bank, and each Bank hereby irrevocably agrees to
purchase, and each Bank shall be deemed, without further action by any party
hereto, to have purchased, from the Issuing Bank, an undivided and continuing
participation in such Letter of Credit, in accordance with such Bank's Pro Rata
Share.
(e) Upon receipt from the beneficiary of any Letter of Credit or
any demand for payment under such Letter of Credit, the Issuing Bank shall
promptly notify the Company and the Agent as to the amount paid or to be paid as
a result of such demand and the respective payment date.
(f) Each Bank shall, upon request by the Issuing Bank (with a
copy to the Agent), remit to the Issuing Bank, through the Agent, such Bank's
share (as determined in accordance with SECTION 3.1(d) above) of the payment
made by the Issuing Bank together with interest thereon for each day from the
day of demand through the day of payment at a rate equal to the Federal Funds
Rate, changing as and when said rate shall change, plus, for each day from the
day three Business Days after such demand through the day of payment, two
percent. If the Issuing Bank shall have made such request to any Bank prior to
12:00 noon, New York City time, on a Business Day, such payment shall be made by
each Bank no later than 2:00 p.m., New York City time, on such Business Day,
otherwise such payment shall be made no later than 2:00 p.m., New York City
time, on the next Business Day.
(g) The Company shall, not later than 2:00 p.m., New York City
time, on the date of payment of each drawing, reimburse the Issuing Bank,
through the Agent, for any amounts paid by the Issuing Bank under any Letter of
Credit. The Issuing Bank shall promptly remit to each Bank, through the Agent,
such Bank's share (as determined in accordance with SECTION 3.1(d)) of any
payment received by the Issuing Bank to the extent that such Bank has reimbursed
the Issuing Bank in accordance with SECTION 3.1(f). To the extent that the
Company does not reimburse the Issuing Bank, by means of payment pursuant to
this clause (g) or by means of Loans issued pursuant to SECTION 3.1(h), for any
payment by the Issuing Bank under any Letter of Credit on the date of such
payment, such amounts not reimbursed shall accrue interest, payable on demand,
at the rate per annum (on the basis of a 365-day year for the actual number of
days involved) equal to the sum of (i) 2% per annum and (ii) the rate of
interest then applicable to ABR Loans, changing as and when said rate shall
change.
(h) The Company may request that the Banks make a Committed Loan
in order to pay its Reimbursement Obligation in respect of any payment of each
drawing under any Letter of Credit. To the extent that the Company has not
otherwise paid such Reimbursement Obligation on the date of any such drawing,
the Company shall be deemed to have given a timely notice of request for Loans
to be made on such day as ABR Loans in an aggregate amount of such Reimbursement
Obligation; such Loans, if made consistently with the provisions of this
Agreement, shall be deemed to have been made on the date of such drawing. On the
day that Loans are to be made in order to pay such Reimbursement Obligation,
each Bank shall, subject to and in accordance with the terms and conditions of
this Agreement (including satisfaction of the conditions set forth in ARTICLE
VII hereof), make a Loan, the proceeds of which shall be applied to such
Reimbursement Obligation; provided, however, that such Loan may be in amounts
less than the minimum aggregate principal amount or in amounts other than in
multiples of $100,000
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in excess thereof as required by SECTION 2.2(a); and provided, further, that,
with respect to such Loan, such Bank shall be required to make available to the
Issuing Bank under SECTION 2.2(b) only an amount equal to the difference, if
any, between the amount of such Loan and the amount remitted through the Agent
to the Issuing Bank pursuant to SECTION 3.1(f). Nothing in this paragraph (h)
shall limit each Bank's irrevocable obligations with respect to participations
in each Letter of Credit pursuant to this SECTION.
(i) The Company shall pay to the Agent for the account of each
Bank a letter of credit fee (the "Letter of Credit Fee") on such Bank's share
(as determined in accordance with SECTION 3.1(d)) of each Letter of Credit in
the daily average undrawn Face Amount of such Letter of Credit for the period
from and including the date of issuance thereof to and including the date of
expiration or termination thereof at a rate per annum (on the basis of a 360-day
year for the actual number of days involved) equal to the Applicable Margin,
such fee shall be payable in arrears on the last day of each calendar quarter
and on the date of expiration of such Letter of Credit; provided that if any
such day is not a Business Day, such fee shall be payable on the next preceding
Business Day.
(j) The obligations of the Company under this SECTION shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including circumstances such
as: (i) any lack of validity or enforceability of any Letter of Credit or any
other Credit Document; (ii) the existence of any claim, set-off, defense or
other right that the Company or any other Person may have at any time against
any beneficiary or transferee of any Letter of Credit (or any Persons for whom
any such beneficiary or transferee may be acting), the Issuing Bank, any Bank or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or any unrelated transaction; (iii) any draft, certificate,
statement or other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect of any statement
therein being untrue or inaccurate in any respect; (iv) payment to the
beneficiary of such Letter of Credit by the Issuing Bank under any Letter of
Credit against presentation of a draft or certificate that does not comply with
the terms of such Letter of Credit, or payment to the beneficiary of such Letter
of Credit by the Issuing Bank under the Letter of Credit in any other
circumstances in which conditions to payment are not met, except any such
payment resulting solely from the gross negligence or willful misconduct of the
Issuing Bank; or (v) any other event, condition or circumstance whatever,
whether or not similar to any of the foregoing. The Company bears the risk of,
and none of the Issuing Bank, any of its directors, officers, employees or
agents, the Agent or any Bank shall be liable or responsible for, any of the
foregoing matters, the use that may be made of any Letter of Credit or acts or
omissions of the beneficiary or any transferee in connection therewith.
(k) On each day during the period commencing with the issuance by
the Issuing Bank of any Letter of Credit and until such Letter of Credit shall
have expired or been terminated, the Commitment of each Bank shall be deemed to
be utilized for all purposes hereof (including SECTION 2.4) in an amount equal
to such Bank's share (as determined in accordance with SECTION 3.1(d)) of the
then Face Amount of such Letter of Credit; provided, however, that for the
purpose of determining whether any requested Loan or Letter of Credit would
exceed the Total Commitment if made, on each day during the period commencing
with the giving of notice by the Company to the Agent and the Issuing Bank of a
requested Letter of Credit pursuant to
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SECTION 3.1(c), the Commitment of each Bank shall be deemed to be utilized in an
amount equal to such Bank's Commitment with respect to the then Face Amount of
such Letter of Credit.
(l) The issuance and renewal by the Issuing Bank of each Letter
of Credit shall, in addition to the conditions set forth in ARTICLE VII, be
subject to the conditions precedent that such Letter of Credit shall be in such
form as shall be satisfactory to the Issuing Bank in its reasonable discretion
and that the Company shall have executed and delivered such other agreements,
instruments and other documents relating to such Letter of Credit as the Issuing
Bank shall have reasonably requested.
(m) If, at any time, after the Issuing Bank has made payment on a
demand under a Letter of Credit and has received from any Bank such Bank's share
of such payment, and the Issuing Bank receives any payment or makes any
application of funds on account of the Company's Reimbursement Obligations under
such Letter of Credit arising from such payment, the Issuing Bank will pay to
the Agent, for the account of such Bank, such Bank's share (as determined in
accordance with SECTION 3.1(d)) of such payment.
(n) If any amount received by the Issuing Bank on account of any
Letter of Credit or any Reimbursement Obligation shall be avoided, rescinded or
otherwise returned or paid over by the Issuing Bank for any reason at any time,
whether before or after the termination of this Agreement (or the Issuing Bank
believes in good faith that such avoidance, rescission, return or payment is
required, whether or not such matter has been adjudicated), each Bank shall,
promptly upon notice from the Issuing Bank, pay over to the Agent for the
account of the Issuing Bank its share (as determined in accordance with SECTION
3.1(d)) of such amount, together with its Pro Rata Share of any interest or
penalties payable with respect thereto.
(o) In the event that the obligations of any Bank to make Loans
or of the Issuing Bank to issue or renew Letters of Credit terminates upon the
occurrence of an Event of Default or otherwise, upon such termination, the
Company shall, prior to the Termination Date, either (i) cause all Letters of
Credit to be returned to the Issuing Bank for cancellation or (ii) deposit with
the Issuing Bank an amount of cash equal to the sum of the Face Amount of all
Letters of Credit not so returned to the Issuing Bank upon such termination. The
Issuing Bank shall hold funds so deposited for the ratable benefit of the Banks
as collateral against the obligation of the Banks to pay such Letters of Credit
in the event of any draw with respect hereto and the obligation of the Company
to pay such Reimbursement Obligations. The Issuing Bank shall return to the
Company any amounts deposited with it pursuant to this clause (o) promptly upon
the expiration or cancellation of each Letter of Credit and the payment of each
Reimbursement Obligation with respect to which such funds were deposited.
(p) Notwithstanding any other provision hereof, each Bank hereby
agrees that its obligation to participate in each Letter of Credit issued or
renewed in accordance herewith, its obligation to make the payments specified in
this SECTION, and the right of the Issuing Bank to receive such payments in the
manner specified therein are each absolute, irrevocable and unconditional and
shall not be affected by any event, condition or circumstance whatsoever. The
failure of any Bank to make any such payment shall not relieve any other Bank of
its funding obligation hereunder on the date due, but no Bank shall be
responsible for the failure of any other Bank to meet its funding obligations
hereunder.
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ARTICLE IV.
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 4.1. 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 Negotiated Rate 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 Negotiated Rate Loan and as set forth in a Negotiated
Rate Confirmation.
(c) Each Competitive Bid Loan shall bear interest at the
Competitive Bid Rate applicable to such Competitive Bid Loan.
Section 4.2. Interest on ABR Loans and Competitive Bid Loans. (a)
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.
(b) Interest on Competitive Bid Loans. Each Competitive Bid Loan
shall bear interest from the date of such Competitive Bid Loan until maturity
thereof or until such Competitive Bid Loan is repaid, payable in arrears, with
respect to a term of 90 days or less, on the maturity date of such Competitive
Bid Loan, and with respect to a term of more than 90 days, on the day which is
90 days after the date of such Competitive Bid Loan and the last day of each
subsequent 90-day period thereafter or, if sooner, the maturity date of such
Competitive Bid Loan, at a rate per annum (on the basis of a 360-day year for
the actual number of days involved) equal to the Competitive Bid Rate applicable
to such Competitive Bid Loan.
Section 4.3. 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
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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 (with respect to such Bank, its
"Eurodollar Lending Office") 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 4.4. 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, 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 5.3, 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 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; 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.
Section 4.5. 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
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Loans, changing as and when said rate shall change; with respect to Eurodollar
Loans, the rate of interest applicable to each such Eurodollar Loan; with
respect to Competitive Bid Loans, the Competitive Bid Rate applicable to each
such Competitive Bid Loan; and, with respect to Negotiated Rate Loans, the
agreed-upon rate of interest applicable to each such Negotiated Rate Loan,
changing as and when said rate shall change if such rate shall be subject to
change. Interest payable pursuant to this SECTION shall be payable on demand.
Section 4.6. 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 12.1 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, 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 V.
DISBURSEMENT AND PAYMENT
Section 5.1. Pro Rata Treatment. Each payment of the Facility Fee and
the Utilization 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 5.4 or 5.5, the Committed Notes or portions thereof as to
which a Conversion/Continuance Request has been made pursuant to SECTION 4.4
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 5.2. Method of Payment. All payments by the Company hereunder
and under the Committed Notes, the Negotiated Rate Notes and the Competitive Bid
Notes or in connection with the Letters of Credit shall be made 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 without set-off,
counterclaim or other deduction.
Section 5.3. Compensation for Losses.
(a) Compensation. In the event that (i) the Company makes a
prepayment under SECTION 2.14 on a day other than the last day of the Interest
Period for the amount so prepaid, in the case of Eurodollar Loans, or the
scheduled maturity date of the amount so prepaid, in the case of Negotiated Rate
Loans or Competitive Bid Loans, (ii) a Conversion/Continuance Date selected
pursuant to SECTION 4.4 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
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revokes any notice given under SECTION 2.2 requesting Eurodollar Loans, (iv)
Eurodollar Loans are converted into ABR Loans pursuant to SECTION 5.5 on a day
other than the last day of the Interest Period for the Eurodollar Loans so
converted, (v) Eurodollar Loans, Negotiated Rate Loans or Competitive Bid Loans
shall be declared to be due and payable prior to the scheduled maturity thereof
pursuant to SECTION 9.1, or (vi) the Company shall fail to borrow any
Competitive Bid Loan after accepting the Competitive Bid to make such
Competitive Bid Loan or shall fail to borrow any Negotiated Rate Loan after
delivering the Negotiated Rate Confirmation for such Negotiated Rate Loan in
accordance with SECTION 2.6, the Company shall pay to the Agent for the account
of each Bank promptly after demand by such Bank (with notice to the Agent) an
amount which will compensate such Bank for any costs and losses incurred by such
Bank as a result of such prepayment, revocation of notice, conversion,
declaration or failure to borrow in respect of funds obtained for the purpose of
making or maintaining such Bank's Eurodollar Loans, Negotiated Rate Loans or
Competitive Bid 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,
declared due and payable, converted, or not borrowed, for the period from the
date of such payment or prepayment or declaration or conversion or failure to
borrow to the last day of the relevant Interest Period or scheduled maturity
date, as the case may be, (or, in the case of a failure to borrow, the Interest
Period that would have commenced on the date of such failure to borrow or the
maturity date that would have been scheduled for the relevant Negotiated Rate
Loan or Competitive Bid Loan, as the case may be) in each case at the applicable
rate of interest for the relevant 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, in the case of Eurodollar Loans,
or the rate of interest (as reasonably determined by such Bank) which would have
been quoted by such Bank with respect to such amount for a comparable period, in
all other cases.
(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. When requesting payment
pursuant to this SECTION, 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 12.8(e), each Participant
shall be deemed a "Bank" for the purposes of this SECTION.
Section 5.4. Withholding, Additional Costs and Capital Adequacy.
