<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
March 28, 1997
HEALTH CARE REIT, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8923 34-1096634
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One SeaGate, Suite 1500, P.O. Box 1475, Toledo, Ohio 43603-1475
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area Code): 419-247-2800
The Exhibit Index is located on page 3.
ITEM 5. OTHER EVENTS.
On March 28, 1997, the Registrant and its subsidiaries entered into an
unsecured Loan Agreement with twelve (12) banks, for which KeyBank National
Association will act as administrative agent. Under the terms of the unsecured
Loan Agreement, $175,000,000 will be made available to the Registrant and its
subsidiaries on a revolving credit basis. Also on March 28, 1997, the
collateral that secured the Registrant's $52,000,000 Senior Notes and
$30,000,000 Senior Notes was released pursuant to Amended and Restated Note
Purchase Agreements.
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
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<S> <C> <C>
(10.1) Loan Agreement dated as of March 28, 1997 by and
among Health Care REIT, Inc., its subsidiaries, the
banks which are signatory thereto and KeyBank
National Association, as Agent.
(10.2) Amended and Restated Note Purchase Agreement -
$52,000,000 Senior Notes
(10.3) Amended and Restated Note Purchase Agreement -
$30,000,000 Senior Notes
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
HEALTH CARE REIT, INC.
/s/ George L. Chapman
----------------------------------
George L. Chapman
Its: Chairman of the Board, Chief
Executive Officer and President
Dated: April 8, 1997
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<TABLE>
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EXHIBIT INDEX
-------------
Designation
Number Under
Item 601
Exhibit of Reg.
Number S-K Description
- ------- -------- -----------
<S> <C> <C>
10.1 10 Loan Agreement dated as of March 28, 1997 by and among
Health Care REIT, Inc., its subsidiaries, the banks which
are signatory thereto and KeyBank National Association, as
Agent.
10.2 10 Amended and Restated Note Purchase Agreement - $52,000,000
Senior Notes
10.3 10 Amended and Restated Note Purchase Agreement - $30,000,000
Senior Notes
</TABLE>
<PAGE> 1
Exhibit 10.1
================================================================================
LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT FOR SUCH BANKS
AND
FLEET BANK, N.A.,
AS SYNDICATION AGENT
MARCH 28, 1997
================================================================================
<PAGE> 2
<TABLE>
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1. DEFINITIONS
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Section 1.1 Defined Terms............................................................... 1
Section 1.2 GAAP........................................................................ 20
ARTICLE 2. REVOLVING CREDIT COMMITMENTS; LOANS
Section 2.1 Loans....................................................................... 21
Section 2.2 Notices Relating to Loans................................................... 21
Section 2.3 Disbursement of Loan Proceeds............................................... 22
Section 2.4 Notes....................................................................... 22
Section 2.5 Repayment of Loans; Voluntary Changes
in Commitment; Mandatory Repayments........................................ 22
Section 2.6 Interest.................................................................... 23
Section 2.7 Fees........................................................................ 25
Section 2.8 Use of Proceeds of Loans.................................................... 26
Section 2.9 Computations................................................................ 26
Section 2.10 Minimum Amounts of Borrowings,
Conversions and Repayments................................................ 26
Section 2.11 Time and Method of Payments..................................................27
Section 2.12 Lending Offices............................................................. 27
Section 2.13 Several Obligations......................................................... 27
Section 2.14 Pro Rata Treatment Among Banks.............................................. 27
Section 2.15 Non-Receipt of Funds by the Agent........................................... 28
Section 2.16 Sharing of Payments
and Set-Off Among Banks................................................... 28
Section 2.17 Conversions of Loans........................................................ 29
Section 2.18 Additional Costs; Capital Requirements...................................... 29
Section 2.19 Limitation on Types of Loans................................................ 31
Section 2.20 Illegality.................................................................. 32
Section 2.21 Certain Conversions pursuant
to Sections 2.18 and 2.20................................................. 32
Section 2.22 Indemnification............................................................. 33
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
Section 3.1 Organization................................................................ 34
Section 3.2 Power, Authority, Consents.................................................. 34
Section 3.3 No Violation of Law or Agreements........................................... 35
Section 3.4 Due Execution, Validity,
Enforceability............................................................. 35
Section 3.5 Title to Properties......................................................... 35
Section 3.6 Judgments, Actions, Proceedings............................................. 35
Section 3.7 No Defaults, Compliance With Laws........................................... 36
Section 3.8 Burdensome Documents........................................................ 36
Section 3.9 Financial Statements; Projections........................................... 36
Section 3.10 Tax Returns................................................................. 37
Section 3.11 Intangible Assets........................................................... 37
Section 3.12 Regulation U................................................................ 37
Section 3.13 Name Changes, Mergers, Acquisitions......................................... 38
Section 3.14 Full Disclosure............................................................. 38
Section 3.15 Licenses and Approvals...................................................... 38
Section 3.16 ERISA....................................................................... 38
Section 3.17 REIT Status................................................................. 39
</TABLE>
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ARTICLE 4. CONDITIONS TO THE LOANS
Section 4.1 Conditions to Initial Loans................................................. 40
Section 4.2 Conditions to Subsequent Loans.............................................. 41
ARTICLE 5. DELIVERY OF FINANCIAL REPORTS
DOCUMENTS AND OTHER INFORMATION
Section 5.1 Annual Financial Statements................................................. 43
Section 5.2 Quarterly Financial Statements.............................................. 43
Section 5.3 Compliance Information...................................................... 44
Section 5.4 No Default Certificate...................................................... 44
Section 5.5 Certificate of Accountants'................................................. 44
Section 5.6 Borrowing Base Certificate.................................................. 44
Section 5.7 Business Plans and Projections.............................................. 45
Section 5.8 Quarterly Facility Reports.................................................. 45
Section 5.9 Accountants' Reports........................................................ 45
Section 5.10 Copies of Documents......................................................... 45
Section 5.11 Notices of Defaults......................................................... 46
Section 5.12 ERISA Notices and Requests.................................................. 46
Section 5.13 Additional Information...................................................... 46
ARTICLE 6. AFFIRMATIVE COVENANTS
Section 6.1 Books and Records........................................................... 47
Section 6.2 Inspections and Audits...................................................... 47
Section 6.3 Maintenance and Repairs..................................................... 47
Section 6.4 Continuance of Business..................................................... 47
Section 6.5 Copies of Corporate Documents............................................... 48
Section 6.6 Perform Obligations......................................................... 48
Section 6.7 Notice of Litigation........................................................ 48
Section 6.8 Insurance................................................................... 48
Section 6.9 Financial Covenants......................................................... 49
Section 6.10 Notice of Certain Events.................................................... 49
Section 6.11 Comply with ERISA........................................................... 50
Section 6.12 Environmental Compliance.................................................... 50
Section 6.13 Maintenance of REIT Status.................................................. 50
Section 6.14 Long-Term Care Facilities................................................... 50
Section 6.15 Behavioral Care Facilities.................................................. 50
Section 6.16 Operator Concentration...................................................... 50
ARTICLE 7. NEGATIVE COVENANTS
Section 7.1 Indebtedness................................................................ 51
Section 7.2 Liens....................................................................... 51
Section 7.3 Guaranties.................................................................. 52
Section 7.4 Mergers, Acquisitions....................................................... 52
Section 7.5 Distributions............................................................... 53
Section 7.6 Changes in Structure........................................................ 53
Section 7.7 Disposition of Assets....................................................... 53
Section 7.8 Investments................................................................. 53
Section 7.9 Fiscal Year................................................................. 55
Section 7.10 ERISA Obligations........................................................... 55
</TABLE>
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<TABLE>
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Section 7.11 Capital Expenditures........................................................ 55
Section 7.12 Rental Obligations.......................................................... 55
Section 7.13 Use of Cash................................................................. 56
Section 7.14 Transactions with Affiliates................................................ 56
Section 7.15 Hazardous Material.......................................................... 56
Section 7.16 Construction Investments.................................................... 57
ARTICLE 8. EVENTS OF DEFAULT
Section 8.1 Payments.................................................................... 58
Section 8.2 Certain Covenants........................................................... 58
Section 8.3 Other Covenants............................................................. 58
Section 8.4 Other Defaults.............................................................. 58
Section 8.5 Representations and Warranties.............................................. 59
Section 8.6 Bankruptcy. . ............................................................. 59
Section 8.7 Judgments................................................................... 60
Section 8.8 ERISA....................................................................... 60
Section 8.9 Material Adverse Effect..................................................... 60
Section 8.10 Ownership................................................................... 60
Section 8.11 REIT Status, Etc............................................................ 61
Section 8.12 Management.................................................................. 61
Section 8.13 Environmental............................................................... 61
Section 8.14 Default by Operator......................................................... 61
ARTICLE 9. THE AGENT
Section 9.1 Appointment, Powers and Immunities.......................................... 62
Section 9.2 Reliance by Agent........................................................... 63
Section 9.3 Events of Default........................................................... 63
Section 9.4 Rights as a Bank............................................................ 63
Section 9.5 Indemnification............................................................. 63
Section 9.6 Non-Reliance on Agent and other Banks....................................... 64
Section 9.7 Failure to Act.............................................................. 64
Section 9.8 Resignation or Removal of Agent............................................. 64
Section 9.9 Sharing of Payments......................................................... 65
ARTICLE 10. MISCELLANEOUS PROVISIONS
Section 10.1 Fees and Expenses; Indemnity................................................ 67
Section 10.2 Taxes....................................................................... 68
Section 10.3 Payments.................................................................... 69
Section 10.4 Survival of Agreements and
Representations; Construction............................................. 69
Section 10.5 Lien on and Set-off of Deposits............................................. 70
Section 10.6 Modifications, Consents and
Waivers; Entire Agreement ................................................ 70
Section 10.7 Remedies Cumulative; Counterclaims.......................................... 71
Section 10.8 Further Assurances.......................................................... 71
Section 10.9 Notices..................................................................... 72
Section 10.10 Counterparts................................................................ 73
Section 10.11 Severability................................................................ 73
</TABLE>
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Section 10.12 Binding Effect; No Assignment
or Delegation by Borrowers................................................73
Section 10.13 Assignments and Participations
by Banks..................................................................74
Section 10.14 Delivery of Tax Forms.......................................................76
Section 10.15 Governing Law; Consent to Juris-
diction; Waiver of Trial by Jury..........................................77
Section 10.16 Syndication Agent...........................................................78
</TABLE>
EXHIBITS
- --------
1 List of Borrowers
A Form of Note
B Form of Assignment and Acceptance
C Form of Borrowing Base Certificate
D Form of Compliance Certificate
SCHEDULES
- ---------
3.1 States of Incorporation and Qualification, and
Capitalization of Borrowers and Subsidiaries
3.2 Consents, Waivers, Approvals; Violation of
Agreements
3.6 Judgments, Actions, Proceedings
3.7 Defaults; Compliance with Laws, Regulations,
Agreements
3.8 Burdensome Documents
3.13 Name Changes, Mergers, Acquisitions
3.16 Employee Benefit Plans
5.8 Form of Quarterly Facility Report
7.1 Permitted Indebtedness and Guarantees
7.2 Permitted Security Interests, Liens and
Encumbrances
7.11 Permitted Capital Expenditures
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<PAGE> 6
LOAN AGREEMENT
AGREEMENT, made this 28th day of March, 1997, by and among:
HEALTH CARE REIT, INC., a Delaware corporation and each of the other
corporations listed on Exhibit 1 annexed hereto (individually, a "BORROWER" and
collectively, the "BORROWERS");
The Banks that have executed the signature pages hereto (individually,
a "BANK" and collectively, the "BANKS"); and
KEYBANK NATIONAL ASSOCIATION, a national banking association, as Agent
for the Banks (in such capacity, together with its successors in such capacity,
the "AGENT");
W I T N E S S E T H:
WHEREAS, the Borrowers wish to obtain a joint and several revolving
credit facility from the Banks in the aggregate principal amount of up to One
Hundred Seventy-Five Million ($175,000,000) Dollars, and the Banks are willing
to provide such revolving credit facility to the Borrowers in an aggregate
principal amount of up to such sum on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS.
SECTION 1.1 DEFINED TERMS. As used in this
Agreement, the following terms shall have the following meanings:
"ADDITIONAL COSTS" - as defined in subsection 2.18(b)
hereof.
"AFFECTED LOANS" - as defined in Section 2.21 hereof.
"AFFECTED TYPE" - as defined in Section 2.21 hereof.
"AFFILIATE" - as to any Person, any other Person that directly
or indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), PROVIDED
THAT, in any event: (a) any Person that owns directly or indirectly ten (10%)
percent or more of the securities having ordinary voting power for the election
of
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<PAGE> 7
directors or other governing body of a corporation or ten (10%) percent or more
of the partnership or other ownership interests of any other Person (other than
as a limited partner of such other Person) will be deemed to control such
corporation or other Person; and (b) each ten (10%) percent or more shareholder,
each director and executive officer of any Borrower shall be deemed to be an
Affiliate of such Borrower.
"AGENCY FEE" - as defined in subsection 2.7(c) hereof.
"ALTERNATE BASE RATE" - for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16th of 1%) equal to the greater of (a) the
Base Rate in effect on such day, and (b) 0.5% plus the Federal Funds Rate in
effect on such day.
"ALTERNATE APPLICABLE MARGIN" - as at any date of
determination, with respect to LIBOR Loans, the applicable percentage set forth
below based upon the Ratings in effect on such date:
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<S> <C>
Any two of the following Ratings:
BBB+ or higher by S&P
Baa1 or higher by Moody's
BBB+ or higher by D&P .75%
Any two of the following Ratings:
BBB by S&P
Baa2 by Moody's
BBB by D&P 1.0%
Any two of the following Ratings:
BBB- by S&P
Baa3 by Moody's
BBB- by D&P 1.125%
</TABLE>
If any Rating shall be changed (other than as a result of a change in the rating
system of the applicable Rating Agency), such change shall be effective as of
the date on which it is first announced by the Rating Agency making such change.
If the rating system of any Rating Agency shall change, the parties hereto shall
negotiate in good faith to amend the references to specific ratings in this
definition to reflect such changed rating system.
"APPLICABLE MARGIN" - as at the last date of any fiscal
quarter, with respect to LIBOR Loans, the applicable percentage set forth below
opposite the ratio of Funded Indebtedness to Tangible Net Worth as at such date,
with respect to HCRI on a consolidated basis:
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<TABLE>
<CAPTION>
RATIO OF FUNDED INDEBTEDNESS APPLICABLE MARGIN
TO TANGIBLE NET WORTH FOR LIBOR LOANS
---------------------------- ------------------
<S> <C>
Greater than 1.0:1.0 1.5%
Less than or equal
to 1.0:1.0 but
greater than 0.8:1.0 1.375%
Less than or equal
to 0.8:1.0 but
greater than 0.6:1.0 1.25%
Less than or equal
to 0.6:1.0 but greater
than or equal to 0.4:1.0 1.125%
Less than 0.4:1.0 1.0%
</TABLE>
The determination of the applicable percentage pursuant to the table set forth
above shall be made on a quarterly basis based on an examination of the
financial statements delivered pursuant to and in compliance with Section 5.1 or
Section 5.2 hereof, which financial statements, whether annual or quarterly,
shall indicate that there exists no Default or Event of Default hereunder. Each
determination of the Applicable Margin shall be effective as of the first day of
the calendar month following the date on which the financial statements on which
such determination was based were received by the Agent.
In the event that financial statements for the full fiscal quarter ending on
such date of determination either: (i) have not been delivered to the Agent in
compliance with Section 5.1 or 5.2 hereof, or (ii) if delivered, do not comply
in form or substance with Section 5.1 or 5.2 hereof (in the reasonable judgment
of the Agent), then the Agent may determine, in its reasonable judgment, the
ratio referred to above that would have been in effect as at such date, and,
consequently, the Applicable Margin in effect for the period commencing on such
date.
"APPRAISAL" - an appraisal providing an assessment of the fair
market value of a Property (whether appraised on a stand-alone basis or "in
bulk" together with similar Properties) which is independently and impartially
prepared by an MAI appraiser having substantial experience in the appraisal of
health care facilities and conforming to Uniform Standards of Professional
Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal
Foundation.
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"APPRAISED VALUE" - with respect to any Facility, the value of
such Facility reflected in the most recent Appraisal prepared with respect to
such Facility.
"ARRANGEMENT FEE" - as defined in subsection 2.7(c)
hereof.
"ASSESSMENT RATE" - at any time, the rate (rounded upwards, if
necessary, to the nearest 1/100 of one (1%) percent) then charged by the Federal
Deposit Insurance Corporation (or any successor) to the Reference Bank for
deposit insurance for Dollar time deposits with the Reference Bank at the
Principal Office as determined by the Reference Bank.
"ASSIGNMENT AND ACCEPTANCE" - an agreement in the form
of Exhibit B hereto.
"BALLOON PAYMENTS" - as of any date as of which the amount
thereof shall be determined, with respect to HCRI on a consolidated basis, an
amount equal to (x) its aggregate obligation to make payments of principal in
respect of Indebtedness having a maturity during the immediately succeeding six
(6) month period, less (y) the sum of Cash and the total unused availability
under this Agreement; provided, however, any Indebtedness with respect to which
HCRI (or any of its Subsidiaries) has received a commitment for the renewal or
other refinancing of such Indebtedness shall not be included in the computation
of Balloon Payments and provided, further, if the calculation of the amount of
Balloon Payments results in a negative number, then the amount thereof shall be
deemed to be zero (0).
"BASE RATE" - the interest rate established from time to time
by Key as its base rate at the Principal Office. Notwithstanding the foregoing,
the Borrowers acknowledge that Key may regularly make domestic commercial loans
at rates of interest less than the rate of interest referred to in the preceding
sentence. Each change in any interest rate provided for herein based upon the
Base Rate resulting from a change in the Base Rate shall take effect at the time
of such change in the Base Rate.
"BASE RATE LOANS" - Loans that bear interest at a rate based
upon the Alternate Base Rate.
"BORROWING BASE" - with respect to the Borrowers on a combined
basis, as of any date as of which the amount thereof shall be determined, an
amount equal to (x) the sum of (i) 66-2/3% of Eligible Healthcare Assets plus
(ii) Cash on hand as of such date, MINUS, without duplication (y) the sum of:
(i) unsecured Indebtedness as of such date, (ii) current maturities of secured
Indebtedness as of such date, and (iii) Funded Indebtedness as of such date
which is supported by a "guarantee(s)" (as permitted by subsection 7.3(ii)
hereof) but only if the Facility with respect to which such guarantee is issued
has a Fixed Charge Coverage of less than 1.25 to 1.00.
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"BORROWING BASE CERTIFICATE" - a certificate certified and
executed by the chief executive officer or chief financial officer of HCRI
substantially in the form annexed hereto as Exhibit C.
"BORROWING NOTICE" - as defined in Section 2.2 hereof.
"BUSINESS DAY" - any day other than Saturday, Sunday or any
other day on which commercial banks in the States of Ohio or New York are
authorized or required to close under the laws of such States.
"CAPITAL EXPENDITURES" - for any period, the aggregate amount
of all payments made or to be made during such period by any Person directly or
indirectly for the purpose of acquiring, constructing or maintaining fixed
assets, real property or equipment that, in accordance with GAAP, would be added
as a debit to the fixed asset account of such Person, including, without
limitation, all amounts paid or payable during such period with respect to
Capitalized Lease Obligations and interest that are required to be capitalized
in accordance with GAAP.
"CAPITALIZED LEASE" - any lease, the obligations to pay rent
or other amounts under which constitute Capitalized Lease Obligations.
"CAPITALIZED LEASE OBLIGATIONS" - as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"CASH" - as to any Person, such Person's cash and cash
equivalents, as defined in accordance with GAAP consistently applied.
"CERCLA" - the Comprehensive Environmental Response
Compensation and Liability Act of 1980, 42 U.S.C. ss.9601, et seq.
"CODE" - the Internal Revenue Code of 1986, as it may be
amended from time to time, and the regulations promulgated thereunder.
"COMMITMENT FEE" - as defined in subsection 2.7(b)
hereof.
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"COMMITMENT FEE PERCENTAGE" - as at the last day of any fiscal
quarter, the applicable percentage set forth below opposite the ratio of Funded
Indebtedness to Tangible Net Worth as at such date of determination, with
respect to HCRI on a consolidated basis:
<TABLE>
<CAPTION>
RATIO OF FUNDED INDEBTEDNESS APPLICABLE COMMITMENT
TO TANGIBLE NET WORTH FEE PERCENTAGE
---------------------------- ---------------------
<S> <C>
Greater than 0.8:1.0 .375%
Less than or equal
to 0.8:1.0 but greater
than or equal to 0.4:1.0 .25%
Less than 0.4:1.0 .20%
</TABLE>
The determination of the applicable percentage pursuant to the table set forth
above shall be made on a quarterly basis based on an examination of the
financial statements delivered pursuant to and in compliance with Section 5.1 or
Section 5.2 hereof, which financial statements, whether annual or quarterly,
shall indicate that there exists no Default or Event of Default hereunder. Each
determination of the Commitment Fee Percentage shall be effective as of the
first day of the calendar month following the date on which the financial
statements on which such determination was based were received by the Agent.
In the event that financial statements for the full fiscal quarter ending on
such date of determination either: (i) have not been delivered to the Agent in
compliance with Section 5.1 or 5.2 hereof, or (ii) if delivered, do not comply
in form or substance with Section 5.1 or 5.2 hereof (in the reasonable judgement
of the Agent), then the Agent may determine, in its reasonable judgment, the
ratio referred to above that would have been in effect as at such date, and,
consequently, the Commitment Fee Percentage in effect for the period commencing
on such date.
Notwithstanding the foregoing, in the event the Borrowers elect the pricing grid
based on the Alternate Applicable Margin as set forth in subsection 2.6(a)(ii)
hereof, commencing on the day the Alternate Applicable Margin becomes effective
and continuing at all times thereafter so long as the Alternate Applicable
Margin is in effect, the Commitment Fee Percentage shall be equal to .20%. In
the event that HCRI either loses its investment grade Rating or any two Rating
Agencies determine that its Rating falls below BBB- or its equivalent, then the
Commitment Fee Percentage shall immediately be determined in accordance with the
table set forth above for the duration of the Credit Period.
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"COMPLIANCE CERTIFICATE" - a certificate in the form of
Exhibit D annexed hereto, executed by the chief executive officer or chief
financial officer of HCRI to the effect that: (a) as of the effective date of
the certificate, no Default or Event of Default under this Agreement exists or
would exist after giving effect to the action intended to be taken by the
Borrowers as described in such certificate, including, without limitation, that
the covenants set forth in Section 6.9 hereof would not be breached after giving
effect to such action, together with a calculation in reasonable detail, and in
form and substance satisfactory to the Agent, of such compliance, and (b) the
representations and warranties contained in Article 3 hereof are true and with
the same effect as though such representations and warranties were made on the
date of such certificate, except for changes in the ordinary course of business
none of which, either singly or in the aggregate, have had a Material Adverse
Effect.
"CONSTRUCTION INVESTMENTS" - financing extended by HCRI with
respect to a Facility which is under construction i.e., has not received a
certificate of occupancy and the Borrower(s) conditions for conversion to
permanent financing for the Facility have not been satisfied.
"CONTROLLED GROUP" - all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with HCRI, are treated as a single employer under
Section 414(b), 414(c) or 414(m) of the Code and Section 4001(a)(2) of ERISA.
"CREDIT PERIOD" - the period commencing on the date of this
Agreement and ending on the Revolving Credit Commitment Termination Date.
"D&P" - Duff & Phelps.
"DEBT INSTRUMENT" - as defined in subsection 8.4(a)
hereof.
"DEFAULT" - an event which with notice or lapse of time, or
both, would constitute an Event of Default.
"DISPOSITION" - the sale, lease, conveyance, transfer or other
disposition of any Facility (whether in one or a series of transactions),
including accounts and notes receivable (with or without recourse) and
sale-leaseback transactions.
"DOLLARS" and "$" - lawful money of the United States
of America.
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"EBITDA" - for any period, with respect to HCRI on a
consolidated basis, determined in accordance with GAAP, the sum of net income
(or net loss) for such period plus, the sum of all amounts treated as expenses
for: (a) interest, (b) depreciation, (c) amortization, and (d) all accrued taxes
on or measured by income to the extent included in the determination of such net
income (or net loss); provided, however, that net income (or net loss) shall be
computed without giving effect to extraordinary losses or gains.
"EBITDAR" - for any period, with respect to any Facility,
pre-tax net income PLUS Operator Interest Expense, Mortgage Expense (but
excluding therefrom any amounts relating to principal), Lease Rental Expense,
depreciation, amortization and management fees as reported by the Operator less
an imputed management fee equal to five (5%) percent of the Facility's net
revenues; provided, however, that net income (or net loss) shall be computed
without giving effect to extraordinary losses or gains.
"ELIGIBLE ASSIGNEE" - a commercial bank or other financial
institution having a combined capital and surplus of at least One Hundred
Million ($100,000,000) Dollars.
"ELIGIBLE HEALTHCARE ASSETS" - as of any date as of which the
amount thereof is to be determined, an amount equal to the sum of:
(i) the lesser of the Appraised Value or purchase
price of each Facility owned entirely by a Borrower and leased to
an Operator; plus
(ii) the lesser of the Appraised Value of any
Facility encumbered by a Mortgage or the outstanding principal amount of the
Mortgage which encumbers any such Facility;
provided, however, there shall be EXCLUDED from the calculation of
Eligible Healthcare Assets:
(a) any Facility which has a Fixed Charge
Coverage of less than 1.10 to 1.00;
(b) any Investment which is delinquent for
thirty (30) days or more in payments to the Borrowers;
(c) any Facility which is under construction
(i.e. has not received a certificate of occupancy); and
(d) any Facility which is subject to any
Lien other than a Permitted Lien or a Mortgage referred to in clause (ii) above.
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Notwithstanding clause (a) above:
(x) with respect to Pooled Facilities comprised of
three (3) or more properties, any individual Facility which has a Fixed Charge
Coverage of less than 1.10 to 1.00 may be included in the computation of
Eligible Healthcare Assets if (1) the combined Fixed Charge Coverage of the
Pooled Facilities of which such Facility is a part is greater than or equal to
1.00 to 1.00, and (2) each individual Facility which is a part of such Pooled
Facilities has a Fixed Charge Coverage of not less than .70 to 1.00;
(y) with respect to Pooled Facilities comprised of
two (2) properties, any individual Facility which has a Fixed Charge Coverage of
less than 1.10 to 1.00 may be included in the computation of Eligible Healthcare
Assets if (1) the combined Fixed Charge Coverage of the Pooled Facilities of
which such Facility is a part is greater than or equal to 1.10 to 1.00, and (2)
each individual Facility which is a part of such Pooled Facilities has a Fixed
Charge Coverage of not less than .70 to 1.00; and
(z) any individual Facility which is part of an
Operator's Pooled Facilities (regardless of the number of Facilities comprising
such Pooled Facilities) that is in a stage of development or "fill-up" may be
included as part of such Operator's Pooled Facilities if (1) such Facility has
received its certificate of occupancy, and (2) such Facility has a Fixed Charge
Coverage of not less than .70 to 1.00 (and for purposes of this clause (z)(2)
only, in computing such Fixed Charge Coverage, EBITDAR shall be determined based
on the immediately preceding fiscal quarter, multiplied by four (4)); provided,
however, to remain an Eligible Healthcare Asset included in such Operator's
Pooled Facilities, within fifteen (15) months of receiving its certificate of
occupancy, such Facility must have a Fixed Charge Coverage of greater than or
equal to 1.00 to 1.00.
"EMPLOYEE BENEFIT PLAN" - any employee benefit plan within the
meaning of Section 3(3) of ERISA which is subject to ERISA and (a) is maintained
for employees of HCRI, or (b) with respect to which any Loan Party has any
liability.
"ENVIRONMENTAL LAWS AND REGULATIONS" - all federal, state and
local environmental laws, regulations, ordinances, orders, judgments and decrees
applicable to the Borrowers or any other Loan Party, or any of their respective
assets or properties.
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<PAGE> 15
"ENVIRONMENTAL LIABILITY" - any liability under any applicable
Environmental Laws and Regulations for any disposal, release or threatened
release of a hazardous substance pollutant or contaminant as those terms are
defined under CERCLA, and any liability which would require a removal, remedial
or response action, as those terms are defined under CERCLA, by any person or by
any environmental regulatory body having jurisdiction over HCRI and its
Subsidiaries and/or any liability arising under any Environmental Laws and
Regulations for HCRI's or any Subsidiary's failure to comply with such laws and
regulations, including without limitation, the failure to comply with or obtain
any applicable environmental permit.
"ENVIRONMENTAL PROCEEDING" - any judgment, action, proceeding
or investigation pending before any court or governmental authority, with
respect to HCRI or any Subsidiary and arising under or relating to any
Environmental Laws and Regulations.
"ERISA" - the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time, and the regulations promulgated
thereunder.
"ERISA AFFILIATE" - as applied to any Loan Party, any
corporation, person or trade or business which is a member of a group which is
under common control with any Loan Party, who together with any Loan Party, is
treated as a single employer within the meaning of Section 414(b) - (o) of the
Code and, if applicable, Section 4001(a)(14) and (b) of ERISA.
"EVENT OF DEFAULT" - as defined in Article 8 hereof.
"FACILITY" - a health care facility offering health
care-related products and services, including but not limited to any acute care
hospital, rehabilitation hospital, nursing facility, assisted living facility,
retirement center, long-term care facility, or medical office building, and
facilities and services directly related thereto.
"FEDERAL FUNDS RATE" - for any day, the weighted average of
the rates on overnight federal funds transactions with member banks of the
Federal Reserve System arranged by federal funds brokers as published by the
Federal Reserve Bank of New York for such day, or if such day is not a Business
Day, for the next preceding Business Day (or, if such rate is not so published
for any such day, the average rate charged to the Agent on such day on such
transactions as reasonably determined by the Agent).
"FEE(S)" - as defined in subsection 2.7(d) hereof.
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"FINANCIAL STATEMENTS" - with respect to HCRI, its audited
Consolidated Balance Sheet as at December 31, 1995, together with the related
audited Consolidated Income Statement and Statement of Changes in Cash Flow for
the fiscal year then ended.
"FIXED CHARGE COVERAGE" - with respect to any Facility, the
ratio of: (x) EBITDAR, to (y) the sum of Operator Interest Expense (but
excluding therefrom Operator Interest Expense, the payment of which is
subordinated to the payment of Indebtedness owing to a Borrower(s)), Lease
Rental Expense, Mortgage Expense and principal paid with respect to Indebtedness
of Operators (other than Indebtedness relating to a Mortgage) which is not
subordinated to the Borrower(s); all of the foregoing calculated as at any date
of determination thereof by reference to the immediately preceding four (4)
fiscal quarters and based upon the financial statements provided to HCRI by each
Operator for the immediately preceding four (4) fiscal quarters of each
Operator.
"FLEET" - Fleet Bank, N.A., a national banking association, in
its capacity as a Bank hereunder.
"FUNDED INDEBTEDNESS" - as of any date of determination
thereof, all Indebtedness of any Person, determined in accordance with GAAP,
which by its terms matures more than one year after the date of calculation, and
any such Indebtedness maturing within one year from such date which is renewable
or extendable at the option of the obligor to a date more than one year from
such date, including, in any event, the Revolving Credit Loans.
"GAAP" - generally accepted accounting principles in the
United States in effect from time to time.
"HAZARDOUS MATERIALS" - any toxic chemical, hazardous
substances, contaminants or pollutants, medical wastes, infectious wastes, or
hazardous wastes.
"HCRI" - Health Care REIT, Inc., a Delaware
corporation.
"HCRI'S FIXED COVERAGE RATIO" - as at the last day of any
fiscal quarter, with respect to the immediately preceding four (4) fiscal
quarters of the Borrowers ending on such date, the ratio of (x) EBITDA, to the
sum of (y) Interest Expense, cash dividends and Balloon Payments.
"HEALTHCARE ASSETS" - as of any date as of which the amount
thereof is to be determined, the aggregate amount equal to the sum of:
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<PAGE> 17
(i) the lesser of the Appraised Value or purchase
price of each Facility owned entirely by a Borrower and leased to
an Operator; plus
(ii) the lesser of the Appraised Value of any
Facility encumbered by a Mortgage or the outstanding principal amount of the
Mortgage which encumbers any such Facility.
"INDEBTEDNESS" - with respect to any Person, all: (a)
liabilities or obligations, direct and contingent, which in accordance with GAAP
would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person at the date as of which Indebtedness is
to be determined, including, without limitation, contingent liabilities that in
accordance with such principles, would be set forth in a specific Dollar amount
on the liability side of such balance sheet, and Capitalized Lease Obligations
of such Person; (b) liabilities or obligations of others for which such Person
is directly or indirectly liable, by way of guaranty (whether by direct
guaranty, suretyship, discount, endorsement, take-or-pay agreement, agreement to
purchase or advance or keep in funds or other agreement having the effect of a
guaranty) or otherwise; (c) liabilities or obligations secured by Liens on any
assets of such Person, whether or not such liabilities or obligations shall have
been assumed by it; and (d) liabilities or obligations of such Person, direct or
contingent, with respect to letters of credit issued for the account of such
Person and bankers acceptances created for such Person.
"INTEREST COVERAGE" - as at the last day of any fiscal
quarter, the quotient, expressed as a percentage (which may be in excess of
100%), determined by dividing EBITDA by Interest Expense; all of the foregoing
calculated by reference to the immediately preceding four (4) fiscal quarters of
the Borrowers ending on such date of determination.
"INTEREST EXPENSE" - for any period, on a combined basis, the
sum of all interest paid or payable (excluding unamortized debt issuance costs)
on all items of Indebtedness of the Borrowers outstanding at any time during
such period.
"INTEREST PERIOD" - with respect to any LIBOR Loan, each
period commencing on the date such Loan is made or converted from a Loan or
Loans of another Type into a LIBOR Loan, or the last day of the next preceding
Interest Period with respect to such Loan, and ending on the same day 1, 2, 3 or
6 months thereafter, as the Borrowers may select as provided in Section 2.2
hereof, except that each such Interest Period which commences on the last LIBOR
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last LIBOR Business Day of the appropriate subsequent calendar
month.
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<PAGE> 18
Notwithstanding the foregoing: (a) each Interest Period that would otherwise end
on a day which is not a LIBOR Business Day shall end on the next succeeding
LIBOR Business Day (or, if such next succeeding LIBOR Business Day falls in the
next succeeding calendar month, on the next preceding LIBOR Business Day); (b)
no more than seven (7) Interest Periods for LIBOR Loans shall be in effect at
the same time; (c) any Interest Period that commences before the Revolving
Credit Commitment Termination Date shall end no later than the Revolving Credit
Commitment Termination Date; and (d) notwithstanding clause (c) above, no
Interest Period shall have a duration of less than one month. In the event that
the Borrowers fail to select the duration of any Interest Period for any LIBOR
Loan within the time period and otherwise as provided in Section 2.2 hereof,
such LIBOR Loans will be automatically converted into a Base Rate Loan on the
last day of the preceding Interest Period for such LIBOR Loan.
"INTEREST RATE CONTRACTS" - interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance and other agreements or arrangements designed to provide protection
against fluctuation in interest rates, in each case, in form and substance
satisfactory to the Agent and, in each case, with counter-parties satisfactory
to the Agent.
"INVESTMENT" - a Facility or a Mortgage, individually
or collectively, as the case may be.
"KEY" - KeyBank National Association, a national banking
association, in its capacity as a Bank hereunder.
"LATEST BALANCE SHEET" - as defined in subsection
3.9(a) hereof.
"LEASE RENTAL EXPENSE" - for any period and with respect to
any Facility, the total amount payable during such period by the lessee of such
Facility to any Borrower, including, without limitation, (a) base rent (as
adjusted from time to time), plus (b) all incremental charges to which the
Facility is subject under the lease relating thereto.
"LENDING OFFICE" - with respect to each Bank, with respect to
each Type of Loan, the Lending Office as designated for such Type of Loan below
its name on the signature pages hereof or such other office of such Bank or of
an affiliate of such Bank as it may from time to time specify to the Agent and
the Borrowers as the office at which its Loans of such Type are to be made and
maintained.
"LEVERAGE RATIO" - as defined in subsection 6.9(a)
hereof.
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<PAGE> 19
"LEVERAGE TEST PERIOD" - as defined in subsection
6.9(a) hereof.
"LIBOR BASE RATE" - with respect to any LIBOR Loan, for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of one (1%) percent) quoted by the Reference Bank at
approximately 11:00 a.m. London time (or as soon thereafter as practicable) two
(2) LIBOR Business Days prior to the first day of such Interest Period as the
rate at which the Reference Bank is offered Dollar deposits in the London
interbank market where the LIBOR and foreign currency and exchange operations of
the Reference Bank are customarily conducted, having terms of one (1), two (2),
three (3) or six (6) months and in an amount comparable to the principal amount
of the LIBOR Loan to be made by the Banks to which such Interest Period relates.
"LIBOR BUSINESS DAY" - a Business Day on which dealings in
Dollar deposits are carried out in the London interbank market.
"LIBOR LOAN(S)" - any Loan the interest on which is determined
on the basis of rates referred to in the definition of "LIBOR Base Rate" in this
Article 1.
"LIBOR RATE" - for any LIBOR Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of one (1%) percent) determined by the Agent to be equal to: (a) the LIBOR
Base Rate for such Loan for such Interest Period; DIVIDED By (b) one (1) MINUS
the Reserve Requirement for such Loan for such Interest Period. The Agent shall
use its best efforts to advise the Borrowers of the LIBOR Rate as soon as
practicable after each change in the LIBOR Rate; PROVIDED, HOWEVER, that the
failure of the Agent to so advise the Borrowers on any one or more occasions
shall not affect the rights of the Banks or the Agent or the obligations of the
Borrowers hereunder.
"LIEN" - any mortgage, deed of trust, pledge, security
interest, encumbrance, lien, claim or charge of any kind (including any
agreement to give any of the foregoing), any conditional sale or other title
retention agreement, any lease in the nature of any of the foregoing, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction.
"LOAN(S)" - as defined in Section 2.1 hereof. Loans of
different Types made or converted from Loans of other Types on the same day (or
of the same Type but having different Interest Periods) shall be deemed to be
separate Loans for all purposes of this Agreement.
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<PAGE> 20
"LOAN DOCUMENTS" - this Agreement, the Notes, Interest Rate
Contracts and all other documents executed and delivered in connection herewith
or therewith, including all amendments, modifications and supplements of or to
all such documents.
"LOAN PARTY" - each Borrower and any other Person (other than
the Banks and the Agent) which now or hereafter executes and delivers to any
Bank or the Agent any Loan Document.
"LONG-TERM CARE FACILITIES" - health care facilities comprised
of nursing facilities, assisted living facilities and retirement facilities or
combinations thereof.
"MATERIAL ADVERSE EFFECT" - any fact or circumstance which (a)
materially and adversely affects the business, operation, property or financial
condition of the Borrowers taken as a whole, or (b) has a material adverse
effect on the ability of the Borrowers to perform their respective obligations
under this Agreement, the Notes or the other Loan Documents.
"MOODY'S" - Moody's Investors Service, Inc.
"MORTGAGE(S)" - mortgages of real property constituting a
Facility for which any Borrower is the sole mortgagee.
"MORTGAGE EXPENSE" - for any period and with respect to any
Facility, the total amount payable during such period by the mortgagor of such
Facility to any Borrower, including, without limitation, (a) interest and
principal (as adjusted from time to time) plus (b) all incremental charges to
which the Facility is subject under the mortgage.
"MULTIEMPLOYER PLAN" - a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any ERISA Affiliate is
making, or is accruing an obligation to make, contributions or has made, or been
obligated to make, contributions within the preceding six (6) years.
"NET ISSUANCE PROCEEDS" - in respect of any issuance of
Indebtedness or equity, the proceeds in Cash received by HCRI or any of its
Subsidiaries upon or simultaneously with such issuance, net of direct costs of
such issuance and any taxes paid or payable by the recipient of such proceeds.
"NET PROCEEDS" - in respect of any Disposition, the proceeds
in Cash received by any of the Borrowers upon or simultaneously with such
Disposition, net of (i) direct costs of such Disposition, (ii) any taxes paid or
payable by the recipient of such proceeds, and (iii) amounts required to be
applied to repay any Indebtedness secured by a lien on the asset which is the
subject of the Disposition.
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<PAGE> 21
"NEW TYPE LOANS" - as defined in Section 2.21 hereof.
"NOTE(S)" - as defined in subsection 2.4(a) hereof.
"OBLIGATIONS" - collectively, all of the Indebtedness, of the
Borrowers to the Banks and the Agent, whether now existing or hereafter arising,
whether or not currently contemplated, including, without limitation, those
arising under the Loan Documents.
"OPERATOR" - (a) the lessee of any Facility owned or leased by
a Borrower, and (b) the mortgagor of a Facility which is subject to a Mortgage
to the extent that such entity controls the operation of the Facility.
"OPERATOR INTEREST EXPENSE" - for any period, the sum of all
interest on, and all amortization of debt discount and expenses on, all
Indebtedness of an Operator outstanding at any time during such period but
excluding any amounts which constitute Mortgage Expense.
"ORIGINATION FEE" - as defined in subsection 2.7(a)
hereof.
"PAYOR" - as defined in Section 2.15 hereof.
"PBGC" - Pension Benefit Guaranty Corporation.
"PERMITTED LIENS" - as to any Person: (a) pledges or deposits
by such Person under workers' compensation laws, unemployment insurance laws,
social security laws, or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness of such Person), or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or deposits of
Cash or United States Government Bonds to secure surety, appeal, performance or
other similar bonds to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent; (b) Liens imposed
by law, such as carriers', warehousemen's, materialmen's and mechanics' liens,
or Liens arising out of judgments or awards against such Person with respect to
which such Person at the time shall currently be prosecuting an appeal or
proceedings for review; (c) Liens for taxes not yet subject to penalties for
non-payment and Liens for taxes the payment of which is being contested as
permitted by Section 6.6 hereof; (d) minor survey exceptions, minor
encumbrances, easements or reservations of, or rights of, others for rights of
way, highways and railroad crossings, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as
to the use of real properties; and (e) Liens incidental to the conduct of the
business of such Person or to the ownership of such
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<PAGE> 22
Person's property that were not incurred in connection with Indebtedness of such
Person, all of which Liens referred to in this clause (e) do not in the
aggregate materially impair the value of the properties to which they relate or
materially impair their use in the operation of the business taken as a whole of
such Person, and as to all the foregoing only to the extent arising and
continuing in the ordinary course of business.
"PERSON" - an individual, a corporation, a limited liability
company, a partnership, a joint venture, a trust or unincorporated organization,
a joint stock company or other similar organization, a government or any
political subdivision thereof, a court, or any other legal entity, whether
acting in an individual, fiduciary or other capacity.
"PLAN" - at any time an employee pension benefit plan that is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either: (a) maintained by HCRI or any member of
the Controlled Group for employees of HCRI, or by HCRI for any other member of
such Controlled Group, or (b) maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one employer makes
contributions and to which HCRI or any member of the Controlled Group is then
making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"POOLED FACILITIES" - Facilities which are commonly owned or
operated by one Operator or an Affiliate thereof (as selected by the Borrowers),
and the debt financings or leases of which are cross-defaulted and, with respect
to Mortgages, are cross-collateralized.
"POST-DEFAULT RATE" - (a) in respect of any Loans, a rate per
annum equal to: (i) if such Loans are Base Rate Loans, two (2%) percent above
the Alternate Base Rate as in effect from time to time for Base Rate Loans, or
(ii) if such Loans are LIBOR Loans, two (2%) percent above the rate of interest
in effect thereon at the time of the Event of Default that resulted in the
Post-Default Rate being instituted until the end of the then current Interest
Period therefor and, thereafter, two (2%) above the Alternate Base Rate as in
effect from time to time; and (b) in respect of other amounts payable by the
Borrowers hereunder (other than interest), equal to two (2%) above the Alternate
Base Rate as in effect from time to time.
"PRINCIPAL OFFICE" - the principal office of Key presently
located at 127 Public Square, Cleveland, Ohio 44114-1306.
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<PAGE> 23
"PROJECTIONS" - the projections relating to HCRI and its
Subsidiaries for the three (3) year period 1997-1999, including balance sheets,
statements of operations and cash flows (together with related assumptions) as
furnished by HCRI to the Agent.
"PROPERTY" - any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.
"QUARTERLY DATES" - the first day of each June, September,
December and March, the first of which shall be the first such day after the
date of this Agreement, PROVIDED THAT, if any such date is not a LIBOR Business
Day, the relevant Quarterly Date shall be the next succeeding LIBOR Business Day
(or, if the next succeeding LIBOR Business Day falls in the next succeeding
calendar month, then on the next preceding LIBOR Business Day).
"RATINGS" - shall mean the ratings from time to time
established by the Rating Agencies for senior, unsecured, noncredit enhanced
long-term debt of HCRI.
"RATINGS AGENCIES" - Moody's, S&P and D&P.
"REFERENCE BANK" - a bank appearing on the display designated
as page "LIBOR" on the Reuters Monitor Money Rates Service (or such other page
as may replace the LIBOR page on that service for the purpose of displaying
London interbank offered rates of major banks); provided, that, if no such
offered rate shall appear on such display, "Reference Bank" shall mean a bank in
the London interbank market as selected by the Agent.
"REGULATION D" - Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be amended or supplemented from time to
time.
"REGULATORY CHANGE" - as to any Bank, any change after the
date of this Agreement in United States federal, or state, or foreign, laws or
regulations (including Regulation D and the laws or regulations that designate
any assessment rate relating to certificates of deposit or otherwise (including
the "Assessment Rate" if applicable to any Loan)) or the adoption or making
after such date of any interpretations, directives or requests applying to a
class of banks, including such Bank, of or under any United States federal, or
state, or foreign laws or regulations (whether or not having the force of law)
by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
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<PAGE> 24
"REIT STATUS" - with respect to any Person, (a) the
qualification of such Person as a real estate investment trust under Sections
856 through 860 of the Code, and (b) the applicability to such Person and its
shareholders of the method of taxation provided for in Sections 857 et seq. of
the Code.
"REQUIRED BANKS" - at any time, any combination of Banks
having at least 75% of the Total Revolving Credit Commitment hereunder, or if
the Total Revolving Credit Commitment has been terminated at such time, any
combination of Banks having at least 75% of the aggregate principal amount of
Loans then outstanding; provided, however, regardless of the foregoing
percentage, other than with respect to Section 9.8 hereof, Required Banks shall
not be deemed constituted unless both Key and Fleet are part of the Required
Banks.
"REQUIRED PAYMENT" - as defined in Section 2.15 hereof.
"RESERVE REQUIREMENT" - for any LIBOR Loans for any quarterly
period (or, as the case may be, shorter period) as to which interest is payable
hereunder, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
period under Regulation D by member banks of the Federal Reserve System in New
York City with deposits exceeding One Billion ($1,000,000,000) Dollars against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by reason of any
Regulatory Change against: (a) any category of liabilities which includes
deposits by references to which the LIBOR Rate for LIBOR Loans is to be
determined as provided in the definition of "LIBOR Base Rate" in this Article 1,
or (b) any category of extensions of credit or other assets which include LIBOR
Loans.
"REVOLVING CREDIT COMMITMENT" - as to each Bank, the
obligation of such Bank to make Loans in the aggregate amount set forth opposite
such Bank's name on the signature pages hereof under the caption "Revolving
Credit Commitment" as such amount is subject to reduction in accordance with the
terms hereof.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE" -
March 28, 2000.
"S&P" - Standard and Poor's Corporation.
"SUBSIDIARY" - with respect to any Person, any corporation,
partnership, joint venture or other entity, whether now existing or hereafter
organized or acquired: (a) in the case of a corporation, of which a majority of
the securities having ordinary voting power for the election of directors
(other than
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<PAGE> 25
securities having such power only by reason of the happening of a contingency)
are at the time owned by such Person and/or one or more Subsidiaries of such
Person, (b) in the case of a partnership or other entity, in which such Person
is a general partner or of which a majority of the partnership or other equity
interests are at the time owned by such Person and/or one or more of its
Subsidiaries, or (c) in the case of a joint venture, in which such Person is a
joint venturer and of which a majority of the ownership interests are at the
time owned by such Person and/or one or more of its Subsidiaries. Unless the
context otherwise requires, references in this Agreement to "Subsidiary" or
"Subsidiaries" shall be deemed to be references to a Subsidiary or Subsidiaries
of HCRI.
"TANGIBLE NET WORTH" - the sum of capital surplus, earned
surplus and capital stock, minus deferred charges, intangibles and treasury
stock, all as determined in accordance with GAAP consistently applied.
"TEST PERIOD" - as defined in subsection 2.6(d) hereof.
"TOTAL REVOLVING CREDIT COMMITMENT" - the aggregate obligation
of the Banks to make Loans hereunder up to the aggregate amount of One Hundred
Seventy-Five Million ($175,000,000) Dollars.
"TYPE" - refers to the characteristics of a Loan as a Base
Rate Loan or a LIBOR Loan for a particular Interest Period. All Base Rate Loans
are of the same Type. All LIBOR Loans with identical interest rates and Interest
Periods are of the same Type. All other Loans are of different Types. Interest
Periods are identical if they begin and end on the same days.
"UNUSED COMMITMENT" - as at any date, for each Bank, the
difference, if any, between: (a) the amount of such Bank's Revolving Credit
Commitment as in effect on such date, and (b) the then aggregate outstanding
principal amount of all Loans made by such Bank.
SECTION 1.2 GAAP. Any accounting terms used in this Agreement
that are not specifically defined herein shall have the meanings customarily
given to them in accordance with GAAP as in effect on the date of this
Agreement, except that references in Article 5 to such principles shall be
deemed to refer to such principles as in effect on the date of the financial
statements delivered pursuant thereto.
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<PAGE> 26
ARTICLE 2. REVOLVING CREDIT COMMITMENTS; LOANS.
SECTION 2.1 LOANS.
Each Bank hereby severally agrees, on the terms
and subject to the conditions of this Agreement, to make joint and several loans
(individually a "LOAN" and, collectively, the "LOANS") to the Borrowers during
the Credit Period to and including the Revolving Credit Commitment Termination
Date in an aggregate principal amount at any one time outstanding up to, but not
exceeding, the Revolving Credit Commitment of such Bank as then in effect;
PROVIDED, HOWEVER, that the aggregate principal amount of Loans at any one time
outstanding shall not exceed the lesser of (i) the Borrowing Base, or (ii) the
Total Revolving Credit Commitment, as each is then in effect. Subject to the
terms of this Agreement, including the borrowing limitation referred to above,
during the Credit Period the Borrowers may borrow, repay and reborrow Loans.
SECTION 2.2 NOTICES RELATING TO LOANS.
The Borrowers shall give the Agent written notice
of each termination or reduction of the Revolving Credit Commitments, each
borrowing, conversion, repayment and prepayment of each Loan and of the duration
of each Interest Period applicable to each LIBOR Loan (in each case, a
"BORROWING NOTICE"). Each such written notice shall be irrevocable and shall be
effective only if received by the Agent not later than 1:00 p.m.(Cleveland, Ohio
time) on the date that is:
(a) In the case of each notice of termination or
reduction of the Revolving Credit Commitments, five (5) Business Days prior to
the date of the related termination or reduction;
(b) In the case of each notice of borrowing and
repayment of, or conversion into, Base Rate Loans, one (1) Business Day prior to
the date of the related borrowing or repayment or conversion; and
(c) In the case of each notice of borrowing or
repayment of, or conversion into, LIBOR Loans, or the duration of an Interest
Period for LIBOR Loans, three (3) LIBOR Business Days prior to the date of the
related borrowing, repayment or conversion or the first day of such Interest
Period.
Each such notice of termination or reduction shall
specify the amount thereof. Each such notice of borrowing, conversion, repayment
or prepayment shall specify the amount (subject to Section 2.1 hereof) and Type
of Loans to be borrowed, converted, repaid or prepaid (and, in the case of a
conversion, the Type of Loans to result from such conversion), the date of
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borrowing, conversion, repayment or prepayment (which shall be: (i) a Business
Day in the case of each borrowing or repayment of Base Rate Loans, and (ii) a
LIBOR Business Day in the case of each borrowing, prepayment, or repayment of
LIBOR Loans and each conversion of or into a LIBOR Loan). Each such notice of
the duration of an Interest Period shall specify the Loans to which such
Interest Period is to relate. The Agent shall notify the Banks of the content of
each such Borrowing Notice promptly after its receipt thereof.
SECTION 2.3 DISBURSEMENT OF LOAN PROCEEDS.
The Borrowers shall give the Agent notice of each
borrowing hereunder as provided in Section 2.2 hereof and the Agent shall
promptly notify the Banks thereof. Not later than 1:00 p.m.(Cleveland, Ohio
time) on the date specified for each borrowing hereunder, each Bank shall
transfer to the Agent, by wire transfer or otherwise, but in any event in
immediately available funds, the amount of the Loan to be made by it on such
date, and the Agent, upon its receipt thereof, upon compliance with the
requirements of Section 4.1 and 4.2, as applicable, shall disburse such sum to
the Borrowers by depositing the amount thereof in an account of the Borrowers,
or any of them, designated by the Borrowers maintained with the Agent.
SECTION 2.4 NOTES.
(a) The Loans made by each Bank shall be evidenced
by a single joint and several promissory note of the Borrowers in substantially
the form of Exhibit A hereto (each, a "NOTE" and collectively, the "NOTES").
Each Note shall be dated the date hereof, shall be payable to the order of such
Bank in a principal amount equal to such Bank's Revolving Credit Commitment as
originally in effect, and shall otherwise be duly completed. The Notes shall be
payable as provided in Sections 2.1 and 2.5 hereof.
(b) Each Bank shall enter on a schedule with respect
to its Note a notation with respect to each Loan made hereunder of: (i) the date
and principal amount thereof and (ii) each payment and repayment of principal
thereof. The failure of any Bank to make a notation on any such schedule as
aforesaid shall not limit or otherwise affect the joint and several obligation
of the Borrowers to repay the Loans in accordance with their respective terms as
set forth herein.
SECTION 2.5 PAYMENT OF LOANS; VOLUNTARY CHANGES
IN COMMITMENT; MANDATORY REPAYMENTS.
(a) All outstanding Loans shall be paid in full not
later than the Revolving Credit Commitment Termination Date.
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(b) The Borrowers shall be entitled to terminate or
reduce the Total Revolving Credit Commitment or repay the principal amount of
the Loans provided that the Borrowers shall give notice of such termination,
reduction or repayment to the Agent as provided in Section 2.2 hereof and that
any repayment or partial reduction of the Total Revolving Credit Commitment
shall be in the minimum aggregate amount of Three Million ($3,000,000) Dollars
and multiples of One Million ($1,000,000) Dollars in excess thereof. Any such
termination or reduction in the Total Revolving Credit Commitment shall be
permanent and irrevocable.
(c) Repayment of a LIBOR Loan on a day other than the
last day of the relevant Interest Period relating thereto shall be subject to
the provisions of Section 2.22 hereof; and all repayments of principal (whether
mandatory or voluntary) shall be applied first to Base Rate Loans, then to the
fewest number of Types of LIBOR Loans as possible.
(d) Notwithstanding any other provision of this
Agreement, the Loans shall be repaid as and when necessary to cause the
aggregate principal amount of Loans outstanding not to exceed the Borrowing
Base, as at any date of determination thereof.
(e) If any of the Borrowers shall at any time agree
to a Disposition, the Borrowers shall promptly notify the Agent of such
Disposition and repay the Loans in an amount equal to the aggregate Net Proceeds
of such Disposition immediately upon receipt thereof.
(f) If HCRI (or any of its Subsidiaries) shall make
any public or private issuance of Indebtedness or equity (other than in
connection with any dividend reinvestment program(s)), HCRI shall promptly
notify the Agent of such issuance and repay the Loans in an amount equal to the
aggregate Net Issuance Proceeds of such issuance immediately upon receipt
thereof.
SECTION 2.6 INTEREST.
(a) The Borrowers shall pay to the Agent for the
account of each Bank interest on the unpaid principal amount of each Loan made
by such Bank for the period commencing on the date of such Loan until such Loan
shall be paid in full, at the following rates per annum:
(i) During such periods that such Loan is a
Base Rate Loan, the Alternate Base Rate;
(ii) During such periods that such Loan is a
LIBOR Loan, for each Interest Period relating thereto, the LIBOR Rate for such
Loan for such Interest Period plus the Applicable Margin.
