<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For The Quarterly Period Ended MARCH 31, 1997
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition period from ____ to ____
Commission file number 1-09582
MEDITRUST
---------
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-6532031
- -------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
197 First Avenue
NEEDHAM HEIGHTS, MASSACHUSETTS 02194
- ---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 433-6000
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
As of March 31, 1997, there were outstanding 61,514,108 Shares of Beneficial
Interest, without par value.
<PAGE> 2
MEDITRUST
FORM 10-Q
INDEX
Part I. Financial Information Page (s)
-------
Item 1. Financial Statements
Consolidated Balance Sheets at March 31, 1997 (unaudited)
and December 31, 1996 3
Consolidated Statements of Income for the three months
ended March 31, 1997 and 1996 (unaudited) 4
Consolidated Statements of Cash Flows for the three months
ended March 31, 1997 and 1996 (unaudited) 5
Notes to the Consolidated Financial Statements (unaudited) 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-11
Part II. Other Information
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 12
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<PAGE> 3
MEDITRUST
PART I. FINANCIAL INFORMATION
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1997 1996
---------- ----------
(Unaudited) (Audited)
(In thousands)
ASSETS
<S> <C> <C>
Real estate investments (Note 3):
Land............................................. $ 75,639 $ 68,098
Buildings and improvements, net of
accumulated depreciation of $104,054
and $98,082, respectively..................... 975,706 938,162
Real estate mortgages..................... ...... 1,241,741 1,181,818
---------- ----------
Total real estate investments................. 2,293,086 2,188,078
Other assets, net (Note 4).......................... 65,606 65,893
Fees, interest and other receivables................ 22,013 20,178
Cash and cash equivalents........................... 5,666 42,726
---------- ----------
Total assets.................................. $2,386,371 $2,316,875
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Indebtedness (Note 5):
Notes payable, net................................ $ 494,972 $ 494,790
Convertible debentures, net....................... 278,591 280,813
Bank notes payable, net........................... 110,291 24,114
Bonds and mortgages payable, net.................. 58,795 59,043
---------- ----------
Total indebtedness............................ 942,649 858,760
Deferred income..................................... 9,918 9,716
Accrued expenses and other liabilities.............. 47,394 63,458
---------- ----------
Total liabilities............................. 999,961 931,934
---------- ----------
Commitments and contingencies (Notes 3, 8 and 9)
Shareholders' equity (Notes 4, 5, 6 and 9):
Shares of beneficial interest without par value:
Unlimited Shares authorized; 61,514 and
61,349 Shares issued and outstanding
in 1997 and 1996, respectively ............... 1,524,344 1,520,454
Distributions in excess of net income............ (137,934) (135,513)
---------- ----------
Total shareholders' equity....................... 1,386,410 1,384,941
---------- ----------
Total liabilities and shareholders' equity $2,386,371 $2,316,875
========== ==========
</TABLE>
The accompanying notes, together with the Notes to the Consolidated
Financial Statements incorporated by reference in the Company's Form 10-K for
the year ended December 31, 1996, are an integral part of these financial
statements.
-3-
<PAGE> 4
MEDITRUST
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
for the three months ended March 31, 1997 and 1996
(Unaudited)
----------
<CAPTION>
1997 1996
---- ----
(In thousands, except
per Share amounts)
<S> <C> <C>
Revenues (Note 3):
Rental income............................. $32,293 $23,806
Interest income........................... 35,672 35,521
------- -------
Total revenues.......................... 67,965 59,327
------- -------
Expenses:
Interest.................................. 18,115 16,105
Depreciation and amortization............. 6,476 5,424
General and administrative................ 2,321 2,265
------- -------
Total expenses.......................... 26,912 23,794
------- -------
Net income................................... $41,053 $35,533
======= =======
Net income per Share, based on 61,442
and 55,153 weighted average Shares
outstanding in 1997 and 1996, respectively $ .67 $ .64
======= =======
</TABLE>
The accompanying notes, together with the Notes to the Consolidated
Financial Statements incorporated by reference in the Company's Form 10-K for
the year ended December 31, 1996, are an integral part of these financial
statements.
-4-
<PAGE> 5
MEDITRUST
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS for the three months
ended March 31, 1997 and 1996
(Unaudited)
<CAPTION>
1997 1996
---- ----
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................. $41,053 $35,533
Depreciation of real estate............................ 5,972 4,937
Goodwill amortization.................................. 389 389
Shares issued for compensation......................... 608 359
Other depreciation, amortization and other items, net .. 359 492
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
AVAILABLE FOR DISTRIBUTION............................. 48,381 41,710
Net change in other assets and liabilities............. (16,425) (9,883)
------- -------
Net cash provided by operating activities.............. 31,956 31,827
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from equity offering.......................... 312,800
Proceeds from bank notes payable....................... 111,000 110,399
Repayment of bank notes payable........................ (25,000) (197,000)
Equity offering and debt issuance costs................ (39) (16,435)
Principal payments on bonds and mortgages payable ...... (254) (227)
Distributions to shareholders.......................... (43,474) (35,257)
Proceeds from stock options............................ 1,923 3,987
------- -------
Net cash provided by financing activities ............ 44,156 178,267
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of real estate and development funding ..... (51,057) (129,607)
Investment in real estate mortgages and
development funding.................................. (64,049) (39,369)
Prepayment proceeds and principal payments
on real estate mortgages............................. 4,190 6,511
Working capital advances............................... (3,295) (9,884)
Collection of receivables and repayment of
working capital advances............................. 1,591 10,614
Investment in equity securities........................ (552)
------- -------
Net cash used in investing activities................. (113,172) (161,735)
------- -------
Net increase (decrease) in cash and cash equivalents . (37,060) 48,359
Cash and cash equivalents at:
Beginning of period................................... 42,726 44,248
------- -------
End of period......................................... $ 5,666 $92,607
======= =======
Supplemental disclosure of cash flow information (see Note 2).
</TABLE>
The accompanying notes, together with the Notes to the Consolidated
Financial Statements incorporated by reference in the Company's Form 10-K for
the year ended December 31, 1996, are an integral part of these financial
statements.
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<PAGE> 6
MEDITRUST
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies
------------------------------------------
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted
accounting principles, have been condensed or omitted in this Form 10-Q in
compliance with the Rules and Regulations of the Securities and Exchange
Commission. However, in the opinion of Meditrust ("the Company"), the
disclosures contained in this Form 10-Q are adequate to make the
information presented not misleading. See the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 (and the Report on Form 8-K
dated January 31, 1997 incorporated by reference therein) for additional
information relevant to significant accounting policies followed by the
Company.
Basis of Presentation
---------------------
In the opinion of the Company, the accompanying unaudited consolidated
financial statements reflect all adjustments (consisting of normal
recurring accruals) necessary to present fairly its financial position as
of March 31, 1997 and its results of operations and cash flows for each of
the three-month periods ended March 31, 1997 and 1996. The results of
operations for the three-month period ended March 31, 1997 are not
necessarily indicative of the results which may be expected for the entire
year.
2. Supplemental Cash Flow Information
----------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1997 1996
------- ------
(In thousands)
<S> <C> <C>
Interest paid during the period ........................ $29,931 $23,954
Non-cash investing and financing transactions:
Reduction of real estate mortgages net
of participation reduction ......................... (64) (54)
Change in market value of equity securities in excess
of cost ............................................ (1,159)
Value of Shares issued for conversion of debentures.. 2,552 2,080
</TABLE>
3. Real Estate Investments
-----------------------
During the three months ended March 31, 1997, the Company acquired six
assisted living facilities for $33,731,000. In addition, during the three
month period ended March 31, 1997, the Company provided net funding of
$846,000 for the construction of one assisted living facility and
$16,480,000 for ongoing construction of facilities already in the portfolio
prior to 1997.
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<PAGE> 7
MEDITRUST
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued
(Unaudited)
Also, during the three months ended March 31, 1997, the Company provided
permanent mortgage financing of $17,750,000 for one long-term care facility
located in Washington, six assisted living facilities in Wisconsin and one
retirement living facility in Ohio. The Company also provided $2,380,000 in
additional permanent mortgage financing secured by two long-term care
facilities located in New Mexico and Washington.
The Company commenced new development funding of $21,752,000 relating to
three long-term care facilities in three states, three assisted living
facilities in three states and two medical office buildings in two states.
The Company also provided $22,167,000 for ongoing construction of
facilities already in the portfolio prior to 1997.
During the three months ended March 31, 1997, the Company received
principal payments on real estate mortgages of $4,190,000.
At March 31, 1997, the Company was committed to provide additional
financing of approximately $176,412,000 relating to 29 assisted living
facilities, ten medical office buildings and nine long-term care facilities
currently under construction, and additions to existing facilities already
in the portfolio.
4. Investment in Equity Securities
-------------------------------
On July 25, 1996, the Company invested approximately $13,509,000 in
exchange for 7,936,000 shares of common stock, representing a 19.99%
interest in Nursing Home Properties Plc (NHP Plc), a property investment
group which specializes in the financing, through sale and leaseback
transactions, of nursing homes located in the United Kingdom. The Company
does not have the right to vote more than 9.99% of the shares of NHP Plc.
As of March 31, 1997 the market value of this investment was $14,877,000
and is included in other assets in the accompanying balance sheet. The
resulting difference between the current market value and cost, $1,368,000,
is included in shareholders' equity in the accompanying balance sheet.
5. Indebtedness and Shareholders' Equity
-------------------------------------
During the three months ended March 31, 1997, $1,105,000 of principal
amount of 9% convertible debentures were converted into 40,922 Shares;
$1,427,000 of principal amount of 7% convertible debentures were converted
into 46,594 Shares and $20,000 of principal amount of 7.5% convertible
debentures were converted into 552 Shares.
The Company has a total of $280,000,000 in unsecured lines of credit,
bearing interest at the lenders' prime rate or LIBOR plus .875%, of which
$168,000,000 was available at March 31, 1997.
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<PAGE> 8
MEDITRUST
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, Continued
6. Distributions Paid to Shareholders
----------------------------------
On February 14, 1997, the Company paid a dividend of $.7075 per Share to
shareholders of record on January 31, 1997. This dividend related to the
period from October 1, 1996 through December 31, 1996.
7. Accounting for Net Income Per Share
-----------------------------------
Financial Accounting Standards Board Statement No. 128 ("FAS No. 128")
"Earning Per Share" is effective for financial statements issued for
periods ending after December 15, 1997, including interim periods. The
Company intends to adopt the requirements of this pronouncement in its
financial statements for the year ended December 31, 1997. FAS No. 128
specifies the computation, presentation and disclosure requirements for net
income per share. As stated in the Summary of Significant Accounting
Policies included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 (and the Report on Form 8-K dated January 31, 1997
incorporated by reference therein), net income per Share is calculated
using weighted average number of Shares outstanding during the year and the
affect of common stock equivalents is immaterial. The Company does not
believe that the presentation of basic net income per Share as required by
FAS No. 128 will have a material impact on it's financial statements. FAS
No. 128 also requires the presentation of diluted net income per share
which the Company was not previously required to present under generally
accepted accounting principles.
8. Contingency
-----------
On April 23, 1997, the Company and certain of its subsidiaries were served
with a complaint in an action in the Suffolk County, Massachusetts
Superior Court entitled Temkin, et al. vs. Meditrust, et al., alleging
that a former borrower of the Company had transferred funds to the Company
without fair consideration at a time when the transferors were insolvent.
The plaintiffs, who are unsecured creditors of the transferors, seek
damages against the Company in the amount of approximately $6.5 million,
plus costs, attorneys fees and multiple damages. The Company believes that
there is no basis for these claims and will defend the matter
vigorously.
9. Subsequent Events
-----------------
On April 8, 1997, the Company declared a dividend of $.7125 per Share
payable on May 15, 1997 to shareholders of record on April 30, 1997. This
dividend relates to the period from January 1, 1997 through March 31, 1997.
On April 13, 1997, the Company and its wholly-owned subsidiary, Meditrust
Acquisition Corporation IV (together, "Meditrust") entered into a
definitive Agreement and Plan of Merger (the "Merger Agreement") with Santa
Anita Realty Enterprises, Inc. and Santa Anita Operating Company (together,
"Santa Anita"). When the transaction is consummated, Meditrust will be
merged into Santa Anita, and shareholders of Meditrust will receive 1.2016
paired common shares of Santa Anita for each share of Meditrust they own in
a tax-free exchange of shares. Based on the closing price of Meditrust on
April 11, 1997 of $37.25 per share, the transaction will have an initial
value to the shareholders of Santa Anita of approximately $383 million or
$31.00 per paired common share. Upon completion of the merger, the
surviving corporations will be called Meditrust Corporation and Meditrust
Operating Company.
Meditrust has agreed to buy approximately 1.2 million paired common shares
of Santa Anita at $31.00 per paired common share. In addition, Santa Anita
has agreed to sell to one or more independent parties designated by
Meditrust approximately 1.0 million Santa Anita paired common shares at a
price of $31.00 per paired common share. As of March 31, 1997, there were
approximately 61.5 million shares of beneficial interest of Meditrust
outstanding and there were approximately 11.5 million paired shares of
common stock and approximately 867,000 paired shares of preferred stock of
Santa Anita outstanding.
The Merger Agreement also provides that, if requested by Santa Anita,
Meditrust will make available to Santa Anita $100 million (less the
purchase price of the 1.2 million paired common shares acquired by
Meditrust) to be used by Santa Anita for a cash self tender or cash
election to its shareholders at a price of $31.00 per paired common share.
The transaction, which has been approved unanimously by the Board of
Trustees of Meditrust and the Boards of Directors of Santa Anita, is
subject to regulatory approvals and approvals of the shareholders of both
Meditrust and Santa Anita. The merger is not subject to any financing
conditions. The parties intend to file proxy materials for the proposed
transaction as soon as possible. The transaction is expected to close in
the fall of 1997.
-8-
<PAGE> 9
MEDITRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
---------------------
Revenues for the three months ended March 31, 1997 were $67,965,000
compared to $59,327,000 for the three months ended March 31, 1996, an
increase of $8,638,000 or 14.6%. Revenue growth was attributed to increased
rental income of $8,487,000 and increased interest income of $151,000.
These increases were principally the result of additional real estate
investments made during the past year.
For the three months ended March 31, 1997, total expenses increased by
$3,118,000 compared to the three months ended March 31, 1996. Interest
expense increased by $2,010,000 due to increases in debt outstanding
resulting from additional real estate investments made during the past
year. Depreciation and amortization increased by $1,052,000, as a result of
increased real estate investments. General and administrative expenses
increased by $56,000.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
As of March 31, 1997, the Company's gross real estate investments totaled
approximately $2,397,140,000 consisting of 276 long-term care facilities,
26 rehabilitation hospitals, 102 retirement and assisted living facilities,
20 medical office buildings, six alcohol and substance abuse treatment
facilities and psychiatric hospitals, and one acute care hospital campus.
As of March 31, 1997, the Company's outstanding commitments for additional
financing totaled approximately $176,412,000 for the completion of 48
facilities under construction and additions to existing facilities in the
portfolio.
The Company had shareholders' equity of $1,386,410,000 and debt constituted
40% of the Company's total capitalization as of March 31, 1997.
The Company provides funding for its investments through a combination of
long-term and short-term financing including both debt and equity. The
Company obtains long-term financing through the issuance of Shares, the
issuance of long-term unsecured notes, the issuance of convertible
debentures and the assumption of mortgage notes. The Company obtains
short-term financing through the use of unsecured notes and bank lines of
credit which are replaced with long-term financing as appropriate. From
time to time, the Company may utilize interest rate caps or swaps to hedge
interest rate volatility. It is the Company's objective to match mortgage
and lease terms with the terms of its borrowings. The Company seeks to
maintain an appropriate spread between its borrowing costs and the rate of
return on its investments. When development loans convert to sale/leaseback
transactions or permanent mortgage loans, the base rent or interest rate,
as appropriate, is fixed at the time of such conversion.
-9-
<PAGE> 10
MEDITRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, Continued
Liquidity and Capital Resources, Continued
------------------------------------------
On April 13, 1997, Meditrust and its wholly-owned subsidiary, Meditrust
Acquisition Corporation IV (together, "Meditrust") entered into a
definitive Agreement and Plan of Merger (the "Merger Agreement") with Santa
Anita Realty Enterprises, Inc. and Santa Anita Operating Company (together,
"Santa Anita"). When the transaction is consummated, Meditrust will be
merged into Santa Anita, and shareholders of Meditrust will receive 1.2016
paired common shares of Santa Anita for each share of Meditrust they own in
a tax-free exchange of shares. Based on the closing price of Meditrust on
April 11, 1997 of $37.25 per share, the transaction will have an initial
value to the shareholders of Santa Anita of approximately $383 million or
$31.00 per paired common share. Upon completion of the merger, the
surviving corporations will be called Meditrust Corporation and Meditrust
Operating Company.
Meditrust has agreed to buy approximately 1.2 million paired common shares
of Santa Anita at $31.00 per paired common share. In addition, Santa Anita
has agreed to sell to one or more independent parties designated by
Meditrust approximately 1.0 million Santa Anita paired common shares at a
price of $31.00 per paired common share. As of March 31, 1997, there were
approximately 61.5 million shares of beneficial interest of Meditrust
outstanding and there were approximately 11.5 million paired shares of
common stock and approximately 867,000 paired shares of preferred stock of
Santa Anita outstanding.
The Merger Agreement also provides that, if requested by Santa Anita,
Meditrust will make available to Santa Anita $100 million (less the
purchase price of the 1.2 million paired common shares acquired by
Meditrust) to be used by Santa Anita for a cash self tender or cash
election to its shareholders at a price of $31.00 per paired common share.
The transaction, which has been approved unanimously by the Board of
Trustees of Meditrust and the Boards of Directors of Santa Anita, is
subject to regulatory approvals and approvals of the shareholders of both
Meditrust and Santa Anita. The merger is not subject to any financing
conditions. The parties intend to file proxy materials for the proposed
transaction as soon as possible. The transaction is expected to close in
the fall of 1997.
As of April 15, 1997, the Company had unsecured revolving lines of credit
expiring September 23, 1999 in the aggregate amount of $280,000,000,
bearing interest at the lender's prime rate (8.5%) or LIBOR plus .875%
(6.5625% at April 15, 1997), of which $143,000,000 was available at that
date. In addition, the Company has effective shelf registrations on file
with the Securities and Exchange Commission under which the Company may
issue up to approximately $406,000,000 of securities including Shares,
Preferred Shares of beneficial interest ("Preferred Shares"), debt,
convertible debt and warrants to purchase Shares, Preferred Shares, debt
and convertible debt.
-10-
<PAGE> 11
MEDITRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, Continued
Liquidity and Capital Resources, Continued
------------------------------------------
The Company believes that its various sources of capital are adequate to
finance its operations as well as pending property acquisitions, mortgage
financings and future dividends. For 1997, however, in the event that the
Company identifies appropriate investment opportunities, the Company may
raise additional capital through the sale of Shares or Preferred Shares or
by the issuance of additional long-term debt or through a securitization
transaction.
-11-
<PAGE> 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
On April 23, 1997, the Company and certain of its subsidiaries were served with
a complaint in an action in the Suffork County, Massachusetts Superior Court
entitled Temkin, et al. v. Meditrust, et al., alleging that a former borrower
of the Company had transferred funds to the Company without fair consideration
at a time when the transferors were insolvent. The plaintiffs, who are
unsecured creditors of the transferors, seek damages against the Company in the
amount of approximately $6.5 million, plus costs, attorneys fees and multiple
damages. The Company believes that there is no basis for these claims and will
defend the matter vigorously.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit
No. Title Method of Filing
- --- ----- ----------------
10.1 Revolving Credit Agreement by and among
Meditrust the "Banks" and Fleet National
Bank as agent dated September 23, 1996 ......... Filed herewith
10.2 Revolving Credit Agreement by and between
Meditrust and Via Banque dated
December 12, 1996............................... Filed herewith
11 Statement Regarding Computation of Per
Share Earnings.................................. Filed herewith
27 Financial Data Schedule......................... Filed herewith
(b) Reports on Form 8-K
During the quarter ended March 31, 1997, the Company filed a current report on
Form 8-K dated January 31, 1997, which included the consolidated financial
statements of the Company for the year ended December 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEDITRUST
Date: May 1, 1997 By: /s/ LAURIE TIDOR
----------------------------------------
Laurie Tidor, Chief Financial Officer
-12-
<PAGE> 1
EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
by and among
MEDITRUST
as the Company
and
THE LENDING INSTITUTIONS REFERENCED HEREIN
as the Banks
and
FLEET NATIONAL BANK
as the Agent
September 23, 1996
<PAGE> 2
TABLE OF EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Guaranty
Exhibit D Notice of Continuation or Conversion
Exhibit E Form of Opinion of Counsel to the Company
Exhibit F Form of Borrowing Report
Exhibit G Form of Administrative Questionnaire
Exhibit H Form of Assignment and Acceptance
2
<PAGE> 3
TABLE OF SCHEDULES
Schedule 1.22. Commitments and Commitment Percentages
Schedule 1.106 Pre-Existing Guarantees
Schedule 3.3. Restrictions
Schedule 3.8. Material Adverse Changes
Schedule 3.12. Liens
Schedule 3.18. Existing Indebtedness
Schedule 3.19. Litigation
Schedule 3.20. Guarantees
Schedule 3.22. Environmental Matters
Schedule 7.1. Indebtedness
3
<PAGE> 4
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT (the "Agreement") is made as of this
23rd day of September, 1996 by and among MEDITRUST, a Massachusetts business
trust, with its chief executive office located at 197 First Avenue, Needham,
Massachusetts 02194 ("Meditrust" or the "Company"); the lending institutions
listed on the signature pages hereto and such other lending institutions that
may become parties to this Agreement from time to time in accordance with the
provisions hereof (such lending institutions being referred to individually as a
"Bank" and collectively as the "Banks"); and FLEET NATIONAL BANK, a national
banking association, with an office located at 777 Main Street, Hartford,
Connecticut 06115-1600 ("Fleet") as agent for the Banks (the "Agent").
Section 1. DEFINITIONS
All capitalized terms used in this Agreement, the Notes or the Other
Documents, or in any certificate, report or other document, agreement or
instrument executed or delivered pursuant hereto and thereto (unless otherwise
indicated therein) shall have the meanings ascribed to such terms below.
Section 1.1. "Administrative Questionnaire" has the meaning in Section
9.16. hereof.
Section 1.2. "Affected Loans" has the meaning ascribed to it in Section
2.3.4. hereof.
Section 1.3. "Affiliate" means any Person (i) which directly or
indirectly controls, or is controlled by, or is under common control with,
another Person or any Subsidiary of such other Person; (ii) which directly or
indirectly beneficially owns or holds ten percent (10%) or more of any class of
voting stock of such other Person or any Subsidiary of such other Person; or
(iii) ten percent (10%) or more of the voting stock of which is directly or
indirectly beneficially owned or held by such other Person or any Subsidiary of
such other Person. The term "control" (and its correlative meanings "controlled
by" and "under common control with") as used in this Section 1.4. 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 ownership
of voting stock, by contract or otherwise.
Section 1.4. "Agent" has the meaning ascribed to it in the Preamble
hereof and shall include any successor agent or agents for the Banks which may
be appointed at any time in the future under the terms of this Agreement.
Section 1.5. "Agreement" means this Revolving Credit Agreement and
shall include any and all amendments, restatements, modifications and
supplements hereto.
Section 1.6. "Appraised Value" means, with respect to any Investment,
the value of such Investment reflected in the most recent Qualified Appraisal
prepared with respect to such Investment.
-1-
<PAGE> 5
Section 1.7. "Assignment and Acceptance" has the meaning ascribed to it
in Section 11.1. hereof.
Section 1.8. "Balloon Payments" means, as of any date as of which the
amount thereof shall be determined, an amount equal to the Company's aggregate
obligation to make payments of principal in respect of Indebtedness having a
maturity during the immediately succeeding six (6) month period minus Liquid
Assets and availability under the Line of Credit and the Via Banque Credit
Facility; provided, however, that any Indebtedness with respect to which the
Company 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, that 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).
Section 1.9. "Bank" has the meaning ascribed to it in the Preamble
hereof.
Section 1.10. "Banks" has the meaning ascribed to it in the Preamble
hereof.
Section 1.11. "Bank Affiliate" or "Bank Affiliates" means any Affiliate
of the Agent, the Banks or their parent bank holding companies.
Section 1.12. "Bank Agents" has the meaning ascribed to it in Section
2.2.8. hereof.
Section 1.13. "Beneficiary" means the beneficiary of any Letter of
Credit issued under this Agreement for the account of the Company or any
Subsidiary of the Company.
Section 1.14. "Borrowing Base" means, as of any date as of which the
amount thereof shall be determined, an amount equal to (x) the sum of (i)
seventy-five percent (75%) of Eligible Investments as of such date plus (ii)
Liquid Assets as of such date minus (y) Unsecured Indebtedness as of such date,
the Via Banque Amount as of such date and Guarantees Outstanding as of such
date.
Section 1.15. "Borrowing Report" has the meaning ascribed to it in
Section 6.1.(c) hereof.
Section 1.16. "Breakage Costs" means an amount equal to all costs
either Agent or any Bank sustains in breaking or unwinding or in not making
after receiving a Notice of Borrowing or a Notice of Continuation or Conversion
any LIBOR funding contract, and all expenses that the Agent or any Bank sustains
or incurs as a result of prepayment or receipt of principal with respect to a
LIBOR Loan on a day other than the last day of the then current Interest Period.
Section 1.17. "Business Day" means any day in which dealings in foreign
currencies and exchange between banks may be carried on in the place where the
Eurodollar Office is located and in the place where the head office of the Agent
is located, other than a Saturday, Sunday, legal holiday or other day on which
banks in such places are required or permitted by law to close.
Section 1.18. "Closing Date" means September 23, 1996.
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Section 1.19. "Code" means the Internal Revenue Code of 1986 and the
rules and regulations promulgated thereunder, collectively, as the same may from
time to time be supplemented or amended and remain in effect.
Section 1.20. "Combined Commitment Amount" means an amount equal to the
sum of all Commitments as in effect from time to time in accordance with the
provisions hereof, but in no event greater than TWO HUNDRED THIRTY MILLION AND
NO/100 DOLLARS ($230,000,000.00).
Section 1.21. "Commitment" means, with respect to each Bank, such
Bank's several obligation to make Revolving Loans, to participate in the
issuance of Letters of Credit and to honor Credits Outstanding, as set forth in
Schedule 1.22. attached hereto.
Section 1.22. "Commitment Percentage" at any time means, with respect
to each Bank, the percentage equal to such Bank's Commitment divided by the then
sum of all Commitments. The initial Commitment Percentages are set opposite each
Bank's name on Schedule 1.22. attached hereto.
Section 1.23. "Company" has the meaning ascribed to it in the Preamble
hereof.
Section 1.24. "Company Limited Partnership" means a limited partnership
which is organized to own a Facility of which the Company or a Subsidiary of the
Company is the general partner and owns one hundred percent (100%) of the
partnership interests of such limited partnership.
Section 1.25. "Consolidated" or "consolidated" means, with reference to
any term defined in this Agreement, that term as applied to the accounts of the
Company consolidated in accordance with GAAP and whenever "Consolidated" or
"consolidated" is used herein, it shall always mean, with reference to the
Company, Meditrust and all of its Subsidiaries (but including for purposes of
this definition all entities in which the Company has any interest, even if less
than fifty percent (50%)).
Section 1.26. "Construction Investments" means financing extended by
the Company or a Subsidiary of the Company with respect to a Facility which is
either under construction (i.e., has not received a certificate of occupancy) or
in development (i.e., has received a certificate of occupancy or operating
license within the preceding eighteen (18) months); provided, however, that a
Facility will not be considered to be in development if at least three (3)
calendar months have lapsed since the date on which the Facility received a
certificate of occupancy and (i) such Facility has a Fixed Charge Coverage of at
least 1.10 to 1.0 or (ii), in the case of a Facility which is a Pooled Facility,
the Pooled Facilities' Fixed Charge Coverage is at least 1.2 to 1.0 and the
Pooled Facility's Fixed Charge Coverage is at least 0.8 to 1.0 or (iii) in the
case of a Facility which is a Pooled Guaranteed Facility, the Pooled Guaranteed
Facilities' Fixed Charge Coverage is at least 1.0 to 1.0 and the Pooled
Guaranteed Facility's Fixed Charge Coverage is at least 0.8 to 1.0.
Section 1.27. "Continental Investments" means Investments which relate
to Facilities leased or operated by Continental Medical Systems, Inc. or its
affiliates and existing as of the Closing Date
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and which are subject to Indebtedness provided by a Person other than the
Company or a Subsidiary of the Company.
Section 1.28. "Controlled Limited Partnership" means a limited
partnership, other than a Company Limited Partnership, organized to own a
Facility of which the Company or a Subsidiary of the Company is the sole general
partner and which the Company or a Subsidiary of the Company owns at least sixty
six and two/thirds percent (66.66%) of the aggregate partnership interests of
such limited partnership.
Section 1.29. "Controlled Group" means all trades or businesses
(whether or not incorporated) under common control that, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
Section 1.30. "Credits Outstanding" means, as of any time, the
aggregate current available balances of all issued and outstanding Letters of
Credit.
Section 1.31. "Default" means an Event of Default or event or condition
that, but for the lapse of time, the giving of notice, or both, would constitute
an Event of Default.
Section 1.32. "Default Rate" means a rate of interest equal to four
percentage points (4%) above (i) the rate of interest otherwise in effect under
this Agreement or (ii), with respect to a Letter of Credit issued with a
separate Reimbursement Agreement, the rate of interest otherwise in effect under
such Reimbursement Agreement.
Section 1.33. "Delinquent Bank" has the meaning ascribed to it in
Section 2.5.5.(a) hereof.
Section 1.34. "Dividend" or "Dividends" means the payment of any
dividend or other distribution in respect of the capital stock of a corporation
or, with respect to Meditrust, shares of beneficial interest, in cash or other
property (excepting distribution in the form of such stock or shares of
beneficial interest) or the redemption or acquisition of any capital stock or
shares of beneficial interest.
Section 1.35. "Drawing" or "Drawings" means any payment(s) or
disbursement(s) made under any Letter of Credit honoring any demand for payment
presented by the Beneficiary in accordance with the terms of such Letter of
Credit.
Section 1.36. "Eligible Investments" means, 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
Facilities owned (whether through fee simple title ownership or pursuant to
rights as lessee under a long-term ground lease) entirely by the Company, a
Subsidiary of the Company or a Company Limited Partnership; plus
(ii) the lesser of the Appraised Value of any Facility
securing a Mortgage or the outstanding principal amount of the Mortgage secured
by any such Facility; plus
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(iii) seventy and one-half percent (70.5%) of the lesser of
the Appraised Value or the outstanding principal amount of the Continental
Investments minus the aggregate outstanding principal amount of any loans
secured by a first lien mortgage in the Continental Investments but in no event
greater than FIFTY EIGHT MILLION AND NO/100 DOLLARS ($58,000,000.00); plus
(iv) seventy five percent (75%) of the amount determined by
multiplying the lesser of the Appraised Value of a Facility owned by a
Controlled Limited Partnership or the purchase price of a Facility owned by a
Controlled Limited Partnership by a fraction, the numerator of which is the
aggregate interest in the Controlled Limited Partnership possessed by the
Company or a Subsidiary of the Company and the denominator of which is one
hundred (100);
but excluding from the calculation thereof:
(a) any Investment in which the Company or a Subsidiary of the
Company has granted a voluntary Lien other than the
Continental Investments as set forth above;
(b) any Construction Investments;
(c) any Pooled Facilities or Pooled Guaranteed Facilities
which have a Fixed Charge Coverage of less than 1.0 to 1.0,
and as to Pooled Guaranteed Facilities only, any Pooled
Guaranteed Facility which has an individual Fixed Charge
Coverage ratio of less than .8 to 1.0 and, in the case of a
Facility which is not a Pooled Facility or a Pooled Guaranteed
Facility, 1.10 to 1.0;
(d) any Investment where audited Financial Statements are not
available within one hundred twenty (120) days after year end;
provided, however, that no Facility shall be excluded from the
calculation of Eligible Investments once such audited
Financial Statements are available; and provided, further,
that no Facility shall be excluded from the calculation of
Eligible Investments for failure to deliver Financial
Statements if the Investment Amount of such Facility, when
aggregated with the Investment Amount of other Facilities
owned by the same Operator, equal less than FIFTEEN MILLION
AND NO/100 DOLLARS ($15,000,000.00) of the Company's actual
Gross Real Estate Investments in a sale/leaseback transaction
or Mortgage and provided, further, that the foregoing proviso
shall not discharge the Company's obligation to deliver
Financial Statements to the Banks upon receipt of the same by
the Company;
(e) any Investment which is delinquent for thirty (30) days or
more in payments to the Company or a Subsidiary of the
Company;
(f) Gross Real Estate Investments relating to Controlled
Limited Partnerships which exceed fifteen percent (15%) of the
Company's Gross Real Estate Investments; and
(g) any Investment which is not located within the United
States of America.
Section 1.37. INTENTIONALLY LEFT BLANK.
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Section 1.38. "Environmental Laws" means any and all Laws of any
Tribunal pertaining to the environment, including without limitation, the
federal Clean Water Act, the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), and as may be
further amended (all together herein called "CERCLA"), the Federal Water
Pollution Control Amendments, the Resource Conservation and Recovery Act of
1976, as amended ("RCRA"), the Hazardous Materials Transportation Act of 1975,
as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, and any comparable or similar environmental laws of any
state in which the Company, a Subsidiary of the Company or Operator owns or
operates a Facility. Likewise, the terms "hazardous substance," "release," and
"threatened release" herein referenced in connection with Environmental Laws
shall have the meanings specified in CERCLA and the terms "solid waste" and
"dispose" (or "disposed") shall have the meanings specified in RCRA; provided,
however, in the event either CERCLA or RCRA is amended so as to broaden the
meaning of any term defined therein, such broader meaning shall apply subsequent
to the effective date of such amendment, and provided further that, to the
extent the laws of any state which are applicable to a specific Facility and
which establish a meaning for "hazardous substance," "release," "solid waste" or
"disposal" which is broader than that specified in either CERCLA or RCRA, such
broader meaning shall apply with respect to such Facility.