(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
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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 are paid by any Bank, the Company shall, not
later than 10 days after demand of such Bank (with a copy to the Agent) make
payment to the Agent for the account of such Bank to 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. 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 (i) impose, modify or
deem applicable any reserve, special deposit or similar requirement against the
Banks' Commitments or the Loans or (ii) impose on any Bank any other condition
regarding this Agreement, the Notes, its Commitment or the Loans and the result
of any event referred to in subclause (i) or (ii) 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 (with a copy to
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the Agent), the Company shall pay to the Agent for the account of 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.
(c) Capital Adequacy. 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
(with a copy to the Agent), the Company shall pay to the Agent for the account
of such Bank such additional amount or amounts as will compensate such Bank or
such corporation 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.
(d) Lending Office Designations. Before giving any notice to the
Company pursuant to this SECTION, 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.
(e) 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. When requesting payment
pursuant to this SECTION, 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 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 practical, to all of the affected Bank's or controlling
corporation's assets, commitments, activities or other relevant aspects of such
Bank's or controlling corporation'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.
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(f) Participants. Subject to SECTION 12.8(e), each Participant
shall be deemed a "Bank" for the purposes of this SECTION.
Section 5.5. 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 shall automatically 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.
Section 5.6. Additional Costs in Respect of Letters of Credit. (a)
Except in the case of increased costs attributable to the imposition of taxes as
to which the Company's liability is governed by SECTION 5.4(a), if as a result
of any change after the date hereof in applicable law or regulation or in the
interpretation thereof by any Governmental Authority there shall be imposed,
modified or deemed applicable any reserve, special deposit, capital adequacy
requirement or other requirements against or with respect to or measured by
reference to Letters of Credit issued or to be issued by the Issuing Bank
hereunder and the result shall be to increase the cost to the Issuing Bank (or,
as appropriate, any corporation controlling the Issuing Bank) of issuing or
maintaining any Letter of Credit hereunder, or reduce any amount receivable by
the Issuing Bank hereunder in respect of any Letter of Credit (which increase in
cost, or reduction in amount receivable shall be the result of the Issuing
Bank's (or such corporation's) reasonable allocation of the aggregate of such
increases or reductions resulting from such event), the Company shall, upon
demand by the Issuing Bank, pay to the Issuing Bank within 10 days of such
written demand such additional amounts as the Issuing Bank from time to time
specifies as necessary to compensate the Issuing Bank (or such corporation) for
such increased costs or reductions in amounts receivable 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 of such demand to the date of reimbursement by the
Company.
(b) Certificate, Etc. The Issuing 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. When requesting payment
pursuant to this SECTION, the Issuing Bank shall provide to the Company, with a
copy to the Agent, a certificate, signed by an officer of the Issuing Bank,
setting forth the amount required to be paid by the Company to the
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Issuing Bank and the computations made by the Issuing Bank to determine such
amount. Determinations and allocations by the Issuing Bank for purposes of this
SECTION 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 practical, to
all the Issuing Bank's (or the relevant controlling corporation's) assets,
commitments, activities and other relevant aspects of the Issuing Bank's (or
such corporation'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 the Issuing Bank. Notwithstanding anything to the
contrary contained herein, the Company shall not be required to make any payment
to the Issuing Bank pursuant to this SECTION with respect to costs, reductions
or other amounts relating to any time which is greater than 30 days prior to the
Issuing Bank's request therefor.
Section 5.7. Commercial Practices in Respect of Letters of Credit.
Without affecting any rights the Banks may have under applicable law (including
under the Uniform Customs and Practices for Documentary Credits (1993
Revisions), International Chamber of Commerce Publication No. 500, as the same
may be amended and in effect from time to time), the Company agrees that none of
the Banks, the Issuing Bank or the Agent nor any of their respective officers or
directors shall be liable or responsible for, and the obligations of the Company
to the Banks, the Issuing Bank and the Agent hereunder shall not in any manner
be affected by: (i) the use that may be made of any Letter of Credit or the
proceeds thereof by the beneficiary thereof or any other Person; (ii) the
validity, sufficiency or genuineness of documents other than Letters of Credit,
or of any endorsement(s) thereon, even if such documents should, in fact, prove
to be in any or all respects invalid, insufficient, fraudulent or forged; or
(iii) any other circumstances whatsoever in making or failing to make payment
under any Letter of Credit; provided that the foregoing shall not operate to bar
a claim against a Bank or the Issuing Bank to the extent, but only to the
extent, of any direct, as opposed to consequential, damages suffered by the
Company that are caused by such Bank's or Issuing Bank's willful misconduct or
gross negligence in determining whether documents presented under any Letter of
Credit complied with the terms of such Letter of Credit or such Bank's or
Issuing Bank's failure to pay under such Letter of Credit after the presentation
to it of documents strictly complying with the terms and conditions of such
Letter of Credit. In furtherance and not in limitation of the foregoing, any
Bank or the Issuing Bank may accept documents that appear on their face to be in
order without responsibility for further investigation.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties. As of each Compliance Date,
the Company represents and warrants to the Banks that:
(a) Subsidiaries. On the Effective Date, the Company has no
Subsidiaries and is a participant in no joint ventures other than as listed on
SCHEDULE 6.1(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
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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 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 borrowings 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 the Subsidiaries, would have a Material Adverse Effect or
relates to any Credit Document or the lending transactions contemplated hereby
and by the other Credit Documents.
(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 the 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
the 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
lending
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transactions contemplated hereby and by the other Credit Documents, or the
incurrence of the obligations provided for in the Credit Documents, or result in
or require the creation or imposition of any Lien on any of the Company's or the
Subsidiaries' properties as a consequence of the execution, delivery and
performance of any Credit Document or the lending transactions contemplated
hereby and by the other Credit Documents.
(h) Financial Condition. (i) The consolidated balance sheet of
the Company and the Subsidiaries as of December 31, 1998, 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 the 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
Effective Date, there are no material liabilities, direct or indirect, fixed or
contingent, of the Company or any of the 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 the Subsidiaries as of March 31, 1999 and June 30, 1999,
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 the 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
Effective Date, there are no material liabilities, direct or indirect,
fixed or contingent, of the Company and any of the Subsidiaries as of
the dates of such balance sheets which are not reflected therein or in
the notes thereto.
(iii) The unaudited pro forma combined balance sheets of
the Company as of June 30, 1999, together with the unaudited pro forma
combined statements of income of the Company for the related periods
ending June 30, 1999, in each case after giving effect to the Initial
Transactions, heretofore delivered to the Agent and the Banks, fairly
present the pro forma consolidated financial condition of the Company
and the Subsidiaries and the results of their operations as of the dates
and for the periods referred to (in each case after giving effect to the
Initial Transactions). As of the Effective Date, there are no material
liabilities, direct or indirect, fixed or contingent, of the Company and
any of the Subsidiaries as of the dates of such financial statements
which are not reflected therein or in the notes thereto.
(iv) Since June 30, 1999, there has been no Material
Adverse Change.
(v) Since June 30, 1999, there has not occurred any
fact, event or condition which could have a Material Adverse Effect from
that reflected in the pro forma financial statements referred to in
clause (iii) above.
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(i) Taxes. Each of the Company and the 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 (1) which are being
contested in good faith and for which adequate reserves (in accordance with
GAAP) have been established or (2) of which the failure to file or pay would
not, individually or in the aggregate, be material and adverse to the Company
and the Subsidiaries, taken as a whole.
(j) Use of Proceeds. The proceeds of the Loans will be used by
the Company to consummate the Initial Transactions and for other 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
purchasing or carrying, any "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System.
(l) No Material Misstatements. All written information relating
to the Company and the Subsidiaries heretofore delivered by the Company and the
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
the 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, 1998, referred to in SECTION 6.1(h),
except for (i) 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, (ii) 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 (iii) such other items
as would not, individually or in the aggregate, be material and adverse to the
Company and the 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.
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(o) Conduct of Business. At the Effective Date, the Company and
the 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 the 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
incorporation, 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 the 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 the
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
Effective Date and neither the Company nor any ERISA Affiliate is (1)
required to give security to any Single-Employer Plan pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, or (2) 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 the Subsidiaries, taken
as a whole, no liability under Section 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 the 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 Effective Date, 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
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of the Company and its ERISA Affiliates. As used in this SECTION, (1)
"accumulated funding deficiency" shall have the meaning assigned to such
term in Section 412 of the Code and Section 302 of ERISA; (2)
"multiemployer plan" and "plan year" shall have the respective meanings
assigned to such terms in Section 3 of ERISA; (3) "benefit liabilities"
shall have the meaning assigned to such term in Section 4001 of ERISA;
(4) "taxable period" shall have the meaning assigned to such term in
Section 4975 of the Code; and (5) "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
the 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 the Subsidiaries are and
have been conducted in compliance in all material respects with all applicable
Environmental Laws, including having required permits, licenses and other
approvals and authorizations, during the time the Company and the Subsidiaries
engaged in such businesses, (ii) the properties presently or formerly owned or
operated by the Company and the Subsidiaries (including 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 the
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 Effective
Date, (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 clause
(viii) are limited to the period the Company owned or operated such Properties),
(ix)
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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 the 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
the 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.
(u) Year 2000. The Company and each of the Subsidiaries have
taken all necessary action to complete in all material respects the
reprogramming of computer software, hardware and firmware systems and equipment
containing embedded microchips owned or operated by or for the Company and the
Subsidiaries required as a result of the Year 2000 Issue to permit the proper
functioning of such computer systems and other equipment and the testing of such
systems and equipment, as so reprogrammed, other than action for which the
failure to complete would not have a Material Adverse Effect. The Company and
the Subsidiaries are undertaking reasonable efforts to assess the efforts of its
investment banks, commercial banks, primary lessees and major vendors to deal
with the Year 2000 Issue. The costs to the Company and the Subsidiaries of any
reprogramming required as a result of the Year 2000 Issue to permit the proper
functioning of the systems and equipment of the Company and the Subsidiaries and
the proper processing of data and the testing of such reprogramming are not
reasonably expected to result in an Event of Default or to have a Material
Adverse Effect on the business, properties, condition (financial or otherwise)
or operations of the Company and the Subsidiaries, taken as a whole. The "Year
2000 Issue" shall mean the failure of computer software, hardware and firmware
systems and equipment containing embedded computer chips to properly receive,
transmit, process, manipulate, store, retrieve, retransmit or in any other way
utilize data and information due to the occurrence of the year 2000 or the
inclusion of dates on or after January 1, 2000.
(v) AHPI Acquisition Documents. As of the Effective Date, all the
representations, warranties and certifications contained in each AHPI
Acquisition Document shall be true and correct in all material respects with the
same effect as though such representations, warranties and certifications had
been made on the Effective Date.
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ARTICLE VII.
CONDITIONS OF LENDING
Section 7.1. Conditions to the Availability of the Commitment. The
obligations of each Bank and the Issuing Bank hereunder are subject to, and the
Banks' Commitments and the Letter of Credit Commitment shall not become
available from the date hereof until the date (the "Effective Date") on which,
each of the following conditions shall have been satisfied or waived in
accordance with SECTION 12.4, 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 maximum stated principal amounts equal to each such Bank's
Commitment, and Negotiated Rate Notes and Competitive Bid Notes in maximum
stated 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 a reasonable period of time prior to the Effective Date, confirming the
Company's representation as to good standing in SECTION 6.1(b) with respect to
the States of Maryland and California.
(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 Effective Date, (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 Effective Date, of Latham & Watkins,
special counsel for the Company, in substantially the form of EXHIBIT I, and of
Ballard Spahr Andrews & Ingersoll, LLP, special Maryland counsel for the
Company, in substantially the form of EXHIBIT J.
(f) Initial Transactions. The Agent on behalf of the Banks shall
have received from the Company (i) a certificate from an authorized executive
officer of the Company, dated as of the Effective Date, certifying that,
substantially simultaneous with the Initial Loan, each of the Initial
Transactions shall have been consummated, and attaching a true, complete and
correct copy of each AHPI Merger Document, which shall be in form and substance
reasonably satisfactory to the Agent and the Banks, and (ii) other evidence
reasonably satisfactory to the Agent that the transactions described in clause
(ii) of the definition of "Initial Transactions" shall have been consummated.
(g) Other Documents. The Agent shall have received such other
certificates and documents as the Agent and the Banks reasonably may require.
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(h) Litigation. There shall not be pending or threatened any
action or proceeding before any court or administrative agency relating to any
Credit Document, any AHPI Merger Document, the Initial Transactions or the other
lending transactions contemplated by the Credit Documents which, in the judgment
of the Agent or any Bank, could materially impair the ability of the Company to
perform its obligations under the Credit Documents or the AHPI Merger Documents.
(i) Certain Fees and Expenses. The Agent shall have received (i)
those certain fees that are payable as described in SECTION 2.13 and (ii) those
fees and expenses of counsel to the Agent and the Lead Arranger and Book
Manager, as described in SECTION 12.3, that have been incurred up to the date
hereof and of which the Agent has given the Company notice.
Notwithstanding the foregoing, the obligations of each Bank and the Issuing Bank
hereunder shall not become effective, and the Banks' Commitments and the Letter
of Credit Commitment shall not become available, unless each of the foregoing
conditions is satisfied or waived in writing by each of the Banks at or prior to
3:00 p.m., New York City time, on November 30, 1999 (and, in the event such
conditions are not so satisfied or waived, all of the Commitments shall
terminate at such time).
Section 7.2. Conditions to All Loans and Letters of Credit. The
obligations of (i) each Bank in connection with each Loan (including the Initial
Loan) and (ii) the Issuing Bank in connection with each Letter of Credit are
subject to the conditions that, on the date of each such Loan and issuance or
renewal of each Letter of Credit and after giving effect thereto, each of the
following conditions shall have been satisfied or waived in accordance with
SECTION 12.4, and upon such satisfaction or written waiver each Bank will give a
written confirmation of the same to the Company on request:
(a) Committed Loan Request/Negotiated Rate
Confirmation/Competitive Bid Request/Letter of Credit Request. (i) For each
Committed Loan, the Agent shall have received a Committed Loan Request in
substantially the form of EXHIBIT B. (ii) For each Negotiated Rate Borrowing,
the Agent shall have received a Negotiated Rate Confirmation in substantially
the form of EXHIBIT D. (iii) For each Competitive Bid Loan, the Agent shall have
received a Competitive Bid Request in substantially the form of EXHIBIT F and
such other documents required to be provided or executed by the Company pursuant
to SECTIONS 2.9 to 2.12. (iv) For each Letter of Credit, the Agent and Issuing
Bank shall have received a Letter of Credit Notice in substantially the form of
EXHIBIT L.