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Notwithstanding subsection 2.6(a)(ii) above, upon receipt of a Rating of at
least BBB- or its equivalent from two Rating Agencies, the Borrowers may elect
to change to the "Alternative Applicable Margin", i.e. the pricing grid based on
such Rating as set forth in the definition of Alternate Applicable Margin in
Article 1 hereof with respect to LIBOR Loans. In order to elect the Alternate
Applicable Margin, the Borrowers shall give prior written notice to the Agent of
the receipt of the Ratings (together with written evidence thereof), which
election may be made only one time during the Credit Period. The Alternate
Applicable Margin shall become effective upon receipt of such notice by the
Agent and shall continue in effect at all times thereafter so long as the
Ratings are in effect. In the event that HCRI either loses its investment grade
Rating or any two Rating Agencies determine that its Rating falls below BBB- or
its equivalent, then the pricing grid with respect to LIBOR Loans shall
immediately revert back to and be determined in accordance with the table set
forth in the definition of "Applicable Margin" in Article 1 hereof for the
duration of the Credit Period.
(b) Notwithstanding the foregoing, the Borrowers
shall pay interest on any Loan or any installment thereof, and on any other
amount payable by the Borrowers hereunder (to the extent permitted by law) which
are not paid in full when due (whether at stated maturity, by acceleration or
otherwise) for the period commencing on the due date thereof until the same is
paid in full at the applicable Post-Default Rate.
(c) Except as provided in the next sentence, accrued
interest on each Loan shall be payable: (i) in the case of each Base Rate Loan,
quarterly on the Quarterly Dates, (ii) in the case of a LIBOR Loan, on the last
day of each Interest Period for such Loan (and, if such Interest Period exceeds
three months' duration, quarterly, commencing on the first quarterly anniversary
of the first day of such Interest Period), and (iii) in the case of any Loan,
upon the payment or repayment thereof or the conversion thereof into a Loan of
another Type (but only on the principal so paid, repaid or converted); provided,
however, this clause (iii) shall not apply in the case of a conversion of a Base
Rate Loan into a LIBOR Loan. Interest that is payable at the Post-Default Rate
shall be payable from time to time on demand of the Agent. Promptly after the
establishment of any interest rate provided for herein or any change therein,
the Agent will notify the Banks and the Borrowers thereof, PROVIDED THAT the
failure of the Agent to so notify the Banks and the Borrowers shall not affect
the obligations of the Borrowers hereunder or under any of the Notes in any
respect.
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(d) In addition to the interest accruing under
subsection (a) above, in the event the daily average amount of outstanding Loans
exceeds 50% of the Total Revolving Credit Commitment for any period in excess of
nine (9) consecutive months (each, a "TEST PERIOD"), the Borrowers shall pay
additional interest on the daily average amount of the Loans outstanding during
such Test Period at a rate per annum equal to one-eighth of one (.125%) percent.
Such additional interest shall be payable to the Agent for the account of each
Bank on the first Quarterly Date immediately succeeding the last day of each
Test Period and if any such Quarterly Date would otherwise end after the
Revolving Credit Commitment Termination Date, on the Revolving Credit Commitment
Termination Date.
(e) Anything in this Agreement or any of the Notes to
the contrary notwithstanding, the obligation of the Borrowers to make payments
of interest shall be subject to the limitation that payments of interest shall
not be required to be made to any Bank to the extent that such Bank's receipt
thereof would not be permissible under the law or laws applicable to such Bank
limiting rates of interest that may be charged or collected by such Bank. Any
such payments of interest that are not made as a result of the limitation
referred to in the preceding sentence shall be made by the Borrowers to such
Bank on the earliest interest payment date or dates on which the receipt thereof
would be permissible under the laws applicable to such Bank limiting rates of
interest that may be charged or collected by such Bank. Such deferred interest
shall not bear interest.
SECTION 2.7 FEES.
(a) Simultaneously with the execution and delivery of
this Agreement, the Borrowers shall pay to the Agent, for the benefit of the
Banks according to their respective Revolving Credit Commitments, a
non-refundable origination fee (the "ORIGINATION FEE"), as set forth in a
separate written agreement among the Borrowers and Fleet.
(b) The Borrowers shall pay to the Agent for the
account of the Banks, PRO RATA according to their respective Commitments, a
commitment fee (the "COMMITMENT FEE") on the daily average amount of such Bank's
Unused Commitment, for the period from the date hereof to and including the
earlier of (i) the date such Bank's Revolving Credit Commitment is terminated,
and (ii) the Revolving Credit Commitment Termination Date, at the rate per annum
equal to the Commitment Fee Percentage from time to time in effect on the amount
of the Total Revolving Credit Commitment. The accrued Commitment Fee shall be
payable on the Quarterly Dates, and on the earlier of (i) the date the Total
Revolving Credit Commitment is terminated, or (ii) the Revolving Credit
Commitment Termination Date, and in the event the Borrowers reduce the Total
Revolving Credit Commitment as provided in subsection 2.5(b) hereof, on the
effective date of such reduction.
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(c) The Borrowers shall (i) pay to Key, for its own
account, an annual agency fee (the "AGENCY FEE"), and (ii) pay to Fleet, for its
own account, an arrangement fee (the "ARRANGEMENT FEE"), as set forth in a
separate written agreement among the Borrowers and Fleet.
(d) The Origination Fee, the Commitment Fee, the
Agency Fee and the Arrangement Fee are hereinafter sometimes referred to
individually as a "FEE" and collectively as the "FEES".
SECTION 2.8 USE OF PROCEEDS OF LOANS.
The proceeds of the Loans hereunder may be used by
the Borrowers solely as follows: (a) up to $87,288,125.00 for the repayment in
full of the outstanding principal amount of, and all accrued interest on,
certain indebtedness of HCRI existing pursuant to the Amended and Restated
Credit Agreement dated as of September 8, 1994 among HCRI, the bank's signatory
thereto and National City Bank, as Agent, (b) to acquire Facilities, (c) to
extend or acquire loans secured by Mortgages, (d) to finance Construction
Investments, (e) for investments that are not prohibited under Section 7.8
hereof, and (f) for general working capital purposes.
SECTION 2.9 COMPUTATIONS.
Interest on all Loans and each Fee shall be
computed on the basis of a year of 360 days and actual days elapsed (including
the first day but excluding the last) occurring in the period for which
payable.
SECTION 2.10 MINIMUM AMOUNTS OF BORROWINGS,
CONVERSIONS AND REPAYMENTS.
Except for borrowings, conversions and repayments
that exhaust the full remaining amount of the Revolving Credit Commitments (in
the case of borrowings) or result in the conversion or repayment of all Loans of
a particular Type (in the case of conversions or repayments) or conversions made
pursuant to Section 2.17, subsection 2.18(b) or Section 2.20 hereof, each
borrowing from each Bank, each conversion of Loans of one Type into Loans of
another Type and each repayment of principal of Loans hereunder shall be in a
minimum amount of One Million ($1,000,000) Dollars, in the case of Base Rate
Loans, and Three Million ($3,000,000) Dollars, in the case of LIBOR Loans, and
in either case if in excess thereof, in integral multiples of One Hundred
Thousand ($100,000) Dollars (borrowings, conversions and repayments of different
Types of Loans at the same time hereunder to be deemed separate borrowings,
conversions and repayments for purposes of the foregoing, one for each Type).
The Agent and the Borrowers may make immaterial mutually convenient adjustments
to the thresholds and multiples set forth above in respect of LIBOR Loans.
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SECTION 2.11 TIME AND METHOD OF PAYMENTS.
---------------------------
All payments of principal, interest, Fees and other
amounts (including indemnities) payable by the Borrowers hereunder shall be made
in Dollars, in immediately available funds, to the Agent at the Principal Office
not later than 11:00 a.m., Cleveland, Ohio time, on the date on which such
payment shall become due (and the Agent or any Bank for whose account any such
payment is to be made may, but shall not be obligated to, debit the amount of
any such payment that is not made by such time to any ordinary deposit account
of the Borrowers, or any of them, with the Agent or such Bank, as the case may
be). Additional provisions relating to payments are set forth in Section 10.3
hereof. Each payment received by the Agent hereunder for the account of a Bank
shall be paid promptly to such Bank, in like funds, for the account of such
Bank's Lending Office for the Loan in respect of which such payment is made.
SECTION 2.12 LENDING OFFICES.
The Loans of each Type made by each Bank shall be
made and maintained at such Bank's applicable Lending Office for Loans of such
Type.
SECTION 2.13 SEVERAL OBLIGATIONS.
The failure of any Bank to make any Loan to be made
by it on the date specified therefor shall not relieve the other Banks of their
respective obligations to make their Loans on such date, but no Bank shall be
responsible for the failure of the other Banks to make Loans to be made by such
other Banks.
SECTION 2.14 PRO RATA TREATMENT AMONG BANKS.
Except as otherwise provided herein: (a) each
borrowing from the Banks under Section 2.1 hereof will be made from the Banks
and each payment of each Fee (other than the Agency Fee, the Arrangement Fee and
the Origination Fee) shall be made for the account of the Banks PRO RATA
according to the amount of their respective Unused Commitments; (b) each partial
reduction of the Total Revolving Credit Commitment shall be applied to the
Revolving Credit Commitments of the Banks PRO RATA according to each Bank's
respective Revolving Credit Commitment; (c) each payment and repayment of
principal of or interest on Loans will be made to the Agent for the account of
the Banks PRO RATA in accordance with the respective unpaid principal amounts of
the Loans held by such Banks; and (d) each conversion of Loans of a particular
Type under Section 2.17 hereof (other than conversions provided for by Section
2.20 or 2.21 hereof) shall be made PRO RATA among the Banks holding Loans of
such Type according to the respective principal amounts of such Loans held by
such Banks.
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SECTION 2.15 NON-RECEIPT OF FUNDS BY THE AGENT.
Unless the Agent shall have been notified by a Bank
or the Borrowers (the "PAYOR") prior to the date on which such Bank is to make
payment to the Agent of the proceeds of a Loan to be made by it hereunder or the
Borrowers are to make a payment to the Agent for the account of one or more of
the Banks, as the case may be (such payment being herein called the "REQUIRED
PAYMENT"), which notice shall be effective upon receipt, that the Payor does
not intend to make the Required Payment to the Agent, the Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment shall, on demand,
repay to the Agent the amount made available to it together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal (i) when the recipient is a Bank, the Federal
Funds Rate for such day, or (ii) the rate of interest applicable to such Loan
(when the recipient is the Borrowers).
SECTION 2.16 SHARING OF PAYMENTS
AND SET-OFF AMONG BANKS.
The Borrowers hereby agree that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim a Bank
may otherwise have, each Bank shall be entitled, at its option, to offset
balances held by it at any of its offices against any principal of or interest
on any of its Loans hereunder or any Fee payable to it, that is not paid when
due (regardless of whether such balances are then due to the Borrowers), in
which case it shall promptly notify the Borrowers and the Agent thereof,
provided that its failure to give such notice shall not affect the validity
thereof. If a Bank shall effect payment of any principal of or interest or Fee
on Loans held by it under this Agreement through the exercise of any right of
set-off, banker's lien, counterclaim or similar right, it shall promptly
purchase from the other Banks participations in the Loans held by the other
Banks in such amounts, and make such other adjustments from time to time as
shall be equitable, to the end that all the Banks shall share the benefit of
such payment pro rata in accordance with the unpaid amount of principal and
interest or Fee on the Loans held by each of them. To such end all the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrowers agree that any Bank so purchasing a participation in
the Loans held by the other Banks may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect
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to such participation as fully as if such Bank were a direct holder of Loans in
the amount of such participation. Nothing contained herein shall require any
Bank to exercise any such right or shall affect the right of any Bank to
exercise and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of the Borrowers.
SECTION 2.17 CONVERSION OF LOANS.
The Borrowers shall have the right to convert Loans
of one Type into Loans of another Type from time to time, PROVIDED THAT: (i) the
Borrowers shall give the Agent notice of each such conversion as provided in
Section 2.2 hereof; (ii) LIBOR Loans may be converted only on the last day of an
Interest Period for such Loans; and (iii) no Base Rate Loan may be converted
into a LIBOR Loan or LIBOR Loan continued as or converted into another LIBOR
Loan if on the proposed date of conversion a Default or an Event of Default
exists. The Agent shall use its best efforts to notify the Borrowers of the
effectiveness of such conversion, and the new interest rate to which the
converted Loans are subject, as soon as practicable after the conversion;
provided, however, that any failure to give such notice shall not affect the
Borrowers' obligations, or the Agent's or the Banks' rights and remedies,
hereunder in any way whatsoever.
SECTION 2.18 ADDITIONAL COSTS; CAPITAL
REQUIREMENTS.
(a) In the event that any existing or future law or
regulation, guideline or interpretation thereof, by any court or administrative
or governmental authority (foreign or domestic) charged with the administration
thereof, or compliance by any Bank with any request or directive (whether or not
having the force of law) of any such authority shall impose, modify or deem
applicable or result in the application of, any capital maintenance, capital
ratio or similar requirement against loan commitments made by any Bank
hereunder, and the result of any event referred to above is to impose upon any
Bank or increase any capital requirement applicable as a result of the making or
maintenance of such Bank's Revolving Credit Commitment or the obligation of the
Borrowers hereunder with respect to such Revolving Credit Commitment (which
imposition of capital requirements may be determined by each Bank's reasonable
allocation of the aggregate of such capital increases or impositions), then,
within ten (10) Business Days' of demand made by such Bank as promptly as
practicable after it obtains knowledge that such law, regulation, guideline,
interpretation, request or directive exists and determines to make such demand,
the Borrowers shall pay to such Bank from time to time as specified by such Bank
additional amounts which shall be sufficient to compensate such Bank for such
imposition of or increase in capital requirements together with interest on each
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such amount from the date demanded until payment in full thereof at the
Post-Default Rate. A certificate setting forth in reasonable detail the amount
necessary to compensate such Bank as a result of an imposition of or increase in
capital requirements submitted by such Bank to the Borrowers shall be
conclusive, absent manifest error, as to the amount thereof. All references to
any "Bank" shall be deemed to include any participant in such Bank's Revolving
Credit Commitment.
(b) In the event that any Regulatory Change shall:
(i) change the basis of taxation of any amounts payable to any Bank under this
Agreement or the Notes in respect of any Loans including, without limitation,
LIBOR Loans (other than taxes imposed on the overall net income of such Bank for
any such Loans by the United States of America or the jurisdiction in which such
Bank has its principal office); or (ii) impose or modify any reserve, Federal
Deposit Insurance Corporation premium or assessment, special deposit or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Bank (including any of such Loans or
any deposits referred to in the definition of "LIBOR Base Rate" in Article 1
hereof); or (iii) impose any other conditions affecting this Agreement in
respect of Loans, including, without limitation, LIBOR Loans (or any of such
extensions of credit, assets, deposits or liabilities); and the result of any
event referred to in clause (i), (ii) or (iii) above shall be to increase such
Bank's costs of making or maintaining any Loans including, without limitation,
LIBOR Loans, or its Revolving Credit Commitment, or to reduce any amount
receivable by such Bank hereunder in respect of its Commitment (such increases
in costs and reductions in amounts receivable are hereinafter referred to as
"ADDITIONAL COSTS") in each case, only to the extent, with respect to LIBOR
Loans, that such Additional Costs are not included in the LIBOR Base Rate
applicable to LIBOR Loans, then, within ten (10) Business Days' of demand made
by such Bank as promptly as practicable after it obtains knowledge that such a
Regulatory Change exists and determines to make such demand (a copy of which
demand shall be delivered to the Agent), the Borrowers shall pay to such Bank
from time to time as specified by such Bank, additional amounts which shall be
sufficient to compensate such Bank for such increased cost or reduction in
amounts receivable by such Bank from the date of such change, together with
interest on each such amount from the date demanded until payment in full
thereof at the Post-Default Rate. All references to any "Bank" shall be deemed
to include any participant in such Bank's Revolving Credit Commitment.
(c) Without limiting the effect of the foregoing
provisions of this Section 2.18, in the event that, by reason of any Regulatory
Change, any Bank either: (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or other
liabilities of such Bank which includes deposits by reference to which the
interest rate on LIBOR Loans is determined as provided in this
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Agreement or a category of extensions of credit or other assets of such Bank
which includes LIBOR Loans, or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets that it may hold, then, if
such Bank so elects by notice to the Borrowers (with a copy to the Agent), the
obligation of such Bank to make, and to convert Loans of any other Type into,
Loans of such Type hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (and all Loans of such Type then outstanding shall
be converted into Base Rate Loans or into LIBOR Loans of another duration as the
case may be, in accordance with Sections 2.17 and 2.21).
(d) Determinations by any Bank for purposes of this
Section 2.18 of the effect of any Regulatory Change on its costs of making or
maintaining Loans or on amounts receivable by it in respect of Loans, and of the
additional amounts required to compensate such Bank in respect of any Additional
Costs, shall be set forth in writing in reasonable detail describing the
Additional Costs together with a calculation demonstrating the allocation to the
Borrowers of such Additional Costs which shall be conclusive, absent manifest
error.
SECTION 2.19 LIMITATION ON TYPES OF LOANS.
Anything herein to the contrary notwithstanding, if,
on or prior to the determination of an interest rate for any LIBOR Loans for any
Interest Period therefor, the Required Banks determine (which determination
shall be conclusive):
(a) by reason of any event affecting the money
markets in the United States of America or the London interbank market,
quotations of interest rates for the relevant deposits are not being provided in
the relevant amounts or for the relevant maturities for purposes of determining
the rate of interest for such Loans under this Agreement; or
(b) the rates of interest referred to in the
definition of "LIBOR Base Rate" in Article 1 hereof upon the basis of which the
rate of interest on any LIBOR Loans for such period is determined, do not
accurately reflect the cost to the Banks of making or maintaining such Loans for
such period;
then the Agent shall give the Borrowers and each Bank prompt notice thereof (and
shall thereafter give the Borrowers and each Bank prompt notice of the
cessation, if any, of such condition), and so long as such condition remains in
effect, the Banks shall be under no obligation to make Loans of such Type or to
convert Loans of any other Type into Loans of such Type and the Borrowers shall,
on the last day(s) of the then current Interest Period(s) for the outstanding
Loans of the affected Type either repay such Loans in accordance with Section
2.5 hereof or convert such Loan into Loans of another Type in accordance with
Section 2.17 hereof.
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SECTION 2.20 ILLEGALITY.
Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Bank or its applicable
Lending Office to: (a) honor its obligation to make LIBOR Loans hereunder, or
(b) maintain LIBOR Loans hereunder, then such Bank shall promptly notify the
Borrowers thereof (with a copy to the Agent), describing such illegality in
reasonable detail (and shall thereafter promptly notify the Borrowers and the
Agent of the cessation, if any, of such illegality), and such Bank's obligation
to make LIBOR Loans and to convert Base Rate Loans into LIBOR Loans hereunder
shall, upon written notice given by such Bank to the Borrowers, be suspended
until such time as such Bank may again make and maintain LIBOR Loans and such
Bank's outstanding LIBOR Loans shall be converted into Base Rate Loans, in
accordance with Sections 2.17 and 2.21 hereof.
SECTION 2.21 CERTAIN CONVERSIONS PURSUANT
TO SECTIONS 2.18 AND 2.20.
If the Loans of any Bank of a particular Type (Loans
of such Type are hereinafter referred to as "AFFECTED LOANS" and such Type is
hereinafter referred to as the "AFFECTED TYPE") are to be converted pursuant to
Section 2.18 or 2.20 hereof, such Bank's Affected Loans shall be converted into
Base Rate Loans, or LIBOR Loans of another Type, as the case may be (the "NEW
TYPE LOANS"), on the last day(s) of the then current Interest Period(s) for the
Affected Loans (or, in the case of a conversion required by subsection 2.18(b)
or Section 2.20 hereof, on such earlier date as such Bank may specify to the
Borrowers with a copy to the Agent) and, until such Bank gives notice as
provided below that the circumstances specified in Section 2.18 or 2.20 hereof
which gave rise to such conversion no longer exist:
(a) to the extent that such Bank's Affected Loans
have been so converted, all repayments of principal which would otherwise be
applied to such Affected Loans shall be applied instead to its New Type Loans;
(b) all Loans which would otherwise be made by such
Bank as Loans of the Affected Type shall be made instead as New Type Loans and
all Loans of such Bank which would otherwise be converted into Loans of the
Affected Type shall be converted instead into (or shall remain as) New Type
Loans.
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SECTION 2.22 INDEMNIFICATION.
The Borrowers shall pay to the Agent for the account
of each Bank, upon the request of such Bank through the Agent, such amount or
amounts as shall compensate such Bank for any loss (including loss of profit),
cost or expense incurred by such Bank (as reasonably determined by such Bank) as
a result of:
(a) any payment or repayment or conversion of a LIBOR
Loan held by such Bank on a date other than the last day of an Interest Period
for such LIBOR Loan except pursuant to Sections 2.18 or 2.20 hereof; or
(b) any failure by the Borrowers to borrow a LIBOR
Loan held by such Bank on the date for such borrowing specified in the relevant
Borrowing Notice under Section 2.2 hereof,
such compensation to include, without limitation, an amount equal to: (i) any
loss or expense suffered by such Bank during the period from the date of receipt
of such early payment or repayment or the date of such conversion to the last
day of such Interest Period if the rate of interest obtainable by such Bank upon
the redeployment of an amount of funds equal to such Bank's PRO RATA share of
such payment, repayment or conversion or failure to borrow or convert is less
than the rate of interest applicable to such LIBOR Loan for such Interest
Period, or (ii) any loss or expense suffered by such Bank in liquidating LIBOR
deposits prior to maturity which correspond to such Bank's PRO RATA share of
such payment, repayment, conversion, failure to borrow or failure to convert.
The determination by each such Bank of the amount of any such loss or expense,
when set forth in a written notice to the Borrowers, containing such Bank's
calculation thereof in reasonable detail, shall be presumed correct, in the
absence of manifest error.
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ARTICLE 3. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers hereby represents and warrants to the
Banks and the Agent that:
SECTION 3.1 ORGANIZATION.
(a) Each Borrower is duly organized and validly
existing under the laws of its state of organization and has the power to own
its assets and to transact the business in which it is presently engaged and in
which it proposes to be engaged. Schedule 3.1 hereto accurately and completely
lists, as to each Borrower: (i) the state of incorporation or organization of
each such entity, (ii) as to each of them that is a corporation, the classes and
number of authorized and outstanding shares of capital stock of each such
corporation, and (iii) the business in which each of such entities is engaged.
All of the foregoing shares or other equity interests that are issued and
outstanding have been duly and validly issued and are fully paid and
non-assessable. Except as set forth on Schedule 3.1, none of the Borrowers has
any Subsidiary.
(b) Each Borrower is in good standing in its state of
organization and in each state in which it is qualified to do business. There
are no jurisdictions other than as set forth on Schedule 3.1 hereto in which the
character of the properties owned or proposed to be owned by each Borrower or in
which the transaction of the business of each Borrower as now conducted or as
proposed to be conducted requires or will require such Borrower to qualify to do
business and as to which failure so to qualify could have a Material Adverse
Effect on such Borrower.
SECTION 3.2 POWER, AUTHORITY, CONSENTS.
Each Borrower has the power to execute, deliver and
perform the Loan Documents to be executed by it. Each Borrower has the power to
borrow hereunder and has taken all necessary corporate action to authorize the
borrowing hereunder on the terms and conditions of this Agreement. Each Borrower
has taken all necessary action, corporate or otherwise, to authorize the
execution, delivery and performance of the Loan Documents to be executed by it.
No consent or approval of any Person (including, without limitation, any
stockholder of any Borrower), no consent or approval of any landlord or
mortgagee, no waiver of any Lien or right of distraint or other similar right
and no consent, license, certificate of need, approval, authorization or
declaration of any governmental authority, bureau or agency, is or will be
required in connection with the execution, delivery or performance by each
Borrower, or the validity or enforcement of
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the Loan Documents, except as set forth on Schedule 3.2 hereto, each of which
either has been duly and validly obtained on or prior to the date hereof and is
now in full force and effect, or is designated on Schedule 3.2 as waived by the
Required Banks.
SECTION 3.3 NO VIOLATION OF LAW OR AGREEMENTS.
The execution and delivery by each Borrower of each
Loan Document to which it is a party and performance by it hereunder and
thereunder, will not violate any provision of law and will not conflict with or
result in a breach of any order, writ, injunction, ordinance, resolution,
decree, or other similar document or instrument of any court or governmental
authority, bureau or agency, domestic or foreign, or any certificate of
incorporation or by-laws of each Borrower, or create (with or without the giving
of notice or lapse of time, or both) a default under or breach of any agreement,
bond, note or indenture to which any Borrower is a party, or by which any
Borrower is bound or any of their respective properties or assets is affected,
except for such defaults and breaches which in the aggregate could not have a
Material Adverse Effect on the Borrowers, or result in the imposition of any
Lien of any nature whatsoever upon any of the properties or assets owned by or
used in connection with the business of each Borrower.
SECTION 3.4 DUE EXECUTION, VALIDITY,
ENFORCEABILITY.
This Agreement and each other Loan Document to which
each Borrower is a party has been duly executed and delivered by each Borrower
that is a party thereto and each constitutes the valid and legally binding
obligation of each Borrower, enforceable in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws, now or hereafter in effect,
relating to or affecting the enforcement of creditors' rights generally and
except that the remedy of specific performance and other equitable remedies are
subject to judicial discretion.
SECTION 3.5 TITLE TO PROPERTIES.
Each of the Borrowers has good and marketable title
in fee simple to, or valid leasehold interests in, all real property necessary
or used in the ordinary course of its business, except for such defects in title
as could not, individually or in the aggregate, have a Material Adverse Effect.
SECTION 3.6 JUDGMENTS, ACTIONS, PROCEEDINGS.
Except as set forth on Schedule 3.6 hereto, there are
no outstanding judgments, investigations, actions or proceedings, including,
without limitation, any Environmental Proceeding, pending before any court or
governmental authority, bureau or agency, with respect to or, to the best of
each
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Borrower's knowledge, threatened against or affecting such Borrower or any of
its assets involving, in the case of any court proceeding, a claim in excess of
Two Hundred Fifty Thousand ($250,000) Dollars, nor, to the best of each
Borrower's knowledge, is there any reasonable basis for the institution of any
such action or proceeding that is probable of assertion, nor are there any such
actions or proceedings in which any Borrower is a plaintiff or complainant.
SECTION 3.7 NO DEFAULTS, COMPLIANCE WITH LAWS.
Except as set forth on Schedule 3.7 hereto, none of
the Borrowers is in default under any agreement, ordinance, resolution, decree,
bond, note, indenture, order or judgment to which it is a party or by which it
is bound, or any other agreement or other instrument by which any of the
properties or assets owned by it or used in the conduct of its business is
affected, which default could have a Material Adverse Effect on such Borrower.
Each Borrower has complied and is in compliance in all respects with all
applicable laws, ordinances and regulations, resolutions, ordinances, decrees
and other similar documents and instruments of all courts and governmental
authorities, bureaus and agencies, domestic and foreign, including, without
limitation, all applicable provisions of the Americans with Disabilities Act (42
U.S.C. ss.12101-12213) and the regulations issued thereunder and all applicable
Environmental Laws and Regulations, non-compliance with which could have a
Material Adverse Effect on such Borrower.
SECTION 3.8 BURDENSOME DOCUMENTS.
Except as set forth on Schedule 3.8 hereto, none of
the Borrowers is a party to or bound by, nor are any of the properties or assets
owned by any of the Borrowers used in the conduct of their respective businesses
affected by, any agreement, ordinance, resolution, decree, bond, note,
indenture, order or judgment, including, without limitation, any of the
foregoing relating to any Environmental Liability, that materially and adversely
affects their respective businesses, assets or conditions, financial or
otherwise.
SECTION 3.9 FINANCIAL STATEMENTS; PROJECTIONS.
(a) Each of the Financial Statements is complete and
presents fairly the consolidated financial position of HCRI and its Subsidiaries
as at its date, and has been prepared in accordance with GAAP. None of the
Borrowers to which any of the Financial Statements relates, has any material
obligation, liability or commitment, direct or contingent (including, without
limitation, any Environmental Liability), that is not reflected in the Financial
Statements. There has been no material adverse
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change in the financial position or operations of any of the Borrowers since the
date of the latest balance sheet included in the Financial Statements (the
"LATEST BALANCE SHEET"). Each Borrower's fiscal year is the twelve-month period
ending on December 31 in each year.
(b) The Projections have been prepared on the basis
of the assumptions accompanying them and reflect as of the date thereof HCRI's
good faith projections, after reasonable analysis, of the matters set forth
therein, based on such assumptions.
SECTION 3.10 TAX RETURNS.
Each Borrower has filed all federal, state and local
tax returns required to be filed by it and has not failed to pay any taxes, or
interest and penalties relating thereto, on or before the due dates thereof.
Except to the extent that reserves therefor are reflected in the Financial
Statements: (i) there are no material federal, state or local tax liabilities of
any of the Borrowers, due or to become due for any tax year ended on or prior to
the date of the Latest Balance Sheet relating to such entity, whether incurred
in respect of or measured by the income of such entity, that are not properly
reflected in the Latest Balance Sheet relating to such entity, and (ii) there
are no material claims pending or, to the knowledge of each of the Borrowers,
proposed or threatened against such Borrower for past federal, state or local
taxes, except those, if any, as to which proper reserves are reflected in the
Financial Statements.
SECTION 3.11 INTANGIBLE ASSETS.
Each Borrower possesses all patents, trademarks,
service marks, trade names, and copyrights, and rights with respect to the
foregoing, necessary to conduct its business as now conducted and as proposed to
be conducted, without any conflict with the patents, trademarks, service marks,
trade names, and copyrights and rights with respect to the foregoing, of any
other Person.
SECTION 3.12 REGULATION U.
No part of the proceeds received by any of the
Borrowers from the Loans will be used directly or indirectly for: (a) any
purpose other than as set forth in Section 2.8 hereof, or (b) the purpose of
purchasing or carrying, or for payment in full or in part of Indebtedness that
was incurred for the purposes of purchasing or carrying, any "margin stock", as
such term is defined in ss.221.3 of Regulation U of the Board of Governors of
the Federal Reserve System, 12 C.F.R., Chapter II, Part 221.
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SECTION 3.13 NAME CHANGES, MERGERS, ACQUISITIONS.
Except as set forth on Schedule 3.13 hereto, none of
the Borrowers has within the six-year period immediately preceding the date of
this Agreement changed its name, been the surviving entity of a merger or
consolidation, or acquired all or substantially all of the assets of any Person.
SECTION 3.14 FULL DISCLOSURE.
Neither the Financial Statements nor any certificate,
opinion, or any other statement made or furnished in writing to the Agent or any
Bank by or on behalf of the Borrowers in connection with this Agreement or the
transactions contemplated herein, contains any untrue statement of a material
fact, or omits to state a material fact necessary in order to make the
statements contained therein or herein not misleading, as of the date such
statement was made. There is no fact known to any Borrower that has, or would in
the now foreseeable future have, a Material Adverse Effect on such Borrower,
which fact has not been set forth herein, in the Financial Statements or any
certificate, opinion or other written statement so made or furnished to the
Agent or the Banks.
SECTION 3.15 LICENSES AND APPROVALS.
(a) Each Borrower has all necessary licenses, permits
and governmental authorizations, including, without limitation, licenses,
permits and authorizations arising under or relating to Environmental Laws and
Regulations, to own and operate its properties and to carry on its business as
now conducted, the absence of which would have a Material Adverse Effect on the
Borrowers.
(b) To the best of HCRI's knowledge, no violation
exists of any applicable law pertaining to the ownership or operation of any
Facility or any Operator that would have a reasonable likelihood of leading to
revocation of any license necessary for the operation of such Facility.
SECTION 3.16 ERISA.
(a) Except as set forth on Schedule 3.16 hereto, no
Employee Benefit Plan is maintained or has ever been maintained by any Loan
Party or any ERISA Affiliate, nor has any Loan Party or any ERISA Affiliate ever
contributed to a Multiemployer Plan.
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(b) There are no agreements which will provide
payments to any officer, employee, shareholder or highly compensated individual
which will be "parachute payments" under 280G of the Code that are nondeductible
to any Loan Party and which will be subject to tax under Section 4999 of the
Code for which any Loan Party will have a material withholding liability.
SECTION 3.17 REIT STATUS.
HCRI currently has REIT Status and has maintained
REIT Status on a continuous basis since its formation. None of the Subsidiaries
of HCRI currently has REIT Status.
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ARTICLE 4. CONDITIONS TO THE LOANS.
SECTION 4.1 CONDITIONS TO INITIAL LOAN(S).
The obligation of each Bank to execute and deliver
this Agreement shall be subject to the fulfillment (to the satisfaction of the
Agent) of the following conditions precedent:
(a) Each Borrower shall have executed and delivered
to each Bank its Note.
(b) (i) The Borrowers shall have paid to the Agent,
for the benefit of the Banks, the Origination Fee.
(ii) The Borrowers shall have paid to Key and
Fleet, as the case may be, the Agency Fee and the Arrangement Fee.
(c) Counsel to the Borrowers shall have delivered its
opinion to, and in form and substance satisfactory to, the Agent.
(d) The Agent shall have received complete copies of
the Financial Statements and the Projections, each certified as such in a
certificate executed by an executive officer of HCRI.
(e) The Agent shall have received copies of the
following:
(i) All of the consents, approvals and
waivers referred to on Schedule 3.2 hereto (except only those which, as stated
on Schedule 3.2, shall not be delivered);
(ii) The certificates of incorporation of
each of the Borrowers, certified by the Secretary of State of
their respective states of incorporation;
(iii) The by-laws of each of the Borrowers,
certified by their respective secretaries;
(iv) All corporate action taken by each of
the Borrowers to authorize the execution, delivery and performance of each of
the Loan Documents to which it is a party and the transactions contemplated
thereby, certified by their respective secretaries;
(v) Good standing certificates as of a recent
date, with respect to each of the Borrowers from the Secretary of State
of their respective states of incorporation and each state in which each of them
is qualified to do business; and
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(vi) An incumbency certificate (with specimen
signatures) with respect to each of the Borrowers.
(f) The Borrowers shall have delivered to the Agent a
Borrowing Base Certificate.
(g) The Agent shall have received evidence
satisfactory to it that all liens covering the collateral securing HCRI's
$52,000,000 Senior Notes and $30,000,000 Senior Notes held by Fifth Third Bank
of Northwestern Ohio, N.A., as Collateral Agent shall have been released or
terminated.
(h) (i) Each of the Borrowers shall have complied and
shall then be in compliance with all of the terms, covenants and conditions of
this Agreement;
(ii) After giving effect to the initial Loan,
there shall exist no Default or Event of Default hereunder; and
(iii) The representations and warranties
contained in Article 3 hereof shall be true and correct on the date hereof;
and the borrowing by the Borrowers of the initial Loan hereunder shall
constitute a representation and warranty by the Borrowers as of the date hereof
that the conditions set forth in this subsection 4.1(h) have been satisfied.
(i) All legal matters incident to the initial Loans
shall be satisfactory to counsel to the Agent.
SECTION 4.2 CONDITIONS TO SUBSEQUENT LOANS.
The obligation of the Banks to make each Loan
subsequent to the date hereof shall be subject to the fulfillment (to the
satisfaction of the Agent) of the following conditions precedent:
(a) The Agent shall have received a Borrowing Notice
in accordance with Section 2.2 hereof, together with a Borrowing Base
Certificate.
(b) Each of the Borrowers shall have complied and
shall then be in compliance with all of the terms, covenants and conditions of
this Agreement;
(i) After giving effect to the requested Loan,
there shall exist no Default or Event of Default hereunder; and
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(ii) The representations and warranties contained
in Article 3 hereof shall be true and correct on and as of such date as if made
on and as of such date (provided Section 3.6 shall relate only to claims in
excess of $1,500,000 as of the date of such requested Loan);
and the borrowing by the Borrowers of the requested Loan hereunder shall
constitute a representation and warranty by the Borrowers as of the date of such
Loan that the conditions set forth in this subsection 4.2(b) have been
satisfied.
(c) All legal matters incident to such Loan shall
be satisfactory to counsel for the Agent.
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ARTICLE 5. DELIVERY OF FINANCIAL REPORTS,
DOCUMENTS AND OTHER INFORMATION.
While the Commitments are outstanding, and, in the event any
Loan remains outstanding, so long as any of the Borrowers are indebted to the
Banks or the Agent and until payment in full of the Notes and full and complete
performance of all of its other obligations arising hereunder, HCRI shall
deliver to each Bank:
SECTION 5.1 ANNUAL FINANCIAL STATEMENTS.
Annually, as soon as available, but in any event
within ninety (90) days after the last day of each of its fiscal years, a
consolidated balance sheet of HCRI and its Subsidiaries as at such last day of
the fiscal year, and consolidated statements of income and retained earnings and
statements of cash flow, for such fiscal year, each prepared in accordance with
generally accepted accounting principles consistently applied, in reasonable
detail, and certified without qualification by a nationally recognized
independent public accounting firm or by any other certified public accounting
firm satisfactory to the Agent as fairly presenting the financial position and
results of operations of HCRI and its Subsidiaries as at and for the year ending
on its date and as having been prepared in accordance with GAAP; PROVIDED,
HOWEVER, HCRI may satisfy its obligations to deliver the financial statements
described in this Section 5.1 by furnishing to the Banks a copy of its annual
report on Form 10-K in respect of such fiscal year together with the financial
statements required to be attached thereto, provided HCRI is required to file
such annual report on Form 10-K with the Securities and Exchange Commission and
such filing is actually made.
SECTION 5.2 QUARTERLY FINANCIAL STATEMENTS.
As soon as available, but in any event within
forty-five (45) days after the end of each of HCRI's fiscal quarters, a
consolidated balance sheet of HCRI and the Subsidiaries as of the last day of
such quarter and consolidated statements of income and retained earnings and
statements of cash flow, for such quarter, and on a comparative basis figures
for the corresponding period of the immediately preceding fiscal year, all in
reasonable detail, each such statement to be certified in a certificate of the
chief financial officer of HCRI as accurately presenting the financial position
and the results of operations of HCRI and its Subsidiaries as at its date and
for such quarter and as having been prepared in accordance with GAAP (subject to
year-end audit adjustments); PROVIDED, HOWEVER, HCRI may satisfy its obligations
to deliver the financial statements described in this Section 5.2 by furnishing
to the Banks a copy
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of its quarterly report on Form 10-Q in respect of such fiscal quarter together
with the financial statements required to be attached thereto, provided HCRI is
required to file such quarterly report on Form 10-Q with the Securities and
Exchange Commission and such filing is actually made.
SECTION 5.3 COMPLIANCE INFORMATION.
Promptly after a written request therefor, such
other financial data or information evidencing compliance with the requirements
of this Agreement, the Notes and the other Loan Documents, as any Bank may
reasonably request from time to time.
SECTION 5.4 NO DEFAULT CERTIFICATE.
At the same time as it delivers the financial
statements required under the provisions of Sections 5.1 and 5.2 hereof, a
certificate of the chief executive officer or chief financial officer of HCRI to
the effect that no Event of Default hereunder and that no default under any
other agreement to which any Borrower is a party or by which it is bound, or by
which, to the best knowledge of HCRI or any other Borrower, any of its
properties or assets, taken as a whole, may be materially affected, and no event
which, with the giving of notice or the lapse of time, or both, would constitute
such an Event of Default or default, exists, or, if such cannot be so certified,
specifying in reasonable detail the exceptions, if any, to such statement. Such
certificate shall be accompanied by a detailed calculation indicating compliance
with the covenants contained in Section 6.9 hereof in the form annexed hereto as
Exhibit D.
SECTION 5.5 CERTIFICATE OF ACCOUNTANTS.
At the same time as it delivers the financial
statements required under the provisions of Section 5.1 hereof, a certificate of
the independent certified public accountants of HCRI addressed specifically to
both HCRI and the Agent to the effect that during the course of their audit of
the operations of HCRI and its Subsidiaries and its condition as of the end of
the fiscal year, nothing has come to their attention which would indicate that a
Default or an Event of Default hereunder has occurred or that there was any
violation of the covenants of HCRI and its Subsidiaries contained in Section 6.9
or Article 7 of this Agreement, or, if such cannot be so certified, specifying
in reasonable detail the exceptions, if any, to such statement.
SECTION 5.6 BORROWING BASE CERTIFICATES.
As soon as available but in any event not less
than forty-five (45) days after the end of each fiscal quarter of HCRI, a
Borrowing Base Certificate prepared as of the close of business on the last day
of such fiscal quarter.
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SECTION 5.7 BUSINESS PLAN AND PROJECTIONS.
Not later than January 31st in each year, copies
of HCRI's business plan and financial projections for the upcoming three (3)
fiscal years (together with a copy in writing of the assumptions on which such
business plan and projections were based), each certified by HCRI's chief
financial officer and illustrating the projected income statements, balance
sheets and statements of changes in cash flow on a consolidated basis.
SECTION 5.8 QUARTERLY FACILITY REPORTS.
(a) As soon as available but in any event not less
than forty-five (45) days after the end of each fiscal quarter of HCRI, a report
with respect to the Facilities and the Operators, the form of which is set forth
on Schedule 5.8 annexed hereto and which report shall contain information for
the quarterly period immediately prior to the fiscal quarter for which the
report is submitted.
(b) Within thirty (30) days after the receipt
thereof, a copy of the annual audited financial statements of each publicly-held
Operator delivered to HCRI by each such Operator.
(c) Such other information regarding the financial
condition of the Operators as Key or Fleet may from time to time reasonably
request, subject to each of their agreement that all such information shall be
and remain confidential and none of such information may be distributed to any
other Person without HCRI's prior consent.
SECTION 5.9 ACCOUNTANTS' REPORTS.
Promptly upon receipt thereof, copies of all material
reports submitted to HCRI by its independent accountants in connection with any
annual or interim audit of the books of HCRI or its Subsidiaries made by such
accountants which material reports are a necessary part of such annual or
interim audit.
SECTION 5.10 COPIES OF DOCUMENTS.
Promptly upon their becoming available, copies of
any: (i) financial statements, non-routine reports and notices (other than
routine correspondence), any of which are of a material nature, requests for
waivers and proxy statements, in each case, delivered by HCRI or any of its
Subsidiaries to any of their respective existing lending institutions or
creditors; (ii) correspondence or notices received by HCRI from any federal,
state or local governmental authority that regulates the operations of HCRI or
any of its Subsidiaries, relating to an actual or threatened change or
development that would be
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materially adverse to HCRI or any Subsidiary; (iii) registration statements and
any amendments and supplements thereto, and any regular and periodic reports, if
any, filed by HCRI or any of its Subsidiaries with any securities exchange or
with the Securities and Exchange Commission or any governmental authority
succeeding to any or all of the functions of the said Commission; and (iv) at
the request of the Agent, any appraisals received by HCRI or any of its
Subsidiaries with respect to the properties or assets of HCRI or its
Subsidiaries during the term of this Agreement.
SECTION 5.11 NOTICES OF DEFAULTS.
Promptly, notice of the occurrence of any Default or
Event of Default, or any event that would constitute or cause a Material Adverse
Effect in the condition, financial or otherwise, or the operations of HCRI or
any of the Subsidiaries.
SECTION 5.12 ERISA NOTICES AND REQUESTS.
(a) Concurrently with such filing, a copy of each
Form 5500 that is filed with respect to each Plan with the IRS; and
(b) Promptly, upon their becoming available, copies
of: (i) all correspondence with the PBGC, the Secretary of Labor or any
representative of the IRS with respect to any Plan, relating to an actual or
threatened change or development that would be materially adverse to the
Borrower(s); (ii) all actuarial valuations received by the Borrower(s) with
respect to any Plan; and (iii) any notices of Plan termination filed by any Plan
Administrator (as those terms are used in ERISA) with the PBGC and of any
notices from the PBGC to the Borrower(s) with respect to the intent of the PBGC
to institute involuntary termination proceedings.
SECTION 5.13 ADDITIONAL INFORMATION.
Such other material additional information regarding
the business, affairs and condition of the Borrowers as Key or Fleet may from
time to time request, including, without limitation, quarterly schedules, in
form and substance satisfactory to the Agent, with respect to HCRI on a
consolidated basis, of recorded liabilities, unfunded commitments, contingent
liabilities and other similar material items.
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ARTICLE 6. AFFIRMATIVE COVENANTS.
While the Commitments are outstanding, and, in the event any
Loan remains outstanding, so long as any Borrower is indebted to the Banks or
the Agent, and until payment in full of the Notes and full and complete
performance of all of its other obligations arising hereunder, each Borrower
shall:
SECTION 6.1 BOOKS AND RECORDS.
Keep proper books of record and account in a
manner reasonably satisfactory to the Agent in which full and true entries shall
be made of all dealings or transactions in relation to its business and
activities.
SECTION 6.2 INSPECTIONS AND AUDITS.
Permit the Agent to make or cause to be made
(prior to an Event of Default, at the Banks' expense and after the occurrence of
and during the continuance of an Event of Default, at the Borrowers' expense),
inspections and audits of any books, records and papers of HCRI or any
Subsidiary and to make extracts therefrom and copies thereof, or to make
appraisals, inspections and examinations of any properties and facilities of
HCRI or any Subsidiary, on reasonable notice, at all such reasonable times and
as often as any Bank may reasonably require, in order to assure that the
Borrowers are and will be in compliance with their obligations under the Loan
Documents or to evaluate the investment in the then outstanding Notes.
SECTION 6.3 MAINTENANCE AND REPAIRS.
Cause to be maintained in good repair, working
order and condition, subject to normal wear and tear, all material properties
and assets from time to time owned by HCRI or any Subsidiary and used in or
necessary for the operation of its businesses, and make or cause to be made all
reasonable repairs, replacements, additions and improvements thereto.
SECTION 6.4 CONTINUANCE OF BUSINESS.
Do, or cause to be done, all things reasonably
necessary to preserve and keep in full force and effect the corporate existence
of HCRI or any Subsidiary and all permits, rights and privileges necessary for
the proper conduct of its business, and continue to engage in the same line of
business and comply in all material respects with all applicable laws,
regulations and orders.
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SECTION 6.5 COPIES OF CORPORATE DOCUMENTS.
Subject to the prohibitions set forth in Section
7.6 hereof, promptly deliver to the Agent copies of any amendments or
modifications to the certificate of incorporation and by-laws of HCRI or any
Subsidiary, certified with respect to the certificate of incorporation by the
Secretary of State of its state of incorporation and, with respect to the
by-laws, by the secretary or assistant secretary of such corporation.
SECTION 6.6 PERFORM OBLIGATIONS.
Pay and discharge all of the obligations and
liabilities of HCRI or any Subsidiary, including, without limitation, all taxes,
assessments and governmental charges upon its income and properties when due,
unless and to the extent only that such obligations, liabilities, taxes,
assessments and governmental charges shall be contested in good faith and by
appropriate proceedings and that, to the extent required by GAAP, proper and
adequate book reserves relating thereto are established by HCRI or any
Subsidiary, and then only to the extent that a bond is filed in cases where the
filing of a bond is necessary to avoid the creation of a Lien against any of its
properties.
SECTION 6.7 NOTICE OF LITIGATION.
Promptly notify the Agent in writing of any
litigation, legal proceeding or dispute, other than disputes in the ordinary
course of business or, whether or not in the ordi nary course of business,
involving amounts in excess of Two Million Five Hundred Thousand ($2,500,000)
Dollars, affecting HCRI or any Subsidiary whether or not fully covered by
insurance, and regardless of the subject matter thereof (excluding, however, any
actions relating to workers' compensation claims or negligence claims relating
to use of motor vehicles, if fully covered by insurance, subject to
deductibles).
SECTION 6.8 INSURANCE.
(a) (i) Maintain or cause to maintain with
responsible insurance companies reasonably acceptable to the Agent such
insurance on the properties of HCRI or any Subsidiary, in such amounts and
against such risks as is customarily maintained by similar businesses and cause
each Operator to do so; (ii) file with the Agent upon its request a detailed
list of the insurance then in effect, stating the names of the insurance
companies, the amounts and rates of the insurance, the dates of the expiration
thereof and the properties and risks covered thereby; and (iii) within ten (10)
days after notice in writing from the Agent, obtain such additional insurance as
the Agent may reasonably request; and
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(b) Carry all insurance available through the PBGC or
any private insurance companies covering its obligations to the PBGC.
SECTION 6.9 FINANCIAL COVENANTS.
Have or maintain, with respect to HCRI, on a
consolidated basis, as at the last day of each fiscal quarter of
HCRI:
(a) A ratio of Funded Indebtedness to Tangible Net
Worth (the "LEVERAGE RATIO") of not more than 1.10:1.00; provided, so long as
the Leverage Ratio for any two consecutive fiscal quarters does not exceed
1.10:1.00 (each, a "LEVERAGE TEST PERIOD"), then the Leverage Ratio for the two
consecutive fiscal quarters immediately succeeding such Leverage Test Period may
increase to a maximum of 1.20:1.00.
(b) Tangible Net Worth of not less than $300,000,000,
plus 100% of the Net Issuance Proceeds received by HCRI (or any of its
Subsidiaries) in connection with the issuance of any equity interest in HCRI (or
any of its Subsidiaries) other than any such equity interests issued in
connection with any dividend reinvestment program(s).
(c) Interest Coverage of not less than 200%.
(d) HCRI's Fixed Coverage Ratio of not less than 1.05
to 1.00.
SECTION 6.10 NOTICE OF CERTAIN EVENTS.
(a) Promptly notify the Agent in writing of the
occurrence of any Reportable Event, as defined in Section 4043 of ERISA, if a
notice of such Reportable Event is required under ERISA to be delivered to the
PBGC within 30 days after the occurrence thereof, together with a description of
such Report able Event and a statement of the action the Borrower(s) or the
ERISA Affiliate intends to take with respect thereto, together with a copy of
the notice thereof given to the PBGC.
(b) Promptly notify the Agent in writing if the
Borrower(s) or ERISA Affiliate receives an assessment of withdrawal liability in
connection with a complete or partial withdrawal with respect to any
Multiemployer Plan, together with a statement of the action that such
Borrower(s) or ERISA Affiliate intends to take with respect thereto.
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(c) Promptly notify the Agent in writing if any
Borrower receives: (i) any notice of any violation or administrative or judicial
complaint or order having been filed or about to be filed against such Borrower
alleging violations of any Environmental Law and Regulation, or (ii) any notice
from any governmental body or any other Person alleging that such Borrower is or
may be subject to any Environmental Liability; and promptly upon receipt
thereof, provide the Agent with a copy of such notice together with a statement
of the action such Borrower intends to take with respect thereto.
SECTION 6.11 COMPLY WITH ERISA.
Materially comply with all applicable provisions
of ERISA and the Code now or hereafter in effect.
SECTION 6.12 ENVIRONMENTAL COMPLIANCE.
Operate or cause to operate all property owned,
operated or leased by it in compliance with all Environmental Laws and
Regulations, such that no Environmental Liability arises under any Environmental
Laws and Regulations, which would result in a Lien on any property of any
Borrower.
SECTION 6.13 MAINTENANCE OF REIT STATUS.
Maintain its REIT Status.
SECTION 6.14 LONG-TERM CARE FACILITIES.
Ensure that not less than seventy (70%) percent of
its Investments in Healthcare Assets are in Long-Term Care Facilities.
SECTION 6.15 BEHAVIORAL CARE FACILITIES.
Ensure that not more than ten (10%) percent of its
Investments in Healthcare Assets are in Facilities classified as "Behavioral
Care".
SECTION 6.16 OPERATOR CONCENTRATION.
Ensure that not more than twenty (20%) percent of the
Borrowers' Investments are maintained with a single Operator (including any
Affiliates of such Operator).
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ARTICLE 7. NEGATIVE COVENANTS.
While the Commitments are outstanding, and, in the event any
Loan remains outstanding, so long as any Borrower is indebted to the Banks or
the Agent and until payment in full of the Notes and full and complete
performance of all of its other obligations arising hereunder, HCRI shall not
and shall not permit any of its Subsidiaries to do, agree to do, or permit to be
done, any of the following:
SECTION 7.1 INDEBTEDNESS.
Create, incur, permit to exist or have outstanding
any Indebtedness, except:
(a) Indebtedness of the Borrowers to the Banks and
the Agent and under this Agreement and the Notes;
(b) Taxes, assessments and governmental charges,
non-interest bearing accounts payable and accrued liabilities, in any case not
more than 90 days past due from the original due date thereof (unless the
failure to satisfy such obligations is pursuant to the good faith contest by
appropriate dispute or other proceedings as set forth in Section 6.6 hereof),
and non-interest bearing deferred liabilities other than for borrowed money
(e.g., deferred compensation and deferred taxes), in each case incurred and
continuing in the ordinary course of business;
(c) Indebtedness secured by the security interests
referred to in subsection 7.2(b) hereof;
(d) Indebtedness consisting of contingent obligations
permitted by Section 7.3 hereof;
(e) Unsecured Indebtedness;
(f) In addition to the Indebtedness otherwise
permitted under this Section 7.1, Indebtedness secured by Liens provided that
immediately after giving effect to the incurrence of such Indebtedness, the
total outstanding amount of such Indebtedness of HCRI, on a consolidated basis,
does not exceed fifteen (15%) percent of HCRI's consolidated Tangible Net Worth
as of the end of the most recently completed fiscal quarter of HCRI; and
(g) As set forth on Schedule 7.1 hereto.
SECTION 7.2 LIENS.
Create, or assume or permit to exist, any Lien on
any of the properties or assets of the Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, except:
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(a) Permitted Liens;
(b) Purchase money Liens on property acquired or held
by HCRI or its Subsidiaries in the ordinary course of business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such property; provided, that (i) any such Lien attaches
to such property concurrently with or within twenty (20) days after the
acquisition thereof, (ii) such Lien attaches solely to the property so acquired
in such transaction, (iii) the principal amount of the debt secured thereby does
not exceed 100% of the cost of such property, and (iv) the aggregate amount of
all such Indebtedness on a consolidated basis for HCRI and its Subsidiaries
shall not at any time exceed $1,000,000.00;
(c) Liens securing Indebtedness permitted under
subsection 7.1(f) hereof; and
(d) As set forth on Schedule 7.2 hereto.
SECTION 7.3 GUARANTIES.
Assume, endorse, be or become liable for, or
guarantee, the obligations of any Person, except (i) by the endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business, (ii) guarantees in support of Facilities if, after giving effect to
the proposed guarantee, the aggregate amount of all such obligations guaranteed
by the Borrowers, or any of them (exclusive of the guarantees referred to in
subsection 7.3(iii) hereof), would not exceed Thirty Million ($30,000,000)
Dollars, and (iii) as set forth on Schedule 7.1 hereof. For the purposes hereof,
the term "guarantee" shall include any agreement, whether such agreement is on a
contingency or otherwise, to purchase, repurchase or otherwise acquire
Indebtedness of any other Person, or to purchase, sell or lease, as lessee or
lessor, property or services, in any such case primarily for the purpose of
enabling another person to make payment of Indebtedness, or to make any payment
(whether as an advance, capital contribution, purchase of an equity interest or
otherwise) to assure a minimum equity, asset base, working capital or other
balance sheet or financial condition, in connection with the Indebtedness of
another Person, or to supply funds to or in any manner invest in another Person
in connection with such Person's Indebtedness.
SECTION 7.4 MERGERS, ACQUISITIONS.
Merge or consolidate with any Person, or, acquire all
or substantially all of the assets or any of the capital stock of any Person
unless (a) a Borrower is the surviving entity, (b) no Default or Event of
Default exists or will occur after giving effect thereto, and (c) the
consideration paid in onnection with any such merger or acquisition does not
exceed an amount equal to ten (10%) percent of Healthcare Assets as at the date
of the consummation of such transaction, prior to giving effect to such
transaction.
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SECTION 7.5 DISTRIBUTIONS.