Section 1.39. "ERISA" means the Employee Retirement Income Security Act
of 1974 and the rules and regulations promulgated thereunder, collectively, as
the same may from time to time be supplemented or amended and remain in effect.
Section 1.40. "Eurodollar Office" means, initially, Fleet's office in
Boston, Massachusetts, and thereafter such other office or offices of the Agent
or its Bank Affiliates (as designated from time to time by notice from the
Agent) through which the LIBOR Rate is determined. A Eurodollar Office may be,
at the option of the Agent, either a domestic or a foreign office.
Section 1.41. "Event of Default" has the meaning ascribed to it in
Section 10 hereof.
Section 1.42. "Expected Loan Date" has the meaning ascribed to it in
Section 2.1.5. hereof.
Section 1.43. "Facility" or "Facilities" means a health care facility
(including, but not limited to, long-term care and retirement living facilities,
psychiatric and rehabilitation hospitals, alcohol and substance abuse treatment
facilities and medical office buildings), whether already existing or under
construction, owned (whether through fee simple title ownership or pursuant to
rights as lessee under a long-term ground lease) by the Company, a Company
Limited Partnership, a Controlled Limited Partnership or any Subsidiary of the
Company or upon which the Company, a Company Limited Partnership, a Controlled
Limited Partnership or any Subsidiary of the Company holds a Mortgage.
Section 1.44. "Federal Funds Effective Rate" means for any day, a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the
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average of the quotations for such day on such transactions received by the
Agent from three (3) Federal funds brokers of recognized standing selected by
the Agent.
Section 1.45. "Fees" means the Unused Fee and any and all commission,
issuance and other fees, if any, payable hereunder or under a separate
Reimbursement Agreement in respect of a Letter of Credit.
Section 1.46. "Financial Statement" or "Financial Statements" means, as
of any date, or with respect to any period, as applicable, a financial report or
reports consisting of (i) a balance sheet; (ii) an income statement; (iii) a
statement of cash flow; (iv) a statement of retained earnings (if prepared by
the Company); and (v) changes in stockholders' equity.
Section 1.47. "Fixed Charge Coverage" means, with respect to any
Facility, Pooled Facilities or Pooled Guaranteed Facilities, the ratio of (x)
pre-tax net income plus Operator Interest Expense, Mortgage Expense (but
excluding therefrom any amounts relating to principal), Lease Rental Expense,
depreciation and amortization on the Facility, Pooled Facilities or Pooled
Guaranteed Facilities, management fees and any revenues from prior period
adjustments relating to the settlement, filing or audit of cost reports less
Imputed Management Fees 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 to a
Subsidiary of the Company), Mortgage Expense, Lease Rental Expense, and current
maturities of Indebtedness of the Operator (other than Indebtedness relating to
a Mortgage) which are not subordinated to the Company or a Subsidiary of the
Company, all of the foregoing calculated on a year-to-date basis by reference to
the period commencing on the first day of the fiscal year for which such
calculation applies.
Section 1.48. "Funded Debt" shall mean and include, without
duplication,
(i) any obligation payable more than one (1) year from the date of
creation thereof which, under GAAP, is shown on a balance sheet of a Person as a
liability (including capitalized lease obligations and excluding reserves to the
extent that such reserves do not constitute an obligation),
(ii) Indebtedness payable more than one (1) year from the date of
creation thereof which is secured by any Lien on property owned by the Company
or any Subsidiary, whether or not the Indebtedness secured thereby shall have
been assumed by the Company or such Subsidiary,
(iii) Guarantees (other than endorsements of negotiable instruments for
collection in the ordinary course of business) and other contingent liabilities
(whether direct or indirect) in connection with the obligations, stock or
dividends of any Person,
(iv) obligations under any contract providing for the making of loans,
advances or capital contributions to any Person, or for the purchase of any
property from any Person, in each case in order to enable such Person primarily
to maintain working capital, net worth or any other balance sheet condition or
to pay debts, dividends or expenses,
(v) obligations under any contract for the purchase of materials,
supplies or other property or services if such contract (or any related
document) requires that payment for such materials,
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<PAGE> 11
supplies or other property or services shall be made regardless of whether or
not delivery of such materials, supplies or other property or services is ever
made or tendered,
(vi) obligations under any contract to rent or lease (as lessee) any
real or personal property if such contract (or any related document) provides
that the obligation to make payments thereunder is absolute and unconditional
under conditions not customarily found in commercial leases then in general use
or requires that the lessee purchase or otherwise acquire securities or
obligations of the lessor,
(vii) obligations under any contract for the sale or use of materials,
supplies or other property or services if such contract (or any related
document) requires that payment for such materials, supplies or other property
or services, or the use thereof, shall be subordinated to any indebtedness (of
the purchaser or user of such materials, supplies or other property or the
Person entitled to the benefit of such services) owed or to be owed to any
Person,
(viii) any arrangement with any lender or investor or to which such
lender or investor is a party providing for the leasing by the Company or any
Subsidiary of the Company of real property which has been or is to be sold or
transferred by the Company or any Subsidiary to such lender or investor or to
any Person to whom funds have been or are to be advanced by such lender or
investor on the security of such property or rental obligations of the Company
or any Subsidiary, and
(ix) obligations under any other contract which, in economic effect, is
substantially equivalent to a Guarantee.
Section 1.49. "GAAP" means generally accepted accounting principles in
the United States of America in effect from time to time.
Section 1.50. "Gross Real Estate Investments" means, as of any date as
of which the amount thereof shall be determined, an amount equal to the purchase
price of Facilities owned by, or the amount of the Company's or any Subsidiary
of the Company's investment in Facilities leased by, the Company or any
Subsidiary of the Company plus the outstanding principal amount of Mortgages
encumbering Facilities which are owned by Persons other than the Company as of
such date.
Section 1.51. "Guarantees" means, as applied to the Company and its
Subsidiaries, all guarantees, endorsements or other contingent or surety
obligations with respect to obligations of any other Person (except those made
to or by the Company or any Subsidiary with respect to an underlying obligation
of the Company, any Subsidiary, any Company Limited Partnership or any
Controlled Limited Partnership), whether or not reflected on the balance sheet
of the Company or its Subsidiaries, including any obligation to furnish funds,
directly or indirectly (whether by virtue of partnership arrangements, by
agreement to keep-well or otherwise), through the purchase of goods, supplies or
services, or by way of stock purchase, capital contribution, advance or loan, or
to enter into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person.
Section 1.52. "Guarantees Outstanding" means, as of any date as of
which the amount thereof shall be determined, the aggregate amount of Guarantees
with respect to which the Company is liable or obligated (but not including
Permitted Guarantees) as of such date.
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Section 1.53. "Guaranty" has the meaning ascribed to it in Section
2.2.10. hereof.
Section 1.54. "Hazardous Materials" means (i) any chemical, compound,
material, mixture or substance that is now or hereafter defined as or included
in the definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous waste", "restricted hazardous waste", or "toxic
substances" or terms of similar import under any Environmental Laws; (ii) any
oil, petroleum or petroleum derived substance, any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, any flammable substances or explosives, any radioactive
materials, any hazardous wastes or substances, any toxic wastes or substances or
any other materials or pollutants which (a) poses a hazard to human health or
the environment or (b) causes any of any properties or assets of the Company or
its Subsidiaries to be in violation of any Environmental Laws; (iii) asbestos in
any form, urea formaldehyde foam insulation, electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty (50) parts per million; (iv) to the extent prohibited or
required to be mitigated by any Environmental Laws, lead in paint, plaster or
other accessible materials and (v) any other chemical, material or substance,
exposure to, or disposal of, which is now or hereafter prohibited, limited or
regulated by any Tribunal but shall not mean cleaning agents, pharmaceuticals
and petroleum products in such quantities and concentrations as are customarily
used in connection with the operation and maintenance of health care facilities
and which are used in compliance with applicable Environmental Laws.
Section 1.55. "Imputed Management Fees" means, for any period, an
amount equal to five percent (5%) of the net revenues of a Facility.
Section 1.56. "Indebtedness" means any obligation for borrowed money
(and any notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money) but excluding
Guarantees.
Section 1.57. "Insurance" has the meaning ascribed to it in Section
6.3.(c) hereof.
Section 1.58. "Interest Expense" for any period shall mean, on a
consolidated basis, the sum of all interest on, and all amortization of debt
discount and expenses on, all Indebtedness of the Company and its Subsidiaries
outstanding at any time during such period.
Section 1.59. "Interest Period" means, (i) with respect to each LIBOR
Loan, the period commencing on the date of the making or continuation of, or
conversion to, such Loan and ending one (1), two (2), or three (3) months
thereafter, as the Company may elect in the applicable Notice of Borrowing or
Notice of Continuation or Conversion and (ii) with respect to a Prime Rate Loan,
the period commencing on the date of the making of such Loan and the date on
which the Prime Rate Loan is repaid or the Company elects, in accordance with
this Agreement, to convert such Loan to a LIBOR Loan;
provided, however, that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iii) below) that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless, in
the case of LIBOR Loans, such Business Day falls in the next
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calendar month, in which case such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period applicable to a LIBOR Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) below, end on the last Business Day of a
calendar month;
(iii) any Interest Period that would otherwise end after the Scheduled
Maturity Date shall end on the Scheduled Maturity Date;
(iv) notwithstanding clause (iii) above, no Interest Period applicable
to a LIBOR Loan shall have a duration of less than one (1) month and if any
Interest Period applicable to such Loan would be for a shorter Interest Period,
such Interest Period shall not be available hereunder; and
(v) if the Company fails to designate the length of the Interest Period
with respect to a LIBOR Loan, then the period shall be thirty (30) days.
Section 1.60. "Investment" or "Investments" means a Facility or a
Mortgage, individually or collectively, as the case may be.
Section 1.61. "Investment Amount" means, with respect to any individual
Investment, the purchase price in the case of a Facility owned by the Company or
a Subsidiary of the Company, the amount invested by the Company or a Subsidiary
of the Company in the case of a Facility leased by the Company or any such
Subsidiary or the outstanding principal amount in the case of a Mortgage.
Section 1.62. "Investment Commitment" means a commitment, agreement or
undertaking by the Company or a Subsidiary of the Company to acquire a Facility
or to make or acquire a Mortgage.
Section 1.63. "Investment Fee" means a fee paid by a third party to the
Company or a Subsidiary of the Company as an inducement to the Company or a
Subsidiary of the Company to make or issue an Investment Commitment.
Section 1.64. "IRS" has the meaning ascribed to it in Section 3.4.
hereof.
Section 1.65. "Law" or "Laws" means all constitutions, treaties,
statutes, laws, ordinances, codes, regulations, rules, orders, decisions, writs,
injunctions, or decrees of the United States of America or any other Tribunal,
now in effect and as hereafter amended, issued, promulgated, or otherwise coming
into effect.
Section 1.66. "Lease" means leases for Facilities for which the
Company, a Subsidiary of the Company, a Company Limited Partnership or a
Controlled Limited Partnership is the lessor or sublessor.
Section 1.67. "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
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or a Subsidiary of the Company, 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, plus (c) in the case of
ground leases, any other amounts payable thereunder to the Company or a
Subsidiary of the Company under the lease relating thereto.
Section 1.68. "Legal Impediment" has the meaning ascribed to it in
Section 2.3.4.(ii)(A) hereof.
Section 1.69. "Legal Requirements" means all Laws, and all recorded or
unrecorded agreements, covenants, restrictions, easements or conditions
(including any requirement of any insurance or surety company or any board of
fire underwriters), as now in effect and as hereafter amended, issued,
promulgated, or otherwise coming into effect.
Section 1.70. "Letter of Credit" or "Letters of Credit" means any
letter(s) of credit or confirmation(s) thereof issued under this Agreement or a
separate Reimbursement Agreement for the account of the Company, any Subsidiary
or any Affiliate of the Company and shall include any Letter of Credit as it may
be amended, modified, renewed or extended from time to time.
Section 1.71. "Letter of Credit Application" has the meaning ascribed
to it in Section 2.2.2. hereof.
Section 1.72. "Letter of Credit Participation" has the meaning set
forth in Section 2.2.3. hereof.
Section 1.73. "Letter of Credit Termination Date" has the meaning
ascribed to it in Section 2.2.6. hereof.
Section 1.74. "LIBOR Base" means the rate per annum (rounded upwards,
if necessary, to the nearest 1/16 of one percentage point (1%) shown on the
display referred to as the "LIBOR page" (or any display substituted therefor) of
the Telerate U.S. Domestic Money Service transmitted through the Telerate
monitor system as being the respective rates at which U.S. dollar deposits would
be offered two (2) Business Days prior to the beginning of the relevant Interest
Period by the principal London offices of each of the banks named thereon to
major banks in the London interbank Eurodollar market where the Eurodollar
Office is located at the Relevant Local Time for delivery on the first day of
such Interest Period for the number of days comprised therein and in the amount
of the principal amount of the applicable LIBOR Loan.
Section 1.75. "LIBOR Loan" means a Loan bearing interest at the LIBOR
Rate.
Section 1.76. "LIBOR Margin" means, as of any date as of which the
amount thereof shall be determined, an amount determined by reference to the
Rating as follows:
(i) If the Rating is A-/A3, then the Libor Margin shall be one-half of
one percentage point (.5%); and
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(ii) If the Rating is BBB+/Baa1, then the Libor Margin shall be
five-eighths of one percentage point (.625%); and
(iii) If the Rating is BBB/Baa2, then the Libor Margin shall be
three-quarters of one percentage point (.75%); and
(iv) If the Rating is BBB-/Baa3, then the Libor Margin shall be
seven-eighths of one percentage point (.875%); and
(v) If the Rating is less than BBB-/Baa3, then the Libor Margin shall
be one and one-half percentage points (1.5%).
Section 1.77. "LIBOR Rate" means, with respect to each Interest Period,
the rate per annum equal to the sum of:
(A) (i) the LIBOR Base for such Interest Period divided by (ii) a percentage
equal to one hundred percent (100%) minus the maximum reserve percentage
applicable during such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System for determining the
maximum reserve requirements (including, without limitation, any basic,
supplemental, marginal or emergency reserve requirements) for the Agent in
respect of liabilities or assets consisting of or including Eurocurrency
liabilities (as defined in Regulation D of the Board of Governors of the Federal
Reserve System) having a term equal to the Interest Period; and
(B) the LIBOR Margin.
Section 1.78. "Lien" means any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's interest
under a financing lease or any analogous arrangements in a Person's properties
or assets, intended as, or having the effect of, security, whether voluntary or
involuntary.
Section 1.79. "Line of Credit" has the meaning ascribed to it in
Section 2.1.1. hereof.
Section 1.80. "Liquid Assets" means the aggregate cash and cash
equivalents possessed by the Company and its Subsidiaries as of such date on a
consolidated basis.
Section 1.81. "Litigation" means any proceeding, claim, suit, action,
case or investigation by, before or involving any Tribunal.
Section 1.82. "Loan" means any Revolving Loan.
Section 1.83. "Loan Account" has the meaning ascribed to it in Section
2.1.8. hereof.
Section 1.84. "Loan Documents" means this Agreement, the Notes, and the
Other Documents.
Section 1.85. "Loans" means the Revolving Loans.
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Section 1.86. "Majority Banks" means, as of any date, any combination
of the Banks which hold in excess of sixty-six and two thirds percent (66.66%)
of the Outstanding Amount as of such date, and if there shall be no Outstanding
Amount as of such date, any combination of the Banks possessing in excess of
sixty-six and two thirds percent (66.66%) of the then aggregate Commitment
Percentages.
Section 1.87. "Material Adverse Effect" means an effect resulting from
any circumstance or event of whatever nature (including any adverse
determination in any Litigation) which does, or could reasonably be expected to,
materially and adversely (i) impair the validity or enforceability of this
Agreement, the Notes or the Other Documents, (ii) impair the ability of the
Company to pay or perform the Obligations, (iii) cause an Event of Default or
(iv) affect the business operations or financial condition of the Company taken
as a whole.
Section 1.88. INTENTIONALLY LEFT BLANK
Section 1.89. "Meditrust" has the meaning ascribed to it in the
Preamble hereof.
Section 1.90. "Modified Operating Cash Flow" shall mean, for any
period, the sum of (a) Net Earnings for such period, (b) any gains (net of
expenses and taxes applicable thereto) in excess of losses resulting from the
sale, conversion or other disposition of capital assets (i.e., assets other than
current assets), (c) depreciation and amortization and (d) Investment Fees
received in cash during such period minus the amortized amount of all Investment
Fees included in Net Earnings for such period, all of the foregoing determined
on a consolidated basis.
Section 1.91. "Mortgage" or "Mortgages" means the mortgages of real
estate for which the Company or a Subsidiary of the Company is the mortgagee,
whether or not the Company or a Subsidiary of the Company has sold third party
participations in such Mortgages.
Section 1.92. "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, a Subsidiary of the Company or any third party
under any participating agreement relating to a Mortgage, 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.
Section 1.93. "Net Earnings" means, for any period, the consolidated
net earnings of Meditrust during such period as determined in accordance with
GAAP.
Section 1.94. "Note" or "Notes" means any Revolving Credit Note and
collectively the Revolving Credit Notes.
Section 1.95. "Notice of Borrowing" has the meaning ascribed to it in
Section 2.1.4. hereof.
Section 1.96. "Notice of Continuation or Conversion" has the meaning
ascribed to it in Section 2.3.2. hereof.
Section 1.97. "Notice of Default" has the meaning ascribed to it in
Section 9.5. hereof.
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Section 1.98. "Obligations" means any and all loans, advances,
indebtedness, liabilities, obligations, covenants or duties of the Company to
the Agent, any Agent Affiliate, the Banks or any Bank Affiliate under this
Agreement, the Notes or the Other Documents.
Section 1.99. "Operating Cash Flow" shall mean, for any period, the sum
of (a) Net Earnings for such period, (b) depreciation and amortization and (c)
Investment Fees received in cash during such period minus the amortized amount
of all Investment Fees included in Net Earnings for such period, all of the
foregoing determined on a consolidated basis.
Section 1.100. "Operating Facilities" shall mean any Facility, Pooled
Facilities or Pooled Guaranteed Facilities which are not Construction
Investments and which are currently operating in accordance with all applicable
Laws.
Section 1.101. "Operator" means the lessee or sublessee of a Facility
owned or leased by the Company or a Subsidiary of the Company, a Company Limited
Partnership or a Controlled Limited Partnership and also means the mortgagor or
lessee or sublessee of a Facility which is subject to a Mortgage to the extent
that such entity controls the operation of such Facility.
Section 1.102. "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.
Section 1.103. "Other Documents" means the Guaranty, the Letter of
Credit Applications, the Letters of Credit, any Reimbursement Agreement and any
other document, guarantee, agreement or instrument now or hereafter executed by
the Company or any of its Subsidiaries in connection with the Loans and the
Letters of Credit, as renewed, extended, amended, supplemented, increased,
modified, or replaced.
Section 1.104. "Outstanding Amount" means, as of any date as of which
the amount thereof shall be determined, the aggregate outstanding principal
amount of (i) the Line of Credit, (ii)Credits Outstanding and (iii) the
Reimbursement Obligations, all as of the date of determination.
Section 1.105. "PBGC" means the Pension Benefit Guaranty Corporation or
any entity succeeding to all or part of its functions under ERISA.
Section 1.106. "Permitted Guarantees" means:
(a) Guarantees in favor of the Agent, the Banks or any Bank Affiliates
including the Guaranty;
(b) Guarantees existing on the date of this Agreement and Disclosed on
Schedule 1.106. attached hereto or in the Financial Statements referred to in
Section 3.8 hereof or in favor of Subsidiaries of the Company;
(c) Guarantees resulting from the endorsement of negotiable instruments
of collection in the ordinary course of business;
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(d) Guarantees of the Company and its Subsidiaries with respect to
surety, appeal, performance and return-of-money and other similar obligations
incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money) not exceeding ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00) in the aggregate;
(e) Guarantees of normal trade debt relating to the acquisition of
goods and supplies; and
(f) Guarantees relating to Permitted Indebtedness described in
subsections (a) and (b) of Section 7.1.
Section 1.107. "Permitted Indebtedness" has the meaning ascribed to it
in Section 7.1. hereof.
Section 1.108. "Permitted Investments" means:
(a) Obligations of the United States of America or any department or
agency thereof, and obligations guaranteed by the United States of America, in
each case due within one year from the date of purchase and payable in the
United States in United States dollars,
(b) Prime Commercial Paper which is rated P-1 by Moody's Investors
Service, Inc. ("Moody's") or A-1 by Standard & Poor's Corporation ("S&P"),
bankers acceptances and certificates of deposit in United States commercial
banks or foreign banks with United States branches (having capital resources in
excess of ONE HUNDRED MILLION AND NO/100 DOLLARS ($100,000,000.00) and having a
long-term certificate of deposit rating of either A-1 by Moody's or A+ by S&P),
(c) Repurchase agreements of United States commercial banks or
brokerage institutions or foreign banks with United States branches (any such
bank or institution having capital resources in excess of TWO HUNDRED FIFTY
MILLION AND NO/100 DOLLARS ($250,000,000.00)), in respect of the certificates
and obligations referred to in clause (b) above, provided that any such
repurchase agreement (x) has a term of less than one year and (y) is fully
collateralized, and
(d) Long-term corporate bonds with respect to which the Company or a
Subsidiary of the Company has the option, granted by a brokerage institution
having capital resources in excess of TWO HUNDRED FIFTY MILLION AND NO/100
DOLLARS ($250,000,000.00) and having a long-term debt rating of either A-1 by
Moody's or A+ by S&P, to require such brokerage institution to repurchase such
bonds at par within twelve (12) months following acquisition thereof by the
Company or a Subsidiary of the Company, provided that any such bond (x) may only
be held during the time that the Company or a Subsidiary of the Company is
entitled to the benefit of the repurchase option with respect to such bond, and
(y) must be rated at least BBB- by S&P, and Baa3 by Moody's (provided that no
such bond is required to be rated by both S&P and Moody's).
Section 1.109. "Permitted Liens" has the meaning ascribed to it in
Section 7.2. hereof.
Section 1.110. "Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture or other entity of whatever nature, whether public or private.
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Section 1.111. "Plan" means, at any time, an employee pension or other
benefit plan that is subject to Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either (i) maintained by
the Company or any member of the Controlled Group for employees of the Company
or any member of the Controlled Group or (ii) if such plan is established,
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one (1) employer makes contributions and to
which the Company or any member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
(5) plan years made contributions.
Section 1.112. "Pooled Facilities" means three or more Operating
Facilities having an aggregate appraised value of at least TWENTY MILLION AND
NO/100 DOLLARS ($20,000,000.00), (i) the debt financings or leases of which are
cross defaulted and, with respect to Mortgages, cross collateralized and (ii)
which are commonly owned or operated by any Person or Affiliate of such Person.
Section 1.113. "Pooled Guaranteed Facilities" means three or more
Operating Facilities having an aggregate appraised value of at least TWENTY
MILLION AND NO/100 DOLLARS ($20,000,000.00), which are commonly owned or
operated by any Person or Affiliate of such Person and the debt financings or
leases of which are subject to a valid, binding and enforceable unconditional
guarantee of payment from such Person or Affiliate of such Person which commonly
owns or operates such Facilities.
Section 1.114. "Prime Rate" means the rate of interest then announced
from time to time by the Agent as its prime rate of interest; provided, however,
that if, at any time, the Rating shall ever be less than BBB- or Baa3, then the
Prime Rate shall mean the rate of interest announced by the Agent as its prime
rate of interest plus one-quarter of one percentage point (.25%). The Prime Rate
shall be adjusted automatically as of the effective date of any change in the
prime rate of interest announced by the Agent.
Section 1.115. "Prime Rate Loan" means a Loan bearing interest at a
rate equal to the Prime Rate.
Section 1.116. "Qualified Appraisal" means an appraisal independently
and impartially prepared by a qualified appraiser retained or approved in
writing by the Agent and having substantial experience in the appraisal of
health care facilities and conforming to Uniform Standards of Professional
Appraisal Practice ("USPAP") adopted by the Appraisal Standards Board of the
Appraisal Foundation.
Section 1.117. "Rating" means the higher two ratings established from
time to time by either Standard & Poors Corporation, Moody's Investors Service
Inc. and Duff & Phelps Ratings Group for senior, unsecured non-credit-enhanced
long-term indebtedness of the Company.
Section 1.118. "Register" has the meaning ascribed to it in Section
11.2. hereof.
Section 1.119. "Reimbursement Agreement" means any agreement with
respect to a Letter of Credit which establishes terms for the reimbursement of
Drawings thereunder which are different
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from those set forth in Section 2.2.4.(A) hereof or which establish rates of
interest for Drawings thereunder which are different from those applicable to
Revolving Loans.
Section 1.120. "Reimbursement Obligations" means the obligation of the
Company or any Subsidiary of the Company to reimburse any issuer of any Letter
of Credit for (i) any Drawing honored by such issuer in accordance with Section
2.2.4. hereof or any separate Reimbursement Agreement relating thereto, plus
interest accrued on such Drawing, and (ii) the fees set forth in Section 2.4.3.
hereof or any separate Reimbursement Agreement relating thereto and the amount
of any third party, out-of-pocket taxes, fees, charges or other reasonable costs
and expenses whatsoever, including reasonable attorneys' fees (collectively,
"Expenses"), incurred by such issuer, the Agent or any Bank in connection with
such Drawing (including, but not limited to, expenses in determining the
issuer's obligation to honor such Drawing).
Section 1.121. "REIT" means a "real estate investment trust," as such
term is defined in Section 856 of the Code.
Section 1.122. "Release" means any release, emission, disposal,
leaching, or migration into the environment (including, without limitation, the
abandonment or improper disposal of any barrels, containers, or other closed
receptacles containing any Hazardous Materials), or into or out of any property
owned, occupied or used by the Company or any of its Subsidiaries.
Section 1.123. "Relevant Local Time" means 10:00 a.m. local time in the
place where the Eurodollar Office is located.
Section 1.124. "Reportable Event" means any of the events described in
Section 4043(b) of ERISA.
Section 1.125. "Request" has the meaning set forth in Section 2.5.6.
hereof.
Section 1.126. "Revolving Credit Note" and "Revolving Credit Notes"
have the meanings ascribed to them in Section 2.1.9. hereof.
Section 1.127. "Revolving Loan" means any loan or advance which the
Company requests pursuant to Section 2.1.1. hereof and Drawings deemed to create
Revolving Loans under Section 2.2.4. hereof (which shall not otherwise be
considered to be Reimbursement Obligations).
Section 1.128. "Revolving Loans" means each group of Revolving Loans
requested by the Company and made by the Agent for the accounts of the Banks
under Section 2.1.1. hereof or deemed made under Section 2.2.4. hereof.
Section 1.129. "Scheduled Maturity Date" has the meaning ascribed to it
in Section 2.1.12. hereof.
Section 1.130. "SEC" means the United States Securities and Exchange
Commission or any successor agency or body.
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Section 1.131. "Solvent" means, when used with respect to any Person,
that as of the date as to which the Person's solvency is to be determined:
(a) it has sufficient capital to conduct its business;
and
(b) it is able to meet its debts as they mature.
Section 1.132. "Subsidiary" means, in the case of the Company, any
corporation or other entity, including Company Limited Partnerships but
excluding Controlled Limited Partnerships, of which fifty percent (50%) or more
of the outstanding voting stock or interests are owned or controlled directly or
indirectly by the Company or one or more of its Subsidiaries and, in the case of
any other Person, any Person of which fifty percent (50%) or more of the
ordinary voting power for the election of a majority of the members of the board
of directors or other governing body of such Person is held or controlled by
another Person or a Subsidiary of such other Person; or any other organization
the management of which is directly or indirectly controlled by another Person
or Subsidiary of such other Person through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which a Person
has more than a fifty percent (50%) ownership interest. The term "control" (and
its correlative meanings "controlled by" and "under common control with") as
used in this Section 1.132. 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 ownership of voting stock, by contract or otherwise.
Section 1.133. "Tangible Net Worth" means, as of any date of which the
amount thereof shall be determined, the excess of (a) the sum of (i) the par
value (or value stated on the books of Meditrust) of the shares of beneficial
interest of Meditrust, plus (or minus, in the case of a surplus deficit) and
(ii) the amount of the consolidated surplus, whether capital or earned, of
Meditrust, over (b) the sum of treasury stock, goodwill, intangible items such
as unamortized debt discount and expense, patents, trade and service marks and
names, copyrights and research and development expenses and any write-up in the
value of assets, all of the foregoing determined on a consolidated basis.
Section 1.134. "Total Capital" means, as of any date as of which the
amount thereof shall be determined, the sum of (i) Meditrust's Funded Debt plus
(ii) Meditrust's Tangible Net Worth as of such date, all of the foregoing
determined on a consolidated basis.
Section 1.135. "Total Liabilities" means as of any date all of
Meditrust's liabilities that should, in accordance GAAP, be classified as total
liabilities on a balance sheet of Meditrust prepared as of such date, all of the
foregoing determined on a consolidated basis.
Section 1.136. "Tribunal" means any state, commonwealth, country,
municipal, federal, foreign, territorial or other governmental body, court,
administrative department, commission, board, bureau, district, authority,
agency, or instrumentality, or any arbitration authority.
Section 1.137. "Uniform Customs and Practices" means the Uniform
Customs and Practices for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 and any successor thereto.
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Section 1.138. "Unsecured Indebtedness" means Indebtedness other than
Indebtedness under the Line of Credit and the Via Banque Credit Facility which
is not secured by any Lien.
Section 1.139. "Unused Commitment" means, in the case of each Bank, as
of the date as of which the amount thereof shall be determined, the positive
difference, if any, between (i) the amount of such Bank's Commitment as of such
date and (ii) the aggregate outstanding principal amount of Revolving Loans,
Credits Outstanding and Reimbursement Obligations made by, with respect to or
allocable to (based on such Bank's Commitment Percentage) such Bank as of such
date.
Section 1.140. "Unused Combined Commitment Amount" means, as of any
date as of which the amount thereof shall be determined, the positive
difference, if any, between (i) the Combined Commitment Amount as of such date
and (ii) the Outstanding Amount as of such date.
Section 1.141. "Unused Fee" has the meaning ascribed to it in Section
2.4.1. hereof.
Section 1.142. "Via Banque" means Via Banque, a banking corporation
organized under the laws of the Republic of France.
Section 1.143. "Via Banque Amount" means, as of any date as of which
the amount thereof shall be determined, the principal amount of Indebtedness
outstanding under the Via Banque Credit Facility.
Section 1.144. "Via Banque Credit Facility" means the credit facility
provided to the Company by Via Banque in the original principal amount of FIFTY
MILLION AND NO/100 DOLLARS ($50,000,000.00) as of March 10, 1992, as amended and
in effect from time to time.
Section 2. THE CREDIT FACILITIES
Section 2.1. The Line of Credit.
Section 2.1.1. Revolving Loans. Subject to the terms and
conditions contained in this Agreement, the Banks agree to extend to the Company
a line of credit and each Bank severally agrees to lend to the Company, and the
Company may borrow, repay and reborrow, on a revolving basis, in one (1) or more
Revolving Loans from time to time during the period commencing after the Closing
Date and continuing through the close of business on the Scheduled Maturity
Date, amounts which are at least TWO MILLION AND NO/100 DOLLARS ($2,000,000.00)
and in integral multiples of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($500,000.00) thereafter (except that no Letter of Credit need be in any
specific amount) and which, together with the Outstanding Amount, do not exceed
(after giving effect to all amounts requested) in the aggregate at any one time
outstanding the lesser of the Combined Commitment Amount or the Borrowing Base
in effect from time to time (the "Line of Credit"). Notwithstanding any
provision of this Agreement to the contrary, all Revolving Loans, all Credits
Outstanding and any unpaid Reimbursement Obligations shall constitute one
obligation of the Company to the Banks. Each Bank's obligation to make Revolving
Loans hereunder (i) shall terminate on the Scheduled Maturity Date or any
earlier date as may be provided for in this Agreement and (ii) is limited to the
amount
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of its Commitment minus its proportionate share (based on its Commitment
Percentage) of (a) Credits Outstanding and (b) unpaid Reimbursement Obligations.
Section 2.1.2. Use of Proceeds. The proceeds from the
Revolving Loans shall be used by the Company solely (a) to acquire Facilities;
(b) to fund Construction Investments; (c) to extend or acquire loans secured by
Mortgages; (d) for general corporate purposes; and (e) to fund the Reimbursement
Obligations.
Section 2.1.3. Calculation of the Borrowing Base. The
Borrowing Base shall be calculated by reference to the most recent Borrowing
Report delivered by the Company under Section 6.1.(c) hereof. The Company shall
calculate the Borrowing Base on a quarterly basis and the Company shall
immediately notify the Agent when the Outstanding Amount exceeds the available
Borrowing Base and shall pay any excess in accordance with Section 2.1.15.
hereof. The Company may request that it receive a Revolving Loan in excess of
the amount which would be available under the most recent Borrowing Report
delivered by the Company; provided, however, that the Company shall provide the
Agent with evidence set forth in a new Borrowing Report to be delivered with
such request that, on a pro forma basis, the inclusion of the value of new or
reappraised Facilities will be sufficient to increase the Borrowing Base so as
to permit the requested borrowing. The acceptance or rejection of any such
request or any calculation of the Borrowing Base shall be within the reasonable
discretion of the Majority Banks.
Section 2.1.4. Notice of Borrowing. Whenever the Company
desires to obtain a Revolving Loan, and, in any case, promptly after receiving
notice from the Agent of the making of a Revolving Loan in accordance with the
terms hereof by reason of a Drawing, the Company shall notify the Agent (which
notice shall be irrevocable) by telex, telegraph or telephone received no later
than 11:00 a.m. (Hartford, Connecticut time) on the date one (1) Business Day
before the date of the requested Revolving Loan in the case of a Prime Rate Loan
and no later than 3:00 p.m. (Hartford, Connecticut time) on the date three (3)
Business Days before the date of the requested Revolving Loan in the case of a
LIBOR Loan. Such notice shall specify: (i) the effective date and amount of the
requested Revolving Loan; (ii) the interest rate option to be applicable
thereto; and (iii) the duration of the applicable Interest Period, if any
(subject to the provisions of the definition of Interest Period). Each such
notification shall be immediately followed by a written confirmation thereof by
Meditrust in substantially the form of Exhibit A attached hereto (the "Notice of
Borrowing"); provided, however, that if such written confirmation differs in any
material respect from the action taken by the Agent, the records of the Agent
shall control absent manifest error. Notwithstanding the foregoing, no Revolving
Loan shall be made unless at the time thereof:
(a) no Default or Event of Default shall exist; and
(b) as of the date of making such Revolving Loan, no event,
circumstance or condition shall exist or shall have occurred and be continuing
which has a Material Adverse Effect.