(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 VI (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 or the issuance or renewal of such Letter
of
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Credit, and the Agent shall have received from the Company a certificate to that
effect signed by an authorized officer of the Company.
ARTICLE VIII.
COVENANTS
Section 8.1. Affirmative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and all of the 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 the Subsidiaries, prepared in a format and in scope
consistent with the financial statements and reports of the Company referenced
in SECTION 6.1(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 the Subsidiaries,
certified by Arthur Andersen & Co., one of the other "Big Five" 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,
1998 financial statements and reports of the Company referenced in SECTION
6.1(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 clause (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 the Subsidiaries or their accountants in
connection with any annual or interim audit of the books of the Company or the
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 the 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 (1) 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, (2) adequate
reserves (in accordance with GAAP) are maintained by the Company or such
Subsidiary, as the case may be, with respect thereto, and (3) 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 the Subsidiaries, taken as a whole.
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(c) Corporate Existence. Except as permitted by SECTION 8.2(d) or
(e), maintain, and cause each of the 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
the 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 the 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 the 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 the 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 the 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 the 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 the
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
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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 the 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
communication or report received by Company or any of the Subsidiaries in
connection with any such matters as they may affect such premises, if material.
(j) Insurance on Leased Properties. Use its, and cause the
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 judgment of the
Agent, may be necessary or advisable to carry out the intent and purpose of this
Agreement.
(l) Year 2000 Covenant. The Company shall provide, and shall
cause each of the Subsidiaries to provide, reasonable assurance of compliance
with the representations and warranties contained in SECTION 6.1(u) to the Agent
at its request or the request of the Required Lenders (and, in the case of any
such request by the Required Lenders, the Agent shall provide a copy thereof to
each Bank).
Section 8.2. Negative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes and all of the Reimbursement
Obligations and performance of all other obligations of the Company hereunder
(other than Unmatured Surviving Obligations), the Company will not:
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(a) Secured Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness of the Company secured by mortgages, encumbrances or
other Liens, except Indebtedness secured by mortgages, encumbrances or other
Liens which, together with the Indebtedness of the Subsidiaries permitted under
SECTION 8.2(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 the Subsidiaries (other than
Indebtedness to the Banks hereunder) shall not exceed 30% of Consolidated Total
Assets.
(b) Subsidiary Indebtedness. Permit any Subsidiary to create,
incur, assume or suffer to exist any Indebtedness, except (i) any Indebtedness
described in clause (ii) of the definition of "Initial Transactions", provided
that such Indebtedness is paid in full substantially simultaneous with the
Initial Loan, (ii) Indebtedness to the Company or any other Subsidiary, or (iii)
Indebtedness which, together with outstanding Indebtedness of the Company
permitted under SECTION 8.2(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 the 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 8.2(a) or
8.2(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 8.2(b)(ii)) 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 (other than as contemplated by
the definition of "Initial Transactions"), 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: (1) the Company is the surviving corporation of
such merger or consolidation; (2) 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 (3) 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: (1) the amount of the total consideration
(including any Indebtedness or liabilities incurred or assumed in connection
therewith) paid in connection with such acquisition is not greater than 15% of
Consolidated Stockholders' Equity; (2) the acquired entity is engaged in
substantially the same line of business as the Company; and (3) at the time of
such acquisition and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing.
(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.
(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
(other than as contemplated by
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the definition of "Initial Transactions"), 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 thereof; (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
A2 by Moody's; (iii) repurchase agreements, tax exempt investments, certificates
of deposit, time deposits, Eurodollar time deposits or bankers' acceptances
issued by (1) any Bank, (2) 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 (3) 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 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 (i) in connection with a merger or consolidation of a
Wholly-Owned Subsidiary permitted by SECTION 8.2(d) or with the dissolution of
any Subsidiary or (ii) a sale in accordance with SECTION 8.2(e) of any equity
interest in any Subsidiary that is not material to the Company and the
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 8.3. Financial Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes 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 the higher of (i)
$850,000,000 and (ii) 80% of Consolidated Stockholders' Equity calculated on a
pro forma basis at the time of, and immediately after giving effect to, the
consummation of the acquisition described in clause (i) of the definition of
"Initial Transactions".
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(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 1.75:1.00.
(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, in each case for the
four quarter period ending on the last day of each fiscal quarter, to be less
than 2.25:1.00.
ARTICLE IX.
EVENTS OF DEFAULT
Section 9.1. 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, Negotiated Rate Note, Competitive Bid Note or
Reimbursement Obligation with respect to any Letter of Credit 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 or in respect of any Letter of Credit 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, the
Utilization 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 8.1(g), 8.2(d), 8.2(e) or
8.3; 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 the Subsidiaries for the payment of Indebtedness in excess of
$5,000,000 (i) is not paid when due or within any grace period for the payment
therefor, or (ii) becomes or is declared to be due and payable prior to the
expressed maturity thereof, or (iii) there shall have occurred an event
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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, except that, solely for purposes of this clause (iii), for a period of
60 days after the date hereof, no default with respect to any Indebtedness
listed on SCHEDULE 9.1(f) resulting from the merger of AHPI into the Company
shall constitute a Default or Event of Default; 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 the 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 the 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 the
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 the
Subsidiaries in furtherance of any such action; or
(i) One or more judgments against the Company or any of the
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 the
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: (1) 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; (2) 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;(3)
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 (4) the Company or any ERISA Affiliate
fails to
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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
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; or
(m) A Change of Control shall have occurred;
then (i) upon the happening of any of the foregoing Events of Default, the
obligation of the Banks to make any further Loans and of the Issuing Bank to
issue any additional Letters of Credit or renew any outstanding Letters of
Credit 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 9.1(g) or
9.1(h), the Notes shall become immediately due and payable and the obligation of
the Banks to make any further Loans and of the Issuing Bank to issue any
additional Letters of Credit or renew any outstanding Letters of Credit
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 X.
THE AGENT AND THE BANKS
Section 10.1. The Agency and Co-Documentation 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 each of Bank of America, N.A. and Wells
Fargo Bank, N.A. as a Co-Documentation Agent hereunder, and each
Co-Documentation Agent hereby accepts such appointment subject to the terms
hereof. Each Co-Documentation 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.
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Section 10.2. 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", and promptly after its receipt of any such written notice, the Agent
shall give the Company and each Bank a copy thereof.
Section 10.3. 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.
In the case of any payment allocable to more than one party hereto that are made
with respect to obligations pursuant to this Agreement or any Note incurred
prior to the date hereof, such payments shall be apportioned, as applicable and
to the extent that such payment is attributable to the period prior to the date
hereof, according to each such party's Commitment or other rights hereunder as
they existed prior to such date.
Section 10.4. 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 willful
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, (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
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telephone transmission) believed by it to be genuine and correct and to have
been signed and/or sent by the proper Persons, and (iv) the Agent in such
capacity shall be entitled to rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Persons.
Section 10.5. 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 10.6. 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,
financial 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, sufficiency, 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 the 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 10.7. Indemnification. Each Bank agrees (which agreement shall
survive payment of the Loans, the Reimbursement Obligations 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 willful
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
50
<PAGE> 55
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 10.8. 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 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 XI.
CONSENT TO JURISDICTION
Section 11.1. 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.
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<PAGE> 56
ARTICLE XII.
MISCELLANEOUS
SECTION 12.1. 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 12.2. 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 12.3. Expenses. The Company agrees to pay (i) all reasonable
out-of-pocket fees and expenses of the Agent and the Lead Arranger and Book
Manager (including the reasonable out-of-pocket fees and expenses of Bryan Cave
LLP, as counsel to the Agent and the Lead Arranger and Book Manager) 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 the Credit
Documents or any amendment or supplement hereto or thereto and (iii) all
reasonable out-of-pocket fees and expenses of the Agent and the Lead Arranger
and Book Manager, 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 12.4. 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 or the Issuing Bank are affected thereby, by the Agent or
the Issuing Bank, respectively); provided that no such amendment, waiver or
modification shall, unless signed by all the Banks, (i) except as otherwise
provided in SECTIONS 2.4, 12.12 and 12.13, 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 4.5) or
any fees hereunder, (iii) except as otherwise provided in SECTION 12.12,
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 12.12, 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 V or of this SECTION.
Section 12.5. 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
52
<PAGE> 57
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 12.6. 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 SECTION 2.2, 2.6, 2.10 or 12.12 will not be
effective until received by the Agent. A communication, demand or notice given
pursuant to this SECTION shall be addressed: if to the Agent or any Bank, at its
address as indicated on the signature pages hereof, and if to the Company, at
4675 MacArthur Court, Suite 900
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.
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 12.7. 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 12.8. 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, the Issuing Bank 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
53
<PAGE> 58
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 (v), inclusive, of SECTION 12.4 without the consent of the
Participant. Subject to SECTION 12.8(e), the Company agrees that each
Participant shall be entitled to the benefits of SECTIONS 5.3, 5.4 and 12.3(ii)
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 (i) 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 or (ii) if any event specified in SECTION
9.1(a), 9.1(g), 9.1(h), 9.1(l) or 9.1(m) has occurred and is continuing. Upon
(1) execution and delivery of such an instrument, (2) 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 (3) payment by the transferee Bank or
transferor Bank to the Agent of an administrative fee in the amount of $3,500,
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 5.3 or 5.4
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Company's prior written
consent or by reason of the provisions of SECTION 5.4 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 5.3, 5.4 or 12.3(ii) than such Bank would have
been entitled to receive if it had not granted a participation to such
Participant.
SECTION 12.9. 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
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<PAGE> 59
(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 12.10. 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 12.11. 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 the Letters of Credit 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 willful misconduct of any Indemnitee. The provisions of this
SECTION shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement or any Letter of Credit, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans or any of the Reimbursement Obligations, the reduction or cancellation
of the Commitment, the invalidity or unenforceability of any term or provision
of any Credit Document, or any investigation made by or on behalf of the Banks.
All amounts due under this SECTION shall be payable in immediately available
funds upon written demand therefor.
Section 12.12. 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 K,
delivered to each such Bank and the Agent not earlier than 60 days prior to such
scheduled Termination Dates. 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
55
<PAGE> 60
succeeding such Bank's then-current scheduled Termination Date. Any Bank failing
to respond to the extension request letter shall be deemed to have declined to
extend such Bank's scheduled Termination Date.
(b) With respect to any Bank which has declined to extend such
Bank's scheduled Termination Date, the Company may (unless Banks with an
aggregate percentage of the Total Commitment not in excess of 25% have declined
to extend their respective scheduled Termination Dates), 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, whether or not it 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 Terminating Bank that is not the subject of a notice of removal
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
Terminating 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 SECTIONS 5.3, 5.4, 12.3 and 12.11 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 12.13. Increase of Commitments. At any time and from time to
time, the Company may, at its option, arrange for one or more Banks or one or
more other financial institutions acceptable to the Agent (an "Increasing Bank")
to increase their respective Commitments (or, in the case of such other
financial institutions, extend new Commitments hereunder) in an aggregate amount
not to exceed $26,708,000. Such increase or extension shall
56
<PAGE> 61
be effected by means of one or more agreements or other documents supplemental
to this Agreement among the Increasing Banks, the Company and the Agent. In the
event that immediately after giving effect to such increase or extension
Committed Loans shall then be outstanding, then simultaneously with such
increase or extension the Banks (including the Increasing Banks) shall, subject
to the terms and conditions of this Agreement, make new Committed Loans in
accordance with their respective Commitments (immediately after giving effect to
such increase or extension) as shall be necessary to pay in full such
outstanding Committed Loans, provided that (i) the making of such new Committed
Loans and the payment in full of such outstanding Committed Loans shall be
deemed to have been made simultaneously and shall be effected in a manner
reasonably determined by the Agent through means of one or more advances and/or
payments made directly among the Banks on a netted basis through the Agent and
(ii) upon the consummation thereof, the Banks, the Agent and the Company shall
make appropriate arrangements so that, if required, new Notes are issued to the
Banks. On and as of the effective date of each such increase or extension, each
Increasing Bank shall be and become a Bank for all purposes of this Agreement
(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.
Section 12.14 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 12.15. 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.
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<PAGE> 62
HEALTH CARE REVOLVING CREDIT AGREEMENT
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:
---------------------------------
Name: Devasis Ghose
Title: Senior Vice President
THE BANK OF NEW YORK,
as Agent for the Banks
By:
---------------------------------
Name:
Title:
Address for Notices:
The Bank of New York
One Wall Street, 18th Floor
New York, NY 10286
Attn: Kalyani Bose
Fax: (212) 635-6365
With a copy to:
The Bank of New York
10990 Wilshire Boulevard, Suite 1125
Los Angeles, CA 90024
Attn: Rebecca K. Levine
Fax: (310) 996-8667
<PAGE> 63
HEALTH CARE REVOLVING CREDIT AGREEMENT
Commitment: $40,064,516 THE BANK OF NEW YORK,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
The Bank of New York
One Wall Street, 18th Floor
New York, NY 10286
Attn: Kalyani Bose
Fax: (212) 635-6365
With a copy to:
The Bank of New York
10990 Wilshire Boulevard, Suite 1125
Los Angeles, CA 90024
Attn:Rebecca K. Levine
Fax: (310) 996-8667
Eurodollar Lending Office:
The Bank of New York
One Wall Street, 18th Floor
New York, NY 10286
Attn: Kalyani Bose
Fax: (212) 635-6365
<PAGE> 64
HEALTH CARE REVOLVING CREDIT AGREEMENT
Commitment: $36,725,806 BANK OF AMERICA, N.A.,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
Bank of America, N.A.
One Independence Center
101 N. Tryon Street, 15th Floor
Charlotte, NC 28255
Attn: Mathew Menz
Fax: (704) 409-0083
With a copy to:
Bank of America, N.A.
700 Louisiana Street, 8th Floor
Houston, TX 77002
Attn: Scott Singhoff
Fax: (713) 247-6719
Eurodollar Lending Office:
Bank of America, N.A.