Declare or pay any dividends or make any
distribution of any kind on HCRI's outstanding stock, or set aside any sum for
any such purpose, except that:
(a) HCRI may declare and make dividend payments or
other distributions payable solely in its common stock;
(b) HCRI may declare and pay cash dividends if, and
only if: (x) at the time of such payment and after giving effect thereto, no
Event of Default shall exist hereunder, and (y) after giving effect to such
dividend payment, the aggregate amount of all dividends declared and paid during
the fiscal year of HCRI in which such payment is proposed to be made would not
exceed an amount equal to ninety-five (95%) percent of EBITDA (as shown on the
audited consolidated income statement of HCRI for such fiscal year furnished to
the Agent in accordance with Section 5.1 hereof; and
(c) if a Default or an Event of Default exists or
will occur as a result of the dividend payment, HCRI may declare and pay
dividends to the minimum extent necessary (taking into account any dividends or
distributions otherwise made) to generate the minimum deduction for dividends
paid during each year that would be required to satisfy Code Section 857(a)(1).
SECTION 7.6 CHANGES IN STRUCTURE.
Amend, supplement or modify the certificate of
incorporation or by-laws of any Borrower in a manner which would be reasonably
likely to cause a Material Adverse Effect.
SECTION 7.7 DISPOSITION OF ASSETS.
Make any Disposition of Property, or enter into any
agreement to do so, unless (a) the Disposition is at fair market value, (b) at
the time of the Disposition no Event of Default exists, and (c) any mandatory
prepayment required in connection therewith under subsection 2.5(e) is made as
provided therein.
SECTION 7.8 INVESTMENTS.
Make, or suffer to exist, any Investment in any
Person, including, without limitation, any shareholder, director, officer or
employee of HCRI or any of its Subsidiaries, except:
(a) Investments in:
(i) obligations issued or guaranteed by the
United States of America;
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(ii) certificates of deposit, bankers
acceptances and other "money market instruments" issued by any bank or trust
company organized under the laws of the United States of America or any State
thereof and having capital and surplus in an aggregate amount of not less than
$100,000,000;
(iii) open market commercial paper bearing the
highest credit rating issued by Standard & Poor's Corporation or by another
nationally recognized credit rating agency;
(iv) repurchase agreements entered into with any
bank or trust company organized under the laws of the United States of America
or any State thereof and having capital and surplus in an aggregate amount of
not less than $100,000,000 relating to United States of America government
obligations; and
(v) shares of "money market funds", each having
net assets of not less than $100,000,000; in each case maturing or being due or
payable in full not more than 180 days after the Borrowers' acquisition thereof.
(b) Investments by HCRI in any Subsidiary, and by any
Subsidiary in HCRI or another Subsidiary, provided, HCRI shall cause each
newly-created Subsidiary, if any, within thirty (30) days after its organization
thereof, to become a party to this Agreement and a signatory to the Notes, with
the effect that each such new Subsidiary shall be deemed to become a "Borrower"
for the purposes of this Agreement and in connection therewith, there shall be
delivered to the Agent with respect to such Subsidiary those certificates and
documents described in subsection 4.1(e) hereof and all legal matters incident
to the addition of such Subsidiary as a "Borrower" hereunder shall be
satisfactory to counsel to the Agent.
(c) The acquisition by HCRI and its Subsidiaries, on
a consolidated basis, of healthcare assets consisting of Facilities and
Mortgages and, subject to subsection 7.8(d) below, Investments in Operators in
the ordinary course of business.
(d) Investments in any Person provided that the
aggregate Cash portion of all such Investments does not exceed an amount equal
to ten (10%) percent of Healthcare Assets as at any date of determination
thereof, prior to giving effect to any such Investment.
For purposes of subsection 7.8(a)-(d) and Section 7.14 hereof,
"Investments" shall mean, by any Person:
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(i) the amount paid or committed to be paid,
or the value of property or services contributed or committed to be contributed,
by such Person for or in connection with the acquisition by such Person of any
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person; and
(ii) the amount of any advance, loan or
extension of credit by such Person, to any other Person, or guaranty or other
similar obligation of such Person with respect to any Indebtedness of such other
Person, and (without duplication) any amount committed to be advanced, loaned,
or extended by such Person to any other Person, or any amount the payment of
which is committed to be assured by a guaranty or similar obligation by such
Person for the benefit of, such other Person.
SECTION 7.9 FISCAL YEAR.
Change its fiscal year.
SECTION 7.10 ERISA OBLIGATIONS.
Permit the establishment of any Employee Benefit Plan
or amend any Employee Benefit Plan which establishment or amendment could result
in liability to any Loan Party or increase the obligation for post-retirement
welfare benefits of any Loan Party which liability or increase, individually or
together with all similar liabilities and increases, has a Material Adverse
Effect on any Loan Party.
SECTION 7.11 CAPITAL EXPENDITURES.
Except as set forth on Schedule 7.11 hereof, make or
be or become obligated to make Capital Expenditures in the aggregate for HCRI
and its Subsidiaries on a consolidated basis, during each fiscal year of HCRI
and its Subsidiaries, in excess of Three Hundred Fifty Thousand ($350,000.00)
Dollars (exclusive of Investments permitted under Section 7.8 hereof).
SECTION 7.12 RENTAL OBLIGATIONS.
Enter into, or permit to remain in effect, any lease
(other than Capitalized Leases that are governed by Section 7.11 hereof), if,
after giving effect thereto, the aggregate amount of all rentals and other
obligations, including, without limitation, all percentage rents and additional
rent, due from HCRI and its Subsidiaries thereunder would exceed Three Hundred
Fifty Thousand ($350,000.00) Dollars during any fiscal year.
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SECTION 7.13 USE OF CASH.
Use, or permit to be used, in any manner or to any
extent, each Borrower's Cash from operations for the benefit of any Person,
except: (a) in connection with the payment or prepayment of expenses (other than
Capital Expenditures) directly incurred for the benefit of each Borrower in the
maintenance and operation of its business, in each case only in the ordinary
course of its business, (b) for the payment of required payments of principal
and interest on Indebtedness of each Borrower permitted to exist hereunder, and
(c) for uses that are otherwise specifically permitted by this Agreement.
SECTION 7.14 TRANSACTIONS WITH AFFILIATES.
Except as expressly permitted by this Agreement,
directly or indirectly: (a) make any Investment in an Affiliate; (b) transfer,
sell, lease, assign or otherwise dispose of any assets to an Affiliate; (c)
merge into or consolidate with or purchase or acquire assets from an Affiliate;
or (d) enter into any other transaction directly or indirectly with or for the
benefit of any Affiliate (including, without limitation, guarantees and
assumptions of obligations of an Affiliate); PROVIDED, HOWEVER, that: (i)
payments on Investments expressly permitted by Section 7.8 hereof may be made,
(ii) any Affiliate who is a natural person may serve as an employee or director
of HCRI or any Subsidiary and receive reasonable compensation for his services
in such capacity, and (iii) HCRI or any Subsidiary may enter into any
transaction with an Affiliate providing for the leasing of property, the
rendering or receipt of services or the purchase or sale of product, inventory
and other assets in the ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as advantageous to HCRI
or a Subsidiary as the monetary or business consideration that would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
SECTION 7.15 HAZARDOUS MATERIAL.
Cause or permit: (i) any Hazardous Material to be
placed, held, located or disposed of, on, under or at any Facility or any part
thereof, except for such Hazardous Materials that are necessary for HCRI's or
any Subsidiary's or any Operator's operation of its business thereon and which
shall be used, stored, treated and disposed of in compliance with all applicable
Environmental Laws and Regulations or (ii) such Facility or any part thereof to
be used as a collection, storage, treatment or disposal site for any Hazardous
Material. HCRI and each Subsidiary acknowledges and agrees that the Agent and
the Banks shall have no liability or responsibility for either:
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(i) damage, loss or injury to human health,
the environment or natural resources caused by the presence, disposal, release
or threatened release of Hazardous Materials on any part of such Facility; or
(ii) abatement and/or clean-up required
under any applicable Environmental Laws and Regulations for a release,
threatened release or disposal of any Hazardous Materials located at any
Facility or used by or in connection with the HCRI's or any Subsidiary's or any
Operator's business.
SECTION 7.15 CONSTRUCTION INVESTMENTS.
Permit the outstanding principal amount, accrued
interest on and related fees in connection with its Construction Investments to
exceed (i) an amount equal to twenty (20%) percent of the Borrowers'
consolidated Investments in Healthcare Assets during the first twelve (12)
months of the Credit Period, and (ii) an amount equal to seventeen and one-half
(17.5%) percent of the Borrowers' consolidated Investments in Healthcare Assets
at any time thereafter; provided, the Borrowers shall not make a Construction
Investment for a Facility unless (i) there is included in the terms thereof an
agreement for the conversion of the Borrower(s) interests in the Facility upon
the completion thereof into full ownership or a mortgage interest, and (ii) if a
mortgage interest, the Borrower(s) shall retain a first Lien on such Facility.
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ARTICLE 8. EVENTS OF DEFAULT.
If any one or more of the following events ("EVENTS OF
DEFAULT") shall occur and be continuing, the Revolving Credit Commitments shall
terminate and the entire unpaid balance of the principal of and interest on the
Notes outstanding and all other obligations and Indebtedness of each of the
Borrowers to the Banks and the Agent arising hereunder and under the other Loan
Documents shall immediately become due and payable upon written notice to that
effect given to the Borrowers by the Agent (except that in the case of the
occurrence of any Event of Default described in Section 8.6 no such notice shall
be required), without presentment or demand for payment, notice of non-payment,
protest or further notice or demand of any kind, all of which are expressly
waived by each Borrower:
SECTION 8.1 PAYMENTS.
Failure by any Borrower to make any payment or
mandatory repayment of principal or interest upon any Note or to make any
payment of any Fee when due; or
SECTION 8.2 CERTAIN COVENANTS.
Failure by any Borrower to perform or observe any
of the agreements of a Borrower contained in Section 6.9 or Article 7 hereof;
or
SECTION 8.3 OTHER COVENANTS.
Failure by any Borrower to perform or observe any
other term, condition or covenant of this Agreement or of any of the other Loan
Documents to which it is a party, which shall remain unremedied for a period of
thirty (30) days after notice thereof shall have been given to such Borrower by
the Agent; or
SECTION 8.4 OTHER DEFAULTS.
(a) Failure by any Borrower to perform or observe any
term, condition or covenant of any bond, note, debenture, loan agreement,
indenture, guaranty, trust agreement, mortgage or similar instrument to which it
is a party or by which it is bound, or by which any of its properties or assets
may be affected (a "DEBT INSTRUMENT"), so that, as a result of any such failure
to perform, the Indebtedness included therein or secured or covered thereby may
be declared due and payable prior to the date on which such Indebtedness would
otherwise become due and payable; or
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(b) Any event or condition referred to in any Debt
Instrument shall occur or fail to occur, so that, as a result thereof, the
Indebtedness included therein or secured or covered thereby may be declared due
and payable prior to the date on which such Indebtedness would otherwise become
due and payable; or
(c) Failure to pay any Indebtedness for borrowed
money due at final maturity or pursuant to demand under any Debt Instrument;
PROVIDED, HOWEVER, that the provisions of this Section 8.4 shall not be
applicable to any Debt Instrument that on the date this Section 8.4 would
otherwise be applicable thereto, relates to or evidences Indebtedness in a
principal amount of less than $1,500,000; or
SECTION 8.5 REPRESENTATIONS AND WARRANTIES.
Any representation or warranty made in writing to the
Banks or the Agent in any of the Loan Documents or in connection with the
making of the Loans, or any certificate, statement or report made or delivered
in compliance with this Agreement, shall have been false or misleading in any
material respect when made or delivered; or
SECTION 8.6 BANKRUPTCY.
(a) Any Borrower shall make an assignment for the
benefit of creditors, file a petition in bankruptcy, be adjudicated insolvent,
petition or apply to any tribunal for the appointment of a receiver, custodian,
or any trustee for it or a substantial part of its assets, or shall commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect, or any Borrower shall take any corporate action to
authorize any of the foregoing actions; or there shall have been filed any such
petition or application, or any such proceeding shall have been commenced
against it, that remains undismissed for a period of sixty (60) days or more; or
any order for relief shall be entered in any such proceeding; or any Borrower by
any act or omission shall indicate its consent to, approval of or acquiescence
in any such petition, application or proceeding or the appointment of a
custodian, receiver or any trustee for it or any substantial part of its
properties, or shall suffer any custodianship, receivership or trusteeship to
continue undischarged for a period of thirty (30) days or more; or
(b) Any Borrower shall generally not pay its debts as
such debts become due; or
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(c) Any Borrower shall have concealed, removed, or
permitted to be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them or made or suffered a
transfer of any of its property that may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or shall have made any transfer of its
property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or shall have suffered or permitted,
while insolvent, any creditor to obtain a Lien upon any of its property through
legal proceedings or distraint that is not vacated within thirty (30) days from
the date thereof; or
SECTION 8.7 JUDGMENTS.
Any judgment against any Borrower or any attachment,
levy or execution against any of its properties for any amount in excess of One
Million Five Hundred Thousand ($1,500,000) Dollars shall remain unpaid, unstayed
on appeal, undischarged, unbonded or undismissed for a period of thirty (30)
days or more; or
SECTION 8.8 ERISA.
(a) The termination of any Plan or the institution
by the PBGC of proceedings for the involuntary termination of any Plan, in
either case, by reason of, or that results or could result in, a "material
accumulated funding deficiency" under Section 412 of the Code; or
(b) Failure by any Borrower to make required
contributions, in accordance with the applicable provisions of ERISA, to each of
the Plans hereafter established or assumed by it; or
SECTION 8.9 MATERIAL ADVERSE EFFECT.
There shall occur a Material Adverse Effect; or
SECTION 8.10 OWNERSHIP.
(i) Any Person, or a group of related Persons, shall
acquire (a) beneficial ownership in excess of 25% of the outstanding stock of
HCRI or other voting interest having ordinary voting powers to elect a majority
of the directors, managers or trustees of HCRI (irrespective of whether at such
time stock of any other class or classes shall have or might have voting power
by reason of the happening of any contingency), or (b) all or substantially all
of the Investments of HCRI, or (ii) a majority of the Board of Directors of
HCRI, at any time, shall be composed of Persons other than (a) Persons who were
members of the Board of Directors on the date of this Agreement, or (b) Persons
who subsequently become members of the Board of Directors and who either (x) are
appointed or recommended for election with
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the affirmative vote of a majority of the directors in office as of the date of
this Agreement, or (y) are appointed or recommended for election with the
affirmative vote of a majority of the Board of Directors of HCRI then in office;
or
SECTION 8.11 REIT STATUS, ETC.
HCRI shall at any time fail to maintain its REIT
Status, or HCRI or any Subsidiary shall lose, through suspension, termination,
impoundment, revocation, failure to renew or otherwise, any material license or
permit; or
SECTION 8.12 MANAGEMENT.
George L. Chapman shall cease for any reason
whatsoever, including, without limitation, death or disability (as such
disability shall be determined in the reasonable judgment of the Agent) to be
and continuously perform the duties of an executive officer of HCRI and to be a
member of its Board of Directors or, if such cessation shall occur as a result
of the death or such disability, no successor satisfactory to the Agent, in its
sole discretion, shall have become and shall have commenced to perform the
duties of such executive officer of HCRI and serve as a member of HCRI's Board
of Directors within thirty (30) days after such cessation; provided, however,
that if any satisfactory successor shall have been so elected and shall have
commenced performance of such duties within such period, the name of such
successor or successors shall be deemed to have been inserted in place of George
L. Chapman in this Section 8.12; or
SECTION 8.13 ENVIRONMENTAL.
Any of the Borrowers or any of their respective
Facilities shall become subject to one or more Liens for costs or damages in
excess of One Million ($1,000,000) Dollars individually or in the aggregate
under any Environmental Laws and Regulations, such Liens shall remain in place
for thirty (30) days after the creation thereof and such Liens are reasonably
likely to cause a Material Adverse Effect; or
SECTION 8.14 DEFAULT BY OPERATOR.
Thirty (30) days after the acceleration by any
Borrower of the obligations of an Operator as a result of any default in the
payment of amounts which are due and owing under any lease, note, mortgage or
related security documents in connection with any Facility of such Operator
(such Facility, herein referred to as the "DEFAULTED FACILITY"), in the event
the sum of Lease Rental Expense and/or Mortgage Expense arising from (i) the
Defaulted Facility, and (ii) all Pooled Facilities, if any, of which the
Defaulted Facility is a part, which have a Fixed Charge Coverage of less than
1.0 to 1.0, account for 12.5% or more of the aggregate amount of all Lease
Rental Expense and/or Mortgage Expense owing to the Borrowers from all Operators
during the immediately preceding four (4) calendar quarters.
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ARTICLE 9. THE AGENT.
SECTION 9.1 APPOINTMENT, POWERS AND IMMUNITIES.
Each Bank hereby irrevocably appoints and authorizes
the Agent to act as its agent hereunder and the other Loan Documents with such
powers as are specifically delegated to the Agent by the terms of this Agreement
and the other Loan Documents together with such other powers as are reasonably
incidental thereto. The Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the other Loan Documents and
shall not be a trustee for any Bank. The Agent shall not be responsible to the
Banks for any recitals, statements, representations or warranties contained in
this Agreement or the other Loan Documents in any certificate or other document
referred to or provided for in, or received by any of them under, this Agreement
or the other Loan Documents, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or any other document referred to or provided for herein or therein or
for the collectibility of the Loans or for any failure by any Borrower to
perform any of its obligations hereunder or under the other Loan Documents. The
Agent may employ agents and attorneys-in-fact and shall not be answerable,
except as to money or securities received by it or its authorized agents, for
the negligence or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or the other Loan Documents
or in connection herewith or therewith, except for its or their own gross
negligence or willful misconduct.
SECTION 9.2 RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper person or persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. As to any matters not expressly provided
for by this Agreement or the other Loan Documents, the Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder or the
other Loan Documents in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks and any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
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SECTION 9.3 EVENTS OF DEFAULT.
The Agent shall not be deemed to have knowledge of
the occurrence of a Default (other than the non-payment of principal of or
interest on Loans) unless the Agent has received notice from a Bank or the
Borrower specifying such Default and stating that such notice is a "Notice of
Default". In the event that the Agent receives such a notice of the occurrence
of a Default, the Agent shall give notice thereof to the Banks (and shall give
each Bank notice of each such non-payment). The Agent shall (subject to Section
9.7 hereof) take such action with respect to such Default as shall be directed
by the Required Banks.
SECTION 9.4 RIGHTS AS A BANK.
With respect to its Revolving Credit Commitment and
the Loans made by it, the Agent in its capacity as a Bank hereunder shall have
the same rights and powers hereunder as any other Bank and may exercise the same
as though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with each Borrower or its Affiliates,
as if it were not acting as the Agent, and the Agent may accept fees and other
consideration from each Borrower or its Affiliates, for services in connection
with this Agreement or any of the other Loan Documents or otherwise without
having to account for the same to the Banks.
SECTION 9.5 INDEMNIFICATION.
The Banks shall indemnify the Agent (to the extent
not reimbursed by each Borrower under Sections 10.1 and 10.2 hereof), ratably in
accordance with the aggregate principal amount of the Loans made by the Banks
(or, if no Loans are at the time outstanding, ratably in accordance with their
respective Revolving Credit Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement or any of the other Loan Documents or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated by or referred to herein or therein or the transactions
contemplated hereby and thereby (including, without limitation, the costs and
expenses that each Borrower is obligated to pay under Sections 10.1 and 10.2
hereof, but excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of
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its agency duties hereunder) or the enforcement of any of the terms hereof or of
any such other documents, PROVIDED THAT no Bank shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
SECTION 9.6 NON-RELIANCE ON AGENT AND OTHER
BANKS.
Each Bank agrees that it has, independently and
without reliance on the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of each
Borrower and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or the other Loan Documents. The Agent shall not be
required to keep itself informed as to the performance or observance by each
Borrower of this Agreement or the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the properties or
books of each Borrower. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent
hereunder or the other Loan Documents, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of each Borrower, that
may come into the possession of the Agent or any of its Affiliates.
SECTION 9.7 FAILURE TO ACT.
Except for action expressly required of the Agent
hereunder, the Agent shall in all cases be fully justified in failing or
refusing to act hereunder or thereunder unless it shall be indemnified to its
satisfaction by the Banks against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action.
SECTION 9.8 RESIGNATION OR REMOVAL OF AGENT.
Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at any time by giving
not less than 10 days' prior written notice thereof to the Banks and each
Borrower and the Agent may be removed at any time with or without cause by the
Required Banks. Upon any such resignation or removal, 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 retiring Agent's giving of notice of resignation or the
Required Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, after consultation with the Borrowers, appoint a successor
Agent which shall be a bank with a
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combined capital and surplus of at least $100,000,000. 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 retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 9
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
SECTION 9.9 SHARING OF PAYMENTS.
(a) Prior to any acceleration by the Agent and
the Banks of the Obligations:
(i) in the event that any Bank shall obtain
payment in respect of a Note, or interest thereon, whether voluntarily or
involuntarily, and whether through the exercise of a right of banker's lien,
set-off or counterclaim against each Borrower or otherwise, in a greater
proportion than any such payment obtained by any other Bank in respect of the
corresponding Note held by it, then the Bank so receiving such greater
proportionate payment shall purchase for cash from the other Bank or Banks such
portion of each such other Bank's or Banks' Loan as shall be necessary to cause
such Bank receiving the proportionate overpayment to share the excess payment
with each Bank; and
(ii) in the event that any Bank shall obtain
payment in respect of any Interest Rate Contract to which such Bank is a party,
whether voluntarily or involuntarily, and whether through the exercise of a
right of banker's lien, set-off or counterclaim against each Borrower or
otherwise, such Bank shall be permitted to retain the full amount of such
payment and shall not be required to share such payment with any other Bank.
(b) Upon or following any acceleration by the Agent
and the Banks of the Obligations, in the event that any Bank shall obtain
payment in respect of a Note, or interest or Fees thereon, or in respect of an
Interest Rate Contract to which such Bank is a party, whether voluntarily or
involuntarily, and whether through the exercise of a right of banker's lien,
set-off or counterclaim against each Borrower or otherwise, in a greater
proportion than any such payment obtained by any other Bank in respect of the
aggregate amount of the corresponding Note held by such Bank and any Interest
Rate Contract to which such Bank is a party, then the Bank so receiving such
greater proportionate payment shall purchase for cash from the other Bank or
Banks such portion of each such other Bank's or Banks' Loan as shall be
necessary to cause such Bank receiving the proportionate overpayment to share
the excess payment with each Bank. For the purposes of this subsection 9.9(b),
payments on Notes received by each Bank shall be in the same proportion as the
proportion of:
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(A) the sum of: (x) the Obligations owing to such Bank in respect of the Note
held by such Bank, plus (y) the Obligations owing to such Bank in respect of
Interest Rate Contracts to which such Bank is party, if any, to (B) the sum of:
(x) the Obligations owing to all of the Banks in respect of all of the Notes,
plus (y) the Obligations owing to all of the Banks in respect of all Interest
Rate Contracts to which any Bank is a party; PROVIDED, HOWEVER, that, with
respect to subsections 9.9(a)(i) and (b) above, if all or any portion of such
excess payment or benefits is thereafter recovered from the Bank that received
the proportionate overpayment, such purchase of Loans or payment of benefits, as
the case may be, shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.
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ARTICLE 10. MISCELLANEOUS PROVISIONS.
SECTION 10.1 FEES AND EXPENSES; INDEMNITY.
(a) The Borrowers will promptly pay all costs of the
Agent in preparing the Loan Documents and all costs and expenses of the issue of
the Notes and of each Borrower's performance of and compliance with all
agreements and conditions contained herein on its part to be performed or
complied with and the reasonable fees and expenses and disbursements of counsel
to the Agent in connection with the preparation, execution and delivery,
administration, interpretation and enforcement of this Agreement, the other Loan
Documents and all other agreements, instruments and documents relating to this
transaction, the consummation of the transactions contemplated by all such
documents, the preservation of all rights of the Banks and the Agent, the
negotiation, preparation, execution and delivery of any amendment, modification
or supplement of or to, or any consent or waiver under, any such document (or
any such instrument that is proposed but not executed and delivered) and with
any claim or action threatened, made or brought against any of the Banks or the
Agent arising out of or relating to any extent to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby (other than a claim
or action resulting from the gross negligence, willful misconduct, or
intentional violation of law by the Agent and or the Banks).
(b) In addition, the Borrowers will promptly pay all
costs and expenses (including, without limitation, reasonable fees and
disbursements of counsel) suffered or incurred by each Bank in connection with
its enforcement of the payment of the Notes held by it or any other sum due to
it under this Agreement or any of the other Loan Documents or any of its other
rights hereunder or thereunder. In addition to the foregoing, the Borrowers
shall indemnify each Bank and the Agent and each of their respective directors,
officers, employees, attorneys, agents and Affiliates against, and hold each of
them harmless from, any loss, liabilities, damages, claims, costs and expenses
(including reasonable attorneys' fees and disbursements) suffered or incurred by
any of them arising out of, resulting from or in any manner connected with, the
execution, delivery and performance of each of the Loan Documents, the Loans and
any and all transactions related to or consummated in connection with the Loans
(other than as a result of the gross negligence, willful misconduct or
intentional violation of law by the party seeking indemnification), including,
without limitation, losses, liabilities, damages, claims, costs and expenses
suffered or incurred by any Bank or the Agent or any of their respective
directors, officers, employees, attorneys, agents or Affiliates arising out of
or related to any Environmental Liability or
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Environmental Proceeding, or in investigating, preparing for, defending against,
or providing evidence, producing documents or taking any other action in respect
of any commenced or threatened litigation, administrative proceeding or
investigation under any federal securities law or any other statute of any
jurisdiction, or any regulation, or at common law or otherwise against the
Agent, the Banks or any of their officers, directors, affiliates, agents or
Affiliates, that is alleged to arise out of or is based upon: (i) any untrue
statement or alleged untrue statement of any material fact of any Borrower and
its affiliates in any document or schedule filed with the Securities and
Exchange Commission or any other governmental body; (ii) any omission or alleged
omission to state any material fact required to be stated in such document or
schedule, or necessary to make the statements made therein, in light of the
circumstances under which made, not misleading; (iii) any acts, practices or
omission or alleged acts, practices or omissions of any Borrower or its agents
related to the making of any acquisition, purchase of shares or assets pursuant
thereto, financing of such purchases or the consummation of any other
transactions contemplated by any such acquisitions that are alleged to be in
violation of any federal securities law or of any other statute, regulation or
other law of any jurisdiction applicable to the making of any such acquisition,
the purchase of shares or assets pursuant thereto, the financing of such
purchases or the consummation of the other transactions contemplated by any such
acquisition; or (iv) any withdrawals, termination or cancellation of any such
proposed acquisition for any reason whatsoever. The indemnity set forth herein
shall be in addition to any other obligations or liabilities of any Borrower to
the Agent and the Banks hereunder, at common law or otherwise. The provisions of
this Section 10.1 shall survive the payment of the Notes and the termination of
this Agreement.
SECTION 10.2 TAXES.
If, under any law in effect on the date of the
closing of any Loan hereunder, or under any retroactive provision of any law
subsequently enacted, it shall be determined that any Federal, state or local
tax is payable in respect of the issuance of any Note, or in connection with the
filing or recording of any assignments, mortgages, financing statements, or
other documents (whether measured by the amount of Indebtedness secured or
otherwise) as contemplated by this Agreement, then each Borrower will pay any
such tax and all interest and penalties, if any, and will indemnify the Banks
and the Agent against and save each of them harmless from any loss or damage
resulting from or arising out of the nonpayment or delay in payment of any such
tax. If any such tax or taxes shall be assessed or levied against any Bank or
any other holder of a Note, such Bank, or such other holder, as the case may be,
may notify each Borrower and make
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immediate payment thereof, together with interest or penalties in connection
therewith, and shall thereupon be entitled to and shall receive immediate
reimbursement therefor from each Borrower. Notwithstanding any other provision
contained in this Agreement, the covenants and agreements of the Borrowers in
this Section 10.2 shall survive payment of the Notes and the termination of this
Agreement.
SECTION 10.3 PAYMENTS.
As set forth in Article 2 hereof, all payments by
each Borrower on account of principal, interest, fees and other charges
(including any indemnities) shall be made to the Agent at the Principal Office
of the Agent, in lawful money of the United States of America in immediately
available funds, by wire transfer or otherwise, not later than 11:00 A.M.
Cleveland, Ohio time on the date such payment is due. Any such payment made on
such date but after such time shall, if the amount paid bears interest, be
deemed to have been made on, and interest shall continue to accrue and be
payable thereon until, the next succeeding Business Day. If any payment of
principal or interest becomes due on a day other than a Business Day, such
payment may be made on the next succeeding Business Day and such extension shall
be included in computing interest in connection with such payment. All payments
hereunder and under the Notes shall be made without set-off or counterclaim and
in such amounts as may be necessary in order that all such payments shall not be
less than the amounts otherwise specified to be paid under this Agreement and
the Notes (after withholding for or on account of: (i) any present or future
taxes, levies, imposts, duties or other similar charges of whatever nature
imposed by any government or any political subdivision or taxing authority
thereof, other than any tax (except those referred to in clause (ii) below) on
or measured by the net income of the Bank to which any such payment is due
pursuant to applicable federal, state and local income tax laws, and (ii)
deduction of amounts equal to the taxes on or measured by the net income of such
Bank payable by such Bank with respect to the amount by which the payments
required to be made under this sentence exceed the amounts otherwise specified
to be paid in this Agreement and the Notes). Upon payment in full of any Note,
the Bank holding such Note shall mark the Note "Paid" and return it to the
Borrowers.
SECTION 10.4 SURVIVAL OF AGREEMENTS AND
REPRESENTATIONS; CONSTRUCTION.
All agreements, representations and warranties made
herein shall survive the delivery of this Agreement and the Notes. The headings
used in this Agreement and the table of contents are for convenience only and
shall not be deemed to constitute a part hereof. All uses herein of the
masculine
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gender or of singular or plural terms shall be deemed to include uses of the
feminine or neuter gender, or plural or singular terms, as the context may
require.
SECTION 10.5 LIEN ON AND SET-OFF OF DEPOSITS.
As security for the due payment and performance of
all the Obligations, each Borrower hereby grants to Agent for the ratable
benefit of the Banks a Lien on any and all deposits or other sums at any time
credited by or due from the Agent or any Bank to the Borrower, whether in
regular or special depository accounts or otherwise, and any and all monies,
securities and other property of the Borrower, and the proceeds thereof, now or
hereafter held or received by or in transit to any Bank or the Agent from or for
such Borrower, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, and any such deposits, sums, monies, securities and
other property, may at any time after the occurrence and during the continuance
of any Event of Default be set-off, appropriated and applied by any Bank or the
Agent against any of the Obligations, whether or not any of such Obligations is
then due or is secured by any collateral.
SECTION 10.6 MODIFICATIONS, CONSENTS AND
WAIVERS; ENTIRE AGREEMENT.
No modification, amendment or waiver of or with
respect to any provision of this Agreement, any Notes, or any of the other Loan
Documents and all other agreements, instruments and documents delivered pursuant
hereto or thereto, nor consent to any departure by any Borrower from any of the
terms or conditions thereof, shall in any event be effective unless it shall be
in writing and signed by the Agent and each Bank except that: (i) any
modification or amendment of, or waiver or consent with respect to, Article 4
shall be required to be signed only by the Agent and the Required Banks
(PROVIDED, HOWEVER, that the consummation of a Loan by a Bank shall be deemed,
with respect to such Loan only, to have the effect of the execution by such Bank
of a waiver of, or consent to a departure from, any term or provision of Article
4 that has not been satisfied as of the date of the consummation of such Loan);
and (ii) any modification or amendment of, or waiver or consent with respect to,
Articles 1 (other than the definition of "Required Banks" or any other defined
term which is used in the application of any of the provisions of Article 2), 5,
6, 7, 8 (other than Section 8.1 hereof) and 10 (other than this Section 10.6)
may be signed only by the Agent and the Required Banks. Any such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No consent to or demand on any Borrower in any case shall, of
itself, entitle it to any other or further
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notice or demand in similar or other circumstances. This Agreement and the other
Loan Documents embody the entire agreement and understanding among the Banks,
the Agent and the Borrowers and supersede all prior agreements and
understandings relating to the subject matter hereof.
SECTION 10.7 REMEDIES CUMULATIVE; COUNTERCLAIMS.
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 it 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 or
the holder of any Note to exercise, and no delay in exercising, any right shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right preclude any other or future exercise thereof or the exercise of any other
right. The due payment and performance of the Obligations shall be without
regard to any counterclaim, right of offset or any other claim whatsoever that
any Borrower may have against any Bank or the Agent and without regard to any
other obligation of any nature whatsoever that any Bank or the Agent may have to
any Borrower, and no such counterclaim or offset shall be asserted by any
Borrower (unless such counterclaim or offset would, under applicable law, be
permanently and irrevocably lost if not brought in such action) in any action,
suit or proceeding instituted by any Bank or the Agent for payment or
performance of the Obligations.
SECTION 10.8 FURTHER ASSURANCES.
At any time and from time to time, upon the request
of the Agent, each Borrower shall execute, deliver and acknowledge or cause to
be executed, delivered and acknowledged, such further documents and instruments
and do such other acts and things as the Agent may reasonably request in order
to fully effect the purposes of this Agreement, the other Loan Documents and any
other agreements, instruments and documents delivered pursuant hereto or in
connection with the Loans.
SECTION 10.9 NOTICES.
All notices, requests, reports and other
communications pursuant to this Agreement shall be in writing, either by letter
(delivered by hand or commercial messenger service or sent by certified mail,
return receipt requested, except for routine reports delivered in compliance
with Article 5 hereof which may be sent by ordinary first-class mail) or
telecopy, addressed as follows:
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(a) If to the Borrowers:
Health Care REIT, Inc.
One SeaGate/Suite 1500
Toledo, Ohio 43603-1475
Attention: Mr. George L. Chapman
Chairman of the Board,
Chief Executive Officer and
President
Telecopier No: (419) 247-2826
with a copy to:
Shumaker, Loop & Kendrick, LLP
North Courthouse Square
1000 Jackson
Toledo, Ohio 43624-1573
Attention: Mary Ellen Pisanelli, Esq.
Telecopier No.: (419) 241-6894
(b) If to any Bank:
To its address set forth below its
name on the signature pages hereof,
with a copy to the Agent; and
(c) If to the Agent:
KeyBank National Association, as Agent
127 Public Square
Cleveland, Ohio 44114-1306
Attention: Mr. Joseph T. Resor, III
Senior Vice President
Telecopier No.: (216) 689-5970
with a copy (other than in the case of
Borrowing Notices and reports and other
documents delivered in compliance with
Article 5 hereof) to:
Winston & Strawn
200 Park Avenue
New York, New York 10166
Attention: Richard S. Talesnick, Esq.
Telecopier No.: (212) 294-4700
Any notice, request, demand or other communication hereunder shall be deemed to
have been given on: (x) the day on which it is telecopied to such party at its
telecopier number specified above (provided such notice shall be effective only
if followed
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by one of the other methods of delivery set forth herein) or delivered by
receipted hand or such commercial messenger service to such party at its address
specified above, or (y) on the third Business Day after the day deposited in the
mail, postage prepaid, if sent by mail. Any party hereto may change the Person,
address or telecopier number to whom or which notices are to be given hereunder,
by notice duly given hereunder; PROVIDED, HOWEVER, that any such notice shall be
deemed to have been given hereunder only when actually received by the party to
which it is addressed.
SECTION 10.10 COUNTERPARTS.
This Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
SECTION 10.11 SEVERABILITY.
The provisions of this Agreement are severable,
and if any clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision in this Agreement in any
jurisdiction. Each of the covenants, agreements and conditions contained in this
Agreement is independent and compliance by the Borrower with any of them shall
not excuse non-compliance by the Borrower with any other. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or condition exists.
SECTION 10.12 BINDING EFFECT; NO ASSIGNMENT
OR DELEGATION BY BORROWERS.
This Agreement shall be binding upon and inure to
the benefit of each of the Borrowers and their respective successors and to the
benefit of the Banks and the Agent and their respective successors and assigns.
The rights and obligations of each Borrower under this Agreement shall not be
assigned or delegated without the prior written consent of the Agent and the
Required Banks, and any purported assignment or delegation without such consent
shall be void.
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SECTION 10.13 ASSIGNMENTS AND PARTICIPATIONS BY
BANKS.
(a) Each Bank may assign to one or more banks or
other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Revolving
Credit Commitment, the Loans owing to it, and the Note held by it); PROVIDED,
HOWEVER, that: (i) the Borrowers and the Agent must give prior written consent
to such assignment (unless such assignment is to an Affiliate of such Bank),
which consent shall not be unreasonably withheld, (ii) the parties to each such
assignment shall execute and deliver to the Agent an Assignment and Acceptance,
and a processing fee of $3,500.00, (iii) each such assignment shall be of a
constant, and not a varying, percentage of all of the assigning Bank's rights
and obligations under this Agreement, (iv) the amount of the Revolving Credit
Commitment of the assigning Bank being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000 and shall be an integral
multiple of $1,000,000, and (v) each such assignment shall be to an Eligible
Assignee. Upon such execution, delivery and acceptance, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof: (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder, and (y) the
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Bank's rights and obligations under this Agreement, such
Bank shall cease to be a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of each Borrower or the performance or observance by each Borrower of any of
its obligations under this Agreement or any other instrument or document
furnished pursuant
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hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of such financial statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such assigning
Bank or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Bank.
(c) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee representing that it is an
Eligible Assignee, together with any Note subject to such assignment, the Agent
shall: (i) accept such Assignment and Acceptance, and (ii) give prompt notice
thereof to the Borrowers. Within five (5) Business Days after its receipt of
such notice, the Borrowers, at their own expense, shall execute and deliver to
the Agent in exchange for the surrendered Note a new Note to the order of such
Eligible Assignee in an amount equal to the Revolving Credit Commitment assumed
by it pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained a Revolving Credit Commitment hereunder, a new Note to the order of the
assigning Bank in an amount equal to the Revolving Credit Commitment retained by
it hereunder. Such new Note shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.
(d) Each Bank may, without the prior consent of the
Agent, the other Banks or the Borrowers, sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Revolving
Credit Commitment, the Loans owing to it, and the Note held by it); PROVIDED,
HOWEVER, that: (i) such Bank's obligations under this Agreement (including,
without limitation, its Revolving Credit Commitment hereunder) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Bank shall remain the
holder of any such Note for all purposes of this Agreement, and the Borrowers,
the Agent and the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement.
-75-
<PAGE> 81
(e) Any Bank may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 10.13, disclose to the assignee or participant or proposed assignee or
participant, any information relating to any Borrower furnished to such Bank by
or on behalf of such Borrower; PROVIDED THAT, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any confidential information relating to such
Borrower received by it from such Bank.
(f) Anything in this Section 10.13 to the contrary
notwithstanding, any Bank may assign and pledge all or any portion of its Loans
and its Note to any Federal Reserve Bank (and its transferees) as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal Reserve Bank.
No such assignment shall release the assigning Bank from its obligations
hereunder.
SECTION 10.14 DELIVERY OF TAX FORMS.
Each Bank that is not organized under the laws of the
United States or a state thereof shall:
(a) deliver to the Borrowers and Fleet, on or prior
to the date of the execution and delivery of this Agreement or the date on which
it becomes a Bank hereunder, (i) two accurate and duly completed executed copies
of United States IRS Form 1001 or 4224, or successor applicable form, as the
case may be, and (ii) an accurate and complete IRS Form W-8 or W-9, or successor
applicable form, as the case may be;
(b) deliver to the Borrowers and Fleet two further
accurate and complete executed copies of any such form or certification on or
before the date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers; and
(c) obtain such extensions of time for filing and
completing such forms or certifications as may reasonably be requested by the
Borrowers or Fleet;
unless in any such case under clause (b) above an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Bank from duly completing
and delivering any such form with respect to it and such Bank so advises the
Borrower and Fleet. Such Bank shall
-76-
<PAGE> 82
certify (i) in the case of a Form 1001 or 4224 that is provided pursuant to
Section 10.14(a), that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States Federal income taxes; (ii)
in the case of an IRS Form 1001 or 4224 that is provided pursuant to Section
10.14(b), to the extent legally entitled to do so, that it is entitled to
receive payments under this Agreement without, or at a reduced rate of,
deduction or withholding of any United States Federal income taxes; and (iii)
and in the case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax. Each Person not organized under the laws
of the United States or a state thereof that is an assignee hereunder shall,
prior to the effectiveness of the related transfer, be required to provide all
of the forms and statements required pursuant to this Section 10.14.
SECTION 10.15 GOVERNING LAW; CONSENT TO JURIS-
DICTION; WAIVER OF TRIAL BY JURY.
(A) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL
OTHER DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH
AND THEREWITH, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS RULES PERTAINING
TO CONFLICTS OF LAWS.
(B) EACH BORROWER IRREVOCABLY CONSENTS THAT ANY LEGAL
ACTION OR PROCEEDING AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING
TO THIS AGREEMENT, AND EACH OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY COURT OF
THE STATE OF NEW YORK, COUNTY OF NEW YORK, OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH BORROWER, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO THE
NONEXCLUSIVE PERSONAL JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR
PROCEEDING. EACH BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY
COMPLAINT, SUMMONS, NOTICE OR OTHER PROCESS RELATING TO ANY SUCH ACTION OR
PROCEEDING BY DELIVERY THEREOF TO IT BY HAND OR BY MAIL IN THE MANNER PROVIDED
FOR IN SECTION 10.9 HEREOF. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY
ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS OR
ANY SIMILAR BASIS. EACH BORROWER SHALL NOT BE ENTITLED IN ANY SUCH ACTION OR
PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE
OTHER THAN THE STATE OF NEW YORK UNLESS SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY
THE LAWS OF THE STATE OF NEW YORK. NOTHING IN THIS SECTION 10.15 SHALL AFFECT OR
IMPAIR IN ANY MANNER OR TO ANY EXTENT THE RIGHT OF THE AGENT OR ANY BANK TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION OR THE RIGHT, IN CONNECTION WITH ANY LEGAL
ACTION OR PROCEEDING WHATSOEVER, TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
-77-
<PAGE> 83
(C) EACH BORROWER, THE BANKS AND THE AGENT WAIVE
TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION
WITH, OR ARISING OUT OF, THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANY
INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT, OR THE VALIDITY,
INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.
SECTION 10.16 SYNDICATION AGENT.
The parties hereto acknowledge that Fleet Bank, N.A.
has acted as "syndication agent" in connection with the consummation of the
transactions contemplated by this Loan
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date first above written.
HEALTH CARE REIT, INC.
HCRI PENNSYLVANIA PROPERTIES, INC.
HCRI OVERLOOK GREEN, INC.
HCRI TEXAS PROPERTIES, INC.
HCRI TEXAS PROPERTIES, LTD.
BY HEALTH CARE REIT, INC.,
ITS GENERAL PARTNER
BY_______________________________
TITLE
GEORGE L. CHAPMAN, as Chief Executive Officer of all of the
aforementioned corporations, has executed this Loan Agreement and intending that
all entities above named are bound and are to be bound by the one signature as
if he had executed this Loan Agreement separately for each of the above named
entities.
-78-
<PAGE> 84
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$20,000,000 KEYBANK NATIONAL ASSOCIATION,
AS AGENT AND AS A BANK
BY_______________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
KeyBank National Association
127 Public Square, MC:OH-01-27-0605
Cleveland, Ohio 44114
Attention: Ms. Judi Trapp
Address for Notices:
KeyBank National Association
127 Public Square, MC:OH-01-27-0605
Cleveland, Ohio 44114
Attention: Ms. Carolyn Briner
Telecopier: (216) 689-5970
-79-
<PAGE> 85
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$20,000,000 FLEET BANK, N.A.
BY_______________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
Fleet Bank, N.A.
1133 Avenue of the Americas
New York, New York 10036
Attention: Mr. Robert A. Isaksen
Address for Notices:
Fleet Bank, N.A.
1133 Avenue of the Americas
New York, New York 10036
Attention: Mr. Robert A. Isaksen
Telecopier: (212) 703-1724
-80-
<PAGE> 86
REVOLVING CREDIT COMMITMENT:
$15,000,000 HARRIS TRUST AND SAVINGS BANK
BY_______________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
Harris Trust and Savings Bank
111 West Monroe
Chicago, Illinois 60603
Attention: Arlett Hall
Address for Notices:
Harris Trust and Savings Bank
111 West Monroe
Chicago, Illinois 60603
Attention: Arlett Hall
Telecopier: (312) 461-2591
-81-
<PAGE> 87
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$15,000,000 THE SUMITOMO BANK, LIMITED
BY_______________________________
TITLE
BY_______________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
The Sumitomo Bank, Limited
U.S. Commercial Banking Department
233 S. Wacker Drive, 54th Floor
Chicago, Illinois 60606
Attention: Vice President
of Administration
Address for Notices:
The Sumitomo Bank, Limited
U.S. Commercial Banking Department
233 S. Wacker Drive, 54th Floor
Chicago, Illinois 60606
Attention: Vice President
of Administration
Telecopier: (312) 876-1995
with a copy to:
The Sumitomo Bank, Limited
2450 CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222
Attention: Manager
Telecopier: (412) 288-1819
-82-
<PAGE> 88
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$15,000,000 COMERICA BANK
BY_______________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
Comerica Bank
P.O. Box 75000
Detroit, Michigan 48275-3266
Attention: Craig F. Durno
Address for Notices:
Comerica Bank
P.O. Box 75000
Detroit, Michigan 48275-3266
Attention: Craig F. Durno
Telecopier: (313) 222-3420
-83-
<PAGE> 89
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$15,000,000 BHF-BANK, AKTIENGESELLSCHAFT
GRAND CAYMAN BRANCH
BY_______________________________
TITLE
BY_______________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
BHF-Bank, Aktiengesellschaft
590 Madison Avenue
New York, New York 10022-2540
Attention: Ms. Renate Boston
Address for Notices:
BHF-Bank, Aktiengesellschaft
590 Madison Avenue
New York, New York 10022-2540
Attention: Ms. Renate Boston
Telecopier: (212) 756-5536
-84-
<PAGE> 90
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$15,000,000 NATIONSBANK OF TEXAS, N.A.
BY_______________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
NationsBank of Texas, N.A.
901 Main Street
Dallas, Texas 75202
Attention: Barbara Harris
Address for Notices:
NationsBank of Texas, N.A.
901 Main Street
Dallas, Texas 75202
Attention: Barbara Harris
Telecopier: (214) 508-0944
-85-
<PAGE> 91
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$15,000,000 BANK ONE, DAYTON, NATIONAL ASSOCIATION
BY_____________________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
Bank One, Dayton, NA
40 N. Main Street
Dayton, Ohio 45423
Attention: Commercial Loan Operations
Address for Notices:
Bank One, Dayton, NA
Commercial Banking
40 N. Main Street
Dayton, Ohio 45423
Attention: Ms. Karen St. Arnaud
Telecopier: (937) 449-4885
-86-
<PAGE> 92
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$15,000,000 NATIONAL CITY BANK
BY_______________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
National City Bank
1900 East Ninth Street, Loc 3032
Cleveland, Ohio 44114
Attention: Ms. Wendy Pollarine
Address for Notices:
National City Bank
1900 East Ninth Street, Loc 2104
Cleveland, Ohio 44114
Attention: Ms. Lisa Gargas
Telecopier: (216) 575-9396
-87-
<PAGE> 93
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$10,000,000 MANUFACTURERS AND TRADERS TRUST COMPANY
BY_____________________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
M & T Center
One Fountain Plaza, 12th Floor
Buffalo, New York 14203-1495
Attention: Mr. C. Gregory Vogelsang
Address for Notices:
M & T Center
One Fountain Plaza, 12th Floor
Buffalo, New York 14203-1495
Attention: Ms. Patricia Gustina
Telecopier: (716) 848-7318
-88-
<PAGE> 94
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$10,000,000 KREDIETBANK N.V.
BY_______________________________
TITLE
BY_______________________________
TITLE
Lending Office for Base Rate Loans:
Kredietbank N.V., New York Branch
125 West 55th Street
New York, New York 10019
Attention: Lynda Resuma
Lending Office for Base Rate Loans:
Kredietbank N.V., Grand Cayman Branch
125 West 55th Street
New York, New York 10019
Attention: Lynda Resuma
Address for Notices:
Kredietbank N.V.
125 West 55th Street
New York, New York 10019
Attention: John Thierfelder
Telecopier: (212) 541-0793
-89-
<PAGE> 95
REVOLVING CREDIT COMMITMENT:
- ----------------------------
$10,000,000 NBD BANK
BY_______________________________
TITLE
Lending Office for Base Rate Loans
and LIBOR Loans:
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Attention: C. Allen
Address for Notices:
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
Attention: C. Allen
Telecopier: (313) 225-1212
-90-
<PAGE> 96
EXHIBITS AND SCHEDULES
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
EXHIBITS
- --------
1 List of Borrowers
A Form of Note
B Form of Assignment and Acceptance
C Form of Borrowing Base Certificate
D Form of Compliance Certificate
SCHEDULES
- ---------
3.1 States of Incorporation and Qualification, and
Capitalization of Borrowers and Subsidiaries
3.2 Consents, Waivers, Approvals; Violation of Agreements
3.6 Judgments, Actions, Proceedings
3.7 Defaults; Compliance with Laws, Regulations, Agreements
3.8 Burdensome Documents
3.13 Name Changes, Mergers, Acquisitions
3.16 Employee Benefit Plans
5.8 Form of Quarterly Facility Report
7.1 Permitted Indebtedness and Guarantees
7.2 Permitted Security Interests, Liens and Encumbrances
7.11 Permitted Capital Expenditures
<PAGE> 97
EXHIBIT 1
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
LIST OF BORROWERS
-----------------
NAME OF BORROWER STATE OF ORGANIZATION
- ---------------- ---------------------
Health Care REIT, Inc. Delaware
HCRI Pennsylvania Properties, Inc. Pennsylvania
HCRI Overlook Green, Inc. Pennsylvania
HCRI Texas Properties, Inc. Delaware
HCRI Texas Properties, Ltd. Texas
<PAGE> 98
EXHIBIT A
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
FORM OF NOTE
------------
$ Dated: March 28, 1997
- ----------------------
FOR VALUE RECEIVED, each of the undersigned (collectively, the
"BORROWERS"), hereby jointly and severally promises to pay to the order of
_________________________ (the "BANK") on the Revolving Credit Commitment
Termination Date, the principal sum of _____________________ ($________)
Dollars, or such lesser amount as shall be equal to the aggregate unpaid
principal amount of the Loans outstanding on the close of business on the
Revolving Credit Commitment Termination Date made by the Bank to the Borrowers;
and to pay interest on the unpaid principal amount of each Loan from the date
thereof at the rates per annum and for the periods set forth in or established
by the Agreement and calculated as provided therein.
All indebtedness outstanding under this Note shall bear interest
(computed in the same manner as interest on this Note prior to the relevant due
date) at the applicable Post-Default Rate for all periods when an Event of
Default has occurred and is continuing, commencing on the occurrence of such
Event of Default until such Event of Default has been cured or waived as
acknowledged in writing by the Agent, and all of such interest shall be payable
on demand.
Anything herein to the contrary notwithstanding, the obligation of the
Borrowers to make payments of interest shall be subject to the limitation that
payments of interest shall not be required to be made to the Bank to the extent
that the Bank's receipt thereof would not be permissible under the law or laws
applicable to the Bank limiting rates of interest which may be charged or
collected by the Bank, Any such payments of interest which are not made as a
result of the limitation referred to in the preceding sentence shall be made by
the Borrowers to the Bank on the earliest interest payment date or dates on
which the receipt thereof would be permissible under the laws applicable to the
Bank limiting rates of interest which may be charged or collected by the Bank.
Payments of both principal and interest on this Note are to be made to
the office of KeyBank National Association, as Agent, at 127 Public Square,
Cleveland, Ohio 44114-1306 or such other place as the holder hereof shall
designate to the Borrowers in writing, in lawful money of the United States of
America in immediately available funds.
<PAGE> 99
This Note is one of the Notes referred to in, AND is entitled to the
benefits of, the Loan Agreement dated of even date herewith by and among the
Borrowers, the Banks signatory thereto (including the Bank) and the Agent (as
amended, modified or supplemented from time to time, the "Agreement") .
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Agreement.
The Bank is hereby authorized by the Borrowers to record on the
schedule to this Note (or on a supplemental schedule thereto) the amount of each
Loan made by the Bank to the Borrowers and the amount of each payment or
repayment of principal of such Loans received by the Bank, it being understood,
however, that failure to make any such notation shall not affect the rights of
the Bank or the obligations of the Borrowers hereunder in respect of this Note.
The Bank may, at its option, record such matters in its internal records rather
than on such schedule.
Upon the occurrence of any Event of Default, the principal amount and
accrued interest on this Note may be declared due and payable in the manner and
with the effect provided in the Loan Agreement.
The Borrowers shall pay costs and expenses of collection, including,
without limitation, attorneys' fees and disbursements in the event that any
action, suit or proceeding is brought by the holder hereof to collect this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS RULES
PERTAINING TO CONFLICTS OF LAWS.
HEALTH CARE REIT, INC.
HCRI PENNSYLVANIA PROPERTIES, INC.
HCRI OVERLOOK GREEN, INC.
HCRI TEXAS PROPERTIES, INC.
HCRI TEXAS PROPERTIES, LTD.
By Health Care REIT, Inc.,
Its General Partner
By
-------------------------------
Title
GEORGE L. CHAPMAN, as Chief Executive Officer of all of the
aforementioned corporations, has executed this Note intending that all entities
above named are bound and are to be bound by the one signature as if he had
executed this Note separately for each of the above named entities.
-2-
<PAGE> 100
Schedule A
----------
- --------------------------------------------------------------------------------
PRINCIPAL PAYMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Note dated March __, 1997
payable to the order of
[Bank]
-----------------------
Interest Period
(if other than a Amount Unpaid
Principal Base Rate Loan) of Principal Principal Notation
Date Amount of Loan and Interest Rate Repaid Balance Made By
<S> <C> <C> <C> <C> <C>
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
- ---- -------------- ----------------- ------------ --------- ----------
</TABLE>
<PAGE> 101
EXHIBIT B
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
FORM OF ASSIGNMENT AND ACCEPTANCE
---------------------------------
Dated
---------------
Reference is hereby made to the Loan Agreement dated March 28,
1997 (the "Loan Agreement") by and among Health Care REIT, Inc. and its
Subsidiaries (collectively, the "Borrowers"), the Banks signatory thereto
(collectively, the "Banks") and KeyBank National Association in its capacity as
agent for the Banks (in such capacity, the "Agent") . Capitalized terms used
herein that are defined in the Loan Agreement that are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Loan
Agreement.
__________________________, a _______________________ (the
"Assignor") and ____________________________________________________, a
___________________, (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee
without recourse, representation or warranty of any kind except as expressly
stated herein, and the Assignee hereby purchases and assumes from the Assignor,
a % interest in and to all of the Assignor's rights and obligations under
the Loan Agreement as of the Effective Date (as defined below) (including,
without limitation, such percentage interest in the Assignor's Revolving Credit
Commitment as in effect on the Effective Date, and the Loans owing to the
Assignor on the Effective Date, and the Note(s) held by the Assignor).
2. The Assignor: (i) represents and warrants that as of the
date hereof its Revolving Commitment (without giving effect to assignments
thereof that have not yet become effective) is $ and the aggregate
outstanding principal amount of Loans owing to it (without giving effect to
assignments thereof that have not yet become effective) is $ ; (ii)
represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder, and that such interest is free and
clear of any adverse claim; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Agreement or any other
instrument or document furnished pursuant thereto; and (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrowers or any other Loan Party or the performance
or observance by the Borrowers or any other Loan Party of any of their
respective obligations under
<PAGE> 102
the Loan Agreement or any other instrument or document furnished pursuant
thereto; and (v) attaches the Note(s) referred to in paragraph 1 above and
requests that the Agent exchange such Note(s) for new Note(s) as follows: a
Note dated the Effective Date (as such term is defined below) in the principal
amount of $ payable to the order of the Assignee and a Note dated the
Effective Date in the principal amount of $ payable to the order of the
Assignor.