In addition, the Agent shall only be required to advance in connection with any
Notice of Borrowing an amount up to the total amount of funds made available to
the Agent by the Banks in accordance with Section 2.1.5. relating to such Notice
of Borrowing (but this condition shall not be construed as
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affecting in any manner any Bank's obligation to make funds available in
accordance with such Section 2.1.5.).
Section 2.1.5. Funding of Revolving Loans. The Agent shall
notify each Bank of its receipt of a Notice of Borrowing and the date that the
Agent intends to make the Revolving Loan (the "Expected Loan Date") no later
than 3:00 p.m. (Hartford, Connecticut time) on the date on which the Agent
receives a Notice of Borrowing in the case of Prime Rate Loans and 11:00 a.m.
(Hartford, Connecticut time) on the date immediately succeeding the date on
which such Notice of Borrowing is received in the case of LIBOR Loans. The
Expected Loan Date shall be no earlier than one (1) Business Day after the
delivery of such notice by the Agent in the case of Prime Rate Loans and two (2)
Business Days after the delivery of such notice by the Agent in the case of
LIBOR Loans. Not later than 12:00 noon (Hartford, Connecticut time) on the
Expected Loan Date, each Bank shall make available to the Agent, at the Agent's
head office, in immediately available funds, such Bank's pro rata share of such
Revolving Loan (determined as provided in Section 2.1.6.
hereof).
Section 2.1.6. Relationship of Revolving Loans to Commitment
Amount. Each Revolving Loan under Section 2.1.1. hereof shall consist of a
Revolving Loan by each Bank in respect of its Commitment, which Revolving Loan
shall be made by each Bank in the proportion that such Bank's Commitment bears
to the Combined Commitment Amount; provided, that if at any time prior to the
Scheduled Maturity Date, for any reason, the proportion that any Bank's Unused
Commitment bears to the Unused Combined Commitment Amount is not equal to the
proportion that the Commitment of such Bank bears to the Combined Commitment
Amount, then each such Bank shall promptly purchase or sell, as may be
necessary, participations in the Revolving Loan held by the other Banks in such
amounts as will (but only if and to the extent that the purchase of such
participations would not cause any Bank to have outstanding Revolving Loans in
an amount in excess of its Commitment and would not cause any Bank to exceed its
lending limit or to violate any other legal requirement to which it is subject),
and make such other adjustments from time to time as shall be necessary to,
cause the proportion that such Bank's Unused Commitment bears to the Unused
Combined Commitment Amount to be equal to the proportion that such Bank's
Commitment bears to the Combined Commitment Amount. Nothing in this Section
shall be construed as requiring any Bank to, and no Bank shall be required to,
lend a dollar amount in excess of the dollar amount of its Commitment, whether
by reason of any other Bank failing to fund its proportionate share of any
Revolving Loan, or otherwise.
Section 2.1.7. Failure to Honor Commitment. The failure of any
Bank to make available its proportionate share of any Revolving Loan with
respect to any Commitment on the date specified therefor shall not relieve any
other Bank of its respective obligation to make available its share of the
Revolving Loan on such date, but no Bank shall be responsible for the failure of
any other Bank to make available such other Bank's proportionate share of the
Revolving Loan with respect to any Commitment, the Company agreeing that each
Bank's Commitment is and shall be a several, but not joint, obligation.
Section 2.1.8. The Loan Account. Each Revolving Loan shall be
recorded in an account on the books of the Agent bearing the Company's name (the
"Loan Account"). There shall also be recorded in the Loan Account all
prepayments and payments made by the Company in respect of the Line of Credit
and other appropriate debits and credits as herein provided. The Agent
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shall render and send to the Company on a monthly basis a statement of the Loan
Account showing the respective outstanding principal balance of the Line of
Credit, together with interest and other appropriate debits and credits as of
the date of the statement. The statement of the Loan Account shall be considered
correct in all respects and accepted by and be conclusively binding upon the
Company unless the Company makes specific written objection thereto within sixty
(60) days after the date the statement of the Loan Account is sent.
Section 2.1.9. Revolving Credit Notes. On the Closing Date,
the Company shall issue to the Banks promissory notes executed in substantially
the form attached hereto as Exhibit B (individually a "Revolving Credit Note"
and collectively the "Revolving Credit Notes"), with all blanks therein
appropriately completed. The Revolving Credit Notes shall evidence the
obligation of the Company to repay to the Banks all Revolving Loans made by the
Banks to the Company on account of the Banks' Commitments.
Section 2.1.10. Payment of Principal. The aggregate unpaid
principal amount of all Revolving Loans, together with accrued and unpaid
interest thereon, as evidenced by the Revolving Credit Notes, and all
Reimbursement Obligations, shall, unless sooner accelerated by the Banks
following the occurrence of an Event of Default, be repaid by the Company on the
Scheduled Maturity Date.
Section 2.1.11. Interest Rates and Payments of Interest.
(a) Each Revolving Loan which is a LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the LIBOR Rate. Such interest
shall be payable (i) in arrears on the last Business Day of the Interest Period
with respect thereto and (ii) when such LIBOR Loan is due (whether at maturity,
by reason of acceleration or otherwise). In addition, upon any prepayment which
has the effect of reducing the outstanding principal amount of any LIBOR Loan to
zero (0), all accrued and unpaid interest in respect of such LIBOR Loan shall be
payable at the time of any such prepayment.
(b) Each Revolving Loan which is a Prime Rate Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the Prime Rate in effect from
time to time. Such interest shall be payable (i) quarterly in arrears on the
last day of each quarter commencing September 30, 1996 and continuing on each
September 30, December 31, March 31 and June 30 thereafter and (ii) when such
Revolving Loan is due (whether at maturity, by reason of acceleration or
otherwise). In addition, upon any prepayment which has the effect of reducing
the outstanding principal amount of any Prime Rate Loan to zero (0), all accrued
and unpaid interest in respect of such Prime Rate Loan shall be payable at the
time of any such prepayment.
Section 2.1.12. Termination. The Line of Credit and the Banks'
obligations to lend thereunder shall terminate on September 23, 1999 (the
"Scheduled Maturity Date"), at which time all outstanding principal, accrued and
unpaid interest and any other sums due and owing under the Line of Credit shall
be immediately due and payable.
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Section 2.1.13. Renewal. This Agreement may be renewed upon
the agreement of the Company and all of the Banks no later than March 23, 1999.
If this Agreement shall be so renewed, the Scheduled Maturity Date shall be
extended to September 23, 2001.
Section 2.1.14. Mandatory Prepayments. The Company shall be
required to pay to the Agent for the benefit of the Banks and to Via Banque on a
pari passu and pro rata basis, as a prepayment in respect of outstanding
Revolving Loans, one hundred percent (100%) of the net proceeds (defined as all
proceeds received or to be received less customary transaction costs and
expenses) from (i) sales or other dispositions of assets of the Company,
including shares of stock of, and Indebtedness due and owing to, Subsidiaries of
the Company, the aggregate proceeds of which are in excess of TWO MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($2,500,000.00) in the trailing twelve (12)
month period, (ii) the creation or issuance of additional Indebtedness of the
Company (except for loans and advances under the Via Banque Credit Facility) and
(iii) the sale of additional equity securities or other ownership interests of
the Company, said amount to be paid immediately upon the receipt of said
proceeds unless such proceeds are to be used for the purposes set forth in
Section 2.1.2 hereof within ten (10) Business Days of receipt. In addition, if
it should be determined at any time that the Outstanding Amount exceeds the
available Borrowing Base, the Company shall be required to prepay any such
excess amount within five (5) Business Days following such determination.
Further, if at any time the Outstanding Amount exceeds the Combined Commitment
Amount in effect from time to time, any such excess amount shall be due and
payable within five (5) Business Days.
Section 2.1.15. Reduction of Commitment. The Company may
reduce any unused portion of the Combined Commitment Amount at any time upon ten
(10) days prior written notice from the Company to the Agent; provided, however,
that any such reduction shall be in an amount of at least FIVE MILLION AND
NO/100 DOLLARS ($5,000,000.00) or any multiple thereof and no such reduction
shall be subject to reinstatement. Any such reduction in the Combined Commitment
Amount shall reduce the Commitments of each of the Banks on a pro rata basis in
accordance with their respective Commitment Percentages.
Section 2.2. The Letters of Credit.
Section 2.2.1. Issuance. The Agent hereby agrees, subject to
and in accordance with the terms and conditions set forth in this Section 2.2.,
to issue, from time to time after the Closing Date and prior to the Letter of
Credit Termination Date, Letters of Credit on behalf of the Banks for the
account of the Company or a Subsidiary of the Company. Notwithstanding the
foregoing, no Letter of Credit shall be issued unless at the time of such
issuance:
(a) the Majority Banks shall consent to the issuance
of the requested Letter of Credit;
(b) no Default or Event of Default shall exist;
(c) no event, circumstance or condition shall exist
or shall have occurred and be continuing which has a Material Adverse Effect;
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(d) the face amount of such Letter of Credit, when
added to the Outstanding Amount hereof, does not exceed the lesser of the
Combined Commitment Amount or the Borrowing Base; and
(e) the Letter of Credit provides for an expiration
date not later than the Scheduled Maturity Date.
Notwithstanding the foregoing, at no time shall the aggregate amount of Credits
Outstanding and unpaid Reimbursement Obligations exceed TWENTY FIVE MILLION AND
NO/100 DOLLARS ($25,000,000.00).
In connection with the issuance of any Letter of Credit, the Banks
reserve the right to employ, and the Company shall have the right to request
that the Banks' employ, a separate Reimbursement Agreement to set forth the
terms and conditions to be applicable to such Letter of Credit; provided,
however, that no separate Reimbursement Agreement shall contain or provide for
any terms, conditions, covenants or Fees which are less favorable to the Banks
than those contained in this Agreement.
Section 2.2.2. Application. The Company or a Subsidiary of the
Company shall request the issuance of a Letter of Credit by its execution and
delivery to the Agent of an application in a form required by the Agent (the
"Letter of Credit Application") at least thirty (30) Business Days before the
date on which the requested Letter of Credit is to be issued, which shall be
accompanied by a certification from a duly authorized officer of the Company or
any such Subsidiary with respect to the same representations and warranties as
are required to be certified in the Notice of Borrowing. If the Letter of Credit
Application is acceptable to the Agent, in its reasonable discretion, and the
conditions to the issuance of Letter of Credit set forth in Section 2.2.1.
hereof have been satisfied, then the Agent shall prepare the Letter of Credit in
a form acceptable to the Agent in accordance with the instructions set forth in
the Letter of Credit Application and reasonably acceptable to the Company and
provided that there is adequate availability under the Line of Credit as set
forth in Section 2.1.1. above, issue the Letter of Credit to the Beneficiary of
such Letter of Credit unless otherwise instructed by the Company or any such
Subsidiary.
Section 2.2.3. Letter of Credit Participation.
(a) The Company and each Bank hereby acknowledge that each
Letter of Credit issued by the Agent under this Agreement is issued by the Agent
on behalf of all of the Banks. Each Bank severally agrees that it shall be
absolutely liable, without regard to the occurrence of any Default or Event of
Default or any other condition precedent whatsoever, to the extent of such
Bank's Commitment Percentage, to reimburse the Agent on demand (in accordance
with Section 2.2.5. hereof) for the amount of each Drawing honored by the Agent
under each Letter of Credit to the extent that such amount has not previously
been reimbursed by the Company (such agreement for a Bank being referred to
herein as the "Letter of Credit Participation" of such Bank), and each such
payment made by a Bank shall be treated as the purchase by such Bank of a
participating interest in the Company's Reimbursement Obligation under Section
2.2.4. hereof in an amount equal to such payment.
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(b) Each Bank shall share in any interest which accrues
pursuant to Section 2.2.4. hereof (from and including the date that such
interest begins to accrue) and fees under Section 2.4.3.
hereof in accordance with its participating interest.
Section 2.2.4. Reimbursement of Drawings/Pay down of Credits
Outstanding. The Company hereby acknowledges and agrees that it shall be
obligated to reimburse, and shall thereupon reimburse, the Agent for any Drawing
(or, in the case of subsection (A)(b) below, shall (i) repay any Revolving Loan
made by reason of such Drawing or (ii) pay down Credits Outstanding):
(A) With respect to any Letter of Credit issued without a separate
Reimbursement Agreement:
(a) except as provided in subsection (b) below, (I) on the
Scheduled Maturity Date with respect to any Drawing made on or prior to the
Scheduled Maturity Date, and (II) with respect to any Drawing made after the
Scheduled Maturity Date, within one (1) Business Day after the Company shall
have received notice from the Agent that any Drawing was honored; and
(b) upon the termination of the obligation of the Banks to
make Revolving Loans and to issue Letters of Credit, the termination of the
Commitments by the Company or the acceleration of the Reimbursement Obligations
hereof, in an amount equal to the sum of (i) Credits Outstanding as of such date
(except to the extent that the Company returns or causes to have returned any
Letter of Credit prior to a Drawing thereunder) plus (ii) the amount of all then
unpaid Reimbursement Obligations.
(B) With respect to any Letter of Credit issued with a separate
Reimbursement Agreement, in accordance with the terms and provisions of such
Reimbursement Agreement executed in connection therewith.
Nothing herein is intended to supersede any reimbursement directions contained
in any separate Reimbursement Agreement executed in connection with any Letter
of Credit. The Company shall pay interest at the Default Rate on any amounts due
and payable with respect to any Revolving Loan created under this Section 2.2.4.
from the date such amounts are payable (whether at maturity, by acceleration or
otherwise) after any applicable cure period and, in all events, regardless of
any cure period, after the Scheduled Maturity Date, and until paid in full. In
connection with any Reimbursement Obligation or other payment obligation created
with respect to a Letter of Credit issued with a separate Reimbursement
Agreement, from the date of creation of such obligation to the earlier of the
date of payment thereof, the due date therefor or the Scheduled Maturity Date,
such unpaid obligation shall bear interest and be payable strictly in accordance
with the provisions of such Reimbursement Agreement and to the extent that any
such Reimbursement Obligation or other obligation remains unpaid on the earlier
of the due date therefor or the Scheduled Maturity Date, such unpaid obligation
shall, on and after the earlier of the due date therefor or Scheduled Maturity
Date, bear interest at the Default Rate.
Notwithstanding the foregoing, all Drawings on Letters of Credit issued without
a separate Reimbursement Agreement which are honored prior to the Scheduled
Maturity Date shall automatically be deemed Revolving Loans made under Section
2.1.1. and shall be subject to all the
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terms and conditions in this Agreement with respect to Revolving Loans;
provided, however, that if Meditrust shall not have submitted a Notice of
Borrowing with respect to such Drawing, such Revolving Loan shall be deemed to
be a Prime Rate Loan by the Agent. Drawings under any Letter of Credit issued
with a separate Reimbursement Agreement shall create a Reimbursement Obligation
but shall not create a Revolving Loan hereunder unless requested by Meditrust or
the separate Reimbursement Agreement so provides.
Section 2.2.5. Letter of Credit Payments. If any Drawing shall
be presented under any Letter of Credit, the Agent shall immediately notify the
Company of the date and amount of the Drawing presented and of the date and time
when the Agent expects to honor such Drawing. On the date of any such Drawing or
the date of the creation of any Reimbursement Obligation which does not arise
from a Drawing, the Agent shall notify the Banks no later than 3:00 p.m.
(Hartford, Connecticut time) of the amount of any Revolving Loan or
Reimbursement Obligation created by reason thereof. No later than 12:00 noon
(Hartford, Connecticut time) on the Business Day next following the receipt of
such notice, each Bank shall make available to the Agent, at the Agent's Head
Office, in immediately available funds, such Bank's Commitment Percentage of
such Revolving Loan or unpaid Reimbursement Obligation (determined by
multiplying such Bank's Commitment Percentage by the amount of such Revolving
Loan or unpaid Reimbursement Obligation).
Section 2.2.6. Termination of Obligation. The obligation of
the Agent to issue Letters of Credit under this Section 2.2. or any separate
Reimbursement Agreement shall terminate ninety (90) days prior to the Scheduled
Maturity Date (the "Letter of Credit Termination Date").
Section 2.2.7. Obligations Absolute. The obligations of the
Company with respect to Letters of Credit issued under this Agreement and with
respect to Reimbursement Obligations shall be unconditional and irrevocable,
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, shall rank pari passu with the obligation of the Company to repay
the Loans and shall not be reduced by: (a) any lack of validity or
enforceability of any document executed between the Company and a Beneficiary;
(b) the existence of any claim, set-off, defense or other right which the
Company or any Subsidiary may have at any time against a Beneficiary or any
transferee of a Letter of Credit (or any Persons for which such Beneficiary or
any such transferee may be acting), or against the Agent, any Bank or any Bank
Affiliate or any other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction; and (c) any
statement or any other document presented under a Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect, unless the Agent, any Bank or
any Bank Affiliate acted with gross negligence or wanton or willful misconduct.
Section 2.2.8. Indemnification. The Company hereby indemnifies
and holds the Agent, the Banks, the Bank Affiliates and their directors,
officers, employees and agents (collectively, the "Bank Agents"), harmless from
and against any and all claims, damages, losses, liabilities, costs or expenses
(including reasonable legal fees and expenses) which the Agent, any Bank, any
Bank Affiliate or any Bank Agents may incur or which may be claimed against the
Agent, any Bank, any Bank Affiliate or any Bank Agent by any Person by reason of
or in connection with the execution and delivery or transfer of, or payment or
failure to make lawful payment under, a Letter of Credit; provided, however,
that the Company shall not be required to
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indemnify either Agent, any Bank, any Bank Affiliate or any Bank Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by such Agent's, such Bank's, such Bank Affiliate's or
Bank Agent's gross negligence or wanton and willful misconduct. Nothing in this
Section 2.2.8. is intended to limit the Company's obligations hereunder. In case
any claim is asserted or any action or proceeding is brought against the Agent,
any Bank, any Bank Affiliate or any Bank Agent (an "Indemnified Party"), the
Indemnified Party shall promptly notify the Company of such claim, action or
proceeding and, at the option of the Indemnified Party, (i) such Indemnified
Party may retain legal counsel, reasonably satisfactory to the Company, to
represent it in such defense and the Company shall reimburse such Indemnified
Party for its reasonable fees and expenses of such legal counsel or (ii) the
Company shall resist, settle or defend with counsel reasonably acceptable to
such Indemnified Party, such claim, action or proceeding. The Agent, any Bank,
any Bank Affiliate and any Bank Agent shall cooperate and join with the Company,
at the expense of the Company, as may be required in connection with any action
taken or defended by the Company as provided herein.
Section 2.2.9. Liability of the Banks. Any action, inaction or
omission on the part of either Agent, any Bank or any Bank Affiliate under or in
connection with a Letter of Credit issued hereunder or related instruments or
documents, if not amounting to gross negligence or wanton or willful misconduct,
shall be binding upon the Company, shall not place the Agent, the Banks or any
Bank Affiliate under any liability to the Company or any Subsidiary, shall not
affect, impair, or prevent the vesting of any of the Agent's, the Banks' or any
Bank Affiliate's rights or powers hereunder or the Company's obligation to make
full reimbursement to the Agent, the Banks and any Bank Affiliate. The Company
assumes all risks of the acts or omissions of a Beneficiary or transferee of a
Letter of Credit with respect to its use of the Letter of Credit. In furtherance
of, and not in limitation of, the Agent's, the Banks' or any Bank Affiliate's
rights and powers under the Uniform Customs and Practices, but subject to all
other provisions of this Section 2.2., it is understood and agreed that, unless
resulting from gross negligence or wanton or willful misconduct of the Agent,
the Banks or any Bank Affiliate, neither the Agent, the Banks nor any Bank
Affiliate shall have any liability for and that the Company assumes all
responsibility for: (a) the genuineness of any signature; (b) the form,
correctness, validity, sufficiency, genuineness, falsification and legal effect
of any draft, certification or other document required by a Letter of Credit and
the authority of the person signing the same; (c) the failure of any instrument
to bear any reference or adequate reference to the Letter of Credit or the
failure of any persons to note the amount of any instrument on the reverse of
the Letter of Credit or to surrender the Letter of Credit or otherwise to comply
with the terms and conditions of the Letter of Credit; (d) the good faith or
acts of any Person other than the Agent, the Banks, any Bank Affiliate or any
Bank Agents; (e) the existence, form, sufficiency or breach of or default under
any other agreement or instrument of any nature whatsoever; (f) any delay in
giving or failure to give any notice, demand or protest; and (g) any error,
omission, delay in or nondelivery of any notice or other communication, however
sent. The determination as to whether the required documents are presented prior
to the expiration of a Letter of Credit issued hereunder and whether such other
documents are in proper and sufficient form for compliance with the Letter of
Credit shall be made by the Agent in its sole and absolute discretion, which
determination shall be conclusive and binding upon the Company.
Section 2.2.10. Guaranty. The Company shall unconditionally
guarantee the payment and performance of the Reimbursement Obligations of each
Subsidiary in respect of any
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Letter of Credit issued under this Agreement pursuant to a continuing guaranty
agreement in the form attached hereto as Exhibit C (the "Guaranty").
Section 2.3. Interest.
Section 2.3.1. Calculation of Interest. Interest on Prime Rate
Loans shall accrue on the basis of a three hundred sixty-five (365) day year and
interest on LIBOR Loans shall accrue on the basis of a three hundred sixty (360)
day year. In each case, interest shall be calculated according to the actual
number of days elapsed during each accrual period.
Section 2.3.2. Continuation or Conversion of Loans. The
Company may continue or convert all or any part (in amounts which are at least
TWO MILLION AND NO/100 DOLLARS ($2,000,000.00) and in integral multiples of FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00)) of any outstanding Revolving
Loan into a Loan of any other type provided for in this Agreement in the same
aggregate principal amount, on any Business Day (which, in the case of a
conversion of a LIBOR Loan, shall be the last day of the Interest Period
applicable to such Loan unless the Company shall prepay all Breakage Costs
associated therewith). Whenever the Company desires to continue or convert a
Revolving Loan, including a Revolving Loan resulting from a Drawing in
accordance with the terms hereof, the Company shall notify the Agent (which
notice shall be irrevocable) by telex, telegraph or telephone received no later
than 11:00 a.m. (Hartford, Connecticut time) on the date one (1) Business Day
before the date on which the Revolving Loan is to be continued or converted to a
Prime Rate Loan and three (3) Business Days before the date on which the
requested Revolving Loan is to be continued or converted to LIBOR Loan. Such
notice shall specify: (i) the effective date and amount of each Revolving Loan
or portion thereof to be continued or converted; (ii) the interest rate option
to be applicable thereto; and (iii) the duration of the applicable Interest
Period, if any (subject to the provisions of the definition of Interest Period).
Each such notification shall be immediately followed by a written confirmation
thereof by the Company in substantially the form of Exhibit D attached hereto
(the "Notice of Continuation or Conversion"); provided, however, that if such
written confirmation differs in any material respect from the action taken by
the Agent, the records of the Agent shall control absent manifest error. On each
date on which a Notice of Continuation or Conversion is delivered to the Agent,
the Agent shall notify each Bank no later than 3:00 p.m. (Hartford, Connecticut
time) of the receipt of such Notice of Continuation or Conversion.
Section 2.3.3. Duration of Interest Periods.
(a) Subject to the provisions of the definition of
Interest Period, the duration of each Interest Period applicable to a Loan shall
be as specified in the applicable Notice of Borrowing or Notice of Continuation
or Conversion delivered pursuant to the provisions of Section 2.1.4. or Section
2.3.2.
(b) If the Agent does not receive a notice of
election of duration of an Interest Period for a Loan pursuant to subsection (a)
above within the applicable time limits specified therein, or if a Default or an
Event of Default exists when such notice must be given, the Company shall be
deemed to have elected to convert such Loan in whole into a Prime Rate Loan on
the last day of the then current Interest Period with respect thereto, except
that if such Loan is
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converted to a Prime Rate Loan because an Event of Default exists, the rate of
interest payable on all Loans shall be the Default Rate.
(c) Notwithstanding the foregoing, the Company may
not select an Interest Period that would end, but for the provisions of the
definition of Interest Period, after the Scheduled Maturity Date.
Section 2.3.4. Changed Circumstances.
In the event that:
(i) on any date on which the LIBOR Rate would
otherwise be set the Agent shall have reasonably determined in good faith (which
determination shall be final and conclusive) that adequate and fair means do not
exist for ascertaining the LIBOR Base, or
(ii) at any time the Agent shall have reasonably
determined in good faith (which determination shall be final and conclusive)
that:
(A) the making or continuation of or
conversion of any Loan to a LIBOR Loan has been made impracticable or unlawful
by (1) the occurrence of a contingency that materially and adversely affects the
interbank market or (2) compliance by the Agent or any Bank in good faith with
any applicable law or governmental regulation, guideline or order or
interpretation or change thereof by any governmental authority charged with the
interpretation or administration thereof or with any request or directive of any
such governmental authority, whether or not having the force of law (in any such
case, a "Legal Impediment"); or
(B) the LIBOR Rate shall no longer represent
the effective cost to the Agent or any Bank for United States dollar deposits in
the interbank market for deposits in which it regularly participates; or
(C) that U.S. dollar deposits in immediately
available funds in an amount approximately equal to the outstanding principal
balance of the Line of Credit are not readily available to the Agent's
Eurodollar Office for delivery on the first day of any Interest Period;
then, and in any such event, the Agent shall forthwith so notify the Company by
facsimile notice at least one day prior to (i) the date that the LIBOR Rate is
to be set, (ii) the commencement date of the applicable Interest Period or (iii)
the occurrence of the applicable event, and the Interest Rate shall become the
Prime Rate and shall remain the Prime Rate until the Agent determines and so
notifies the Company that the circumstances giving rise to such notice no longer
apply. Until the Agent notifies the Company that the circumstances giving rise
to such notice no longer apply, the obligation of the Agent to allow selection
by the Company of a LIBOR Loan (during the occurrence of such circumstances,
referred to as "Affected Loans") shall be suspended. If at the time the Agent so
notifies the Company, the Company has previously given the Agent a Notice of
Borrowing or a Notice of Continuation or Conversion with respect to one or more
Affected Loans but such borrowing or conversion has not yet gone into effect,
such notification shall be deemed to be void and the Company may only borrow or
convert to a Prime Rate Loan. If as a result of a Legal
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Impediment, the Agent and/or any Bank shall incur Breakage Costs in converting
from a LIBOR Loan, then the Company shall pay all such Breakage Costs to the
Agent promptly upon its demand therefor for its account and/or the account of
any such Bank.
Section 2.3.5. Payments Not at End of Interest Period. If the
Company for any reason makes any payment of principal with respect to any LIBOR
Loan on any day other than the last day of an Interest Period applicable to such
Loan or fails to borrow or continue, or convert to, a LIBOR Loan after giving a
Notice of Borrowing or Notice of Continuation or Conversion, the Company shall
pay to the Agent for the account of the Banks an amount equal to all Breakage
Costs associated therewith (which amounts shall be disclosed to the Company in
reasonable detail). The Company shall pay such amount within ten (10) Business
Days of receipt by the Company of a statement therefor.
Section 2.3.6. Usury. If the rate of interest payable by the
Company under this Agreement, the Notes or the Other Documents shall be or
become usurious or otherwise unlawful under laws applicable thereto, the
interest rate shall be reduced to the maximum lawful rate and any amount paid by
the Company in excess of the maximum lawful rate shall be considered a payment
in reduction of principal or, at the sole election of the Banks, shall be
returned to the Company.
Section 2.4. Fees.
Section 2.4.1. Unused Fee. The Company agrees to pay to the
Agent for the account of the Banks a fee (the "Unused Fee") on the average daily
unused portion of the Combined Commitment Amount from the Closing Date until the
Scheduled Maturity Date at a per annum rate determined daily by reference to the
Rating as follows:
(i) If the Rating is A-/A3, then the per annum rate shall be
seventeen and one half basis points (17.5bp); and
(ii) If the Rating is BBB+/Baa1, then the per annum rate shall
be twenty basis points (20bp); and
(iii) If the Rating is BBB/Baa2, then the per annum rate shall
be twenty-two and one-half basis points (22.5bp); and
(iv) If the Rating is BBB-/Baa3, then the per annum rate shall
be twenty five basis points (25bp); and
(v) If the Rating is less than BBB-/Baa3, then the per annum
rate shall be fifty basis points (50bp).
The Unused Fee shall be payable in arrears on (i) the last day of each quarter
commencing on September 30, 1996 and continuing on each September 30, December
31, March 31 and June 30 thereafter, (ii) the Scheduled Maturity Date, (iii) the
acceleration of the Obligations and (iv) the termination of this Agreement. The
Agent shall promptly pay to each Bank its pro rata share of the Unused Fee.
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Section 2.4.2. Letter of Credit Fees. The Company agrees to
pay to the Agent for the account of the Banks such issuance, annual, drawing,
amendment and/or renewal fees as the Agent may customarily charge in connection
with letters of credit of a type and having an amount and a maturity similar to
that of the requested Letter of Credit, and, in addition thereto, with respect
to any Letter of Credit issued with a separate Reimbursement Agreement, to pay
all fees owed to the Agent as set forth in such Reimbursement Agreement. The
Agent shall promptly pay to each Bank its pro rata share of any such fees.
Section 2.4.3. Calculation of Fees. All Fees shall, except as
otherwise provided in this Agreement, be calculated on the basis of a three
hundred sixty (360) day year and according the actual number of days elapsed in
each accrual period.
Section 2.5. General Terms Applicable to the Credit Facility.
Section 2.5.1. Direct Debit. The Company hereby authorizes the
Agent to automatically debit, charge against and collect from the Company's
demand deposit account established with the Agent any and all principal,
interest, fees, charges, expenses and other amounts due and payable under this
Agreement as when the same become due and payable.
Section 2.5.2. Overdue Payments. Overdue principal (whether at
maturity, by reason of acceleration or otherwise) and, to the extent permitted
by applicable law, overdue interest and fees and any other amounts payable
hereunder and under the Notes, including unpaid Reimbursement Obligations, shall
bear interest from and including the due date thereof until paid, compounded
monthly and payable on demand, at a rate per annum equal to the Default Rate.
Section 2.5.3. Manner and Time of Payments by the Company. All
payments made by the Company hereunder on account of principal, interest, and
fees and expenses shall be made in United States funds on their respective due
dates to the Agent for the account of the Banks in immediately available funds
without setoff or counterclaim not later than 12:00 p.m. (Hartford, Connecticut
time) at the head office of the Agent or at such other address as the Agent may
from time to time specify in writing. Any payment required to be made by the
Company hereunder on account of any Letter of Credit which is denominated in a
currency other than United States dollars shall be made in and be equal to the
equivalent of such currency in United States dollars. Each such payment will be
applied, first, on account of fees and expenses which may be due and payable
hereunder, second, on account of the interest then due and owing, and third, on
account of the principal then due and owing.
Section 2.5.4. Payments among the Agent and the Banks. The
Agent shall have no obligation to remit to the Banks any amounts under this
Agreement not actually collected from the Company. In addition, in the event
that any payment received by the Agent is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Company or upon the appointment of any intervenor or
conservator of, or trustee or similar official for, the Company or any
substantial part of its properties or assets, or otherwise, and if the Agent
paid any Bank its pro rata share of such payment, then such Bank shall, on
demand from the Agent, immediately pay to the Agent an amount equal to such
Bank's pro rata share of any such payment which must be rescinded, restored or
returned by the Agent. Any such amount shall be paid no later than 3:00 p.m.
(Hartford, Connecticut time) on the Business Day
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following the date of demand for payment by the Agent and, if not so paid, shall
bear interest at the Federal Funds Effective Rate.
Section 2.5.5. Non-Receipt of Funds by the Agent.
(a) Unless the Agent shall have received notice from
a Bank prior to the date on which such Bank is to provide funds to the Agent for
a Revolving Loan or Letter of Credit Participation under such Bank's Commitment
that such Bank will not make available to the Agent such funds, the Agent may
assume that such Bank has made such funds available to the Agent on the date of
the Loan or Drawing, and the Agent, in its sole discretion, may, but shall not
be obligated to, in reliance upon such assumption, make available to the Company
on such date a corresponding amount.
If and to the extent any Bank shall not have made funds available to the Agent
as required by this Agreement (whether in connection with a Revolving Loan or a
Drawing), and if the Agent shall have made such funds available to the Company,
such Bank (a "Delinquent Bank") and the Company severally agree to repay to the
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the Company
or the Drawing is made, as applicable, until the date such amount is repaid to
the Agent, at (i) the Federal Funds Effective Rate, in the case of the
Delinquent Bank, and (ii) at the rate applicable to such Revolving Loan, in the
case of the Company. If such Bank shall repay to the Agent such corresponding
amount (in which case such Bank shall no longer be deemed a Delinquent Bank) and
such amount was advanced to the Company, such amount so repaid shall constitute
such Bank's Revolving Loan or unpaid Reimbursement Obligation, as the case may
be, under its Commitment for purposes of this Agreement. Until it shall have
paid to the Agent any unpaid amount as described above, a Delinquent Bank
(regardless of whether such Bank serves as the Agent) shall be deemed to have
assigned any and all payments due to it from the Company, whether on account of
outstanding Loans, unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining non-Delinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Loans and
unpaid Reimbursement Obligations. If the Delinquent Bank has not paid to the
Agent any unpaid amount as described above within three (3) Business Days after
demand therefor from the Agent, then the Delinquent Bank hereby authorizes the
Agent to distribute such payments to the non-Delinquent Banks in accordance with
their respective pro rata shares of all outstanding Loans and unpaid
Reimbursement Obligations. A Delinquent Bank shall be deemed to have satisfied
in full a delinquency when and if, as a result of application of the assigned
payments to all outstanding Loans and unpaid Reimbursement Obligations of the
non-Delinquent Banks, the Banks' respective pro rata shares of all outstanding
Loans have been returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
(b) Unless the Agent shall have received notice from
the Company prior to the date on which any payment is due to the Banks hereunder
that the Company will not make such payment in full, the Agent may assume that
the Company has made such payment in full to the Agent on such date, and the
Agent in its sole discretion may, but shall not be obligated to, in reliance
upon such assumption, cause to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent that the
Company shall not have so made such payment in full to the Agent, each Bank
shall repay to the Agent forthwith on demand
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such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Effective Rate.