One Independence Center
101 N. Tryon Street, 15th Floor
Charlotte, NC 28255
Attn: Mathew Menz
Fax: (704) 409-0083
<PAGE> 65
HEALTH CARE REVOLVING CREDIT AGREEMENT
Commitment: $36,725,806 WELLS FARGO BANK, N.A.,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
Wells Fargo Bank, N.A.
Los Angeles Regional Commercial
Banking Office
333 South Grand Avenue, 3rd Floor
Los Angeles, CA 90071
Attn: Charles Warner
Fax: (213) 687-3501
Eurodollar Lending Office:
Wells Fargo Bank, N.A.
Los Angeles Regional Commercial
Banking Office
333 South Grand Avenue, 3rd Floor
Los Angeles, CA 90071
Attn: Charles Warner
Fax: (213) 687-3501
<PAGE> 66
HEALTH CARE REVOLVING CREDIT AGREEMENT
Commitment: $36,725,806 FIRST UNION NATIONAL BANK,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
First Union Bank National Bank
One First Union Center
301 South College Street, TW5
Charlotte, NC 28288-0735
Attn: Valerie Cline
Fax: (704) 383-9144
Eurodollar Lending Office:
First Union Bank National Bank
One First Union Center
301 South College Street, TW5
Charlotte, NC 28288-0735
Attn: Valerie Cline
Fax: (704) 383-9144
<PAGE> 67
HEALTH CARE REVOLVING CREDIT AGREEMENT
Commitment: $10,016,129 BANK OF HAWAII,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
Bank of Hawaii
130 Merchant Street
Honolulu, HI 96813-6000
Attn: Scott Nahame
Fax: (808) 537-8301
Eurodollar Lending Office:
Bank of Hawaii
949 Kamokila Boulevard
Kapolei, HI 96706
Attn: Donna Arakawa
Fax: (808) 693-1672
<PAGE> 68
HEALTH CARE REVOLVING CREDIT AGREEMENT
Commitment: $6,677,419 CITY NATIONAL BANK,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
City National Bank
400 North Roxbury Drive, 3rd. Floor
Beverly Hills, CA 90210
Attn: Randall F. Watsek
Fax: (310) 888-6564
Eurodollar Lending Office:
City National Bank
831 South Douglas Street, Suite 100
El Segundo, CA 90245
Attn: Pamela Terry
Fax: (310) 297-8171
<PAGE> 69
HEALTH CARE REVOLVING CREDIT AGREEMENT
Commitment: $13,354,839 KBC BANK N.V.,
as a Bank
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
Address for Notices:
KBC BANK N.V.
125 West 55th Street,
10th Floor
New York, NY 10019
Attn: Michael Curran
Fax: (212) 541-0784
With a copy to:
KBC BANK N.V.
515 South Figueroa, Suite 1920
Los Angeles, CA 90071
Attn: Barbara Readick
Fax: (213) 629-5801
Eurodollar Lending Office:
KBC BANK N.V.
125 West 55th Street
10th Floor
Ne w York, NY 10019
Attn: Michael Curran
Fax: (212) 541-0784
<PAGE> 70
HEALTH CARE REVOLVING CREDIT AGREEMENT
Commitment: $16,693,548 SOCIETE GENERALE,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
SOCIETE GENERALE
2029 Century Park East, 2900
Los Angeles, CA 90067
Attn: Richard Bernal
Fax: (310) 551-1537
Eurodollar Lending Office:
SOCIETE GENERALE
2001 Ross Avenue, Suite 4800
Dallas, TX 75201
Attn: Lia Guerra
Fax: (214) 979-0171
<PAGE> 71
HEALTH CARE REVOLVING CREDIT AGREEMENT
Commitment: $10,016,129 CREDIT LYONNAIS NEW YORK BRANCH,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
Credit Lyonnais
1301 Avenue of the Americas
New York, NY 10019
Attn: Henry Reukauf
Fax: (212) 261-3440
Eurodollar Lending Office:
Credit Lyonnais
1301 Avenue of the Americas
New York, NY 10019
Attn: Henry Reukauf
Fax: (212) 261-3440
<PAGE> 1
EXHIBIT 10.5
$103,000,000
364-DAY REVOLVING CREDIT AGREEMENT
dated as of November 3, 1999
among
HEALTH CARE PROPERTY INVESTORS, INC.,
THE BANKS NAMED HEREIN
THE BANK OF NEW YORK
as Agent
and
BANK OF AMERICA, N.A. and WELLS FARGO BANK, N.A.
as Co-Documentation Agents
---------------------------------------------
FIRST UNION NATIONAL BANK
as Managing Agent
BNY CAPITAL MARKETS, INC.
as Lead Arranger and Book Manager
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I. DEFINITIONS......................................................................................1
Section 1.1. Definitions...................................................................1
ARTICLE II. THE LOANS......................................................................................14
Section 2.1. Committed Loans..............................................................14
Section 2.2. Procedure for Committed Loans................................................14
Section 2.3. Committed Notes..............................................................15
Section 2.4. Cancellation or Reduction of the Commitment..................................15
Section 2.5. Negotiated Rate Loans........................................................15
Section 2.6. Procedure for Negotiated Rate Loans..........................................15
Section 2.7. Funding of Negotiated Rate Loans.............................................16
Section 2.8. Negotiated Rate Notes........................................................16
Section 2.9. Competitive Bid Loans........................................................17
Section 2.10. Procedure for Competitive Bid Loans..........................................17
Section 2.11. Funding of Competitive Bid Loans.............................................18
Section 2.12. Competitive Bid Notes........................................................19
Section 2.13. Certain Fees.................................................................19
Section 2.14. Optional Prepayment..........................................................20
ARTICLE III. INTEREST, METHOD OF PAYMENT, CONVERSION, ETC..................................................20
Section 3.1. Procedure for Interest Rate Determination....................................20
Section 3.2. Interest on ABR Loans and Competitive Bid Loans..............................21
Section 3.3. Interest on Eurodollar Loans.................................................21
Section 3.4. Conversion/Continuance.......................................................22
Section 3.5. Post Default Interest........................................................22
Section 3.6. Maximum Interest Rate........................................................22
ARTICLE IV. DISBURSEMENT AND PAYMENT.......................................................................23
Section 4.1. Pro Rata Treatment...........................................................23
Section 4.2. Method of Payment............................................................23
Section 4.3. Compensation for Losses......................................................23
Section 4.4. Withholding, Additional Costs and Capital Adequacy...........................24
Section 4.5. Unavailability...............................................................26
ARTICLE V. REPRESENTATIONS AND WARRANTIES..................................................................27
Section 5.1. Representations and Warranties...............................................27
ARTICLE VI. CONDITIONS OF LENDING..........................................................................33
Section 6.1. Conditions to the Availability of the Commitment.............................33
Section 6.2. Conditions to All Loans......................................................34
ARTICLE VII. COVENANTS.....................................................................................35
Section 7.1. Affirmative Covenants........................................................35
Section 7.2. Negative Covenants...........................................................38
Section 7.3. Financial Covenants..........................................................40
ARTICLE VIII. EVENTS OF DEFAULT............................................................................40
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 8.1. Events of Default............................................................40
ARTICLE IX. THE AGENT AND THE BANKS........................................................................42
Section 9.1. The Agency and Co-Agency.....................................................42
Section 9.2. The Agent's Duties...........................................................43
Section 9.3. Sharing of Payment and Expenses..............................................43
Section 9.4. The Agent's Liabilities......................................................44
Section 9.5. The Agent as a Bank..........................................................44
Section 9.6. Bank Credit Decision.........................................................44
Section 9.7. Indemnification..............................................................44
Section 9.8. Successor Agent..............................................................45
ARTICLE X. CONSENT TO JURISDICTION.........................................................................45
Section 10.1. Consent to Jurisdiction......................................................45
ARTICLE XI. MISCELLANEOUS..................................................................................46
Section 11.1. Applicable Law...............................................................46
Section 11.2. Set-off......................................................................46
Section 11.3. Expenses.....................................................................46
Section 11.4. Amendments...................................................................46
Section 11.5. Cumulative Rights and No Waiver..............................................47
Section 11.6. Notices......................................................................47
Section 11.7. Separability.................................................................47
Section 11.8. Assignments and Participations...............................................47
Section 11.9. Waiver of Jury Trial.........................................................49
Section 11.10. Confidentiality..............................................................49
Section 11.11. Indemnity....................................................................49
Section 11.12. Extension of Termination Dates; Removal of Banks; Substitutions of Banks.....49
Section 11.13. Increase of Commitments......................................................50
Section 11.14. Knowledge of the Company.....................................................51
Section 11.15. Execution in Counterparts....................................................51
</TABLE>
ii
<PAGE> 4
EXHIBITS AND SCHEDULES
EXHIBIT A Form of Conversion/Continuance Request
EXHIBIT B Form of Committed Loan Request
EXHIBIT C Form of Committed Note
EXHIBIT D Form of Negotiated Rate Confirmation
EXHIBIT E Form of Negotiated Rate Note
EXHIBIT F Form of Competitive Bid Request
EXHIBIT G Form of Competitive Bid
EXHIBIT H Form of Competitive Bid Note
EXHIBIT I Form of Opinion of Latham & Watkins
EXHIBIT J Form of Opinion of Ballard Spahr Andrews & Ingersoll, LLP
EXHIBIT K Form of Extension Letter
SCHEDULE 5.1(a) Subsidiaries and Joint Ventures of the Company
SCHEDULE 8.1(f) Indebtedness
iii
<PAGE> 5
364-DAY REVOLVING CREDIT AGREEMENT
364-DAY REVOLVING CREDIT AGREEMENT, dated as of November 3, 1999
(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 Bank of America, N.A. and Wells Fargo
Bank, N.A., as Co-Documentation Agents, with BNY Capital Markets, Inc., as Lead
Arranger and Book Manager:
W I T N E S S E T H:
WHEREAS, the Company has requested the Banks to lend up to
$103,000,000 to the Company on a revolving basis to refinance certain existing
indebtedness, to finance the acquisition of American Health Properties, Inc., a
Delaware corporation ("AHPI"), and for other general corporate purposes;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions.
(a) Terms Generally. The definitions ascribed to terms in this
SECTION and elsewhere in this Agreement shall apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The words "hereby", "herein", "hereof",
"hereunder" and words of similar import refer to this Agreement as a whole
(including any exhibits and schedules hereto) and not merely to the specific
section, paragraph or clause in which such word appears. All references herein
to Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, (i) all references to "dollars" or "$" shall be deemed references to the
lawful money of the United States of America, and (ii) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or other modifications set forth
herein).
(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 SECTION
7.2(a), 7.2(b), 7.2(c), 7.2(d) or 7.3 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
<PAGE> 6
Agreement applied on a basis consistent with the construction thereof applied in
preparing the Company's audited financial statements referred to in SECTION
5.1(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 SECTION 7.2(a), 7.2(b), 7.2(c) or 7.3 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 3.2.
"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.
"Agent" shall have the meaning given to such term in the preamble
of this Agreement and shall also include any successor agent hereunder.
"Agreement" shall have the meaning given to such term in the
preamble.
"AHPI" shall have the meaning given to such term in the preamble.
"AHPI Merger Documents" shall mean the Agreement and Plan of
Merger, dated as of August 4, 1999, between the Company and AHPI, and each
agreement, instrument or other document executed or delivered in connection
therewith.
"Applicable Margin" shall mean the margin set forth in the
following chart applicable to the Pricing Level then in effect:
<TABLE>
<CAPTION>
APPLICABLE
PRICING LEVEL MARGIN
------------- ----------
<S> <C>
I 0.7250%
II 0.8125%
III 1.0500%
IV 1.1250%
V 1.2000%
</TABLE>
2
<PAGE> 7
<TABLE>
<CAPTION>
APPLICABLE
PRICING LEVEL MARGIN
------------- ----------
<S> <C>
VI 1.5250%
</TABLE>
Subject to clauses (i), (ii) and (iii) below, "Pricing Level I" shall be
applicable for so long as the rating of the Company's unsecured (non-credit
enhanced) senior long term debt ("Senior Debt Rating") is greater than or equal
to A by Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc., or any successor thereto ("S&P"), or greater than or equal to
A2 by Moody's Investors Service, Inc., or any successor thereto ("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 or 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 or
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 or greater than or equal to
Baa2 by Moody's and none of Pricing Level I, II or III is applicable; "Pricing
Level V" shall be applicable for so long as the Senior Debt Rating is greater
than or equal to BBB- by S&P or greater than or equal to Baa3 by Moody's and
none of Pricing Level I, II, III or IV is applicable; and "Pricing Level VI"
shall be applicable for so long as none of Pricing Level I, II, III, IV or V is
applicable.
Notwithstanding the foregoing, (i) in the event of a split rating
as between S&P and Moody's by more than one equivalent rating level, then the
Pricing Level shall be determined by a rating that is one rating higher than the
lower of the two ratings; (ii) in the event that no Senior Debt Rating is made
available by S&P and Moody's and the Company's senior subordinated unsecured
debt rating is made available by S&P or Moody's, then for purposes of the
foregoing determinations the Senior Debt Rating shall be deemed to be one rating
higher than such subordinated unsecured debt rating (e.g., if such subordinated
unsecured debt rating by S&P is A-, then the Senior Debt Rating by S&P shall be
deemed to be A); and (iii) in the event that no Senior Debt Rating and no such
subordinated unsecured debt rating are made available by S&P and Moody's, then
Pricing Level VI above shall apply.
"Assignee" shall have the meaning given to such term in SECTION
11.8(c).
"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.
3
<PAGE> 8
"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, Negotiated Rate Confirmation or Competitive Bid Request, 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, any Negotiated Rate Loan or any Competitive Bid
Loan, 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.
"Change of Control" shall mean (i) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person(s) and/or
group(s) (within the meaning of the Securities Exchange Act of 1934 and the
rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof) of shares representing 35% or more of the aggregate ordinary voting
power or economic interests represented by the issued and outstanding equity
securities of the Company on a fully diluted basis or (ii) during any period of
up to 24 consecutive months, commencing after the date hereof, individuals who
at the beginning of such 24-month period were directors of the Company (together
with any new directors whose election or nomination for election to the board of
directors of the Company was approved by 66% of the directors who were either in
office at the beginning of such period or whose election or nomination for
election to the board of directors of the Company was previously so approved)
shall cease for any reason (other than due to death or disability or, in
addition to the foregoing, in the case of directors in office on the date
hereof, retirement in the ordinary course or pursuant to contractual agreements
in effect on the date hereof) to constitute a majority of the board of directors
of the Company.