3. The Assignee: (i) confirms that it has received a copy of
the Loan Agreement, together with copies of such financial statements and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (ii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Agreement; (iii) confirms that it is
an Eligible Assignee; (iv) appoints and authorizes the Agent to take such action
as its agent on its behalf and to exercise such powers under the Loan Agreement
as are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Agreement
are required to be performed by it as a Bank; and (vi) specifies as its
addresses for Base Rate Loans and LIBOR Loans (and address for notices) the
offices set forth beneath its name on the signature pages hereof.
4. The effective date for this Assignment and Acceptance
shall be (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for acceptance by
the Agent, together with a processing fee of $3,500.
5. Upon such acceptance, as of the Effective Date:
(i) the Assignee shall be a party to the Loan Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Bank thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Loan Agreement.
6. Upon such acceptance, from and after the Effective Date,
the Agent shall make all payments under the Loan Agreement and the Note(s) in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect thereto) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Loan Agreement and the Note(s) for periods prior to the
Effective Date directly between themselves.
-2-
<PAGE> 103
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
[NAME OF ASSIGNOR]
By
------------------------------------
Title
[NAME OF ASSIGNEE]
By
-------------------------------------
Title
Lending Office for Base Rate Loans:
Lending Office for LIBOR Loans:
Attention:
Address for Notices:
Attention:
Telephone No.:
Telecopier No.:
Accepted this ___ day
of
----------------, -----
KEYBANK NATIONAL ASSOCIATION, as Agent
By
- --------------------------------------
Title
-3-
<PAGE> 104
EXHIBIT C
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
FORM OF BORROWING BASE CERTIFICATE
----------------------------------
Eligible Investments as of most recent quarter ended:
Unencumbered Real Estate
--------------
Mortgages
--------------
Total Eligible Investments as of most recent
quarter ended: ==============
Additions of Eligible investments Acquired/To Be Acquired
with this Borrowing
Request After The End of the Most Recent Quarter Ended
--------------
Deductions of Eligible Assets Sold
--------------
After The End of the Most Recent Quarter Ended
==============
X 66 2/3%
TOTAL ELIGIBLE INVESTMENTS
--------------------- --------------
Advance Rate
Available Collateral at
------------------- --------------
PLUS:
CASH as of
------------- --------------
LESS:
Unsecured Debt as of
---------------------- --------------
Current Maturities of Secured indebtedness
--------------
Funded Indebtedness as of
----------------- --------------
(per clause (III) of "Borrowing Base", definition) --------------
TOTAL BORROWING BASE AT 0
-------------------- --------------
Outstanding Under Loan Agreement --------------
Availability as of 0
------------------ ==============
<PAGE> 105
EXHIBIT D
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
FORM OF COMPLIANCE CERTIFICATE
------------------------------
Section 6.9 (Financial Covenants): Health Care REIT, Inc. Loan Agreement
Compliance Certificate: Quarter Ended (date)
a) Maximum Funded Indebtedness to Tangible Net Worth of Not Greater Than
1.10:1.00:
As of (date) in thousands
Funded Indebtedness $
================
Shareholders' Equity $
----------------
less: Goodwill and Noncompete Agreements
----------------
Unamortized Deferred Costs
----------------
Treasury Stock
----------------
Tangible Net Worth
----------------
Ratio COMPLIANCE
----------
********************************************************************************
b) Minimum Tangible Net Worth of Not Less Than $300,000,000 plus 100% of Net
Issuance Proceeds:
As of: (date) in thousands
Tangible Net Worth $
----------------
plus: Net Equity Proceeds (excluding DRIP)
----------------
Total Tangible Net Worth
================
COMPLIANCE
----------
********************************************************************************
c) Minimum EBITDA/Interest Expense of Not Less than 200% (rolling four
quarters basis):
HCRI:
Last Four Quarters EBITDA:
March 31, 1997 $
------------------
December, 1996 $
------------------
September, 1996 $
------------------
June, 1996 $
------------------
Rolling Four Quarter EBITDA $
===============
Last Four Quarter Interest Expense on All Indebtedness:
March 31, 1997 $
------------------
December, 1996 $
------------------
September, 1996 $
------------------
June, 1996 $
------------------
Rolling Four Quarter Interest $
===============
Ratio (%) COMPLIANCE
------- ----------
********************************************************************************
d) Minimum HCRI's Fixed Charge Coverage of Not Less Than 1.05:1.00 (rolling
four quarters)
HCRI:
Rolling Four Quarter EBITDA (Above) $
---------------
Rolling Four Quarter Interest (Above) $
---------------
Cash Dividend Paid for Quarter Ended:
March 31, 1997 $
------------------
December, 1996 $
------------------
September, 1996 $
------------------
June, 1996 $
------------------
Rolling Four Quarter Cash Dividends Paid $
---------------
Balloon Payments $
---------------
Sub-Total $
---------------
Ratio COMPLIANCE
----------
********************************************************************************
<PAGE> 106
SCHEDULE 3.1
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
STATES OF INCORPORATION AND QUALIFICATION,
AND CAPITALIZATION OF BORROWERS
-------------------------------
HEALTH CARE REIT, INC.
- ----------------------
(i) State of Incorporation:
Delaware
(ii) Capitalization:
$448,847,129.00 (12/31/96)
(iii) Business:
Investments in health care facilities
(iv) States of Qualification:
Alabama, Arizona, Colorado, Connecticut, Florida,
Illinois, Indiana, Kentucky, Massachusetts, Missouri,
Oklahoma, New Mexico, North Carolina, Ohio,
Pennsylvania, Texas, Virginia and West Virginia
(v) Subsidiaries:
HCRI Pennsylvania Properties, Inc.
HCRI Overlook Green, Inc.
HCRI Texas Properties, Inc.
HCRI Texas Properties, Ltd.
HCRI PENNSYLVANIA PROPERTIES, INC.
- ----------------------------------
(i) State of Incorporation:
Pennsylvania
(ii) Capitalization:
$1,000.00 (initial)
(iii) Business:
Investments in health care facilities
(iv) States of Qualification:
None
(v) Subsidiaries:
None
<PAGE> 107
HCRI OVERLOOK GREEN, INC.
- -------------------------
(i) State of Incorporation:
Pennsylvania
(ii) Capitalization:
$1,000.00 (initial)
(iii) Business:
Investments in health care facilities
(iv) States of Qualification:
None
(v) Subsidiaries:
None
HCRI TEXAS PROPERTIES, INC.
- ---------------------------
(i) State of Incorporation:
Delaware
(ii) Capitalization:
$1,000.00 (initial)
(iii) Business:
Investments in health care facilities
(iv) States of Qualification:
None
(v) Subsidiaries:
None
HCRI TEXAS PROPERTIES, LTD.
- ---------------------------
(i) State of Incorporation:
Texas
(ii) Capitalization:
$1,000.00 (initial)
(iii) Business:
Investments in health care facilities
(iv) States of Qualification:
None
(v) Subsidiaries:
None
<PAGE> 108
SCHEDULE 3.2
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
CONSENTS, WAIVERS, APPROVALS;
VIOLATION OF AGREEMENTS
-----------------------
None
<PAGE> 109
SCHEDULE 3.6
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
JUDGMENTS, ACTIONS, PROCEEDINGS
-------------------------------
See Attached
<PAGE> 110
On March 14, 1995, the Company commenced an action in the
Circuit Court for Pinellas County, Florida, against Psychiatric Hospitals of
America, Inc. ("PHA") and PHA's wholly owned subsidiary, Psychiatric Hospitals
of Florida, INC. ("PHFI") to, INTER ALIA, collect on a loan made to PHA (the
"PHA Note") and a promissory note in the amount of $10,000,000 made in favor of
PHA (the "PHFI Note") and to foreclose the first mortgage on a 200-bed
psychiatric hospital known as "Horizon Hospital" owned and operated by PHFI (the
"PHFI Mortgage"). The foregoing action is styled: HEALTH CARE REIT, INC.'S V.
PSYCHIATRIC HOSPITALS OF AMERICA, INC. ("PHA"), ET AL., and is numbered
95-1535-CI, Division 21, on the docket of said court.
On March 14, 1995, the Company also commenced an action in the
Circuit Court for Dade County, Florida, against New Dodge Management Company
("New Dodge") to, INTER ALIA, to collect on a promissory note in the amount of
$3,700,000 (the "New Dodge Note") and to foreclose on a second mortgage on a
94-bed psychiatric hospital known as "Harbor View Hospital" owned and operated
by New Dodge (the "New Dodge Mortgage") of which the Company is the assignee.
The foregoing action is styled: HEALTH CARE REIT, INC.'S NEW DODGE
MANAGEMENT CORPORATION, ET AL., and is numbered 95-05035, Division 10, on the
docket of said court.
Finally, on April 6, 1995, the Company commenced an action in
the Circuit Court for Dade County, Florida, against Robert Cohen ("Cohen") to
enforce the terms of a $500,000 personal guaranty on the loan executed by Cohen.
The foregoing action is styled: HEALTH CARE REIT, INC. V. ROBERT COHEN and is
numbered 95-6750 on the docket of said court. On September 28, 1995, a
Judgment in the sum of Five Hundred Thousand Dollars ($500,000.00) in favor of
the Company was obtained against Cohen (hereinafter the "Cohen Judgment"). The
Cohen Judgment was assigned to J.I.T., Inc., a company controlled by Cohen,
pursuant to a certain Settlement Agreement described below.
Following the service of the before-described actions in State
Court, PHA, PHFI, New Dodge, and Psychiatric Hospitals of Hernando, Inc.
("PHHI) filed Chapter 11 Bankruptcy Petitions in the United States Bankruptcy
Court for the Middle District of Florida, Tampa Division. The foregoing
bankruptcy matters are styled as follows; IN RE: NEW DODGE MANAGEMENT
CORPORATION, Case No. 95-2532-BP1; IN RE: PSYCHIATRIC HOSPITALS OF AMERICA,
INC., Case No. 95-2552-8P1; IN RE: PSYCHIATRIC HOSPITALS OF FLORIDA, INC., Case
No. 95-2531-8P1; IN RE, PSYCHIATRIC HOSPITALS OF HERNANDO, INC., Case No.
95-2531-8P1,
Each of the foregoing bankruptcy proceedings are progressing
in an orderly fashion. As of this writing, however, no Plans of Reorganization
have been approved in any of the
<PAGE> 111
proceedings.
On December 15, 1995, the Greenbriar Mortgage, the Cohen
Judgment, and all of the Company's claims in the PHHI bankruptcy proceedings
described above were assigned to J.I.T., Inc. for cash payment of Seven Hundred
Fifty Thousand and No/100 Dollars ($750,000.00).
<PAGE> 112
SCHEDULE 3.7
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
DEFAULTS; COMPLIANCE WITH LAWS,
REGULATIONS, AGREEMENTS
-----------------------
None
<PAGE> 113
SCHEDULE 3.8
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
BURDENSOME DOCUMENTS
--------------------
None
<PAGE> 114
SCHEDULE 3.13
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
NAME CHANGES, MERGERS, ACQUISITIONS
-----------------------------------
In 1995, the former manager of HCRI, First Toledo Advisory Company, was the
merged with and into HCRI.
<PAGE> 115
SCHEDULE 3.16
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
EMPLOYEE BENEFIT PLANS
----------------------
Health Care REIT, Inc. Retirement Plan and Trust (401-K)
<PAGE> 116
SCHEDULE 5.8
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
FORM OF QUARTERLY FACILITY REPORT
---------------------------------
ON FILE WITH EACH OF THE BANKS AND THE BORROWERS
<PAGE> 117
<TABLE>
<CAPTION>
SCHEDULE 7.1
TO LOAN AGREEMENT
BY AND AMONG HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
PERMITTED INDEBTEDNESS
----------------------
I. LINES OF CREDIT
- ------------------ Total
Available
------------
<S> <C>
Key/Fleet Revolving Line of Credit $175,000,000
Capital Bank, N.A. 10,000,000
------------
$185,000,000
<CAPTION>
II. EXISTING SECURED DEBT
- -------------------------
Investment Amount of
Operator Facility Balance Liens/Indebtedness
- -------- -------- ----------- -------------------
<S> <C> <C> <C>
Gordon Health Ventures Pittsburgh, PA $10,481,950 $6,527,045
Horizon Healthcare Corp. San Antonio, TX 1,415,224 1,415,224
----------
$7,942,269
==========
<CAPTION>
III. EXISTING OTHER UNSECURED DEBT
- -----------------------------------
<S> <C>
1993 Series Senior Notes $52,000,000
1996 Series Senior Notes 30,000,000
-----------
$82,000,000
===========
<CAPTION>
IV. EXISTING CONTINGENT OBLIGATIONS:
- -------------------------------------
Amount of
Operator Facility Guaranty
- --------- -------- ---------
<S> <C> <C>
Kingston Health Care Ashland, OH $ 1,625,000
Kingston Health Care Vermilion, OH 1,625,000
Kingston Health Care Naperville, IL 4,715,000
Kingston Health Care Santa Fe, NM 5,795,000
Village Management Rockford, IL 5,055,000
-----------
Total $18,815,000
===========
</TABLE>
<PAGE> 118
<TABLE>
<CAPTION>
SCHEDULE 7.2
TO LOAN AGREEMENT
BY AND AMONG HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
PERMITTED SECURITY INTERESTS,
LIENS AND ENCUMBRANCES
-----------------------------
EXISTING LIENS
- --------------
Investment Amount of
Operator Facility Balance Liens/Indebtedness
- -------- -------- ----------- -------------------
<S> <C> <C> <C>
Gordon Health Ventures Pittsburgh, PA $10,481,950 $6,527,045
Horizon Healthcare Corp. San Antonio, TX 1,415,224 1,415,224
----------
$7,942,269
==========
</TABLE>
<PAGE> 119
SCHEDULE 7.11
TO LOAN AGREEMENT
BY AND AMONG
HEALTH CARE REIT, INC.
AND ITS SUBSIDIARIES,
THE BANKS SIGNATORY HERETO
AND
KEYBANK NATIONAL ASSOCIATION, AS AGENT
--------------------------------------
PERMITTED CAPITAL EXPENDITURES
------------------------------
$2,500,000 in Capital Expenditures in connection with the
following Facilities:
Facility Name Location
------------- --------
Harborview Hospital Miami, FL
Horizon Hospital Clearwater, FL
<PAGE> 1
Exhibit 10.2
----------------------------------------------------------------
[Execution Copy]
AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND
EACH OF THE PURCHASERS PARTY HERETO
Dated as of March 28, 1997
$52,000,000 Senior Notes
----------------------------------------------------------------
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C> <C>
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENTS................................2
1.1. DESCRIPTION OF NOTES...............................................2
1.2. ORIGINAL ISSUANCE DATE; REPLACEMENT OF NOTES; COMMITMENT FEES......2
SECTION 2. PREPAYMENT OF NOTES.................................................3
2.1. OPTIONAL PREPAYMENT................................................3
2.2. NOTICE OF PREPAYMENTS..............................................3
2.3. ALLOCATION OF PREPAYMENTS..........................................3
2.4. NO PURCHASE OF NOTES...............................................3
2.5. PREPAYMENT IN THE EVENT OF A RATING DOWNGRADE......................3
SECTION 3. REPRESENTATIONS....................................................4
3.1. REPRESENTATIONS OF THE COMPANY.....................................4
3.2. REPRESENTATIONS OF EACH PURCHASER..................................8
SECTION 4. CLOSING CONDITIONS.................................................9
SECTION 5. COMPANY COVENANTS..................................................9
5.1. FINANCIAL REPORTS..................................................9
5.2. BOOKS AND RECORDS.................................................12
5.3. PAYMENTS..........................................................12
5.4. PAYING AGENCY.....................................................13
5.5. CORPORATE EXISTENCE...............................................13
5.6. OBLIGATIONS.......................................................13
5.7. INSURANCE.........................................................13
5.8. LIMITATION ON CONSOLIDATION AND MERGER, SALES OF ASSETS...........14
5.9. RATINGS...........................................................14
5.10. DIRECT PAYMENTS..................................................15
5.11. MAINTENANCE OF PROPERTIES; PROPERTIES LEASED TO OTHERS...........15
5.12. INDEBTEDNESS.....................................................15
5.13. LIENS............................................................16
5.14. TANGIBLE NET WORTH; LEVERAGE RATIO...............................17
5.15. INTEREST COVERAGE RATIO; FIXED COVERAGE RATIO....................17
5.16. RESTRICTED PAYMENTS..............................................17
</TABLE>
-i
<PAGE> 3
<TABLE>
<S> <C> <C>
5.17. CONSTRUCTION FINANCING...........................................18
5.18. INCONSISTENT AGREEMENTS..........................................18
5.19. CREDIT ENHANCEMENTS..............................................18
5.20. LONG-TERM CARE FACILITIES........................................18
5.21. BEHAVIORAL CARE FACILITIES.......................................18
5.22. OPERATOR CONCENTRATION; DIVERSIFICATION OF ASSETS AND REVENUES...18
5.23. MAINTENANCE OF REIT STATUS.......................................19
5.24. NOTICE...........................................................19
5.25. ENVIRONMENTAL LAWS...............................................20
5.26. MODIFICATION OF CERTAIN AGREEMENTS...............................20
5.27. TRANSACTIONS WITH AFFILIATES.....................................21
5.28. LIMITATION ON INVESTMENTS........................................21
5.29. ERISA, ETC.......................................................22
5.30. CHANGES IN STRUCTURE; FISCAL YEAR................................22
5.31. CAPITAL EXPENDITURES.............................................22
5.32. RENTAL OBLIGATIONS...............................................23
5.33. USE OF CASH......................................................23
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR...........................23
6.1. EVENTS OF DEFAULT.................................................23
6.2. NOTICE TO PURCHASERS..............................................26
6.3. ACCELERATION OF MATURITIES; OTHER REMEDIES........................26
6.4. RESCISSION OF ACCELERATION........................................27
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS...................................27
7.1. CONSENT REQUIRED..................................................27
7.2. SOLICITATION OF PURCHASERS........................................28
7.3. EFFECT OF AMENDMENT OR WAIVER.....................................28
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS...........................28
8.1. DEFINITIONS.......................................................28
8.2. ACCOUNTING PRINCIPLES; TIME PERIODS...............................39
SECTION 9. MISCELLANEOUS......................................................39
9.1. REGISTERED NOTES..................................................39
9.2. EXCHANGE OF NOTES.................................................39
9.3. LOSS, THEFT OR MUTILATION OF NOTES................................40
9.4. EXPENSES, STAMP TAX, INDEMNITY....................................40
9.5. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE; COUNTERCLAIMS..42
9.6. NOTICES...........................................................42
</TABLE>
-ii
<PAGE> 4
9.7. SUCCESSORS AND ASSIGNS...........................................42
9.8. SURVIVAL OF COVENANTS AND REPRESENTATIONS........................42
9.9. SEVERABILITY.....................................................43
9.10. GOVERNING LAW...................................................43
9.11. SUBMISSION TO JURISDICTION......................................43
9.12. WAIVER OF JURY TRIAL............................................44
9.13. CAPTIONS........................................................44
9.14. COUNTERPARTS; INTEGRATION.......................................44
9.15. INTEREST RATE LIMITATION........................................44
SECTION 10. MISCELLANEOUS....................................................44
10.1. CONDITIONS TO EFFECTIVENESS.....................................44
10.2. RELEASE OF COLLATERAL...........................................46
SCHEDULES
- ---------
1.1(a) Purchasers; Commitments
3.1(q) Environmental Reports
5.12 Ongoing Indebtedness
5.19 Credit Enhancements
5.31 Capital Expenditures
EXHIBITS
- --------
A Form of Series A Note
B Form of Series B Note
C Form of Series C Note
D Form of Facilities and Operators Report
-iii
<PAGE> 5
HEALTH CARE REIT, INC.
One SeaGate
Suite 1500
Toledo, Ohio 43604
AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
$52,000,000 Senior Notes
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT, dated as of
March 28, 1997, among HEALTH CARE REIT, INC., a Delaware corporation, and each
of the purchasers identified on Schedule 1.1(a) hereto (each, a "PURCHASER,"
including its respective nominees, successors and assigns, and each successive
holder or holders of any Notes or portions thereof purchased by such Purchaser,
and collectively, the "PURCHASERS"). Certain capitalized terms used herein are
defined in Section 8.1.
WHEREAS, the Company and the Purchasers are parties to the
Note Purchase Agreement, dated as of April 8, 1993, as amended (the "ORIGINAL
NOTE PURCHASE AGREEMENT");
WHEREAS, pursuant to the Original Note Purchase Agreement, the
Company issued and sold to the Purchasers $22,000,000 aggregate principal amount
of its 7.16% Series A Notes due 1998 (the "ORIGINAL SERIES A NOTES"),
$15,000,000 aggregate principal amount of its 7.71% Series B Senior Notes due
2000 (the "ORIGINAL SERIES B NOTES") and $15,000,000 aggregate principal amount
of its 8.24% Series C Notes due 2003 (the "ORIGINAL SERIES C NOTES," and
together with the Original Series A Notes and the Original Series B Notes, the
"ORIGINAL NOTES");
WHEREAS, the parties hereto desire to amend the Original Note
Purchase Agreement, and to restate the Original Note Purchase Agreement in full
as hereinafter set forth;
WHEREAS, the parties hereto desire to amend the Original Notes
and restate the Original Notes in full as hereinafter set forth;
WHEREAS, simultaneously herewith, the Company, each of the
Subsidiaries of the Company and the Purchasers are entering into the Subsidiary
Guaranty (as defined below);
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree to amend and restate the Original Note
Purchase Agreement in full as follows:
<PAGE> 6
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENTS.
1.1. DESCRIPTION OF NOTES. As of the Effective Date (as defined
herein), the Original Notes are hereby amended and restated in accordance with
the terms of this Agreement (such Original Series A Notes, as so amended and
restated, the "SERIES A NOTES", such Original Series B Notes, as so amended and
restated, the "SERIES B NOTES, and such Original Series C Notes, as so amended
and restated, the "SERIES C NOTES" and, together with the Series A Notes and the
Series B Notes, the "NOTES"). As a result, each of the Series A Notes, Series B
Notes and Series C Notes is (i) to be dated as of the date hereof, (ii) to bear
interest from (and including) the Original Issuance Date (as defined herein) to
(but excluding) the date of repayment in full of all amounts due thereunder, at
the rates of 7.16%, 7.71% and 8.24% per annum, respectively, payable on the 8th
day of the months of April and October each year (commencing October 8, 1993)
and at maturity; PROVIDED, HOWEVER, that if, at any time on or after the date
hereof any of the Notes shall not be rated at least BBB by Duff & Phelps (it
being understood and agreed that (x) a rating of BBB- is lower than a rating of
BBB and (y) the withdrawal, discontinuance or absence of a rating of any of the
Notes by Duff & Phelps shall be deemed, for these purposes, to be the equivalent
of a rating that is lower than BBB), the rates of interest shall instead be
7.26%, 7.81% and 8.34% per annum, respectively, for the period during which the
Notes shall not be rated at least BBB by Duff & Phelps, (iii) to bear interest
on overdue principal (whether by acceleration or otherwise and including any
overdue prepayment of principal), premium, if any, and installments of interest
at the Overdue Rate until paid, (iv) to mature on April 8, 1998, April 8, 2000
and April 8, 2003, respectively, and (v) to be substantially in the forms
attached hereto as Exhibit A, Exhibit B and Exhibit C, respectively. Interest on
the Notes shall be computed on the basis of a 360-day year of twelve 30-day
months. The Notes are subject to prepayment at the option of the Company prior
to their stated maturity date on the terms and conditions set forth in Section 2
and in the Notes. The Notes are also subject to prepayment at each holder's
option prior to their stated maturity date on the terms and conditions set forth
in Section 2 and in the Notes.
1.2. ORIGINAL ISSUANCE DATE; REPLACEMENT OF NOTES; COMMITMENT FEES.
(a) The Company issued and sold to each Purchaser, and each
Purchaser purchased from the Company, the principal amount and Series of
Original Notes set forth beside such Purchaser's name on Schedule 1.1(a) at a
price of 100% of the principal amount thereof (the "PURCHASE PRICE"), on April
8, 1993 (the "ORIGINAL ISSUANCE DATE"). The aggregate principal amount of
Original Notes issued and sold on the Original Issuance Date by the Company was
$52,000,000, of which $22,000,000 aggregate principal amount was designated as
Original Series A Notes $15,000,000 aggregate principal amount was designated as
Original Series B Notes and $15,000,000 aggregate principal amount was
designated as Original Series C Notes.
(b) On the Effective Date, each Purchaser will surrender all
Original Notes of each Series held by such Purchaser to the Company and the
Company will deliver in exchange therefor, without expense to the Holder, Notes
of each Series in the same aggregate principal amount as the then aggregate
unpaid principal amount of the Original Notes of such Series so surrendered, in
such denominations of U.S. $100,000 or any amount in excess thereof, and
registered in such names, as such Purchaser shall have specified.
(c) On the Effective Date, the Company shall pay to each Purchaser
a commitment fee equal to 0.05% of the aggregate unpaid principal amount of the
Original Notes of such Purchaser that are being
-2-
<PAGE> 7
exchanged pursuant to Section 1.2(b). Such commitment fees shall be paid in the
manner specified in Section 5.10.
SECTION 2. PREPAYMENT OF NOTES.
2.1. OPTIONAL PREPAYMENT. Upon compliance with Section 2.2 and subject
to Section 2.3, the Company shall have the option at any time and from time to
time to prepay the outstanding Notes, either in whole or in part (but if in
part, then in units of $1,000,000 or an integral multiple of $100,000 in excess
thereof) by payment of the principal amount of the Notes, or portion thereof to
be prepaid, together with accrued interest thereon to but not including the date
of such prepayment and a premium (determined three Business Days prior to the
date of such prepayment) equal to the Make-Whole Premium, if any (collectively,
the "REDEMPTION PRICE").
2.2. NOTICE OF PREPAYMENTS. The Company shall give written notice of
any prepayment of the Notes pursuant to Section 2.1 to each holder thereof not
less than 30 days nor more than 60 days before the date fixed for such
prepayment of the Notes. Notices required by this Section 2.2 shall specify (a)
the date of prepayment, (b) the principal amount of such holder's Notes to be
prepaid on such date, and (c) the estimated Make-Whole Premium and the accrued
interest applicable to the prepayment. Notice of prepayment having been so
given, the aggregate principal amount of the Notes specified in such notice,
together with accrued interest thereon and the Make-Whole Premium, shall become
due and payable on the prepayment date set forth in such notice. The Company
shall give a second written notice to each holder of the Notes, by telecopy or
other same day written communication, setting forth the computation and amount
of the Make-Whole Premium payable in connection with a prepayment pursuant to
Section 2.1, at least three Business Days prior to the date of such prepayment.
2.3. ALLOCATION OF PREPAYMENTS. All partial prepayments shall be
applied on all outstanding Notes (without regard to Series) ratably in
accordance with the unpaid principal amounts thereof.
2.4. NO PURCHASE OF NOTES. The Company will not, and will not permit
any Affiliate to, purchase, redeem, prepay or otherwise acquire any of the
Notes, except for payments or prepayments of the Notes expressly provided for in
accordance with Sections 1, 2 and 6 of this Agreement and the terms of the
Notes.
2.5. PREPAYMENT IN THE EVENT OF A RATING DOWNGRADE. If at any time Duff
& Phelps places its ratings of any of the Notes under review, the Company will
promptly and in any event within one Business Day of the occurrence thereof,
give each Purchaser written notice thereof. If at any time the Duff & Phelps
rating of any of the Notes is decreased to a rating below BBB- (it being
understood and agreed that the withdrawal, discontinuance or absence of a rating
of any of the Notes by Duff & Phelps shall be deemed, for these purposes, to be
the equivalent of a decrease in the rating of the Notes to a rating below BBB-),
the Company will, promptly and in any event within one Business Day after the
occurrence thereof, give each Purchaser written notice thereof. At any time
after any such decrease, the holder of any Note may, by three Business Days'
written notice to the Company, declare such Note to be, and such Note shall
thereby become, due and payable (without presentment, demand, protest or other
notice of any kind, all of which are waived by the Company) at the Redemption
Price. It is specifically understood and agreed that no course of dealing on the
part of any holder of any Note nor any delay or failure on the part of any
holder of any Note to exercise any right specified in this Section 2.5 shall
operate as a waiver of such right or otherwise prejudice such
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<PAGE> 8
holder's rights, powers and remedies under this Section 2.5. If the rating
system of Duff & Phelps shall change, the parties hereto shall negotiate in good
faith to amend the references to specific ratings in Sections 1.1 and 2.5 and in
the Notes to reflect the changed rating system.
SECTION 3. REPRESENTATIONS.
3.1. REPRESENTATIONS OF THE COMPANY. The Company hereby represents and
warrants for the benefit of each Purchaser that the representations set forth as
follows are true and correct as of the date hereof and shall be true and correct
as of the Effective Date:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. Each
Subsidiary of the Company is duly incorporated or formed, validly existing and
in good standing under the laws of its state of incorporation. As of the date
of this Agreement, the Company has no Subsidiaries except for (i) HCRI
Pennsylvania Properties, Inc., a Pennsylvania corporation, (ii) HCRI Overlook
Green, Inc., a Pennsylvania corporation, (iii) HCRI Texas Properties, Inc., a
Delaware corporation and (iv) HCRI Texas Properties, Ltd., a Texas limited
partnership. The Company is the sole general partner of HCRI Texas Properties,
Ltd. and is the sole shareholder of the other such Subsidiaries.
(b) The Company and each Subsidiary of the Company is duly
qualified to do business as a foreign corporation in each jurisdiction in
which the conduct of its business or the ownership or leasing of its
properties would require such qualification, except where the failure to so
qualify could not have a Material Adverse Effect.
(c) The execution, delivery and performance of this Agreement, the
Notes and the other Note Documents are within the corporate powers of the
Company and have been duly authorized by all necessary corporate action on the
part of the Company. This Agreement, the Notes and the other Note Documents
have been duly executed by and are the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the enforcement of creditors' rights generally and by
general principles of equity.
(d) The Company currently has REIT Status and has maintained REIT
Status on a continuous basis since its formation. None of the Subsidiaries of
the Company currently has REIT Status.
(e) No consent, approval or authorization of, or declaration,
registration or filing with, or payment to, any governmental body or any
non-governmental Person is required to be obtained or made in connection with
the execution, delivery and performance by the Company of this Agreement, the
Notes and the other Note Documents or the transactions contemplated hereby or
thereby or as a condition to the legality, validity or enforceability of the
Company's obligations under this Agreement, the Notes or the other Note
Documents, or the offer, issue, sale and delivery of the Notes to the
Purchasers or the fulfillment of or compliance with the terms and provisions
of the Notes, this Agreement or the other Note Documents.
(f) Neither the execution and delivery of this Agreement, the
Notes or the other Note Documents by the Company, nor the performance of the
terms and provisions hereof and thereof, will (i) conflict with, or result in
a breach of the terms, conditions or provisions of, or constitute a default
under, or
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<PAGE> 9
result in any violation of, the certificate of incorporation or by-laws of the
Company, any contract, agreement, mortgage, indenture, credit agreement
(including the Credit Agreement and the Amended 1996 Note Documents), lease or
other instrument to which the Company or any Subsidiary of the Company is a
party or by which the Company or any such Subsidiary or any of their respective
assets is bound, or of any statute, law, rule, regulation or order of the United
States of America or of any State thereof, or any agency, court or other
instrumentality of any thereof, to which the Company is subject, (ii) result in
the creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries, or (iii) result in the disqualification of the Company as a REIT
under the Code.
(g) The Company's annual report on Form 10-K for the fiscal
year ending December 31, 1996 (the "1996 10-K"), this Agreement and all
documents, instruments, certificates and other writings delivered to any
Purchaser by or on behalf of the Company in connection with the transactions
contemplated hereby, taken together, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, on or as of the dates on which such statements were made. The
Company has disclosed to the Purchasers in writing any and all facts which may
(to the extent the Company can reasonably foresee) have a Material Adverse
Effect.
(h) (i) The audited consolidated financial statements of the
Company and its Subsidiaries at and for the fiscal years ended December
31, 1993, 1994, 1995 and 1996 (the "AUDITED FINANCIALS") are true and
complete and have been prepared in accordance with generally accepted
accounting principles in the United States of America ("GAAP"),
consistent with the principles and practices used in the preparation of
the Company's audited consolidated financial statements for the
immediately preceding fiscal year (except as otherwise indicated in the
Audited Financials, including the notes thereto), and present fairly
the consolidated financial condition of the Company at the end of each
such fiscal year and the consolidated results of operations and cash
flows of the Company for each of such periods. Neither the Company nor
any of its Subsidiaries has any material obligation, liability or
commitment, direct or contingent, that is not reflected in the Audited
Financials for the fiscal year ended December 31, 1996.
(ii) The Company and each Subsidiary of the Company
have good and marketable title to all assets reflected in the
consolidated balance sheet included in the Audited Financials for the
fiscal year ended December 31, 1996, except for changes resulting from
transactions in the ordinary course of business occurring after such
date, free and clear of any Lien other than any Lien permitted by
Section 5.13.
(iii) The projections relating to the Company and
its Subsidiaries for the three year period 1997-1999 including balance
sheets, statements of operations and cash flows (together with related
assumptions) furnished by the Company to the Purchasers have been
prepared on the basis of the assumptions accompanying them and reflect,
as of the date thereof, the Company's good faith projections, after
reasonable analysis, of the matters set forth therein, based on such
assumptions.
(i) Since December 31, 1996, there has not been any material
adverse change in the business, value or condition (financial or otherwise),
results of operations or prospects of the Company and its Subsidiaries,
considered as a whole.
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<PAGE> 10
(j) The net proceeds from the issuance and sale of the Notes
have been used to fund the acquisition or financing of Facilities either
directly or through a refinancing or repayment of revolving credit borrowings
under various borrowing arrangements. No part of the proceeds of the sale of the
Notes have been or will be used, directly or indirectly, for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulations G,
T, U or X of the Board of Governors of the Federal Reserve System. The assets of
the Company and its Subsidiaries do not and will not include an amount of
"margin stock" that would cause the provisions of Rule 207.2(f)(2)(i) of
Regulation G or the provisions of Rule 221.2(g)(2)(i) of Regulation U to be
inapplicable and the Company and its Subsidiaries have no present intention of
purchasing such an amount of "margin stock."
(k) Neither the Company nor any Subsidiary of the Company nor,
to the Company's knowledge, anyone acting on its behalf has offered the Notes or
any similar securities to, or solicited any offer to purchase the same from, any
Person, or has taken any other action, which would require the registration of
the Notes under Section 5 of the Act.
(l) (i) The consummation of the transactions contemplated by
this Agreement and compliance by the Company and each Subsidiary of the Company
with the provisions hereof and the Notes issued hereunder and the other Note
Documents will not constitute a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code. (ii) Each Plan complies in all
material respects with all applicable statutes and governmental rules and
regulations, and (A) no Reportable Event has occurred and is continuing with
respect to any Plan subject to Title IV of ERISA, (B) neither the Company nor
any Subsidiary of the Company nor any ERISA Affiliate has withdrawn from any
Plan subject to Title IV of ERISA or any Multiemployer Plan or instituted steps
to do so, and (C) no steps have been instituted to terminate in a distress
termination any Plan subject to Title IV of ERISA. (iii) Neither the Company nor
any Subsidiary of the Company nor any ERISA Affiliate has received notice that
any Multiemployer Plan is in Reorganization or Insolvent where such
Reorganization or Insolvency has resulted, or would be reasonably likely to
result in an unpaid liability that would be reasonably likely to have a Material
Adverse Effect nor, to the best knowledge of the Company, is any such
Reorganization or Insolvency reasonably likely to occur. (iv) No condition
exists or event or transaction has occurred in connection with any Plan that
could result in the incurrence by the Company or any Subsidiary of the Company
or any ERISA Affiliate of any material liability, fine or penalty. (v) No Plan
maintained by the Company or any Subsidiary of the Company or any ERISA
Affiliate and no trust created thereunder has incurred any "ACCUMULATED FUNDING
DEFICIENCY" as defined in Section 302 of ERISA, and the present value of all
benefits vested under all Plans subject to Title IV of ERISA does not exceed the
value of the assets of such Plans allocable to such vested benefits (such
present value to be determined as of, and based on, the most recent valuation of
such Plan for funding purposes). (vi) Neither the Company nor any Subsidiary of
the Company has any material contingent liability with respect to any
post-retirement "welfare plan" (as such term is defined in Section 3(1) of
ERISA), other than as required by Section 4980B of the Code. (vii) No Plan is a
multiple employer plan (within the meaning of Section 413(c) of the Code).
(m) The Company and each Subsidiary of the Company has filed
all tax returns and reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be owing, except any
such taxes or charges (including interest and penalties) which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been set aside on its books. The
charges, accruals and reserves on the books of the Company and each Subsidiary
of the Company in respect of taxes or other governmental charges, if any, are
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<PAGE> 11
adequate. No tax Liens have been filed with respect to the Company or any
Subsidiary of the Company or any of their assets and no claims material to the
Company or any Subsidiary of the Company are being asserted against the Company
or any Subsidiary of the Company with respect to any taxes or governmental
charges, except for Liens for taxes, assessments and governmental charges which
are not yet due and payable or which individually or in the aggregate could not
have a Material Adverse Effect. With respect to each federal income tax return
of the Company and each Subsidiary of the Company, the statute of limitations
for the assessment of such Taxes has expired through the taxable year ended
December 31, 1993 and no audit is in progress and no extension of time is in
force with respect to any date on which any such return was or is to be filed
and no waiver or agreement is in force for the extension of time for the
assessment or payment of any tax.
(n) Neither the Company nor any Subsidiary of the Company is
an "investment company" within the meaning of the Investment Company Act of
1940, as amended. Neither the Company nor any Subsidiary of the Company is a
"holding company" or a "subsidiary" or an "affiliate" of a "holding company" or
a "public utility" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(o) There are no actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against the Company or any Subsidiary
of the Company in any court or before any governmental authority or arbitration
board or tribunal which, if adversely determined, would have a Material Adverse
Effect.
(p) (i) The Company and each Subsidiary of the Company has
good and marketable fee or leasehold title to all of the material real
property owned or leased by the Company or such Subsidiary; and has
good and marketable title to all of their other respective material
properties and assets of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights) free and clear,
in each case, of all Liens (including infringement claims with respect
to patents, trademarks, trade names, service marks and copyrights),
except Liens that are expressly permitted by this Agreement.
(ii) The Company and each Subsidiary owns or holds all
licenses, permits and governmental authorizations as are necessary
or desirable in the conduct of its business, except to the extent that
the failure to own or hold the same would not have a Material Adverse
Effect.
(iii) To the best of the Company's knowledge, no
violation exists of any applicable law pertaining to the ownership or
operation of any Facility or any Operator that would have a reasonable
likelihood of leading to revocation of any license, permit or
governmental authorization necessary for the operation of such
Facility.
(q) All facilities and property (including underlying
groundwater), directly or indirectly, owned, operated or leased by the Company
or any Subsidiary of the Company are owned, operated or leased by the Company or
such Subsidiary in material compliance with all Environmental Laws. All
properties with respect to which the Company or any Subsidiary of the Company
holds a mortgage interest is being operated by the owners, lessees or operators
thereof in material compliance with all Environmental Laws. Except as disclosed
in the environmental reports given to the Purchasers and identified on Schedule
3.1(q) (the "ENVIRONMENTAL REPORTS"), there have been no past, and there are no
pending or threatened (i) claims, complaints, notices or requests for
information received by the Company or any Subsidiary of the Company
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<PAGE> 12
with respect to any alleged violation of any Environmental Law, or (ii)
complaints, notices or inquiries to the Company or any Subsidiary of the Company
regarding potential liability under any Environmental Law. Except as disclosed
in the Environmental Reports, there have been no Releases of Hazardous Materials
at, on or under any property now owned, operated or leased, directly or
indirectly, by the Company or any Subsidiary of the Company, that, singly or in
the aggregate, have, or may reasonably be expected to have, a Material Adverse
Effect. Except as disclosed in the Environmental Reports, the Company and each
Subsidiary of the Company has been issued and is in material compliance with all
permits, certificates, approvals, licenses and other authorizations relating to
environmental matters and necessary or desirable for their respective
businesses, the failure of which to have or be in compliance with, singly or in
the aggregate, has or may reasonably be expected to have a Material Adverse
Effect. No property now owned, operated, or leased, directly or indirectly by
the Company or any Subsidiary of the Company is listed or proposed for listing
on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar federal or state list of sites requiring investigation or clean-up.
Except as disclosed in the Environmental Reports, there are no underground
storage tanks, active or abandoned, including petroleum storage tanks,
landfills, lagoons, surface impoundments, disposal areas or disposal ponds, on
or under any property now owned, operated or leased, directly or indirectly, by
the Company or any Subsidiary of the Company, that, singly or in the aggregate,
have, or may reasonably be expected to have, a Material Adverse Effect. Neither
the Company nor any Subsidiary of the Company has directly transported or
directly arranged for the transportation of any Hazardous Material to any
location which is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar federal or state list or
which is the subject of any federal, state or local enforcement actions or other
investigations which may lead to material claims against the Company or any
Subsidiary of the Company for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA. Except as disclosed in the
Environmental Reports, there are no polychlorinated biphenyls or friable
asbestos present at any property now owned, operated or leased, directly or
indirectly, by the Company or any Subsidiary of the Company, that, singly or in
the aggregate, have, or may reasonably be expected to have, a Material Adverse
Effect. Except as disclosed in the Environmental Reports, no conditions exist
at, on or under any property now owned, operated, or leased, directly or
indirectly, by the Company or any Subsidiary of the Company, which, with the
passage of time, or the giving of notice or both, would give rise to liability
under any Environmental Law which singly or in the aggregate have or may
reasonably be expected to have a Material Adverse Effect. Except as disclosed in
the Environmental Reports, no generation, manufacture, storage, treatment,
transportation or disposal of Hazardous Material has occurred or is occurring on
or from any property owned, operated, or leased by the Company or any Subsidiary
of the Company, that, singly or in the aggregate, has, or may reasonably be
expected to have, a Material Adverse Effect.
3.2. REPRESENTATIONS OF EACH PURCHASER. Each Purchaser hereby
represents and warrants, for itself only, as follows:
(a) Such Purchaser is acquiring the Notes for its own account
(or as trustee for the account of one or more pension or trust funds), and not
with a view to distribution (as such term is used under Section 2(11) of the
Act) thereof; provided that the disposition of each Purchaser's (or such
account's) property shall at all times be and remain within its control.
(b) Such Purchaser acknowledges that (i) the Notes have not
been registered under the Act by reason of their issuance in a transaction
exempt from the registration requirements of the Act pursuant to Section
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<PAGE> 13
4(2) thereof nor have the Notes been registered or qualified under any state
securities laws; (ii) the Notes may be sold in the absence of such registration
only pursuant to an exemption from such registration or qualification; and (iii)
the Notes may bear a legend to such effect.
SECTION 4. CLOSING CONDITIONS.
All conditions to each Purchaser's several obligation to purchase
the Original Notes were satisfied on the Original Issuance Date.
SECTION 5. COMPANY COVENANTS.
Without limiting the obligations of the Company set forth in the
Note Documents, for so long as any amount remains unpaid on any Note:
5.1. FINANCIAL REPORTS. The Company will furnish to each holder of
outstanding Notes:
(a) As soon as available and in any event within 90 days after the
end of each fiscal year of the Company, a copy of the annual audited report for
such fiscal year for the Company (a copy of which shall also be furnished to the
Securities Valuation Office of the National Association of Insurance
Commissioners, New York, New York), including therein a balance sheet of the
Company as at the end of such fiscal year and statements of income, cash flow
and shareholders' equity of the Company for such fiscal year, each prepared in
accordance with GAAP, consistently applied, and setting forth in comparative
form the corresponding figures of the preceding fiscal year and in each case
certified without qualification by either Ernst & Young, another nationally
recognized independent auditing firm, or a firm of independent certified public
accountants reasonably acceptable to the Purchasers, as fairly presenting the
financial position, results of operations, cash flows and shareholders' equity
of the Company and its Subsidiaries as at and for the year ending on its date
and as having been prepared in accordance with GAAP; and a certificate from such
accountants (i) to the effect that, in making the examination necessary for the
signing of such annual report by such accountants, they have not become aware of
any Default or Event of Default that has occurred and is continuing, or, if they
have become aware of such Default or Event of Default, describing such Default
or Event of Default and (ii) confirming the calculations set forth in the
officer's certificate delivered simultaneously therewith pursuant to Section
5.1(d) below and relating to the time period set forth in this Section 5.1(a);
(b) As soon as available and in any event within 45 days after the
end of each of the fiscal quarters of each fiscal year of the Company, a balance
sheet of the Company as at the end of such fiscal quarter and statements of
income, cash flow and shareholders' equity of the Company for such fiscal
quarter and for the period commencing at the end of the previous fiscal year and
ending at the end of such fiscal quarter, prepared in accordance with GAAP
(subject to normal year-end adjustments), and setting forth in comparative form
the figures for the corresponding period of the immediately preceding fiscal
year, together with a certificate of the chief financial officer of the Company
to the effect that such balance sheet and related financial statements fairly
present the financial position, results of operations, cash flows and
shareholders' equity as of such date and for such period;
(c) Promptly upon their becoming available, and notwithstanding the
provisions of Sections 5.1(a) and (b), copies of each financial statement,
report, notice or proxy statement filed by the
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<PAGE> 14
Company with the Securities and Exchange Commission under the Exchange Act and
sent by the Company to its security holders generally;
(d) Within the periods provided in Sections 5.1(a) and (b), a
certificate of the chief financial officer of the Company stating that such
officer has reviewed the provisions of this Agreement and the other Note
Documents and stating whether there existed as of the date of such financial
statements and whether, to the best of such officer's knowledge, there exists at
the time of the certificate or existed at any time during the period covered by
such financial statements, (i) any Default or Event of Default, together with a
detailed calculation which demonstrates the Company's compliance with Section
5.8(b), Sections 5.12 through 5.17, Sections 5.19 through 5.22, and Sections
5.28, 5.31 and 5.32, or (ii) any default under any other agreement to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound, or by which, to the best knowledge of the Company,
any of their respective properties or assets may be materially affected
(including the Credit Agreement and the Amended 1996 Note Documents); and, if
any such condition or event does exist on the date of the certificate,
specifying the nature and period of existence thereof and the action the Company
is taking and/or proposes to take with respect thereto;
(e) As soon as available and in any event within 45 days after the
end of each of the Company's fiscal quarters, a schedule showing the aging of
delinquent lease and mortgage receivables, if any, for all of the Company's
Facilities and in each case where a receivable is past due over 60 days, a
report on the status of the receivable;
(f) As soon as available and in any event within 45 days after the
end of each of the Company's fiscal quarters, a schedule showing the Company's
recorded liabilities, unfunded commitments, contingent liabilities and other
material items;
(g) Promptly after the Company's receipt thereof, (i) a copy of any
special audits of the Company's properties, assets or operations conducted by
the Company's auditors, (ii) a copy of any letters to the Company from the
Company's auditors in connection with the preparation and presentation of the
Company's annual audited report, and (iii) a copy of any other material reports
submitted to the Company or any of its Subsidiaries by its independent auditors,
or submitted by the Company or any of its Subsidiaries to its independent
auditors, in connection with any annual or interim audit of the books of the
Company or its Subsidiaries made by such auditors which material reports are a
necessary part of such annual or interim audit;
(h) In respect of each Plan:
(1) a copy of each annual report (and related schedules)
of such Plan within 10 days after filing the same with any
ERISA regulator;
(2) a copy of each application for a determination of the
qualified status of any such Plan, in each case within 10 days
after the filing thereof; and
(3) Promptly, upon their becoming available, copies of:
(i) all correspondence with the PBGC, the Secretary of Labor or
any representative of the IRS with respect to any Plan,
relating to an actual or threatened change or development that
would be materially adverse to the Company; (ii) all actuarial
valuations received by the Company with respect to any Plan;
and (iii) any notices of Plan termination filed by any Plan
Administrator (as those
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<PAGE> 15
terms are used in ERISA) with the PBGC and of any notices
from the PBGC to the Company with respect to the intent of
the PBGC to institute involuntary termination proceedings.
(i) Not later than January 31st in each year, a copy of the
Company's business plan and financial projections for the upcoming three
fiscal years (together with a copy in writing of the assumptions on which such
business plan and projections were based), each certified by the Company's
chief financial officer and illustrating the projected income statements,
balance sheets and statements of cash flows on a consolidated basis;
(j) (1) As soon as available but in any event not less
than 45 days after the end of each fiscal quarter of the
Company, a report with respect to the Facilities and the
Operators, the form of which is set forth in Exhibit D
hereto, which report shall contain information for the
quarterly period immediately prior to the fiscal quarter for
which the report is submitted;
(2) Within 30 days after the receipt thereof, a copy
of the annual audited financial statements of each
publicly-held Operator delivered to the Company by each such
Operator; and
(3) Such other information regarding the financial
condition of the Operators as any Purchaser may from time to
time reasonably request, subject to such Purchaser's agreement
that all such information shall be and remain confidential and
that none of such information may be distributed to any other
Person without the Company's prior consent;
(k) Promptly upon their becoming available, copies of any: (i)
financial statements, non-routine reports and notices (other than routine
correspondence), any of which are of a material nature, requests for waivers and
proxy statements, in each case, delivered by the Company or any of its
Subsidiaries to any of their respective existing lending institutions or
creditors; and (ii) correspondence or notices received by the Company from any
federal, state or local governmental authority that regulates the operations of
the Company or any of its Subsidiaries, relating to an actual or threatened
change or development that would be materially adverse to the Company or any
Subsidiary; and
(l) Promptly upon any Purchaser's written request, such other
information in writing about the Company's financial condition, properties and
operations as such Purchaser may from time to time reasonably request.
The balance sheets and financial statements referred to in
Sections 5.1(a) and (b) shall be deemed to refer to both the consolidated
balance sheets and financial statements of the Company and its consolidated
Subsidiaries. It is also understood and agreed that the Company may satisfy its
obligations to deliver the financial statements described in Sections 5.1(a) and
(b) by furnishing to each Purchaser a copy of its annual report on Form 10-K or
its quarterly report on Form 10-Q in respect of the relevant fiscal year or the
relevant fiscal quarter, as the case may be, together with the financial
statements required to be attached thereto; PROVIDED that the Company is
required to file, and has actually filed, such annual report on Form 10-K or
such quarterly report on Form 10-Q, as the case may be, with the Securities and
Exchange Commission.
5.2. BOOKS AND RECORDS
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<PAGE> 16
(a) The Company will, and will cause each Subsidiary to, keep
proper books of record and account in accordance with GAAP in a manner
reasonably satisfactory to the Purchasers in which full and true entries shall
be made of all dealings or transactions in relation to its business and
activities.
(b) (i) Each Purchaser shall have the right, at all reasonable
times, at the expense of the Company, subject to reasonable notice and
as often as may be reasonably requested, to examine the corporate books
and records of the Company and its Subsidiaries and to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with
the officers, directors, independent public accountants, actuaries,
Plan administrators and trustees of or for the Company and its
Subsidiaries, each of which is authorized to make such information
available to each Purchaser to the same extent as it would be to the
Company or to its Subsidiaries; PROVIDED, HOWEVER, that any transferee
of a Note (other than an Affiliate of an original Purchaser) in a
principal amount of less than $2,000,000 shall be entitled to exercise
the foregoing rights only once every 12 months.
(ii) The Company shall also permit, and cause each of its
Subsidiaries to permit, upon receipt of not less than two Business
Days' prior written notice, the Purchasers (and their agents and
representatives) (at the expense of the Company after the occurrence
of a Default), during normal business hours, to examine the Company's
or such Subsidiary's properties, as the case may be.
5.3. PAYMENTS.
(a) All payments hereunder and under the Notes shall be made
without set-off or counterclaim and in such amounts as may be necessary in order
that all such payments shall not be less than the amounts otherwise specified to
be paid under this Agreement and the Notes. Without limiting the generality of
the foregoing, the Company will duly and punctually pay the principal of,
premium (if any) and interest on the Notes in accordance with their terms and
this Agreement and all other Obligations in accordance with this Agreement and
the other Note Documents, free and clear of, and without reduction for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholding, now or hereafter imposed,
levied, collected, withheld or assessed by any governmental authority,
excluding, in the case of any Purchaser, net income and franchise taxes imposed
on such Purchaser by the jurisdiction under the laws of which such Purchaser is
organized or any political subdivision or taxing authority thereof or therein
(such non-excluded taxes, "TAXES"). If any Taxes are required to be withheld
from any amounts payable to any Purchaser hereunder, under any Note or under any
other Note Document, the amounts so payable to such Purchaser shall be increased
to the extent necessary to yield to such Purchaser (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, the applicable Note or such other Note
Document. If the Company fails to pay any Taxes when due to the appropriate
taxing authority, the Company shall indemnify each Purchaser for any incremental
taxes, interest or penalties that may become payable by such Purchaser as a
result of any such failure.
(b) Any amount that is due and payable by the Company under
any Note Document that is not paid when due shall bear interest, for each day
from (and including) the date such amount was due and payable to (but excluding)
the date of payment thereof, at a rate per annum equal to the Overdue Rate.
5.4. PAYING AGENCY. The Company will maintain an office in the United
States of America where notices, presentations and demands to or upon the
Company in respect of this Agreement, the Notes
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and the other Note Documents may be given or made. As of the date of this
Agreement, such office is located at the Company's address set forth in
Section 9.6. The Company will give written notice to the holders of the Notes
of any change of location of such office no later than five Business Days
prior to the date of any such change. Notwithstanding the foregoing, in lieu
of, or in addition to, maintaining an office as herein contemplated, the
Company may appoint and maintain an agent for receiving notices, presentations
or demands and/or making payments on the Notes which shall be a state or
national bank or trust company organized under the laws of the United States
of America or any State thereof or the District of Columbia, having capital,
surplus and undivided profits aggregating at least U.S. $250,000,000, and
having an office in the Borough of Manhattan in the City of New York from
which it can perform the functions it is so appointed to perform (the "PAYING
AGENT").
5.5. CORPORATE EXISTENCE. The Company will, and will cause each
of its Subsidiaries to, do or cause to be done all things necessary to (a)
preserve and keep in full force and effect its corporate existence, (b)
maintain the Company's REIT Status, (c) comply in all material respects with
all applicable laws, statutes, regulations, rules, orders, and all applicable
restrictions imposed by any governmental or regulatory body except those being
contested in good faith by appropriate proceedings, (d) maintain all licenses
and permits necessary to conduct its business and own its properties and (e)
continue to engage in the same line of business.
5.6. OBLIGATIONS. The Company will, and will cause each of its
Subsidiaries to, pay and discharge all of the obligations and liabilities of
the Company or any of its Subsidiaries, including all taxes, assessments and
governmental charges, when due, except for taxes, assessments and governmental
charges for which fair and adequate reserves have been established in
accordance with GAAP and the payment of which is being contested by the
Company or such Subsidiary in good faith and by appropriate proceedings, and
then only to the extent that a bond is filed in cases where the filing of a
bond is necessary to avoid the creation of a Lien against any of the
Properties of the Company and its Subsidiaries.
5.7. INSURANCE.
(a) The Company will, and will cause each of its Subsidiaries
and Operators to, carry and maintain in full force and effect at all times with
fiscally sound and reputable insurers accorded a rating of "A VIII" or better by
A.M. Best Company, Inc. (or a comparable rating by any comparable rating agency)
insurance against such risks and in such amounts (i) as is reasonable and
prudent in the circumstances, (ii) as is customarily maintained by similar
businesses and (iii) in any event as may be required by applicable laws,
statutes, regulations, rules or orders. Upon written request from any Purchaser,
the Company shall cause an appropriate officer to furnish to such Purchaser such
information about the Company's insurance as such Purchaser may from time to
time reasonably request, which information shall be prepared in form and detail
reasonably satisfactory to such Purchaser and be certified by an Executive
Officer of the Company. Within 10 days after written notice from the Required
Holders, the Company will, and will cause each of its Subsidiaries and Operators
to, obtain such additional insurance as the Required Holders may reasonably
request.
(b) The Company will, and will cause each of its Subsidiaries
to, carry all insurance available through the PBGC or any private insurance
companies covering its obligations to the PBGC.