(c) Nothing contained in this Section 2.5.5. shall be
construed to relieve any Bank of its obligation to make funds available to the
Agent under this Agreement except as otherwise expressly provided herein, nor to
relieve the Company of its obligation to make any payment when due.
Section 2.5.6. Increased Costs and Capital Adequacy.
(a) If any change in any law, regulation, order, decree,
treaty, directive or bulletin or in the interpretation or application thereof
after the date hereof by any court or administrative or governmental authority
charged with the administration thereof, or if the Agent's or any Bank's or Bank
Affiliate's compliance with any request or directive (whether or not having the
force of law) from any central bank or monetary authority or other governmental
authority, agency or instrumentality enacted or adopted after the date hereof,
shall in any such case:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against any credit extended by the Banks
or any Bank Affiliate under this Agreement; or
(ii) impose on the Banks or any Bank Affiliate or
their parent bank holding companies any other condition regarding this
Agreement,
and the result of any event referred to in the preceding clause (i) or (ii)
above shall be to increase the cost to the Banks or any Bank Affiliate or such
holding company of issuing, funding or maintaining the Loans or Letters of
Credit (which increase in cost shall be determined by the Banks' reasonable
allocation of the aggregate of such cost increases resulting from such event),
then, upon written request by the Agent (a "Request"), the Company shall pay to
the Agent from time to time as specified by the Agent, additional amounts which
shall be sufficient to compensate the Banks for such increased cost from the
date of such change. The Request shall include a certificate as to such
increased cost incurred as a result of any event mentioned in clause (i) or (ii)
above prepared in reasonable detail (which shall include the method employed by
a Bank in determining the allocation of such costs to the Company) and otherwise
in accordance with this subsection (a), submitted by the Agent, shall be
conclusive evidence, absent manifest error, as to the amount thereof. Each Bank
shall notify the Agent in writing of any demand hereunder, which notice shall
include the aforementioned certificate.
(b) (i) In addition to the foregoing, if any change in any
domestic or foreign law, regulation, order, decree, treaty, directive or
bulletin or in the interpretation or application thereof after the date hereof
by any court or administrative or governmental authority charged with the
administration thereof, or if the Agent's or any Banks' or Bank Affiliate's
compliance with any request or directive (whether or not having the force of
law) from any central bank or monetary authority or other governmental
authority, agency or instrumentality enacted or adopted after the date hereof,
shall in any such case:
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(A) subject the Agent and/or any Bank or
Bank Affiliate to any new or additional tax or change in any tax with respect to
the Notes, the Line of Credit or any Letter of Credit, or change the basis of
taxation of payments to the Agent and/or any Bank or Bank Affiliate of
principal, commitment fee, interest, premium, or any other amount payable under
the Notes; or
(B) impose, modify or hold applicable or
change any reserve (including, without limitation, basic, supplemental, marginal
and emergency reserves) on an industry-wide special deposit, capital adequacy,
compulsory loan or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, advances or other credit extended
by, or any other acquisition of funds for loans by (including, without
limitation, all Eurocurrency funding by all "Eurocurrency liabilities" as
defined in Regulation D of the Board of Governors of the Federal Reserve System,
as amended) any office of the Agent and/or any Bank or Bank Affiliate; or
(C) impose on the Agent and/or any Bank or
Bank Affiliate any other condition or change therein;
and the result of any of the foregoing is to increase the cost to the Agent
and/or any Bank or Bank Affiliate of making, renewing or maintaining advances or
extensions of credit or to reduce any amount receivable thereon then, in any
such case, the Company shall promptly pay the Agent, upon a Request, such
amounts as will compensate the Agent and/or any Bank or Bank Affiliate for such
additional cost or reduced amount receivable. Upon the failure of the Company to
compensate the Agent and/or the Bank or the Bank Affiliate for the amounts set
forth herein within ten (10) Business Days of a Request, then, at the Agent's
option, the obligation of the Banks or any Bank Affiliates to make, convert and
maintain advances hereunder as loans under which the Interest Rate is the LIBOR
Rate, and the right of the Company to elect that the Interest Rate be the LIBOR
Rate, shall forthwith be unavailable and the Interest Rate hereunder shall be
automatically converted to the Prime Rate.
(ii) If the Agent and/or any Bank or Bank Affiliate
becomes entitled to claim any additional amounts payable pursuant to this
subsection (b), the Agent shall promptly submit to the Company a Request with
respect to such entitlement. A certificate as to any additional amounts payable
pursuant to the foregoing submitted by the Agent (and signed by an authorized
officer of the Agent) to the Company shall, absent manifest error, be
conclusive. Each Bank shall notify the Agent in writing of any demand hereunder,
which notice shall include the aforementioned certificate.
(iii) If a Request is given, the Company shall have
the option, exercisable by notice to the Agent given within five (5) Business
Days' after the Company's receipt of such notice, to convert the Interest Rate
to the LIBOR Rate, or the Prime Rate, as applicable; provided, however, that if
the Company makes such election, or if the Interest Rate is converted to another
Interest Rate pursuant to this subsection (b), the Company shall pay any
Breakage Costs incurred in making any such conversion to the Agent promptly,
upon demand, for its account and/or the account of any such Bank or Bank
Affiliate. The Agent shall certify such costs to the Company, which
certification may be based on certifications submitted to the Agent, and such
certification shall be binding absent manifest error.
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(c) If any Bank shall have determined that (i) the
applicability of any law, rule, regulation or guideline adopted pursuant to or
arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards", (ii) the adoption after the date
hereof of any applicable law, rule or regulation regarding capital adequacy, or
any change therein, or (iii) any change in the interpretation or administration
thereof, or compliance by the Banks or any of their parent bank holding
companies with any requirement or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, except any such adoption or change or any such compliance
with a request or directive which applies or has been applied solely to the
Banks or any of their parent bank holding companies by reason of events or
conditions relating solely to the Banks, has the effect of reducing the rate of
return on the Banks or any of their parent bank holding companies capital as a
consequence of its commitment hereunder or to a level below that which the Banks
or such holding companies could have achieved but for such adoption, change or
compliance by an amount deemed by the Banks to be material (for which reduction
of the rate of return shall be determined by the Banks' or any such holding
company's reasonable allocation of such reduction of the rate of return
resulting from such event) then, upon the submission of a Request by the Agent,
the Company shall pay to the Agent, from time to time as specified by the Agent,
such additional amount or amounts which shall be sufficient to compensate the
affected Bank(s) for such reduction. A certificate as to such increased cost
incurred by a Bank as a result of any event mentioned in this subsection (c),
prepared in reasonable detail (which shall include the method employed by such
Bank in determining the allocation of such costs to the Company) and otherwise
in accordance with this subsection (c) submitted by the Agent to the Company,
shall be conclusive evidence, absent manifest error, as to the amount thereof.
Each Bank shall notify the Agent in writing of any Request hereunder, which
notice shall include the aforementioned certificate.
(d) Except as otherwise specifically provided in this Section,
amounts payable by the Company pursuant to this Section shall be payable within
ten (10) Business Days of receipt by the Company of a Request.
(e) Any certificate relating to a Request shall provide
reasonable supporting documentation relative to the calculation of any amounts
set forth thereon.
(f) Notwithstanding any provision of this Section 2.5.6. to
the contrary, prior to giving any Request, the Agent or the Bank providing such
Request shall first use its best efforts (which shall not require additional
costs or administrative burdens on the Agent or the Bank) to take such steps
(including, without limitation, changing its head office or Eurodollar Office)
as would eliminate or reduce any cost or expense to be borne by the Company
under this Section 2.5.6.
(g) In lieu of paying any Request, the Company shall have the
right, within thirty (30) Business Days of the delivery of such Request, to
terminate the Commitments by prepaying the entire principal amount due and
payable under this Agreement, the Notes and the Other Documents in accordance
with Section 2.5.8. hereof. In such an event, the Company shall have no
liability to pay any Request.
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(h) Notwithstanding any provision of this Section 2.5.6. to
the contrary, in no event shall Borrower be obligated to pay any Request which
relates to any income, excise or franchise taxes imposed or sought to be imposed
on the Agent or any of the Banks.
Section 2.5.7. Withholding Tax Exemption. Each Bank that is
not incorporated under the laws of the United States of America or a state
thereof agrees that such Bank will deliver to each of the Company and the Agent,
at least three (3) Business Days before interest or fees first become payable
hereunder for the account of such Bank, two (2) duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, in either case certifying
whether such Bank is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States Federal income
taxes. Each Bank which so delivers a Form 1001 or 4224 further undertakes to
deliver to each of the Company and the Agent two (2) additional copies of such
form (or a successor form) on or before the date that such form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent form so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Company or the Agent,
in each case certifying whether such Bank is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any United
States Federal income taxes, unless 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 advises the Company
and the Agent that it is not capable of receiving payments without any deduction
or withholding of United States federal income tax.
Section 2.5.8. Prepayments of the Loans. The Company may upon
at least three (3) Business Days' notice to the Agent in the case of LIBOR Loans
and upon at least one (1) Business Day's notice in the case of Prime Rate Loans
prepay any Revolving Loan in whole by paying the entire principal amount of such
Loan together with accrued and unpaid interest thereon to the date of such
prepayment and, in the case where the Agent will be required to break a LIBOR
funding contract by reason of such prepayment, any Breakage Costs. Any such
prepayment hereunder shall be applied first to any Breakage Costs and other
amounts due with respect to the Revolving Loan being prepaid, then to accrued
and unpaid interest and finally to the principal due in respect thereof. Any and
all prepayments shall not affect the obligation, if any, to pay the regular
installments required hereunder, until all Obligations have been paid in full.
Section 2.5.9. Sharing of Payments, Etc. If any Bank shall
effect payment of any principal, interest, fee or expense under this Agreement
or any Other Document through the exercise of any right of set-off, banker's
lien, counterclaim or similar right, it shall be deemed to have purchased from
each of the other Banks participations in the Revolving Loans made by or the
Letter of Credit Participations 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 the Banks shall share the benefit of such payment pro rata in accordance
with the respective amounts of unpaid principal of and interest on the Revolving
Loans made by and the Letter of Credit Participations held by each of them. To
such end, 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 Company agrees that any Bank so purchasing a
participation in the Revolving Loans made by or the Letter of Credit
Participations held by the other Banks may exercise all rights of set-off,
banker's
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lien, counterclaim or similar rights with respect to such participation as fully
as if such Bank were a direct holder of the Revolving Loans or the Letter of
Credit Participations 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 Company to
such Bank.
Section 2.5.10. Interpretation. Whenever this Agreement shall
refer to the amount of Revolving Loans, Credits Outstanding and/or Reimbursement
Obligations of or made by or with respect to any Bank as of any date, it shall
mean such Bank's share, based on such Bank's then Commitment Percentage, of all
Revolving Loans, Credits Outstanding and/or Reimbursement Obligations as of such
date.
Section 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Banks to enter into this Agreement
and to make the Loans and to induce the Agent to issue the Letters of Credit,
the Company makes the following representations and warranties to the Agent and
the Banks, which, except as specifically provided below, shall be deemed made as
of the Closing Date and as of the date each Revolving Loan is made and each
Letter of Credit is issued which shall survive the execution and delivery hereof
and each performance hereunder. Any knowledge acquired by the Agent or the Banks
shall not diminish its right to rely upon such representations and warranties.
Section 3.1. Organization, Power and Authority. Meditrust is a
self-administered REIT, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts, and is qualified to do business in each
jurisdiction in which such qualification is necessary in view of its business
and operations or the ownership of its properties, except where the failure to
so qualify would not have a Material Adverse Effect.
Section 3.2. Authority. The execution, delivery and performance by the
Company of this Agreement, the Notes and the Other Documents are within
Meditrust's trust powers, have been duly authorized by all necessary action, and
do not and will not (a) require any consent or approval of the shareholders of
the Company not obtained, (b) contravene Meditrust's Declaration of Trust, (c)
violate any provision of any Legal Requirement (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System) presently
in effect having applicability to the Company, the violation of which would have
a Material Adverse Effect, (d) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Company is a party or by which it or its properties may
be bound or affected, the default under or breach of which would have a Material
Adverse Effect, or (e) result in, or require, the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any of the properties now
owned or hereafter acquired by the Company. The Company is not in default under
any such Legal Requirement or any such indenture, agreement, lease or
instrument, which default would result in or cause any Material Adverse Effect.
Section 3.3. No Breach. Neither the execution nor delivery of this
Agreement or the Notes, nor the offering, issuance and sale of the Notes, nor
fulfillment of nor compliance with the terms
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and provisions hereof and of the Notes will 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, or result in the creation of any Lien upon any of
the properties or assets of the Company pursuant to, the Declaration of Trust of
Meditrust or any agreement (including any agreement with stockholders),
instrument or Legal Requirements to which the Company is subject which would
have a Material Adverse Effect. Meditrust is not a party to, or otherwise
subject to any provisions contained in, any instrument evidencing Indebtedness
of the Company, any agreement relating thereto or any other contract or
agreement (including its Declaration of Trust) which limits the amount of, or
otherwise imposes restrictions on the incurring of, Indebtedness of the Company
of the type to be evidenced by the Notes except as set forth in the Declaration
of Trust and the agreements listed in Schedule 3.3. attached hereto.
Section 3.4. Qualification as a Real Estate Investment Trust. Meditrust
qualified as a REIT under the provisions of the Code, as applicable for its
fiscal years ended December 31, 1988 through December 31, 1993. Appropriate
Federal income tax returns for the fiscal years through December 31, 1993 have
been filed by the Company with the Internal Revenue Service (the "IRS") and no
previously filed return has been examined and reported on by the IRS. Meditrust
is in a position to qualify for the 1994 and 1995 fiscal year as a REIT under
the provisions of the Code. The Company has not incurred any liability for
excise taxes pursuant to Section 4981 of the Code.
Section 3.5. Binding Obligations. This Agreement, the Notes and the
Other Documents, when issued and delivered for value received, constitute the
legal, valid and binding obligations of the Company enforceable against it in
accordance with their respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally or general principles of equity.
Section 3.6. Permits. The Company possesses all material permits,
authorizations, licenses, approvals, waivers and consents, the failure of which
to possess would have a Material Adverse Effect, all of which are in full force
and effect.
Section 3.7. No Consents. The execution, delivery and performance of
the Agreement, the Notes and the Other Documents did not and does not require
any approval, consent or waiver under any material agreement, document, or
instrument to which the Company is a party or by which it or its properties or
assets may be bound or affected. No approval, authorization, consent, waiver or
order of, or registration, application or filing with, any Tribunal was or is
required in connection with the transactions contemplated by the Agreement, the
Notes or the Other Documents.
Section 3.8. Financial Statements. Meditrust has furnished to the Agent
and the Banks its audited consolidated Financial Statements for the fiscal year
ending December 31, 1995. All Financial Statements of the Company heretofore
delivered to the Agent present fairly in all material respects the financial
condition and results of business operations of the Company for the periods
indicated in accordance with GAAP. The Company has no material direct or
contingent liabilities, liabilities for taxes, unusual commitments or unrealized
or unanticipated losses not disclosed in such Financial Statements which when
taken together would have a Material Adverse Effect. Since the date of the
latest dated balance sheet included in the Financial Statements, there has been
no material adverse change in the business operations or financial condition of
the Company from that
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set forth in the balance sheet contained in such Financial Statements except as
disclosed in such Financial Statements or in Schedule 3.8. attached hereto.
Section 3.9. Financial Information. All written data, reports and
information which the Company has supplied to the Agent or the Banks or caused
to be so supplied by a third party on its behalf in connection with this
Agreement are complete and accurate in all material respects and contain no
material omission or misstatement except such as have been corrected in a
writing delivered to the Agent.
Section 3.10. INTENTIONALLY LEFT BLANK.
Section 3.11. Use of Proceeds. Meditrust is not an "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended (15 U.S.C. Section 80(a)(1) et seq.).
Meditrust (i) is not a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (ii) is not
subject to regulation under the Federal Power Act, the Investment Company Act of
1940 or the Interstate Commerce Act, nor is subject to any other statute or
regulation which regulates the incurring of Indebtedness by Meditrust, other
than Federal and State securities laws. The Company does not own any margin
security as that term is defined in Regulation U of the Board of Governors of
the Federal Reserve System. None of the proceeds of the Loans will be used, or
have been used, directly or indirectly, for the purpose of reducing or retiring
any Indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might constitute any of the Loans a
"purpose credit" within the meaning of said Regulation U or Regulations G or X
of the Federal Reserve Board.
Section 3.12. Title to Real and Personal Property. Unless otherwise
disclosed to the Agent, the Company or a Subsidiary of the Company has good and
marketable fee or leasehold title to all its real property, including all
Facilities owned by the Company, a Subsidiary of the Company, a Company Limited
Partnership or a Controlled Limited Partnership, and good and marketable title
to all the other property and assets, including Mortgages, reflected in the
Financial Statements referred to in Section 3.8. hereof or acquired by the
Company subsequent to such date, free of all Liens except (a) property and
assets sold or otherwise disposed of subsequent to such date; (b) Permitted
Liens; and (c) imperfections of title and other Liens not otherwise insured
against that do not materially detract from the value of the property or have a
Material Adverse Effect. All Mortgages have been properly recorded in the
jurisdictions necessary in order to perfect the Company's or a Subsidiary of the
Company's Liens therein. No financing statement under any Uniform Commercial
Code or other law which names the Company or any Subsidiary of the Company as a
debtor relating to any Facility has been filed in any jurisdiction and neither
the Company or any Subsidiary of the Company has signed any financing statement
or any security agreement authorizing any secured party thereunder to file any
such financing statement relating to any Facility except for Permitted Liens or
as set forth on Schedule 3.12. attached hereto.
Section 3.13. Statutory Compliance. Except where non-compliance would
not have a Material Adverse Effect, the Company is in material compliance with
all material Laws existing on the date hereof of all Tribunals applicable to it,
its properties and assets and the business conducted by it, including, without
limitation, (i) the provisions of the Code (Sections 856 through 860)
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relating to the organization of REITs and their qualification and maintenance as
such, (ii) all SEC and state "blue sky" laws relating to the offering its
securities, (iii) ERISA, (iv) the United States Occupational Safety and Health
Act of 1970 and (v) all Environmental Laws.
Section 3.14. Events of Default. No Event of Default has occurred
and/or is continuing and no Default would occur as a result of the execution and
delivery by the Company of this Agreement, the Notes and the Other Documents,
the making of any Revolving Loan or the issuance of any Letter of Credit.
Section 3.15. Other Defaults. The Company is not in default, after
giving effect to any applicable notice, grace or cure periods, in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any indenture, mortgage, deed of trust,
lease, agreement, document or instrument to which it is a party or by which it
or its properties and assets are bound, where such default would have a Material
Adverse Effect.
Section 3.16. Taxes. The Company has filed all tax returns and reports
required to be filed by them with any and all Federal, state or local
governmental bodies, instrumentalities or agencies and has paid in full, made
adequate provisions or established adequate reserves for or is contesting in
good faith in appropriate proceedings, the payment of all taxes, interest,
penalties, assessments or deficiencies shown to be due or claimed to be due on
or in respect to such tax returns and reports.
Section 3.17. Solvency. The Company is currently, and after giving
effect to the transactions contemplated by this Agreement will be, Solvent and
is not contemplating either the filing of a petition under any Federal or state
bankruptcy or insolvency law or the liquidating of all or a major portion of its
properties and assets, and the Company has no knowledge of any Person
contemplating the filing of any such petition against it.
Section 3.18. Ranking of Loan. Except as permitted by Section 7.2. or
as set forth in Schedule 3.18. attached hereto, no Indebtedness of the Company
is secured by or otherwise benefits from any Lien on or with respect to the
whole or any part of the Company's properties or assets, present or future. The
Revolving Loans and other sums payable by the Company hereunder and under the
Notes rank at least equal in terms of seniority and priority with all Unsecured
Indebtedness of the Company and at least pari passu with the Via Banque Credit
Facility. There exists no default or event or condition which, with the giving
of notice or passage of time, or both, would constitute a default under the
provisions of any instrument evidencing such Indebtedness or of any agreement
relating thereto.
Section 3.19. Litigation. Except as set forth on Schedule 3.19.
attached hereto or in the Company's filings with the United States Securities
and Exchange Commission, there are no actions, suits or proceedings by or before
any Tribunal or any arbitration or alternate dispute resolution proceeding,
pending or, to the knowledge of the Company or any of its officers, threatened
against the Company, its Subsidiaries or their properties or assets, which if
adversely determined, would have a Material Adverse Effect.
Section 3.20. Guarantees. Except as permitted in Schedule 1.106. or as
set forth in the Financial Statements referred to in Section 3.8. hereof and
Schedule 3.20. attached hereto, the Company is not a party to any Guarantee or
other similar type of agreement, and the Company has
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not offered its endorsement to any Person which would in any way create a
contingent liability (except by endorsement of negotiable instruments payable at
sight for deposit or collection or similar banking transactions in the Company's
ordinary course of business).
Section 3.21. ERISA. The Company and each member of the Controlled
Group have fulfilled their obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and are in compliance in all
material respects with the currently applicable provisions of ERISA and the
Code, and have not incurred any liability to the PBGC or a Plan under Title IV
of ERISA.
Section 3.22. Environmental Protection. Except as set forth on Schedule
3.22. attached hereto, to the best of the Company's knowledge, after due inquiry
and investigation:
(a) The business operations of the Company, each Subsidiary of
the Company and each Facility comply in all material respects with all
applicable Environmental Laws except where non-compliance would not have a
Material Adverse Effect or result in a material decrease in the value of a
Facility.
(b) Neither the Company nor, to the Company's knowledge, any
Subsidiary of the Company or any Operator has received any notice or claim to
the effect that it is or may be liable to any Person as a result of the Release
or threatened Release of any Hazardous Materials or any letter or request for
information under CERCLA or any other Environmental Laws which would have a
Material Adverse Effect or result in a material decrease in the value of a
Facility, and, neither the Company, any Subsidiary of the Company, any Operator
nor any Facility are the subject of any investigation by a Federal, state or
local governmental instrumentality, body or agency evaluating whether any
remedial action is needed to respond to a Release or threatened Release of any
Hazardous Material or claim, or threatened lawsuit or claim arising under or
related to any Environmental Law which would have a Material Adverse Effect or
result in a material decrease in the value of a Facility.
(c) Neither the Company, any Subsidiary of the Company nor, to
the Company's knowledge, any Operator or any Facility are, nor are any of their
properties, assets and operations, subject to any outstanding written order or
agreement with any Federal, state or local governmental instrumentality, body or
agency or private party respecting any Environmental Laws which would have a
Material Adverse Effect or result in a material decrease in the value of a
Facility.
(d) Neither the Company, any Subsidiary of the Company, any
Operator nor any Facility has filed any notice under any Environmental Law
indicating past or present treatment or disposal of Hazardous Materials except
where non-compliance would not have a Material Adverse Effect or result in a
material decrease in the value of a Facility, and all of the operations of the
Company, any Subsidiary of the Company, any Operator or any Facility which
involve the generation, transportation, treatment, storage or disposal of
Hazardous Materials are in substantial and material compliance with all
Environmental Laws except where non-compliance would not have a Material Adverse
Effect or result in a material decrease in the value of a Facility.
(e) No Hazardous Material exists on, under or about any of the
Facilities, in a manner that could give rise to any claim or suit against the
Company, any Subsidiary of the
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Company, or any Operator, which would have a Material Adverse Effect or any
result in a material decrease in the value of a Facility and neither the
Company, any Subsidiary or the Company, any Operator nor any Facility has filed
any notice or report of a Release of any Hazardous Materials that could give
rise to any such claim or suit against the Company, any Subsidiary of the
Company or any Operator which would have a Material Adverse Effect or result in
a material decrease in the value of a Facility.
Section 3.23. Facilities and Operators. Each Subsidiary of the Company
which is the owner or operator of a Facility and, to the knowledge of the
Company, each Operator is in compliance in all material respects with all
applicable Laws pertaining to the ownership or operation of health care
facilities of the types owned by a Subsidiary of the Company or any Operator.
Section 3.24. Material Subsidiaries. All Subsidiaries of Meditrust are
listed on Schedule 3.24. attached hereto.
Section 3.25. Materiality. Nothing has come to the attention of the
Company that causes it to believe that any documents or agreements delivered or
caused to be delivered by it, or any statements made by the Company or its
agents or representatives, to the Banks or its agents or representatives
regarding the transactions contemplated hereby, contains an untrue statement of
a material fact or omits to state a material fact necessary to make the
statements therein not misleading.
Section 3.26. Intercompany Indebtedness. All Indebtedness of any
Subsidiary of the Company to the Company or to another Subsidiary of the Company
is evidenced by an intercompany promissory note. All Indebtedness of any
Subsidiary of the Company which relates to any Investment is subject to terms
and conditions, including rates of interest and terms of repayment, which are
substantially similar to the terms and conditions of the underlying Investment
in all material respects.
Section 4. CONDITIONS TO OBLIGATIONS OF THE BANKS
The Agent and the Banks shall have no obligations under this Agreement
unless and until they are satisfied, in their reasonable credit judgment, that
all of the following conditions shall have been fulfilled prior to or on the
Closing Date:
Section 4.1. Authorizations. The Agent shall have received:
(i) evidence satisfactory to the Agent to verify the authority
of the Person or Persons signing this Agreement, the Notes and the Other
Documents to legally bind the Company, and the authority of each Person who will
sign the other statements, reports, certificates and documents called for by the
terms of this Agreement and will otherwise act under this Agreement and the
Notes for and on behalf of the Company; and
(ii) the specimen signature of each Person named pursuant to
clause (i) of this Section 4.1. certified by an appropriate officer of each
Company to be a true specimen thereof.
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Section 4.2. Representations and Warranties True. The representations
and warranties contained in Section 3 of this Agreement are true and correct in
all material respects, and the Company shall have so certified to the Agent.
Section 4.3. Performance and Compliance. The Company shall have
performed and complied in all material respects with all covenants, agreements
and conditions in this Agreement, the Notes and the Other Documents which are
required to be performed or complied with by the Company on or prior to the
Closing Date, and the Company shall have so certified to the Agent.
Section 4.4. Delivery of Documents. The Company shall have duly
executed and delivered to the Agent on behalf of the Banks, in form and
substance satisfactory to the Banks and their legal counsel, this Agreement, the
Notes, the Other Documents and all further documents as they may request to
evidence the Obligations. In addition, the Agent on behalf of the Banks shall
have received or agreed to waive or delay the receipt of:
Section 4.4.1. A certificate of a duly authorized officer of
Meditrust certifying as to (A) the resolutions of the Trustees of Meditrust
approving this Agreement, the Notes and the Other Documents to which it is a
party, (B) Meditrust's Declaration of Trust and (C) all documents evidencing
other necessary action and governmental approvals, if any, with respect to the
transactions contemplated by this Agreement.
Section 4.4.2. A certificate from the Secretary of the
Commonwealth of Massachusetts certifying as to the Declaration of Trust of
Meditrust.
Section 4.4.3. A certificate from the Secretary of the
Commonwealth of Massachusetts certifying as to the good standing of Meditrust.
Section 4.4.4. The Company shall deliver a certificate
executed by a duly authorized officer that the Company, after giving effect to
the transactions contemplated by the Agreement, is Solvent on the Closing Date.
Section 4.4.5. The Company's legal counsel shall deliver to
the Agent and the Banks an opinion as to certain matters relating to the
transactions contemplated by this Agreement, the Notes and the Other Documents,
such opinion to be substantially in the form attached hereto as Exhibit E.
Section 4.4.6. Via Banque shall have executed and delivered to
the Banks a letter acknowledging and agreeing as to the pari passu nature of
payments and borrowings under the Line of Credit and the Via Banque Credit
Facility.
Section 4.4.7. Such further documents, instruments and
agreements as the Banks shall reasonably request, all reasonably satisfactory in
form and substance to the Banks and their legal counsel.
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Section 5. CONDITIONS TO MAKING REVOLVING LOANS AND ISSUING LETTERS OF
CREDIT
The Agent and the Banks shall have no obligation to make Revolving
Loans or to issue or purchase participations in Letters of Credit unless and
until they are satisfied, in their sole and absolute discretion, that all of the
following conditions shall have been fulfilled prior to or contemporaneously
with the making of such Revolving Loan or the issuance of such Letter of Credit,
as applicable.
Section 5.1. Notice of Borrowing. The Agent shall have received, in a
timely manner, a Notice of Borrowing or a Letter of Credit Application, as
applicable, in a form reasonably satisfactory to the Agent.
Section 5.2. No Adverse Change. No event, circumstance, or condition
shall exist or shall have occurred and be continuing which has a Material
Adverse Effect and Meditrust shall have so certified.
Section 5.3. Truth of Representations and Warranties. All of the
representations and warranties set forth in Section 3 hereof shall be true and
correct in all material respects as of the date of the requested Revolving Loan
or the issuance of the requested Letter of Credit and Meditrust shall have so
certified.
Section 5.4. No Default. No event which constitutes an Event of Default
has occurred and is continuing, or would occur as a result of the making of the
requested Revolving Loan or the issuance of the requested Letter of Credit and
Meditrust shall have so certified.
Section 5.5. Payment of Fees. The Company shall have paid any fees and
expenses due and payable to the Agent and the Banks under this Agreement and the
Other Documents.
Section 5.6. Authority. To the extent necessary, the authority referred
to in Section 4.1. shall remain in full force and effect and the incumbency of
officers shall be as stated in the certificates of incumbency delivered pursuant
to Section 4.1. or as subsequently reflected in a new certificate of incumbency
delivered to the Agent in connection with the requested Revolving Loan or Letter
of Credit.
Section 5.7. Legal Matters. All legal matters incident to the
transactions contemplated by the requested Letter of Credit shall be reasonably
satisfactory to the Agent and its legal counsel and no change shall have
occurred in any Law or interpretation thereof which, in the opinion of the Banks
and their legal counsel, would make it illegal or against the policy of any
Tribunal for the Agent or any Bank to issue Letters of Credit.
Section 6. AFFIRMATIVE COVENANTS OF BORROWER
The Company covenants and agrees that from the Closing Date until the
payment and performance in full of the Obligations, unless the Agent otherwise
consents in writing:
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6.1. Financial Statements and Reporting Requirements.
(a) Quarterly Reports. As soon as available and in any event
within fifty (50) days after the end of each of the first three fiscal quarters
of each fiscal year, the Company shall provide a consolidated Financial
Statement to the Banks, including consolidated balance sheets as of the end of
such quarter, consolidated statements of income and statements of cash flow for
the period commencing as of the end of the previous fiscal year and ending with
such fiscal quarter (it being understood that for so long as the Company files
reports on Form 10-Q with the SEC, copies of said Form 10-Q shall satisfy its
obligations hereunder), together with a certificate of a duly authorized officer
of Meditrust stating that as of the date of such certificate, to the best of
such officer's knowledge, after reasonable inquiry, no Event of Default or
Default has occurred, or, if an Event of Default or a Default has occurred and
is continuing, a statement as to the nature thereof and the action which the
Company has taken or proposes to take with respect thereto, and further setting
out in such detail as is reasonably required by the Banks.
(b) Annual Reports. As soon as available and in any event
within one hundred (100) days after the end of each fiscal year, the Company
shall provide a consolidated Financial Statement to the Banks for such fiscal
year audited without qualification by Coopers & Lybrand L.L.P. or such an
independent certified public accountant of recognized standing and acceptable to
the Majority Banks, which Financial Statement shall include the consolidated
balance sheets as of the end of such fiscal year, consolidated statements of
income and statements of cash flow for such year and a consolidated statement of
shareholders' equity (it being understood that for so long as the Company files
reports on Form 10-K with the SEC, copies of said Form 10-K shall satisfy its
obligations hereunder), together with a certificate of a duly authorized officer
of Meditrust stating that, as of the date of such certificate, to the best of
such officer's knowledge and after reasonable inquiry, no Event of Default or
Default has occurred, or, if an Event of Default or a Default has occurred and
is continuing, a statement as to the nature thereof and the action which the
Company has taken or proposes to take with respect thereto further setting out
in such detail as is reasonably requested by the Majority Banks.
(c) Borrowing Base Report. As soon as available but in any
event within fifty (50) days of the end of each fiscal quarter, the Company
shall furnish to the Banks a report in the form of Exhibit F attached hereto
setting forth a computation of the Borrowing Base, a listing of all Investments
which are thirty (30) days or more delinquent in payments to the Company and
such other information in respect of the Borrowing Base as the Banks may
reasonably require (the "Borrowing Report").
(d) Covenant Compliance. The Company shall submit with any
quarterly or annual reports required under subsections (a) or (b) above, a
report executed by a duly authorized officer of Meditrust certifying as to the
Company's compliance with the financial covenants set forth in Section 8 hereof
in a form reasonably acceptable to the Banks.
(e) Other Reports. The Company shall also submit with any
quarterly or annual reports required under subsections (a) or (b) above, a
report as to any material litigation relating to the Company not previously
disclosed to the Banks and such other information as the Banks may reasonably
require.
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(f) SEC Reports. As soon as available, the Company shall
provide the Banks with copies of any and all reports and filings required to be
made by the Company with the SEC, including Form 10-Q and Form 10-K.