"Co-Documentation Agents" shall mean Bank of America, N.A. and
Wells Fargo Bank, N.A., and shall also include any successor co-documentation
agent(s) hereunder.
4
<PAGE> 9
"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 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 2.4 or 11.12 or increased pursuant to SECTION 11.13 and (ii)
on or after such Bank's Termination Date, zero.
"Committed Loan Request" shall mean a request by the Company to
borrow Committed Loans pursuant to the terms hereof, which shall be
substantially in the form of EXHIBIT B and shall specify, with respect to such
requested Committed Loans, (i) the requested Borrowing Date, (ii) the aggregate
amount of Committed Loans which the Company desires to borrow on such date,
(iii) whether such requested Committed Loans are to bear interest as ABR Loans
or Eurodollar Loans and (iv) if the requested Committed 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 SECTIONS 2.1 to 2.3 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 C.
"Company" shall have the meaning given to such term in the
preamble.
"Competitive Bid" shall mean an offer by a Bank to make a
Competitive Bid Loan pursuant to SECTIONS 2.9 to 2.12, substantially in the form
of EXHIBIT G.
"Competitive Bid Borrowing" shall mean a Competitive Bid Loan or
a group of Competitive Bid Loans made on the same date and as to which a single
term is in effect as specified in a Competitive Bid Request.
"Competitive Bid Loan" shall mean a Loan that is made pursuant to
SECTIONS 2.9 to 2.12 and outstanding hereunder.
"Competitive Bid Notes" shall mean, collectively, the promissory
notes of the Company, each substantially in the form of EXHIBIT H.
"Competitive Bid Rate" shall have the meaning given to such term
in SECTION 2.10(b).
"Competitive Bid Request" shall mean a request by the Company for
Competitive Bids pursuant to SECTIONS 2.9 to 2.12, substantially in the form of
EXHIBIT F.
"Compliance Date" shall mean each of the Effective Date, each
Borrowing Date, each Conversion/Continuance Date and the date of each delivery
by the Company of a certificate
5
<PAGE> 10
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 Funds from Operations" shall mean, for any period,
"Funds From Operations" or the similar item, determined on a consolidated basis
for the Company and the Subsidiaries, as shown on the most recent consolidated
statements of cash flows for the Company and the Subsidiaries which has been
delivered to the Agent pursuant to SECTION 7.1(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 the Subsidiaries, determined on a consolidated
basis, in accordance with GAAP with respect to all outstanding Indebtedness of
the Company and the Subsidiaries, including all net costs under Interest Rate
Protection Agreements.
"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 the Subsidiaries, as shown on the most recent
consolidated balance sheet for the Company and the Subsidiaries which has been
delivered to the Agent pursuant to SECTION 7.1(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 the Subsidiaries, as shown on the most recent
consolidated balance sheet for the Company and the Subsidiaries which has been
delivered to the Agent pursuant to SECTION 7.1(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 the Subsidiaries, as
shown on the most recent consolidated balance sheet for the Company and the
Subsidiaries which has been delivered to the Agent pursuant to SECTION 7.1(a),
less Consolidated Stockholders' Equity.
"Conversion/Continuance Date" shall mean the date on which a
conversion of interest rates on outstanding Committed 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 Committed Loans pursuant to the terms hereof, which shall be
substantially in the form of EXHIBIT A and shall specify, with respect to such
outstanding Committed Loans, (i) the requested Conversion/Continuance Date,
which shall be not less than three Business Days after the date of such
Conversion/Continuance
6
<PAGE> 11
Request, (ii) the aggregate amount of the Committed Loans, from and after the
Conversion/Continuance Date, which are to bear interest as ABR Loans or
Eurodollar Loans and (iii) if any Committed Loans are Eurodollar Loans, the term
of the Interest Periods therefor, if any.
"Credit Documents" shall mean this Agreement and the Notes.
"Effective Date" shall have the meaning given to such term in
SECTION 6.1.
"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 liabilities relating to the
release of Hazardous Substances (whether on-site or off-site), any claim by any
third party (including 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" shall mean (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, (a) relating
to the protection, preservation or restoration of the environment, (including
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 (b) 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 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 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.
7
<PAGE> 12
"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 3.3.
"Eurodollar Lending Office" shall have the meaning given to such
term in SECTION 3.3(d).
"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 have the meaning given to such term in
SECTION 8.1.
"Facility Fee" shall have the meaning given to such term in
SECTION 2.13(a).
"Facility Fee Rate" shall mean, with respect to any Facility Fee
payment, 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:
<TABLE>
<CAPTION>
PRICING LEVEL FACILITY FEE
------------- ------------
<S> <C>
I 0.1500%
II 0.1875%
III 0.2000%
IV 0.2500%
V 0.3000%
VI 0.3500%
</TABLE>
"Federal Funds Rate" shall mean, for any day, 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.
8
<PAGE> 13
"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
pronouncements 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" shall mean 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 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.
"Increasing Bank" shall have the meaning given to such term in
SECTION 11.13.
"Indebtedness" of any Person shall mean, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (including all obligations, contingent or
otherwise, 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,
(ii) all obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments, (iii) all indebtedness created or arising under any
conditional 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), (iv) all Capital Lease Obligations of such Person,
(v) all Indebtedness referred to in clauses (i), (ii), (iii) or (iv) 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
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contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness, (vi) 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 (vii) all Indebtedness of
others Guaranteed by such Person. For purposes of this Agreement, the amount of
any Indebtedness under clauses (iii) and (v) shall be the lesser of (a) the
principal amount of such Indebtedness and (b) the value of the property subject
to the Lien referred to therein.
"Indemnitee" shall have the meaning given to such term in SECTION
11.11.
"Initial Loan" shall mean the first Loan which is made pursuant
to the terms of this Agreement.
"Initial Transactions" shall mean the following transactions
consummated on or before the Effective Date: (i) the merger of AHPI into the
Company pursuant to the AHPI Merger Documents in effect on the Effective Date,
and (ii) the payment in full of all Indebtedness (together with all accrued and
unpaid interest, fees and other unpaid sums) under, and the cancellation or
termination of, each of the following documents (together with the cancellation
or termination of any and all Liens securing the same): (a) each of the Amended
and Restated $135,000,000 Revolving Credit Agreement and the Amended and
Restated $45,000,000 Revolving Credit Agreement, dated as of October 22, 1997,
among the Company, the banks named therein, and The Bank of New York, as agent,
(b) the Credit Agreement, dated as of December 23, 1993, among AHPI, the lenders
party thereto and Wells Fargo Bank, N.A., as administrative agent, and (c) all
agreements, instruments and other documents executed or delivered in connection
with any of the foregoing.
"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 SECTION 2.2 or 3.4 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.
"Lead Arranger and Book Manager" shall mean BNY Capital Markets,
Inc.
"Lien" shall mean, with respect to any asset, (i) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset and (ii) 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:
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<PAGE> 15
Base LIBOR
-----------------------------------
LIBOR = (1 - Eurodollar Reserve Percentage)
"Loans" shall, collectively, mean the Committed Loans, the
Negotiated Rate Loans and the Competitive Bid Loans and, individually, any
Committed Loan, any Negotiated Rate Loan or any Competitive Bid Loan.
"Material Adverse Change" shall mean a material adverse change in
the business, properties, condition (financial or otherwise) or operations of
the Company and the Subsidiaries, taken as a whole, in each case determined on a
pro forma basis after giving effect to the Initial Transactions, from that
reflected in the financial statements referred to in SECTION 5.1(h)(iii).
"Material Adverse Effect" shall mean (i) any material adverse
effect on the business, properties, condition (financial or otherwise) or
operations of the Company and the 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 other Credit
Documents, or (iii) any adverse effect on the legality, validity, binding effect
or enforceability of this Agreement or any other Credit Document.
"Negotiated Rate Borrowing" shall mean one or more Negotiated
Rate Loans made to the Company by one or more of the Banks and of which the
Agent is given notice by a Negotiated Rate Confirmation.
"Negotiated Rate Confirmation" shall mean the notice, in
substantially the form of EXHIBIT D, pertaining to a Negotiated Rate Loan, and
made pursuant to SECTION 2.6, duly completed and executed and personally
delivered or transmitted by facsimile to the Company.
"Negotiated Rate Funding Date" shall mean the date specified in
the Negotiated Rate Confirmation as the date of funding for the relevant
Negotiated Rate Borrowing.
"Negotiated Rate Loan" shall mean a Loan that is made pursuant to
SECTIONS 2.5 to 2.8.
"Negotiated Rate Notes" shall mean, collectively, the promissory
notes of the Company, each substantially in the form of EXHIBIT E.
"Notes" shall mean, collectively, the Committed Notes, the
Negotiated Rate Notes and the Competitive Bid Notes.
"Participant" shall have the meaning given to such term in
SECTION 11.8(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,
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<PAGE> 16
(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 (i) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (ii) the Code, or (iii) 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.
"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 zero or
expired, the proportion of such Bank's then outstanding Committed Loans to the
aggregate amount of Committed Loans then outstanding.
"Properties" shall have the meaning given to such term in SECTION
5.1(s).
"Reference Amount" shall mean, with respect to any Reference Bank
and Interest Period, (i) if that Reference Bank is a Bank, the amount of that
Bank's Eurodollar Loan scheduled to be outstanding during that Interest Period
or (ii) 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 either case, (a) without
taking into account any reduction in the amount of any Bank's Loan through any
assignment or transfer and (b) rounded up to the nearest integral multiple of
$1,000,000.
"Reference Bank" shall mean each of The Bank of New York, Bank of
America, N.A. 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.
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"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.
"Successor Bank" shall have the meaning given to such term in
SECTION 11.12(c).
"Taxes" shall have the meaning given to such term in SECTION
4.4(a).
"Terminating Bank" shall have the meaning given to such term in
SECTION 11.12(c).
"Termination Date" shall mean, with respect to any Bank, the
earlier 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 8.1 or the Commitments shall
be reduced to zero pursuant to SECTION 2.4.
"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.
"Utilization Fee" shall have the meaning given to such term in
SECTION 2.13(b).
"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.
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ARTICLE II.
THE LOANS
Section 2.1. 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 contained in SECTION 6.2, 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 principal amount of outstanding Committed Loans, (ii) the
aggregate principal amount of outstanding Negotiated Rate Loans and (iii) the
aggregate principal amount of outstanding Competitive Bid Loans may not exceed
the Total Commitment.
Section 2.2. Procedure for Committed Loans. (a) The Company may borrow
Committed Loans by delivering a written Committed Loan Request to the Agent (i)
at or before 11:00 a.m., New York City time, on the requested Borrowing Date
therefor, in the case of ABR Loans, or (ii) at or before 12:00 noon, New York
City time, 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 City 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, 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) in the case of the Bank, (1) the Federal Funds Rate, for the
five-day period beginning on the Borrowing Date, and (2) the applicable rate on
the Loans made on the Borrowing Date, for the period beginning on the sixth day
after the Borrowing Date, and (ii) in the case of the Company, the applicable
rate on the Loans made on the Borrowing Date.
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(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; provided that such telephonic notice shall be
confirmed by delivery of a written Committed Loan Request to the Agent by no
later than 3:00 p.m., New York City time, on the date of such telephonic notice.
Section 2.3. 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
principal 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 2.4. 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 all Committed Loans, Negotiated Rate Loans and Competitive
Bid 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 all Loans is less than
$5,000,000, then all of such lesser amount). All such cancellations or
reductions shall be permanent.
Section 2.5. Negotiated Rate 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 Negotiated Rate Loans to the Company
from time to time on or after the Effective Date and prior to such Bank's
Termination Date in amounts determined as indicated in the Negotiated Rate
Confirmation and for a term that, for each Negotiated Rate Loan, is not less
than one day nor more than 270 days from the date of funding of such Negotiated
Rate Loan as provided in SECTION 2.7; provided that the aggregate principal
amount of all outstanding Loans shall not at any time exceed the then Total
Commitment.
Section 2.6. Procedure for Negotiated Rate Loans. 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 Negotiated Rate 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 Negotiated Rate Loans as part of such proposed
Negotiated Rate Borrowing on mutually agreed-upon terms and notify the
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Agent by delivering a written Negotiated Rate Confirmation from the Company and
the Bank or Banks proposing to make Negotiated Rate Loans before 12:30 p.m. (New
York City time) on the date of the funding of such Negotiated Rate Loan, which
shall be a Business Day (the "Negotiated Rate Funding Date"). Such Negotiated
Rate Confirmation shall specify the amount of each Negotiated Rate Loan that
such Bank or Banks will make as part of such proposed Negotiated Rate Borrowing
(which amounts may, subject to the proviso in SECTION 2.5, exceed each such
Bank's Commitment), the Negotiated Rate Funding Date, the date or dates of
maturity thereof, which date or dates may not occur after the Termination Date,
the rate or rates of interest applicable thereto and all other terms thereof.
Each Negotiated Rate Loan shall be made pursuant to a Negotiated Rate
Confirmation. In lieu of delivering the written Negotiated Rate Confirmation
described above, the Company may give the Agent telephonic notice of any
Negotiated Rate Borrowing by the time required under this clause (a), provided
that such telephonic notice shall be confirmed by delivery of a written
Negotiated Rate Confirmation to the Agent by no later than 2:00 p.m., New York
City time, on the date of such telephonic notice.
Section 2.7. Funding of Negotiated Rate Loans. No later than 2:00 p.m.
(New York City time) on the Negotiated Rate Funding Date, each Bank will make
available to the Agent in dollars and immediately available funds at the office
of the Agent at its address set forth on the signature pages hereof the
Negotiated Rate Loan, if any, to be made by such Bank as part of the Negotiated
Rate Borrowing to be made on such date in the manner provided above. Upon
receipt by the Agent of all such funds, the Agent shall disburse to the Company
on such date such Negotiated Rate Loan in like funds at the Company's account
specified in the relevant Negotiated Rate Confirmation. The Agent may, but shall
not be required to, advance on behalf of any Bank such Bank's Negotiated Rate
Loan 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 such Negotiated
Rate Loan 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 Negotiated Rate 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) in the case of the Bank, (1) the Federal Funds Rate, for the five-day period
beginning on the Borrowing Date, and (2) the applicable rate on the Loans made
on the Borrowing Date, for the period beginning on the sixth day after the
Borrowing Date, and (ii) in the case of the Company, the applicable rate on the
Loans made on the Borrowing Date.