5.8. LIMITATION ON CONSOLIDATION AND MERGER, SALES OF ASSETS.
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(a) The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, consolidate or merge with or into, any
Person (whether or not the Company or such Subsidiary is the surviving entity)
or acquire all or substantially all of the assets or any of the capital stock of
any Person unless (i) the Company or any of its Subsidiaries is the surviving
entity, (ii) no Default or Event of Default exists or will occur after giving
effect thereto, and (iii) the consideration paid in connection with any such
merger or acquisition does not exceed an amount equal to 10% of Healthcare
Assets as at the date of the consummation of such transaction, prior to giving
effect to such transaction.
(b) Other than Leases of Health Care Facilities in the
ordinary course of the Company's business ("ORDINARY LEASES"), the Company and
its Subsidiaries will not, directly or indirectly, during any four consecutive
fiscal quarters of the Company, sell, lease or otherwise dispose of any assets
or shares of capital stock of a Subsidiary which, individually or when combined
with all other assets (other than Ordinary Leases) sold, leased or otherwise
disposed of by the Company and its Subsidiaries during such four fiscal
quarters, including the assets attributable to a Subsidiary the capital stock of
which was sold during such period, (i) represented 15% or more of the Company's
total assets shown on the balance sheet of the Company and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of
the end of the most recently completed fiscal quarter of the Company, or (ii)
generated 15% or more of the Company's total gross revenues shown on the income
statement of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, for the most recently completed four
consecutive fiscal quarters of the Company, unless the net proceeds from any
such sale, lease or other disposition are reinvested in the business of the
Company within 180 days following the date of each such sale, lease or other
disposition and, prior to such investment, invested in Investments of the type
described in Section 5.28(a). The provisions of this Section 5.8(b) shall not
restrict the sale by the Company or its Subsidiaries of owned real property and
the improvements thereon pursuant to and in accordance with the terms of
Ordinary Leases which grant the lessee thereunder an option to purchase such
owned real property and improvements thereon.
5.9. RATINGS. The Company (a) will use its commercially
reasonable best efforts to enable a Recognized Rating Agency to have in effect
a rating for its unsubordinated, senior, unsecured indebtedness, and (b) shall
cause Duff & Phelps to have in effect at all times a rating for the Notes.
5.10. DIRECT PAYMENTS. Notwithstanding anything to the contrary in
this Agreement or the Notes, if any Purchaser has given written notice to the
Company and the Paying Agent requesting that the provisions of this Section
5.10 shall apply, the Company will cause the Paying Agent promptly and
punctually to pay when due the principal of the Notes and premium, if any, and
interest thereon, without any presentment thereof directly to such Purchaser
at the address of such Purchaser set forth on Schedule 1.1(a) or at such other
address as such Purchaser may from time to time designate in writing to the
Company and the Paying Agent or, if a bank account is designated for such
Purchaser in any written notice to the Company and the Paying Agent from such
Purchaser, the Company will cause the Paying Agent to make such payments in
current and immediately available federal funds which at the time of payment
shall be legal tender in the United States of America for the payment of
public and private debts to such bank account, marked for attention as
indicated, or in such other manner or to such other account of such Purchaser
in any bank in the United States as such Purchaser may from time to time
direct in writing. With respect to Notes to which this Section 5.10 applies,
the Company and the Paying Agent shall be entitled to presume conclusively
that any Purchaser as shall have requested the provisions hereof to apply to
its Notes remains the holder of such Notes until such Notes shall have been
presented to the Company as evidence of the transfer thereof.
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5.11. MAINTENANCE OF PROPERTIES; PROPERTIES LEASED TO OTHERS.
(a) The Company will cause to be maintained in good repair,
working order and condition, subject to normal wear and tear, all material
properties and assets from time to time owned by the Company or any of its
Subsidiaries and used in or necessary for the operation of their respective
businesses, and make or cause to be made all reasonable repairs, replacements,
additions and improvements thereto.
(b) The Company and its Subsidiaries will provide in each of
its Leases entered into after the Original Issuance Date that the lessee
thereunder will maintain the assets leased thereunder in good working order and
condition, ordinary wear and tear excepted.
5.12. INDEBTEDNESS. The Company will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist or guaranty
or otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
(a) Indebtedness of the Company in respect of the Notes
and other obligations hereunder and under the Note Documents;
(b) Indebtedness of the Company which is identified on
Schedule 5.12 ("ONGOING INDEBTEDNESS");
(c) Indebtedness of a Subsidiary which is owed to or
held by the Company or a Wholly Owned Subsidiary of the Company; and
(d) Credit Enhancements by the Company permitted by
Section 5.19;
unless (i) such Indebtedness (other than the Indebtedness described in clause
(c) above) is Indebtedness of the Company and (ii) immediately after giving
effect to the incurrence of such Indebtedness, the total outstanding
Indebtedness of the Company and its Subsidiaries (including the Indebtedness
described in clauses (a) through (d) above) does not exceed 150% of the
Company's Tangible Net Worth as of the end of the most recently completed fiscal
quarter of the Company.
5.13. LIENS. The Company will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of
its property, revenues or assets, whether now owned or hereafter acquired,
except:
(i) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(ii) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or, if overdue, being diligently contested in good faith by
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appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(iii) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than for
Debt) entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds;
(iv) judgment Liens in existence for less than 15 days after
the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies;
(v) the Liens of the lessee created or permitted by Ordinary
Leases;
(vi) any purchase money Liens on property acquired or held by
the Company or any Subsidiary in the ordinary course of business,
securing Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property; provided, that
(i) any such Lien attaches to such property concurrently with or within
twenty (20) days after the acquisition thereof, (ii) such Lien attaches
solely to the property so acquired in such transaction, (iii) the
principal amount of the Indebtedness secured thereby does not exceed
100% of the cost of such property, and (iv) the aggregate amount of all
such Indebtedness on a consolidated basis for the Company and its
Subsidiaries shall not at any time exceed $1,000,000.00; and
(vii) Liens securing the payment of Debt permitted under
Section 5.12 (other than Section 5.12(b)), PROVIDED that (x) no such
Debt is incurred pursuant to a Secured Credit Agreement and (y) such
Liens shall be permitted only if the aggregate amount of all Debt
secured by such Liens does not exceed 15% of the Company's Tangible Net
Worth as of the end of the most recently completed fiscal quarter of
the Company.
5.14. TANGIBLE NET WORTH; LEVERAGE RATIO.
(a) Tangible Net Worth will at no time be less than the sum of
(i) $300,000,000 plus (ii) 100% of the aggregate Net Issuance Proceeds received
by the Company (or any of its Subsidiaries) in connection with the issuance of
any equity interest in the Company (or any of its Subsidiaries) on or after the
date hereof other than any such equity interests issued in connection with any
dividend reinvestment program(s).
(b) The Company shall have or maintain on a consolidated
basis, as at the last day of each fiscal quarter, a ratio of Funded Indebtedness
to Tangible Net Worth (the "LEVERAGE RATIO") of not greater than 1.10:1.00;
PROVIDED, so long as the Leverage Ratio for any two consecutive fiscal quarters
does not exceed 1.10:1.00 (each, a "LEVERAGE TEST PERIOD"), then the Leverage
Ratio for the two consecutive fiscal quarters immediately succeeding such
Leverage Test Period may increase to a maximum of 1.20:1.00.
5.15. INTEREST COVERAGE RATIO; FIXED COVERAGE RATIO. The Company
shall have or maintain on a consolidated basis, as at the last day of each
fiscal quarter:
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(a) Interest Coverage of not less than 200%; and
(b) A Fixed Coverage Ratio of not less than 1.05:1.00.
5.16. RESTRICTED PAYMENTS.
(a) The Company will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of capital stock
(now or hereafter outstanding) of the Company, or on any warrants, options or
other rights with respect to any class of capital stock (now or hereafter
outstanding) of the Company, or apply or permit any Subsidiary to apply, any of
its funds, property or assets to the purchase, redemption, sinking fund, or
other retirement of, or agree, or permit any Subsidiary of the Company to agree,
to purchase or redeem (or set aside funds to purchase or redeem) any shares of
any class of capital stock (now or hereafter outstanding) of the Company, or
warrants, options or other rights with respect to any class of capital stock
(now or hereafter outstanding) of the Company (all or any of the foregoing,
"RESTRICTED PAYMENTS"); PROVIDED, HOWEVER, that so long as the Company remains
qualified as a REIT under the Code, the Company may make Restricted Payments if
and to the extent (but only to the extent) that: (i) no Default or Event of
Default shall have occurred and be continuing at the time of declaration of such
Restricted Payment, and (ii) immediately after giving effect to the making of
such Restricted Payment, the sum of all Restricted Payments made subsequent to
December 31, 1995 would not exceed the sum of (1) $10,000,000, (2) 100% of Cash
Flow accumulated subsequent to December 31, 1995, and (3) the net proceeds to
the Company since December 31, 1995 from the issuance of any shares of its
capital stock or any warrants, options or other rights with respect thereto;
PROVIDED FURTHER that the Company may make a Restricted Payment if a Default
(but not an Event of Default) shall have occurred and be continuing if such
Restricted Payment was declared but not yet paid prior to the occurrence of such
Default and the making of such Restricted Payment would be permitted under
clause (ii) of this Section 5.16(a).
(b) The provisions of Section 5.16(a) to the contrary
notwithstanding, the Company may declare and make a Restricted Payment if a
Default or Event of Default shall have occurred and be continuing at the time
that such Restricted Payment was declared, if (i) the declaration and payment of
such Restricted Payment is required in order for the Company to continue to
qualify as a REIT under the Code, and (ii) the Default or Event of Default
existing at the time of such declaration did not result from (1) a breach of
this Section 5.16, (2) a failure to make any payment or prepayment of principal
or interest on the Notes (including failure to pay the Make-Whole Premium
pursuant to Section 2, when due), or (3) the occurrence of any event specified
in Section 6.1(a) or (g).
5.17. CONSTRUCTION FINANCING. The Company will not permit the
aggregate outstanding principal, accrued interest (estimated in good faith to
the extent not known) and fees, in connection with Construction Investments
made by it and its Subsidiaries to exceed (i) an amount equal to 20% of the
Company's consolidated Investments in Healthcare Assets during the 12 month
period following the date hereof, and (ii) an amount equal to 17.5% percent of
the Company's consolidated Investments in Healthcare Assets at any time
thereafter; provided that neither the Company nor any Subsidiary of the
Company shall make a Construction Investment for a Facility unless (x) there
is included in the terms thereof an agreement for the conversion of the
interests of the Company or such Subsidiary in the Facility upon the
completion thereof into full ownership or a mortgage interest, and (y) if a
mortgage interest, the Company or such Subsidiary shall retain a first Lien on
such Facility.
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5.18. INCONSISTENT AGREEMENTS. The Company will not, and will not
permit any of its Subsidiaries to, enter into any agreement containing any
provision which would be violated or breached by the performance by the
Company of its obligations hereunder, under the Notes or under any other Note
Document.
5.19. CREDIT ENHANCEMENTS. Neither the Company nor any Subsidiary
of the Company will provide any Credit Enhancement, except (a) by the
endorsement of negotiable instruments for deposit or collection in the
ordinary course of business, (b) Credit Enhancements in support of Facilities,
if, immediately after giving effect thereto, the aggregate outstanding amount,
including principal, accrued interest (estimated in good faith to the extent
not known) and fees, of all issued Credit Enhancements (exclusive of the
Credit Enhancements referred to in subsection 5.19(c)) will not exceed
$30,000,000 and (c) as set forth on Schedule 5.19 hereof.
5.20. LONG-TERM CARE FACILITIES. The Company will ensure that not
less than 70% of the Investments in Healthcare Assets made by the Company and
its Subsidiaries are in Long-Term Care Facilities.
5.21. BEHAVIORAL CARE FACILITIES. The Company will ensure that not
more than 10% of the Investments in Healthcare Assets made by the Company and
its Subsidiaries are in Facilities classified as "Behavioral Care".
5.22. OPERATOR CONCENTRATION; DIVERSIFICATION OF ASSETS AND
REVENUES. The Company will ensure that not more than 20% of the Investments
made by the Company and its Subsidiaries are maintained with a single Operator
(including Affiliates of such Operator).
5.23. MAINTENANCE OF REIT STATUS. The Company will maintain its REIT
Status. The Company will not create, acquire or permit to exist any Subsidiary
unless such Subsidiary is a "qualified REIT subsidiary" within the meaning of
Section 856(j)(i)(2) of the Code. The Company may not and will not permit any
of its Subsidiaries to, directly or indirectly, engage in any business which
would substantially change the general nature of the business of the Company
and its Subsidiaries, considered as a whole, from the nature of the Company's
business as it exists on the date of this Agreement.
5.24. NOTICE. The Company will give each Purchaser written notice
whenever any of the following events occurs, promptly, and in any event,
within five days, after the Company knows or has reason to know thereof:
(a) (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan; or (ii) the institution of
proceedings or the taking or expected taking of any other action by PBGC or the
Company, any Subsidiary of the Company or any ERISA Affiliate to terminate,
withdraw or partially withdraw from any Plan and with respect to a Multiemployer
Plan, the Reorganization or Insolvency of such Plan;
(b) the Internal Revenue Service or any other federal, state
or local taxing authority shall allege any material default by the Company or
any Subsidiary in the payment of any tax material in amount or make any
assessment in respect thereof;
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(c) (i) any litigation or proceeding shall be brought against
the Company or any Subsidiary of the Company before any court or administrative
agency which, if successful, may reasonably be expected to have a Material
Adverse Effect, or (ii) without limiting the generality of clause (i), any
litigation, proceeding or dispute, other than disputes in the ordinary course of
business, or, whether or not in the ordinary course of business, involving
amounts in excess of $2,500,000 affecting the Company or any of its
Subsidiaries, whether or not fully covered by insurance, and regardless of the
subject matter thereof (excluding, however, any actions relating to worker's
compensation claims or negligence claims relating to use of motor vehicles, if
fully covered by insurance, subject to deductibles);
(d) there shall be filed any application for a
determination of the qualified status of any Plan;
(e) the Company receives (i) any written claims, complaints,
notices or inquiries relating to the condition of its facilities and properties,
or compliance with Environmental Laws which, if adversely determined,
individually or in the aggregate may reasonably be expected to have a Material
Adverse Effect, (ii) any notice of violation or of any administrative or
judicial complaint or order having been filed or about to be filed against the
Company or any of its Subsidiaries alleging violations of any Environmental Law,
or (iii) any notice from any governmental body or any other Person alleging that
the Company or any of its Subsidiaries is or may be subject to any environmental
liability;
(f) any officer of the Company reasonably believes that any
Default has occurred or that any representation or warranty made in Section 3.1
shall for any reason have ceased in any material respect to be true and correct;
or
(g) the occurrence or expected occurrence of any event that
would constitute or cause a Material Adverse Effect.
5.25. ENVIRONMENTAL LAWS.
(a) The Company will, and will cause each of its Subsidiaries
and lessees under Leases to, use and operate all of its respective facilities
and properties in material compliance with all Environmental Laws, and keep all
necessary permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material compliance
therewith. The Company shall promptly resolve any non-compliance with
Environmental Laws and keep its property free of any Lien imposed by any
Environmental Law.
(b) The Company will, and will cause each of its Subsidiaries
and lessees under the Leases to handle all Hazardous Materials in material
compliance with all applicable Environmental Laws. The Company will not, and
will cause each of its Subsidiaries and lessees under the Leases not to cause or
permit: (i) any Hazardous Material to be placed, held, located or disposed of,
on, under or at any Facility or any part thereof, except for such Hazardous
Materials that are necessary for the Company's or any Subsidiary's or any
Operator's operation of its business thereon and which shall be used, stored,
treated and disposed of in compliance with all applicable Environmental Laws or
(ii) such Facility or any part thereof to be used as a collection, storage,
treatment or disposal site for any Hazardous Material. The Company and each
Subsidiary acknowledges and agrees that the Purchasers shall have no liability
or responsibility for either:
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(i) damage, loss or injury to human health, the
environment or natural resources caused by the presence, disposal,
release or threatened release of Hazardous Materials on any part of
such Facility; or
(ii) abatement and/or clean-up required under any
applicable Environmental Laws for a release, threatened release or
disposal of any Hazardous Materials located at any Facility or used by
or in connection with the Company's or any Subsidiary's or any
Operator's business.
5.26. MODIFICATION OF CERTAIN AGREEMENTS.
(a) The Company will not consent to any amendment, supplement
or other modification to any of the terms or provisions contained in, or
applicable to the Credit Agreement, the Amended 1996 Note Documents, or other
agreement evidencing Indebtedness of the Company or any of its Subsidiaries that
would require the lenders thereunder to consent to any amendment or modification
of the Note Documents. The Company shall deliver to each Purchaser, promptly
upon their becoming available, all amendments, supplements or modifications to
the Credit Agreement or the Amended 1996 Note Documents.
(b) Subject to the prohibitions set forth in Section 5.30, the
Company will promptly deliver to each of the Purchasers copies of any amendments
or modifications to the certificate of incorporation or by-laws of the Company
or any of its Subsidiaries, certified with respect to the certificate of
incorporation by the Secretary of State of its state of incorporation and, with
respect to the by-laws, by the secretary or assistant secretary of such
corporation.
5.27. TRANSACTIONS WITH AFFILIATES. The Company will not, and will
not permit any of its Subsidiaries to, directly or indirectly, (a) make any
Investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise
dispose of any assets to an Affiliate; (c) merge into or consolidate with or
purchase or acquire assets from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of any Affiliate
(including, without limitation, guaranties and assumptions of obligations of an
Affiliate); PROVIDED, HOWEVER, that: (i) payments on Investments expressly
permitted by Section 5.28 hereof may be made, (ii) any Affiliate who is a
natural person may serve as an employee or director of the Company or any
Subsidiary and receive reasonable compensation for his services in such
capacity, and (iii) the Company or any Subsidiary of the Company may enter into
any transaction with an Affiliate providing for the leasing of property, the
rendering or receipt of services or the purchase or sale of product, inventory
and other assets in the ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as advantageous to the
Company or such Subsidiary as the monetary or business consideration that would
obtain in a comparable arm's length transaction with a Person not an Affiliate.
5.28. LIMITATION ON INVESTMENTS.5.28. The Company will not, and
will not permit any of its Subsidiaries to, make or permit to remain
outstanding any Investment in any Person, including any shareholder, director,
officer or employee of the Company or any of its Subsidiaries, except:
(a) Investments in:
(i) obligations issued or guaranteed by the
United States of America;
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(ii) certificates of deposit, bankers acceptances and
other "money market instruments" issued by any bank or trust company
organized under the laws of the United States of America or any State
thereof and having capital and surplus in an aggregate amount of not
less than $100,000,000;
(iii) open market commercial paper bearing the
highest credit rating issued by Standard & Poor's Corporation or by
another nationally recognized credit rating agency;
(iv) repurchase agreements entered into with any bank
or trust company organized under the laws of the United States of
America or any State thereof and having capital and surplus in an
aggregate amount of not less than $100,000,000 relating to United
States of America government obligations; and
(v) shares of "money market funds", each having net
assets of not less than $100,000,000;
in each case maturing or being due or payable in full not more than 180 days
after the acquisition thereof by the Company or any of its Subsidiaries.
(b) Investments by the Company in any Subsidiary, and by any
Subsidiary in the Company or another Subsidiary, provided that (i) the Company
shall cause each newly-created Subsidiary, if any, within thirty (30) days after
its organization thereof, to become a party to the Subsidiary Guaranty, (ii) the
Company shall cause each such newly-created Subsidiary to deliver to each
Purchaser those certificates and documents described in subsection 10.1(a), as
applicable, and (iii) all legal matters incident to the execution by such
Subsidiary of the Subsidiary Guaranty shall be satisfactory to counsel for each
Purchaser.
(c) The acquisition by the Company and its Subsidiaries, on a
consolidated basis, of healthcare assets consisting of Facilities and
Mortgages.
(d) Investments in any Person (including any Operators)
provided that the aggregate Cash portion of all such Investments does not exceed
an amount equal to 10% of Healthcare Assets as at any date of determination
thereof, prior to giving effect to any such Investment.
For purposes of Sections 5.8(b), 5.27 and 5.28, "Investments" shall
mean, by any Person:
(i) any amount paid or committed to be paid, or the
value of property of services contributed or committed to be
contributed, by such Person for or in connection with the acquisition
by such Person of any stock, bonds, notes, debentures, partnership,
membership or other ownership interests or other securities of, or
other investment in, any other Person; and
(ii) any amount of any advance, loan or extension of
credit by such Person to any other Person, or any guaranty or other
similar obligation of such Person with respect to any Indebtedness of
such other Person, and (without duplication) any amount committed to be
advanced, loaned, or extended by such Person to any other Person, or
any amount the payment of which is committed to be assured by a
guaranty or similar obligation by such Person for the benefit of such
other Person.
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5.29. ERISA, ETC. The Company will materially comply with all
applicable provisions of ERISA and the Code now or hereinafter in effect. The
Company will not permit the establishment of any Plan or amendment of any
Plan, which establishment or amendment could result in liability to the
Company or any of its Subsidiaries or increase the obligation for
post-retirement welfare benefits of the Company or any of its Subsidiaries
which liability or increase, individually or together with all similar
liabilities and increases, may reasonably be expected to have a Material
Adverse Effect.
5.30. CHANGES IN STRUCTURE; FISCAL YEAR. The Company will not
amend, supplement or modify the certificate of incorporation or by-laws of the
Company or any of its Subsidiaries in a manner which would be reasonably
likely to cause a Material Adverse Effect. The Company will not change its
fiscal year.
5.31. CAPITAL EXPENDITURES. Except as set forth on Schedule 5.31,
the Company will not, and will not permit any of its Subsidiaries to, make or
be or become obligated to make Capital Expenditures in the aggregate for the
Company and its Subsidiaries on a consolidated basis, during each fiscal year
of the Company and its Subsidiaries, in excess of $350,000 (exclusive of
Investments permitted under Section 5.28).
5.32. RENTAL OBLIGATIONS. The Company will not, and will not
permit any of its Subsidiaries to, enter into, or permit to remain in effect,
any lease (other than Capitalized Leases that are governed by Section 5.31),
if, after giving effect thereto, the aggregate amount of all rentals and other
obligations, including, without limitation, all percentage rents and additional
rent, due from the Company and its Subsidiaries thereunder would exceed
$350,000 during any fiscal year.
5.33. USE OF CASH. The Company will not, and will not permit
any of its Subsidiaries to, use, or permit to be used, in any manner or to any
extent, the Company's, or such Subsidiary's, Cash from operations for the
benefit of any Person, except: (a) in connection with the payment or prepayment
of expenses (other than Capital Expenditures) directly incurred for the benefit
of the Company or such Subsidiary in the maintenance and operation of its
business, in each case only in the ordinary course of its business, (b) for the
payment of required payments of principal and interest on Indebtedness of the
Company and its Subsidiaries permitted to exist hereunder, and (c) for uses
that are otherwise specifically permitted by this Agreement.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
6.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an "EVENT OF DEFAULT" as the term is used herein or in the other
Note Documents:
(a) (i) the Company shall fail to pay when due any
payment (including any mandatory prepayment) of the principal of any
Note or of any premium or interest thereon; or
(ii) the Company shall fail to pay when due any other
amount payable hereunder or under any other Note Document and such
payment default with respect to such other amount shall continue for
more than five Business Days; or
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(b) the Company shall fail to observe or perform any of its
obligations under Section 2.5, 5.8, 5.12, 5.13, 5.14, 5.15, 5.16, 5.17, 5.18,
5.19, 5.20, 5.21, 5.22, 5.23, 5.24, 5.25, 5.26, 5.27, 5.28, 5.29, 5.30, 5.31,
5.32, 5.33 or 6.2 of this Agreement or Article IV of the Subsidiary Guaranty; or
any Subsidiary of the Company shall fail to observe or perform any of its
obligations under Article II of the Subsidiary Guaranty; or
(c) the Company, or any Subsidiary of the Company, shall fail
to observe or perform any other obligation, covenant, undertaking, condition or
provision in respect of the Notes or contained in this Agreement or the other
Note Documents that is not remedied within 30 days after the earliest of (i) the
furnishing of notice thereof by the Company to the Purchasers, (ii) the
Company's willful failure to provide any notice required under Section 6.2 or
(iii) receipt of written notice thereof from any Purchaser to the Company
requiring the same to be remedied; or
(d) any representation or warranty made by the Company herein,
or made by the Company or any Subsidiary of the Company in any other Note
Document, shall be untrue or inaccurate in any material respect; or
(e) any of the Note Documents or any provision thereof shall
cease to be a legal, valid and binding agreement enforceable against the Company
(or, in the case of the Subsidiary Guaranty, the Company or any of the
Subsidiaries) in accordance with the respective terms thereof or shall in any
way be terminated or become or be declared ineffective or inoperative or shall
in any way whatsoever cease to give or provide the respective rights, titles,
interests, remedies, priorities, powers or privileges intended to be created
thereby; or
(f) a judgment shall be rendered against the Company or any
Subsidiary of the Company, or any attachment, levy or execution against any of
their respective properties shall occur, for any amount in excess of $1,500,000
and shall remain unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of 30 days or more; or
(g) (i) the Company or any of its Subsidiaries shall have made
an assignment for the benefit of creditors, filed a petition in
bankruptcy, shall be adjudicated insolvent, shall have petitioned or
applied to any tribunal for the appointment of a receiver, custodian,
or any trustee for it or a substantial part of its assets, or shall
have commenced any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, whether nor or hereafter in effect, or the
Company or any of its Subsidiaries shall have taken any corporate
action to authorize any of the foregoing actions; or there shall have
been filed any such petition or application, or any such proceeding
shall have been commenced against the Company or any of its
Subsidiaries, that remains undismissed for a period of 60 days or more;
or any order for relief shall be entered in any such proceeding; or the
Company or any of its Subsidiaries by any act or omission shall have
indicated its consent to, approval of, or acquiescence in any such
petition, application or proceeding or the appointment of a custodian,
receiver or any trustee for it or any substantial part of its
properties, or shall have suffered any custodianship, receivership or
trusteeship to continue undischarged for a period of 30 days or more;
or
(ii) the Company or any of its Subsidiaries shall have
generally failed to pay its debts as such debts become due; or
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(iii) the Company or any of its Subsidiaries shall have
concealed, removed, or permitted to be concealed or removed, any part
of its property, with intent to hinder, delay or defraud its
creditors or any of them or made or suffered a transfer of any of its
property that may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or shall have made any transfer of its
property to or for the benefit of a creditor at a time when other
creditors similarly situated have not been paid; or shall have
suffered or permitted, while insolvent, any creditor to obtain a Lien
upon any of its property through legal proceedings or distraint that
is not vacated within 30 days from the date thereof; or
(h) a default shall occur in the payment when due (subject to
any applicable grace period), whether by acceleration or otherwise, of any
Indebtedness (other than the Obligations) of the Company with an aggregate
principal amount in excess of $1,000,000 or any Subsidiary with an aggregate
principal amount in excess of $200,000, or a default shall occur in the
performance or observance of any obligation or condition with respect to any
such Indebtedness if the effect of such default is to accelerate the maturity of
any such Indebtedness or to permit the holder or holders thereof, or any trustee
or agent for such holders (immediately or after the giving of notice or passage
of time or both), to cause such Indebtedness to become due and payable prior to
its stated maturity, or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(i) any of the following events shall occur with respect to
any Plan:
(x) the institution of any steps by the Company, any
Subsidiary of the Company, any ERISA Affiliate or any other Person to
terminate a Plan if, as a result of such termination, the Company, any
Subsidiary of the Company or any such ERISA Affiliate could be required
to make a contribution to such Plan, or could reasonably expect to
incur a liability or obligation to the PBGC or any other Person under
Title IV of ERISA or to such Plan, in excess of $100,000; or
(y) a contribution failure occurs with respect to
any Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA; or
(j) a Material Adverse Effect shall have occurred; or
(k) (i) any Person, or a group of Persons (within the meaning
of Section 13 or 14 of the Exchange Act), shall have acquired (A) beneficial
ownership in excess of 25% of the outstanding stock of the Company or other
voting interest having ordinary voting powers to elect a majority of the
directors, managers or trustees of the Company (irrespective of whether at such
time stock of any other class or classes shall have or might have voting power
by reason of the happening of any contingency), or (B) all or substantially all
of the Investments of the Company; or (ii) a majority of the Board of Directors
of the Company, at any time, shall be composed of Persons other than (A) Persons
who were members of the Board of Directors on the date of this Agreement, or (B)
Persons who subsequently become members of the Board of Directors and who either
(x) are appointed or recommended for election with the affirmative vote of a
majority of the directors in office as of the date of the Agreement, or (y) are
appointed or recommended for election with the affirmative vote of a majority of
the Board of Directors of the Company then in office; or
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(l) The Company shall at any time fail to maintain its REIT
Status, or the Company or any Subsidiary shall lose, through suspension,
termination, impoundment, revocation, failure to renew or otherwise, any
material license, permit or governmental authorization; or
(m) George L. Chapman shall cease for any reason whatsoever,
including, without limitation, death or disability (as such disability shall be
determined in the reasonable judgment of the Required Holders) to be and
continuously perform the duties of an executive officer of the Company and to be
a member of its Board of Directors or, if such cessation shall occur as a result
of the death or such disability, no successor satisfactory to the Required
Holders, in their sole discretion, shall have become and shall have commenced to
perform the duties of such executive officer of the Company and serve as a
member of the Company's Board of Directors within 30 days after such cessation;
PROVIDED, HOWEVER, that if any satisfactory successor shall have been so elected
and shall have commenced performance of such duties within such period, the name
of such successor or successors shall be deemed to have been inserted in place
of George L. Chapman in this Section 6.1(m); or
(n) The Company or any of its Subsidiaries, or any of their
respective Facilities, shall be subject to one or more Liens for costs or
damages in excess of $1,000,000 individually or in the aggregate under any
Environmental Law, such Liens shall remain in place for 30 days after the
creation thereof and such Liens are reasonably likely to cause a Material
Adverse Effect; or
(o) 30 days after the acceleration by the Company or any of
its Subsidiaries of the obligations of an Operator as a result of any default in
the payment of amounts which are due and owing under any lease, note, mortgage
or related security documents in connection with any Facility of such Operator
(such Facility, herein referred to as the "DEFAULTED FACILITY"), in the event
the sum of Lease Rental Expense and/or Mortgage Expense arising from (i) the
Defaulted Facility, and (ii) all Pooled Facilities, if any, of which the
Defaulted Facility is a part, which have a Fixed Charge Coverage of less than
1.0 to 1.0, account for 12.5% or more of the aggregate amount of all Lease
Rental Expense and/or Mortgage Expense owing to the Company or any of its
Subsidiaries from all Operators during the immediately preceding four calendar
quarters.
6.2. NOTICE TO PURCHASERS. Whenever the Company becomes aware that any
Default or Event of Default has occurred, or if a Purchaser has either given
any notice to the Company or taken any other action of which the Company is
aware with respect to a Default or Event of Default, or the Company receives
written notice from a third party concerning an event which constitutes a
Default or Event of Default, the Company will ensure that notice is given (or
such third party notice is forwarded) to all holders of the Notes then
outstanding, no later than the fifth day (or second day in the case of an
Event of Default or Default under Section 6.1(a)) after it becomes aware that
such Event of Default or Default has occurred, or that such notice has been
given or such other action has been taken with respect to such Default or
Event of Default, such notice to be in writing and sent in the manner provided
in Section 9.6.
6.3. ACCELERATION OF MATURITIES; OTHER REMEDIES.
(a) Upon the occurrence of an Event of Default under Section
6.1(a), the holder of any Note may, by written notice to the Company, declare
such Note to be, and such Note shall thereby become, due and payable (without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company) at the Redemption Price. Upon the occurrence of an
Event of Default under Section
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6.1(g), all Notes shall immediately become due and payable (without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company) at the Redemption Price. Upon the occurrence of
any Event of Default, other than under Section 6.1(g) and other than under
Section 6.1(a) (which are governed by the preceding two sentences), the
holders of Notes representing a majority of the principal amount of the Notes
outstanding excluding in each case any Notes held by the Company or any
Subsidiary or Affiliate of the Company, may, by written notice to the Company,
declare all Notes to be, and such Notes shall thereby become, due and payable
(without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Company) at the Redemption Price. No course of
dealing on the part of any holder of any Note nor any delay or failure on the
part of any holder of any Note to exercise any right shall operate as a waiver
of such right or otherwise prejudice such holder's rights, powers and
remedies. The Company further agrees to pay to the holder or holders of the
Notes all costs and expenses incurred by them in the collection of any Note
upon any default hereunder or thereon, including the fees, disbursements and
other charges of such holder's or holders' attorneys for all services rendered
in connection therewith.
(b) The rights and remedies expressly provided for in this
Agreement and the other Note Documents are cumulative and not exclusive of any
rights or remedies which the Purchaser or any holder of a Note would otherwise
have including, without limitation, the rights and remedies provided for in the
Subsidiary Guaranty.
6.4. RESCISSION OF ACCELERATION. The provisions of Section 6.3 are
subject to the condition that if any outstanding Notes have been declared or
have become immediately due and payable by reason of the occurrence of any
Event of Default described in paragraphs (a) through (f), inclusive, of
Section 6.1, or an Event of Default described in paragraphs (h) through (o),
inclusive, of Section 6.1, then the holders of Notes representing a majority
of the principal amount of the Notes outstanding excluding in each case any
Notes held by the Company or any Subsidiary or Affiliate of the Company, may,
by written instrument filed with the Company, rescind and annul such
declaration and the consequences thereof; PROVIDED that at the time such
declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely by
reason of such declaration under Section 6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall
have been cured or waived pursuant to Section 7.1 and the Company shall have
paid all of Purchaser's costs and expenses as provided for in Section 9.4;
and PROVIDED further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
7.1. CONSENT REQUIRED. Any term, covenant, agreement or condition of
this Agreement or the Notes or the other Note Documents may, with the consent
of the Company, be amended or compliance
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therewith may be waived (either generally or in a particular instance and
either retroactively or prospectively), if the Company shall have obtained the
consent in writing of the Required Holders, provided that no such waiver,
modification, alteration or amendment shall (a) change the time of payment of
the principal of or the interest on any Note or reduce the principal amount
thereof or change the rate of interest thereon, (b) change any of the
provisions with respect to Section 2 including, without limitation, the
calculation of the Redemption Price, or (c) change the percentage of holders
of the Notes, or the number of holders of Notes, required to take any action
under this Section 7 or any other provision of this Agreement, without the
consent of each holder of the Notes affected thereby. Executed or true and
correct copies of any waiver, modification, alteration or amendment to this
Agreement shall be delivered by the Company to each holder of outstanding
Notes forthwith following the date on which the same shall have been executed
and delivered by the holder or holders of the requisite percentage of
outstanding Notes. Whenever in this Agreement it is provided that an action
may be taken or a condition may exist with the consent of all or any
percentage of the Purchasers or the outstanding Notes, such consent must be
the consent of all or such percentage of the Purchasers or such outstanding
Notes without regard to any Notes held or agreed to be purchased by the
Company, any Subsidiary of the Company or any Affiliate of the Company or any
such Subsidiary.
7.2. SOLICITATION OF PURCHASERS. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes or the other Note Documents unless each holder of Notes
(irrespective of the amount of Notes then owned by it) shall be informed
thereof by the Company and shall be afforded the opportunity of considering
the same and shall be supplied by the Company with sufficient information to
enable it to make an informed decision with respect thereto. The Company will
not, directly or indirectly, pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or otherwise, to any holder
as consideration for or as an inducement to entering into by any holder of any
waiver or amendment of any of the terms and provisions of the Agreements or
the Notes or the other Note Documents unless such remuneration is concurrently
paid, on the same terms, ratably to the holders of all Notes then outstanding,
whether or not such holders agreed to such waiver or amendment.
7.3. EFFECT OF AMENDMENT OR WAIVER. Any such amendment or waiver shall
apply equally to all of the holders of the Notes and shall be binding upon
them, upon each future holder of any Note and upon the Company, whether or not
such Note shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS
8.1. DEFINITIONS. (a) Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined. Capitalized terms used
but not otherwise defined herein shall have the respective meanings ascribed
thereto in the other Note Documents.
"ACT" means the Securities Act of 1933, as amended.
"AFFILIATE" means any Person (a) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, the Company, (b) which beneficially owns or holds with power to
vote 5% or more of any class of the voting stock of the Company, (c) 5% or more
of the
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voting stock of which is beneficially owned or held by the Company, or (d)
which is an officer or director of the Company. The term "CONTROL" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGREEMENT" shall mean this Amended and Restated Note Purchase
Agreement, as amended, modified or supplemented from time to time.
"AMENDED 1996 NOTE DOCUMENTS" means, collectively, the Amended and
Restated Note Purchase Agreement between the Company and the Purchasers party
thereto, dated as of the date hereof, for $30,000,000 of Senior Notes, the notes
issued pursuant thereto and all other documents and instruments executed or
delivered by the Company in connection therewith or pursuant thereto.
"APPRAISAL" means an appraisal providing an assessment of the fair
market value of a Property (whether appraised on a stand-alone basis or "in
bulk" together with similar Properties) which is independently and impartially
prepared by an MAI appraiser having substantial experience in the appraisal of
health care facilities and conforming to Uniform Standards of Professional
Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal
Foundation.
"APPRAISED VALUE" means with respect to any Facility, the value of such
Facility reflected in the most recent Appraisal prepared with respect to such
Facility.
"BALLOON PAYMENTS" means as of any date as of which the amount thereof
shall be determined, with respect to the Company on a consolidated basis, an
amount equal to (x) its aggregate obligation to make payments of principal in
respect of Indebtedness having a maturity during the immediately succeeding six
month period, less (y) the sum of Cash and the total unused availability under
the Credit Agreement; PROVIDED, HOWEVER, any Indebtedness with respect to which
the Company (or any of its Subsidiaries) has received a commitment for the
renewal or other refinancing of such Indebtedness shall not be included in the
computation of Balloon Payments and provided, further, if the calculation of the
amount of Balloon Payments results in a negative number, then the amount thereof
shall be deemed to be zero.
"BANKRUPTCY CODE" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 ET SEQ., as amended.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which banks in New York are required by law to close or are customarily
closed.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
amount of such Note that is to be paid or prepaid pursuant to any paragraph of
Section 2 or is declared to be immediately due and payable pursuant to Section
6.3, as the context requires.
"CAPITAL EXPENDITURES" means, for any period, the aggregate amount of
all payments made or to be made during such period by any Person directly or
indirectly for the purpose of acquiring, constructing or maintaining fixed
assets, real property or equipment that, in accordance with GAAP, would be added
as a debit to the fixed asset account of such Person, including, without
limitation, all amounts paid or payable
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during such period with respect to Capitalized Lease Obligations and interest
that are required to be capitalized in accordance with GAAP.
"CAPITALIZED LEASE" means any lease, the obligations to pay rent or
other amounts under which constitute Capitalized Lease Obligations.
"CAPITALIZED LEASE OBLIGATION" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"CASH" means, as to any Person, such Person's cash and cash
equivalents, as defined in accordance with GAAP consistently applied.
"CASH FLOW" means, for any period, the Company's consolidated net
income (loss) for such period, excluding extraordinary items net of tax effect,
plus depreciation, plus amortization of loan expenses, plus (minus) any change
in provision for losses, plus (minus) each of the following: (i) non-refundable
loan and commitment fees received in cash in excess of (less than) amounts
earned; (ii) non-refundable lease income received in cash in excess of (less
than) amounts earned; and (iii) non-refundable interest income received in cash
in excess of (less than) amounts earned.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"COMPANY" means Health Care REIT, Inc., a Delaware corporation,
together with its successors.
"CONSTRUCTION INVESTMENTS" means any financing extended by the Company
or any Subsidiary of the Company with respect to a Facility which is under
construction, i.e., has not received a certificate of occupancy and the
Company's or such Subsidiary's conditions for conversion to permanent financing
for the Facility have not been satisfied.
"CREDIT AGREEMENT" means the Company's loan agreement, dated as of the
date hereof, by and among the Company and the banks signatory thereto and
KeyBank National Association, as Administrative Agent, and Fleet Bank, N.A., as
Syndication Agent, and as hereafter amended from time to time (provided that no
such amendment results in a breach of Section 5.26), providing for a
$175,000,000 revolving credit facility.
"CREDIT ENHANCEMENT" means any obligation, contingent or otherwise, of
the Company or any of its Subsidiaries directly or indirectly guaranteeing any
Indebtedness or other obligation of any Person and any obligation, direct or
indirect, contingent or otherwise, of the Company or any of its Subsidiaries (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation of such Person (whether arising by virtue
of partnership arrangements, or by agreement to keep
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well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part). The term "Credit Enhanced" used
as a verb has a corresponding meaning.
"DEBT" means at any date, without duplication, (i) all obligations of
the Company or any of its Subsidiaries for borrowed money, (ii) all obligations
of the Company or any of its Subsidiaries evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of the Company or any of its
Subsidiaries to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (iv) all
obligations of the Company or any of its Subsidiaries as lessee which are
capitalized in accordance with generally accepted accounting principles, (v) all
obligations of the Company or any of its Subsidiaries to purchase securities (or
other property) which arise out of or in connection with the sale of the same or
substantially similar securities or property, (vi) all obligations of the
Company or any of its Subsidiaries to reimburse any bank or other Person in
respect of amounts paid under a letter of credit or similar instrument, (vii)
all obligations of the Company or any of its Subsidiaries to mandatorily redeem
any capital stock of the Company or any of its Subsidiaries or any other Person,
(viii) all Debt of others secured by a Lien on any asset of the Company or any
of its Subsidiaries, whether or not such Debt is assumed by the Company or any
of its Subsidiaries, and (ix) all Debt of others Credit Enhanced by the Company
or any of its Subsidiaries.
"DEFAULT" means any event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event of
Default as defined in Section 6.1.
"DISCOUNTED PREPAYMENT VALUE" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to the sum of the Reinvestment
Yield plus 50 basis points.
"EBITDA" means, for any period, with respect to the Company on a
consolidated basis, determined in accordance with GAAP, the sum of net income
(or net loss) for such period PLUS, the sum of all amounts treated as expenses
for: (a) interest, (b) depreciation, (c) amortization, and (d) all accrued taxes
on or measured by income to the extent included in the determination of such net
income (or net loss); provided, however, that net income (or net loss) shall be
computed without giving effect to extraordinary losses or gains.
"EBITDAR" means, for any period, with respect to any Facility, pre-tax
net income plus Operator Interest Expense, Mortgage Expense (but excluding
therefrom any amounts relating to principal), Lease Rental Expense,
depreciation, amortization and management fees as reported by the Operator less
an imputed management fee equal to five percent of the Facility's net revenues;
PROVIDED, HOWEVER, that net income (or net loss) shall be computed without
giving effect to extraordinary losses or gains.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and the protection of the environment.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.
"ERISA AFFILIATE" means any corporation, trade or business that is
treated as a single employer with the Company or any Subsidiary of the Company
under Section 414(b), (c), (m) or (o) of the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means the Chairman of the Board, President, a Vice
President, chief financial officer or Treasurer of the Company.
"FACILITY" means a health care facility offering health care-related
products and services, including, but not limited to, any acute care hospital,
rehabilitation hospital, nursing facility, assisted living facility, retirement
center, long-term care facility, or medical office building, and facilities and
services directly related thereto.
"FIXED CHARGE COVERAGE" means, with respect to any Facility, the ratio
of: (x) EBITDAR, to (y) the sum of Operator Interest Expense (but excluding
therefrom Operator Interest Expense, the payment of which is subordinated to the
payment of Indebtedness owing to the Company or any of its Subsidiaries), Lease
Rental Expense, Mortgage Expense and principal paid with respect to Indebtedness
of Operators (other than Indebtedness relating to a Mortgage) which is not
subordinated to the Company or any of its Subsidiaries; all of the foregoing
calculated as at any date of determination thereof by reference to the
immediately preceding four fiscal quarters and based upon the financial
statements provided to the Company by each Operator for the immediately
preceding four fiscal quarters of each Operator.
"FIXED COVERAGE RATIO" means as of the last day of any fiscal quarter
with respect to the immediately preceding four fiscal quarters of the Company
ending on such date, the ratio of (x) EBITDA to (y) the sum of Interest Expense,
cash dividends and Balloon Payments.
"FUNDED INDEBTEDNESS" means, as of any date of determination thereof,
all Indebtedness of any Person, determined in accordance with GAAP, which by its
terms matures more than one year after the date of calculation, and any such
Indebtedness maturing within one year from such date which is renewable or
extendable at the option of the obligor to a date more than one year from such
date, including, in any event, the revolving credit loans borrowed pursuant to
the Credit Agreement.
"HAZARDOUS MATERIALS" means (a) any "hazardous substance" as defined by
CERCLA; (b) any "hazardous waste" or "petroleum," as defined by the Resource
Conservation and Recovery Act, as amended; (c) any petroleum product; (d) any
pollutant or contaminant or hazardous, dangerous or toxic chemical, material or
substance within the meaning of any other Environmental Law, as amended or
hereafter amended; (e) any radioactive material, including any source, special
nuclear or by-product material as defined at 42 U.S.C. 2011 et seq., as amended
or hereafter amended; or (f) any other toxic chemical, hazardous substance,
contaminant or pollutant, medical waste, infectious waste or hazardous waste.
"HEALTHCARE ASSETS" means, as of any date as of which the amount
thereof is to be determined, the aggregate amount equal to the sum (without
duplication) of:
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<PAGE> 36
(i) the lesser of the Appraised Value or purchase
price of each Facility owned entirely by the Company or any of its
Subsidiaries and leased to an Operator; plus
(ii) the lesser of the Appraised Value of any
Facility encumbered by a Mortgage or the outstanding principal amount
of the Mortgage which encumbers any such Facility.
"INCLUDING" means including without limitation.
"INDEBTEDNESS" means, with respect to any Person, all: (a) liabilities
or obligations, direct and contingent, which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Person at the date as of which Indebtedness is to be
determined, including, without limitation, contingent liabilities that in
accordance with such principles, would be set forth in a specific dollar amount
on the liability side of such balance sheet, and Capitalized Lease Obligations
of such Person; (b) liabilities or obligations of others for which such Person
is directly or indirectly liable, by way of guaranty (whether by direct
guaranty, suretyship, discount, endorsement, take-or-pay agreement, agreement to
purchase or advance or keep in funds or other agreement having the effect of a
guaranty) or otherwise; (c) liabilities or obligations secured by Liens on any
assets of such Person, whether or not such liabilities or obligations shall have
been assumed by it; and (d) liabilities or obligations of such Person, direct or
contingent, with respect to letters of credit issued for the account of such
Person and bankers acceptances created for such Person.
"INSOLVENCY" means with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
section 4245 of ERISA.
"INSOLVENT" shall pertain to a condition of Insolvency.
"INTEREST COVERAGE" means, as at the last day of any fiscal quarter,
the quotient, expressed as a percentage (which may be in excess of 100%),
determined by dividing EBITDA by Interest Expense; all of the foregoing
calculated by reference to the immediately preceding four fiscal quarters of the
Company ending on such date of determination.
"INTEREST EXPENSE" means, for any period, on a combined basis, the sum
of all interest paid or payable (excluding unamortized debt issuance cost) on
all items of Indebtedness of the Company and its Subsidiaries outstanding at any
time during such period.
"INVESTMENT" means (except as otherwise provided in Section 5.28 in
respect of Sections 5.8(b), 5.27 and 5.28) a Facility or a Mortgage,
individually or collectively, as the case may be.
"LEASE" means any Operating Lease or a Lease that creates a Capitalized
Lease Obligation, in either case in which the Company or a Subsidiary of the
Company is the lessor.
"LEASE RENTAL EXPENSE" means, for any period and with respect to any
Facility, the total amount payable during such period by the lessee of such
Facility to the Company or any Subsidiary, including, without limitation, (a)
base rent (as adjusted from time to time), plus (b) all incremental charges to
which the Facility is subject under the lease relating thereto.
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"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
encroachment, charge or claim against or interest in property, to secure payment
of a debt or performance of an obligation or other priority or preferential
arrangement of any kind or nature whatsoever.
"LONG-TERM CARE FACILITIES" means healthcare facilities comprised of
nursing facilities, assisted living facilities and retirement facilities or
combinations thereof.
"MAKE-WHOLE PREMIUM" means, with respect to any Note, a premium equal
to the excess, if any, of the Discounted Prepayment Value of the Called
Principal of such Note over such Called Principal. The Make-Whole Premium shall
in no event be less than zero.
"MATERIAL ADVERSE EFFECT" means:
(a) a material adverse effect on the business, results of
operations or financial condition of the Company and its Subsidiaries, taken as
a whole, or on the ability of the Company or any Subsidiary of the Company to
perform its obligations under this Agreement, the Notes or any other Note
Document; or
(b) a material adverse effect on the legality, validity or
enforceability of the obligations of the Company or any Subsidiary of the
Company under this Agreement or the Notes or the other Note Documents.
"MORTGAGE(S)" means mortgages of real property constituting a Facility
for which the Company or a Subsidiary of the Company is the sole mortgagee.
"MORTGAGE EXPENSE" means, for any period and with respect to any
Facility, the total amount payable during such period by the mortgagor of such
Facility to the Company or any Subsidiary, including, without limitation, (a)
interest and principal (as adjusted from time to time) plus (b) all incremental
charges to which the Facility is subject under the Mortgage.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET ISSUANCE PROCEEDS" means in respect of any issuance of
Indebtedness or equity, the proceeds in Cash received by the Company or any of
its Subsidiaries upon or simultaneously with such issuance, net of direct costs
of such issuance and any taxes paid or payable by the recipient of such
proceeds.
"NET WORTH" means, at any date, the aggregate amount of capital stock
(less any treasury stock), surplus and retained earnings of the Company, all
determined as of such date in accordance with GAAP consistently applied.
"NOTE DOCUMENTS" means this Agreement, the Notes, the Subsidiary
Guaranty and any other agreements, documents and writings now or hereafter
executed by, on behalf of or for the benefit of the Company, any Subsidiary of
the Company or the Purchasers pursuant to or in connection with this Agreement,
the Notes, the Subsidiary Guaranty or the transactions contemplated hereby and
thereby, together with all amendments, modifications (including through the
waiver of any provision hereof or thereof), supplements and/or restatements
hereto or thereto.
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"NOTES" means the Notes described in Section 1.1, and any Notes issued
in exchange or replacement therefor, in each case as the same may be amended,
modified or supplemented from time to time.
"OBLIGATIONS" means the payment and performance of all present and
future obligations and liabilities of the Company or any Subsidiary of the
Company (whether actual or contingent or whether owed jointly or severally or in
any other capacity whatsoever) to the Purchasers (or any of them) under the Note
Documents (or any of them), together with all costs, charges and expenses
incurred by the Purchasers (or any of them) in connection with the protection,
preservation or enforcement of their respective rights under the Note Documents,
including, without limitation, all principal of, premium (including the
Make-Whole Premium), if any, and interest on, any Note and all other amounts
payable by the Company or any Subsidiary of the Company under any Note Document
(including, without limitation, amounts owed in respect of interest that accrues
on all or any portion of the Obligations after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company or any Subsidiary of the Company), and all
renewals or extensions of any of the foregoing.
"OPERATING LEASE" means any lease (other than a lease constituting a
Capitalized Lease Obligation) of real or personal property having a lease term
(as defined in Financial Accounting Standards Board Statement No. 13, as in
effect on the Original Issuance Date) of more than one year.
"OPERATOR" means (a) the lessee of any Facility owned or leased by the
Company or any of its Subsidiaries, and (b) the mortgagor of a Facility which is
subject to a Mortgage to the extent that such entity controls the operation of
the Facility.
"OPERATOR INTEREST EXPENSE" means, for any period, the sum of all
interest on, and all amortization of debt discount and expenses on, all
Indebtedness of an Operator outstanding at any time during such period but
excluding any amounts which constitute Mortgage Expense.
"OVERDUE RATE" means, for each day, a rate per annum equal to the
higher of (a) 10.24% and (b) the sum of (i) 2% PLUS (ii) the Prime Rate for such
day. Nothing contained in this definition shall require the Company or any
Subsidiary of the Company to pay interest at a rate exceeding the maximum rate
permitted by applicable law.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" means a corporation, an association, a partnership, a limited
liability company or partnership, an organization, a business, a trust or any
other entity, an individual, a government or political subdivision thereof or a
governmental agency or instrumentality.
"PLAN" means at any particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company, any Subsidiary of the
Company or an ERISA Affiliate is (or, if such plan was terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
section 3(5) of ERISA.
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"POOLED FACILITIES" means Facilities which are commonly owned or
operated by one Operator or an Affiliate thereof (as selected by the Company or
any of its Subsidiaries), and the debt financings or leases of which are
cross-defaulted and, with respect to Mortgages, are cross-collateralized.
"PRIME RATE" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"PROPERTY" means any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.
"PURCHASER'S ENVIRONMENTAL LIABILITY" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys' fees at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against any Purchaser or any of
its respective affiliates, shareholders, directors, officers, employees or
agents in connection with or arising from:
(a) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment to which the Company or any of its Subsidiaries
may be subject;
(b) the Release by the Company or any of its Subsidiaries of
any Hazardous Material on, in, under or affecting all or any portion of any
property of the Company or any such Subsidiary, the groundwater, or any of the
surrounding areas;
(c) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real property
owned or operated by the Company or any of its Subsidiaries of any Hazardous
Material (including any losses, liabilities, damages, injuries, costs, expenses
or claims asserted or arising under any Environmental Law);
(d) any misrepresentation, inaccuracy or breach of any
warranty, contained or referred to in Section 3.1(q); or
(e) the imposition of any lien for damages caused by or the
recovery of any costs for the cleanup, release or threatened release of
Hazardous Material by the Company or any of its Subsidiaries, or in connection
with any property owned or formerly owned by the Company or any of its
Subsidiaries.
"RECOGNIZED RATING AGENCY" shall mean a nationally recognized rating
agency or organization, including Moody's, Standard & Poor's and Duff & Phelps,
and any other rating agency or organization approved by the Purchasers holding a
majority of the principal amount of the Notes.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal
of any Note, the yield to maturity implied by (i) the yields reported, as of
10:00 A.M. (New York City time) on the third Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively
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<PAGE> 40
traded U.S. Treasury securities having a maturity equal to the weighted
average remaining life of the Called Principal being paid or prepaid as of
such Settlement Date, or (ii) if such yields shall not be reported as of such
time or the yields reported as of such time shall not be ascertainable, the
Treasury Constant Maturity Series yields reported, for the latest day for
which such yields shall have been so reported as of the third Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15(519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the weighted average remaining life of the Called Principal
being paid or prepaid as of such Settlement Date. Such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between reported yields.
"REIT STATUS" means, with respect to any Person, (a) the qualification
of such Person as a real estate investment trust under Sections 856 through 860
of the Code, and (b) the applicability to such Person and its shareholders of
the method of taxation provided for in Section 857 et seq. of the Code.
"RELEASE" means a "release," as such term is defined in CERCLA.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon (other than interest accrued to the Settlement Date) that would be due
on or after the Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its expressed maturity date.
"REORGANIZATION" means with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the 30-day notice period is waived
under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ' 2615, and the
event described in Section 4062(e) of ERISA.
"REQUIRED HOLDERS" means, at any time, the holders of at least 66 2/3%
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Subsidiaries or any Affiliates).
"SECURED CREDIT AGREEMENT" means any credit agreement, note purchase
agreement or other documentation evidencing Debt borrowed from institutional
investors or banks which is secured by Liens on assets or properties of the
Company or any Subsidiary of the Company; provided that if the only security for
such Debt is a mortgage creating a Lien on a single real estate property of the
Company or any Subsidiary of the Company, then such credit agreement, note
purchase agreement or other documentation shall not be deemed to be a Secured
Credit Agreement.
"SERIES" when referring to the Notes shall mean either the Series A
Notes, Series B Notes or the Series C Notes issued hereunder.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be paid or prepaid
pursuant to any paragraph of Section 2 or is declared to be immediately due and
payable pursuant to Section 6.3, as the context requires.
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"SUBSIDIARY" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(assuming exercise or conversion solely of the securities held by such Person)
is at the time beneficially owned by such Person directly or indirectly through
Subsidiaries, and (ii) any partnership, association, joint venture or other
entity in which such Person directly or indirectly through Subsidiaries has more
than a 50% equity interest at the time or the power to elect a majority of the
Board of Directors or similar governing body.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty Agreement, dated as
of the date hereof, among the Purchasers, the Company and each of the
Subsidiaries of the Company, as amended, modified or supplemented from time to
time.