(g) Additional Reports. The Company shall provide the Banks
with the following additional reports:
(i) as soon as available and in any event within a
reasonable time after the close of each fiscal year of Meditrust copies of the
portions of any and all auditor's letters to the trustees of Meditrust or to any
Subsidiary of the Company regarding any material weakness of the various
accounting practices and control procedures used by Meditrust or any Subsidiary
of the Company;
(ii) promptly after the Company becomes aware of the
commencement thereof, notice of all actions, suits and proceedings against the
Company or any Subsidiary of the Company before any Tribunal which are not fully
covered by insurance without the applicability of any co-insurance provisions or
which have not been bonded and in which either (a) the amount in controversy
exceeds THREE MILLION AND NO/100 DOLLARS ($3,000,000.00) for any single
proceeding or FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) in the aggregate
or (b) the results thereof may have a Material Adverse Effect;
(iii) promptly after becoming aware of a claim by any
Person that the Company or any Subsidiary of the Company is in default under any
agreement entered into in connection with the borrowing of money in excess of
ONE MILLION AND NO/100 DOLLARS ($1,000,000.00), notice of any such claim or
default;
(iv) notice of any material adverse change in the
conduct of the business operations or financial condition of the Company, any
Subsidiary of the Company, or any Company Limited Partnership taken as a whole
promptly upon the Company, any Subsidiary of the Company or any Company Limited
Partnership becoming aware of any such change;
(v) notice of any Release or any danger of a Release
resulting from a condition which exists on any Facility which could form a basis
for a claim pursuant to Environmental Laws or of any notification having been
filed with regard to a Release on or into any Facility under any Environmental
Laws but only if the foregoing may result in a material decrease in the value of
such Facility and such notice shall indicate the steps the Company has or will
take to remediate all hazardous environmental conditions and the reserves it has
or expects to establish in its Financial Statements for such purposes;
(vi) notice of any Facilities which have not provided
the Company with financial and operating reports for a period of ninety (90)
days from the date specified for the delivery thereof promptly upon the passage
of such ninetieth day; and
(vii) promptly after the request of the Agent, a
description of any Indebtedness referred to in Section 7.1(d).
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(h) The Company shall provide the Banks, as soon as possible,
but in any event not later than one hundred (100) days after the end of each
fiscal year of Meditrust, a certificate of a duly authorized officer of
Meditrust stating that Meditrust qualified as a REIT under Sections 856 through
860 of the Code (or any successor provisions thereto) for such fiscal year and
that it is in a position to qualify as such REIT for its current fiscal year.
(i) The Company shall also provide the Banks with such other
information relating to the Company or any of its Subsidiaries (including,
without limitation, any Plan) as the Banks may from time to time reasonably
request.
(j) To the extent any Bank is obligated to do so by applicable
Law, it may deliver to any Tribunal having jurisdiction over it, copies of the
reports and other information provided by the Company to the Banks pursuant to
this Section 6.1.
(k) The Company shall notify the Agent immediately upon the
amendment or modification of the Via Banque Credit Facility and the Banks shall
have a period of five (5) Business Days in which to determine whether or not
they wish to make a corresponding amendment or modification to this Agreement.
Section 6.2. Appraisals. The Company shall, from time to time and upon
the request of the Agent, deliver a Qualified Appraisal with respect to each
Facility included in the Borrowing Base and, notwithstanding the foregoing, the
Agent may, at the Company's expense, obtain an updated Qualified Appraisal with
respect to any Facility included in the Borrowing Base; provided, however, that,
unless an Event of Default has occurred and is continuing beyond any applicable
grace or cure period, the Company shall not have to pay for a new or updated
Qualified Appraisal for which the existing appraisal is less than eighteen (18)
months old or expend more than FIFTY THOUSAND ($50,000.00) in any twelve (12)
month period in respect of appraisals.
Section 6.3. Maintenance of Property.
(a) The Company covenants, on behalf of itself and each of its
Subsidiaries, to keep and maintain, or to use all reasonable legal remedies to
cause the Operator of each Facility to keep and maintain, all of their
respective material property in good repair, working order and condition
reasonable wear and tear excepted, and from time to time to make, or use all
reasonable legal remedies to cause to be made, all proper repairs, renewals or
replacements, betterments and improvements thereto so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times.
(b) The Company covenants, on behalf of itself and each of its
Subsidiaries, to procure and maintain, or use all reasonable legal remedies to
cause the Operator of each Facility to procure and maintain, (i) all necessary
licenses and permits and (ii) if operating hospital facilities, all
accreditations or health care facilities accredited, as appropriate, by the
Accreditation Association for Ambulatory Care and the Joint Commission on
Accreditation of Healthcare Organizations (or any successors thereto).
(c) The Company, on behalf of itself and each of its Subsidiaries,
covenants to (i) keep all of its respective insurable properties insured, or to
use all reasonable legal remedies to cause the
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Operator of each Facility to keep such property insured, against loss or damage
by theft, fire, smoke, sprinklers, riot and explosion, such insurance (the
"Insurance") to be in such form, in such amounts and against such other risks
and hazards as are customarily maintained by other Persons operating similar
business and having similar properties in the same general areas in which the
Company or its Subsidiaries presently owns Facilities, including but not limited
to liability coverage; (ii) with respect to Facilities operated pursuant to
Leases or Mortgages in effect on the date of this Agreement, to use all
reasonable legal remedies to cause the Operators of such Facilities to place the
Insurance on each such Facility with an insurer which is financially sound and
reputable, and (iii) with respect to any Facility operated pursuant to a Lease
or Mortgage entered into after the date of this Agreement, to include in such
Lease or Mortgage contractual provisions requiring the Operator thereunder to at
all times have Insurance in effect with respect to such Facility, carried by an
insurer which is financially sound and reputable, and the Company covenants to
use all reasonable legal remedies to enforce such contractual provisions. The
Company further covenants, on behalf of itself and each of its Subsidiaries,
that it shall require, or use its best efforts to cause the Operator of each
Facility to require, that the insurer with respect to each such Insurance policy
provide for thirty (30) days' advance written notice to the Company of any
cancellation or termination of, or other change of any nature whatsoever in, the
coverage provided under any such policy.
Section 6.4. Maintenance of Existence. (a) Meditrust shall preserve and
maintain (i) its qualifications as a REIT under Sections 856 through 860 of the
Code (and any successor provisions thereto) and (ii) the applicability to the
Company and its shareholders of the method of taxation provided for in Section
857(b) of the Code (and any successor provision thereto).
(b) Meditrust shall preserve and maintain its existence as a
Massachusetts business trust and all of its rights, franchises and privileges as
a business trust and shall cause each of its Subsidiaries to preserve and
maintain its existence as a corporation or partnership in the state in which it
is incorporated or organized and all of its rights, franchises and privileges as
a corporation or partnership. Notwithstanding the foregoing provisions of this
subsection (b), (i) Meditrust may change its existence as a Massachusetts
business trust with the prior written consent of the Banks, which consent shall
not be unreasonably withheld, conditioned or delayed, if such change does not,
in the reasonable opinion of the Banks and their counsel, have a Material
Adverse Effect and (ii) any Subsidiary or Controlled Limited Partnership may be
dissolved if it no longer possesses any assets.
Section 6.5. Taxes and Other Assessments. The Company shall pay and
discharge, and maintain adequate reserves for the payment and discharge of, all
taxes, assessments, government charges or levies, or claims for labor, supplies,
rent or other obligations made against it or its properties and assets which, if
unpaid, might become a Lien against the Company, any Subsidiaries of the Company
or their properties and assets, except liabilities which are being contested in
good faith in appropriate proceedings or with respect to which the Company has
made adequate provision or established adequate reserves, except that the
Company shall pay all such taxes, assessments, government charges, levies or
claims forthwith upon the commencement of proceedings to foreclose any Lien that
may have attached as security therefor.
Section 6.6. Inspection. The Company shall permit the Agent or any of
its officers, agents, attorneys or accountants, at its expense and at any time
during normal business hours and upon reasonable prior notice (or if an Event of
Default shall have occurred and is continuing, at any time
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and without prior notice), to (i) examine and take abstracts from the books and
records of the Company and any Subsidiary of the Company; and (ii) discuss the
affairs, finances and business operations of the Company and any Subsidiary of
the Company with its and their appropriate officers, employees and accountants;
provided, however, that the right of inspection under this Section 6.6. is
subject to the contractual provisions contained in the Leases and Mortgages and
the legal rights of patients in Facilities.
Section 6.7. Notices of Default. Upon becoming aware of the occurrence
of any Default or Event of Default the Company shall promptly notify the Agent
thereof in writing.
Section 6.8. Maintenance of Books and Records. The Company and its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of their business and financial
transactions, and such entries will be made in accordance with GAAP including
the maintenance of adequate reserves for depreciation of property, if such
reserves are required by GAAP.
Section 6.9. Maintenance of Permits. The Company and its Subsidiaries
shall obtain and/or maintain in full force and effect all material permits,
authorizations, licenses, approvals, waivers and consents which they presently
possesses and are advisable to maintain or which may become necessary in the
future to conduct their business operations.
Section 6.10. Use of Proceeds. The Company will use the proceeds of the
Loans solely for the purposes set forth in Section 2.1.2. hereof.
Section 6.11. Change of Offices. The Company shall give the Agent
prompt written notice of any change or relocation of its chief executive office.
Section 6.12. Compliance with Laws. The Company and its Subsidiaries
will, or will use all reasonable legal remedies to cause the Operators of each
of the Facilities to, comply in all material respects with all Legal
Requirements applicable to such Operators or to the Company or any Subsidiary of
the Company as owner or mortgagee of health care facilities, such compliance to
include, without limitation, compliance with all applicable Laws pertaining to
the operation of health care facilities of the types owned by the Company or its
Subsidiaries, paying before the same become delinquent all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or its properties, and paying all its properties, except to the extent contested
in good faith by proper proceedings which stay the imposition of any penalty,
fine or Lien resulting from the non-payment thereof and with respect thereof,
and except to the extent that payment of such items or compliance with the
relevant Legal Requirements is the responsibility of the Operator of the
Facility, where the Company or any of its Subsidiaries is using all reasonable
legal remedies to enforce its rights against such Operator and to obtain
compliance by such Operator with the relevant Legal Requirements, and except
where the non-payment or non-compliance would not have a Material Adverse
Effect.
Section 6.13. Compliance with Environmental Laws.
(a) The Company shall promptly advise the Agent in writing and
in reasonable detail of (i) any Release of any Hazardous Material required to be
reported to any Tribunal under
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any applicable Environmental Laws which would have a Material Adverse Effect or
result in a material decrease in the value of a Facility; (ii) any and all
written communications received by the Company or any of its Subsidiaries with
respect to claims or suits under such Environmental Laws or any Release of
Hazardous Materials required to be reported to any Tribunal which would have a
Material Adverse Effect or result in a material decrease in the value of a
Facility; or (iii) any remedial action taken by the Company or any of its
Subsidiaries, each Operator or any other Person in response to any Hazardous
Materials on, under or about the properties or assets of the Company or any of
its Subsidiaries or any Facility, the existence of which could give rise to a
claim or suit which would have a Material Adverse Effect, result in a material
adverse change of any Operator's business operations or financial condition or
result in a material decrease in the value of a Facility.
(b) The Company shall, and shall use all reasonable efforts to
insure that each of its Subsidiaries, each Facility and each Operator, comply in
all material respects with all Environmental Laws and establish and maintain
policies and procedures to ensure and monitor continued compliance with all
Environmental Laws. The Company shall, and shall use all reasonable efforts to
insure that each of its Subsidiaries, Facilities and Operators, to the extent
required by any Environmental Law, promptly take any and all necessary remedial
action in connection with the presence, storage, use, disposal, transportation
or Release of any Hazardous Materials on, under or about its business premises
or any Facility.
Section 6.14. Business of the Borrower. The Company, on a consolidated
basis, will continue to operate the same primary business as those in which it
currently operates (i.e., investing in and financing Facilities).
Section 6.15. Ranking of Loan. The obligations of the Company to the
Banks under this Agreement and the Notes shall rank at least equal in seniority
and priority with all other Unsecured Indebtedness of the Company and, in the
event that any of such other Indebtedness shall be secured, the obligations to
the Banks hereunder shall be secured likewise so as to continue to rank at least
equal in seniority and priority with such other secured Indebtedness.
Section 6.16. Intercompany Indebtedness. All Indebtedness of any
Subsidiary of the Company to the Company or any other Subsidiary shall be
evidenced by an intercompany promissory note executed within 30 days after the
issuance of such indebtedness. All Indebtedness of any Subsidiary of the Company
which relates to any Investment shall be subject to terms and conditions,
including rates of interest and terms of repayment, which are substantially
similar to the terms and conditions of the underlying Investment in all material
respects.
Section 7. NEGATIVE COVENANTS
The Company covenants and agrees that from the date hereof until the
payment and performance in full of the Obligations, unless the Agent otherwise
consents in writing:
Section 7.1. Limitation on Indebtedness. Neither the Company nor any of
its Subsidiaries shall create, incur or assume any Indebtedness other than the
following ("Permitted Indebtedness"):
(a) Indebtedness of the Company or any of its Subsidiaries to the
Agent, the Banks or any Bank Affiliates;
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(b) Indebtedness existing as of the date of this Agreement and
disclosed on Schedule 7.1 hereto or in the Financial Statements referred to in
Section 3.8. hereof;
(c) Indebtedness under the Via Banque Credit Facility; and
(d) Indebtedness of the Company which satisfies the following
conditions:
(1) the additional Indebtedness must conform in all material
respect with the restrictions contained in Section 7.2. hereof regarding
additional Liens;
(2) the terms and provisions of the instrument or instruments
controlling the covenants, events of default and acceleration of maturity
provisions of such additional Indebtedness may not be less favorable to the
Company than the comparable terms and provisions set forth in this Agreement;
provided, however, that the Company or its Subsidiaries may incur additional
Indebtedness which does not exceed FIFTY MILLION AND NO/100 DOLLARS
($50,000,000.00) in the aggregate at any one time outstanding, plus the amount
outstanding pursuant to Section 7.1(f), on terms and provisions which are less
favorable to the Company than the comparable terms and provisions hereof;
(3) the additional Indebtedness and the instrument or
instruments controlling the creation, assumption or issuance thereof shall
satisfy the requirements of Section 6.15 hereof;
(4) any additional Indebtedness otherwise permitted by this
Section 7.1. shall not affect the Company's obligation to prepay outstanding
Loans pursuant to Section 2.1.14 hereof; and
(5) the proceeds of such additional Indebtedness shall be used
to prepay outstanding Loans as required by said Section 2.1.14;
(e) Indebtedness of any Subsidiary of the Company to the Company the
proceeds of which are used to fund Investments in the ordinary course of the
business of the Company; and
(f) Indebtedness relating to $3,475,000 Manatee County, Florida First
Mortgage Revenue Refunding Bonds, Series 1995 (Meditrust Project) or any
refinancing thereof in an amount not to exceed THREE MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($3,500,000.00) and Northwood Nursing Home, Bedford,
New Hampshire, CFHA Project No. 024- 43039-PM) or any refinancing thereof in an
amount not to exceed SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($7,500,000.00).
Section 7.2. Negative Pledge/Encumbrances. Neither the Company nor any
of its Subsidiaries shall not create, incur, assume or suffer to exist any Lien
on any of its properties and assets, or assign or otherwise convey any right to
receive income with respect to, any of its properties and assets except the
following ("Permitted Liens"):
(a) Liens for taxes, assessments and governmental charges not
yet due and payable or which are being actively contested in good faith by
appropriate proceedings or for which adequate reserves have been established in
accordance with GAAP,
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(b) other Liens incidental to the conduct of the Company's or
any Subsidiary's business or the ownership of its property and assets which were
not incurred in connection with the borrowing of money or the obtaining of
advances or credit, and which do not in the aggregate materially detract from
the value of its property or assets or materially impair the use thereof in the
operation of its business,
(c) existing Liens securing Indebtedness of the Company or any
its Subsidiaries that is outstanding on the Closing Date and set forth in
Schedule 7.1. attached hereto or as otherwise described in the Financial
Statements (including, for this purpose, any substitute Lien required to be
created to secure such Indebtedness where (i) either the existing Lien was
released to enable the Company or any such Subsidiary to comply with the option
provisions under a Facility Lease, which permits the lessee thereunder to
purchase the Facility covered by such Lease, or the substitution provisions
under a Facility Lease, which permit the lessee of such Facility to substitute
one property for another under the relevant Lease, and (ii) a Qualified
Appraisal has been obtained which shows that the property covered by such
substitute Lien is of equivalent value to the property it has replaced, and
(iii) the Board of Trustees of Meditrust has made a good faith determination
that the property subject to such substitute Lien is of equivalent value to the
property it has replaced, and (iv) the failure to create such Lien would create
a default under the terms of the instrument governing such Indebtedness);
provided, that neither the Company nor any of its Subsidiaries may create,
assume, incur or suffer to exist any Lien upon any of its property or assets to
secure any Indebtedness set forth in Schedule 7.1. or as is otherwise described
in the Financial Statements that is hereafter renewed, refunded, extended or
refinanced,
(d) Liens incurred in connection with the borrowing of money
not otherwise permitted provided that immediately after creation of such Lien,
the total amount of Indebtedness secured by Liens permitted by this Agreement
will not exceed 15% of the shareholders' equity in the Company; provided,
further, that (A) nothing in this subsection (d) shall be deemed to permit any
transaction which would otherwise be prohibited by this Agreement and (B)
shareholders' equity shall, for the purpose of all calculations thereof under
this subsection (d) only, be reduced by the amount by which the Company's
intangible assets exceed five percent (5%) of shareholders' equity,
(e) Liens (other than those permitted by subsections (a)
through (d) of this Section 7.2.) securing Indebtedness in an aggregate
principal amount at any time outstanding not exceeding ONE HUNDRED THOUSAND AND
NO/100 DOLLARS ($100,000.00) for the Company and its Subsidiaries taken as a
whole, and
(f) Liens on property of the Company or any of its
Subsidiaries other than those permitted by subsections (a) through (e) of this
Section 7.2., provided that the Indebtedness incurred under this Agreement shall
be equally and ratably secured, on a pari passu and pro rata basis, with any and
all Indebtedness hereinafter incurred by the Company or any of its Subsidiaries
and secured by such Lien.
Section 7.3. Investments. Neither the Company nor any Subsidiary shall
make or permit to remain outstanding any loan or advance to, or own, purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any Person, except that the Company and any
Subsidiary may:
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(a) invest in Permitted Investments and, to the extent
permitted by Section 7.6., Gross Real Estate Investments and, to the extent
permitted by Section 7.7., Construction Investments;
(b) make or permit to remain outstanding loans and advances to
any Subsidiary;
(c) own, purchase or acquire stock, obligations or securities
of, or any other interest in, a Subsidiary or another Person which immediately
after such purchase or acquisition will be a Subsidiary;
(d) acquire and own stock, obligations or securities, or other
interests, received in settlement of debts (created in the ordinary course of
business) owing to the Company or any Subsidiary, provided, that such stock,
obligations, securities or other interests shall be carried on the books of the
Company at the lesser of book value or fair market value, such valuation to be
as determined by the board of trustees of Meditrust in good faith, in the case
of any debt in an aggregate principal amount equal to or exceeding ONE MILLION
AND NO/100 DOLLARS ($1,000,000.00);
(e) make or permit to remain outstanding travel and other like
advances to officers and employees in the ordinary course of business;
(f) own, purchase or acquire stock, obligations or securities
of any Person, including, without limitation, making mortgage loans, entering
into sale and leaseback transactions not otherwise prohibited by this Agreement,
or investing in partnerships, to the extent that any such investments are in the
ordinary course of business and not prohibited by Meditrust's Declaration of
Trust, as the same may from time to time be amended; and
(g) own, purchase or acquire stock, obligations or securities
of any REIT; provided, however, that the Company shall not purchase or acquire
stock, obligations or securities of any REIT, which when aggregated with all
other existing REIT investments of the Company, exceeds five percent (5%) of the
Company's total assets as defined by GAAP.
Section 7.4. ERISA. Neither the Company nor any member of the
Controlled Group shall terminate any Plan so as to result in any material
liability to the Company or any Subsidiary to the PBGC or permit to exist any
occurrence of any "reportable event" (as defined in Title IV of ERISA), or any
other event or condition, which presents a material risk of such a termination
by the PBGC of any Plan.
Section 7.5. Fiscal Year. The Company shall not change its fiscal year
end.
Section 7.6. Gross Real Estate Investments. The Company and its
Subsidiaries shall not have Gross Real Estate Investments relating to a single
Operator which exceed, in the aggregate, thirty percent (30%) of the Company's
and its Subsidiaries' Gross Real Estate Investments.
Section 7.7. Construction Investments. The Company and its Subsidiaries
shall not permit the Construction Investments of the Company and its
Subsidiaries to exceed twenty-five percent (25%) of Gross Real Estate
Investments. In addition, neither the Company nor any Subsidiary shall
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make a Construction Investment for a Facility unless (i) there is included in
the terms thereof an agreement for the conversion of the Company's or such
Subsidiary's interests in the Facility upon the completion thereof into full
ownership, a mortgage interest or majority partnership interest and (ii), if a
mortgage interest, the Company or a Subsidiary of the Company shall receive or
retain a first Lien in such Facility and otherwise satisfy all Legal
Requirements.
Section 7.8. Interest Rate Protection. The Company shall not permit
more than twenty-five percent (25%) of its consolidated Total Capital to bear
interest at other than fixed rates; provided, however, that if and to the extent
that any of such consolidated Total Capital is subject to an interest rate
protection agreement approved by the Agent (which approval shall not be
unreasonably withheld, conditioned or delayed), such consolidated Total Capital
shall be deemed to bear interest at a fixed rate.
Section 7.9. Dividends. Meditrust shall not pay or declare any Dividend
on any of its shares of beneficial interest or make any other distribution on
account thereof, or redeem or otherwise acquire, directly or indirectly, any of
its shares of beneficial interest if such action by Meditrust would constitute
an Event of Default or Default, or an event of default or default under any
other material agreement to which Meditrust is a party. This Section 7.9. shall
not apply to the payment or distribution made in the form of shares of
beneficial interest of Meditrust.
Section 7.10. Amendment of Declaration of Trust. Meditrust shall not
amend its Declaration of Trust except if (a) such amendment is required by
applicable law or (b) the Agent consents to such amendment, which consent shall
not be unreasonably withheld. In the event of any such amendment, Meditrust
shall promptly forward copies thereof to the Banks.
Section 7.11. Future Leases. Neither the Company nor any Subsidiary
shall become a party to any Lease after the Closing Date except for a Lease
where the obligations of the lessee to make payments under such Lease cover
fully the Company's or such Subsidiary obligations to make principal, interest
and other payments on the Indebtedness relating to the Facility which is the
subject of such Lease, if any, including, without limitation, all interest rate
adjustments or escalations, prepayment penalties and similar payments.
Section 7.12. Leases. Neither the Company nor any of its Subsidiaries
shall create or suffer to exist any obligations for the payment of rent by the
Company or such Subsidiary for any property under leases (other than capitalized
lease obligations included as Indebtedness of the Company or such Subsidiary)
except for the following:
(i) ground leases for Facilities existing on the Closing Date;
(ii) ground leases for terms no less than ten (10) years in connection
with sale/leaseback transactions of Facilities;
(iii) office leases in the ordinary course of business; and
(iv) office equipment and automobile leases in the ordinary course of
business.
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Section 7.13. Prohibited Transactions. Neither the Company nor any of
its Subsidiaries shall engage in any prohibited transactions as such term is
defined in Section 857(b)(6) of the Code (except that the Company or a
Subsidiary may sell, transfer or otherwise dispose of a Facility within four (4)
years after the acquisition thereof so long as (i) such disposition, including
the excise taxes attributable thereto, will not have a Material Adverse Effect
and (ii) the trustees of Meditrust have theretofore made a good-faith
determination that such disposition is in the best interests of the Company, nor
shall the Company or a Subsidiary incur any material liability for excise taxes
pursuant to Section 4981 of the Code.
Section 7.14. Mergers. Neither the Company nor any of its Subsidiaries
shall merge or consolidate with, or sell, assign, lease or otherwise dispose of
(whether in one transaction or a series of transactions) all or substantially
all of its properties and assets (whether now owned or hereafter acquired) to
any Person, except that (i) any Subsidiary may dispose of its properties and
assets (subject to the limitations of Section 7.13. hereof) to Meditrust or any
Subsidiary, (ii) any Subsidiary may dispose of its properties and assets to any
Person other than Meditrust or any Subsidiary if the proceeds of such
disposition are applied in accordance with the provisions of Section 2.1.14. and
(iii), notwithstanding Sections 7.16 and 7.17 to the contrary, Meditrust or a
Subsidiary may merge or consolidate with any other Person if in such transaction
Meditrust or the Subsidiary is the surviving entity.
Section 7.15. Change in Business. The Company shall not make any
material change in the nature of its business as conducted as of the Closing
Date.
Section 7.16. Issuance of Stock by Subsidiaries. The Company shall not
permit any Subsidiary to issue, sell or dispose of any shares of its stock of
any class (including any warrants, rights or options to purchase or otherwise
acquire stock or other securities exchangeable for or convertible into stock) or
any of its partnership or other equity interests, except to Meditrust or any
wholly-owned Subsidiary, and except (i) for the purpose of qualifying directors
and (ii) to the extent that holders of minority interests may be entitled to
purchase stock by reason of validly pre-existing preemptive rights.
Section 7.17. Sale of Stock and Indebtedness. The Company shall not
sell or otherwise dispose of, or part with control of, any shares of stock or
Indebtedness of any Subsidiary, except to another Subsidiary, and except that
all shares of stock and Indebtedness of any Subsidiary at the time owned by or
owed to the Company and any Subsidiaries may be sold as an entirety for a cash
consideration which represents the fair value (as determined in good faith by
the trustees of Meditrust) at the time of sale of the shares of stock and such
Indebtedness; provided, that the assets of such Subsidiary do not constitute,
when aggregated with all sales during the four (4) most recently completed
fiscal quarters, ten percent (10%) of the Company's consolidated total assets
(as defined by GAAP) or ten percent (10%) of the Company's Operating Cash Flow;
and provided further, that at the time of such sale, such Subsidiary shall not
own, directly or indirectly, any shares of stock or Indebtedness of any other
Subsidiary (unless all of the shares of stock and Indebtedness of such other
Subsidiary are being sold simultaneously as permitted by this Section 7.17.).
Section 7.18. Transactions with Affiliates. Neither the Company nor any
Subsidiary shall directly or indirectly, purchase, acquire or lease any property
from, or sell, transfer or lease any
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property to, exchange any property with, render any service to or otherwise deal
with, (i) any Affiliate, (ii) any Person owning, beneficially or of record,
directly or indirectly, either individually or together with all other Persons
to whom such Person is related by blood, adoption or marriage, equity securities
of the Company aggregating ten percent (10%) or more of the voting power of the
Company or (iii) any Person related by blood, adoption or marriage to any Person
described or coming within the provisions of clause (i) or (ii) of this Section
7.18., provided that the Company may sell to or purchase (within the limitations
of Section 7.18.) from any such Person shares of equity securities of, or other
interests in, the Company; provided, however, that this Section shall not
prohibit transactions which are in the ordinary course of business of the
Company or its Subsidiaries, and which are made upon fair and reasonable terms
no less favorable to the Company or its Subsidiaries involved than could be
obtained in a comparable arm's-length transaction with a Person which is not an
Affiliate.
Section 8. FINANCIAL COVENANTS.
The Company covenants and agrees that from the date hereof, until the
payment and performance in full of the Obligations, unless the Banks otherwise
consent in writing:
Section 8.1. Cash Flow Coverage. Meditrust shall not permit the ratio
of (x) its Operating Cash Flow plus its Interest Expense to (y) its Interest
Expense to be less than 2.0 to 1.0 at the end of each fiscal quarter.
Meditrust's compliance with said ratio shall be calculated on a year-to-date
basis.
Section 8.2. Modified Cash Flow Coverage. Meditrust shall not permit
the ratio of (x) its Modified Operating Cash Flow plus its Interest Expense to
(y) its Interest Expense plus its Dividends plus its Balloon Payments to be less
than 1.0 to 1.0 at the end of each fiscal quarter. Meditrust's compliance with
said ratio shall be calculated on a year-to-date basis.
Section 8.3. Total Liabilities to Tangible Net Worth. Meditrust shall
not permit the ratio of (x) its Total Liabilities to (y) its Tangible Net Worth
to be greater than 1.75 to 1.0 at any time.
Section 8.4. Tangible Net Worth. Meditrust shall maintain a Tangible
Net Worth at all times of at least ONE BILLION EIGHTY MILLION AND NO/100 DOLLARS
($1,080,000,000.00) plus seventy-five percent (75%) of the net amount received
by Meditrust from the sale of equity securities, the exercise of warrants and
the conversion of debentures to equity after the Closing Date.
Section 8.5. Establishment of Covenants. The Company acknowledges that
the foregoing covenants were established by the Company and the Banks on the
basis of financial information and forecasts provided to the Banks by the
Company in connection with the Banks' evaluation and underwriting of the Line of
Credit after leaving a margin in favor of the Company which the Company and the
Banks have mutually agreed is fair. Accordingly, the Company and the Banks have
mutually agreed that the Company's failure to comply with the express terms of
any financial covenant shall be deemed material for the purposes of this
Agreement.
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Section 9. THE AGENT
Section 9.1. Appointment, Powers and Immunities. Each Bank and each
subsequent holder of the Notes and the Letter of Credit Participations hereby
irrevocably appoints and authorizes the Agent to act as their agent under this
Agreement and the Other Documents with such powers as are specifically delegated
to the Agent by the terms of this Agreement and the Other 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 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 Documents
or in any certificate or other document referred to or provided for in, or
received by any of them under, this Agreement or the Other Documents, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the Other Documents or any other document referred to or
provided for herein or therein or for the collectibility of the Loans or the
Letter of Credit Participations or for any failure by the Company to perform any
of its obligations under this Agreement, the Notes or the Other 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 them under this Agreement, or under the Other Documents
or in connection herewith or therewith, except for 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 the Agent 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 Documents, the Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or the Other Documents in accordance with instructions signed by
the Banks, and such instructions of the Banks and any action taken or failure to
act pursuant thereto shall be binding on all of the Banks. The Agent shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to their rights and duties under this Agreement and the Other
Documents. The Agent may utilize the services of such Persons as the Agent in
its sole discretion may reasonably determine.
Section 9.3. Payments.
(a) A payment by the Company to the Agent under this
Agreement, the Notes or any of the Other Documents for the account of any Bank
shall constitute a payment to such Bank. Except as otherwise provided in this
Agreement, the Agent agrees promptly to distribute to each Bank such Bank's pro
rata share of payments received by the Agent for the account of the Banks except
as otherwise expressly provided in this Agreement, the Notes or any of the Other
Documents.
(b) If in the opinion of the Agent, the distribution of any
amount received by the Agent in such capacity hereunder, under this Agreement,
the Notes or any of the Other Documents
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could reasonably be expected to involve the Agent in liability, the Agent may
refrain from making distribution until the Agent's right to make distribution
shall have been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and distributed by
the Agent is to be repaid, each Person to whom any such distribution shall have
been made shall either repay to the Agent its proportionate share of the amount
so adjudged to the repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
Section 9.4. Holders. The Agent may deem and treat the holder of any
Letter of Credit Participation as the absolute owner for all purposes hereof
until the Agent shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee or transferee.
Section 9.5. Events of Default. The Agent shall not be deemed to have
knowledge of the occurrence of any Default or Event of Default (other than the
nonpayment of principal of or interest on the Loans or the Reimbursement
Obligations) unless the Agent have received notice from a Bank or the Company
specifying such Event of Default or Default and stating that such notice is a
"Notice of Default." In the event that the Agent receives such a "Notice of
Default" or in the event of any nonpayment of principal or interest on the Loans
or the Reimbursement Obligations, the Agent shall give prompt notice thereof to
the Banks and shall take such action with respect to such Event of Default or
Default as shall be directed by the Majority Banks.
Section 9.6. Rights as a Bank. With respect to its Commitment, its
Letter of Credit Participation 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 an
Agent, and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. The Agent and its Bank
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 the Company, as if it were not acting as the Agent, and the Agent
may accept fees and other consideration from the Company for services in
connection with this Agreement or any of the Other Documents or otherwise
without having to account for the same to the Banks.
Section 9.7. Indemnification. The Banks shall indemnify the Agent (to
the extent not reimbursed by the Company hereunder), ratably in accordance with
their respective Commitments and/or Letter of Credit Participations, for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Agent in its capacity as
the Agent under this Agreement in any way relating to or arising out of this
Agreement or any of the Other Documents or any other document contemplated
hereby or thereby or referred to herein or therein (including, without
limitation, the costs and expenses which the Company is obligated to pay under
Section 12.4. hereof, but excluding, unless an Event of Default has occurred and
is continuing, normal administrative costs and expenses incident to the
performance of their agency duties hereunder) or the enforcement of any of the
terms of this Agreement, the Other Documents or of any such other documents;
provided, however, 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 Person
to be indemnified.
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Section 9.8. 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 the Company 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 Documents. The Agent shall not
be required to keep itself informed as to the performance or observance by the
Company of this Agreement or the Other Documents or any other document referred
to or provided for herein or therein or to inspect the properties or books of
the Company or any Subsidiary. Except for (i) notices, reports and other
documents and written information delivered by the Company to the Agent
hereunder or under the Other Documents (copies of all of which the Agent shall
immediately distribute to the Banks), or required to be delivered by the Company
to all of the Banks and (ii) notices, reports and other documents required to be
delivered by the Agent hereunder to the Banks, the Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the financial condition or business of the Company or any Subsidiary,
which may come into the possession of the Agent or any of its Bank Affiliates.
Section 9.9. Failure to Act. Except for action expressly required of
the Agent hereunder or under the Other Documents, the Agent shall in all cases
be fully justified in failing or refusing to act hereunder or thereunder unless
they shall be indemnified to their satisfaction by the Banks against any and all
liability and expense that may be incurred by them by reason of taking or
continuing to take any such action.
Section 9.10. Resignation of Agent. The Agent may resign at any time by
giving sixty (60) days prior written notice thereof to the Banks and the Company
and, unless otherwise approved by the Majority Banks, the Agent shall resign
within thirty (30) days after the date on which its Commitment (plus the
Commitments of any of its Bank Affiliates) is reduced to less than FIFTEEN
MILLION AND NO/100 DOLLARS ($15,000,000.00); provided, however, that such
resignation shall not be effective until the appointment of a successor Agent as
provided for herein. Upon any such resignation, the Majority Banks shall have
the right to appoint a successor Agent. Unless an Event of Default shall have
occurred and be continuing, such successor Agent shall be acceptable to the
Company. If no successor Agent shall have been so appointed by the Banks as
aforesaid and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a bank or
financial institution of recognized standing. 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 as an Agent. After any retiring
Agent's resignation, the provisions of this Agreement, the Notes and the Other
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by the Agent while it was acting as the Agent.