Section 2.8. Negotiated Rate Notes. The Negotiated Rate Loans of each
Bank shall be evidenced by a Negotiated Rate Note payable to the order of each
Bank. The Negotiated Rate Note of each Bank shall (i) be in the principal amount
of $103,000,000, or such amount less than $103,000,000 as the Company and such
Bank may agree, (ii) be dated not later than the date of the initial Negotiated
Rate Confirmation relating to a Negotiated Rate 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 herein and in the applicable Negotiated Rate Confirmations.
Each Bank is authorized to indicate upon the grid
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attached to its Negotiated Rate Note all Negotiated Rate 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 Negotiated Rate 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 Negotiated Rate Notes.
Section 2.9. Competitive Bid Loans. On the terms and subject to the
conditions of this Agreement, from time to time on or after the Effective Date
and prior to the Termination Date, the Company may (but is not obligated to)
make requests for Competitive Bids for Competitive Bid Loans and may (but is not
obligated to) accept Competitive Bids and borrow Competitive Bid Loans for a
term that, for each Competitive Bid Loan, is not less than seven days nor more
than 270 days from the Borrowing Date of such Competitive Bid Loan; provided
that the aggregate principal amount of all outstanding Loans shall not at any
time exceed the then Total Commitment.
Section 2.10. Procedure for Competitive Bid Loans.
(a) Competitive Bid Requests. To request Competitive Bids, the
Company shall deliver a written Competitive Bid Request to the Agent not later
than 1:00 p.m., New York City time, on the date not less than one Business Day
prior to the Borrowing Date of the proposed Competitive Bid Borrowing; provided
that (i) the Company may not submit more than one Competitive Bid Request on the
same day and (ii) in lieu of delivering the written Competitive Bid Request
described above, the Company may give the Agent telephonic notice of any request
for Competitive Bids by the time required under this clause (a), provided,
further, that such telephonic notice shall be confirmed by delivery of a written
Competitive Bid Request to the Agent by no later than 3:00 p.m., New York City
time, on the date of such telephonic notice. Each such Competitive Bid Request
shall specify the aggregate amount of the requested Competitive Bid Borrowing,
the proposed Borrowing Date of such Competitive Bid Borrowing, which shall be a
Business Day, the date of maturity of the Competitive Bid Loans that are
requested to be made as part of such Competitive Bid Borrowing, which date shall
be a Business Day occurring on or before the Termination Date, and the Company's
account to which funds are to be disbursed. Promptly following receipt of a
Competitive Bid Request in accordance with this SECTION, the Agent shall notify
the Banks of the details thereof by facsimile, inviting the Banks to submit
Competitive Bids.
(b) Competitive Bids. Each Bank may in its sole and absolute
discretion make one or more Competitive Bids to the Company in response to a
Competitive Bid Request. Each Competitive Bid by a Bank must be substantially in
the form of EXHIBIT G and must be received by the Agent by facsimile not later
than 11:30 a.m., New York City time, on the proposed Borrowing Date of such
Competitive Bid Borrowing. Competitive Bids that do not conform substantially to
the form of EXHIBIT G may be rejected by the Agent, and the Agent shall notify
the applicable Bank as promptly as practicable. Each Competitive Bid shall
specify (i) the principal amount (which shall be the amount of $5,000,000 or in
integral multiples of $1,000,000 in excess thereof and which may equal the
entire principal amount of the Competitive Bid Borrowing requested by the
Company) of the Competitive Bid Loan or Loans that the Bank is willing to make,
(ii) the rate of interest (the "Competitive Bid Rate") at which the Bank is
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prepared to make such Loan (expressed as a percentage rate per annum in the form
of a decimal to no more than four decimal places) and (iii) the term applicable
to each such Competitive Bid Loan and the date of maturity of such Competitive
Bid Loan.
(c) Acceptance/Rejections of Competitive Bids. The Agent shall
promptly notify the Company by facsimile of the Competitive Bid Rate and the
principal amount specified in each Competitive Bid and the identity of the Bank
that shall have made such Competitive Bid. Subject only to the provisions of
this paragraph, the Company may in its sole and absolute discretion accept or
reject any Competitive Bid. The Company shall notify the Agent by telephone,
confirmed by facsimile in a form approved by the Agent, whether and to what
extent it has decided to accept or reject each Competitive Bid not later than
12:30 p.m., New York City time, on the proposed Borrowing Date of the
Competitive Bid Borrowing; provided that (i) the failure of the Company to give
such notice shall be deemed to be a rejection of each Competitive Bid, (ii) the
Company shall not accept a Competitive Bid made at a particular Competitive Bid
Rate if the Company rejects a Competitive Bid made at a lower Competitive Bid
Rate, (iii) the aggregate amount of the Competitive Bids accepted by the Company
shall not exceed the aggregate amount of the requested Competitive Bid Borrowing
specified in the related Competitive Bid Request, (iv) to the extent necessary
to comply with clause (iii) above, the Company may accept Competitive Bids at
the same Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each Competitive Bid and (v) except pursuant to
clause (iv) above, no Competitive Bid shall be accepted for a Competitive Bid
Loan unless such Competitive Bid Loan is in the amount of $5,000,000 or in
integral multiples of $1,000,000 in excess thereof; provided, further, that if a
Competitive Bid Loan must be in an amount less than $5,000,000 because of the
provisions of clause (iv) above, such Competitive Bid Loan may be for an amount
of $1,000,000 or any integral multiple in excess thereof, and in calculating the
pro rata allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by the
Company. A notice given by the Company pursuant to this paragraph shall be
irrevocable.
(d) Competitive Bid Confirmation. The Agent shall promptly notify
each bidding Bank by facsimile whether or not its Competitive Bid has been
accepted (and, if so, the amount and Competitive Bid Rate so accepted), and each
successful bidder will thereupon become bound, on the terms and subject to the
conditions of this Agreement, to make the Competitive Bid Loan in respect of
which its Competitive Bid has been accepted.
(e) Competitive Bids by the Agent. If the Agent shall elect to
submit a Competitive Bid in its capacity as a Bank, it shall submit such
Competitive Bid directly to the Company at least one quarter of an hour earlier
than the time by which the other Banks are required to submit their Competitive
Bids to the Agent pursuant to paragraph (b) of this SECTION.
Section 2.11. Funding of Competitive Bid Loans. No later than 2:00 p.m.,
New York City time, on the relevant Borrowing Date, each Bank will make
available to the Agent in dollars and immediately available funds at the office
of the Agent at its address set forth on the signature pages hereof, each
Competitive Bid Loan, if any, to be made by such Bank as part of the Competitive
Bid Borrowing to be made on such date in the manner provided above. Upon
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receipt by the Agent of all such funds, the Agent shall disburse to the Company
on such date such Competitive Bid Loan in like funds at the Company's account
specified in the relevant Competitive Bid Request. The Agent may, but shall not
be required to, advance on behalf of any Bank such Bank's Competitive Bid Loan
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 such Competitive Bid
Loan 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 Competitive Bid 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) in the case
of the Bank, (1) the Federal Funds Rate, for the five-day period beginning on
the Borrowing Date, and (2) the applicable rate on the Loans made on the
Borrowing Date, for the period beginning on the sixth day after the Borrowing
Date, and (ii) in the case of the Company, the applicable rate on the Loans made
on the Borrowing Date.
Section 2.12. Competitive Bid Notes. The Competitive Bid Loans of each
Bank shall be evidenced by a Competitive Bid Note payable to the order of each
Bank. The Competitive Bid Note of each Bank shall (i) be in the principal amount
of $103,000,000, (ii) be dated not later than the date of the initial
Competitive Bid 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 herein. Each Bank is
authorized to indicate upon the grid attached to its Competitive Bid Note all
Competitive Bid 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 Competitive Bid
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
Competitive Bid Notes.
Section 2.13. Certain Fees. (a) The Company shall pay to the Agent for
the pro rata account of the Banks during the period from and including the
Effective Date through but excluding the Termination Date 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 Effective Date, on any date
that the Total Commitment is canceled or reduced pursuant to SECTION 2.4 (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 the pro rata account
of the Banks during the period from and including the Effective Date through but
excluding the Termination Date a fee (the "Utilization Fee") equal to (i) 0.125%
per annum (on the basis of a 360-day year for the actual number of days
involved) on the daily amount during such period of the sum of (1) the aggregate
unpaid principal amount of all Committed Loans plus (2) the aggregate unpaid
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principal amount of all committed loans and the maximum amount available to be
drawn under all issued and outstanding letters of credit (together with the
aggregate amount of all payments made by the issuing bank thereunder that have
not yet been reimbursed by or on behalf of the Company), in each case under the
Revolving Credit Agreement, dated as of November 3, 1999, among the Borrower,
the banks named therein and The Bank of New York, as agent and issuing bank,
provided that such sum is greater than 50% of the sum of the Total Commitments
on such day and the total commitments to make committed or similar loans under
such Revolving Credit Agreement on such day, multiplied by (ii) a fraction, the
numerator of which is the aggregate unpaid principal amount on such day of all
Committed Loans and the denominator of which is the sum of items (1) and (2)
above. 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, and on the
Termination Date.
(c) The Company shall pay to each of the Agent and the Banks, for
its account, fees payable in the amounts and at the times separately agreed upon
between the Company and the Agent or such Bank, as the case may be.
Section 2.14. 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, and on not less than one Business Day's written notice to the
Agent, in the case of ABR Loans, Negotiated Rate Loans and Competitive Bid
Loans, to prepay Loans that, in the case of all Loans other than Negotiated Rate
Loans, bear interest on the same basis and having the same Interest Periods, if
any, or terms, as the case may be, 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 unpaid principal 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,
the amounts required by SECTION 4.3 and, in the case of Negotiated Rate Loans,
such other compensation as may be agreed to by the Company and the Bank making
such Negotiated Rate Loan and as to which the Company and such Bank shall have
promptly notified the Agent; provided that the Company shall not have the right
to prepay any Negotiated Rate Loan or any Competitive Bid Loan without the prior
written consent of the Bank making such Negotiated Rate Loan or such Competitive
Bid Loan, as the case may be. Subject to the terms and conditions hereof,
prepaid Loans may be reborrowed.
ARTICLE III.
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 3.1. 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 Negotiated Rate 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 Negotiated Rate Loan and as set forth in a Negotiated
Rate Confirmation.
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(c) Each Competitive Bid Loan shall bear interest at the
Competitive Bid Rate applicable to such Competitive Bid Loan.
Section 3.2. Interest on ABR Loans and Competitive Bid Loans. (a)
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.
(b) Interest on Competitive Bid Loans. Each Competitive Bid Loan
shall bear interest from the date of such Competitive Bid Loan until maturity
thereof or until such Competitive Bid Loan is repaid, payable in arrears, with
respect to a term of 90 days or less, on the maturity date of such Competitive
Bid Loan, and with respect to a term of more than 90 days, on the day which is
90 days after the date of such Competitive Bid Loan and the last day of each
subsequent 90-day period thereafter or, if sooner, the maturity date of such
Competitive Bid Loan, at a rate per annum (on the basis of a 360-day year for
the actual number of days involved) equal to the Competitive Bid Rate applicable
to such Competitive Bid Loan.
Section 3.3. 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
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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 (with respect to such Bank, its
"Eurodollar Lending Office") 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 3.4. 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, 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 4.3, 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 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; 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.
Section 3.5. 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; with
respect to Competitive Bid Loans, the Competitive Bid Rate applicable to each
such Competitive Bid Loan; and, with respect to Negotiated Rate Loans, the
agreed-upon rate of interest applicable to each such Negotiated Rate Loan,
changing as and when said rate shall change if such rate shall be subject to
change. Interest payable pursuant to this SECTION shall be payable on demand.
Section 3.6. 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 11.1 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
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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, 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 4.1. Pro Rata Treatment. Each payment of the Facility Fee and the
Utilization 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 4.4 or 4.5, the Committed Notes or portions thereof as to which a
Conversion/Continuance Request has been made pursuant to SECTION 3.4 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 4.2. Method of Payment. All payments by the Company hereunder and
under the Committed Notes, the Negotiated Rate Notes and the Competitive Bid
Notes shall be made 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 without set-off, counterclaim or other deduction.
Section 4.3. Compensation for Losses.
(a) Compensation. In the event that (i) the Company makes a
prepayment under SECTION 2.14 on a day other than the last day of the Interest
Period for the amount so prepaid, in the case of Eurodollar Loans, or the
scheduled maturity date of the amount so prepaid, in the case of Negotiated Rate
Loans or Competitive Bid Loans, (ii) a Conversion/Continuance Date selected
pursuant to SECTION 3.4 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 2.2 requesting Eurodollar Loans, (iv)
Eurodollar Loans are converted into ABR Loans pursuant to SECTION 4.5 on a day
other than the last day of the Interest Period for the Eurodollar Loans so
converted, (v) Eurodollar Loans, Negotiated Rate Loans or Competitive Bid Loans
shall be declared to be due and payable prior to the scheduled maturity thereof
pursuant to SECTION 8.1, or (vi) the Company shall fail to borrow any
Competitive Bid Loan after accepting the Competitive Bid to make such
Competitive Bid Loan or shall fail to borrow any Negotiated Rate Loan after
delivering the Negotiated Rate Confirmation for such Negotiated Rate Loan in
accordance with SECTION 2.6, the Company shall pay to the Agent for the account
of each Bank promptly after demand by such Bank (with notice to the Agent) an
amount which will compensate such Bank for any costs and losses incurred by such
Bank as a result of such prepayment, revocation of notice, conversion,
declaration or failure to borrow in respect of funds obtained for the purpose of
making or maintaining such Bank's
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Eurodollar Loans, Negotiated Rate Loans or Competitive Bid 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, declared due and payable, converted, or not
borrowed, for the period from the date of such payment or prepayment or
declaration or conversion or failure to borrow to the last day of the relevant
Interest Period or scheduled maturity date, as the case may be, (or, in the case
of a failure to borrow, the Interest Period that would have commenced on the
date of such failure to borrow or the maturity date that would have been
scheduled for the relevant Negotiated Rate Loan or Competitive Bid Loan, as the
case may be) in each case at the applicable rate of interest for the relevant
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, in the case of Eurodollar Loans, or the rate of interest (as
reasonably determined by such Bank) which would have been quoted by such Bank
with respect to such amount for a comparable period, in all other cases.