"TANGIBLE NET WORTH" means, at any date, the aggregate amount of Net
Worth of the Company, after subtracting deferred charges and intangible assets,
all as determined as of such date in accordance with GAAP consistently applied.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, joint venture or other entity of which
all of the equity securities or ownership interests (other than, in the case of
a corporation, directors' qualifying shares) are owned or controlled by such
Person or one or more Wholly Owned Subsidiaries of such Person.
(b) In addition, each of the following terms is defined in
the Section set forth opposite such term:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Audited Financials 3.1(h)
Defaulted Facility 6.1(o)
Effective Date 10.1
Environmental Reports 3.1(q)
Event of Default 6.1
GAAP 3.1(h)
Indemnified Liabilities 9.4(b)
Indemnified Parties 9.4(b)
1996 10-K 3.1(g)
Leverage Ratio 5.14(b)
Leverage Test Period 5.14(b)
Note Register 9.1(a)
Notes 1.1
Ongoing Indebtedness 5.12(b)
Ordinary Leases 5.8(b)
Original Issuance Date 1.2(a)
Original Note Purchase Agreement Preamble
Original Notes Preamble
Original Series A Notes Preamble
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<PAGE> 42
Original Series B Notes Preamble
Original Series C Notes Preamble
Paying Agent 5.4
Purchase Price 1.2(a)
Purchaser Preamble
Redemption Price 2.1
Release 10.2
Release Documents 10.2
Restricted Payments 5.16(a)
Series A Notes 1.1
Series B Notes 1.1
Series C Notes 1.1
Taxes 5.3
</TABLE>
8.2. ACCOUNTING PRINCIPLES; TIME PERIODS. (a) Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, the same shall be
done in accordance with GAAP.
(b) In the Note Documents, in connection with the computation
of periods of time, each such period shall run from (and including) the
beginning of such period to (but excluding) the end of such period.
SECTION 9. MISCELLANEOUS
9.1. REGISTERED NOTES. (a) Company shall cause to be kept a
register for the registration and transfer of the Notes (the "NOTE REGISTER")
at the office of the Company or the Paying Agent, and the Company will cause
to be registered or transferred on the Note Register as hereinafter provided
and under such reasonable regulations as it may prescribe, any Note issued
pursuant to this Agreement.
(b) At any time and from time to time the registered holder of
any Note which has been duly registered as hereinabove provided may, subject to
compliance with applicable securities laws, transfer such Note upon surrender
thereof at the Company or the principal office of the Paying Agent (if one shall
have been appointed) duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder of such Note or its attorney
duly authorized in writing; provided that the Company or the Paying Agent may
decline to exchange or register the transfer of any Note during the period of
five Business Days preceding the due date for any payment of principal or
interest on the Notes.
(c) The Person in whose name any registered Note shall be
registered shall be deemed and treated as the owner and holder thereof for all
purposes of this Agreement. Payment of or on account of the principal, premium,
if any, and interest on any registered Note shall be made to or upon the written
order of such registered holder.
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9.2. EXCHANGE OF NOTES. At any time and from time to time, upon not
less than three Business Days' notice to that effect given by the holder of
any Note initially delivered or of any Note substituted therefor pursuant to
Section 9.1, this Section 9.2, or Section 9.3 (except in the case of a lost,
stolen, or mutilated certificate sought to be exchanged pursuant to Section
9.3, as soon as practicable), and, upon surrender of such Note at the office
of the Paying Agent, the Company will cause the Paying Agent to deliver in
exchange therefor, without expense to the holder, except as set forth below,
Notes for the same aggregate principal amount as the then unpaid principal
amount of the Note so surrendered, in the denomination of U.S. $100,000 or any
amount in excess thereof as such holder shall specify, dated as of the date to
which interest has been paid on the Note so surrendered, or, if such surrender
is prior to the payment of any interest thereon, then dated as of the date of
issue, payable to such Person or Persons, or registered assigns, as may be
designated by such holder and otherwise permitted hereunder, and otherwise of
the same form and tenor as the Notes so surrendered for exchange. The Company
may require the payment of a sum sufficient to cover any stamp tax or
governmental charges imposed upon such exchange or transfer.
9.3. LOSS, THEFT OR MUTILATION OF NOTES. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
any Notes, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation upon surrender
and cancellation of the Note, the Company will cause the Paying Agent to
deliver without expense to the holder thereof, a new Note, of like tenor, in
lieu of such lost, stolen, destroyed or mutilated Note. If any Purchaser is
the owner of any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer, of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of the Note at the time of such loss, theft
or destruction shall be accepted as satisfactory evidence thereof and no
further indemnity shall be required as a condition to the execution and
delivery of a new Note other than the written agreement of such owner to
indemnify the Company.
9.4. EXPENSES, STAMP TAX, INDEMNITY.
(a) Whether or not the transactions herein contemplated shall
be consummated, the Company agrees to pay directly all of its and the
Purchasers' out-of-pocket expenses in connection with the preparation, execution
and delivery, administration, interpretation and enforcement of this Agreement
and each of the other Note Documents and the transactions contemplated or
permitted hereby and thereby, including the reasonable fees, disbursements and
other charges of Purchasers' special counsel, and all duplicating and printing
costs and charges for shipping the Notes, adequately insured to each Purchaser
at such Purchaser's home office or at such other place as such Purchaser may
designate. The Company agrees to pay all of its out-of-pocket expenses in
connection with the preparation, execution and delivery of this Agreement and
the transactions contemplated or permitted hereby, including the fees and
expenses of its counsel and of Everen Securities, Inc. (if any). The Company
also agrees to pay all expenses relating to the performance of any transactions
contemplated or permitted hereby, any filing or recording fees or taxes, all
expenses of the Purchasers in connection with any Default or Event of Default or
any alleged Default or Event of Default hereunder or in connection with any
action for the enforcement or collection of the Notes or this Agreement or any
other Note Document and all expenses associated with any amendments, waivers or
consents pursuant to the provisions hereof or thereof (whether or not the same
are actually executed and delivered), including any amendments, waivers or
consents resulting from any work-out, restructuring or similar proceedings
relating to the performance by the Company of the Obligations. The Company also
agrees to pay all expenses relating to any claim or action threatened, made or
brought against any of the Purchasers arising out of or relating to any extent
to this Agreement, the Notes, or the other Note Documents
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<PAGE> 44
or the transactions contemplated hereby or thereby. The Company also agrees
that it will pay any fees and related expenses incurred or to be incurred in
connection with its cooperation with a Recognized Rating Agency and Duff &
Phelps as provided in Section 5.9 and all initial and ongoing fees and all
out-of-pocket expenses of the Paying Agent, if any, and will pay and save the
Purchasers harmless against any and all liability with respect to stamp and
other similar taxes, if any, which may be payable or which may be determined
to be payable in connection with the execution, delivery or enforcement of
this Agreement or the Notes or any other Note Documents, whether or not any
Notes are then outstanding. Without limiting the foregoing, the Company agrees
to pay the cost of obtaining a private placement number for the Notes and
authorizes the submission of such information as may be required by Standard &
Poor's for the purpose of obtaining such number.
(b) In consideration of the execution and delivery of this
Agreement by each Purchaser, the Company hereby indemnifies, exonerates and
holds each Purchaser and each of its respective affiliates, shareholders,
officers, directors, employees, attorneys and agents (collectively, the
"INDEMNIFIED PARTIES") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, claims, liabilities and damages, and
expenses incurred in connection therewith (irrespective of whether any such
Indemnified Party is a party to the action for which indemnification hereunder
is sought), including reasonable attorneys' fees and disbursements
(collectively, the "INDEMNIFIED LIABILITIES"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to:
(i) any and all brokerage fees and commissions
payable or claimed to be payable by the Company to any Person in
connection with the transactions contemplated by this Agreement or any
of the other Note Documents;
(ii) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds from the
sale of the Notes;
(iii) the execution, delivery and performance of
this Agreement and any other Note Document by any of the Indemnified Parties; or
(iv) any Purchaser's Environmental Liability;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of such Indemnified Party's gross
negligence or willful misconduct, as finally determined by a court of competent
jurisdiction. This indemnity shall survive repayment or transfer of the Notes,
the release of any collateral, or a transfer of the Company's property by
foreclosure or by a deed in lieu of foreclosure, regardless of whether caused
by, or within the control of, the Company or any Subsidiary of the Company. The
Company, its successors and assigns, hereby waive, release and agree not to make
any claim or bring any cost recovery action against any Indemnified Party under
CERCLA or any state equivalent, or any other similar law now existing or
hereafter enacted. It is expressly understood and agreed that the Company's
obligation to any Indemnified Party under this indemnity shall be without regard
to fault on the part of the Company with respect to the violation or condition
which results in liability of any Indemnified Party. If and to the extent that
the foregoing undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.
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<PAGE> 45
9.5. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE;
COUNTERCLAIMS. (a) No delay or failure on the part of the holder of any Note
in the exercise of any power or right shall operate as a waiver thereof; nor
shall any single or partial exercise of the same preclude any other or further
exercise thereof, or the exercise of any other power or right, and the rights
and remedies of the holder of any Note are cumulative to and are not exclusive
of any rights or remedies any such holder would otherwise have, and no waiver
or consent, given or extended pursuant to Section 7, shall extend to or affect
any obligation or right not expressly waived or consented to. The indemnities
set forth in Section 9.4 shall be in addition to any other obligations or
liabilities of the Company or any of its Subsidiaries to the Purchasers
hereunder or under any other Note Documents, at common law or otherwise.
(b) The due payment and performance of the Obligations shall
be without regard to any counterclaim, right of offset or any other claim
whatsoever that the Company or any of its Subsidiaries may have against any
Purchaser and without regard to any other obligation of any nature whatsoever
that any Purchaser may have to the Company or any of its Subsidiaries, and no
such counterclaim or offset shall be asserted by the Company or any of its
Subsidiaries (unless such counterclaim or offset would, under applicable law, be
permanently and irrevocably lost if not brought in such action) in any action,
suit or proceeding instituted by any Purchaser for payment or performance of the
Obligations.
9.6. NOTICES. All communications provided for hereunder shall be in
writing and delivered or mailed by registered or certified mail, return
receipt requested, or by overnight courier, or by facsimile communication
transmitted on a Business Day (confirmed in writing by registered or certified
mail, return receipt requested, or by overnight courier), and shall be deemed
given if mailed, five Business Days after deposited in the mail, if sent by
overnight courier, one Business Day after delivered to the courier or, if sent
by facsimile transmission when appropriate record of transmission is obtained,
in each case prepaid and addressed, if to the Company, to Health Care REIT,
Inc., One Sea Gate, Suite 1500, Toledo, Ohio 43604, Attention: Chairman,
Telecopier No. 419-247-2826 or to such other address as the Company or the
Paying Agent, if any, may in writing designate to the Purchasers or to a
subsequent holder of the Note initially issued to Purchaser, and, if to an
original Purchaser, addressed to such Purchaser at the address set forth on
Schedule 1.1(a) hereto, and if to any transferee of such Purchaser, to the
address set forth on the Note Register, or to such other address as such
original Purchaser or transferee of such Purchaser shall designate in writing
to the Company and the Paying Agent, if any.
9.7. SUCCESSORS AND ASSIGNS. This Agreement and the Notes shall be
binding upon the Company and its respective successors and permitted assigns
and shall be binding upon and inure to each Purchaser's benefit and to the
benefit of each Purchaser's successors and assigns, including each successive
holder or holders of any Notes, except that the Company may not assign or
otherwise transfer any of its rights or obligations under this Agreement and
the Notes without the prior written consent of all the Purchasers. Each such
successive holder or holders of any Notes, including each Purchaser, shall
have all rights and privileges of a "Purchaser" hereunder. Each successive
holder or holders of a Note shall, at the Company's request, restate in
writing for the Company's benefit as to such holder, the representations set
forth in Section 3.2.
9.8. SURVIVAL OF COVENANTS AND REPRESENTATIONS. All covenants,
representations and warranties made by the Company or any of its Subsidiaries
herein and in any other Note Documents and in any certificates delivered
pursuant hereto or thereto, shall survive the execution and the delivery of
this Agreement and the Notes. The obligations of the Company under Section 5.3
and Section 9.4 shall in each
-41-
<PAGE> 46
case survive any termination of this Agreement, the payment in full of all
Obligations, or the invalidity or unenforceability of any term or provision of
this Agreement or any other Note Document.
9.9. SEVERABILITY. If any provision of this Agreement or any of the
other Note Documents for any reason is declared unenforceable by a court of
competent jurisdiction (sustained on appeal, if any), such unenforceability
shall not affect the enforceability of any other provision hereof or thereof,
all of which shall remain in force and effect; provided that, if any provision
of this Agreement or any of the other Note Documents shall be unenforceable by
reason of a final judgment of a court of competent jurisdiction based upon a
court's ruling (sustained on appeal, if any) that such provision is
unenforceable because of the excessive degree or magnitude of the obligation
imposed thereby on any Person, that unenforceable obligation shall be reduced
in magnitude or degree by the minimum degree or magnitude necessary in order
to permit the provision to be enforceable by the Purchasers. In the event the
provisions of the immediately preceding sentence applies, the parties shall
make appropriate adjustment to the provisions of this Agreement and the other
Note Documents to give effect to the benefits intended to be conferred upon
the parties hereby.
9.10. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
9.11. SUBMISSION TO JURISDICTION. THE COMPANY HEREBY CONSENTS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF NEW YORK, STATE OF NEW YORK, AND IRREVOCABLY AGREES THAT ALL ACTIONS
OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTES AND OTHER NOTE DOCUMENTS
SHALL BE LITIGATED IN SUCH COURTS, AND THE COMPANY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER
VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH
COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS
THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL
(RETURN RECEIPT REQUESTED) OR MESSENGER DIRECTED TO IT AT ITS ADDRESS SET
FORTH IN SECTION 9.6 OR TO ITS AGENT REFERRED TO BELOW AT SUCH AGENT'S ADDRESS
SET FORTH BELOW AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED IN
ACCORDANCE WITH SECTION 9.6. THE COMPANY HEREBY IRREVOCABLY APPOINTS THE
PRENTICE HALL CORPORATION SYSTEM, INC., WITH AN OFFICE ON THE DATE HEREOF AT
15 COLUMBUS CIRCLE, NEW YORK, NEW YORK 10023, AS ITS AGENT FOR THE PURPOSE OF
ACCEPTING SERVICE OF ANY PROCESS WITHIN THE STATE OF NEW YORK. NOTHING
CONTAINED IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY HOLDER OF NOTES TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY
ACTION OR PROCEEDING IN THE COURTS OF ANY JURISDICTION AGAINST THE COMPANY OR
TO ENFORCE A JUDGMENT OBTAINED IN THE COURTS OF ANY OTHER JURISDICTION.
9.12. WAIVER OF JURY TRIAL. THE COMPANY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL
-42-
<PAGE> 47
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH, THIS AGREEMENT, THE NOTES OR ANY OTHER NOTE DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF THE PURCHASERS, OR THE COMPANY IN CONNECTION HEREWITH OR
THEREWITH. THE COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
NOTE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR EACH PURCHASER ENTERING INTO THIS AGREEMENT.
9.13. CAPTIONS. The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
9.14. COUNTERPARTS; INTEGRATION. This Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
hereof but all together constituting only one agreement. This Agreement, the
Notes and the other Note Documents constitute the entire agreement and
understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof and thereof.
9.15. INTEREST RATE LIMITATION. Nothing contained in the definition
of Overdue Rate or in any Note Document shall require the Company or any of
its Subsidiaries to pay interest at a rate exceeding the maximum rate
permitted by applicable law.
SECTION 10. MISCELLANEOUS
10.1. CONDITIONS TO EFFECTIVENESS. This Agreement will become
effective on the date (the "EFFECTIVE DATE") on which each of the following
conditions precedent shall be satisfied:
(a) CORPORATE DOCUMENTS. Each Purchaser shall have received
(i) a certified copy of the charter of the Company and of each of its
Subsidiaries; (ii) certified copies of the by-laws of the Company and of each of
its Subsidiaries and of all corporate action taken by the Company and of each of
its Subsidiaries authorizing the execution, delivery and performance of this
Agreement, the Notes and the other Note Documents; (iii) a certificate in
respect of the name, signature and incumbency of each of the Company's and of
each of its Subsidiary's officers who is authorized to sign on its behalf this
Agreement, the Notes and the other Note Documents to be delivered by it
hereunder; and (iv) counterparts of each of this Agreement, the Notes and the
other Note Documents, signed by each of the parties thereto.
(b) COMPANY'S CLOSING CERTIFICATE. Each Purchaser shall have
received a certificate of the Company signed by an Executive Officer of the
Company and of each of its Subsidiaries to the effect that (i) the
representations and warranties contained in Section 3.1 and the other Note
Documents are true and correct on and as of the Effective Date, and (ii) no
Default or Event of Default exists on and as of the Effective Date.
(c) LEGAL OPINIONS. Each Purchaser shall have received an
opinion dated the Effective Date, in each case in form and substance
satisfactory to each Purchaser, covering such matters relating to the
transactions contemplated by this Agreement and the other Note Documents as each
Purchaser may
-43-
<PAGE> 48
reasonably request, from (i) Shumaker, Loop & Kendrick, counsel to the Company
and (ii) Dorsey & Whitney, special New York counsel to the Company.
(d) RATINGS. The Notes shall have a Duff & Phelps rating of at
least BBB-, and each Purchaser shall have received written evidence thereof.
(e) NO DEFAULT OR EVENT OF DEFAULT; ACCURACY OF
REPRESENTATIONS AND WARRANTIES. On the Effective Date, no Default or Event of
Default shall exist. The representations and warranties contained in this
Agreement (including Section 3.1) and in the other Note Documents shall be true
and correct on and as of the Effective Date.
(f) OTHER AGREEMENTS. Each Purchaser shall have received a
copy of the Credit Agreement and the Amended 1996 Note Documents and each
material document referred to therein, in each case as in effect on the
Effective Date, together with a certificate of an Executive Officer of the
Company certifying that each such copy is a true, complete and correct copy of
each such document and agreement as then in effect. Such certificate shall state
that each such document and agreement is in full force and effect and that no
default or event of default exists thereunder or will result from the
consummation of the transactions contemplated by this Agreement and the other
Note Documents.
(g) OPINION OF COUNSEL TO THE PURCHASERS. Each Purchaser shall
have received from its special counsel an opinion dated the Effective Date in
form and substance satisfactory to such Purchaser covering such matters relating
to the transactions contemplated by this Agreement as such Purchaser may
reasonably request.
(h) SATISFACTORY PROCEEDINGS. All proceedings taken in
connection with the transactions contemplated by this Agreement and the other
Note Documents, and all documents necessary for the consummation thereof, shall
be satisfactory in form and substance to each Purchaser and its special counsel,
and such Purchaser shall have received a copy (executed or certified as may be
appropriate) of all legal documents or proceedings taken in connection with the
consummation of such transactions.
(i) COSTS AND EXPENSES. The Company shall have paid or
provided for the payment of all expenses that the Company is obligated to pay
pursuant to Section 9.4 and all of the commitment fees the Company is obligated
to pay pursuant to Section 1.2. In addition, each Purchaser shall have received
reasonable assurance in writing that all other fees and expenses incurred by any
other Person in connection with the transactions contemplated hereunder has been
paid on or prior to the date hereof.
(j) RELEASE OF COLLATERAL. Each Purchaser shall have received
evidence satisfactory to it that all liens covering the collateral securing
certain indebtedness of the Company existing pursuant to (i) the $150,000,000
Credit Agreement, dated as of September 8, 1994, among the Company, the banks
signatory thereto and National City Bank, as Agent, as amended, and (ii) the
Amended 1996 Note Documents have been released or terminated.
(k) SUBSIDIARY GUARANTY. The Company, each of the Company's
Subsidiaries and each Purchaser shall have executed and delivered the
Subsidiary Guaranty, and the Subsidiary Guaranty shall be in full force and
effect.
10.2. RELEASE OF COLLATERAL. Each Purchaser hereby agrees to release
and to cause to be released (the "Release"), as of the Effective Date, all
Liens granted to it or to the Collateral Agent (as such term is defined in the
Original Note Purchase Agreement) for its benefit in and to the Collateral (as
such term is defined in the Original Note Purchase Agreement). Each Purchaser
agrees to use all reasonable efforts to take or cause to be taken all actions
and to do all things reasonably necessary to effectuate the Release (in
-44-
<PAGE> 49
each case at the expense of the Company), including instructing the Collateral
Agent to (a) execute and deliver to the Company or its agent all instruments
reasonably requested by the Company in order to evidence the Release of record
("Release Documents"), including, without limitation, (i) releases of all
Direct Mortgages, Assignments of Lease, Assignments of Loan Documents and
related documents, (ii) termination statements for all UCC-1 financings
statements that name the Company as debtor and the Collateral Agent as secured
party, and (iii) assignments to the Company of all UCC-1 financing statements
that name the Company's borrower or tenant as debtor and the Company as
secured party and that were assigned to the Collateral Agent; and (b) endorse
(where applicable) and deliver to the Company all original promissory notes,
letters of credit and all other original documents held by the Collateral
Agent in connection with any assigned loan or fee property.
-45-
<PAGE> 50
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as of the date first written above.
HEALTH CARE REIT, INC.
By:
-----------------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, AS
TRUSTEE OF A COMMINGLED PENSION TRUST
By:
-----------------------------------
Name:
Title:
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By:
-----------------------------------
Name:
Title: Authorized Signatory
-46-
<PAGE> 51
ALLSTATE LIFE INSURANCE COMPANY
By:
--------------------------------------
Name:
Title: Authorized Signatory
By:
---------------------------------------
Name:
Title: Authorized Signatory
THE LIFE INSURANCE COMPANY OF VIRGINIA
By:
---------------------------------------
Name:
Title:
-47-
<PAGE> 52
SCHEDULE 3.1(q)
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
ENVIRONMENTAL REPORTS
---------------------
None
<PAGE> 53
SCHEDULE 5.12
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
ONGOING INDEBTEDNESS
--------------------
I. LINES OF CREDIT
- ------------------
<TABLE>
<CAPTION>
Total
Available
---------
<S> <C>
Key/Fleet Revolving Line of Credit $175,000,000
Capital Bank, NA 10,000,000
- ---------------- ------------
$185,000.000
============
</TABLE>
II. EXISTING SECURED DEBT
<TABLE>
<CAPTION>
Investment Amount of Liens/
Operator Facility Balance Indebtedness
- -------- -------- ------- ----------------
<S> <C> <C> <C>
Gordon Health Pittsburgh, PA $10,481,950 $ 6,527,045
Ventures
Horizon Healthcare San Antonio, TX 1,415,224 1,415,224
------------
$ 7,942,269
============
</TABLE>
III. EXISTING OTHER UNSECURED DEBT
<TABLE>
<CAPTION>
<C> <C>
1993 Series Senior Notes $ 52,000,000
1996 Series Senior Notes 30,000,000
------------
$ 82,000,000
============
</TABLE>
IV. EXISTING CONTINGENT OBLIGATIONS
<TABLE>
<CAPTION>
Amount of
Operator Facility Guaranty
- -------- -------- --------
<S> <C> <C>
Kingston Health Care Ashland, OH $ 1,625,000
Kingston Health Care Vermilion, OH 1,625,000
Kingston Health Care Naperville, IL 4,715,000
Kingston Health Care Santa Fe, NM 5,795,000
Village Management Rockford, IL 5,055,000
------------
Total $ 18,815,000
============
</TABLE>
<PAGE> 54
SCHEDULE 5.19
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
CREDIT ENHANCEMENTS
-------------------
EXISTING CONTINGENT OBLIGATIONS
- --------------------------------
<TABLE>
<CAPTION>
Amount of
Operator Facility Guaranty
- -------- -------- --------
<S> <C> <C>
Kingston Health Care Ashland, OH $ 1,625,000
Kingston Health Care Vermilion, OH 1,625,000
Kingston Health Care Naperville, IL 4,715,000
Kingston Health Care Santa Fe, NM 5,795,000
Village Management Rockford, IL 5,055,000
------------
Total $ 18,815,000
============
</TABLE>
<PAGE> 55
SCHEDULE 5.31
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
PERMITTED CAPITAL EXPENDITURES
------------------------------
$2,500,000 in Capital Expenditures in connection with the
following Facilities:
Facility Name Location
------------- --------
Harborview Hospital Miami, FL
Horizon Hospital Clearwater, FL
<PAGE> 56
Exhibit A
Form of
HEALTH CARE REIT, INC.
Amended and Restated
7.16% Series A Senior Note
Due 1998
Private Placement No. 42217K C@3
No. __ March 28, 1997
U.S. $________________
HEALTH CARE REIT, INC., a Delaware corporation (the "Company"), for
value received, hereby unconditionally promises to pay to the order of
____________ (the "Purchaser") or its registered assigns, on April 8, 1998 the
principal amount of ______________________ DOLLARS (U.S. $________________) and
to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7.16% per annum from (and including) April 8, 1993 to (but excluding)
the date of repayment of such principal amount, payable on the 8th day of each
April and October in each year (commencing October 8, 1993), and at maturity;
PROVIDED, HOWEVER, that if, at any time on or after March 28, 1997, any of the
Notes shall not be rated at least BBB by Duff & Phelps (it being understood and
agreed that (x) a rating of BBB- is lower than a rating of BBB and (y) the
withdrawal, discontinuance or absence of a rating of any of the Notes by Duff &
Phelps shall be deemed, for these purposes, to be the equivalent of a rating
that is lower than BBB), the rate of interest shall instead be 7.26% per annum
for the period during which the Notes shall not be rated at least BBB by Duff &
Phelps. The Company agrees to pay interest on overdue principal (whether by
acceleration or otherwise, and including any overdue prepayment of principal)
and premium, if any, and on any overdue installment of interest, at the Overdue
Rate until paid.
Unless otherwise set forth herein, capitalized terms used
herein but not defined herein have the respective meanings assigned to them in
the Note Purchase Agreement (as such term is hereafter defined).
1. Except as may be otherwise provided pursuant to Section 5.4
or 5.10 of the Note Purchase Agreement, both the principal hereof, premium, if
any, and interest hereon are payable at the principal office of the Company, in
immediately available funds, in coin or currency of the United States of America
which at the time of payment shall be legal tender for the payment of public and
private debts. Such payments shall be applied first to accrued interest, then to
premium, if any, and then to principal. If any amount of principal, premium,
-1-
<PAGE> 57
if any, or interest on or in respect of this Note becomes due and payable on
any date which is not a Business Day, such amount shall be payable on the
immediately preceding Business Day. Payment of any amount on or in respect of
this Note shall be made not later than 12:00 Noon New York Time on the date on
which such payment shall become due (each such payment made after such time on
such date to be deemed to have been made on the next succeeding Business Day).
2. This Note is one of the Series A Senior Notes due 1998
issued pursuant to the terms and provisions of that certain Amended and Restated
Note Purchase Agreement, dated as of March 28, 1997 (the "Note Purchase
Agreement"), entered into by the Company and each of the Purchasers party
thereto, and this Note and the holder hereof are entitled equally and ratably
with the holders of all other Notes (as defined in the Note Purchase Agreement)
outstanding under the Note Purchase Agreement to all benefits provided for in
the Note Documents or referred to therein, and may be accelerated, or redeemed
at the option of the holder hereof, prior to maturity, all as provided in the
Note Purchase Agreement, to which Note Purchase Agreement reference is hereby
made for the statement thereof. A copy of the Note Purchase Agreement may be
obtained from the Company.
3. The Notes are not subject to prepayment, purchase or
redemption at the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with the Make-Whole
Premium, if any, all as set forth in Section 2 of the Note Purchase Agreement.
4. This Note is registered on the books of the Company and is
transferable only by surrender hereof at the offices of the Company (or of such
Paying Agent as may be appointed by the Company pursuant to Section 5.4 of the
Note Purchase Agreement from time to time), duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of this
Note or its attorney duly authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Note shall be made only to or
upon the order in writing of the registered holder.
5. Pursuant to the Subsidiary Guaranty, payment of all amounts
owed under this Note is absolutely and unconditionally guaranteed by each
Subsidiary of the Company. The Company and each surety, endorser, guarantor and
other party ever liable for payment of any sums of money payable upon this Note
jointly and severally waive presentment, demand, protest, notice of protest and
nonpayment or other notice of default, notice of acceleration and intention to
accelerate or other notice of any kind, and agree that their liability under
this Note shall not be affected by any renewal or extension in the time of
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes hereto or any other Note
Document, regardless of the number of such renewals, extensions, indulgences,
releases or changes.
6. No waiver by Purchaser of any of its rights or remedies
hereunder or under any other Note Document or otherwise, shall be considered a
waiver of any other subsequent right or remedy of Purchaser; no delay or
omission in the exercise or enforcement by Purchaser of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Purchaser; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Purchaser.
-2-
<PAGE> 58
7. This Note and the Note Purchase Agreement shall be governed
by and shall be construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
HEALTH CARE REIT, INC.
By:_____________________
Name:
Title:
-3-
<PAGE> 59
Exhibit B
Form of
HEALTH CARE REIT, INC.
Amended and Restated
7.71% Series B Senior Note
Due 2000
Private Placement No. 42217K C#1
No. __ March 28, 1997
U.S. $________________
HEALTH CARE REIT, INC., a Delaware corporation (the "Company"), for
value received, hereby unconditionally promises to pay to the order of
____________. (the "Purchaser") or its registered assigns, on April 8, 2000 the
principal amount of ______________________ DOLLARS (U.S. $________________) and
to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7.71% per annum from (and including) April 8, 1993 to (but excluding)
the date of repayment of such principal amount, payable on the 8th day of each
April and October in each year (commencing October 8, 1993), and at maturity;
PROVIDED, HOWEVER, that if, at any time on or after March 28, 1997, any of the
Notes shall not be rated at least BBB by Duff & Phelps (it being understood and
agreed that (x) a rating of BBB- is lower than a rating of BBB and (y) the
withdrawal, discontinuance or absence of a rating of any of the Notes by Duff &
Phelps shall be deemed, for these purposes, to be the equivalent of a rating
that is lower than BBB), the rate of interest shall instead be 7.81% per annum
for the period during which the Notes shall not be rated at least BBB by Duff &
Phelps. The Company agrees to pay interest on overdue principal (whether by
acceleration or otherwise, and including any overdue prepayment of principal)
and premium, if any, and on any overdue installment of interest, at the Overdue
Rate until paid.
Unless otherwise set forth herein, capitalized terms used
herein but not defined herein have the respective meanings assigned to them in
the Note Purchase Agreement (as such term is hereafter defined).
1. Except as may be otherwise provided pursuant to Section 5.4
or 5.10 of the Note Purchase Agreement, both the principal hereof, premium, if
any, and interest hereon are payable at the principal office of the Company, in
immediately available funds, in coin or currency of the United States of America
which at the time of payment shall be legal tender for the payment of public and
private debts. Such payments shall be applied first to accrued interest, then to
premium, if any, and then to principal. If any amount of principal, premium, if
any, or interest on or in respect of this Note becomes due and payable on any
date which is not a Business Day,
-1-
<PAGE> 60
such amount shall be payable on the immediately preceding Business Day.
Payment of any amount on or in respect of this Note shall be made not later
than 12:00 Noon New York Time on the date on which such payment shall become
due (each such payment made after such time on such date to be deemed to have
been made on the next succeeding Business Day).
2. This Note is one of the Series B Senior Notes due 2000
issued pursuant to the terms and provisions of that certain Amended and Restated
Note Purchase Agreement, dated as of March 28, 1997 (the "Note Purchase
Agreement"), entered into by the Company and each of the Purchasers party
thereto, and this Note and the holder hereof are entitled equally and ratably
with the holders of all other Notes (as defined in the Note Purchase Agreement)
outstanding under the Note Purchase Agreement to all benefits provided for in
the Note Documents or referred to therein, and may be accelerated, or redeemed
at the option of the holder hereof, prior to maturity, all as provided in the
Note Purchase Agreement, to which Note Purchase Agreement reference is hereby
made for the statement thereof. A copy of the Note Purchase Agreement may be
obtained from the Company.
3. The Notes are not subject to prepayment, purchase or
redemption at the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with the Make-Whole
Premium, if any, all as set forth in Section 2 of the Note Purchase Agreement.
4. This Note is registered on the books of the Company and is
transferable only by surrender hereof at the offices of the Company (or of such
Paying Agent as may be appointed by the Company pursuant to Section 5.4 of the
Note Purchase Agreement from time to time), duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of this
Note or its attorney duly authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Note shall be made only to or
upon the order in writing of the registered holder.
5. Pursuant to the Subsidiary Guaranty, payment of all amounts
owed under this Note is absolutely and unconditionally guaranteed by each
Subsidiary of the Company. The Company and each surety, endorser, guarantor and
other party ever liable for payment of any sums of money payable upon this Note
jointly and severally waive presentment, demand, protest, notice of protest and
nonpayment or other notice of default, notice of acceleration and intention to
accelerate or other notice of any kind, and agree that their liability under
this Note shall not be affected by any renewal or extension in the time of
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes hereto or any other Note
Document, regardless of the number of such renewals, extensions, indulgences,
releases or changes.
6. No waiver by Purchaser of any of its rights or remedies
hereunder or under any other Note Document or otherwise, shall be considered a
waiver of any other subsequent right or remedy of Purchaser; no delay or
omission in the exercise or enforcement by Purchaser of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Purchaser; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Purchaser.
7. This Note and the Note Purchase Agreement shall be governed
by and shall be construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
-2-
<PAGE> 61
HEALTH CARE REIT, INC.
By:_____________________
Name:
Title:
-3-
<PAGE> 62
Exhibit C
Form of
HEALTH CARE REIT, INC.
Amended and Restated
8.24% Series C Senior Note
Due 2003
Private Placement No. 42217K D*4
No. __ March 28, 1997
U.S. $________________
HEALTH CARE REIT, INC., a Delaware corporation (the "Company"), for
value received, hereby unconditionally promises to pay to the order of
____________. (the "Purchaser") or its registered assigns, on April 8, 2003 the
principal amount of ______________________ DOLLARS (U.S. $________________) and
to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 8.24% per annum from (and including) April 8, 1993 to (but excluding)
the date of repayment of such principal amount, payable on the 8th day of each
April and October in each year (commencing October 8, 1993), and at maturity;
PROVIDED, HOWEVER, that if, at any time on or after March 28, 1997, any of the
Notes shall not be rated at least BBB by Duff & Phelps (it being understood and
agreed that (x) a rating of BBB- is lower than a rating of BBB and (y) the
withdrawal, discontinuance or absence of a rating of any of the Notes by Duff &
Phelps shall be deemed, for these purposes, to be the equivalent of a rating
that is lower than BBB), the rate of interest shall instead be 8.34% per annum
for the period during which the Notes shall not be rated at least BBB by Duff &
Phelps. The Company agrees to pay interest on overdue principal (whether by
acceleration or otherwise, and including any overdue prepayment of principal)
and premium, if any, and on any overdue installment of interest, at the Overdue
Rate until paid.
Unless otherwise set forth herein, capitalized terms used
herein but not defined herein have the respective meanings assigned to them in
the Note Purchase Agreement (as such term is hereafter defined).
1. Except as may be otherwise provided pursuant to Section 5.4
or 5.10 of the Note Purchase Agreement, both the principal hereof, premium, if
any, and interest hereon are payable at the principal office of the Company, in
immediately available funds, in coin or currency of the United States of America
which at the time of payment shall be legal tender for the payment of public and
private debts. Such payments shall be applied first to accrued interest, then to
premium, if any, and then to principal. If any amount of principal, premium, if
any, or interest on or in respect of this Note becomes due and payable on any
date which is not a Business Day,
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<PAGE> 63
such amount shall be payable on the immediately preceding Business Day.
Payment of any amount on or in respect of this Note shall be made not later
than 12:00 Noon New York Time on the date on which such payment shall become
due (each such payment made after such time on such date to be deemed to have
been made on the next succeeding Business Day).
2. This Note is one of the Series C Senior Notes due 2003
issued pursuant to the terms and provisions of that certain Amended and Restated
Note Purchase Agreement, dated as of March 28, 1997 (the "Note Purchase
Agreement"), entered into by the Company and each of the Purchasers party
thereto, and this Note and the holder hereof are entitled equally and ratably
with the holders of all other Notes (as defined in the Note Purchase Agreement)
outstanding under the Note Purchase Agreement to all benefits provided for in
the Note Documents or referred to therein, and may be accelerated, or redeemed
at the option of the holder hereof, prior to maturity, all as provided in the
Note Purchase Agreement, to which Note Purchase Agreement reference is hereby
made for the statement thereof. A copy of the Note Purchase Agreement may be
obtained from the Company.
3. The Notes are not subject to prepayment, purchase or
redemption at the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with the Make-Whole
Premium, if any, all as set forth in Section 2 of the Note Purchase Agreement.
4. This Note is registered on the books of the Company and is
transferable only by surrender hereof at the offices of the Company (or of such
Paying Agent as may be appointed by the Company pursuant to Section 5.4 of the
Note Purchase Agreement from time to time), duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of this
Note or its attorney duly authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Note shall be made only to or
upon the order in writing of the registered holder.
5. Pursuant to the Subsidiary Guaranty, payment of all amounts
owed under this Note is absolutely and unconditionally guaranteed by each
Subsidiary of the Company. The Company and each surety, endorser, guarantor and
other party ever liable for payment of any sums of money payable upon this Note
jointly and severally waive presentment, demand, protest, notice of protest and
nonpayment or other notice of default, notice of acceleration and intention to
accelerate or other notice of any kind, and agree that their liability under
this Note shall not be affected by any renewal or extension in the time of
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes hereto or any other Note
Document, regardless of the number of such renewals, extensions, indulgences,
releases or changes.
6. No waiver by Purchaser of any of its rights or remedies
hereunder or under any other Note Document or otherwise, shall be considered a
waiver of any other subsequent right or remedy of Purchaser; no delay or
omission in the exercise or enforcement by Purchaser of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Purchaser; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Purchaser.
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<PAGE> 64
7. This Note and the Note Purchase Agreement shall be governed
by and shall be construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
HEALTH CARE REIT, INC.
By:_____________________
Name:
Title:
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<PAGE> 65
EXHIBIT D
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
FORM OF FACILITIES AND OPERATORS REPORT
---------------------------------------
ON FILE WITH EACH OF THE BANKS AND THE BORROWERS
<PAGE> 1
Exhibit 10.3
- --------------------------------------------------------------------------------
[Execution Copy]
AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND
EACH OF THE PURCHASERS PARTY HERETO
Dated as of March 28, 1997
$30,000,000 Senior Notes
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
Table of Contents
Page
<CAPTION>
<S> <C> <C>
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENTS..........................................................................2
1.1. Description of Notes.........................................................................................2
1.2. Original Issuance Date; Replacement of Notes; Commitment Fees................................................2
SECTION 2. PREPAYMENT OF NOTES...........................................................................................3
2.1. Optional Prepayment..........................................................................................3
2.2. Notice of Prepayments........................................................................................3
2.3. Allocation of Prepayments....................................................................................3
2.4. No Purchase of Notes.........................................................................................3
2.5. Prepayment in the Event of a Rating Downgrade................................................................3
SECTION 3. REPRESENTATIONS..............................................................................................4
3.1. Representations of the Company...............................................................................4
3.2. Representations of Each Purchaser............................................................................8
SECTION 4. CLOSING CONDITIONS...........................................................................................9
SECTION 5. COMPANY COVENANTS............................................................................................9
5.1. Financial Reports............................................................................................9
5.2. Books and Records...........................................................................................12
5.3. Payments....................................................................................................12
5.4. Paying Agency...............................................................................................13
5.5. Corporate Existence.........................................................................................13
5.6. Obligations.................................................................................................13
5.7. Insurance...................................................................................................13
5.8. Limitation on Consolidation and Merger, Sales of Assets.....................................................14
5.9. Ratings.....................................................................................................14
5.10. Direct Payments............................................................................................15
5.11. Maintenance of Properties; Properties Leased to Others.....................................................15
5.12. Indebtedness...............................................................................................15
5.13. Liens......................................................................................................16
5.14. Tangible Net Worth; Leverage Ratio.........................................................................17
5.15. Interest Coverage Ratio; Fixed Coverage Ratio..............................................................17
5.16. Restricted Payments........................................................................................17
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C> <C>
5.17. Construction Financing.....................................................................................18
5.18. Inconsistent Agreements....................................................................................18
5.19. Credit Enhancements........................................................................................18
5.20. Long-Term Care Facilities..................................................................................18
5.21. Behavioral Care Facilities.................................................................................18
5.22. Operator Concentration; Diversification of Assets and Revenues.............................................18
5.23. Maintenance of REIT Status.................................................................................19
5.24. Notice.....................................................................................................19
5.25. Environmental Laws.........................................................................................20
5.26. Modification of Certain Agreements.........................................................................20
5.27. Transactions with Affiliates...............................................................................21
5.28. Limitation on Investments..................................................................................21
5.29. ERISA, etc.................................................................................................22
5.30. Changes in Structure; Fiscal Year..........................................................................22
5.31. Capital Expenditures.......................................................................................22
5.32. Rental Obligations.........................................................................................23
5.33. Use of Cash................................................................................................23
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.....................................................................23
6.1. Events of Default...........................................................................................23
6.2. Notice to Purchasers........................................................................................26
6.3. Acceleration of Maturities; Other Remedies..................................................................26
6.4. Rescission of Acceleration..................................................................................27
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.............................................................................27
7.1. Consent Required............................................................................................27
7.2. Solicitation of Purchasers..................................................................................28
7.3. Effect of Amendment or Waiver...............................................................................28
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.....................................................................28
8.1. Definitions.................................................................................................28
8.2. Accounting Principles; Time Periods.........................................................................39
SECTION 9. MISCELLANEOUS................................................................................................39
9.1. Registered Notes............................................................................................39
9.2. Exchange of Notes...........................................................................................39
9.3. Loss, Theft or Mutilation of Notes..........................................................................40
9.4. Expenses, Stamp Tax, Indemnity..............................................................................40
9.5. Powers and Rights Not Waived; Remedies Cumulative; Counterclaims............................................41
9.6. Notices.....................................................................................................42
</TABLE>
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<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C> <C>
9.7. Successors and Assigns......................................................................................42
9.8. Survival of Covenants and Representations...................................................................42
9.9. Severability................................................................................................43
9.10. GOVERNING LAW..............................................................................................43
9.11. SUBMISSION TO JURISDICTION.................................................................................43
9.12. WAIVER OF JURY TRIAL.......................................................................................43
9.13. Captions...................................................................................................44
9.14. Counterparts; Integration..................................................................................44
9.15. Interest Rate Limitation...................................................................................44
SECTION 10. MISCELLANEOUS...............................................................................................44
10.1. Conditions to Effectiveness................................................................................44
10.2. Release of Collateral.....................................................................................45
SCHEDULES
- ---------
1.1(a) Purchasers; Commitments
3.1(q) Environmental Reports
5.12 Ongoing Indebtedness
5.19 Credit Enhancements
5.31 Capital Expenditures
EXHIBITS
- --------
A Form of Series A Note
B Form of Series B Note
C Form of Facilities and Operators Report
</TABLE>
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<PAGE> 5
HEALTH CARE REIT, INC.
One SeaGate
Suite 1500
Toledo, Ohio 43604
AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
$30,000,000 Senior Notes
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT, dated as of
March 28, 1997, among HEALTH CARE REIT, INC., a Delaware corporation, and each
of the purchasers identified on Schedule 1.1(a) hereto (each, a "PURCHASER,"
including its respective nominees, successors and assigns, and each successive
holder or holders of any Notes or portions thereof purchased by such Purchaser,
and collectively, the "PURCHASERS"). Certain capitalized terms used herein are
defined in Section 8.1.
WHEREAS, the Company and the Purchasers are parties to the
Note Purchase Agreement, dated as of April 15, 1996 (the "ORIGINAL NOTE PURCHASE
AGREEMENT");
WHEREAS, pursuant to the Original Note Purchase Agreement, the
Company issued and sold to the Purchasers $10,000,000 aggregate principal amount
of its 6.96% Series A Notes due 2001 (the "ORIGINAL SERIES A NOTES") and
$20,000,000 aggregate principal amount of its 7.29% Series B Notes due 2003 (the
"ORIGINAL SERIES B NOTES," and together with the Original Series A Notes, the
"ORIGINAL NOTES");
WHEREAS, the parties hereto desire to amend the Original Note
Purchase Agreement, and to restate the Original Note Purchase Agreement in full
as hereinafter set forth;
WHEREAS, the parties hereto desire to amend the Original Notes
and restate the Original Notes in full as hereinafter set forth;
WHEREAS, simultaneously herewith, the Company, each of the
Subsidiaries of the Company and the Purchasers are entering into the Subsidiary
Guaranty (as defined below);
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree to amend and restate the Original Note
Purchase Agreement in full as follows:
<PAGE> 6
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENTS
1.1. DESCRIPTION OF NOTES. As of the Effective Date (as defined
herein), the Original Notes are hereby amended and restated in accordance with
the terms of this Agreement (such Original Series A Notes, as so amended and
restated, the "SERIES A NOTES" and such Original Series B Notes, as so amended
and restated, the "SERIES B NOTES, and together with the Series A Notes, the
"NOTES"). As a result, each of the Series A Notes and Series B Notes is (i) to
be dated as of the date hereof, (ii) to bear interest from (and including) the
Original Issuance Date (as defined herein) to (but excluding) the date of
repayment in full of all amounts due thereunder, at the rates of 6.96% and 7.29%
per annum, respectively, payable on the 15th day of the months of April and
October each year (commencing October 15, 1996) and at maturity; PROVIDED,
HOWEVER, that if, at any time on or after the date hereof any of the Notes shall
not be rated at least BBB by Duff & Phelps (it being understood and agreed that
(x) a rating of BBB- is lower than a rating of BBB and (y) the withdrawal,
discontinuance or absence of a rating of any of the Notes by Duff & Phelps shall
be deemed, for these purposes, to be the equivalent of a rating that is lower
than BBB), the rates of interest shall instead be 7.06% and 7.39% per annum,
respectively, for the period during which the Notes shall not be rated at least
BBB by Duff & Phelps, (iii) to bear interest on overdue principal (whether by
acceleration or otherwise and including any overdue prepayment of principal),
premium, if any, and installments of interest at the Overdue Rate until paid,
(iv) to mature on April 15, 2001, and April 15, 2003, respectively, and (v) to
be substantially in the forms attached hereto as Exhibit A and Exhibit B,
respectively. Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. The Notes are subject to prepayment at the option
of the Company prior to their stated maturity date on the terms and conditions
set forth in Section 2 and in the Notes. The Notes are also subject to
prepayment at each holder's option prior to their stated maturity date on the
terms and conditions set forth in Section 2 and in the Notes.
1.2. ORIGINAL ISSUANCE DATE; REPLACEMENT OF NOTES; COMMITMENT FEES.
(a) The Company issued and sold to each Purchaser, and each
Purchaser purchased from the Company, the principal amount and Series of
Original Notes set forth beside such Purchaser's name on Schedule 1.1(a) at a
price of 100% of the principal amount thereof (the "PURCHASE PRICE"), on April
23, 1996 (the "ORIGINAL ISSUANCE DATE"). The aggregate principal amount of
Original Notes issued and sold on the Original Issuance Date by the Company was
$30,000,000, of which $10,000,000 aggregate principal amount was designated as
Original Series A Notes and $20,000,000 aggregate principal amount was
designated as Original Series B Notes.
(b) On the Effective Date, each Purchaser will surrender all
Original Notes of each Series held by such Purchaser to the Company and the
Company will deliver in exchange therefor, without expense to the Holder, Notes
of each Series in the same aggregate principal amount as the then aggregate
unpaid principal amount of the Original Notes of such Series so surrendered, in
such denominations of U.S. $100,000 or any amount in excess thereof, and
registered in such names, as such Purchaser shall have specified.
(c) On the Effective Date, the Company shall pay to each
Purchaser a commitment fee equal to 0.05% of the aggregate unpaid principal
amount of the Original Notes of such Purchaser that are being exchanged pursuant
to Section 1.2(b). Such commitment fees shall be paid in the manner specified in
Section 5.10.
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<PAGE> 7
SECTION 2. PREPAYMENT OF NOTES.
2.1. OPTIONAL PREPAYMENT. Upon compliance with Section 2.2 and
subject to Section 2.3, the Company shall have the option at any time and from
time to time to prepay the outstanding Notes, either in whole or in part (but if
in part, then in units of $1,000,000 or an integral multiple of $100,000 in
excess thereof) by payment of the principal amount of the Notes, or portion
thereof to be prepaid, together with accrued interest thereon to but not
including the date of such prepayment and a premium (determined three Business
Days prior to the date of such prepayment) equal to the Make-Whole Premium, if
any (collectively, the "REDEMPTION PRICE").
2.2. NOTICE OF PREPAYMENTS. The Company shall give written notice of
any prepayment of the Notes pursuant to Section 2.1 to each holder thereof not
less than 30 days nor more than 60 days before the date fixed for such
prepayment of the Notes. Notices required by this Section 2.2 shall specify (a)
the date of prepayment, (b) the principal amount of such holder's Notes to be
prepaid on such date, and (c) the estimated Make-Whole Premium and the accrued
interest applicable to the prepayment. Notice of prepayment having been so
given, the aggregate principal amount of the Notes specified in such notice,
together with accrued interest thereon and the Make-Whole Premium, shall become
due and payable on the prepayment date set forth in such notice. The Company
shall give a second written notice to each holder of the Notes, by telecopy or
other same day written communication, setting forth the computation and amount
of the Make-Whole Premium payable in connection with a prepayment pursuant to
Section 2.1, at least three Business Days prior to the date of such prepayment.
2.3. ALLOCATION OF PREPAYMENTS. All partial prepayments shall be
applied on all outstanding Notes (without regard to Series) ratably in
accordance with the unpaid principal amounts thereof.
2.4. NO PURCHASE OF NOTES. The Company will not, and will not permit
any Affiliate to, purchase, redeem, prepay or otherwise acquire any of the
Notes, except for payments or prepayments of the Notes expressly provided for in
accordance with Sections 1, 2 and 6 of this Agreement and the terms of the
Notes.
2.5. PREPAYMENT IN THE EVENT OF A RATING DOWNGRADE . If at any time
Duff & Phelps places its ratings of any of the Notes under review, the Company
will promptly and in any event within one Business Day of the occurrence
thereof, give each Purchaser written notice thereof. If at any time the Duff &
Phelps rating of any of the Notes is decreased to a rating below BBB- (it being
understood and agreed that the withdrawal, discontinuance or absence of a rating
of any of the Notes by Duff & Phelps shall be deemed, for these purposes, to be
the equivalent of a decrease in the rating of the Notes to a rating below BBB-),
the Company will, promptly and in any event within one Business Day after the
occurrence thereof, give each Purchaser written notice thereof. At any time
after any such decrease, the holder of any Note may, by three Business Days'
written notice to the Company, declare such Note to be, and such Note shall
thereby become, due and payable (without presentment, demand, protest or other
notice of any kind, all of which are waived by the Company) at the Redemption
Price. It is specifically understood and agreed that no course of dealing on the
part of any holder of any Note nor any delay or failure on the part of any
holder of any Note to exercise any right specified in this Section 2.5 shall
operate as a waiver of such right or otherwise prejudice such holder's rights,
powers and remedies under this Section 2.5. If the rating system of Duff &
Phelps shall change, the parties hereto shall negotiate in good faith to amend
the references to specific ratings in Sections 1.1 and 2.5 and in the Notes to
reflect the changed rating system.
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<PAGE> 8
SECTION 3. REPRESENTATIONS.
3.1. REPRESENTATIONS OF THE COMPANY. The Company hereby represents
and warrants for the benefit of each Purchaser that the representations set
forth as follows are true and correct as of the date hereof and shall be true
and correct as of the Effective Date:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. Each
Subsidiary of the Company is duly incorporated or formed, validly existing and
in good standing under the laws of its state of incorporation. As of the date of
this Agreement, the Company has no Subsidiaries except for (i) HCRI Pennsylvania
Properties, Inc., a Pennsylvania corporation, (ii) HCRI Overlook Green, Inc., a
Pennsylvania corporation, (iii) HCRI Texas Properties, Inc., a Delaware
corporation and (iv) HCRI Texas Properties, Ltd., a Texas limited partnership.
The Company is the sole general partner of HCRI Texas Properties, Ltd.
and is the sole shareholder of the other such Subsidiaries.
(b) The Company and each Subsidiary of the Company is duly
qualified to do business as a foreign corporation in each jurisdiction in which
the conduct of its business or the ownership or leasing of its properties would
require such qualification, except where the failure to so qualify could not
have a Material Adverse Effect.
(c) The execution, delivery and performance of this Agreement,
the Notes and the other Note Documents are within the corporate powers of the
Company and have been duly authorized by all necessary corporate action on the
part of the Company. This Agreement, the Notes and the other Note Documents have
been duly executed by and are the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally and by general
principles of equity.
(d) The Company currently has REIT Status and has maintained
REIT Status on a continuous basis since its formation. None of the Subsidiaries
of the Company currently has REIT Status.
(e) No consent, approval or authorization of, or declaration,
registration or filing with, or payment to, any governmental body or any
non-governmental Person is required to be obtained or made in connection with
the execution, delivery and performance by the Company of this Agreement, the
Notes and the other Note Documents or the transactions contemplated hereby or
thereby or as a condition to the legality, validity or enforceability of the
Company's obligations under this Agreement, the Notes or the other Note
Documents, or the offer, issue, sale and delivery of the Notes to the Purchasers
or the fulfillment of or compliance with the terms and provisions of the Notes,
this Agreement or the other Note Documents.
(f) Neither the execution and delivery of this Agreement, the
Notes or the other Note Documents by the Company, nor the performance of the
terms and provisions hereof and thereof, will (i) conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
or result in any violation of, the certificate of incorporation or by-laws of
the Company, any contract, agreement, mortgage, indenture, credit agreement
(including the Credit Agreement and the Amended 1993 Note Documents), lease or
other instrument to which the Company or any Subsidiary of the Company is a
party or
-4-
<PAGE> 9
by which the Company or any such Subsidiary or any of their respective assets is
bound, or of any statute, law, rule, regulation or order of the United States of
America or of any State thereof, or any agency, court or other instrumentality
of any thereof, to which the Company is subject, (ii) result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries,
or (iii) result in the disqualification of the Company as a REIT under the Code.
(g) The Company's annual report on Form 10-K for the fiscal
year ending December 31, 1996 (the "1996 10-K"), this Agreement and all
documents, instruments, certificates and other writings delivered to any
Purchaser by or on behalf of the Company in connection with the transactions
contemplated hereby, taken together, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, on or as of the dates on which such statements were made. The
Company has disclosed to the Purchasers in writing any and all facts which may
(to the extent the Company can reasonably foresee) have a Material Adverse
Effect.
(h) (i) The audited consolidated financial statements of the
Company and its Subsidiaries at and for the fiscal years ended December
31, 1993, 1994, 1995 and 1996 (the "AUDITED FINANCIALS") are true and
complete and have been prepared in accordance with generally accepted
accounting principles in the United States of America ("GAAP"),
consistent with the principles and practices used in the preparation of
the Company's audited consolidated financial statements for the
immediately preceding fiscal year (except as otherwise indicated in the
Audited Financials, including the notes thereto), and present fairly
the consolidated financial condition of the Company at the end of each
such fiscal year and the consolidated results of operations and cash
flows of the Company for each of such periods. Neither the Company nor
any of its Subsidiaries has any material obligation, liability or
commitment, direct or contingent, that is not reflected in the Audited
Financials for the fiscal year ended December 31, 1996.
(ii) The Company and each Subsidiary of the Company
have good and marketable title to all assets reflected in the
consolidated balance sheet included in the Audited Financials for the
fiscal year ended December 31, 1996, except for changes resulting from
transactions in the ordinary course of business occurring after such
date, free and clear of any Lien other than any Lien permitted by
Section 5.13.
(iii) The projections relating to the Company and
its Subsidiaries for the three year period 1997-1999 including balance
sheets, statements of operations and cash flows (together with related
assumptions) furnished by the Company to the Purchasers have been
prepared on the basis of the assumptions accompanying them and reflect,
as of the date thereof, the Company's good faith projections, after
reasonable analysis, of the matters set forth therein, based on such
assumptions.