Section 9.11. Cooperation of Banks. The Agent shall provide the other
Banks with such information and documentation as such other Bank shall
reasonably request relating to the performance of its duties hereunder,
including all information relative to the outstanding balance of principal,
interest and other sums owed to such other Banks by the Company, and shall
cooperate
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with the other Banks with respect to any and all collections and/or foreclosure
proceedings at any time commenced against the Company or any Subsidiary or
otherwise in respect of any collateral on behalf of the Banks.
Section 9.12. Actions by Agent. In case one or more Events of Default
have occurred and shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Agent shall, if (a) so requested by the
Majority Banks and (b) the Majority Banks have provided to the Agent such
additional indemnities and assurances against expenses and liabilities as the
Agent may reasonably request, proceed to enforce the provisions of any of the
Other Documents authorizing the sale or other disposition of all or any part of
any collateral and exercise all or any such other legal and equitable and other
rights or remedies as it may have in respect of any such collateral. The
Majority Banks may direct the Agent in writing as to the method and the extent
of any such sale or other disposition or other rights or remedies as it may have
in respect of such collateral, the Banks hereby agreeing to indemnify and hold
the Agent harmless from all liabilities incurred in respect of all actions taken
or omitted in accordance with such directions; provided, however, that the Agent
need not comply with any such direction to the extent that the Agent reasonably
believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction. In any event, the
Banks agree, as among themselves, that the Agent shall not, without the consent
or approval of the Majority Banks, (i) consent or agree to any amendment or
waiver of any material term, condition or covenant contained in this Agreement
or the Other Documents (other than those provisions that may only be amended or
waived with the unanimous approval of the Banks under Section 9.14), (ii)
declare any Event of Default or determine that a Material Adverse Effect has
occurred, (iii) exercise any right or remedy with respect to the acceleration or
collection of the Obligations or (iv) take any other action which requires the
consent or approval of the Banks under this Agreement or the Other Documents.
Section 9.13. Security.
(a) The Agent acknowledges to the other Banks that it is
acting in an agency capacity hereunder and that any liens and security interests
in any collateral secure the Obligations of the Company owing to all of the
Banks.
(b) Notwithstanding anything to the contrary set forth herein,
each of the parties hereto acknowledges and agrees that the respective rights,
benefits and privileges of the Agent and the Banks under each of the Other
Documents and all other instruments, documents and agreements providing the
benefit of any collateral security or guarantees for the prompt payment and
performance of the Obligations are for the ratable and mutual benefit of the
Banks, and each of the rights, benefits and privileges thereunder shall be
exercised (or not exercised) solely by the Agent but only at the direction and
with the consent and approval of the Majority Banks in accordance with this
Section 9.
Section 9.14. Required Approval. Any action which requires the consent
or approval of the Banks under this Agreement may be taken upon the affirmative
consent or approval of the Majority Banks to be effective; provided, however,
that the following action shall require the unanimous affirmative approval of
all of the Banks:
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(i) any increase in the amount of the Combined Commitment Amount or the
aggregate amount of Letters of Credit which may be issued hereunder;
(ii) any amendment of the calculation of the Borrowing Base which would
have the effect of increasing credit availability thereunder;
(iii) any extension of the Scheduled Maturity Date or the Letter of
Credit Termination Date;
(iv) any increase or decrease in any Bank's Commitment Percentage or
Commitment, other than in connection with assignments under Section 11 hereof;
(v) any change in the definitions of LIBOR, LIBOR Margin and Prime
Rate;
(vi) the release of any collateral or the release or discharge of any
Person which is a party to this Agreement, the Notes or the Other Documents
except as contemplated by this Agreement;
(vii) any decrease in any Fees, interest (other than resulting from
fluctuations in the Prime Rate), indemnities or other reimbursements payable to
the Banks;
(viii) any extension, waiver or excuse of any payment of any of the
Obligations at their due date, whether by acceleration or otherwise;
(ix) any amendment to Section 8 of this Agreement;
(x) any amendment to Section 1.87. or Section 9 of this Agreement or
any other provision of this Agreement providing for the respective voting rights
of the Banks; or
(xi) the issuance of a Letter of Credit under a separate Reimbursement
Agreement containing or providing for terms, conditions, covenants or Fees less
favorable to the Banks than those set forth in this Agreement.
Section 9.15. Amendment. The Company hereby agrees that the foregoing
provisions of this Section 9 (other than Section 9.14.) constitute an agreement
among, and solely for the benefit of, the Banks and the Agent, and the Banks and
the Agent acknowledge that the Company is not a party to or bound by such
foregoing provisions and that any and all of the provisions of this Section 9
other than Section 9.14. may be amended at any time by the Banks and the Agent
as provided herein without the consent or approval of, or notice to, the Company
(other than the requirement of notice to the Company of the resignation of the
Agent).
Section 9.16. Questionnaire. In order to assist the Agent in the
administration and performance of its duties under this Agreement, each Bank
hereby agrees to complete and deliver to the Agent a questionnaire in
substantially the form of Exhibit G attached hereto (an "Administrative
Questionnaire").
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Section 10. DEFAULT
Section 10.1. Events of Default. The occurrence and continuance of any
of the following events after any applicable cure period shall constitute a
default under this Agreement, the Notes and the Other Documents (an "Event of
Default"):
(a) the Company shall fail to pay when due and payable,
whether at the due date thereof, at a date fixed for prepayment thereof, by
acceleration thereof or otherwise, (i) any outstanding principal amount of any
Loan; (ii) any amount of accrued and unpaid interest thereon; (iii) any of the
Reimbursement Obligations; or (iv) any fees, expenses or other amounts payable
under this Agreement, the Notes or the Other Documents and, in the case of
clauses (ii), (iii) and (iv) above, such default shall continue unremedied for
(5) Business Days from the date specified for payment; or
(b) the Company shall fail to perform any term, covenant or
agreement contained in Section 7 of this Agreement; or
(c) the Company shall fail to perform any other term, covenant
or agreement contained in this Agreement (other than in respect of terms,
covenants or agreements covered elsewhere in this Section 10) and such
non-performance shall continue unremedied for thirty (30) days after written
notice of such non-performance shall have been received or deemed received by
the Company from the Agent; or
(d) any written representation or warranty of the Company,
made in or in connection with this Agreement, the Notes or the Other Documents
or in any certificate or report or any other document or instrument delivered
hereunder or thereunder, shall prove to have been false in any material respect
upon the date when made or deemed to have been made; or
(e) any monetary default (unless duly waived in writing by the
obligee) shall occur with respect to any Unsecured Indebtedness of the Company
in excess of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) or any amount of
recourse secured Indebtedness of the Company under any agreements under which
any Indebtedness may be issued by the Company and such default shall continue
for more than the grace period, if specified therein, after all required notices
have been given, and any other default under such agreements if the effect of
such other default under such agreements is to accelerate the maturity of such
Indebtedness or to permit the holder thereof (or any representative on behalf of
such holder) to cause the same to become due prior to its stated maturity or if
any such Indebtedness shall not be paid when due or accelerated and such default
shall continue for more than the period of grace, if any, therein specified, all
required notices having been given or if the Company fails to make payment
within five (5) days after demand is made for payment of any Indebtedness which
is due on demand; or
(f) one or more final judgments or orders for the payment of
money which would have a Material Adverse Effect shall be rendered against the
Company or any Subsidiary and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order, or (ii) a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect for any period of ten (10) consecutive
Business Days; or
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(g) Meditrust or any of its Subsidiaries having assets which
in the aggregate exceed FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00)
shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official or it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors or shall fail
generally to pay its debts as they become due, or shall take any action to
authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against Meditrust or any of its Subsidiaries having assets which in the
aggregate exceed FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00) seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or an
order for relief shall be entered against the Company under the federal
bankruptcy laws as now or hereafter in effect and remain undischarged for ninety
(90) days; or
(i) there shall have occurred and be continuing, thirty (30)
days after knowledge or notice thereof shall have been given to Meditrust by the
Agent, any event which would allow for the termination of any Plan and the then
current value of such Plan's benefits guaranteed under Title IV of ERISA exceeds
the then current fair market value of such Plan's assets allocable to such
benefits by more than ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) (or in the
case of such a termination event involving the withdrawal of a substantial
employer, the withdrawing employer's proportionate share of such excess exceeds
such amount); or
(j) the Company should fail to terminate the Commitments and
prepay the entire principal amount due and payable under this Agreement, the
Notes and the Other Documents within forty-five (45) days after any sale,
transfer, assignment or other permanent disposition of an Operator that
represents more than twenty percent (20%) of Gross Real Estate Investments, such
percentage being based on the Company's most recent Borrowing Report and
quarterly Financial Statements; or
(k) the Company should fail to terminate the Commitments and
prepay the entire principal amount due and payable under this Agreement, the
Notes and the Other Documents within forty-five (45) days after the accumulation
of fifteen percent (15%) or more of the voting stock of Meditrust by a Person or
group of affiliated Persons; or
(l) the occurrence of an "event of default" (after giving
effect to any applicable grace period) under any of the Other Documents, as such
term is defined or used therein.
Section 10.2. Remedies. Upon the occurrence of an Event of Default, the
Agent shall (i) if requested by Banks having more than fifty percent (50%) in
aggregate amount of the Commitments, by notice to the Company, terminate the
obligation of the Banks to make Revolving Loans or to issue Letters of Credit
and such obligations shall thereupon terminate, and (ii) if requested by Banks
holding Notes evidencing more than fifty percent (50%) in aggregate principal
amount of the
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Revolving Loans, by notice to the Company declare the Notes (together with
accrued interest thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company; provided that in the
case of any of the Events of Default specified in subsection (g) or (h) of
Section 10.1 hereof with respect to the Company, without any notice to the
Company or any other act by the Agent or the Banks, the obligation of the Banks
to make Revolving Loans and to issue Letters of Credit shall thereupon terminate
and the Notes (together with accrued interest thereon) shall become immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company. The rights and the remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law, in equity or in the Other Documents.
The Company acknowledges and agrees that, at the time of the exercise
by the Banks of its remedies under this Section 10.2., there may be one or more
Letters of Credit issued and outstanding under which, in the event of a Drawing
thereunder, the Agent will be required to honor such Drawing. In addition to any
of the other rights and remedies of the Banks in respect of such Drawing
contained in this Agreement or any of the Other Documents, the amount of any
such Drawing and any Reimbursement Obligation created thereby shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind.
Section 11. ASSIGNMENT
Section 11.1. Assignment.
(a) Each Bank may assign to one or more Persons all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment, the same portion of its Letter of Credit
Participation and the same portion of the Loans at the time owing to it);
provided, however, that (i) except in the case of an assignment to a Bank, the
Agent and Meditrust must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld although in the case of
Meditrust it shall be reasonable for consent to be withheld, among other
reasons, if the proposed assignment is to a competitor of Meditrust or if
Meditrust, in its reasonable discretion, believes that such assignment would
increase its costs under Section 2.5.6. or 12.6. hereof); (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's interests, rights and obligations under this Agreement; (iii)
the amount of the Commitment, the Letter of Credit Participations and the Loans
of the assigning Bank subject to each such assignment (determined as of the date
of the Assignment and Acceptance with respect to such assignment is delivered to
the Agent) shall not be less than FIFTEEN MILLION AND NO/100 DOLLARS
($15,000,000.00); (iv) the parties to each such assignment shall execute and
deliver to the Agent an assignment and acceptance in the form of Exhibit H
attached hereto (the "Assignment and Acceptance") and a processing and
recordation fee in the amount of THREE THOUSAND AND NO/100 DOLLARS ($3,000.00);
(v) the assignee shall be a bank or financial institution of recognized standing
and in the business of making the types of loans contemplated in this Agreement
and (vi) the assignee, if it shall not be a Bank, shall deliver to the Agent an
Administrative Questionnaire. Upon such execution, delivery, acceptance and
recording pursuant to Section 11.2. hereof, 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, (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such
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Assignment and Acceptance, have the rights and obligations of a Bank under this
Agreement (including, without limitation, the benefit of the cost protection
provisions) to the same extent as if they were a Bank; and (B) the assigning
Bank thereunder shall, to the extent of the interest assigned by such Assignment
and Acceptance, 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 interests, rights and obligations under this Agreement,
such Bank shall cease to be a party hereto but shall continue to be entitled to
the benefits of any indemnity, waiver, release or limitation of liability
contained herein, as well as to any Fees accrued for its account and not yet
paid).
(b) By executing and delivering an Assignment and Acceptance,
the assigning Bank thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, its Letter of Credit Participations and the outstanding balances
of its Loans, in each case without giving effect to assignments thereof which
have not become effective, are as set forth in such Assignment and Acceptance;
(ii) except as set forth in subsection (i) above, 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, the Notes, the Other Documents or any
other agreement, document or instrument furnished pursuant hereto or thereto;
(iii) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance; (iv) such assignee confirms that it
has received a copy of this Agreement, together with copies of the most recent
Financial Statements delivered pursuant to Section 6.1. hereof 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; (v) 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; (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 the obligations which by the terms of this Agreement are required to
be performed by it as a Bank.
Section 11.2. Maintenance of a Register. The Agent shall maintain at
one of its principal offices a copy of each Assignment and Acceptance delivered
to it and a register for the recordation of the names and addresses of the
Banks, and the Commitment, the Letter of Credit Participations and the principal
amount of the Loans owing to each Bank pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive in the
absence of manifest error and the Company, the Agent and the Banks may treat
each person whose name is recorded in the Register pursuant to the terms hereof
as a Bank hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Company and any Bank, at any reasonable time and
from time to time upon reasonable prior notice. The Agent shall also be
authorized to amend, modify and substitute Schedule 1.22. attached hereto from
time to time to properly reflect the Commitment Percentages of the Banks under
this Agreement.
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Section 11.3. Questionnaire. Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Bank and an assignee, an
Administrative Questionnaire completed in respect of the assignee (unless the
assignee shall already be a Bank hereunder), the processing and recordation fee
referred to in Section 11.1. above and, if required, the written consent of the
Agent and/or the Company to such assignment, the Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register, and (iii) give prompt notice thereof to the Banks and the Company.
Section 11.4. Sale of Participations. Each Bank may, without the
consent of the Company or the Agent, sell participations to one or more banks,
financial institutions or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment,
the same portion of its Letter of Credit Participations and the same portion of
the Loans owing to Bank); provided, however, that (i) such Bank's obligations
under this Agreement shall remain unchanged; (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations;
(iii) the participating banks, financial institutions or other entities shall be
entitled to the benefit of the cost protection provisions contained in this
Agreement to the same extent as if they were Banks although such participating
banks may not increase any costs which shall be payable by the Company; and (iv)
the Company, the Agent and the other Banks shall continue to deal solely and
directly with such Bank in connection with such Bank's rights, interests and
obligations under this Agreement, and such Bank shall retain the sole right to
enforce the obligations of the Company relating to the Loans and to approve any
amendment, modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any Fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans or changing or extending the Commitments).
Section 11.5. Disclosure of Information. Any Bank or participant may,
in connection with any assignment or participation or proposed assignment or
participation pursuant to this Section, disclose to the assignee or participant,
or proposed assignee or participant, any information relating to the Company
furnished to such Bank by or on behalf of either the Company; provided, however,
that prior to any such disclosure of information designated by the Company as
confidential, each such assignee or participant or proposed assignee or
participant shall be advised of the confidential nature of such information.
Section 11.6. Assignee or Participant Affiliated with the Borrower. If
any assignee Bank is an Affiliate of the Company, then any such assignee Bank
shall have no right to vote as a Bank hereunder or under any of the Other
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to this Agreement or any of the
Other Documents or for purposes of making requests to the Agent pursuant to
Section 11 hereof, and the determination of the Banks shall, for all purposes of
this Agreement and the Other Documents, be made without regard to such assignee
Bank's interest in any of the Loans or the Letter of Credit Participations,
including, without limitation, determinations requiring the consent of all
Banks. If any Bank sells a participating interest in any of the Loans or the
Letter of Credit Participations to a participant, and such participant is the
Company or an Affiliate of the Company, then such transferor Bank shall promptly
notify the Agent of the sale of such participation. A transferor Bank shall have
no right to vote as a Bank under this Agreement or any of the Other Documents
for purposes of (i) granting consents or waivers, (ii) agreeing to amendments or
modifications to this
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Agreement or any of the Other Documents or, (iii) making requests to the Agent
pursuant to Section 11 hereof to the extent that such participation is
beneficially owned by the Company or any Affiliate of the Company, and the
determination of the Bank shall for all purposes of this Agreement and the Other
Documents be made without regard to the interest of such transferor Bank in the
Loans or the Letter of Credit Participations to the extent of such
participation.
Section 11.7. Miscellaneous Assignment Provisions. If any assignee Bank
is not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
under this Agreement or any of the Other Documents for its account, deliver to
the Company and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. If any Bank which serves
as the bank to which reference is had for the determination of any rate of
interest chargeable under this Agreement transfers all of its interest, rights
and obligations under this Agreement, the Agent shall, in consultation with the
Company and with the consent of the Company and the Banks, appoint another Bank
to act as a reference bank hereunder. Anything contained in this Section 11 to
the contrary notwithstanding, any Bank may at any time pledge all or any portion
of its interest and rights under this Agreement (including all or any portion of
its Note) to any of the twelve (12) Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act. No such pledge or the enforcement thereof
shall release the pledgor Bank from its obligations under this Agreement or any
of the Other Documents.
Section 11.8. No Assignment or Delegation by the Company. The Company
shall not assign or delegate any of its rights or duties under this Agreement,
and any attempted assignment by the Company shall be null and void and without
legal effect.
Section 12. MISCELLANEOUS
Section 12.1. Confidentiality. In handling any financial or business
information provided under this Agreement by the Company, the Agent, the Banks
and their officers, agents, attorneys, accountants or designees shall exercise
the same degree of care that such Person exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received except that disclosure of such
information may be made (i) to Bank Affiliates in connection with their present
or prospective business relations with the Company; (ii) with the prior consent
of the Company, to prospective assignees, transferees or purchasers of an
interest in the Obligations (which consent shall not be unreasonably withheld
although it shall be reasonable for the Company to withhold such consent if the
prospective assignee, transferee or purchaser is a competitor of the Company);
(iii) as required by any Law or order, subpoena, judicial order or similar
order; and (iv) as may be required in connection with the examination, audit or
similar investigation of the Banks.
Section 12.2. Waivers.
Section 12.2.1. The Company waives presentment, demand,
notice, protest, notice of acceptance, notice of loans made, credit extended,
collateral received or delivered or other action taken in reliance hereon and
all other demands and notices of any description. With respect to the
Obligations, the Company assents to any extension or postponement of the time of
payment or any other indulgence, to any substitution, exchange or release of any
collateral, to the addition or release
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of any party or Person primarily or secondarily liable therefor, to the
acceptance of partial payments thereon and the settling, compromising or
adjusting of any of the foregoing, all in such manner and at such time or times
as the Banks may deem advisable in their sole and absolute discretion. The Banks
shall have no duty, other than to act in a commercially reasonable manner, as to
the collection or protection of collateral or any income thereon, as to the
preservation of rights or remedies against prior parties, or as to the
preservation of any rights and remedies pertaining thereto beyond the safe
custody thereof. The Banks may exercise their rights and remedies with respect
to any collateral without resorting or regard to other collateral or sources of
reimbursement for liability. The Banks shall not be deemed to have waived any of
their rights and remedies with respect to the Obligations or any collateral
unless such waiver shall be in writing and signed by the Agent. No delay or
omission on the part of the Banks in exercising any right or remedy shall
operate as a waiver of such right or remedy or any other right or remedy. A
waiver on any one occasion shall not be construed as a bar to any subsequent
enforcement by the Banks. All rights and remedies of the Banks with respect to
the Obligations or any collateral shall be cumulative and may be exercised
singularly or concurrently.
Section 12.2.2. THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION
OF WHICH THIS AGREEMENT IS A PART IS A COMMERCIAL TRANSACTION AND HEREBY WAIVES
ITS RIGHTS TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES OR BY OTHER APPLICABLE LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH
THE AGENT OR THE BANKS MAY DESIRE TO USE.
Section 12.2.3. THE COMPANY HEREBY WAIVES TRIAL BY JURY IN ANY
COURT IN ANY SUIT, ACTION OR PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH
OR IN ANY WAY RELATED TO THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART
AND/OR IN THE ENFORCEMENT BY THE AGENT OR THE BANKS OF ANY OF THEIR RIGHTS AND
REMEDIES HEREUNDER OR UNDER APPLICABLE LAW. THE COMPANY ACKNOWLEDGES THAT IT
MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER CONSIDERATION OF THE
RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEY.
Section 12.2.4. In addition to (and without limitation of) any
right of setoff, bankers' lien or counterclaim that the Banks may have, each of
the Banks shall be entitled, at its option, to the fullest extent permitted by
law, to setoff and apply any and all balances and deposits (general or special,
time or demand, provisional or final) at any time held and all other
indebtedness owing by such Bank to or for the credit or account of the Company
(whether or not such balances, deposits or other indebtedness are then due to
the Company) against any and all of the Obligations upon the failure of the
Company to pay when due any amount owing pursuant to this Agreement or the
Notes. Any Bank exercising a right under this Section 12.2.4. shall give the
Company prompt notice thereof; provided, however, that any failure to give such
notice shall not affect the validity of any such action, and shall further
account to each other Bank for any amounts so received in accordance with
Section 2.5.9. hereof.
Section 12.2.5. The Company does hereby waive any claims,
causes of action, losses, damages or expenses, in tort, contract or otherwise
which the Company may have against the Agent, the Banks, a Bank Affiliate or any
Bank Agents which has arisen out of the relationship
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between it and the Agent, the Banks or any Bank Affiliate or Bank Agents which
the Company may have as of the Closing Date. The Company acknowledges that it
makes this waiver and release knowingly, voluntarily and only after considering
the ramifications of this waiver and release with its attorneys.
Section 12.3. Notices. All notices, requests, demands or other
communications required by this Agreement shall be made in writing and shall be
(i) personally delivered, (ii) transmitted by postage prepaid registered mail,
return receipt requested, (iii) transmitted by telex (with postage prepaid mail
confirmation), (iv) transmitted by telecopier or facsimile or (v) transmitted by
internationally recognized courier service with provision for receipt (with
charges prepaid) and unless otherwise specifically provided herein, shall be
deemed to have been duly given on the first to occur of (i) the date of delivery
if delivered personally, (ii) five (5) days following posting if transmitted by
mail, (iii) the date of transmission with confirmed answer back if transmitted
by telex, or (iv) the date of receipt if transmitted by telecopier or by
internationally recognized courier service if addressed as follows or to such
other address as either party may designate in writing:
If to the Company:
Meditrust
197 First Avenue
Needham, MA 02194
Attn: David F. Benson, President
Telephone: (617) 433-6000
Telecopier: (617) 433-1290
with a copy to:
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110-2699
Attn: Paul R. Eklund, Esq.
Telephone: (617) 439-2303
Telecopier: (617) 973-9748
If to the Agent:
Fleet National Bank
777 Main Street
Mail Stop: CTMOHO4A
Hartford, CT 06115-1600
Attn: Cliff Mellor, Vice President
Telephone: (860) 986-4304
Telecopier: (860) 986-3450
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with a copy, in the case of Fleet, to:
Updike, Kelly & Spellacy, P.C.
One State Street
P.O. Box 231277
Hartford, CT 06123-1277
Attn: John F. Wolter, Esq.
Telephone: (203) 548-2600
Telecopier: (203) 548-2680
If to the Banks, to the address set forth in the most recent
Administrative Questionnaire received by the Agent if the notice is to be given
by the Agent and to the Agent, as set forth above, if the notice is to be given
by the Company.
Section 12.4. Fees and Expenses. The Company will pay on demand all
reasonable out-of-pocket expenses incurred by the Agent in connection with (i)
the issuance of any Letters of Credit; (ii) any amendment or modification of
this Agreement or the Other Documents requested by the Company; (iii) any
prepayment, refinancing or other restructuring of this Agreement; (iv) any
Qualified Appraisal subject to the provisions of Section 6.2. hereof and (v) the
Agent's or the Banks' exercise, preservation or enforcement of any of their
rights and remedies under this Agreement and the Other Documents from and after
the occurrence of a Default or Event of Default, including, without limitation,
reasonable fees and expenses of outside legal counsel, accounting, appraisal,
auditing, consulting, or other similar professional fees or expenses, and the
amount of all such expenses shall, until paid, bear interest at the rate
applicable to principal hereunder (including any default rate).
Section 12.5. Term of Agreement. This Agreement shall continue in force
and effect so long as the Banks have any commitment to make Revolving Loans or
Letters of Credit hereunder or any of the Obligations shall be outstanding.
Section 12.6. Taxes.
(a) All payments made by the Company on account of this
Agreement shall be made free and clear of, and without deduction for or on
account of, any present or future stamp or other taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, restrictions or conditions of any
nature whatsoever now or hereafter imposed, levied, collected, withheld or
assessed by the United States of America (or by any political subdivision or
taxing authority thereof or therein), excluding income, excise and franchise
taxes now or hereafter imposed by the United States of America or any political
subdivision or taxing authority thereof or therein (such non-excluded taxes
being called "Taxes"). If any Taxes are required to be withheld from any amounts
payable to the Agent or any Bank pursuant to this Agreement or the Other
Documents, then the amounts so payable to the Agent or the Banks shall be
increased to the extent necessary to yield to the Agent or the Banks (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified herein. Whenever any Tax is payable by the
Company, as promptly as possible thereafter, the Company shall send the Agent an
original official receipt showing payment thereof. The Company shall indemnify
the Agent and the Banks for any incremental taxes, interest or penalties that
may become payable by them as a consequence of the
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failure of the Company to pay any Taxes or the failure of the Company to deliver
to the Agent an original official receipt therefor.
(b) The Company shall indemnify the Agent and the Banks for
and hold the Agent and the Banks harmless from any present or future claim of
liability for any registration charge or any stamp, excise or similar taxes,
including any interest equalization tax, and any penalties or interest with
respect thereto, that may be imposed by any jurisdiction in connection with this
Agreement.
Section 12.7. Schedules and Exhibits. The Schedules and Exhibits which
are attached hereto are and shall constitute a part of this Agreement.
Section 12.8. Governing Law; Consent to Jurisdiction. This Agreement,
the Notes and the Other Documents, and the rights and obligations of the parties
hereunder and thereunder, shall be governed by and construed and interpreted in
accordance with, the laws of the State of Connecticut (or, if any portion of any
collateral is located in another state, by the laws of such state to the extent
necessary for the enforcement of the Banks' remedies under this Agreement). The
Company agrees that any suit for the enforcement of this Agreement, the Notes or
the Other Documents may be brought in the courts of the State of Connecticut or
any federal court sitting therein and consents to the non-exclusive jurisdiction
of such court and to service of process in any such suit being made upon the
Company by mail at the address referred to in Section 12.3. hereof.
Section 12.9. Survival of Representations. All representations,
warranties, covenants and agreements contained in this Agreement, the Notes or
the Other Documents shall survive the Closing Date, and continue in full force
and effect until all of the payment and the performance of the Obligations in
full.
Section 12.10. Amendments. No modification or amendment of this
Agreement, the Notes or the Other Documents shall be effective unless same shall
be in writing and signed by the Company, the Agent and the Majority Banks (or
all of the Banks if required hereunder); provided, however, that modifications
and amendments to Section 11 hereof shall be governed by Section 9.15. hereof.
Section 12.11. Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures hereto and thereto
were upon the same instrument.
Section 12.12. No Agency Relationship. The Agent and the Banks are not
the agents or representatives of the Company nor is the Company the agent or
representative of the Agent or the Banks and this Agreement shall not make the
Agent or the Banks liable to any third party, including, but not limited to, the
Company's existing shareholders, directors, officers, creditors or any other
party in interest.
Section 12.13. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
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Section 12.14. Headings. All article, section and subsection headings
in this Agreement, the Notes and the Other Documents are included for
convenience of reference only and shall not constitute a part of this Agreement,
the Notes or the Other Documents for any other purpose.
Section 12.15. Brokers. No broker or finder has brought about the
obtaining, making or closing of, and no broker's or finder's fees or commissions
will be payable by the Company, the Agent or any Bank to any Person in
connection with, the transactions contemplated by this Agreement, and, except as
to Fees due to the Banks under this Agreement, each party hereunder shall
indemnify and hold the other parties to this Agreement harmless from and against
any and all cost, claim, liability, damage or expense (including but not limited
to reasonable attorneys' fees) in connection with any broker's or finder's fees
or commission's claimed to be due hereunder as a result of such indemnifying
party's actions.
Section 12.16. Reinstatement. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Agent or the Banks in respect of the Obligations is rescinded or
must otherwise be restored or returned by the Banks upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or upon
the appointment of any intervenor or conservator of, or trustee or similar
official for, the Company or any substantial part of its properties or assets,
or otherwise, all as though such payments had not been made.
Section 12.17. Interpretation and Construction. The following rules
shall apply to the interpretation and construction of this Agreement, the Notes
and the Other Documents unless the context requires otherwise: (a) the singular
includes the plural and the plural includes the singular; (b) words importing
any gender include the other genders; (c) references to statutes are to be
construed as including all statutory provisions consolidating, amending or
replacing the statute to which reference is made and all regulations promulgated
pursuant to such statutes; (d) references to "writing" shall include printing,
photocopy, typing, lithography and other means of reproducing words in a
tangible, visible form; (e) the words "including", "includes" and "include"
shall be deemed to be followed by the words "without limitation"; (f) references
to the introductory paragraph, preliminary statements, articles, sections (or
subdivisions of sections), exhibits or schedules are to those of this Agreement
unless otherwise indicated; (g) references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications to such instruments, but only to the extent that such amendments
and other modifications are permitted or not prohibited by the terms of this
Agreement; (h) references to Persons include their respective permitted
successors and assigns; and (i) "or" is not exclusive.
Section 12.18. Indemnification. The Company hereby indemnifies and
holds the Agent, the Banks and any Bank Affiliate and any Bank Agents (an
"Indemnified Party"), harmless from and against any and all claims, actions,
causes of action, damages, losses, obligations, payments, liabilities, costs,
fees or expenses (including reasonable legal fees and expenses) which the
Indemnified Party may incur or which may be claimed against the Indemnified
Party by any Person by reason of or in connection with the execution, delivery,
operation, enforcement or termination of this Agreement, the Notes or the Other
Documents or in any manner in connection with or related to this Agreement, the
Notes or the Other Documents or the transactions contemplated hereby or thereby;
provided, however, that the Company shall not be required to indemnify the
Indemnified Party for any claims, actions, causes of action, damages, losses,
obligations, payments, liabilities,
-72-
<PAGE> 76
costs, fees or expenses to the extent, but only to the extent, caused by the
Indemnified Party's gross negligence or willful misconduct or if the Company
shall be the prevailing party in any such claim, action or cause of action.
Nothing in this Section is intended to limit the Company's obligations
hereunder. In case any claim is asserted or any action or proceeding is brought
against an Indemnified Party, the Indemnified Party shall promptly notify the
Company of such claim, action or proceeding and, at the option of the
Indemnified Party, (i) such Indemnified Party may retain legal counsel,
reasonably satisfactory to the Company, to represent it in such defense and the
Company shall reimburse such Indemnified Party for its reasonable fees and
expenses of such legal counsel or (ii) the Company shall resist, settle or
defend with counsel reasonably acceptable to such Indemnified Party, such claim,
action or proceeding. The Agent, the Banks, the Bank Affiliates and the Bank
Agents shall cooperate and join with the Company, at the expense of the Company,
as may be required in connection with any action taken or defended by the
Company as provided herein.
Section 12.19. Limitation of Liability. The Declaration of Trust of
Meditrust, a copy of which is duly filed in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name "Meditrust" refers to the
Trustees under the Declaration of Trust collectively as Trustees, but not
individually or personally; and that no trustee, officer, shareholder, employee
or agent of Meditrust shall be held to any personal liability, jointly or
severally, for any obligation of, or claim against, Meditrust. All persons
dealing with Meditrust, in any way, shall look only to the assets of Meditrust
and the collateral pledged as security for the Notes, if any, for the payment of
any sum or the performance of any obligation of Meditrust under the Notes or
otherwise.
-73-
<PAGE> 77
IN WITNESS WHEREOF, the Company, the Agent and the Banks have executed
this Agreement as of the date first set forth above.
THE COMPANY:
MEDITRUST
By: /s/ Michael S. Benjamin
-----------------------
Name: Michael S. Benjamin
Its: Senior Vice President
THE AGENT:
FLEET NATIONAL BANK
By: /s/ Cliff Mellor
-----------------------
Name: Cliff Mellor
Its: Vice President
THE BANKS:
FLEET NATIONAL BANK
By: /s/ Cliff Mellor
-----------------------
Name: Cliff Mellor
Its: Vice President
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/ Robert Bottamedi
-----------------------
Name: Robert Bottamedi
Its: Vice President
-74-
<PAGE> 78
FIRST UNION NATIONAL
BANK OF NORTH CAROLINA
By: /s/ Joseph H. Towell
----------------------------
Name: Joseph H. Towell
Its: S.V.P.
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Albert W. Kelley
----------------------------
Name: Albert W. Kelley
Its: Vice President
THE BANK OF TOKYO MITSUBISHI
TRUST COMPANY
By: /s/ M. Sheridan
----------------------------
Name: M. Sheridan
Its: Vice President
RIGGS BANK N.A.
By: /s/ Margaret Mary Scelzo
----------------------------
Name: Margaret Mary Scelzo
Its: Senior Vice President
THE BANK OF NEW YORK
By: /s/ Peter H. Abdill
----------------------------
Name: Peter H. Abdill
Its: Vice President
-75-
<PAGE> 79
KREDIETBANK N.V.
By: /s/ Robert M. Surdam, Jr.
-----------------------------
Name: Robert M. Surdam, Jr.