(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. When requesting payment
pursuant to this SECTION, 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 11.8(e), each Participant
shall be deemed a "Bank" for the purposes of this SECTION.
Section 4.4. Withholding, Additional Costs and Capital Adequacy
(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 are paid by any Bank, the Company shall, not
later than 10 days after
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demand of such Bank (with a copy to the Agent), make payment to the Agent for
the account of such Bank to 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. 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 (i) impose, modify or
deem applicable any reserve, special deposit or similar requirement against the
Banks' Commitments or the Loans or (ii) impose on any Bank any other condition
regarding this Agreement, the Notes, its Commitment or the Loans and the result
of any event referred to in subclause (i) or (ii) 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 (with a copy to the Agent), the
Company shall pay to the Agent for the account of 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.
(c) Capital Adequacy. 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
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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 (with a copy to the Agent), the Company shall
pay to the Agent for the account of such Bank such additional amount or amounts
as will compensate such Bank or such corporation 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.
(d) Lending Office Designations. Before giving any notice to the
Company pursuant to this SECTION, 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.
(e) 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. When requesting payment
pursuant to this SECTION, 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 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 practical, to all of the affected Bank's or controlling
corporation's assets, commitments, activities or other relevant aspects of such
Bank's or controlling corporation'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.
(f) Participants. Subject to SECTION 11.8(e), each Participant
shall be deemed a "Bank" for the purposes of this SECTION.
Section 4.5. 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
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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
shall automatically 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 5.1. Representations and Warranties. As of each Compliance Date,
the Company represents and warrants to the Banks that:
(a) Subsidiaries. On the Effective Date, the Company has no
Subsidiaries and is a participant in no joint ventures other than as listed on
SCHEDULE 5.1(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 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
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which are necessary for the borrowings 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 the Subsidiaries, would have a Material Adverse Effect or
relates to any Credit Document or the lending transactions contemplated hereby
and by the other Credit Documents.
(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 the 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
the 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
lending transactions contemplated hereby and by the other Credit Documents, or
the incurrence of the obligations provided for in the Credit Documents, or
result in or require the creation or imposition of any Lien on any of the
Company's or the Subsidiaries' properties as a consequence of the execution,
delivery and performance of any Credit Document or the lending transactions
contemplated hereby and by the other Credit Documents.
(h) Financial Condition. (i) The consolidated balance sheet of
the Company and the Subsidiaries as of December 31, 1998, 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 the 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
Effective Date, there are no material liabilities, direct or indirect, fixed or
contingent, of the Company or any of the 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 the Subsidiaries as of March 31, 1999 and June 30, 1999,
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 the 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
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to the omission or curtailment of footnotes. As of the Effective Date,
there are no material liabilities, direct or indirect, fixed or
contingent, of the Company and any of the Subsidiaries as of the dates of
such balance sheets which are not reflected therein or in the notes
thereto.
(iii) The unaudited pro forma combined balance sheets of
the Company as of June 30, 1999, together with the unaudited pro forma
combined statements of income of the Company for the related periods
ending June 30, 1999, in each case after giving effect to the Initial
Transactions, heretofore delivered to the Agent and the Banks, fairly
present the pro forma consolidated financial condition of the Company and
the Subsidiaries and the results of their operations as of the dates and
for the periods referred to (in each case after giving effect to the
Initial Transactions). As of the Effective Date, there are no material
liabilities, direct or indirect, fixed or contingent, of the Company and
any of the Subsidiaries as of the dates of such financial statements
which are not reflected therein or in the notes thereto.
(iv) Since June 30, 1999, there has been no Material
Adverse Change.
(v) Since June 30, 1999, there has not occurred any
fact, event or condition which could have a Material Adverse Effect from
that reflected in the pro forma financial statements referred to in
clause (iii) above.
(i) Taxes. Each of the Company and the 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 (1) which are being
contested in good faith and for which adequate reserves (in accordance with
GAAP) have been established or (2) of which the failure to file or pay would
not, individually or in the aggregate, be material and adverse to the Company
and the Subsidiaries, taken as a whole.
(j) Use of Proceeds. The proceeds of the Loans will be used by
the Company to consummate the Initial Transactions and for other 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
purchasing or carrying, any "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System.
(l) No Material Misstatements. All written information relating
to the Company and the Subsidiaries heretofore delivered by the Company and the
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 the 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, 1998,
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referred to in SECTION 5.1(h), except for (i) 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, (ii) 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 (iii) such other items as would not, individually or in the
aggregate, be material and adverse to the Company and the 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 Effective Date, the Company and
the 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 the 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
incorporation, 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 the 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 the
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 Effective
Date and neither the Company nor any ERISA Affiliate is (1) required to
give security to any Single-Employer Plan pursuant to Section 401(a)(29)
of the Code or Section 307 of ERISA, or (2) subject to a lien in favor of
such a Plan under Section 302(f) of ERISA.
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(iii) Except those items that would not, individually or
in the aggregate, be material to the Company and the Subsidiaries, taken
as a whole, no liability under Section 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 the 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 Effective Date, 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, (1)
"accumulated funding deficiency" shall have the meaning assigned to such
term in Section 412 of the Code and Section 302 of ERISA; (2)
"multiemployer plan" and "plan year" shall have the respective meanings
assigned to such terms in Section 3 of ERISA; (3) "benefit liabilities"
shall have the meaning assigned to such term in Section 4001 of ERISA;
(4) "taxable period" shall have the meaning assigned to such term in
Section 4975 of the Code; and (5) "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
the 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 the Subsidiaries are and
have been conducted in compliance in all material respects with all applicable
Environmental Laws, including having required permits, licenses and other
approvals and authorizations, during the time the Company and the Subsidiaries
engaged in such businesses, (ii) the properties presently or formerly owned or
operated by the Company and the Subsidiaries (including 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
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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 the
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 Effective
Date, (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 clause
(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 the 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
the 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.
(u) Year 2000. The Company and each of the Subsidiaries have
taken all necessary action to complete in all material respects the
reprogramming of computer software, hardware and firmware systems and equipment
containing embedded microchips owned or operated by or for the Company and the
Subsidiaries required as a result of the Year 2000 Issue to permit the proper
functioning of such computer systems and other equipment and the testing of such
systems and equipment, as so reprogrammed, other than action for which the
failure to complete would not have a Material Adverse Effect. The Company and
the Subsidiaries are undertaking reasonable efforts to assess the efforts of its
investment banks, commercial banks, primary lessees and major vendors to deal
with the Year 2000 Issue. The costs to the Company
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and the Subsidiaries of any reprogramming required as a result of the Year 2000
Issue to permit the proper functioning of the systems and equipment of the
Company and the Subsidiaries and the proper processing of data and the testing
of such reprogramming are not reasonably expected to result in an Event of
Default or to have a Material Adverse Effect on the business, properties,
condition (financial or otherwise) or operations of the Company and the
Subsidiaries, taken as a whole. The "Year 2000 Issue" shall mean the failure of
computer software, hardware and firmware systems and equipment containing
embedded computer chips to properly receive, transmit, process, manipulate,
store, retrieve, retransmit or in any other way utilize data and information due
to the occurrence of the year 2000 or the inclusion of dates on or after January
1, 2000.
(v) AHPI Merger Documents. As of the Effective Date, all the
representations, warranties and certifications contained in each AHPI Merger
Document shall be true and correct in all material respects with the same effect
as though such representations, warranties and certifications had been made on
the Effective Date.
ARTICLE VI.
CONDITIONS OF LENDING
Section 6.1. Conditions to the Availability of the Commitment. The
obligations of each Bank hereunder are subject to, and the Banks' Commitments
shall not become available from the date hereof until the date (the "Effective
Date") on which, each of the following conditions shall have been satisfied or
waived in accordance with SECTION 11.4, 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 maximum stated principal amounts equal to each such Bank's
Commitment, and Negotiated Rate Notes and Competitive Bid Notes in maximum
stated 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 a reasonable period of time prior to the Effective Date, confirming the
Company's representation as to good standing in SECTION 5.1(b) with respect to
the States of Maryland and California.
(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 Effective Date, (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.
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(e) Opinion of Company Counsel. The Agent shall have received a
favorable written opinion, dated the Effective Date, of Latham & Watkins,
special counsel for the Company, in substantially the form of EXHIBIT I, and of
Ballard Spahr Andrews & Ingersoll, LLP, special Maryland counsel for the
Company, in substantially the form of EXHIBIT J.
(f) Initial Transactions. The Agent on behalf of the Banks shall
have received from the Company (i) a certificate from an authorized executive
officer of the Company, dated as of the Effective Date, certifying that,
substantially simultaneous with the Initial Loan, each of the Initial
Transactions shall have been consummated, and attaching a true, complete and
correct copy of each AHPI Merger Document, which shall be in form and substance
reasonably satisfactory to the Agent and the Banks, and (ii) other evidence
reasonably satisfactory to the Agent that the transactions described in clause
(ii) of the definition of "Initial Transactions" shall have been consummated.
(g) Other Documents. The Agent shall have received such other
certificates and documents as the Agent and the Banks reasonably may require.
(h) Litigation. There shall not be pending or threatened any
action or proceeding before any court or administrative agency relating to any
Credit Document, any AHPI Merger Document, the Initial Transactions or the other
lending transactions contemplated by the Credit Documents which, in the judgment
of the Agent or any Bank, could materially impair the ability of the Company to
perform its obligations under the Credit Documents or the AHPI Merger Documents.
(i) Certain Fees and Expenses. The Agent shall have received (i)
those certain fees that are payable as described in SECTION 2.13 and (ii) those
fees and expenses of counsel to the Agent and the Lead Arranger and Book
Manager, as described in SECTION 11.3, that have been incurred up to the date
hereof and of which the Agent has given the Company notice.
Notwithstanding the foregoing, the obligations of each Bank hereunder shall not
become effective, and the Banks' Commitments shall not become available, unless
each of the foregoing conditions is satisfied or waived in writing by each of
the Banks at or prior to 3:00 p.m., New York City time, on November 30, 1999
(and, in the event such conditions are not so satisfied or waived, all of the
Commitments shall terminate at such time).
Section 6.2. Conditions to All Loans. The obligations of each Bank in
connection with each Loan (including the Initial Loan) are subject to the
conditions that, on the date of each such Loan and after giving effect thereto,
each of the following conditions shall have been satisfied or waived in
accordance with SECTION 11.4, and upon such satisfaction or written waiver each
Bank will give a written confirmation of the same to the Company on request:
(a) Committed Loan Request/Negotiated Rate
Confirmation/Competitive Bid Request. (i) For each Committed Loan, the Agent
shall have received a Committed Loan Request in substantially the form of
EXHIBIT B. (ii) For each Negotiated Rate Borrowing, the Agent shall have
received a Negotiated Rate Confirmation in substantially the form of EXHIBIT D.
(iii) For each Competitive Bid Loan, the Agent shall have received a Competitive
Bid Request
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in substantially the form of EXHIBIT F and such other documents required to be
provided or executed by the Company pursuant to SECTIONS 2.9 to 2.12.
(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 7.1. Affirmative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes 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 the Subsidiaries, prepared in a format and in scope
consistent with the financial statements and reports of the Company referenced
in SECTION 5.1(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 the Subsidiaries,
certified by Arthur Andersen & Co., one of the other "Big Five" 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,
1998 financial statements and reports of the Company referenced in SECTION
5.1(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 clause (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 the Subsidiaries or their accountants in
connection with any annual or interim audit of the books of the Company or the
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.
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(b) Taxes. Pay and discharge, and cause each of the 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 (1) 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, (2) adequate
reserves (in accordance with GAAP) are maintained by the Company or such
Subsidiary, as the case may be, with respect thereto, and (3) 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 the Subsidiaries, taken as a whole.
(c) Corporate Existence. Except as permitted by SECTION 7.2(d) or
(e), maintain, and cause each of the 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
the 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 the 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 the 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 the 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 the 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 the Subsidiaries in
a principal amount in excess of
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$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 the
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 the 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
communication or report received by Company or any of the Subsidiaries in
connection with any such matters as they may affect such premises, if material.
(j) Insurance on Leased Properties. Use its, and cause the
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 judgment of the
Agent, may be necessary or advisable to carry out the intent and purpose of this
Agreement.
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(l) Year 2000 Covenant. The Company shall provide, and shall
cause each of the Subsidiaries to provide, reasonable assurance of compliance
with the representations and warranties contained in SECTION 5.1(u) to the Agent
at its request or the request of the Required Lenders (and, in the case of any
such request by the Required Lenders, the Agent shall provide a copy thereof to
each Bank).
Section 7.2. Negative Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes 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
other Liens, except Indebtedness secured by mortgages, encumbrances or other
Liens which, together with the Indebtedness of the Subsidiaries permitted under
SECTION 7.2(b)(iii), 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 the Subsidiaries (other than
Indebtedness to the Banks hereunder) shall not exceed 30% of Consolidated Total
Assets.
(b) Subsidiary Indebtedness. Permit any Subsidiary to create,
incur, assume or suffer to exist any Indebtedness, except (i) any Indebtedness
described in clause (ii) of the definition of "Initial Transactions", provided
that such Indebtedness is paid in full substantially simultaneous with the
Initial Loan, (ii) Indebtedness to the Company or any other Subsidiary, or (iii)
Indebtedness which, together with outstanding Indebtedness of the Company
permitted under SECTION 7.2(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 the 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 7.2(a) or
7.2(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 7.2(b)(ii)) 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 (other than as contemplated by
the definition of "Initial Transactions"), 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: (1) the Company is the surviving corporation of
such merger or consolidation; (2) 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 (3) 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: (1) the amount of the total consideration
(including any Indebtedness or liabilities incurred or assumed in connection
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therewith) paid in connection with such acquisition is not greater than 15% of
Consolidated Stockholders' Equity; (2) the acquired entity is engaged in
substantially the same line of business as the Company; and (3) at the time of
such acquisition and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing.