(i) Since December 31, 1996, there has not been any material
adverse change in the business, value or condition (financial or otherwise),
results of operations or prospects of the Company and its Subsidiaries,
considered as a whole.
(j) The net proceeds from the issuance and sale of the Notes
have been used to fund the acquisition or financing of Facilities either
directly or through a refinancing or repayment of revolving credit borrowings
under the Credit Agreement referred to in Section 10.1(j)(i) or other borrowing
arrangements.
-5-
<PAGE> 10
No part of the proceeds of the sale of the Notes have been or will be used,
directly or indirectly, for the purpose of purchasing or carrying any "margin
stock" within the meaning of Regulations G, T, U or X of the Board of Governors
of the Federal Reserve System. The assets of the Company and its Subsidiaries do
not and will not include an amount of "margin stock" that would cause the
provisions of Rule 207.2(f)(2)(i) of Regulation G or the provisions of Rule
221.2(g)(2)(i) of Regulation U to be inapplicable and the Company and its
Subsidiaries have no present intention of purchasing such an amount of "margin
stock."
(k) Neither the Company nor any Subsidiary of the Company nor,
to the Company's knowledge, anyone acting on its behalf has offered the Notes or
any similar securities to, or solicited any offer to purchase the same from, any
Person, or has taken any other action, which would require the registration of
the Notes under Section 5 of the Act.
(l) (i) The consummation of the transactions contemplated by
this Agreement and compliance by the Company and each Subsidiary of the Company
with the provisions hereof and the Notes issued hereunder and the other Note
Documents will not constitute a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code. (ii) Each Plan complies in all
material respects with all applicable statutes and governmental rules and
regulations, and (A) no Reportable Event has occurred and is continuing with
respect to any Plan subject to Title IV of ERISA, (B) neither the Company nor
any Subsidiary of the Company nor any ERISA Affiliate has withdrawn from any
Plan subject to Title IV of ERISA or any Multiemployer Plan or instituted steps
to do so, and (C) no steps have been instituted to terminate in a distress
termination any Plan subject to Title IV of ERISA. (iii) Neither the Company nor
any Subsidiary of the Company nor any ERISA Affiliate has received notice that
any Multiemployer Plan is in Reorganization or Insolvent where such
Reorganization or Insolvency has resulted, or would be reasonably likely to
result in an unpaid liability that would be reasonably likely to have a Material
Adverse Effect nor, to the best knowledge of the Company, is any such
Reorganization or Insolvency reasonably likely to occur. (iv) No condition
exists or event or transaction has occurred in connection with any Plan that
could result in the incurrence by the Company or any Subsidiary of the Company
or any ERISA Affiliate of any material liability, fine or penalty. (v) No Plan
maintained by the Company or any Subsidiary of the Company or any ERISA
Affiliate and no trust created thereunder has incurred any "ACCUMULATED FUNDING
DEFICIENCY" as defined in Section 302 of ERISA, and the present value of all
benefits vested under all Plans subject to Title IV of ERISA does not exceed the
value of the assets of such Plans allocable to such vested benefits (such
present value to be determined as of, and based on, the most recent valuation of
such Plan for funding purposes). (vi) Neither the Company nor any Subsidiary of
the Company has any material contingent liability with respect to any
post-retirement "welfare plan" (as such term is defined in Section 3(1) of
ERISA), other than as required by Section 4980B of the Code. (vii) No Plan is a
multiple employer plan (within the meaning of Section 413(c) of the Code).
(m) The Company and each Subsidiary of the Company has filed
all tax returns and reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be owing, except any
such taxes or charges (including interest and penalties) which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been set aside on its books.
The charges, accruals and reserves on the books of the Company and each
Subsidiary of the Company in respect of taxes or other governmental charges,
if any, are adequate. No tax Liens have been filed with respect to the Company
or any Subsidiary of the Company or any of their assets and no claims material
to the Company or any Subsidiary of the Company are being asserted against the
Company or any Subsidiary of the Company with respect to any taxes or
governmental
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<PAGE> 11
charges, except for Liens for taxes, assessments and governmental
charges which are not yet due and payable or which individually or in the
aggregate could not have a Material Adverse Effect. With respect to each
federal income tax return of the Company and each Subsidiary of the Company,
the statute of limitations for the assessment of such Taxes has expired through
the taxable year ended December 31, 1993 and no audit is in progress and no
extension of time is in force with respect to any date on which any such return
was or is to be filed and no waiver or agreement is in force for the extension
of time for the assessment or payment of any tax.
(n) Neither the Company nor any Subsidiary of the Company is
an "investment company" within the meaning of the Investment Company Act of
1940, as amended. Neither the Company nor any Subsidiary of the Company is a
"holding company" or a "subsidiary" or an "affiliate" of a "holding company" or
a "public utility" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(o) There are no actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against the Company or any Subsidiary
of the Company in any court or before any governmental authority or arbitration
board or tribunal which, if adversely determined, would have a Material Adverse
Effect.
(p) (i) The Company and each Subsidiary of the Company has
good and marketable fee or leasehold title to all of the material real
property owned or leased by the Company or such Subsidiary; and has
good and marketable title to all of their other respective material
properties and assets of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights) free and clear,
in each case, of all Liens (including infringement claims with respect
to patents, trademarks, trade names, service marks and copyrights),
except Liens that are expressly permitted by this Agreement.
(ii) The Company and each Subsidiary owns or holds
all licenses, permits and governmental authorizations as are necessary
or desirable in the conduct of its business, except to the extent that
the failure to own or hold the same would not have a Material Adverse
Effect.
(iii) To the best of the Company's knowledge, no
violation exists of any applicable law pertaining to the ownership or
operation of any Facility or any Operator that would have a reasonable
likelihood of leading to revocation of any license, permit or
governmental authorization necessary for the operation of such
Facility.
(q) All facilities and property (including underlying
groundwater), directly or indirectly, owned, operated or leased by the Company
or any Subsidiary of the Company are owned, operated or leased by the Company or
such Subsidiary in material compliance with all Environmental Laws. All
properties with respect to which the Company or any Subsidiary of the Company
holds a mortgage interest is being operated by the owners, lessees or operators
thereof in material compliance with all Environmental Laws. Except as disclosed
in the environmental reports given to the Purchasers and identified on Schedule
3.1(q) (the "ENVIRONMENTAL REPORTS"), there have been no past, and there are no
pending or threatened (i) claims, complaints, notices or requests for
information received by the Company or any Subsidiary of the Company with
respect to any alleged violation of any Environmental Law, or (ii) complaints,
notices or inquiries to the Company or any Subsidiary of the Company regarding
potential liability under any Environmental Law. Except as disclosed in the
Environmental Reports, there have been no Releases of Hazardous Materials at, on
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<PAGE> 12
or under any property now owned, operated or leased, directly or indirectly, by
the Company or any Subsidiary of the Company, that, singly or in the aggregate,
have, or may reasonably be expected to have, a Material Adverse Effect. Except
as disclosed in the Environmental Reports, the Company and each Subsidiary of
the Company has been issued and is in material compliance with all permits,
certificates, approvals, licenses and other authorizations relating to
environmental matters and necessary or desirable for their respective
businesses, the failure of which to have or be in compliance with, singly or in
the aggregate, has or may reasonably be expected to have a Material Adverse
Effect. No property now owned, operated, or leased, directly or indirectly by
the Company or any Subsidiary of the Company is listed or proposed for listing
on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar federal or state list of sites requiring investigation or clean-up.
Except as disclosed in the Environmental Reports, there are no underground
storage tanks, active or abandoned, including petroleum storage tanks,
landfills, lagoons, surface impoundments, disposal areas or disposal ponds, on
or under any property now owned, operated or leased, directly or indirectly, by
the Company or any Subsidiary of the Company, that, singly or in the aggregate,
have, or may reasonably be expected to have, a Material Adverse Effect. Neither
the Company nor any Subsidiary of the Company has directly transported or
directly arranged for the transportation of any Hazardous Material to any
location which is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar federal or state list or
which is the subject of any federal, state or local enforcement actions or other
investigations which may lead to material claims against the Company or any
Subsidiary of the Company for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA. Except as disclosed in the
Environmental Reports, there are no polychlorinated biphenyls or friable
asbestos present at any property now owned, operated or leased, directly or
indirectly, by the Company or any Subsidiary of the Company, that, singly or in
the aggregate, have, or may reasonably be expected to have, a Material Adverse
Effect. Except as disclosed in the Environmental Reports, no conditions exist
at, on or under any property now owned, operated, or leased, directly or
indirectly, by the Company or any Subsidiary of the Company, which, with the
passage of time, or the giving of notice or both, would give rise to liability
under any Environmental Law which singly or in the aggregate have or may
reasonably be expected to have a Material Adverse Effect. Except as disclosed in
the Environmental Reports, no generation, manufacture, storage, treatment,
transportation or disposal of Hazardous Material has occurred or is occurring on
or from any property owned, operated, or leased by the Company or any Subsidiary
of the Company, that, singly or in the aggregate, has, or may reasonably be
expected to have, a Material Adverse Effect.
3.2. REPRESENTATIONS OF EACH PURCHASER. Each Purchaser hereby
represents and warrants, for itself only, as follows:
(a) Such Purchaser is acquiring the Notes for its own account
(or as trustee for the account of one or more pension or trust funds), and not
with a view to distribution (as such term is used under Section 2(11) of the
Act) thereof; provided that the disposition of each Purchaser's (or such
account's) property shall at all times be and remain within its control.
(b) Such Purchaser acknowledges that (i) the Notes have not
been registered under the Act by reason of their issuance in a transaction
exempt from the registration requirements of the Act pursuant to Section 4(2)
thereof nor have the Notes been registered or qualified under any state
securities laws; (ii) the Notes may be sold in the absence of such registration
only pursuant to an exemption from such registration or qualification; and (iii)
the Notes may bear a legend to such effect.
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<PAGE> 13
SECTION 4. CLOSING CONDITIONS.
All conditions to each Purchaser's several obligation to
purchase the Original Notes were satisfied on the Original Issuance Date.
SECTION 5. COMPANY COVENANTS.
Without limiting the obligations of the Company set forth in
the Note Documents, for so long as any amount remains unpaid on any Note:
5.1. FINANCIAL REPORTS. The Company will furnish to each holder of
outstanding Notes:
(a) As soon as available and in any event within 90 days after
the end of each fiscal year of the Company, a copy of the annual audited report
for such fiscal year for the Company (a copy of which shall also be furnished to
the Securities Valuation Office of the National Association of Insurance
Commissioners, New York, New York), including therein a balance sheet of the
Company as at the end of such fiscal year and statements of income, cash flow
and shareholders' equity of the Company for such fiscal year, each prepared in
accordance with GAAP, consistently applied, and setting forth in comparative
form the corresponding figures of the preceding fiscal year and in each case
certified without qualification by either Ernst & Young, another nationally
recognized independent auditing firm, or a firm of independent certified public
accountants reasonably acceptable to the Purchasers, as fairly presenting the
financial position, results of operations, cash flows and shareholders' equity
of the Company and its Subsidiaries as at and for the year ending on its date
and as having been prepared in accordance with GAAP; and a certificate from such
accountants (i) to the effect that, in making the examination necessary for the
signing of such annual report by such accountants, they have not become aware of
any Default or Event of Default that has occurred and is continuing, or, if they
have become aware of such Default or Event of Default, describing such Default
or Event of Default and (ii) confirming the calculations set forth in the
officer's certificate delivered simultaneously therewith pursuant to Section
5.1(d) below and relating to the time period set forth in this Section 5.1(a);
(b) As soon as available and in any event within 45 days after
the end of each of the fiscal quarters of each fiscal year of the Company, a
balance sheet of the Company as at the end of such fiscal quarter and statements
of income, cash flow and shareholders' equity of the Company for such fiscal
quarter and for the period commencing at the end of the previous fiscal year and
ending at the end of such fiscal quarter, prepared in accordance with GAAP
(subject to normal year-end adjustments), and setting forth in comparative form
the figures for the corresponding period of the immediately preceding fiscal
year, together with a certificate of the chief financial officer of the Company
to the effect that such balance sheet and related financial statements fairly
present the financial position, results of operations, cash flows and
shareholders' equity as of such date and for such period;
(c) Promptly upon their becoming available, and
notwithstanding the provisions of Sections 5.1(a) and (b), copies of each
financial statement, report, notice or proxy statement filed by the Company with
the Securities and Exchange Commission under the Exchange Act and sent by the
Company to its security holders generally;
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<PAGE> 14
(d) Within the periods provided in Sections 5.1(a) and (b), a
certificate of the chief financial officer of the Company stating that such
officer has reviewed the provisions of this Agreement and the other Note
Documents and stating whether there existed as of the date of such financial
statements and whether, to the best of such officer's knowledge, there exists at
the time of the certificate or existed at any time during the period covered by
such financial statements, (i) any Default or Event of Default, together with a
detailed calculation which demonstrates the Company's compliance with Section
5.8(b), Sections 5.12 through 5.17, Sections 5.19 through 5.22, and Sections
5.28, 5.31 and 5.32, or (ii) any default under any other agreement to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound, or by which, to the best knowledge of the Company,
any of their respective properties or assets may be materially affected
(including the Credit Agreement and the Amended 1993 Note Documents); and, if
any such condition or event does exist on the date of the certificate,
specifying the nature and period of existence thereof and the action the Company
is taking and/or proposes to take with respect thereto;
(e) As soon as available and in any event within 45 days after
the end of each of the Company's fiscal quarters, a schedule showing the aging
of delinquent lease and mortgage receivables, if any, for all of the Company's
Facilities and in each case where a receivable is past due over 60 days, a
report on the status of the receivable;
(f) As soon as available and in any event within 45 days after
the end of each of the Company's fiscal quarters, a schedule showing the
Company's recorded liabilities, unfunded commitments, contingent liabilities and
other material items;
(g) Promptly after the Company's receipt thereof, (i) a copy
of any special audits of the Company's properties, assets or operations
conducted by the Company's auditors, (ii) a copy of any letters to the Company
from the Company's auditors in connection with the preparation and presentation
of the Company's annual audited report, and (iii) a copy of any other material
reports submitted to the Company or any of its Subsidiaries by its independent
auditors, or submitted by the Company or any of its Subsidiaries to its
independent auditors, in connection with any annual or interim audit of the
books of the Company or its Subsidiaries made by such auditors which material
reports are a necessary part of such annual or interim audit;
(h) In respect of each Plan:
(1) a copy of each annual report (and related
schedules) of such Plan within 10 days after filing the same
with any ERISA regulator;
(2) a copy of each application for a determination of
the qualified status of any such Plan, in each case within 10
days after the filing thereof; and
(3) Promptly, upon their becoming available, copies
of: (i) all correspondence with the PBGC, the Secretary of
Labor or any representative of the IRS with respect to any
Plan, relating to an actual or threatened change or
development that would be materially adverse to the Company;
(ii) all actuarial valuations received by the Company with
respect to any Plan; and (iii) any notices of Plan termination
filed by any Plan Administrator (as those terms are used in
ERISA) with the PBGC and of any notices from the PBGC to the
Company with respect to the intent of the PBGC to institute
involuntary termination proceedings.
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<PAGE> 15
(i) Not later than January 31st in each year, a copy of
the Company's business plan and financial projections for the upcoming three
fiscal years (together with a copy in writing of the assumptions on which
such business plan and projections were based), each certified by the Company's
chief financial officer and illustrating the projected income statements,
balance sheets and statements of cash flows on a consolidated basis;
(j) (1) As soon as available but in any event not less than 45
days after the end of each fiscal quarter of the Company, a
report with respect to the Facilities and the Operators, the
form of which is set forth in Exhibit C hereto, which report
shall contain information for the quarterly period immediately
prior to the fiscal quarter for which the report is submitted;
(2) Within 30 days after the receipt thereof, a copy
of the annual audited financial statements of each
publicly-held Operator delivered to the Company by each such
Operator; and
(3) Such other information regarding the financial
condition of the Operators as any Purchaser may from time to
time reasonably request, subject to such Purchaser's agreement
that all such information shall be and remain confidential and
that none of such information may be distributed to any other
Person without the Company's prior consent;
(k) Promptly upon their becoming available, copies of any: (i)
financial statements, non-routine reports and notices (other than routine
correspondence), any of which are of a material nature, requests for waivers and
proxy statements, in each case, delivered by the Company or any of its
Subsidiaries to any of their respective existing lending institutions or
creditors; and (ii) correspondence or notices received by the Company from any
federal, state or local governmental authority that regulates the operations of
the Company or any of its Subsidiaries, relating to an actual or threatened
change or development that would be materially adverse to the Company or any
Subsidiary; and
(l) Promptly upon any Purchaser's written request, such other
information in writing about the Company's financial condition, properties and
operations as such Purchaser may from time to time reasonably request.
The balance sheets and financial statements referred to in
Sections 5.1(a) and (b) shall be deemed to refer to both the consolidated
balance sheets and financial statements of the Company and its consolidated
Subsidiaries. It is also understood and agreed that the Company may satisfy its
obligations to deliver the financial statements described in Sections 5.1(a) and
(b) by furnishing to each Purchaser a copy of its annual report on Form 10-K or
its quarterly report on Form 10-Q in respect of the relevant fiscal year or the
relevant fiscal quarter, as the case may be, together with the financial
statements required to be attached thereto; PROVIDED that the Company is
required to file, and has actually filed, such annual report on Form 10-K or
such quarterly report on Form 10-Q, as the case may be, with the Securities and
Exchange Commission.
5.2. BOOKS AND RECORDS.
(a) The Company will, and will cause each Subsidiary to, keep
proper books of record and account in accordance with GAAP in a manner
reasonably satisfactory to the Purchasers in which full and true entries shall
be made of all dealings or transactions in relation to its business and
activities.
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<PAGE> 16
(b) (i) Each Purchaser shall have the right, at all reasonable
times, at the expense of the Company, subject to reasonable notice and
as often as may be reasonably requested, to examine the corporate books
and records of the Company and its Subsidiaries and to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with
the officers, directors, independent public accountants, actuaries,
Plan administrators and trustees of or for the Company and its
Subsidiaries, each of which is authorized to make such information
available to each Purchaser to the same extent as it would be to the
Company or to its Subsidiaries; PROVIDED, HOWEVER, that any transferee
of a Note (other than an Affiliate of an original Purchaser) in a
principal amount of less than $2,000,000 shall be entitled to exercise
the foregoing rights only once every 12 months.
(ii) The Company shall also permit, and cause each of
its Subsidiaries to permit, upon receipt of not less than two Business
Days' prior written notice, the Purchasers (and their agents and
representatives) (at the expense of the Company after the occurrence of
a Default), during normal business hours, to examine the Company's or
such Subsidiary's properties, as the case may be.
5.3. PAYMENTS.
(a) All payments hereunder and under the Notes shall be made
without set-off or counterclaim and in such amounts as may be necessary in order
that all such payments shall not be less than the amounts otherwise specified to
be paid under this Agreement and the Notes. Without limiting the generality of
the foregoing, the Company will duly and punctually pay the principal of,
premium (if any) and interest on the Notes in accordance with their terms and
this Agreement and all other Obligations in accordance with this Agreement and
the other Note Documents, free and clear of, and without reduction for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholding, now or hereafter imposed,
levied, collected, withheld or assessed by any governmental authority,
excluding, in the case of any Purchaser, net income and franchise taxes imposed
on such Purchaser by the jurisdiction under the laws of which such Purchaser is
organized or any political subdivision or taxing authority thereof or therein
(such non-excluded taxes, "TAXES"). If any Taxes are required to be withheld
from any amounts payable to any Purchaser hereunder, under any Note or under any
other Note Document, the amounts so payable to such Purchaser shall be increased
to the extent necessary to yield to such Purchaser (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, the applicable Note or such other Note
Document. If the Company fails to pay any Taxes when due to the appropriate
taxing authority, the Company shall indemnify each Purchaser for any incremental
taxes, interest or penalties that may become payable by such Purchaser as a
result of any such failure.
(b) Any amount that is due and payable by the Company under
any Note Document that is not paid when due shall bear interest, for each day
from (and including) the date such amount was due and payable to (but excluding)
the date of payment thereof, at a rate per annum equal to the Overdue Rate.
5.4. PAYING AGENCY. The Company will maintain an office in the United
States of America where notices, presentations and demands to or upon the
Company in respect of this Agreement, the Notes and the other Note Documents may
be given or made. As of the date of this Agreement, such office is located at
the Company's address set forth in Section 9.6. The Company will give written
notice to the holders of the Notes of any change of location of such office no
later than five Business Days prior to the date of any such change.
Notwithstanding the foregoing, in lieu of, or in addition to, maintaining an
office as
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<PAGE> 17
herein contemplated, the Company may appoint and maintain an agent for
receiving notices, presentations or demands and/or making payments on the Notes
which shall be a state or national bank or trust company organized under the
laws of the United States of America or any State thereof or the District of
Columbia, having capital, surplus and undivided profits aggregating at least
U.S. $250,000,000, and having an office in the Borough of Manhattan in the City
of New York from which it can perform the functions it is so appointed to
perform (the "PAYING AGENT").
5.5. CORPORATE EXISTENCE. The Company will, and will cause each of
its Subsidiaries to, do or cause to be done all things necessary to (a) preserve
and keep in full force and effect its corporate existence, (b) maintain the
Company's REIT Status, (c) comply in all material respects with all applicable
laws, statutes, regulations, rules, orders, and all applicable restrictions
imposed by any governmental or regulatory body except those being contested in
good faith by appropriate proceedings, (d) maintain all licenses and permits
necessary to conduct its business and own its properties and (e) continue to
engage in the same line of business.
5.6. OBLIGATIONS. The Company will, and will cause each of its
Subsidiaries to, pay and discharge all of the obligations and liabilities of the
Company or any of its Subsidiaries, including all taxes, assessments and
governmental charges, when due, except for taxes, assessments and governmental
charges for which fair and adequate reserves have been established in accordance
with GAAP and the payment of which is being contested by the Company or such
Subsidiary in good faith and by appropriate proceedings, and then only to the
extent that a bond is filed in cases where the filing of a bond is necessary to
avoid the creation of a Lien against any of the Properties of the Company and
its Subsidiaries.
5.7. INSURANCE.
(a) The Company will, and will cause each of its Subsidiaries
and Operators to, carry and maintain in full force and effect at all times with
fiscally sound and reputable insurers accorded a rating of "A VIII" or better by
A.M. Best Company, Inc. (or a comparable rating by any comparable rating agency)
insurance against such risks and in such amounts (i) as is reasonable and
prudent in the circumstances, (ii) as is customarily maintained by similar
businesses and (iii) in any event as may be required by applicable laws,
statutes, regulations, rules or orders. Upon written request from any Purchaser,
the Company shall cause an appropriate officer to furnish to such Purchaser such
information about the Company's insurance as such Purchaser may from time to
time reasonably request, which information shall be prepared in form and detail
reasonably satisfactory to such Purchaser and be certified by an Executive
Officer of the Company. Within 10 days after written notice from the Required
Holders, the Company will, and will cause each of its Subsidiaries and Operators
to, obtain such additional insurance as the Required Holders may reasonably
request.
(b) The Company will, and will cause each of its Subsidiaries
to, carry all insurance available through the PBGC or any private insurance
companies covering its obligations to the PBGC.
5.8. LIMITATION ON CONSOLIDATION AND MERGER, SALES OF ASSETS
(a) The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, consolidate or merge with or into, any
Person (whether or not the Company or such Subsidiary is the surviving entity)
or acquire all or substantially all of the assets or any of the capital stock of
any Person unless (i) the Company or any of its Subsidiaries is the surviving
entity, (ii) no Default or Event of Default
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<PAGE> 18
exists or will occur after giving effect thereto, and (iii) the consideration
paid in connection with any such merger or acquisition does not exceed an amount
equal to 10% of Healthcare Assets as at the date of the consummation of such
transaction, prior to giving effect to such transaction.
(b) Other than Leases of Health Care Facilities in the
ordinary course of the Company's business ("ORDINARY LEASES"), the Company and
its Subsidiaries will not, directly or indirectly, during any four consecutive
fiscal quarters of the Company, sell, lease or otherwise dispose of any assets
or shares of capital stock of a Subsidiary which, individually or when combined
with all other assets (other than Ordinary Leases) sold, leased or otherwise
disposed of by the Company and its Subsidiaries during such four fiscal
quarters, including the assets attributable to a Subsidiary the capital stock of
which was sold during such period, (i) represented 15% or more of the Company's
total assets shown on the balance sheet of the Company and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of
the end of the most recently completed fiscal quarter of the Company, or (ii)
generated 15% or more of the Company's total gross revenues shown on the income
statement of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, for the most recently completed four
consecutive fiscal quarters of the Company, UNLESS the net proceeds from any
such sale, lease or other disposition are reinvested in the business of the
Company within 180 days following the date of each such sale, lease or other
disposition and, prior to such investment, invested in Investments of the type
described in Section 5.28(a). The provisions of this Section 5.8(b) shall not
restrict the sale by the Company or its Subsidiaries of owned real property and
the improvements thereon pursuant to and in accordance with the terms of
Ordinary Leases which grant the lessee thereunder an option to purchase such
owned real property and improvements thereon.
5.9. RATINGS. The Company (a) will use its commercially reasonable
best efforts to enable a Recognized Rating Agency to have in effect a rating for
its unsubordinated, senior, unsecured indebtedness, and (b) shall cause Duff &
Phelps to have in effect at all times a rating for the Notes.
5.10. DIRECT PAYMENTS. Notwithstanding anything to the contrary in
this Agreement or the Notes, if any Purchaser has given written notice to the
Company and the Paying Agent requesting that the provisions of this Section 5.10
shall apply, the Company will cause the Paying Agent promptly and punctually to
pay when due the principal of the Notes and premium, if any, and interest
thereon, without any presentment thereof directly to such Purchaser at the
address of such Purchaser set forth on Schedule 1.1(a) or at such other address
as such Purchaser may from time to time designate in writing to the Company and
the Paying Agent or, if a bank account is designated for such Purchaser in any
written notice to the Company and the Paying Agent from such Purchaser, the
Company will cause the Paying Agent to make such payments in current and
immediately available federal funds which at the time of payment shall be legal
tender in the United States of America for the payment of public and private
debts to such bank account, marked for attention as indicated, or in such other
manner or to such other account of such Purchaser in any bank in the United
States as such Purchaser may from time to time direct in writing. With respect
to Notes to which this Section 5.10 applies, the Company and the Paying Agent
shall be entitled to presume conclusively that any Purchaser as shall have
requested the provisions hereof to apply to its Notes remains the holder of such
Notes until such Notes shall have been presented to the Company as evidence of
the transfer thereof.
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<PAGE> 19
5.11. MAINTENANCE OF PROPERTIES; PROPERTIES LEASED TO OTHERS.
(a) The Company will cause to be maintained in good repair,
working order and condition, subject to normal wear and tear, all material
properties and assets from time to time owned by the Company or any of its
Subsidiaries and used in or necessary for the operation of their respective
businesses, and make or cause to be made all reasonable repairs, replacements,
additions and improvements thereto.
(b) The Company and its Subsidiaries will provide in each of
its Leases entered into after the Original Issuance Date that the lessee
thereunder will maintain the assets leased thereunder in good working order and
condition, ordinary wear and tear excepted.
5.12. INDEBTEDNESS. The Company will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or guaranty
or otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
(a) Indebtedness of the Company in respect of the Notes
and other obligations hereunder and under the Note Documents;
(b) Indebtedness of the Company which is identified on
Schedule 5.12 ("ONGOING INDEBTEDNESS");
(c) Indebtedness of a Subsidiary which is owed to
or held by the Company or a Wholly Owned Subsidiary of the Company; and
(d) Credit Enhancements by the Company permitted by
Section 5.19;
unless (i) such Indebtedness (other than the Indebtedness described in clause
(c) above) is Indebtedness of the Company and (ii) immediately after giving
effect to the incurrence of such Indebtedness, the total outstanding
Indebtedness of the Company and its Subsidiaries (including the Indebtedness
described in clauses (a) through (d) above) does not exceed 150% of the
Company's Tangible Net Worth as of the end of the most recently completed fiscal
quarter of the Company.
5.13. LIENS. The Company will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except:
(i) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(ii) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or, if overdue, being diligently contested in good faith by
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appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(iii) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than for
Debt) entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds;
(iv) judgment Liens in existence for less than 15 days after
the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies;
(v) the Liens of the lessee created or permitted by Ordinary
Leases;
(vi) any purchase money Liens on property acquired or held by
the Company or any Subsidiary in the ordinary course of business,
securing Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property; provided, that
(i) any such Lien attaches to such property concurrently with or within
twenty (20) days after the acquisition thereof, (ii) such Lien attaches
solely to the property so acquired in such transaction, (iii) the
principal amount of the Indebtedness secured thereby does not exceed
100% of the cost of such property, and (iv) the aggregate amount of all
such Indebtedness on a consolidated basis for the Company and its
Subsidiaries shall not at any time exceed $1,000,000.00; and
(vii) Liens securing the payment of Debt permitted under
Section 5.12 (other than Section 5.12(b)), PROVIDED that (x) no such
Debt is incurred pursuant to a Secured Credit Agreement and (y) such
Liens shall be permitted only if the aggregate amount of all Debt
secured by such Liens does not exceed 15% of the Company's Tangible Net
Worth as of the end of the most recently completed fiscal quarter of
the Company.
5.14. TANGIBLE NET WORTH; LEVERAGE RATIO.
(a) Tangible Net Worth will at no time be less than the sum of
(i) $300,000,000 plus (ii) 100% of the aggregate Net Issuance Proceeds received
by the Company (or any of its Subsidiaries) in connection with the issuance of
any equity interest in the Company (or any of its Subsidiaries) on or after the
date hereof other than any such equity interests issued in connection with any
dividend reinvestment program(s).
(b) The Company shall have or maintain on a consolidated
basis, as at the last day of each fiscal quarter, a ratio of Funded Indebtedness
to Tangible Net Worth (the "LEVERAGE RATIO") of not greater than 1.10:1.00;
PROVIDED, so long as the Leverage Ratio for any two consecutive fiscal quarters
does not exceed 1.10:1.00 (each, a "LEVERAGE TEST PERIOD"), then the Leverage
Ratio for the two consecutive fiscal quarters immediately succeeding such
Leverage Test Period may increase to a maximum of 1.20:1.00.
5.15. INTEREST COVERAGE RATIO; FIXED COVERAGE RATIO. The Company
shall have or maintain on a consolidated basis, as at the last day of each
fiscal quarter:
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(a) Interest Coverage of not less than 200%; and
(b) A Fixed Coverage Ratio of not less than 1.05:1.00.
5.16. RESTRICTED PAYMENTS.
(a) The Company will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of capital stock
(now or hereafter outstanding) of the Company, or on any warrants, options or
other rights with respect to any class of capital stock (now or hereafter
outstanding) of the Company, or apply or permit any Subsidiary to apply, any of
its funds, property or assets to the purchase, redemption, sinking fund, or
other retirement of, or agree, or permit any Subsidiary of the Company to agree,
to purchase or redeem (or set aside funds to purchase or redeem) any shares of
any class of capital stock (now or hereafter outstanding) of the Company, or
warrants, options or other rights with respect to any class of capital stock
(now or hereafter outstanding) of the Company (all or any of the foregoing,
"RESTRICTED PAYMENTS"); PROVIDED, HOWEVER, that so long as the Company remains
qualified as a REIT under the Code, the Company may make Restricted Payments if
and to the extent (but only to the extent) that: (i) no Default or Event of
Default shall have occurred and be continuing at the time of declaration of such
Restricted Payment, and (ii) immediately after giving effect to the making of
such Restricted Payment, the sum of all Restricted Payments made subsequent to
December 31, 1995 would not exceed the sum of (1) $10,000,000, (2) 100% of Cash
Flow accumulated subsequent to December 31, 1995, and (3) the net proceeds to
the Company since December 31, 1995 from the issuance of any shares of its
capital stock or any warrants, options or other rights with respect thereto;
PROVIDED FURTHER that the Company may make a Restricted Payment if a Default
(but not an Event of Default) shall have occurred and be continuing if such
Restricted Payment was declared but not yet paid prior to the occurrence of such
Default and the making of such Restricted Payment would be permitted under
clause (ii) of this Section 5.16(a).
(b) The provisions of Section 5.16(a) to the contrary
notwithstanding, the Company may declare and make a Restricted Payment if a
Default or Event of Default shall have occurred and be continuing at the time
that such Restricted Payment was declared, if (i) the declaration and payment of
such Restricted Payment is required in order for the Company to continue to
qualify as a REIT under the Code, and (ii) the Default or Event of Default
existing at the time of such declaration did not result from (1) a breach of
this Section 5.16, (2) a failure to make any payment or prepayment of principal
or interest on the Notes (including failure to pay the Make-Whole Premium
pursuant to Section 2, when due), or (3) the occurrence of any event specified
in Section 6.1(a) or (g).
5.17. CONSTRUCTION FINANCING. The Company will not permit the
aggregate outstanding principal, accrued interest (estimated in good faith to
the extent not known) and fees, in connection with Construction Investments made
by it and its Subsidiaries to exceed (i) an amount equal to 20% of the Company's
consolidated Investments in Healthcare Assets during the 12 month period
following the date hereof, and (ii) an amount equal to 17.5% percent of the
Company's consolidated Investments in Healthcare Assets at any time thereafter;
PROVIDED that neither the Company nor any Subsidiary of the Company shall make a
Construction Investment for a Facility unless (x) there is included in the terms
thereof an agreement for the conversion of the interests of the Company or such
Subsidiary in the Facility upon the completion thereof into full ownership or a
mortgage interest, and (y) if a mortgage interest, the Company or such
Subsidiary shall retain a first Lien on such Facility.
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5.18. INCONSISTENT AGREEMENTS. The Company will not, and will
not permit any of its Subsidiaries to, enter into any agreement containing any
provision which would be violated or breached by the performance by the Company
of its obligations hereunder, under the Notes or under any other Note Document.
5.19. CREDIT ENHANCEMENTS. Neither the Company nor any
Subsidiary of the Company will provide any Credit Enhancement, except (a) by the
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, (b) Credit Enhancements in support of Facilities, if,
immediately after giving effect thereto, the aggregate outstanding amount,
including principal, accrued interest (estimated in good faith to the extent not
known) and fees, of all issued Credit Enhancements (exclusive of the Credit
Enhancements referred to in subsection 5.19(c)) will not exceed $30,000,000 and
(c) as set forth on Schedule 5.19 hereof.
5.20. LONG-TERM CARE FACILITIES. The Company will ensure that not
less than 70% of the Investments in Healthcare Assets made by the Company and
its Subsidiaries are in Long-Term Care Facilities.
5.21. BEHAVIORAL CARE FACILITIES. The Company will ensure that not
more than 10% of the Investments in Healthcare Assets made by the Company and
its Subsidiaries are in Facilities classified as "Behavioral Care".
5.22. OPERATOR CONCENTRATION; DIVERSIFICATION OF ASSETS AND REVENUES.
The Company will ensure that not more than 20% of the Investments made by the
Company and its Subsidiaries are maintained with a single Operator (including
Affiliates of such Operator).
5.23. MAINTENANCE OF REIT STATUS. The Company will maintain its REIT
Status. The Company will not create, acquire or permit to exist any Subsidiary
unless such Subsidiary is a "qualified REIT subsidiary" within the meaning of
Section 856(j)(i)(2) of the Code. The Company may not and will not permit any of
its Subsidiaries to, directly or indirectly, engage in any business which would
substantially change the general nature of the business of the Company and its
Subsidiaries, considered as a whole, from the nature of the Company's business
as it exists on the date of this Agreement.
5.24. NOTICE. The Company will give each Purchaser written notice
whenever any of the following events occurs, promptly, and in any event, within
five days, after the Company knows or has reason to know thereof:
(a) (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan; or (ii) the institution of
proceedings or the taking or expected taking of any other action by PBGC or the
Company, any Subsidiary of the Company or any ERISA Affiliate to terminate,
withdraw or partially withdraw from any Plan and with respect to a Multiemployer
Plan, the Reorganization or Insolvency of such Plan;
(b) the Internal Revenue Service or any other federal, state
or local taxing authority shall allege any material default by the Company or
any Subsidiary in the payment of any tax material in amount or make any
assessment in respect thereof;
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(c) (i) any litigation or proceeding shall be brought against
the Company or any Subsidiary of the Company before any court or administrative
agency which, if successful, may reasonably be expected to have a Material
Adverse Effect, or (ii) without limiting the generality of clause (i), any
litigation, proceeding or dispute, other than disputes in the ordinary course of
business, or, whether or not in the ordinary course of business, involving
amounts in excess of $2,500,000 affecting the Company or any of its
Subsidiaries, whether or not fully covered by insurance, and regardless of the
subject matter thereof (excluding, however, any actions relating to worker's
compensation claims or negligence claims relating to use of motor vehicles, if
fully covered by insurance, subject to deductibles);
(d) there shall be filed any application for a determination
of the qualified status of any Plan;
(e) the Company receives (i) any written claims, complaints,
notices or inquiries relating to the condition of its facilities and properties,
or compliance with Environmental Laws which, if adversely determined,
individually or in the aggregate may reasonably be expected to have a Material
Adverse Effect, (ii) any notice of violation or of any administrative or
judicial complaint or order having been filed or about to be filed against the
Company or any of its Subsidiaries alleging violations of any Environmental Law,
or (iii) any notice from any governmental body or any other Person alleging that
the Company or any of its Subsidiaries is or may be subject to any environmental
liability;
(f) any officer of the Company reasonably believes that any
Default has occurred or that any representation or warranty made in Section 3.1
shall for any reason have ceased in any material respect to be true and correct;
or
(g) the occurrence or expected occurrence of any event that
would constitute or cause a Material Adverse Effect.
5.25. ENVIRONMENTAL LAWS.
(a) The Company will, and will cause each of its Subsidiaries
and lessees under Leases to, use and operate all of its respective facilities
and properties in material compliance with all Environmental Laws, and keep all
necessary permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material compliance
therewith. The Company shall promptly resolve any non-compliance with
Environmental Laws and keep its property free of any Lien imposed by any
Environmental Law.
(b) The Company will, and will cause each of its Subsidiaries
and lessees under the Leases to handle all Hazardous Materials in material
compliance with all applicable Environmental Laws. The Company will not, and
will cause each of its Subsidiaries and lessees under the Leases not to cause or
permit: (i) any Hazardous Material to be placed, held, located or disposed of,
on, under or at any Facility or any part thereof, except for such Hazardous
Materials that are necessary for the Company's or any Subsidiary's or any
Operator's operation of its business thereon and which shall be used, stored,
treated and disposed of in compliance with all applicable Environmental Laws or
(ii) such Facility or any part thereof to be used as a collection, storage,
treatment or disposal site for any Hazardous Material. The Company and each
Subsidiary acknowledges and agrees that the Purchasers shall have no liability
or responsibility for either:
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<PAGE> 24
(i) damage, loss or injury to human health, the
environment or natural resources caused by the presence, disposal,
release or threatened release of Hazardous Materials on any part of
such Facility; or
(ii) abatement and/or clean-up required under any
applicable Environmental Laws for a release, threatened release or
disposal of any Hazardous Materials located at any Facility or used by
or in connection with the Company's or any Subsidiary's or any
Operator's business.
5.26. MODIFICATION OF CERTAIN AGREEMENTS.
(a) The Company will not consent to any amendment, supplement
or other modification to any of the terms or provisions contained in, or
applicable to the Credit Agreement, the Amended 1993 Note Documents, or other
agreement evidencing Indebtedness of the Company or any of its Subsidiaries that
would require the lenders thereunder to consent to any amendment or modification
of the Note Documents. The Company shall deliver to each Purchaser, promptly
upon their becoming available, all amendments, supplements or modifications to
the Credit Agreement or the Amended 1993 Note Documents.
(b) Subject to the prohibitions set forth in Section 5.30, the
Company will promptly deliver to each of the Purchasers copies of any amendments
or modifications to the certificate of incorporation or by-laws of the Company
or any of its Subsidiaries, certified with respect to the certificate of
incorporation by the Secretary of State of its state of incorporation and, with
respect to the by-laws, by the secretary or assistant secretary of such
corporation.
5.27. TRANSACTIONS WITH AFFILIATES. The Company will not, and will
not permit any of its Subsidiaries to, directly or indirectly, (a) make any
Investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise
dispose of any assets to an Affiliate; (c) merge into or consolidate with or
purchase or acquire assets from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of any Affiliate
(including, without limitation, guaranties and assumptions of obligations of an
Affiliate); PROVIDED, HOWEVER, that: (i) payments on Investments expressly
permitted by Section 5.28 hereof may be made, (ii) any Affiliate who is a
natural person may serve as an employee or director of the Company or any
Subsidiary and receive reasonable compensation for his services in such
capacity, and (iii) the Company or any Subsidiary of the Company may enter into
any transaction with an Affiliate providing for the leasing of property, the
rendering or receipt of services or the purchase or sale of product, inventory
and other assets in the ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as advantageous to the
Company or such Subsidiary as the monetary or business consideration that would
obtain in a comparable arm's length transaction with a Person not an Affiliate.
5.28. LIMITATION ON INVESTMENTS. The Company will not, and will
not permit any of its Subsidiaries to, make or permit to remain outstanding any
Investment in any Person, including any shareholder, director, officer or
employee of the Company or any of its Subsidiaries, except:
(a) Investments in:
(i) obligations issued or guaranteed by the United
States of America;
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(ii) certificates of deposit, bankers acceptances
and other "money market instruments" issued by any bank or trust
company organized under the laws of the United States of America
or any State thereof and having capital and surplus in an
aggregate amount of not less than $100,000,000;
(iii) open market commercial paper bearing the
highest credit rating issued by Standard & Poor's Corporation or
by another nationally recognized credit rating agency;
(iv) repurchase agreements entered into with any
bank or trust company organized under the laws of the United
States of America or any State thereof and having capital and
surplus in an aggregate amount of not less than $100,000,000
relating to United States of America government obligations; and
(v) shares of "money market funds", each having net
assets of not less than $100,000,000;
in each case maturing or being due or payable in full not more than 180 days
after the acquisition thereof by the Company or any of its Subsidiaries.
(b) Investments by the Company in any Subsidiary, and by any
Subsidiary in the Company or another Subsidiary, provided that (i) the Company
shall cause each newly-created Subsidiary, if any, within thirty (30) days after
its organization thereof, to become a party to the Subsidiary Guaranty, (ii) the
Company shall cause each such newly-created Subsidiary to deliver to each
Purchaser those certificates and documents described in subsection 10.1(a), as
applicable, and (iii) all legal matters incident to the execution by such
Subsidiary of the Subsidiary Guaranty shall be satisfactory to counsel for each
Purchaser.
(c) The acquisition by the Company and its Subsidiaries, on a
consolidated basis, of healthcare assets consisting of Facilities and Mortgages.
(d) Investments in any Person (including any Operators)
provided that the aggregate Cash portion of all such Investments does not exceed
an amount equal to 10% of Healthcare Assets as at any date of determination
thereof, prior to giving effect to any such Investment.
For purposes of Sections 5.8(b), 5.27 and 5.28, "Investments" shall
mean, by any Person:
(i) any amount paid or committed to be paid, or the
value of property of services contributed or committed to be
contributed, by such Person for or in connection with the acquisition
by such Person of any stock, bonds, notes, debentures, partnership,
membership or other ownership interests or other securities of, or
other investment in, any other Person; and
(ii) any amount of any advance, loan or extension of
credit by such Person to any other Person, or any guaranty or other
similar obligation of such Person with respect to any Indebtedness of
such other Person, and (without duplication) any amount committed to be
advanced, loaned, or extended by such Person to any other Person, or
any amount the payment of which is committed to be assured by a
guaranty or similar obligation by such Person for the benefit of such
other Person.
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5.29. ERISA, ETC. The Company will materially comply with all
applicable provisions of ERISA and the Code now or hereinafter in effect. The
Company will not permit the establishment of any Plan or amendment of any Plan,
which establishment or amendment could result in liability to the Company or any
of its Subsidiaries or increase the obligation for post-retirement welfare
benefits of the Company or any of its Subsidiaries which liability or increase,
individually or together with all similar liabilities and increases, may
reasonably be expected to have a Material Adverse Effect.
5.30. CHANGES IN STRUCTURE; FISCAL YEAR. The Company will not
amend, supplement or modify the certificate of incorporation or by-laws of the
Company or any of its Subsidiaries in a manner which would be reasonably likely
to cause a Material Adverse Effect. The Company will not change its fiscal year.
5.31. CAPITAL EXPENDITURES. Except as set forth on Schedule 5.31,
the Company will not, and will not permit any of its Subsidiaries to, make or
be or become obligated to make Capital Expenditures in the aggregate for the
Company and its Subsidiaries on a consolidated basis, during each fiscal year
of the Company and its Subsidiaries, in excess of $350,000 (exclusive of
Investments permitted under Section 5.28).
5.32. RENTAL OBLIGATIONS. The Company will not, and will not permit
any of its Subsidiaries to, enter into, or permit to remain in effect, any lease
(other than Capitalized Leases that are governed by Section 5.31), if, after
giving effect thereto, the aggregate amount of all rentals and other
obligations, including, without limitation, all percentage rents and additional
rent, due from the Company and its Subsidiaries thereunder would exceed $350,000
during any fiscal year.
5.33. USE OF CASH. The Company will not, and will not permit any of
its Subsidiaries to, use, or permit to be used, in any manner or to any extent,
the Company's, or such Subsidiary's, Cash from operations for the benefit of
any Person, except: (a) in connection with the payment or prepayment of
expenses (other than Capital Expenditures) directly incurred for the benefit of
the Company or such Subsidiary in the maintenance and operation of its
business, in each case only in the ordinary course of its business, (b) for the
payment of required payments of principal and interest on Indebtedness of the
Company and its Subsidiaries permitted to exist hereunder, and (c) for uses
that are otherwise specifically permitted by this Agreement.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
6.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an "EVENT OF DEFAULT" as the term is used herein or in the other Note
Documents:
(a) (i) the Company shall fail to pay when due any
payment (including any mandatory prepayment) of the principal of any
Note or of any premium or interest thereon; or
(ii) the Company shall fail to pay when due any other
amount payable hereunder or under any other Note Document and such
payment default with respect to such other amount shall continue for
more than five Business Days; or
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(b) the Company shall fail to observe or perform any of its
obligations under Section 2.5, 5.8, 5.12, 5.13, 5.14, 5.15, 5.16, 5.17, 5.18,
5.19, 5.20, 5.21, 5.22, 5.23, 5.24, 5.25, 5.26, 5.27, 5.28, 5.29, 5.30, 5.31,
5.32, 5.33 or 6.2 of this Agreement or Article IV of the Subsidiary Guaranty; or
any Subsidiary of the Company shall fail to observe or perform any of its
obligations under Article II of the Subsidiary Guaranty; or
(c) the Company, or any Subsidiary of the Company, shall fail
to observe or perform any other obligation, covenant, undertaking, condition or
provision in respect of the Notes or contained in this Agreement or the other
Note Documents that is not remedied within 30 days after the earliest of (i) the
furnishing of notice thereof by the Company to the Purchasers, (ii) the
Company's willful failure to provide any notice required under Section 6.2 or
(iii) receipt of written notice thereof from any Purchaser to the Company
requiring the same to be remedied; or
(d) any representation or warranty made by the Company herein,
or made by the Company or any Subsidiary of the Company in any other Note
Document, shall be untrue or inaccurate in any material respect; or
(e) any of the Note Documents or any provision thereof shall
cease to be a legal, valid and binding agreement enforceable against the Company
(or, in the case of the Subsidiary Guaranty, the Company or any of the
Subsidiaries) in accordance with the respective terms thereof or shall in any
way be terminated or become or be declared ineffective or inoperative or shall
in any way whatsoever cease to give or provide the respective rights, titles,
interests, remedies, priorities, powers or privileges intended to be created
thereby; or
(f) a judgment shall be rendered against the Company or any
Subsidiary of the Company, or any attachment, levy or execution against any of
their respective properties shall occur, for any amount in excess of $1,500,000
and shall remain unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of 30 days or more; or
(g) (i) the Company or any of its Subsidiaries shall have made
an assignment for the benefit of creditors, filed a petition in
bankruptcy, shall be adjudicated insolvent, shall have petitioned or
applied to any tribunal for the appointment of a receiver, custodian,
or any trustee for it or a substantial part of its assets, or shall
have commenced any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, whether nor or hereafter in effect, or the
Company or any of its Subsidiaries shall have taken any corporate
action to authorize any of the foregoing actions; or there shall have
been filed any such petition or application, or any such proceeding
shall have been commenced against the Company or any of its
Subsidiaries, that remains undismissed for a period of 60 days or more;
or any order for relief shall be entered in any such proceeding; or the
Company or any of its Subsidiaries by any act or omission shall have
indicated its consent to, approval of, or acquiescence in any such
petition, application or proceeding or the appointment of a custodian,
receiver or any trustee for it or any substantial part of its
properties, or shall have suffered any custodianship, receivership or
trusteeship to continue undischarged for a period of 30 days or more;
or
(ii) the Company or any of its Subsidiaries shall
have generally failed to pay its debts as such debts become due; or
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(iii) the Company or any of its Subsidiaries shall
have concealed, removed, or permitted to be concealed or removed, any
part of its property, with intent to hinder, delay or defraud its
creditors or any of them or made or suffered a transfer of any of its
property that may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or shall have made any transfer of its
property to or for the benefit of a creditor at a time when other
creditors similarly situated have not been paid; or shall have suffered
or permitted, while insolvent, any creditor to obtain a Lien upon any
of its property through legal proceedings or distraint that is not
vacated within 30 days from the date thereof; or
(h) a default shall occur in the payment when due (subject to
any applicable grace period), whether by acceleration or otherwise, of any
Indebtedness (other than the Obligations) of the Company with an aggregate
principal amount in excess of $1,000,000 or any Subsidiary with an aggregate
principal amount in excess of $200,000, or a default shall occur in the
performance or observance of any obligation or condition with respect to any
such Indebtedness if the effect of such default is to accelerate the maturity of
any such Indebtedness or to permit the holder or holders thereof, or any trustee
or agent for such holders (immediately or after the giving of notice or passage
of time or both), to cause such Indebtedness to become due and payable prior to
its stated maturity, or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(i) any of the following events shall occur with respect
to any Plan:
(x) the institution of any steps by the Company, any
Subsidiary of the Company, any ERISA Affiliate or any other Person to
terminate a Plan if, as a result of such termination, the Company, any
Subsidiary of the Company or any such ERISA Affiliate could be required
to make a contribution to such Plan, or could reasonably expect to
incur a liability or obligation to the PBGC or any other Person under
Title IV of ERISA or to such Plan, in excess of $100,000; or
(y) a contribution failure occurs with respect
to any Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA; or
(j) a Material Adverse Effect shall have occurred; or
(k) (i) any Person, or a group of Persons (within the meaning
of Section 13 or 14 of the Exchange Act), shall have acquired (A) beneficial
ownership in excess of 25% of the outstanding stock of the Company or other
voting interest having ordinary voting powers to elect a majority of the
directors, managers or trustees of the Company (irrespective of whether at such
time stock of any other class or classes shall have or might have voting power
by reason of the happening of any contingency), or (B) all or substantially all
of the Investments of the Company; or (ii) a majority of the Board of Directors
of the Company, at any time, shall be composed of Persons other than (A) Persons
who were members of the Board of Directors on the date of this Agreement, or (B)
Persons who subsequently become members of the Board of Directors and who either
(x) are appointed or recommended for election with the affirmative vote of a
majority of the directors in office as of the date of the Agreement, or (y) are
appointed or recommended for election with the affirmative vote of a majority of
the Board of Directors of the Company then in office; or
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(l) The Company shall at any time fail to maintain its REIT
Status, or the Company or any Subsidiary shall lose, through suspension,
termination, impoundment, revocation, failure to renew or otherwise, any
material license, permit or governmental authorization; or
(m) George L. Chapman shall cease for any reason whatsoever,
including, without limitation, death or disability (as such disability shall be
determined in the reasonable judgment of the Required Holders) to be and
continuously perform the duties of an executive officer of the Company and to be
a member of its Board of Directors or, if such cessation shall occur as a result
of the death or such disability, no successor satisfactory to the Required
Holders, in their sole discretion, shall have become and shall have commenced to
perform the duties of such executive officer of the Company and serve as a
member of the Company's Board of Directors within 30 days after such cessation;
PROVIDED, HOWEVER, that if any satisfactory successor shall have been so elected
and shall have commenced performance of such duties within such period, the name
of such successor or successors shall be deemed to have been inserted in place
of George L. Chapman in this Section 6.1(m); or
(n) The Company or any of its Subsidiaries, or any of their
respective Facilities, shall be subject to one or more Liens for costs or
damages in excess of $1,000,000 individually or in the aggregate under any
Environmental Law, such Liens shall remain in place for 30 days after the
creation thereof and such Liens are reasonably likely to cause a Material
Adverse Effect; or
(o) 30 days after the acceleration by the Company or any of
its Subsidiaries of the obligations of an Operator as a result of any default in
the payment of amounts which are due and owing under any lease, note, mortgage
or related security documents in connection with any Facility of such Operator
(such Facility, herein referred to as the "DEFAULTED FACILITY"), in the event
the sum of Lease Rental Expense and/or Mortgage Expense arising from (i) the
Defaulted Facility, and (ii) all Pooled Facilities, if any, of which the
Defaulted Facility is a part, which have a Fixed Charge Coverage of less than
1.0 to 1.0, account for 12.5% or more of the aggregate amount of all Lease
Rental Expense and/or Mortgage Expense owing to the Company or any of its
Subsidiaries from all Operators during the immediately preceding four calendar
quarters.
6.2. NOTICE TO PURCHASERS. Whenever the Company becomes aware that
any Default or Event of Default has occurred, or if a Purchaser has either
given any notice to the Company or taken any other action of which the Company
is aware with respect to a Default or Event of Default, or the Company receives
written notice from a third party concerning an event which constitutes a
Default or Event of Default, the Company will ensure that notice is given (or
such third party notice is forwarded) to all holders of the Notes then
outstanding, no later than the fifth day (or second day in the case of an Event
of Default or Default under Section 6.1(a)) after it becomes aware that such
Event of Default or Default has occurred, or that such notice has been given or
such other action has been taken with respect to such Default or Event of
Default, such notice to be in writing and sent in the manner provided in
Section 9.6.
6.3. ACCELERATION OF MATURITIES; OTHER REMEDIES.
(a) Upon the occurrence of an Event of Default under Section
6.1(a), the holder of any Note may, by written notice to the Company, declare
such Note to be, and such Note shall thereby become, due and payable (without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company) at the Redemption Price. Upon the occurrence of an
Event of Default under Section
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6.1(g), all Notes shall immediately become due and payable (without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Company) at the Redemption Price. Upon the occurrence of any Event of
Default, other than under Section 6.1(g) and other than under Section 6.1(a)
(which are governed by the preceding two sentences), the Required Holders may,
by written notice to the Company, declare all Notes to be, and such Notes shall
thereby become, due and payable (without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company) at the
Redemption Price. No course of dealing on the part of any holder of any Note nor
any delay or failure on the part of any holder of any Note to exercise any right
shall operate as a waiver of such right or otherwise prejudice such holder's
rights, powers and remedies. The Company further agrees to pay to the holder or
holders of the Notes all costs and expenses incurred by them in the collection
of any Note upon any default hereunder or thereon, including the fees,
disbursements and other charges of such holder's or holders' attorneys for all
services rendered in connection therewith.
(b) The rights and remedies expressly provided for in this
Agreement and the other Note Documents are cumulative and not exclusive of any
rights or remedies which the Purchaser or any holder of a Note would otherwise
have including, without limitation, the rights and remedies provided for in the
Subsidiary Guaranty.