Its: Vice President
By: /s/ R. Snauffer
-----------------------------
Name: R. Snauffer
Its: Vice President
-76-
<PAGE> 1
EXHIBIT 10.2
REVOLVING CREDIT AGREEMENT
- --------------------------------------------------------------------------------
================================================================================
REVOLVING CREDIT AGREEMENT
by and between
MEDITRUST
as the Company
and
VIA BANQUE
as the Bank
December 12, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Section 1 DEFINITIONS.......................................................1
Section 1.1 "Affected Loans"..........................................1
Section 1.2 "Affiliate"...............................................1
Section 1.3 "Agreement"...............................................1
Section 1.4 "Appraised Value".........................................1
Section 1.5 "Assignment and Acceptance"...............................1
Section 1.6 "Balloon Payments"........................................1
Section 1.7 "Bank"....................................................2
Section 1.8 "Bank Affiliate"..........................................2
Section 1.9 "Borrowing Base"..........................................2
Section 1.10 "Borrowing Report".......................................2
Section 1.11 "Breakage Costs".........................................2
Section 1.12 "Business Day"...........................................2
Section 1.13 "Closing Date"...........................................2
Section 1.14 "Code"...................................................2
Section 1.15 "Commitment".............................................2
Section 1.16 "Commitment Amount"......................................3
Section 1.17 "Company"................................................3
Section 1.18 "Company Limited Partnership"............................3
Section 1.19 "Consolidated"...........................................3
Section 1.20 "Construction Investments"...............................3
Section 1.21 "Continental Investments"................................3
Section 1.22 "Controlled Limited Partnership".........................3
Section 1.23 "Controlled Group".......................................4
Section 1.24 "Default"................................................4
Section 1.25 "Default Rate"...........................................4
Section 1.26 "Dividend"...............................................4
Section 1.27 "Eligible Investments"...................................4
Section 1.28 "Environmental Laws".....................................5
Section 1.29 "ERISA"..................................................6
Section 1.30 "Eurodollar Office"......................................6
Section 1.31 "Event of Default".......................................6
Section 1.32 "Facility"...............................................6
Section 1.33 "Federal Funds Effective Rate"...........................6
Section 1.34 "Fees"...................................................7
Section 1.35 "Financial Statement"....................................7
Section 1.36 "Fixed Charge Coverage"..................................7
Section 1.37 "Fleet Bank".............................................7
Section 1.38 "Fleet Bank Amount"......................................7
Section 1.39 "Fleet Bank Credit Facility".............................7
Section 1.40 "Funded Debt"............................................7
Section 1.41 "GAAP"...................................................9
Section 1.42 "Gross Real Estate Investments"..........................9
Section 1.43 "Guarantees".............................................9
Section 1.44 "Guarantees Outstanding".................................9
Section 1.45 "Hazardous Materials"....................................9
Section 1.46 "Imputed Management Fees"...............................10
Section 1.47 "Indebtedness"..........................................10
(i)
<PAGE> 3
Section 1.48 "Insurance".............................................10
Section 1.49 "Interest Expense"......................................10
Section 1.50 "Interest Period".......................................10
Section 1.51 "Investment"............................................11
Section 1.52 "Investment Amount".....................................11
Section 1.53 "Investment Commitment".................................11
Section 1.54 "Investment Fee"........................................11
Section 1.55 "IRS"...................................................11
Section 1.56 "Law"...................................................11
Section 1.57 "Lease".................................................11
Section 1.58 "Lease Rental Expense"..................................12
Section 1.59 "Legal Impediment"......................................12
Section 1.60 "Legal Requirements"....................................12
Section 1.61 "LIBOR Base"............................................12
Section 1.62 "LIBOR Loan"............................................12
Section 1.63 "LIBOR Margin"..........................................12
Section 1.64 "LIBOR Rate"............................................13
Section 1.65 "Lien"..................................................13
Section 1.66 "Line of Credit"........................................13
Section 1.67 "Liquid Assets".........................................13
Section 1.68 "Litigation"............................................13
Section 1.69 "Loan"..................................................13
Section 1.70 "Loan Account"..........................................13
Section 1.71 "Loan Documents"........................................13
Section 1.72 "Loans".................................................14
Section 1.73 "Material Adverse Effect"...............................14
Section 1.74 "Meditrust".............................................14
Section 1.75 "Modified Operating Cash Flow"..........................14
Section 1.76 "Mortgage"..............................................14
Section 1.77 "Mortgage Expense"......................................14
Section 1.78 "Net Earnings"..........................................14
Section 1.79 "Note"..................................................14
Section 1.80 "Notice of Borrowing"...................................14
Section 1.81 "Notice of Continuation or Conversion"..................14
Section 1.82 "Obligations"...........................................14
Section 1.83 "Operating Cash Flow"...................................15
Section 1.84 "Operating Facilities"..................................15
Section 1.85 "Operator"..............................................15
Section 1.86 "Operator Interest Expense".............................15
Section 1.87 "Other Documents".......................................15
Section 1.88 "Outstanding Amount"....................................15
Section 1.89 "PBGC"..................................................15
Section 1.91 "Permitted Indebtedness"................................16
Section 1.92 "Permitted Investments".................................16
Section 1.93 "Permitted Liens".......................................17
Section 1.94 "Person"................................................17
Section 1.95 "Plan"..................................................17
Section 1.96 "Pooled Facilities".....................................17
Section 1.97 "Pooled Guaranteed Facilities"..........................17
Section 1.98 "Prime Rate"............................................17
Section 1.99 "Prime Rate Loan".......................................18
Section 1.100 "Qualified Appraisal"..................................18
(ii)
<PAGE> 4
Section 1.101 "Rating"...............................................18
Section 1.102 "Register".............................................18
Section 1.103 "REIT".................................................18
Section 1.104 "Release"..............................................18
Section 1.105 "Relevant Local Time"..................................18
Section 1.106 "Reportable Event".....................................18
Section 1.107 "Request"..............................................18
Section 1.108 "Revolving Credit Note"................................18
Section 1.109 "Revolving Loan".......................................18
Section 1.110 "Revolving Loans"......................................18
Section 1.111 "Scheduled Maturity Date"..............................18
Section 1.112 "SEC"..................................................18
Section 1.113 "Solvent"..............................................19
Section 1.114 "Subsidiary"...........................................19
Section 1.115 "Tangible Net Worth"...................................19
Section 1.116 "Total Capital"........................................19
Section 1.117 "Total Liabilities"....................................19
Section 1.118 "Tribunal".............................................20
Section 1.119 "Unsecured Indebtedness"...............................20
Section 1.120 "Unused Commitment"....................................20
Section 1.121 "Unused Commitment Amount".............................20
Section 1.122 "Unused Fee"...........................................20
Section 2 THE CREDIT FACILITIES............................................20
Section 2.1 The Line of Credit.......................................20
Section 2.1.1 Revolving Loans..................................20
Section 2.1.2 Use of Proceeds..................................21
Section 2.1.3 Calculation of the Borrowing Base................21
Section 2.1.4 Notice of Borrowing..............................21
Section 2.1.5 The Loan Account.................................22
Section 2.1.6 Revolving Credit Note............................22
Section 2.1.7 Payment of Principal.............................22
Section 2.1.8 Interest Rates and Payments of
Interest.........................................22
Section 2.1.9 Termination......................................23
Section 2.1.10 Renewal.........................................23
Section 2.1.11 Mandatory Prepayments...........................23
Section 2.1.12 Reduction of Commitment.........................23
Section 2.2 Interest.................................................24
Section 2.2.1 Calculation of Interest..........................24
Section 2.2.2 Continuation or Conversion of Loans..............24
Section 2.2.3 Duration of Interest Periods.....................24
Section 2.2.4 Changed Circumstances............................25
Section 2.2.5 Payments Not at End of Interest
Period...........................................26
Section 2.2.6 Usury............................................26
Section 2.3 Fees.....................................................26
(iii)
<PAGE> 5
Section 2.3.1 Unused Fee.......................................26
Section 2.3.2 Calculation of Fees..............................27
Section 2.4 General Terms Applicable to the Credit
Facility.................................................27
Section 2.4.1 Direct Debit.....................................27
Section 2.4.2 Overdue Payments.................................27
Section 2.4.3 Manner and Time of Payments by the
Company..........................................27
Section 2.4.4 Increased Costs and Capital
Adequacy.........................................27
Section 2.4.5 Withholding Tax Exemption........................31
Section 2.4.6 Prepayments of the Loans.........................31
Section 3 REPRESENTATIONS AND WARRANTIES...................................31
Section 3.1 Organization, Power and Authority........................32
Section 3.2 Authority................................................32
Section 3.3 No Breach................................................32
Section 3.4 Qualification as a Real Estate Investment
Trust....................................................33
Section 3.5 Binding Obligations......................................33
Section 3.6 Permits..................................................33
Section 3.7 No Consents..............................................33
Section 3.8 Financial Statements.....................................33
Section 3.9 Financial Information....................................34
Section 3.10 INTENTIONALLY LEFT BLANK................................34
Section 3.11 Use of Proceeds.........................................34
Section 3.12 Title to Real and Personal Property.....................34
Section 3.13 Statutory Compliance....................................35
Section 3.14 Events of Default.......................................35
Section 3.15 Other Defaults..........................................35
Section 3.16 Taxes...................................................35
Section 3.17 Solvency................................................35
Section 3.18 Ranking of Loan.........................................36
Section 3.19 Litigation..............................................36
Section 3.20 Guarantees..............................................36
Section 3.21 ERISA...................................................36
Section 3.22 Environmental Protection................................36
Section 3.23 Facilities and Operators................................38
Section 3.24 Material Subsidiaries...................................38
Section 3.25 Materiality.............................................38
Section 3.26 Intercompany Indebtedness...............................38
Section 4 CONDITIONS TO OBLIGATIONS OF THE BANK............................38
Section 4.1 Authorizations...........................................38
Section 4.2 Representations and Warranties True......................38
Section 4.3 Performance and Compliance...............................39
Section 4.4 Delivery of Documents....................................39
(iv)
<PAGE> 6
Section 5 CONDITIONS TO MAKING REVOLVING LOANS.............................40
Section 5.1 Notice of Borrowing......................................40
Section 5.2 No Adverse Change........................................40
Section 5.3 Truth of Representations and Warranties..................40
Section 5.4 No Default...............................................40
Section 5.5 Payment of Fees..........................................40
Section 5.6 Authority................................................40
Section 6 AFFIRMATIVE COVENANTS OF COMPANY.................................40
Section 6.1 Financial Statements and Reporting
Requirements.............................................40
Section 6.2 Appraisals...............................................43
Section 6.3 Maintenance of Property..................................44
Section 6.4 Maintenance of Existence.................................45
Section 6.5 Taxes and Other Assessments..............................45
Section 6.6 Inspection...............................................45
Section 6.7 Notices of Default.......................................46
Section 6.8 Maintenance of Books and Records.........................46
Section 6.9 Maintenance of Permits...................................46
Section 6.10 Use of Proceeds.........................................46
Section 6.11 Change of Offices.......................................46
Section 6.12 Compliance with Laws....................................46
Section 6.13 Compliance with Environmental Laws......................46
Section 6.14 Business of the Borrower................................47
Section 6.15 Ranking of Loan.........................................47
Section 6.16 Intercompany Indebtedness...............................47
Section 7 NEGATIVE COVENANTS...............................................48
Section 7.1 Limitation on Indebtedness...............................48
Section 7.2 Negative Pledge/Encumbrances.............................49
Section 7.3 Investments..............................................50
Section 7.4 ERISA....................................................51
Section 7.5 Fiscal Year..............................................51
Section 7.6 Gross Real Estate Investments............................52
Section 7.7 Construction Investments.................................52
Section 7.8 Interest Rate Protection.................................52
Section 7.9 Dividends................................................52
Section 7.10 Amendment of Declaration of Trust.......................52
Section 7.11 Future Leases...........................................52
Section 7.12 Leases..................................................53
Section 7.13 Prohibited Transactions.................................53
Section 7.14 Mergers.................................................53
Section 7.15 Change in Business......................................54
Section 7.16 Issuance of Stock by Subsidiaries.......................54
Section 7.17 Sale of Stock and Indebtedness..........................54
Section 7.18 Transactions with Affiliates............................54
Section 8 FINANCIAL COVENANTS..............................................55
(v)
<PAGE> 7
Section 8.1 Cash Flow Coverage.......................................55
Section 8.2 Modified Cash Flow Coverage..............................55
Section 8.3 Total Liabilities to Tangible Net Worth..................55
Section 8.4 Tangible Net Worth.......................................55
Section 8.5 Establishment of Covenants...............................55
Section 9 DEFAULT..........................................................55
Section 9.1 Events of Default........................................55
Section 9.2 Remedies.................................................58
Section 10 ASSIGNMENT......................................................58
Section 10.1 Assignment..............................................58
Section 10.2 Maintenance of a Register...............................60
Section 10.3 Sale of Participations..................................60
Section 10.4 Disclosure of Information...............................60
Section 10.5 Assignee or Participant Affiliated with the
Company.................................................61
Section 10.6 Miscellaneous Assignment Provisions.....................61
Section 10.7 No Assignment or Delegation by the
Company.................................................61
Section 11 MISCELLANEOUS...................................................61
Section 11.1 Confidentiality.........................................61
Section 11.2 Waivers.................................................62
Section 11.3 Notices.................................................63
Section 11.4 Fees and Expenses.......................................64
Section 11.5 Term of Agreement.......................................64
Section 11.6 Taxes...................................................65
Section 11.7 Schedules and Exhibits..................................65
Section 11.8 Governing Law; Consent to Jurisdiction..................65
Section 11.9 Survival of Representations.............................66
Section 11.10 Amendments.............................................66
Section 11.11 Counterparts...........................................66
Section 11.12 No Agency Relationship.................................66
Section 11.13 Severability...........................................66
Section 11.14 Headings...............................................66
Section 11.15 Brokers................................................66
Section 11.16 Reinstatement..........................................66
Section 11.17 Interpretation and Construction........................67
Section 11.18 Indemnification........................................67
Section 11.19 Limitation of Liability................................68
(vi)
<PAGE> 8
TABLE OF EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B Form of Revolving Credit Note
Exhibit C INTENTIONALLY LEFT BLANK
Exhibit D Notice of Continuation or Conversion
Exhibit E Form of Opinion of Counsel to the Company
Exhibit F Form of Borrowing Report
Exhibit G INTENTIONALLY LEFT BLANK
Exhibit H Form of Assignment and Acceptance
(vii)
<PAGE> 9
TABLE OF SCHEDULES
Schedule 1.90. Pre-Existing Guarantees
Schedule 3.3. Restrictions
Schedule 3.8. Material Adverse Changes
Schedule 3.12. Liens
Schedule 3.18. Existing Indebtedness
Schedule 3.19. Litigation
Schedule 3.20. Guarantees
Schedule 3.22. Environmental Matters
Schedule 7.1. Indebtedness
(viii)
<PAGE> 10
REVOLVING CREDIT AGREEMENT
--------------------------
This REVOLVING CREDIT AGREEMENT (the "Agreement") is made as of this
____ day of December, 1996 by and between MEDITRUST, a Massachusetts business
trust, with its chief executive office located at 197 First Avenue, Needham,
Massachusetts 02194 ("Meditrust" or the "Company"); and VIA BANQUE, a banking
corporation organized under the laws of the Republic of France (the "Bank").
Section 1 DEFINITIONS
All capitalized terms used in this Agreement, the Notes or the Other
Documents, or in any certificate, report or other document, agreement or
instrument executed or delivered pursuant hereto and thereto (unless otherwise
indicated therein) shall have the meanings ascribed to such terms below.
Section 1.1 "AFFECTED LOANS" has the meaning ascribed to it in
Section 2.2.4. hereof.
Section 1.2 "AFFILIATE" means any Person (i) which directly or
indirectly controls, or is controlled by, or is under common control with,
another Person or any Subsidiary of such other Person; (ii) which directly or
indirectly beneficially owns or holds ten percent (10%) or more of any class of
voting stock of such other Person or any Subsidiary of such other Person; or
(iii) ten percent (10%) or more of the voting stock of which is directly or
indirectly beneficially owned or held by such other Person or any Subsidiary of
such other Person. The term "control" (and its correlative meanings "controlled
by" and "under common control with") as used in this Section 1.2. 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 ownership
of voting stock, by contract or otherwise.
Section 1.3 "AGREEMENT" means this Revolving Credit Agreement and
shall include any and all amendments, restatements, modifications and
supplements hereto.
Section 1.4 "APPRAISED VALUE" means, with respect to any Investment,
the value of such Investment reflected in the most recent Qualified Appraisal
prepared with respect to such Investment.
Section 1.5 "ASSIGNMENT AND ACCEPTANCE" has the meaning ascribed to
it in Section 10.1. hereof.
Section 1.6 "BALLOON PAYMENTS" means, as of any date as of which the
amount thereof shall be determined, an amount equal to the Company's aggregate
obligation to make payments of principal in respect of Indebtedness having a
maturity during the
<PAGE> 11
immediately succeeding six (6) month period minus Liquid Assets and availability
under the Line of Credit and the Fleet Bank Credit Facility; provided, however,
that any Indebtedness with respect to which the Company 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, that
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).
Section 1.7 "BANK" has the meaning ascribed to it in the Preamble
hereof.
Section 1.8 "BANK AFFILIATE" or "BANK AFFILIATES" means any
Affiliate of the Bank or its parent company.
Section 1.9 "BORROWING BASE" means, as of any date as of which the
amount thereof shall be determined, an amount equal to (x) the sum of (i)
seventy-five percent (75%) of Eligible Investments as of such date plus (ii)
Liquid Assets as of such date minus (y) Unsecured Indebtedness as of such date,
the Fleet Bank Amount as of such date and Guarantees Outstanding as of such
date.
Section 1.10 "BORROWING REPORT" has the meaning ascribed to it in
Section 6.1.(c) hereof.
Section 1.11 "BREAKAGE COSTS" means an amount equal to all costs the
Bank sustains in breaking or unwinding or in not making after receiving a Notice
of Borrowing or a Notice of Continuation or Conversion any LIBOR funding
contract, and all expenses that the Bank sustains or incurs as a result of
prepayment or receipt of principal with respect to a LIBOR Loan on a day other
than the last day of the then current Interest Period.
Section 1.12 "BUSINESS DAY" means any day in which dealings in
foreign currencies and exchange between banks may be carried on in the place
where the Eurodollar Office is located and in the place where the head office of
the Bank is located, other than a Saturday, Sunday, legal holiday or other day
on which banks in such places or in London, England or New York, New York are
required or permitted by law to close.
Section 1.13 "CLOSING DATE" means December __, 1996.
Section 1.14 "CODE" means the Internal Revenue Code of 1986 and the
rules and regulations promulgated thereunder, collectively, as the same may from
time to time be supplemented or amended and remain in effect.
Section 1.15 "COMMITMENT" means the Bank's obligation to make
Revolving Loans.
-2-
<PAGE> 12
Section 1.16 "COMMITMENT AMOUNT" means an amount equal to the
Commitment as in effect from time to time in accordance with the provisions
hereof, but in no event greater than FIFTY MILLION AND NO/100 DOLLARS
($50,000,000.00).
Section 1.17 "COMPANY" has the meaning ascribed to it in the Preamble
hereof.
Section 1.18 "COMPANY LIMITED PARTNERSHIP" means a limited
partnership which is organized to own a Facility of which the Company or a
Subsidiary of the Company is the general partner and owns one hundred percent
(100%) of the partnership interests of such limited partnership.
Section 1.19 "CONSOLIDATED" or "CONSOLIDATED" means, with reference
to any term defined in this Agreement, that term as applied to the accounts of
the Company consolidated in accordance with GAAP and whenever "Consolidated" or
"consolidated" is used herein, it shall always mean, with reference to the
Company, Meditrust and all of its Subsidiaries (but including for purposes of
this definition all entities in which the Company has any interest, even if less
than fifty percent (50%)).
Section 1.20 "CONSTRUCTION INVESTMENTS" means financing extended by
the Company or a Subsidiary of the Company with respect to a Facility which is
either under construction (i.e., has not received a certificate of occupancy) or
in development (i.e., has received a certificate of occupancy or operating
license within the preceding eighteen (18) months); provided, however, that a
Facility will not be considered to be in development if at least three (3)
calendar months have lapsed since the date on which the Facility received a
certificate of occupancy and (i) such Facility has a Fixed Charge Coverage of at
least 1.10 to 1.0 or (ii), in the case of a Facility which is a Pooled Facility,
the Pooled Facilities' Fixed Charge Coverage is at least 1.2 to 1.0 and the
Pooled Facility's Fixed Charge Coverage is at least 0.8 to 1.0 or (iii) in the
case of a Facility which is a Pooled Guaranteed Facility, the Pooled Guaranteed
Facilities' Fixed Charge Coverage is at least 1.0 to 1.0 and the Pooled
Guaranteed Facility's Fixed Charge Coverage is at least 0.8 to 1.0.
Section 1.21 "CONTINENTAL INVESTMENTS" means Investments which relate
to Facilities leased or operated by Continental Medical Systems, Inc. or its
affiliates and existing as of the Closing Date and which are subject to
Indebtedness provided by a Person other than the Company or a Subsidiary of the
Company.
Section 1.22 "CONTROLLED LIMITED PARTNERSHIP" means a limited
partnership, other than a Company Limited Partnership, organized to own a
Facility of which the Company or a Subsidiary of the Company is the sole general
partner and which the Company
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or a Subsidiary of the Company owns at least sixty-six and two/thirds percent
(66.66%) of the aggregate partnership interests of such limited partnership.
Section 1.23 "CONTROLLED GROUP" means all trades or businesses
(whether or not incorporated) under common control that, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
Section 1.24 "DEFAULT" means an Event of Default or event or
condition that, but for the lapse of time, the giving of notice, or both, would
constitute an Event of Default.
Section 1.25 "DEFAULT RATE" means a rate of interest equal to four
percentage points (4%) above the rate of interest otherwise in effect under this
Agreement.
Section 1.26 "DIVIDEND" or "DIVIDENDS" means the payment of any
dividend or other distribution in respect of the capital stock of a corporation
or, with respect to Meditrust, shares of beneficial interest, in cash or other
property (excepting distribution in the form of such stock or shares of
beneficial interest) or the redemption or acquisition of any capital stock or
shares of beneficial interest.
Section 1.27 "ELIGIBLE INVESTMENTS" means, 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
Facilities owned (whether through fee simple title ownership or pursuant to
rights as lessee under a longterm ground lease) entirely by the Company, a
Subsidiary of the Company or a Company Limited Partnership; plus
(ii) the lesser of the Appraised Value of any Facility
securing a Mortgage or the outstanding principal amount of the Mortgage secured
by any such Facility; plus
(iii) seventy and one-half percent (70.5%) of the lesser of
the Appraised Value or the outstanding principal amount of the Continental
Investments minus the aggregate outstanding principal amount of any loans
secured by a first lien mortgage in the Continental Investments but in no event
greater than FIFTY- EIGHT MILLION AND NO/100 DOLLARS ($58,000,000.00); plus
(iv) seventy-five percent (75%) of the amount determined by
multiplying the lesser of the Appraised Value of a Facility owned by a
Controlled Limited Partnership or the purchase price of a Facility owned by a
Controlled Limited Partnership by a fraction, the numerator of which is the
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aggregate interest in the Controlled Limited Partnership possessed by the
Company or a Subsidiary of the Company and the denominator of which is one
hundred (100);
but excluding from the calculation thereof:
(a) any Investment in which the Company or a Subsidiary of the
Company has granted a voluntary Lien other than the Continental Investments as
set forth above;
(b) any Construction Investments;
(c) any Pooled Facilities or Pooled Guaranteed Facilities which have
a Fixed Charge Coverage of less than 1.0 to 1.0, and as to Pooled Guaranteed
Facilities only, any Pooled Guaranteed Facility which has an individual Fixed
Charge Coverage ratio of less than .8 to 1.0 and, in the case of a Facility
which is not a Pooled Facility or a Pooled Guaranteed Facility, 1.10 to 1.0;
(d) any Investment where audited Financial Statements are not
available within one hundred twenty (120) days after year end; provided,
however, that no Facility shall be excluded from the calculation of Eligible
Investments once such audited Financial Statements are available; and provided,
further, that no Facility shall be excluded from the calculation of Eligible
Investments for failure to deliver Financial Statements if the Investment Amount
of such Facility, when aggregated with the Investment Amount of other Facilities
owned by the same Operator, equal less than FIFTEEN MILLION AND NO/100 DOLLARS
($15,000,000.00) of the Company's actual Gross Real Estate Investments in a
sale/leaseback transaction or Mortgage and provided, further, that the foregoing
proviso shall not discharge the Company's obligation to deliver Financial
Statements to the Bank upon receipt of the same by the Company;
(e) any Investment which is delinquent for thirty (30) days or more
in payments to the Company or a Subsidiary of the Company;
(f) Gross Real Estate Investments relating to Controlled Limited
Partnerships which exceed fifteen percent (15%) of the Company's Gross Real
Estate Investments; and
(g) any Investment which is not located within the United States of
America.
Section 1.28 "ENVIRONMENTAL LAWS" means any and all Laws of any
Tribunal pertaining to the environment, including without limitation, the
federal Clean Water Act, the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments
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and Reauthorization Act of 1986 ("SARA"), and as may be further amended (all
together herein called "CERCLA"), the Federal Water Pollution Control
Amendments, the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), the Hazardous Materials Transportation Act of 1975, as amended, the
Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as
amended, and any comparable or similar environmental laws of any state in which
the Company, a Subsidiary of the Company or Operator owns or operates a
Facility. Likewise, the terms "hazardous substance," "release," and "threatened
release" herein referenced in connection with Environmental Laws shall have the
meanings specified in CERCLA and the terms "solid waste" and "dispose" (or
"disposed") shall have the meanings specified in RCRA; provided, however, in the
event either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined therein, such broader meaning shall apply subsequent to the effective
date of such amendment, and provided further that, to the extent the laws of any
state which are applicable to a specific Facility and which establish a meaning
for "hazardous substance," "release," "solid waste" or "disposal" which is
broader than that specified in either CERCLA or RCRA, such broader meaning shall
apply with respect to such Facility.
Section 1.29 "ERISA" means the Employee Retirement Income Security
Act of 1974 and the rules and regulations promulgated thereunder, collectively,
as the same may from time to time be supplemented or amended and remain in
effect.
Section 1.30 "EURODOLLAR OFFICE" means, initially, the Bank's office
in Paris, France, and thereafter such other office or offices of the Bank or any
Bank Affiliate (as designated from time to time by notice from the Bank) through
which the LIBOR Rate is determined.
Section 1.31 "EVENT OF DEFAULT" has the meaning ascribed to it in
Section 9 hereof.
Section 1.32 "FACILITY" or "FACILITIES" means a health care facility
(including, but not limited to, long-term care and retirement living facilities,
psychiatric and rehabilitation hospitals, alcohol and substance abuse treatment
facilities and medical office buildings), whether already existing or under
construction, owned (whether through fee simple title ownership or pursuant to
rights as lessee under a long-term ground lease) by the Company, a Company
Limited Partnership, a Controlled Limited Partnership or any Subsidiary of the
Company or upon which the Company, a Company Limited Partnership, a Controlled
Limited Partnership or any Subsidiary of the Company holds a Mortgage.
Section 1.33 "FEDERAL FUNDS EFFECTIVE RATE" means for any day, a
fluctuating interest rate per annum equal to the weighted
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average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average of the quotations for such day on
such transactions received by the Bank from three (3) Federal funds brokers of
recognized standing selected by the Bank.
Section 1.34 "FEES" means the Unused Fee and any and all other fees,
if any, payable hereunder.
Section 1.35 "FINANCIAL STATEMENT" or "FINANCIAL STATEMENTS" means,
as of any date, or with respect to any period, as applicable, a financial report
or reports consisting of (i) a balance sheet; (ii) an income statement; (iii) a
statement of cash flow; (iv) a statement of retained earnings (if prepared by
the Company); and (v) changes in stockholders' equity.
Section 1.36 "FIXED CHARGE COVERAGE" means, with respect to any
Facility, Pooled Facilities or Pooled Guaranteed Facilities, the ratio of (x)
pre-tax net income plus Operator Interest Expense, Mortgage Expense (but
excluding therefrom any amounts relating to principal), Lease Rental Expense,
depreciation and amortization on the Facility, Pooled Facilities or Pooled
Guaranteed Facilities, management fees and any revenues from prior period
adjustments relating to the settlement, filing or audit of cost reports less
Imputed Management Fees 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 to a
Subsidiary of the Company), Mortgage Expense, Lease Rental Expense, and current
maturities of Indebtedness of the Operator (other than Indebtedness relating to
a Mortgage) which are not subordinated to the Company or a Subsidiary of the
Company, all of the foregoing calculated on a year-to-date basis by reference to
the period commencing on the first day of the fiscal year for which such
calculation applies.
Section 1.37 "FLEET BANK" means Fleet National Bank, a national
banking association.
Section 1.38 "FLEET BANK AMOUNT" means, as of any date as of which
the amount thereof shall be determined, the principal amount of Indebtedness
outstanding under the Fleet Bank Credit Facility.
Section 1.39 "FLEET BANK CREDIT FACILITY" means the credit facility
provided to the Company pursuant to the Revolving Credit Agreement among the
Company, the lending institutions referenced therein, and Fleet Bank as Agent,
in the original principal
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amount of TWO HUNDRED THIRTY MILLION AND NO/100 DOLLARS ($230,000,000.00) as of
September 23, 1996, as amended and in effect from time to time.
Section 1.40 "FUNDED DEBT" shall mean and include, without
duplication,
(i) any obligation payable more than one (1) year from the
date of creation thereof which, under GAAP, is shown on a balance sheet of a
Person as a liability (including capitalized lease obligations and excluding
reserves to the extent that such reserves do not constitute an obligation),
(ii) Indebtedness payable more than one (1) year from the
date of creation thereof which is secured by any Lien on property owned by the
Company or any Subsidiary, whether or not the Indebtedness secured thereby shall
have been assumed by the Company or such Subsidiary,
(iii) Guarantees (other than endorsements of negotiable
instruments for collection in the ordinary course of business) and other
contingent liabilities (whether direct or indirect) in connection with the
obligations, stock or dividends of any Person,
(iv) obligations under any contract providing for the making
of loans, advances or capital contributions to any Person, or for the purchase
of any property from any Person, in each case in order to enable such Person
primarily to maintain working capital, net worth or any other balance sheet
condition or to pay debts, dividends or expenses,
(v) obligations under any contract for the purchase of
materials, supplies or other property or services if such contract (or any
related document) requires that payment for such materials, supplies or other
property or services shall be made regardless of whether or not delivery of such
materials, supplies or other property or services is ever made or tendered,
(vi) obligations under any contract to rent or lease (as
lessee) any real or personal property if such contract (or any related document)
provides that the obligation to make payments thereunder is absolute and
unconditional under conditions not customarily found in commercial leases then
in general use or requires that the lessee purchase or otherwise acquire
securities or obligations of the lessor,
(vii) obligations under any contract for the sale or use of
materials, supplies or other property or services if such contract (or any
related document) requires that payment for such materials, supplies or other
property or services, or the use thereof, shall be subordinated to any
indebtedness (of the
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<PAGE> 18
purchaser or user of such materials, supplies or other property or the Person
entitled to the benefit of such services) owed or to be owed to any Person,
(viii) any arrangement with any lender or investor or to which
such lender or investor is a party providing for the leasing by the Company or
any Subsidiary of the Company of real property which has been or is to be sold
or transferred by the Company or any Subsidiary to such lender or investor or to
any Person to whom funds have been or are to be advanced by such lender or
investor on the security of such property or rental obligations of the Company
or any Subsidiary, and
(ix) obligations under any other contract which, in economic
effect, is substantially equivalent to a Guarantee.
Section 1.41 "GAAP" means generally accepted accounting principles in
the United States of America in effect from time to time.
Section 1.42 "GROSS REAL ESTATE INVESTMENTS" Means, as of any date as
of which the amount thereof shall be determined, an amount equal to the purchase
price of Facilities owned by, or the amount of the Company's or any Subsidiary
of the Company's investment in Facilities leased by, the Company or any
Subsidiary of the Company plus the outstanding principal amount of Mortgages
encumbering Facilities which are owned by Persons other than the Company as of
such date.
Section 1.43 "GUARANTEES" means, as applied to the Company and its
Subsidiaries, all guarantees, endorsements or other contingent or surety
obligations with respect to obligations of any other Person (except those made
to or by the Company or any Subsidiary with respect to an underlying obligation
of the Company, any Subsidiary, any Company Limited Partnership or any
Controlled Limited Partnership), whether or not reflected on the balance sheet
of the Company or its Subsidiaries, including any obligation to furnish funds,
directly or indirectly (whether by virtue of partnership arrangements, by
agreement to keep-well or otherwise), through the purchase of goods, supplies or
services, or by way of stock purchase, capital contribution, advance or loan, or
to enter into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person.
Section 1.44 "GUARANTEES OUTSTANDING" means, as of any date as of
which the amount thereof shall be determined, the aggregate amount of Guarantees
with respect to which the Company is liable or obligated (but not including
Permitted Guarantees) as of such date.
Section 1.45 "HAZARDOUS MATERIALS" means (i) any chemical, compound,
material, mixture or substance that is now or hereafter
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defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous waste", "restricted
hazardous waste", or "toxic substances" or terms of similar import under any
Environmental Laws; (ii) any oil, petroleum or petroleum derived substance, any
drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, any flammable substances or
explosives, any radioactive materials, any hazardous wastes or substances, any
toxic wastes or substances or any other materials or pollutants which (a) poses
a hazard to human health or the environment or (b) causes any of any properties
or assets of the Company or its Subsidiaries to be in violation of any
Environmental Laws; (iii) asbestos in any form, urea formaldehyde foam
insulation, electrical equipment which contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of fifty (50) parts per
million; (iv) to the extent prohibited or required to be mitigated by any
Environmental Laws, lead in paint, plaster or other accessible materials and (v)
any other chemical, material or substance, exposure to, or disposal of, which is
now or hereafter prohibited, limited or regulated by any Tribunal but shall not
mean cleaning agents, pharmaceuticals and petroleum products in such quantities
and concentrations as are customarily used in connection with the operation and
maintenance of health care facilities and which are used in compliance with
applicable Environmental Laws.
Section 1.46 "IMPUTED MANAGEMENT FEES" means, for any period, an
amount equal to five percent (5%) of the net revenues of a Facility.
Section 1.47 "INDEBTEDNESS" means any obligation for borrowed money
(and any notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money) but excluding
Guarantees.
Section 1.48 "INSURANCE" has the meaning ascribed to it in Section
6.3.(c) hereof.
Section 1.49 "INTEREST EXPENSE" for any period shall mean, on a
consolidated basis, the sum of all interest on, and all amortization of debt
discount and expenses on, all Indebtedness of the Company and its Subsidiaries
outstanding at any time during such period.