(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.
(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
(other than as contemplated by the definition of "Initial Transactions"), 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 thereof; (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 A2 by Moody's; (iii) repurchase agreements, tax exempt
investments, certificates of deposit, time deposits, Eurodollar time deposits or
bankers' acceptances issued by (1) any Bank, (2) 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 (3) 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 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 (i) in connection with a merger or consolidation of a
Wholly-Owned Subsidiary permitted by SECTION 7.2(d) or with the dissolution of
any Subsidiary or (ii) a sale in accordance with SECTION 7.2(e) of any equity
interest in any Subsidiary that is not material to the Company and the
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.
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Section 7.3. Financial Covenants. Until the Termination Date, and
thereafter until payment in full of the Notes 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 the higher of (i)
$850,000,000 and (ii) 80% of Consolidated Stockholders' Equity calculated on a
pro forma basis at the time of, and immediately after giving effect to, the
consummation of the acquisition described in clause (i) of the definition of
"Initial Transactions".
(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 1.75:1.00.
(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, in each case 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 8.1. 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 Negotiated Rate Note or Competitive Bid 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,
the Utilization 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 7.1(g), 7.2(d), 7.2(e)
or 7.3; 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
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(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 the Subsidiaries for the payment of Indebtedness in excess of
$5,000,000 (i) is not paid when due or within any grace period for the payment
therefor, or (ii) becomes or is declared to be due and payable prior to the
expressed maturity thereof, or (iii) 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, except that, solely for purposes of this clause (iii), for a period of
60 days after the date hereof, no default with respect to any Indebtedness
listed on SCHEDULE 8.1(f) resulting from the merger of AHPI into the Company
shall constitute a Default or Event of Default; 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 the 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 the 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 the
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 the
Subsidiaries in furtherance of any such action; or
(i) One or more judgments against the Company or any of the
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 the
Subsidiaries, remain unpaid, unstayed on appeal, undischarged, unbonded, or
undismissed for a period of 60 days; or
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(j) With respect to any Single-Employer Plan, any of the
following shall occur: (1) 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; (2) 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;(3)
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 (4) 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
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; or
(m) A Change of Control shall have occurred;
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 8.1(g) or 8.1(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 9.1. The Agency and Co-Documentation 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.
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(b) Each Bank appoints each of Bank of America, N.A. and Wells
Fargo Bank, N.A. as a Co-Documentation Agent hereunder, and each
Co-Documentation Agent hereby accepts such appointment subject to the terms
hereof. Each Co-Documentation 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.
Section 9.2. 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", and promptly after its receipt of any such written notice, the Agent
shall give the Company and each Bank a copy thereof.
Section 9.3. 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.
In the case of any payment allocable to more than one party hereto that are made
with respect to obligations pursuant to this Agreement or any Note incurred
prior to the date hereof, such payments shall be apportioned, as applicable and
to the extent that such payment is attributable to the period prior to the date
hereof, according to each such party's Commitment or other rights hereunder as
they existed prior to such date.
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Section 9.4. 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 willful
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, (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, and (iv) the Agent in such
capacity shall be entitled to rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Persons.
Section 9.5. 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 9.6. 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,
financial 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, sufficiency, 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 the 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 9.7. 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
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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 willful 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 9.8. 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 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
Section 10.1. 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
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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 11.1. 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 11.2. 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 11.3. Expenses. The Company agrees to pay (i) all reasonable
out-of-pocket fees and expenses of the Agent and the Lead Arranger and Book
Manager (including the reasonable out-of-pocket fees and expenses of Bryan Cave
LLP, as counsel to the Agent and the Lead Arranger and Book Manager) 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 Lead Arranger
and Book Manager, 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 11.4. 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)
except as otherwise provided in SECTIONS 2.4, 11.12 and 11.13, 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 3.5) 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.
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Section 11.5. 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 11.6. 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 SECTION 2.2, 2.6, 2.10 OR 11.12 will not be
effective until received by the Agent. A communication, demand or notice given
pursuant to this SECTION shall be addressed: if to the Agent or any Bank, at its
address as indicated on the signature pages hereof, and if to the Company, at
4675 MacArthur Court, Suite 900
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.
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 11.7. 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 11.8. 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,
47
<PAGE> 52
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 (v), inclusive, of SECTION 11.4 without the
consent of the Participant. Subject to SECTION 11.8(e), the Company agrees that
each Participant shall be entitled to the benefits of SECTIONS 4.3, 4.4 and
11.3(ii) 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 (i) 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 or (ii) if any event specified in SECTION
8.1(a), 8.1(g), 8.1(h), 8.1(l) or 8.1(m) has occurred and is continuing. Upon
(1) execution and delivery of such an instrument, (2) 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 (3) payment by the transferee Bank or
transferor Bank to the Agent of an administrative fee in the amount of $3,500,
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 4.3 or 4.4
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Company's prior written
consent or by reason of the provisions of SECTION 4.4 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 4.3, 4.4 or 11.3(ii) than such Bank would have
been entitled to receive if it had not granted a participation to such
Participant.
48
<PAGE> 53
SECTION 11.9. 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 willful
misconduct of any Indemnitee. The provisions of this SECTION 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 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 K,
delivered to each such Bank and the Agent not earlier than 60 days prior to such
scheduled Termination Dates. 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
49
<PAGE> 54
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. Any Bank failing to respond to the extension request letter
shall be deemed to have declined to extend such Bank's scheduled Termination
Date.
(b) With respect to any Bank which has declined to extend such
Bank's scheduled Termination Date, the Company may (unless Banks with an
aggregate percentage of the Total Commitment in excess of 25% have declined to
extend their respective scheduled Termination Dates), 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, whether or not it 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 Terminating Bank that is not the subject of a notice of removal
pursuant to subsection (b) above, such Successor Bank had extended its scheduled
Termination Date pursuant to such subsection (a) and (ii) in the case of any
Terminating 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 (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 SECTIONS 4.3, 4.4, 11.3 and 11.11 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. Increase of Commitments. At any time and from time to
time, the Company may, at its option, arrange for one or more Banks or one or
more other financial institutions acceptable to the Agent (an "Increasing Bank")
to increase their respective
50
<PAGE> 55
Commitments (or, in the case of such other financial institutions, extend new
Commitments hereunder) in an aggregate amount not to exceed $13,292,000. Such
increase or extension shall be effected by means of one or more agreements or
other documents supplemental to this Agreement among the Increasing Banks, the
Company and the Agent. In the event that immediately after giving effect to such
increase or extension Committed Loans shall then be outstanding, then
simultaneously with such increase or extension the Banks (including the
Increasing Banks) shall, subject to the terms and conditions of this Agreement,
make new Committed Loans in accordance with their respective Commitments
(immediately after giving effect to such increase or extension) as shall be
necessary to pay in full such outstanding Committed Loans, provided that (i) the
making of such new Committed Loans and the payment in full of such outstanding
Committed Loans shall be deemed to have been made simultaneously and shall be
effected in a manner reasonably determined by the Agent through means of one or
more advances and/or payments made directly among the Banks on a netted basis
through the Agent and (ii) upon the consummation thereof, the Banks, the Agent
and the Company shall make appropriate arrangements so that, if required, new
Notes are issued to the Banks. On and as of the effective date of each such
increase or extension, each Increasing Bank shall be and become a Bank for all
purposes of this Agreement (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.
Section 11.14. 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 11.15. 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.
51
<PAGE> 56
HEALTH CARE 364-DAY CREDIT AGREEMENT
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:
---------------------------
Name: Devasis Ghose
Title: Senior Vice President
THE BANK OF NEW YORK,
as Agent for the Banks
By:
---------------------------
Name:
Title:
Address for Notices:
The Bank of New York
One Wall Street, 18th Floor
New York, NY 10286
Attn:Kalyani Bose
Fax: (212) 635-6365
With a copy to:
The Bank of New York
10990 Wilshire Boulevard, Suite 1125
Los Angeles, CA 90024
Attn:Rebecca K. Levine
Fax: (310) 996-8667
<PAGE> 57
HEALTH CARE 364-DAY CREDIT AGREEMENT
Commitment: $19,935,484 THE BANK OF NEW YORK,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
The Bank of New York
One Wall Street, 18th Floor
New York, NY 10286
Attn: Kalyani Bose
Fax: (212) 635-6365
With a copy to:
The Bank of New York
10990 Wilshire Boulevard, Suite 1125
Los Angeles, CA 90024
Attn: Rebecca K. Levine
Fax: (310) 996-8667
Eurodollar Lending Office:
The Bank of New York
One Wall Street, 18th Floor
New York, NY 10286
Attn: Kalyani Bose
Fax: (212) 635-6365
<PAGE> 58
HEALTH CARE 364-DAY CREDIT AGREEMENT
Commitment: $18,274,194 BANK OF AMERICA, N.A.,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
Bank of America, N.A.
One Independence Center
101 N. Tryon Street, 15th Floor
Charlotte, NC 28255
Attn: Mathew Menz
Fax: (704) 409-0083
With a copy to:
Bank of America, N.A.
700 Louisiana Street, 8th Floor
Houston, TX 77002
Attn: Scott Singhoff
Fax: (713) 247-6719
Eurodollar Lending Office:
Bank of America, N.A.
One Independence Center
101 N. Tryon Street, 15th Floor
Charlotte, NC 28255
Attn: Mathew Menz
Fax: (704) 409-0083
<PAGE> 59
HEALTH CARE 364-DAY CREDIT AGREEMENT
Commitment: $18,274,194 WELLS FARGO BANK, N.A.,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
Wells Fargo Bank, N.A.
Los Angeles Regional Commercial
Banking Office
333 South Grand Avenue, 3rd Floor
Los Angeles, CA 90071
Attn: Charles Warner
Fax: (213) 687-3501
Eurodollar Lending Office:
Wells Fargo Bank, N.A.
Los Angeles Regional Commercial
Banking Office
333 South Grand Avenue, 3rd Floor
Los Angeles, CA 90071
Attn: Charles Warner
Fax: (213) 687-3501
<PAGE> 60
HEALTH CARE 364-DAY CREDIT AGREEMENT
Commitment: $18,274,194 FIRST UNION NATIONAL BANK,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
First Union Bank National Bank
One First Union Center
301 South College Street, TW5
Charlotte, NC 28288-0735
Attn: Valerie Cline
Fax: (704) 383-9144
Eurodollar Lending Office:
First Union Bank National Bank
One First Union Center
301 South College Street, TW5
Charlotte, NC 28288-0735
Attn: Valerie Cline
Fax: (704) 383-9144
<PAGE> 61
HEALTH CARE 364-DAY CREDIT AGREEMENT
Commitment: $4,983,871 BANK OF HAWAII,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
Bank of Hawaii
130 Merchant Street
Honolulu, HI 96813-6000
Attn: Scott Nahame
Fax: (808) 537-8301
Eurodollar Lending Office:
Bank of Hawaii
949 Kamokila Boulevard
Kapolei, HI 96706
Attn: Donna Arakawa
Fax: (808) 693-1672
<PAGE> 62
HEALTH CARE 364-DAY CREDIT AGREEMENT
Commitment: $3,322,581 CITY NATIONAL BANK,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
City National Bank
400 North Roxbury Drive, 3rd. Floor
Beverly Hills, CA 90210
Attn: Randall F. Watsek
Fax: (310) 888-6564
Eurodollar Lending Office:
City National Bank
831 South Douglas Street, Suite 100
El Segundo, CA 90245
Attn: Pamela Terry
Fax: (310) 297-8171
<PAGE> 63
HEALTH CARE 364-DAY CREDIT AGREEMENT
Commitment: $6,645,161 KBC BANK N.V.,
as a Bank
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
Address for Notices:
KBC BANK N.V.
125 West 55th Street,
10th Floor
New York, NY 10019
Attn: Michael Curran
Fax: (212) 541-0784
With a copy to:
KBC BANK N.V.
515 South Figueroa, Suite 1920
Los Angeles, CA 90071
Attn: Barbara Readick
Fax: (213) 629-5801
Eurodollar Lending Office:
KBC BANK N.V.
125 West 55th Street
10th Floor
Ne w York, NY 10019
Attn: Michael Curran
Fax: (212) 541-0784
<PAGE> 64
HEALTH CARE 364-DAY CREDIT AGREEMENT
Commitment: $8,306,452 SOCIETE GENERALE,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
SOCIETE GENERALE
2029 Century Park East, 2900
Los Angeles, CA 90067
Attn: Richard Bernal
Fax: (310) 551-1537
Eurodollar Lending Office:
SOCIETE GENERALE
2001 Ross Avenue, Suite 4800
Dallas, TX 75201
Attn: Lia Guerra
Fax: (214) 979-0171
<PAGE> 65
HEALTH CARE 364-DAY CREDIT AGREEMENT
Commitment: $4,983,871 CREDIT LYONNAIS NEW YORK BRANCH,
as a Bank
By:
---------------------------------
Name:
Title:
Address for Notices:
Credit Lyonnais
1301 Avenue of the Americas
New York, NY 10019
Attn: Henry Reukauf
Fax: (212) 261-3440
Eurodollar Lending Office:
Credit Lyonnais
1301 Avenue of the Americas
New York, NY 10019
Attn: Henry Reukauf
Fax: (212) 261-3440
<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, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 8,199
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,454,081
<DEPRECIATION> 215,258
<TOTAL-ASSETS> 1,504,591
<CURRENT-LIABILITIES> 0
<BONDS> 711,666
0
187,847
<COMMON> 32,046
<OTHER-SE> 397,982
<TOTAL-LIABILITY-AND-EQUITY> 1,504,591
<SALES> 0
<TOTAL-REVENUES> 153,651
<CGS> 0
<TOTAL-COSTS> 25,694
<OTHER-EXPENSES> 19,334
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39,496
<INCOME-PRETAX> 69,227
<INCOME-TAX> 0
<INCOME-CONTINUING> 69,227
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 69,227
<EPS-BASIC> 1.80
<EPS-DILUTED> 1.80
</TABLE>