6.4. RESCISSION OF ACCELERATION. The provisions of Section 6.3 are
subject to the condition that if any outstanding Notes have been declared or
have become immediately due and payable by reason of the occurrence of any Event
of Default described in paragraphs (a) through (f), inclusive, of Section 6.1,
or an Event of Default described in paragraphs (h) through (o), inclusive, of
Section 6.1, then the Required Holders may by written instrument filed with the
Company, rescind and annul such declaration and the consequences thereof;
PROVIDED that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely by
reason of such declaration under Section 6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall
have been cured or waived pursuant to Section 7.1 and the Company shall have
paid all of Purchaser's costs and expenses as provided for in Section 9.4;
and PROVIDED further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
7.1. CONSENT REQUIRED. Any term, covenant, agreement or condition of
this Agreement or the Notes or the other Note Documents may, with the consent of
the Company, be amended or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), if the
Company shall have obtained the consent in writing of the Required Holders,
provided that no such waiver, modification, alteration or amendment shall (a)
change the time of payment of the principal of or the
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interest on any Note or reduce the principal amount thereof or change the
rate of interest thereon, (b) change any of the provisions with respect to
Section 2 including, without limitation, the calculation of the Redemption
Price, or (c) change the percentage of holders of the Notes, or the number of
holders of Notes, required to take any action under this Section 7 or any other
provision of this Agreement, without the consent of each holder of the Notes
affected thereby. Executed or true and correct copies of any waiver,
modification, alteration or amendment to this Agreement shall be delivered by
the Company to each holder of outstanding Notes forthwith following the date on
which the same shall have been executed and delivered by the holder or holders
of the requisite percentage of outstanding Notes. Whenever in this Agreement it
is provided that an action may be taken or a condition may exist with the
consent of all or any percentage of the Purchasers or the outstanding Notes,
such consent must be the consent of all or such percentage of the Purchasers or
such outstanding Notes without regard to any Notes held or agreed to be
purchased by the Company, any Subsidiary of the Company or any Affiliate of the
Company or any such Subsidiary.
7.2. SOLICITATION OF PURCHASERS. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes or the other Note Documents unless each holder of Notes
(irrespective of the amount of Notes then owned by it) shall be informed thereof
by the Company and shall be afforded the opportunity of considering the same and
shall be supplied by the Company with sufficient information to enable it to
make an informed decision with respect thereto. The Company will not, directly
or indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder as
consideration for or as an inducement to entering into by any holder of any
waiver or amendment of any of the terms and provisions of the Agreements or the
Notes or the other Note Documents unless such remuneration is concurrently paid,
on the same terms, ratably to the holders of all Notes then outstanding, whether
or not such holders agreed to such waiver or amendment.
7.3. EFFECT OF AMENDMENT OR WAIVER. Any such amendment or waiver
shall apply equally to all of the holders of the Notes and shall be binding upon
them, upon each future holder of any Note and upon the Company, whether or not
such Note shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS
8.1. DEFINITIONS. (a) Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined. Capitalized terms used but
not otherwise defined herein shall have the respective meanings ascribed thereto
in the other Note Documents.
"ACT" means the Securities Act of 1933, as amended.
"AFFILIATE" means any Person (a) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, the Company, (b) which beneficially owns or holds with power to
vote 5% or more of any class of the voting stock of the Company, (c) 5% or more
of the voting stock of which is beneficially owned or held by the Company, or
(d) which is an officer or director of the Company. The term "CONTROL" means the
possession, directly or indirectly, of the power to direct or cause
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the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGREEMENT" shall mean this Amended and Restated Note Purchase
Agreement, as amended, modified or supplemented from time to time.
"AMENDED 1993 NOTE DOCUMENTS" means, collectively, the Amended and
Restated Note Purchase Agreement between the Company and the Purchasers party
thereto, dated as of the date hereof, for $52,000,000 of Senior Notes, the notes
issued pursuant thereto and all other documents and instruments executed or
delivered by the Company in connection therewith or pursuant thereto.
"APPRAISAL" means an appraisal providing an assessment of the fair
market value of a Property (whether appraised on a stand-alone basis or "in
bulk" together with similar Properties) which is independently and impartially
prepared by an MAI appraiser having substantial experience in the appraisal of
health care facilities and conforming to Uniform Standards of Professional
Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal
Foundation.
"APPRAISED VALUE" means with respect to any Facility, the value of such
Facility reflected in the most recent Appraisal prepared with respect to such
Facility.
"BALLOON PAYMENTS" means as of any date as of which the amount thereof
shall be determined, with respect to the Company on a consolidated basis, an
amount equal to (x) its aggregate obligation to make payments of principal in
respect of Indebtedness having a maturity during the immediately succeeding six
month period, less (y) the sum of Cash and the total unused availability under
the Credit Agreement; PROVIDED, HOWEVER, any Indebtedness with respect to which
the Company (or any of its Subsidiaries) has received a commitment for the
renewal or other refinancing of such Indebtedness shall not be included in the
computation of Balloon Payments and PROVIDED, FURTHER, if the calculation of the
amount of Balloon Payments results in a negative number, then the amount thereof
shall be deemed to be zero.
"BANKRUPTCY CODE" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 ET SEQ., as amended.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which banks in New York are required by law to close or are customarily
closed.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
amount of such Note that is to be paid or prepaid pursuant to any paragraph of
Section 2 or is declared to be immediately due and payable pursuant to Section
6.3, as the context requires.
"CAPITAL EXPENDITURES" means, for any period, the aggregate amount of
all payments made or to be made during such period by any Person directly or
indirectly for the purpose of acquiring, constructing or maintaining fixed
assets, real property or equipment that, in accordance with GAAP, would be added
as a debit to the fixed asset account of such Person, including, without
limitation, all amounts paid or payable during such period with respect to
Capitalized Lease Obligations and interest that are required to be capitalized
in accordance with GAAP.
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"CAPITALIZED LEASE" means any lease, the obligations to pay rent or
other amounts under which constitute Capitalized Lease Obligations.
"CAPITALIZED LEASE OBLIGATION" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"CASH" means, as to any Person, such Person's cash and cash
equivalents, as defined in accordance with GAAP consistently applied.
"CASH FLOW" means, for any period, the Company's consolidated net
income (loss) for such period, excluding extraordinary items net of tax effect,
plus depreciation, plus amortization of loan expenses, plus (minus) any change
in provision for losses, plus (minus) each of the following: (i) non-refundable
loan and commitment fees received in cash in excess of (less than) amounts
earned; (ii) non-refundable lease income received in cash in excess of (less
than) amounts earned; and (iii) non-refundable interest income received in cash
in excess of (less than) amounts earned.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"COMPANY" means Health Care REIT, Inc., a Delaware corporation,
together with its successors.
"CONSTRUCTION INVESTMENTS" means any financing extended by the Company
or any Subsidiary of the Company with respect to a Facility which is under
construction, i.e., has not received a certificate of occupancy and the
Company's or such Subsidiary's conditions for conversion to permanent financing
for the Facility have not been satisfied.
"CREDIT AGREEMENT" means the Company's loan agreement, dated as of the
date hereof, by and among the Company and the banks signatory thereto and as
KeyBank National Association, as Administrative Agent, and Fleet Bank, N.A., as
Syndication Agent, and as hereafter amended from time to time (provided that no
such amendment results in a breach of Section 5.26), providing for a
$175,000,000 revolving credit facility.
"CREDIT ENHANCEMENT" means any obligation, contingent or otherwise, of
the Company or any of its Subsidiaries directly or indirectly guaranteeing any
Indebtedness or other obligation of any Person and any obligation, direct or
indirect, contingent or otherwise, of the Company or any of its Subsidiaries
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation of such Person (whether arising by
virtue of partnership arrangements, or by agreement to keep well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such
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Indebtedness or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part). The term
"Credit Enhanced" used as a verb has a corresponding meaning.
"DEBT" means at any date, without duplication, (i) all obligations of
the Company or any of its Subsidiaries for borrowed money, (ii) all obligations
of the Company or any of its Subsidiaries evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of the Company or any of its
Subsidiaries to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (iv) all
obligations of the Company or any of its Subsidiaries as lessee which are
capitalized in accordance with generally accepted accounting principles, (v) all
obligations of the Company or any of its Subsidiaries to purchase securities (or
other property) which arise out of or in connection with the sale of the same or
substantially similar securities or property, (vi) all obligations of the
Company or any of its Subsidiaries to reimburse any bank or other Person in
respect of amounts paid under a letter of credit or similar instrument, (vii)
all obligations of the Company or any of its Subsidiaries to mandatorily redeem
any capital stock of the Company or any of its Subsidiaries or any other Person,
(viii) all Debt of others secured by a Lien on any asset of the Company or any
of its Subsidiaries, whether or not such Debt is assumed by the Company or any
of its Subsidiaries, and (ix) all Debt of others Credit Enhanced by the Company
or any of its Subsidiaries.
"DEFAULT" means any event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event of
Default as defined in Section 6.1.
"DISCOUNTED PREPAYMENT VALUE" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to the sum of the Reinvestment
Yield plus 50 basis points.
"EBITDA" means, for any period, with respect to the Company on a
consolidated basis, determined in accordance with GAAP, the sum of net income
(or net loss) for such period PLUS, the sum of all amounts treated as expenses
for: (a) interest, (b) depreciation, (c) amortization, and (d) all accrued taxes
on or measured by income to the extent included in the determination of such net
income (or net loss); provided, however, that net income (or net loss) shall be
computed without giving effect to extraordinary losses or gains.
"EBITDAR" means, for any period, with respect to any Facility, pre-tax
net income plus Operator Interest Expense, Mortgage Expense (but excluding
therefrom any amounts relating to principal), Lease Rental Expense,
depreciation, amortization and management fees as reported by the Operator less
an imputed management fee equal to five percent of the Facility's net revenues;
PROVIDED, HOWEVER, that net income (or net loss) shall be computed without
giving effect to extraordinary losses or gains.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and the protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.
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"ERISA AFFILIATE" means any corporation, trade or business that is
treated as a single employer with the Company or any Subsidiary of the Company
under Section 414(b), (c), (m) or (o) of the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means the Chairman of the Board, President, a Vice
President, chief financial officer or Treasurer of the Company.
"FACILITY" means a health care facility offering health care-related
products and services, including, but not limited to, any acute care hospital,
rehabilitation hospital, nursing facility, assisted living facility, retirement
center, long-term care facility, or medical office building, and facilities and
services directly related thereto.
"FIXED CHARGE COVERAGE" means, with respect to any Facility, the ratio
of: (x) EBITDAR, to (y) the sum of Operator Interest Expense (but excluding
therefrom Operator Interest Expense, the payment of which is subordinated to the
payment of Indebtedness owing to the Company or any of its Subsidiaries), Lease
Rental Expense, Mortgage Expense and principal paid with respect to Indebtedness
of Operators (other than Indebtedness relating to a Mortgage) which is not
subordinated to the Company or any of its Subsidiaries; all of the foregoing
calculated as at any date of determination thereof by reference to the
immediately preceding four fiscal quarters and based upon the financial
statements provided to the Company by each Operator for the immediately
preceding four fiscal quarters of each Operator.
"FIXED COVERAGE RATIO" means as of the last day of any fiscal quarter
with respect to the immediately preceding four fiscal quarters of the Company
ending on such date, the ratio of (x) EBITDA to (y) the sum of Interest Expense,
cash dividends and Balloon Payments.
"FUNDED INDEBTEDNESS" means, as of any date of determination thereof,
all Indebtedness of any Person, determined in accordance with GAAP, which by its
terms matures more than one year after the date of calculation, and any such
Indebtedness maturing within one year from such date which is renewable or
extendable at the option of the obligor to a date more than one year from such
date, including, in any event, the revolving credit loans borrowed pursuant to
the Credit Agreement.
"HAZARDOUS MATERIALS" means (a) any "hazardous substance" as defined by
CERCLA; (b) any "hazardous waste" or "petroleum," as defined by the Resource
Conservation and Recovery Act, as amended; (c) any petroleum product; (d) any
pollutant or contaminant or hazardous, dangerous or toxic chemical, material or
substance within the meaning of any other Environmental Law, as amended or
hereafter amended; (e) any radioactive material, including any source, special
nuclear or by-product material as defined at 42 U.S.C. 2011 ET SEQ., as amended
or hereafter amended; or (f) any other toxic chemical, hazardous substance,
contaminant or pollutant, medical waste, infectious waste or hazardous waste.
"HEALTHCARE ASSETS" means, as of any date as of which the amount
thereof is to be determined, the aggregate amount equal to the sum (without
duplication) of:
(i) the lesser of the Appraised Value or
purchase price of each Facility owned entirely by the Company or any of
its Subsidiaries and leased to an Operator; plus
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(ii) the lesser of the Appraised Value of any
Facility encumbered by a Mortgage or the outstanding principal amount
of the Mortgage which encumbers any such Facility.
"INCLUDING" means including without limitation.
"INDEBTEDNESS" means, with respect to any Person, all: (a) liabilities
or obligations, direct and contingent, which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Person at the date as of which Indebtedness is to be
determined, including, without limitation, contingent liabilities that in
accordance with such principles, would be set forth in a specific dollar amount
on the liability side of such balance sheet, and Capitalized Lease Obligations
of such Person; (b) liabilities or obligations of others for which such Person
is directly or indirectly liable, by way of guaranty (whether by direct
guaranty, suretyship, discount, endorsement, take-or-pay agreement, agreement to
purchase or advance or keep in funds or other agreement having the effect of a
guaranty) or otherwise; (c) liabilities or obligations secured by Liens on any
assets of such Person, whether or not such liabilities or obligations shall have
been assumed by it; and (d) liabilities or obligations of such Person, direct or
contingent, with respect to letters of credit issued for the account of such
Person and bankers acceptances created for such Person.
"INSOLVENCY" means with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
section 4245 of ERISA.
"INSOLVENT" shall pertain to a condition of Insolvency.
"INTEREST COVERAGE" means, as at the last day of any fiscal quarter,
the quotient, expressed as a percentage (which may be in excess of 100%),
determined by dividing EBITDA by Interest Expense; all of the foregoing
calculated by reference to the immediately preceding four fiscal quarters of the
Company ending on such date of determination.
"INTEREST EXPENSE" means, for any period, on a combined basis, the sum
of all interest paid or payable (excluding unamortized debt issuance cost) on
all items of Indebtedness of the Company and its Subsidiaries outstanding at any
time during such period.
"INVESTMENT" means (except as otherwise provided in Section 5.28 in
respect of Sections 5.8(b), 5.27 and 5.28) a Facility or a Mortgage,
individually or collectively, as the case may be.
"LEASE" means any Operating Lease or a Lease that creates a Capitalized
Lease Obligation, in either case in which the Company or a Subsidiary of the
Company is the lessor.
"LEASE RENTAL EXPENSE" means, for any period and with respect to any
Facility, the total amount payable during such period by the lessee of such
Facility to the Company or any Subsidiary, including, without limitation, (a)
base rent (as adjusted from time to time), plus (b) all incremental charges to
which the Facility is subject under the lease relating thereto.
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
encroachment, charge or claim against or interest in
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property, to secure payment of a debt or performance of an obligation or other
priority or preferential arrangement of any kind or nature whatsoever.
"LONG-TERM CARE FACILITIES" means healthcare facilities comprised of
nursing facilities, assisted living facilities and retirement facilities or
combinations thereof.
"MAKE-WHOLE PREMIUM" means, with respect to any Note, a premium equal
to the excess, if any, of the Discounted Prepayment Value of the Called
Principal of such Note over such Called Principal. The Make-Whole Premium shall
in no event be less than zero.
"MATERIAL ADVERSE EFFECT" means:
(a) a material adverse effect on the business, results of
operations or financial condition of the Company and its Subsidiaries, taken as
a whole, or on the ability of the Company or any Subsidiary of the Company to
perform its obligations under this Agreement, the Notes or any other Note
Document; or
(b) a material adverse effect on the legality, validity or
enforceability of the obligations of the Company or any Subsidiary of the
Company under this Agreement or the Notes or the other Note Documents.
"MORTGAGE(S)" means mortgages of real property constituting a Facility
for which the Company or a Subsidiary of the Company is the sole mortgagee.
"MORTGAGE EXPENSE" means, for any period and with respect to any
Facility, the total amount payable during such period by the mortgagor of such
Facility to the Company or any Subsidiary, including, without limitation, (a)
interest and principal (as adjusted from time to time) plus (b) all incremental
charges to which the Facility is subject under the Mortgage.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET ISSUANCE PROCEEDS" means in respect of any issuance of
Indebtedness or equity, the proceeds in Cash received by the Company or any of
its Subsidiaries upon or simultaneously with such issuance, net of direct costs
of such issuance and any taxes paid or payable by the recipient of such
proceeds.
"NET WORTH" means, at any date, the aggregate amount of capital stock
(less any treasury stock), surplus and retained earnings of the Company, all
determined as of such date in accordance with GAAP consistently applied.
"NOTE DOCUMENTS" means this Agreement, the Notes, the Subsidiary
Guaranty and any other agreements, documents and writings now or hereafter
executed by, on behalf of or for the benefit of the Company, any Subsidiary of
the Company or the Purchasers pursuant to or in connection with this Agreement,
the Notes, the Subsidiary Guaranty, or the transactions contemplated hereby and
thereby, together with all amendments, modifications (including through the
waiver of any provision hereof or thereof), supplements and/or restatements
hereto or thereto.
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"NOTES" means the Notes described in Section 1.1, and any Notes issued
in exchange or replacement therefor, in each case as the same may be amended,
modified or supplemented from time to time.
"OBLIGATIONS" means the payment and performance of all present and
future obligations and liabilities of the Company or any Subsidiary of the
Company (whether actual or contingent or whether owed jointly or severally or in
any other capacity whatsoever) to the Purchasers (or any of them) under the Note
Documents (or any of them), together with all costs, charges and expenses
incurred by the Purchasers (or any of them) in connection with the protection,
preservation or enforcement of their respective rights under the Note Documents,
including, without limitation, all principal of, premium (including the
Make-Whole Premium), if any, and interest on, any Note and all other amounts
payable by the Company or any Subsidiary of the Company under any Note Document
(including, without limitation, amounts owed in respect of interest that accrues
on all or any portion of the Obligations after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company or any Subsidiary of the Company), and all
renewals or extensions of any of the foregoing.
"OPERATING LEASE" means any lease (other than a lease constituting a
Capitalized Lease Obligation) of real or personal property having a lease term
(as defined in Financial Accounting Standards Board Statement No. 13, as in
effect on the Original Issuance Date) of more than one year.
"OPERATOR" means (a) the lessee of any Facility owned or leased by the
Company or any of its Subsidiaries, and (b) the mortgagor of a Facility which is
subject to a Mortgage to the extent that such entity controls the operation of
the Facility.
"OPERATOR INTEREST EXPENSE" means, for any period, the sum of all
interest on, and all amortization of debt discount and expenses on, all
Indebtedness of an Operator outstanding at any time during such period but
excluding any amounts which constitute Mortgage Expense.
"OVERDUE RATE" means, for each day, a rate per annum equal to the
higher of (a) 9.29% and (b) the sum of (i) 2% PLUS (ii) the Prime Rate for such
day. Nothing contained in this definition shall require the Company or any
Subsidiary of the Company to pay interest at a rate exceeding the maximum rate
permitted by applicable law.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" means a corporation, an association, a partnership, a limited
liability company or partnership, an organization, a business, a trust or any
other entity, an individual, a government or political subdivision thereof or a
governmental agency or instrumentality.
"PLAN" means at any particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company, any Subsidiary of the
Company or an ERISA Affiliate is (or, if such plan was terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
section 3(5) of ERISA.
"POOLED FACILITIES" means Facilities which are commonly owned or
operated by one Operator or an Affiliate thereof (as selected by the Company or
any of its Subsidiaries), and the debt financings or leases of which are
cross-defaulted and, with respect to Mortgages, are cross-collateralized.
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"PRIME RATE" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"PROPERTY" means any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.
"PURCHASER'S ENVIRONMENTAL LIABILITY" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys' fees at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against any Purchaser or any of
its respective affiliates, shareholders, directors, officers, employees or
agents in connection with or arising from:
(a) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment to which the Company or any of its Subsidiaries
may be subject;
(b) the Release by the Company or any of its Subsidiaries of
any Hazardous Material on, in, under or affecting all or any portion of any
property of the Company or any such Subsidiary, the groundwater, or any of the
surrounding areas;
(c) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real property
owned or operated by the Company or any of its Subsidiaries of any Hazardous
Material (including any losses, liabilities, damages, injuries, costs, expenses
or claims asserted or arising under any Environmental Law);
(d) any misrepresentation, inaccuracy or breach of any
warranty, contained or referred to in Section 3.1(q); or
(e) the imposition of any lien for damages caused by or the
recovery of any costs for the cleanup, release or threatened release of
Hazardous Material by the Company or any of its Subsidiaries, or in connection
with any property owned or formerly owned by the Company or any of its
Subsidiaries.
"RECOGNIZED RATING AGENCY" shall mean a nationally recognized rating
agency or organization, including Moody's, Standard & Poor's and Duff & Phelps,
and any other rating agency or organization approved by the Required Holders.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal
of any Note, the yield to maturity implied by (i) the yields reported, as of
10:00 A.M. (New York City time) on the third Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the weighted average remaining life of the Called Principal
being paid or prepaid as of such Settlement Date, or (ii) if such yields shall
not be reported as of such time or the yields reported as of such time shall not
be ascertainable, the Treasury Constant Maturity
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Series yields reported, for the latest day for which such yields shall have been
so reported as of the third Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release
H.15(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the weighted average
remaining life of the Called Principal being paid or prepaid as of such
Settlement Date. Such implied yield shall be determined, if necessary, by (a)
converting U.S. Treasury bill quotations to bond-equivalent yields in accordance
with accepted financial practice and (b) interpolating linearly between reported
yields.
"REIT STATUS" means, with respect to any Person, (a) the qualification
of such Person as a real estate investment trust under Sections 856 through 860
of the Code, and (b) the applicability to such Person and its shareholders of
the method of taxation provided for in Section 857 ET SEQ. of the Code.
"RELEASE" means a "release," as such term is defined in CERCLA.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon (other than interest accrued to the Settlement Date) that would be due
on or after the Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its expressed maturity date.
"REORGANIZATION" means with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the 30-day notice period is waived
under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ' 2615, and the
event described in Section 4062(e) of ERISA.
"REQUIRED HOLDERS" means, at any time, the holders of at least 67% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Subsidiaries or any Affiliates).
"SECURED CREDIT AGREEMENT" means any credit agreement, note purchase
agreement or other documentation evidencing Debt borrowed from institutional
investors or banks which is secured by Liens on assets or properties of the
Company or any Subsidiary of the Company; PROVIDED that if the only security for
such Debt is a mortgage creating a Lien on a single real estate property of the
Company or any Subsidiary of the Company, then such credit agreement, note
purchase agreement or other documentation shall not be deemed to be a Secured
Credit Agreement.
"SERIES" when referring to the Notes shall mean either the Series A
Notes or the Series B Notes issued hereunder.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be paid or prepaid
pursuant to any paragraph of Section 2 or is declared to be immediately due and
payable pursuant to Section 6.3, as the context requires.
"SUBSIDIARY" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of
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such corporation (assuming exercise or conversion solely of the securities held
by such Person) is at the time beneficially owned by such Person directly or
indirectly through Subsidiaries, and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than a 50% equity interest at the time or the power to
elect a majority of the Board of Directors or similar governing body.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty Agreement, dated as
of the date hereof, among the Purchasers, the Company and each of the
Subsidiaries of the Company, as amended, modified or supplemented from time to
time.
"TANGIBLE NET WORTH" means, at any date, the aggregate amount of Net
Worth of the Company, after subtracting deferred charges and intangible assets,
all as determined as of such date in accordance with GAAP consistently applied.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, joint venture or other entity of which
all of the equity securities or ownership interests (other than, in the case of
a corporation, directors' qualifying shares) are owned or controlled by such
Person or one or more Wholly Owned Subsidiaries of such Person.
(b) In addition, each of the following terms is defined in
the Section set forth opposite such term:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Audited Financials 3.1(h)
Defaulted Facility 6.1(o)
Effective Date 10.1
Environmental Reports 3.1(q)
Event of Default 6.1
GAAP 3.1(h)
Indemnified Liabilities 9.4(b)
Indemnified Parties 9.4(b)
1996 10-K 3.1(g)
Leverage Ratio 5.14(b)
Leverage Test Period 5.14(b)
Note Register 9.1(a)
Notes 1.1
Ongoing Indebtedness 5.12(b)
Ordinary Leases 5.8(b)
Original Issuance Date 1.2(a)
Original Note Purchase Agreement Preamble
Original Notes Preamble
Original Series A Notes Preamble
Original Series B Notes Preamble
Paying Agent 5.4
Purchase Price 1.2(a)
</TABLE>
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<PAGE> 42
<TABLE>
<S> <C>
Purchaser Preamble
Redemption Price 2.1
Release 10.2
Release Documents 10.2
Restricted Payments 5.16(a)
Series A Notes 1.1
Series B Notes 1.1
Taxes 5.3
</TABLE>
8.2. ACCOUNTING PRINCIPLES; TIME PERIODS. (a) Where the character
or amount of any asset or liability or item of income or expense is required to
be determined or any consolidation or other accounting computation is required
to be made for the purposes of this Agreement, the same shall be done in
accordance with GAAP.
(b) In the Note Documents, in connection with the computation
of periods of time, each such period shall run from (and including) the
beginning of such period to (but excluding) the end of such period.
SECTION 9. MISCELLANEOUS
9.1. REGISTERED NOTES. (a) Company shall cause to be kept a
register for the registration and transfer of the Notes (the "NOTE REGISTER") at
the office of the Company or the Paying Agent, and the Company will cause to be
registered or transferred on the Note Register as hereinafter provided and under
such reasonable regulations as it may prescribe, any Note issued pursuant to
this Agreement.
(b) At any time and from time to time the registered holder of
any Note which has been duly registered as hereinabove provided may, subject to
compliance with applicable securities laws, transfer such Note upon surrender
thereof at the Company or the principal office of the Paying Agent (if one shall
have been appointed) duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder of such Note or its attorney
duly authorized in writing; provided that the Company or the Paying Agent may
decline to exchange or register the transfer of any Note during the period of
five Business Days preceding the due date for any payment of principal or
interest on the Notes.
(c) The Person in whose name any registered Note shall be
registered shall be deemed and treated as the owner and holder thereof for all
purposes of this Agreement. Payment of or on account of the principal, premium,
if any, and interest on any registered Note shall be made to or upon the written
order of such registered holder.
9.2. EXCHANGE OF NOTES. At any time and from time to time, upon not
less than three Business Days' notice to that effect given by the holder of any
Note initially delivered or of any Note substituted therefor pursuant to
Section 9.1, this Section 9.2, or Section 9.3 (except in the case of a lost,
stolen, or mutilated certificate sought to be exchanged pursuant to Section
9.3, as soon as practicable), and, upon surrender of such Note at the office of
the Paying Agent, the Company will cause the Paying Agent to deliver in
exchange therefor, without expense to the holder, except as set forth below,
Notes for the same aggregate
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principal amount as the then unpaid principal amount of the Note so surrendered,
in the denomination of U.S. $100,000 or any amount in excess thereof as such
holder shall specify, dated as of the date to which interest has been paid on
the Note so surrendered, or, if such surrender is prior to the payment of any
interest thereon, then dated as of the date of issue, payable to such Person or
Persons, or registered assigns, as may be designated by such holder and
otherwise permitted hereunder, and otherwise of the same form and tenor as the
Notes so surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charges imposed upon such
exchange or transfer.
9.3. LOSS, THEFT OR MUTILATION OF NOTES. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Notes, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of the Note, the Company will cause the Paying Agent to deliver without expense
to the holder thereof, a new Note, of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Note. If any Purchaser is the owner of any such lost,
stolen or destroyed Note, then the affidavit of an authorized officer, of such
owner, setting forth the fact of loss, theft or destruction and of its ownership
of the Note at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Company.
9.4. EXPENSES, STAMP TAX, INDEMNITY.
(a) Whether or not the transactions herein contemplated shall
be consummated, the Company agrees to pay directly all of its and the
Purchasers' out-of-pocket expenses in connection with the preparation, execution
and delivery, administration, interpretation and enforcement of this Agreement
and each of the other Note Documents and the transactions contemplated or
permitted hereby and thereby, including the reasonable fees, disbursements and
other charges of Purchasers' special counsel, and all duplicating and printing
costs and charges for shipping the Notes, adequately insured to each Purchaser
at such Purchaser's home office or at such other place as such Purchaser may
designate. The Company agrees to pay all of its out-of-pocket expenses in
connection with the preparation, execution and delivery of this Agreement and
the transactions contemplated or permitted hereby, including the fees and
expenses of its counsel and of Everen Securities, Inc. (if any). The Company
also agrees to pay all expenses relating to the performance of any transactions
contemplated or permitted hereby, any filing or recording fees or taxes, all
expenses of the Purchasers in connection with any Default or Event of Default or
any alleged Default or Event of Default hereunder or in connection with any
action for the enforcement or collection of the Notes or this Agreement or any
other Note Document and all expenses associated with any amendments, waivers or
consents pursuant to the provisions hereof or thereof (whether or not the same
are actually executed and delivered), including any amendments, waivers or
consents resulting from any work-out, restructuring or similar proceedings
relating to the performance by the Company of the Obligations. The Company also
agrees to pay all expenses relating to any claim or action threatened, made or
brought against any of the Purchasers arising out of or relating to any extent
to this Agreement, the Notes, or the other Note Documents or the transactions
contemplated hereby or thereby. The Company also agrees that it will pay any
fees and related expenses incurred or to be incurred in connection with its
cooperation with a Recognized Rating Agency and Duff & Phelps as provided in
Section 5.9 and all initial and ongoing fees and all out-of-pocket expenses of
the Paying Agent, if any, and will pay and save the Purchasers harmless against
any and all liability with respect to stamp and other similar taxes, if any,
which may be payable or which may be determined to be payable in connection with
the execution, delivery or enforcement of this Agreement or the
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<PAGE> 44
Notes or any other Note Documents, whether or not any Notes are then
outstanding. Without limiting the foregoing, the Company agrees to pay the cost
of obtaining a private placement number for the Notes and authorizes the
submission of such information as may be required by Standard & Poor's for the
purpose of obtaining such number.
(b) In consideration of the execution and delivery of this
Agreement by each Purchaser, the Company hereby indemnifies, exonerates and
holds each Purchaser and each of its respective affiliates, shareholders,
officers, directors, employees, attorneys and agents (collectively, the
"INDEMNIFIED PARTIES") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, claims, liabilities and damages, and
expenses incurred in connection therewith (irrespective of whether any such
Indemnified Party is a party to the action for which indemnification hereunder
is sought), including reasonable attorneys' fees and disbursements
(collectively, the "INDEMNIFIED LIABILITIES"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to:
(i) any and all brokerage fees and commissions payable or claimed
to be payable by the Company to any Person in connection with the
transactions contemplated by this Agreement or any of the other Note
Documents;
(ii) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds from the sale of the
Notes;
(iii) the execution, delivery and performance of this Agreement
and any other Note Document by any of the Indemnified Parties; or
(iv) any Purchaser's Environmental Liability;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of such Indemnified Party's gross
negligence or willful misconduct, as finally determined by a court of competent
jurisdiction. This indemnity shall survive repayment or transfer of the Notes,
the release of any collateral, or a transfer of the Company's property by
foreclosure or by a deed in lieu of foreclosure, regardless of whether caused
by, or within the control of, the Company or any Subsidiary of the Company. The
Company, its successors and assigns, hereby waive, release and agree not to make
any claim or bring any cost recovery action against any Indemnified Party under
CERCLA or any state equivalent, or any other similar law now existing or
hereafter enacted. It is expressly understood and agreed that the Company's
obligation to any Indemnified Party under this indemnity shall be without regard
to fault on the part of the Company with respect to the violation or condition
which results in liability of any Indemnified Party. If and to the extent that
the foregoing undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law.
9.5. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE; COUNTERCLAIMS.
(a) No delay or failure on the part of the holder of any Note in the exercise of
any power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to and are not exclusive of any rights or
remedies any such holder would otherwise have, and no waiver or consent, given
or extended pursuant to Section 7, shall extend to or affect any obligation or
right not
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<PAGE> 45
expressly waived or consented to. The indemnities set forth in Section 9.4 shall
be in addition to any other obligations or liabilities of the Company or any of
its Subsidiaries to the Purchasers hereunder or under any other Note Documents,
at common law or otherwise.
(b) The due payment and performance of the Obligations shall
be without regard to any counterclaim, right of offset or any other claim
whatsoever that the Company or any of its Subsidiaries may have against any
Purchaser and without regard to any other obligation of any nature whatsoever
that any Purchaser may have to the Company or any of its Subsidiaries, and no
such counterclaim or offset shall be asserted by the Company or any of its
Subsidiaries (unless such counterclaim or offset would, under applicable law, be
permanently and irrevocably lost if not brought in such action) in any action,
suit or proceeding instituted by any Purchaser for payment or performance of the
Obligations.
9.6. NOTICES. All communications provided for hereunder shall be
in writing and delivered or mailed by registered or certified mail, return
receipt requested, or by overnight courier, or by facsimile communication
transmitted on a Business Day (confirmed in writing by registered or certified
mail, return receipt requested, or by overnight courier), and shall be deemed
given if mailed, five Business Days after deposited in the mail, if sent by
overnight courier, one Business Day after delivered to the courier or, if sent
by facsimile transmission when appropriate record of transmission is obtained,
in each case prepaid and addressed, if to the Company, to Health Care REIT,
Inc., One Sea Gate, Suite 1500, Toledo, Ohio 43604, Attention: Chairman,
Telecopier No. 419-247-2826 or to such other address as the Company or the
Paying Agent, if any, may in writing designate to the Purchasers or to a
subsequent holder of the Note initially issued to Purchaser, and, if to an
original Purchaser, addressed to such Purchaser at the address set forth on
Schedule 1.1(a) hereto, and if to any transferee of such Purchaser, to the
address set forth on the Note Register, or to such other address as such
original Purchaser or transferee of such Purchaser shall designate in writing to
the Company and the Paying Agent, if any.
9.7. SUCCESSORS AND ASSIGNS. This Agreement and the Notes shall
be binding upon the Company and its respective successors and permitted assigns
and shall be binding upon and inure to each Purchaser's benefit and to the
benefit of each Purchaser's successors and assigns, including each successive
holder or holders of any Notes, except that the Company may not assign or
otherwise transfer any of its rights or obligations under this Agreement and the
Notes without the prior written consent of all the Purchasers. Each such
successive holder or holders of any Notes, including each Purchaser, shall have
all rights and privileges of a "Purchaser" hereunder. Each successive holder or
holders of a Note shall, at the Company's request, restate in writing for the
Company's benefit as to such holder, the representations set forth in Section
3.2.
9.8. SURVIVAL OF COVENANTS AND REPRESENTATIONS. All covenants,
representations and warranties made by the Company or any of its Subsidiaries
herein and in any other Note Documents and in any certificates delivered
pursuant hereto or thereto, shall survive the execution and the delivery of this
Agreement and the Notes. The obligations of the Company under Section 5.3 and
Section 9.4 shall in each case survive any termination of this Agreement, the
payment in full of all Obligations, or the invalidity or unenforceability of any
term or provision of this Agreement or any other Note Document.
9.9. SEVERABILITY. If any provision of this Agreement or any of
the other Note Documents for any reason is declared unenforceable by a court of
competent jurisdiction (sustained on appeal, if any), such unenforceability
shall not affect the enforceability of any other provision hereof or thereof,
all of which shall remain in force and effect; PROVIDED that, if any provision
of this Agreement or any of the other Note
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<PAGE> 46
Documents shall be unenforceable by reason of a final judgment of a court of
competent jurisdiction based upon a court's ruling (sustained on appeal, if any)
that such provision is unenforceable because of the excessive degree or
magnitude of the obligation imposed thereby on any Person, that unenforceable
obligation shall be reduced in magnitude or degree by the minimum degree or
magnitude necessary in order to permit the provision to be enforceable by the
Purchasers. In the event the provisions of the immediately preceding sentence
applies, the parties shall make appropriate adjustment to the provisions of this
Agreement and the other Note Documents to give effect to the benefits intended
to be conferred upon the parties hereby.
9.10. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
9.11. SUBMISSION TO JURISDICTION. THE COMPANY HEREBY CONSENTS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF NEW YORK, STATE OF NEW YORK, AND IRREVOCABLY AGREES THAT ALL ACTIONS
OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTES AND OTHER NOTE DOCUMENTS
SHALL BE LITIGATED IN SUCH COURTS, AND THE COMPANY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR
FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL (RETURN RECEIPT
REQUESTED) OR MESSENGER DIRECTED TO IT AT ITS ADDRESS SET FORTH IN SECTION 9.6
OR TO ITS AGENT REFERRED TO BELOW AT SUCH AGENT'S ADDRESS SET FORTH BELOW AND
THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED IN ACCORDANCE WITH SECTION
9.6. THE COMPANY HEREBY IRREVOCABLY APPOINTS THE PRENTICE HALL CORPORATION
SYSTEM, INC., WITH AN OFFICE ON THE DATE HEREOF AT 15 COLUMBUS CIRCLE, NEW YORK,
NEW YORK 10023, AS ITS AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF ANY PROCESS
WITHIN THE STATE OF NEW YORK. NOTHING CONTAINED IN THIS SECTION SHALL AFFECT THE
RIGHT OF ANY HOLDER OF NOTES TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY
JURISDICTION AGAINST THE COMPANY OR TO ENFORCE A JUDGMENT OBTAINED IN THE COURTS
OF ANY OTHER JURISDICTION.
9.12. WAIVER OF JURY TRIAL. THE COMPANY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, THE NOTES OR ANY OTHER NOTE DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE PURCHASERS, OR THE COMPANY IN CONNECTION HEREWITH OR THEREWITH.
THE COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH NOTE
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<PAGE> 47
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR EACH PURCHASER ENTERING INTO THIS AGREEMENT.
9.13. CAPTIONS. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
9.14. COUNTERPARTS; INTEGRATION. This Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original hereof but all together constituting only one agreement. This
Agreement, the Notes and the other Note Documents constitute the entire
agreement and understanding among the parties hereto and supersede any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof and thereof.
9.15. INTEREST RATE LIMITATION. Nothing contained in the
definition of Overdue Rate or in any Note Document shall require the Company or
any of its Subsidiaries to pay interest at a rate exceeding the maximum rate
permitted by applicable law.
SECTION 10. MISCELLANEOUS
10.1. CONDITIONS TO EFFECTIVENESS. This Agreement will become
effective on the date (the "EFFECTIVE DATE") on which each of the following
conditions precedent shall be satisfied:
(a) CORPORATE DOCUMENTS. Each Purchaser shall have received
(i) a certified copy of the charter of the Company and of each of its
Subsidiaries; (ii) certified copies of the by-laws of the Company and of each of
its Subsidiaries and of all corporate action taken by the Company and of each of
its Subsidiaries authorizing the execution, delivery and performance of this
Agreement, the Notes and the other Note Documents; (iii) a certificate in
respect of the name, signature and incumbency of each of the Company's and of
each of its Subsidiary's officers who is authorized to sign on its behalf this
Agreement, the Notes and the other Note Documents to be delivered by it
hereunder; and (iv) counterparts of each of this Agreement, the Notes and the
other Note Documents, signed by each of the parties thereto.
(b) COMPANY'S CLOSING CERTIFICATE. Each Purchaser shall have
received a certificate of the Company signed by an Executive Officer of the
Company and of each of its Subsidiaries to the effect that (i) the
representations and warranties contained in Section 3.1 and the other Note
Documents are true and correct on and as of the Effective Date, and (ii) no
Default or Event of Default exists on and as of the Effective Date.
(c) LEGAL OPINIONS. Each Purchaser shall have received an
opinion dated the Effective Date, in each case in form and substance
satisfactory to each Purchaser, covering such matters relating to the
transactions contemplated by this Agreement and the other Note Documents as each
Purchaser may reasonably request, from (i) Shumaker, Loop & Kendrick, counsel to
the Company and (ii) Dorsey & Whitney, special New York counsel to the Company.
(d) RATINGS. The Notes shall have a Duff & Phelps rating of at
least BBB-, and each Purchaser shall have received written evidence thereof.
(e) NO DEFAULT OR EVENT OF DEFAULT; ACCURACY OF
REPRESENTATIONS AND WARRANTIES. On the Effective Date, no Default or Event of
Default shall exist. The representations and warranties
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<PAGE> 48
contained in this Agreement (including Section 3.1) and in the other Note
Documents shall be true and correct on and as of the Effective Date.
(f) OTHER AGREEMENTS. Each Purchaser shall have received a
copy of the Credit Agreement and the Amended 1993 Note Documents and each
material document referred to therein, in each case as in effect on the
Effective Date, together with a certificate of an Executive Officer of the
Company certifying that each such copy is a true, complete and correct copy of
each such document and agreement as then in effect. Such certificate shall state
that each such document and agreement is in full force and effect and that no
default or event of default exists thereunder or will result from the
consummation of the transactions contemplated by this Agreement and the other
Note Documents.
(g) OPINION OF COUNSEL TO THE PURCHASERS. Each Purchaser shall
have received from its special counsel an opinion dated the Effective Date in
form and substance satisfactory to such Purchaser covering such matters relating
to the transactions contemplated by this Agreement as such Purchaser may
reasonably request.
(h) SATISFACTORY PROCEEDINGS. All proceedings taken in
connection with the transactions contemplated by this Agreement and the other
Note Documents, and all documents necessary for the consummation thereof, shall
be satisfactory in form and substance to each Purchaser and its special counsel,
and such Purchaser shall have received a copy (executed or certified as may be
appropriate) of all legal documents or proceedings taken in connection with the
consummation of such transactions.
(i) COSTS AND EXPENSES. The Company shall have paid or
provided for the payment of all expenses that the Company is obligated to pay
pursuant to Section 9.4 and all of the commitment fees the Company is obligated
to pay pursuant to Section 1.2. In addition, each Purchaser shall have received
reasonable assurance in writing that all other fees and expenses incurred by any
other Person in connection with the transactions contemplated hereunder has been
paid on or prior to the date hereof.
(j) RELEASE OF COLLATERAL. Each Purchaser shall have received
evidence satisfactory to it that all liens covering the collateral securing
certain indebtedness of the Company existing pursuant to (i) the $150,000,000
Credit Agreement, dated as of September 8, 1994, among the Company, the banks
signatory thereto and National City Bank, as Agent, as amended, and (ii) the
Amended 1993 Note Documents have been released or terminated.
(k) SUBSIDIARY GUARANTY. The Company, each of the Company's
Subsidiaries and each Purchaser shall have executed and delivered the Subsidiary
Guaranty, and the Subsidiary Guaranty shall be in full force and effect.
10.2. RELEASE OF COLLATERAL. Each Purchaser hereby agrees to release
and to cause to be released (the "Release"), as of the Effective Date, all Liens
granted to it or to the Collateral Agent (as such term is defined in the
Original Note Purchase Agreement) for its benefit in and to the Collateral (as
such term is defined in the Original Note Purchase Agreement). Each Purchaser
agrees to use all reasonable efforts to take or cause to be taken all actions
and to do all things reasonably necessary to effectuate the Release (in each
case at the expense of the Company), including instructing the Collateral Agent
to (a) execute and deliver to the Company or its agent all instruments
reasonably requested by the Company in order to evidence the Release of record
("Release Documents"), including, without limitation, (i) releases of all Direct
Mortgages, Assignments of Lease, Assignments of Loan Documents and related
documents, (ii) termination statements for all UCC-1 financings statements that
name the Company as debtor and the Collateral Agent as secured party, and (iii)
assignments to the Company of all UCC-1 financing statements that name the
Company's borrower or tenant as debtor and the Company as secured party and that
were assigned to the
-44-
<PAGE> 49
Collateral Agent; and (b) endorse (where applicable) and deliver to the Company
all original promissory notes, letters of credit and all other original
documents held by the Collateral Agent in connection with any assigned loan or
fee property.
-45-
<PAGE> 50
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
HEALTH CARE REIT, INC.
By:
-----------------------------------------------
Name:
Title:
PURCHASERS:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, AS
TRUSTEE OF A COMMINGLED PENSION TRUST
By:
----------------------------------------------
Name:
Title:
ALLSTATE LIFE INSURANCE COMPANY
By:
----------------------------------------------
Name:
Title: Authorized Signatory
By:
Name:
-------------------------------------------
Title: Authorized Signatory
-46-
<PAGE> 51
SCHEDULE 3.1(q)
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
ENVIRONMENTAL REPORTS
---------------------
None
<PAGE> 52
SCHEDULE 5.12
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
ONGOING INDEBTEDNESS
--------------------
I. LINES OF CREDIT
- ------------------
<TABLE>
<CAPTION> Total
Available
---------
<S> <C>
Key/Fleet Revolving Line of Credit $175,000,000
Capital Bank, NA 10,000,000
------------
$185,000.000
============
</TABLE>
II. EXISTING SECURED DEBT
<TABLE>
<CAPTION>
Investment Amount of Liens/
Operator Facility Balance Indebtedness
- -------- -------- ------- ----------------
<S> <C> <C> <C>
Gordon Health Pittsburgh, PA $10,481,950 $ 6,527,045
Ventures
Horizon Healthcare San Antonio, TX 1,415,224 1,415,224
------------
$ 7,942,269
============
</TABLE>
III. EXISTING OTHER UNSECURED DEBT
<TABLE>
<CAPTION>
<C> <C>
1993 Series Senior Notes $ 52,000,000
1996 Series Senior Notes 30,000,000
------------
$ 82,000,000
============
</TABLE>
IV. EXISTING CONTINGENT OBLIGATIONS
<TABLE>
<CAPTION>
Amount of
Operator Facility Guaranty
- -------- -------- --------
<S> <C> <C>
Kingston Health Care Ashland, OH $ 1,625,000
Kingston Health Care Vermilion, OH 1,625,000
Kingston Health Care Naperville, IL 4,715,000
Kingston Health Care Santa Fe, NM 5,795,000
Village Management Rockford, IL 5,055,000
------------
Total $ 18,815,000
============
</TABLE>
<PAGE> 53
SCHEDULE 5.19
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
CREDIT ENHANCEMENTS
-------------------
EXISTING CONTINGENT OBLIGATIONS
- --------------------------------
<TABLE>
<CAPTION>
Amount of
Operator Facility Guaranty
- -------- -------- --------
<S> <C> <C>
Kingston Health Care Ashland, OH $ 1,625,000
Kingston Health Care Vermilion, OH 1,625,000
Kingston Health Care Naperville, IL 4,715,000
Kingston Health Care Santa Fe, NM 5,795,000
Village Management Rockford, IL 5,055,000
------------
Total $ 18,815,000
============
</TABLE>
<PAGE> 54
SCHEDULE 5.31
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
PERMITTED CAPITAL EXPENDITURES
------------------------------
$2,500,000 in Capital Expenditures in connection with the
following Facilities:
Facility Name Location
------------- --------
Harborview Hospital Miami, FL
Horizon Hospital Clearwater, FL
<PAGE> 55
Exhibit A
Form of
HEALTH CARE REIT, INC.
Amended and Restated
6.96% Series A Senior Note
Due 2001
Private Placement No. 42217K B#2
No. __ March 28, 1997
U.S. $________________
HEALTH CARE REIT, INC., a Delaware corporation (the "Company"), for
value received, hereby unconditionally promises to pay to the order of
____________. (the "Purchaser") or its registered assigns, on April 15, 2001 the
principal amount of ______________________ DOLLARS (U.S. $________________) and
to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 6.96% per annum from (and including) April 23, 1996 to (but excluding)
the date of repayment of such principal amount, payable on the 15th day of each
April and October in each year (commencing October 15, 1996), and at maturity;
provided, however, that if, at any time on or after March 28, 1997, any of the
Notes shall not be rated at least BBB by Duff & Phelps (it being understood and
agreed that (x) a rating of BBB- is lower than a rating of BBB and (y) the
withdrawal, discontinuance or absence of a rating of any of the Notes by Duff &
Phelps shall be deemed, for these purposes, to be the equivalent of a rating
that is lower than BBB), the rate of interest shall instead be 7.06% per annum
for the period during which the Notes shall not be rated at least BBB by Duff &
Phelps. The Company agrees to pay interest on overdue principal (whether by
acceleration or otherwise, and including any overdue prepayment of principal)
and premium, if any, and on any overdue installment of interest, at the Overdue
Rate until paid.
Unless otherwise set forth herein, capitalized terms used
herein but not defined herein have the respective meanings assigned to them in
the Note Purchase Agreement (as such term is hereafter defined).
1. Except as may be otherwise provided pursuant to Section 5.4
or 5.10 of the Note Purchase Agreement, both the principal hereof, premium, if
any, and interest hereon are payable at the principal office of the Company, in
immediately available funds, in coin or currency of the United States of America
which at the time of payment shall be legal tender for the payment of public and
private debts. Such payments shall be applied first to accrued interest, then to
premium, if any, and then to principal. If any amount of principal, premium,
-i-
<PAGE> 56
if any, or interest on or in respect of this Note becomes due and payable on any
date which is not a Business Day, such amount shall be payable on the
immediately preceding Business Day. Payment of any amount on or in respect of
this Note shall be made not later than 12:00 Noon New York Time on the date on
which such payment shall become due (each such payment made after such time on
such date to be deemed to have been made on the next succeeding Business Day).
2. This Note is one of the Series A Senior Notes due 2001
issued pursuant to the terms and provisions of that certain Amended and Restated
Note Purchase Agreement, dated as of March 28, 1997 (the "Note Purchase
Agreement"), entered into by the Company and each of the Purchasers party
thereto, and this Note and the holder hereof are entitled equally and ratably
with the holders of all other Notes (as defined in the Note Purchase Agreement)
outstanding under the Note Purchase Agreement to all benefits provided for in
the Note Documents or referred to therein, and may be accelerated, or redeemed
at the option of the holder hereof, prior to maturity, all as provided in the
Note Purchase Agreement, to which Note Purchase Agreement reference is hereby
made for the statement thereof. A copy of the Note Purchase Agreement may be
obtained from the Company.
3. The Notes are not subject to prepayment, purchase or
redemption at the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with the Make-Whole
Premium, if any, all as set forth in Section 2 of the Note Purchase Agreement.
4. This Note is registered on the books of the Company and is
transferable only by surrender hereof at the offices of the Company (or of such
Paying Agent as may be appointed by the Company pursuant to Section 5.4 of the
Note Purchase Agreement from time to time), duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of this
Note or its attorney duly authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Note shall be made only to or
upon the order in writing of the registered holder.
5. Pursuant to the Subsidiary Guaranty, payment of all amounts
owed under this Note is absolutely and unconditionally guaranteed by each
Subsidiary of the Company. The Company and each surety, endorser, guarantor and
other party ever liable for payment of any sums of money payable upon this Note
jointly and severally waive presentment, demand, protest, notice of protest and
nonpayment or other notice of default, notice of acceleration and intention to
accelerate or other notice of any kind, and agree that their liability under
this Note shall not be affected by any renewal or extension in the time of
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes hereto or any other Note
Document, regardless of the number of such renewals, extensions, indulgences,
releases or changes.
6. No waiver by Purchaser of any of its rights or remedies
hereunder or under any other Note Document or otherwise, shall be considered a
waiver of any other subsequent right or remedy of Purchaser; no delay or
omission in the exercise or enforcement by Purchaser of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Purchaser; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Purchaser.
-2-
<PAGE> 57
7. This Note and the Note Purchase Agreement shall be governed
by and shall be construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
HEALTH CARE REIT, INC.
By:
-------------------------------
Name:
Title:
-3-
<PAGE> 58
Exhibit B
Form of
HEALTH CARE REIT, INC.
Amended and Restated
7.29% Series B Senior Note
Due 2003
Private Placement No. 42217K C*5
No. __ March 28, 1997
U.S. $________________
HEALTH CARE REIT, INC., a Delaware corporation (the "Company"), for
value received, hereby unconditionally promises to pay to the order of
____________. (the "Purchaser") or its registered assigns, on April 15, 2003 the
principal amount of ______________________ DOLLARS (U.S. $________________) and
to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7.29% per annum from (and including) April 23, 1996 to (but excluding)
the date of repayment of such principal amount, payable on the 15th day of each
April and October in each year (commencing October 15, 1996), and at maturity;
provided, however, that if, at any time on or after March 28, 1997, any of the
Notes shall not be rated at least BBB by Duff & Phelps (it being understood and
agreed that (x) a rating of BBB- is lower than a rating of BBB and (y) the
withdrawal, discontinuance or absence of a rating of any of the Notes by Duff &
Phelps shall be deemed, for these purposes, to be the equivalent of a rating
that is lower than BBB), the rate of interest shall instead be 7.39% per annum
for the period during which the Notes shall not be rated at least BBB by Duff &
Phelps. The Company agrees to pay interest on overdue principal (whether by
acceleration or otherwise, and including any overdue prepayment of principal)
and premium, if any, and on any overdue installment of interest, at the Overdue
Rate until paid.
Unless otherwise set forth herein, capitalized terms used
herein but not defined herein have the respective meanings assigned to them in
the Note Purchase Agreement (as such term is hereafter defined).
1. Except as may be otherwise provided pursuant to Section 5.4
or 5.10 of the Note Purchase Agreement, both the principal hereof, premium, if
any, and interest hereon are payable at the principal office of the Company, in
immediately available funds, in coin or currency of the United States of America
which at the time of payment shall be legal tender for the payment of public and
private debts. Such payments shall be applied first to accrued interest, then to
premium, if any, and then to principal. If any amount of principal, premium, if
any, or interest on or in respect of this Note becomes due and payable on any
date which is not a Business Day,
-1-
<PAGE> 59
such amount shall be payable on the immediately preceding Business Day. Payment
of any amount on or in respect of this Note shall be made not later than 12:00
Noon New York Time on the date on which such payment shall become due (each such
payment made after such time on such date to be deemed to have been made on the
next succeeding Business Day).
2. This Note is one of the Series B Senior Notes due 2003
issued pursuant to the terms and provisions of that certain Amended and Restated
Note Purchase Agreement, dated as of March 28, 1997 (the "Note Purchase
Agreement"), entered into by the Company and each of the Purchasers party
thereto, and this Note and the holder hereof are entitled equally and ratably
with the holders of all other Notes (as defined in the Note Purchase Agreement)
outstanding under the Note Purchase Agreement to all benefits provided for in
the Note Documents or referred to therein, and may be accelerated, or redeemed
at the option of the holder hereof, prior to maturity, all as provided in the
Note Purchase Agreement, to which Note Purchase Agreement reference is hereby
made for the statement thereof. A copy of the Note Purchase Agreement may be
obtained from the Company.
3. The Notes are not subject to prepayment, purchase or
redemption at the option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with the Make-Whole
Premium, if any, all as set forth in Section 2 of the Note Purchase Agreement.
4. This Note is registered on the books of the Company and is
transferable only by surrender hereof at the offices of the Company (or of such
Paying Agent as may be appointed by the Company pursuant to Section 5.4 of the
Note Purchase Agreement from time to time), duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of this
Note or its attorney duly authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Note shall be made only to or
upon the order in writing of the registered holder.
5. Pursuant to the Subsidiary Guaranty, payment of all amounts
owed under this Note is absolutely and unconditionally guaranteed by each
Subsidiary of the Company. The Company and each surety, endorser, guarantor and
other party ever liable for payment of any sums of money payable upon this Note
jointly and severally waive presentment, demand, protest, notice of protest and
nonpayment or other notice of default, notice of acceleration and intention to
accelerate or other notice of any kind, and agree that their liability under
this Note shall not be affected by any renewal or extension in the time of
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases or changes hereto or any other Note
Document, regardless of the number of such renewals, extensions, indulgences,
releases or changes.
6. No waiver by Purchaser of any of its rights or remedies
hereunder or under any other Note Document or otherwise, shall be considered a
waiver of any other subsequent right or remedy of Purchaser; no delay or
omission in the exercise or enforcement by Purchaser of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Purchaser; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Purchaser.
7. This Note and the Note Purchase Agreement shall be governed
by and shall be construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
-2-
<PAGE> 60
HEALTH CARE REIT, INC.
By:
--------------------------------
Name:
Title:
-3-
<PAGE> 61
EXHIBIT C
TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
AMONG
HEALTH CARE REIT, INC.
AND EACH OF THE PURCHASERS PARTY HERETO
---------------------------------------
FORM OF FACILITIES AND OPERATORS REPORT
---------------------------------------
ON FILE WITH EACH OF THE BANKS AND THE BORROWERS