Section 1.50 "INTEREST PERIOD" means, (i) with respect to each LIBOR
Loan, the period commencing on the date of the making or continuation of, or
conversion to, such Loan and ending one (1), two (2), or three (3) months
thereafter, as the Company may elect in the applicable Notice of Borrowing or
Notice of Continuation or Conversion and (ii) with respect to a Prime Rate Loan,
the period commencing on the date of the making of such
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Loan and the date on which the Prime Rate Loan is repaid or the Company elects,
in accordance with this Agreement, to convert such Loan to a LIBOR Loan;
provided, however, that:
(i) any Interest Period (other than an Interest Period
determined pursuant to clause (iii) below) that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business Day
unless, in the case of LIBOR Loans, such Business Day falls in the next calendar
month, in which case such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period applicable to a LIBOR Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (iii) below, end on the last Business
Day of a calendar month;
(iii) any Interest Period that would otherwise end after the
Scheduled Maturity Date shall end on the Scheduled Maturity Date;
(iv) notwithstanding clause (iii) above, no Interest Period
applicable to a LIBOR Loan shall have a duration of less than one (1) month and
if any Interest Period applicable to such Loan would be for a shorter Interest
Period, such Interest Period shall not be available hereunder; and
(v) if the Company fails to designate the length of the
Interest Period with respect to a LIBOR Loan, then the period shall be thirty
(30) days.
Section 1.51 "INVESTMENT" or "INVESTMENTS" means a Facility or a
Mortgage, individually or collectively, as the case may be.
Section 1.52 "INVESTMENT AMOUNT" means, with respect to any
individual Investment, the purchase price in the case of a Facility owned by the
Company or a Subsidiary of the Company, the amount invested by the Company or a
Subsidiary of the Company in the case of a Facility leased by the Company or any
such Subsidiary or the outstanding principal amount in the case of a Mortgage.
Section 1.53 "INVESTMENT COMMITMENT" means a commitment, agreement or
undertaking by the Company or a Subsidiary of the Company to acquire a Facility
or to make or acquire a Mortgage.
Section 1.54 "INVESTMENT FEE" means a fee paid by a third party to
the Company or a Subsidiary of the Company as an
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inducement to the Company or a Subsidiary of the Company to make or issue an
Investment Commitment.
Section 1.55 "IRS" has the meaning ascribed to it in Section 3.4.
hereof.
Section 1.56 "LAW" or "LAWS" means all constitutions, treaties,
statutes, laws, ordinances, codes, regulations, rules, orders, decisions, writs,
injunctions, or decrees of the United States of America or any other Tribunal,
now in effect and as hereafter amended, issued, promulgated, or otherwise coming
into effect.
Section 1.57 "LEASE" means leases for Facilities for which the
Company, a Subsidiary of the Company, a Company Limited Partnership or a
Controlled Limited Partnership is the lessor or sublessor.
Section 1.58 "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 a Subsidiary of the Company,
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, plus (c) in the case of ground leases, any other amounts
payable thereunder to the Company or a Subsidiary of the Company under the lease
relating thereto.
Section 1.59 "LEGAL IMPEDIMENT" has the meaning ascribed to it in
Section 2.2.4.(ii)(A) hereof.
Section 1.60 "LEGAL REQUIREMENTS" means all Laws, and all recorded or
unrecorded agreements, covenants, restrictions, easements or conditions
(including any requirement of any insurance or surety company or any board of
fire underwriters), as now in effect and as hereafter amended, issued,
promulgated, or otherwise coming into effect.
Section 1.61 "LIBOR BASE" means the rate per annum (rounded upwards,
if necessary, to the nearest 1/16 of one percentage point (1%) shown on the
display referred to as the "LIBOR page" (or any display substituted therefor) of
the Telerate U.S. Domestic Money Service transmitted through the Telerate
monitor system as being the respective rates at which U.S. dollar deposits would
be offered two (2) Business Days prior to the beginning of the relevant Interest
Period by the principal London offices of each of the banks named thereon to
major banks in the London interbank Eurodollar market where the Eurodollar
Office is located at the Relevant Local Time for delivery on the first day of
such Interest Period for the number of days comprised therein and in the amount
of the principal amount of the applicable LIBOR Loan.
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Section 1.62 "LIBOR LOAN" means a Loan bearing interest at the LIBOR
Rate.
Section 1.63 "LIBOR MARGIN" means, as of any date as of which the
amount thereof shall be determined, an amount determined by reference to the
Rating as follows:
(i) If the Rating is A-/A3, then the Libor Margin shall be
one-half of one percentage point (0.5%); and
(ii) If the Rating is BBB+/Baa1, then the Libor Margin shall
be five-eighths of one percentage point (0.625%); and
(iii) If the Rating is BBB/Baa2, then the Libor Margin shall
be three-quarters of one percentage point (0.75%); and
(iv) If the Rating is BBB-/Baa3, then the Libor Margin shall
be seven-eighths of one percentage point (0.875%); and
(v) If the Rating is less than BBB-/Baa3, then the Libor
Margin shall be one and one-half percentage points (1.5%).
Section 1.64 "LIBOR RATE" means, with respect to each Interest
Period, the rate per annum equal to the sum of:
(A) (i) the LIBOR Base for such Interest Period divided by (ii) a percentage
equal to one hundred percent (100%) minus the maximum reserve percentage
applicable during such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or equivalent in
the jurisdiction of the head office of the Bank) for determining the maximum
reserve requirements (including, without limitation, any basic, supplemental,
marginal or emergency reserve requirements) for the Bank in respect of
liabilities or assets consisting of or including Eurocurrency liabilities (as
defined in Regulation D of the Board of Governors of the Federal Reserve System)
having a term equal to the Interest Period; and
(B) the LIBOR Margin.
Section 1.65 "LIEN" means any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's interest
under a financing lease or any analogous arrangements in a Person's properties
or assets, intended as, or having the effect of, security, whether voluntary or
involuntary.
Section 1.66 "LINE OF CREDIT" has the meaning ascribed to it in
Section 2.1.1. hereof.
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Section 1.67 "LIQUID ASSETS" means the aggregate cash and cash
equivalents possessed by the Company and its Subsidiaries as of such date on a
consolidated basis.
Section 1.68 "LITIGATION" means any proceeding, claim, suit, action,
case or investigation by, before or involving any Tribunal.
Section 1.69 "LOAN" means any Revolving Loan.
Section 1.70 "LOAN ACCOUNT" has the meaning ascribed to it in Section
2.1.5. hereof.
Section 1.71 "LOAN DOCUMENTS" means this Agreement, the Notes, and
the Other Documents.
Section 1.72 "LOANS" means the Revolving Loans.
Section 1.73 "MATERIAL ADVERSE EFFECT" means an effect resulting from
any circumstance or event of whatever nature (including any adverse
determination in any Litigation) which does, or could reasonably be expected to,
materially and adversely (i) impair the validity or enforceability of this
Agreement, the Notes or the Other Documents, (ii) impair the ability of the
Company to pay or perform the Obligations, (iii) cause an Event of Default or
(iv) affect the business operations or financial condition of the Company taken
as a whole.
Section 1.74 "MEDITRUST" has the meaning ascribed to it in the
Preamble hereof.
Section 1.75 "MODIFIED OPERATING CASH FLOW" shall mean, for any
period, the sum of (a) Net Earnings for such period, (b) any gains (net of
expenses and taxes applicable thereto) in excess of losses resulting from the
sale, conversion or other disposition of capital assets (i.e., assets other than
current assets), (c) depreciation and amortization and (d) Investment Fees
received in cash during such period minus the amortized amount of all Investment
Fees included in Net Earnings for such period, all of the foregoing determined
on a consolidated basis.
Section 1.76 "MORTGAGE" or "MORTGAGES" means the mortgages of real
estate for which the Company or a Subsidiary of the Company is the mortgagee,
whether or not the Company or a Subsidiary of the Company has sold third party
participations in such Mortgages.
Section 1.77 "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, a Subsidiary of the Company or any
third party under any participating agreement relating to a Mortgage, including,
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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.
Section 1.78 "NET EARNINGS" means, for any period, the consolidated
net earnings of Meditrust during such period as determined in accordance with
GAAP.
Section 1.79 "NOTE" means the Revolving Credit Note.
Section 1.80 "NOTICE OF BORROWING" has the meaning ascribed to it in
Section 2.1.4. hereof.
Section 1.81 "NOTICE OF CONTINUATION OR CONVERSION" has the meaning
ascribed to it in Section 2.2.2. hereof.
Section 1.82 "OBLIGATIONS" means any and all loans, advances,
indebtedness, liabilities, obligations, covenants or duties of the Company to
the Bank or any Bank Affiliate under this Agreement, the Note or the Other
Documents.
Section 1.83 "OPERATING CASH FLOW" shall mean, for any period, the
sum of (a) Net Earnings for such period, (b) depreciation and amortization and
(c) Investment Fees received in cash during such period minus the amortized
amount of all Investment Fees included in Net Earnings for such period, all of
the foregoing determined on a consolidated basis.
Section 1.84 "OPERATING FACILITIES" shall mean any Facility, Pooled
Facilities or Pooled Guaranteed Facilities which are not Construction
Investments and which are currently operating in accordance with all applicable
Laws.
Section 1.85 "OPERATOR" means the lessee or sublessee of a Facility
owned or leased by the Company or a Subsidiary of the Company, a Company Limited
Partnership or a Controlled Limited Partnership and also means the mortgagor or
lessee or sublessee of a Facility which is subject to a Mortgage to the extent
that such entity controls the operation of such Facility.
Section 1.86 "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.
Section 1.87 "OTHER DOCUMENTS" means any document, guarantee,
agreement or instrument other than the Agreement and the Note now or hereafter
executed by the Company or any of its Subsidiaries in connection with the Loans
as renewed, extended, amended, supplemented, increased, modified, or replaced.
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Section 1.88 "OUTSTANDING AMOUNT" means, as of any date as of which
the amount thereof shall be determined, the aggregate outstanding principal
amount of (i) the Line of Credit and (ii) Credits Outstanding, all as of the
date of determination.
Section 1.89 "PBGC" means the Pension Benefit Guaranty Corporation or
any entity succeeding to all or part of its functions under ERISA.
Section 1.90 "PERMITTED GUARANTEES" means:
(a) Guarantees in favor of the Bank or any Bank Affiliates;
(b) Guarantees existing on the date of this Agreement and disclosed
on Schedule 1.90. attached hereto or in the Financial Statements
referred to in Section 3.8. hereof or in favor of Subsidiaries of the
Company;
(c) Guarantees resulting from the endorsement of negotiable
instruments for collection in the ordinary course of business;
(d) Guarantees of the Company and its Subsidiaries with respect to
surety, appeal performance and return-of-money and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money) not exceeding ONE HUNDRED
THOUSAND AND NO/100 DOLLARS ($100,000.00) in the aggregate;
(e) Guarantees of normal trade debt relating to the acquisition of
goods and supplies;
(f) Guarantees relating to Permitted Indebtedness described in
subsections (a) and (b) of Section 7.1.
Section 1.91 "PERMITTED INDEBTEDNESS" has the meaning ascribed to it
in Section 7.1. hereof.
Section 1.92 "PERMITTED INVESTMENTS" means:
(a) Obligations of the United States of America or any department or
agency thereof, and obligations guaranteed by the United States of America, in
each case due within one year from the date of purchase and payable in the
United States in United States dollars,
(b) Prime Commercial Paper which is rated P-1 by Moody's Investors
Service, Inc. ("Moody's") or A-1 by Standard & Poor's Corporation ("S&P"),
bankers acceptances and certificates of deposit in United States commercial
banks or foreign banks with United States branches (having capital resources in
excess of ONE HUNDRED MILLION AND NO/100 DOLLARS ($100,000,000.00) and having a
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long-term certificate of deposit rating of either A-1 by Moody's or A+ by S&P),
(c) Repurchase agreements of United States commercial banks or
brokerage institutions or foreign banks with United States branches (any such
bank or institution having capital resources in excess of TWO HUNDRED FIFTY
MILLION AND NO/100 DOLLARS ($250,000,000.00)), in respect of the certificates
and obligations referred to in clause (b) above, provided that any such
repurchase agreement (x) has a term of less than one year and (y) is fully
collateralized, and
(d) Long-term corporate bonds with respect to which the Company or a
Subsidiary of the Company has the option, granted by a brokerage institution
having capital resources in excess of TWO HUNDRED FIFTY MILLION AND NO/100
DOLLARS ($250,000,000.00) and having a long-term debt rating of either A-1 by
Moody's or A+ by S&P, to require such brokerage institution to repurchase such
bonds at par within twelve (12) months following acquisition thereof by the
Company or a Subsidiary of the Company, provided that any such bond (x) may only
be held during the time that the Company or a Subsidiary of the Company is
entitled to the benefit of the repurchase option with respect to such bond, and
(y) must be rated at least BBB- by S&P, and Baa3 by Moody's (provided that no
such bond is required to be rated by both S&P and Moody's).
Section 1.93 "PERMITTED LIENS" has the meaning ascribed to it in
Section 7.2. hereof.
Section 1.94 "PERSON" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture or other entity of whatever nature, whether public or private.
Section 1.95 "PLAN" means, at any time, an employee pension or other
benefit plan that is subject to Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either (i) maintained by
the Company or any member of the Controlled Group for employees of the Company
or any member of the Controlled Group or (ii) if such plan is established,
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one (1) employer makes contributions and to
which the Company or any member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
(5) plan years made contributions.
Section 1.96 "POOLED FACILITIES" means three or more Operating
Facilities having an aggregate appraised value of at least TWENTY MILLION AND
NO/100 DOLLARS ($20,000,000.00), (i) the debt financings or leases of which are
cross defaulted and, with respect to Mortgages, cross collateralized and (ii)
which are
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commonly owned or operated by any Person or Affiliate of such Person.
Section 1.97 "POOLED GUARANTEED FACILITIES" means three or more
Operating Facilities having an aggregate appraised value of at least TWENTY
MILLION AND NO/100 DOLLARS ($20,000,000.00), which are commonly owned or
operated by any Person or Affiliate of such Person and the debt financings or
leases of which are subject to a valid, binding and enforceable unconditional
guarantee of payment from such Person or Affiliate of such Person which commonly
owns or operates such Facilities.
Section 1.98 "PRIME RATE" means the rate of interest then announced
from time to time by Chase Manhattan Bank, N.A. (or successor bank) as its prime
rate of interest; provided, however, that if, at any time, the Rating shall ever
be less than BBB- or Baa3, then the Prime Rate shall mean the rate of interest
announced by Chase Manhattan Bank, N.A. (or successor bank) as its prime rate of
interest plus one-quarter of one percentage point (0.25%). The Prime Rate shall
be adjusted automatically as of the effective date of any change in the prime
rate of interest announced by Chase Manhattan Bank, N.A. (or successor bank).
Section 1.99 "PRIME RATE LOAN" means a Loan bearing interest at a
rate equal to the Prime Rate.
Section 1.100 "QUALIFIED APPRAISAL" means an appraisal independently
and impartially prepared by a qualified appraiser retained or approved in
writing by the Bank and having substantial experience in the appraisal of health
care facilities and conforming to Uniform Standards of Professional Appraisal
Practice ("USPAP") adopted by the Appraisal Standards Board of the Appraisal
Foundation.
Section 1.101 "RATING" means the higher two ratings established from
time to time by either Standard & Poors Corporation, Moody's Investors Service
Inc. and Duff & Phelps Ratings Group for senior, unsecured non-credit-enhanced
long-term indebtedness of the Company.
Section 1.102 "REGISTER" has the meaning ascribed to it in Section
10.2. hereof.
Section 1.103 "REIT" means a "real estate investment trust," as such
term is defined in Section 856 of the Code.
Section 1.104 "RELEASE" means any release, emission, disposal,
leaching, or migration into the environment (including, without limitation, the
abandonment or improper disposal of any barrels, containers, or other closed
receptacles containing any Hazardous Materials), or into or out of any property
owned, occupied or used by the Company or any of its Subsidiaries.
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Section 1.105 "RELEVANT LOCAL TIME" means 10:00 a.m. local time in the
place where the Eurodollar Office is located.
Section 1.106 "REPORTABLE EVENT" means any of the events described in
Section 4043(b) of ERISA.
Section 1.107 "REQUEST" has the meaning set forth in Section 2.4.4.
hereof.
Section 1.108 "REVOLVING CREDIT NOTE" has the meaning ascribed to it
in Section 2.1.6. hereof.
Section 1.109 "REVOLVING LOAN" means any loan or advance which the
Company requests pursuant to Section 2.1.1. hereof.
Section 1.110 "REVOLVING LOANS" means each group of Revolving Loans
requested by the Company and made by the Bank under Section 2.1.1. hereof.
Section 1.111 "SCHEDULED MATURITY DATE" has the meaning ascribed to it
in Section 2.1.10. hereof.
Section 1.112 "SEC" means the United States Securities and Exchange
Commission or any successor agency or body.
Section 1.113 "SOLVENT" means, when used with respect to any Person,
that as of the date as to which the Person's solvency is to be determined:
(a) it has sufficient capital to conduct its business; and
(b) it is able to meet its debts as they mature.
Section 1.114 "SUBSIDIARY" means, in the case of the Company, any
corporation or other entity, including Company Limited Partnerships but
excluding Controlled Limited Partnerships, of which fifty percent (50%) or more
of the outstanding voting stock or interests are owned or controlled directly or
indirectly by the Company or one or more of its Subsidiaries and, in the case of
any other Person, any Person of which fifty percent (50%) or more of the
ordinary voting power for the election of a majority of the members of the board
of directors or other governing body of such Person is held or controlled by
another Person or a Subsidiary of such other Person; or any other organization
the management of which is directly or indirectly controlled by another Person
or Subsidiary of such other Person through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which a Person
has more than a fifty percent (50%) ownership interest. The term "control" (and
its correlative meanings "controlled by" and "under common control with") as
used in this
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Section 1.113. 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 ownership of voting stock, by contract or otherwise.
Section 1.115 "TANGIBLE NET WORTH" means, as of any date of which the
amount thereof shall be determined, the excess of (a) the sum of (i) the par
value (or value stated on the books of Meditrust) of the shares of beneficial
interest of Meditrust, plus (or minus, in the case of a surplus deficit) and
(ii) the amount of the consolidated surplus, whether capital or earned, of
Meditrust, over (b) the sum of treasury stock, goodwill, intangible items such
as unamortized debt discount and expense, patents, trade and service marks and
names, copyrights and research and development expenses and any write-up in the
value of assets, all of the foregoing determined on a consolidated basis.
Section 1.116 "TOTAL CAPITAL" means, as of any date as of which the
amount thereof shall be determined, the sum of (i) Meditrust's Funded Debt plus
(ii) Meditrust's Tangible Net Worth as of such date, all of the foregoing
determined on a consolidated basis.
Section 1.117 "TOTAL LIABILITIES" means as of any date all of
Meditrust's liabilities that should, in accordance GAAP, be classified as total
liabilities on a balance sheet of Meditrust prepared as of such date, all of the
foregoing determined on a consolidated basis.
Section 1.118 "TRIBUNAL" means any state, commonwealth, country,
municipal, federal, foreign, territorial or other governmental body, court,
administrative department, commission, board, bureau, district, authority,
agency, or instrumentality, or any arbitration authority.
Section 1.119 "UNSECURED INDEBTEDNESS" means Indebtedness other than
Indebtedness under the Line of Credit and the Fleet Bank Credit Facility which
is not secured by any Lien.
Section 1.120 "UNUSED COMMITMENT" means, as of the date as of which
the amount thereof shall be determined, the positive difference, if any, between
(i) the amount of the Bank's Commitment as of such date and (ii) the aggregate
outstanding principal amount of Revolving Loans made by the Bank as of such
date.
Section 1.121 "UNUSED COMMITMENT AMOUNT" means, as of any date as of
which the amount thereof shall be determined, the positive difference, if any,
between (i) the Commitment Amount as of such date and (ii) the Outstanding
Amount as of such date.
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Section 1.122 "UNUSED FEE" has the meaning ascribed to it in Section
2.3.1. hereof.
Section 2 THE CREDIT FACILITIES
Section 2.1 The Line of Credit.
------------------
Section 2.1.1 Revolving Loans. Subject to the terms and
conditions contained in this Agreement, the Bank agrees to extend to the Company
a line of credit and to lend to the Company, and the Company may borrow, repay
and reborrow, on a revolving basis, in one (1) or more Revolving Loans from time
to time during the period commencing after the Closing Date and continuing
through the close of business on the Scheduled Maturity Date, amounts which are
at least TWO MILLION AND NO/100 DOLLARS ($2,000,000.00) and in integral
multiples of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) thereafter
and which, together with the Outstanding Amount, do not exceed (after giving
effect to all amounts requested) in the aggregate at any one time outstanding
the lesser of the Commitment Amount or the Borrowing Base in effect from time to
time (the "Line of Credit"). Notwithstanding any provision of this Agreement to
the contrary, all Revolving Loans shall constitute one obligation of the Company
to the Bank. The Bank's obligation to make Revolving Loans hereunder (i) shall
terminate on the Scheduled Maturity Date or any earlier date as may be provided
for in this Agreement and (ii) is limited to the amount of its Commitment.
Section 2.1.2 USE OF PROCEEDS. The proceeds from the Revolving
Loans shall be used by the Company solely (a) to acquire Facilities; (b) to fund
Construction Investments; (c) to extend or acquire loans secured by Mortgages;
and (d) for general corporate purposes.
Section 2.1.3 CALCULATION OF THE BORROWING BASE. The Borrowing
Base shall be calculated by reference to the most recent Borrowing Report
delivered by the Company under Section 6.1.(c) hereof. The Company shall
calculate the Borrowing Base on a quarterly basis and the Company shall
immediately notify the Bank when the Outstanding Amount exceeds the available
Borrowing Base and shall pay any excess in accordance with Section 2.1.11.
hereof. The Company may request that it receive a Revolving Loan in excess of
the amount which would be available under the most recent Borrowing Report
delivered by the Company; provided, however, that the Company shall provide the
Bank with evidence set forth in a new Borrowing Report to be delivered with such
request that, on a pro forma basis, the inclusion of the value of new or
reappraised Facilities will be sufficient to increase the Borrowing Base so as
to permit the requested borrowing. The acceptance or rejection of any such
request or any calculation of the Borrowing Base shall be within the reasonable
discretion of the Bank.
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Section 2.1.4 NOTICE OF BORROWING. Whenever the Company
desires to obtain a Revolving Loan, the Company shall notify the Bank (which
notice shall be irrevocable) by telex, telegraph or telephone received no later
than 10:00 a.m. (New York, New York time) on the date two (2) Business Days
before the date of the requested Revolving Loan in the case of a Prime Rate Loan
and no later than 10:00 a.m. (New York, New York time) on the date three (3)
Business Days before the date of the requested Revolving Loan in the case of a
LIBOR Loan. Such notice shall specify: (i) the effective date and amount of the
requested Revolving Loan; (ii) the interest rate option to be applicable
thereto; and (iii) the duration of the applicable Interest Period, if any
(subject to the provisions of the definition of Interest Period). Each such
notification shall be immediately followed by a written confirmation thereof by
Meditrust in substantially the form of Exhibit A attached hereto (the "Notice of
Borrowing"); provided, however, that if such written confirmation differs in any
material respect from the action taken by the Bank, the records of the Bank
shall control absent manifest error. Notwithstanding the foregoing, no Revolving
Loan shall be made unless at the time thereof:
(a) no Default or Event of Default shall exist; and
(b) as of the date of making such Revolving Loan, no event,
circumstance or condition shall exist or shall have occurred and be continuing
which has a Material Adverse Effect.
Section 2.1.5 THE LOAN ACCOUNT. Each Revolving Loan shall be
recorded in an account on the books of the Bank bearing the Company's name (the
"Loan Account"). There shall also be recorded in the Loan Account all
prepayments and payments made by the Company in respect of the Line of Credit
and other appropriate debits and credits as herein provided. The Bank shall
render and send to the Company on a monthly basis a statement of the Loan
Account showing the respective outstanding principal balance of the Line of
Credit, together with interest and other appropriate debits and credits as of
the date of the statement. The statement of the Loan Account shall be considered
correct in all respects and accepted by and be conclusively binding upon the
Company unless the Company makes specific written objection thereto within sixty
(60) days after the date the statement of the Loan Account is sent.
Section 2.1.6 REVOLVING CREDIT NOTE. On the Closing Date, the
Company shall issue to the Bank a promissory note executed in substantially the
form attached hereto as Exhibit B (the"Revolving Credit Note"), with all blanks
therein appropriately completed. The Revolving Credit Note shall evidence the
obligation of the Company to repay to the Bank all
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Revolving Loans made by the Bank to the Company on account of the Bank's
Commitment.
Section 2.1.7 PAYMENT OF PRINCIPAL. The aggregate unpaid
principal amount of all Revolving Loans, together with accrued and unpaid
interest thereon, as evidenced by the Revolving Credit Note shall, unless sooner
accelerated by the Bank following the occurrence of an Event of Default, be
repaid by the Company on the Scheduled Maturity Date.
Section 2.1.8 Interest Rates and Payments of Interest.
---------------------------------------
(a) Each Revolving Loan which is a LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the LIBOR Rate. Such interest
shall be payable (i) in arrears on the last Business Day of the Interest Period
with respect thereto and (ii) when such LIBOR Loan is due (whether at maturity,
by reason of acceleration or otherwise). In addition, upon any prepayment which
has the effect of reducing the outstanding principal amount of any LIBOR Loan to
zero (0), all accrued and unpaid interest in respect of such LIBOR Loan shall be
payable at the time of any such prepayment.
(b) Each Revolving Loan which is a Prime Rate Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Prime Rate in effect
from time to time. Such interest shall be payable (i) quarterly in arrears on
the last day of each quarter commencing December 31, 1996 and continuing on each
December 31, March 31, June 30 and September 30 thereafter and (ii) when such
Revolving Loan is due (whether at maturity, by reason of acceleration or
otherwise). In addition, upon any prepayment which has the effect of reducing
the outstanding principal amount of any Prime Rate Loan to zero (0), all accrued
and unpaid interest in respect of such Prime Rate Loan shall be payable at the
time of any such prepayment.
Section 2.1.9 TERMINATION. The Line of Credit and the Bank's
obligation to lend thereunder shall terminate on September 23, 1999 (the
"Scheduled Maturity Date"), at which time all outstanding principal, accrued and
unpaid interest and any other sums due and owing under the Line of Credit shall
be immediately due and payable.
Section 2.1.10 RENEWAL. This Agreement may be renewed upon the
agreement of the Company and the Bank no later than March 23, 1999. If this
Agreement shall be so renewed, the Scheduled Maturity Date shall be extended to
September 23, 2001.
Section 2.1.11 MANDATORY PREPAYMENTS. The Company shall be
required to pay to the Bank and to Fleet Bank on behalf
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of the lending institutions party to the Fleet Bank Credit Facility on a pari
passu and pro rata basis, as a prepayment in respect of outstanding Revolving
Loans, one hundred percent (100%) of the net proceeds (defined as all proceeds
received or to be received less customary transaction costs and expenses) from
(i) sales or other dispositions of assets of the Company, including shares of
stock of, and Indebtedness due and owing to, Subsidiaries of the Company, the
aggregate proceeds of which are in excess of TWO MILLION FIVE HUNDRED THOUSAND
AND NO/100 DOLLARS ($2,500,000.00) in the trailing twelve (12) month period,
(ii) the creation or issuance of additional Indebtedness of the Company (except
for loans and advances under the Fleet Bank Credit Facility) and (iii) the sale
of additional equity securities or other ownership interests of the Company,
said amount to be paid immediately upon the receipt of said proceeds unless such
proceeds are to be used for the purposes set forth in Section 2.1.2 hereof
within ten (10) Business Days of receipt. In addition, if it should be
determined at any time that the Outstanding Amount exceeds the available
Borrowing Base, the Company shall be required to prepay any such excess amount
within five (5) Business Days following such determination. Further, if at any
time the Outstanding Amount exceeds the Commitment Amount in effect from time to
time, any such excess amount shall be due and payable within five (5) Business
Days.
Section 2.1.12 REDUCTION OF COMMITMENT. The Company may reduce
any unused portion of the Commitment Amount at any time upon ten (10) days prior
written notice from the Company to the Bank; provided, however, that any such
reduction shall be in an amount of at least FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) or any multiple thereof and no such reduction shall be subject
to reinstatement.
Section 2.2 Interest.
--------
Section 2.2.1 CALCULATION OF INTEREST. Interest on Prime Rate
Loans shall accrue on the basis of a three hundred sixty-five (365) day year,
and interest on LIBOR Loans shall accrue on the basis of a three hundred sixty
(360) day year. In each case, interest shall be calculated according to the
actual number of days elapsed during each accrual period.
Section 2.2.2 CONTINUATION OR CONVERSION OF LOANS. The Company
may continue or convert all or any part (in amounts which are at least TWO
MILLION AND NO/100 DOLLARS ($2,000,000.00) and in integral multiples of FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00)) of any outstanding Revolving
Loan into a Loan of any other type provided for in this Agreement in the same
aggregate principal amount, on any Business Day (which, in the case of a
conversion of a LIBOR Loan, shall be the last day of the Interest Period
applicable to such Loan unless the Company shall prepay all Breakage Costs
associated therewith). Whenever
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the Company desires to continue or convert a Revolving Loan, the Company shall
notify the Bank (which notice shall be irrevocable) by telex, telegraph or
telephone received no later than 10:00 a.m. (New York, New York time) on the
date two (2) Business Days before the date on which the Revolving Loan is to be
continued or converted to a Prime Rate Loan and three (3) Business Days before
the date on which the requested Revolving Loan is to be continued or converted
to a LIBOR Loan. Such notice shall specify: (i) the effective date and amount of
each Revolving Loan or portion thereof to be continued or converted; (ii) the
interest rate option to be applicable thereto; and (iii) the duration of the
applicable Interest Period, if any (subject to the provisions of the definition
of Interest Period). Each such notification shall be immediately followed by a
written confirmation thereof by the Company in substantially the form of Exhibit
D attached hereto (the "Notice of Continuation or Conversion"); provided,
however, that if such written confirmation differs in any material respect from
the action taken by the Bank, the records of the Bank shall control absent
manifest error.
Section 2.2.3 Duration of Interest Periods.
----------------------------
(a) Subject to the provisions of the definition of
Interest Period, the duration of each Interest Period applicable to a Loan shall
be as specified in the applicable Notice of Borrowing or Notice of Continuation
or Conversion delivered pursuant to the provisions of Section 2.1.4. or Section
2.2.2.
(b) If the Bank does not receive a notice of
election of duration of an Interest Period for a Loan pursuant to subsection (a)
above within the applicable time limits specified therein, or if a Default or an
Event of Default exists when such notice must be given, the Company shall be
deemed to have elected to convert such Loan in whole into a Prime Rate Loan on
the last day of the then current Interest Period with respect thereto, except
that if such Loan is converted to a Prime Rate Loan because an Event of Default
exists, the rate of interest payable on all Loans shall be the Default Rate.
(c) Notwithstanding the foregoing, the Company may
not select an Interest Period that would end, but for the provisions of the
definition of Interest Period, after the Scheduled Maturity Date.
Section 2.2.4 Changed Circumstances.
---------------------
In the event that:
(i) on any date on which the LIBOR Rate would otherwise be
set the Bank shall have reasonably determined in good faith (which determination
shall be final and conclusive)
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<PAGE> 35
that adequate and fair means do not exist for ascertaining the LIBOR Base, or
(ii) at any time the Bank shall have reasonably determined in
good faith (which determination shall be final and conclusive) that:
(A) the making or continuation of or conversion of
any Loan to a LIBOR Loan has been made impracticable or unlawful by (1) the
occurrence of a contingency that materially and adversely affects the interbank
market or (2) compliance by the Bank in good faith with any applicable law or
governmental regulation, guideline or order or interpretation or change thereof
by any governmental authority charged with the interpretation or administration
thereof or with any request or directive of any such governmental authority,
whether or not having the force of law (in any such case, a "Legal Impediment");
or
(B) the LIBOR Rate shall no longer represent the
effective cost to the Bank for United States dollar deposits in the interbank
market for deposits in which it regularly participates; or
(C) that U.S. dollar deposits in immediately
available funds in an amount approximately equal to the outstanding principal
balance of the Line of Credit are not readily available to the Bank's Eurodollar
Office for delivery on the first day of any Interest Period;
then, and in any such event, the Bank shall forthwith so notify the Company by
facsimile notice at least one (1) day prior to (i) the date that the LIBOR Rate
is to be set, (ii) the commencement date of the applicable Interest Period or
(iii) the occurrence of the applicable event, and the Interest Rate shall become
the Prime Rate and shall remain the Prime Rate until the Bank determines and so
notifies the Company that the circumstances giving rise to such notice no longer
apply. Until the Bank notifies the Company that the circumstances giving rise to
such notice no longer apply, the obligation of the Bank to allow selection by
the Company of a LIBOR Loan (during the occurrence of such circumstances,
referred to as "Affected Loans") shall be suspended. If at the time the Bank so
notifies the Company, the Company has previously given the Bank a Notice of
Borrowing or a Notice of Continuation or Conversion with respect to one or more
Affected Loans but such borrowing or conversion has not yet gone into effect,
such notification shall be deemed to be void and the Company may only borrow or
convert to a Prime Rate Loan. If as a result of a Legal Impediment, the Bank
shall incur Breakage Costs in converting from a LIBOR Loan, then the Company
shall pay all such Breakage Costs to the Bank promptly upon its demand therefor
for its account.
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<PAGE> 36
Section 2.2.5 PAYMENTS NOT AT END OF INTEREST PERIOD. If the
Company for any reason makes any payment of principal with respect to any LIBOR
Loan on any day other than the last day of an Interest Period applicable to such
Loan or fails to borrow or continue, or convert to, a LIBOR Loan after giving a
Notice of Borrowing or Notice of Continuation or Conversion, the Company shall
pay to the Bank an amount equal to all Breakage Costs associated therewith
(which amounts shall be disclosed to the Company in reasonable detail). The
Company shall pay such amount within ten (10) Business Days of receipt by the
Company of a statement therefor.
Section 2.2.6 USURY. If the rate of interest payable by the
Company under this Agreement, the Note or the Other Documents shall be or become
usurious or otherwise unlawful under laws applicable thereto, the interest rate
shall be reduced to the maximum lawful rate and any amount paid by the Company
in excess of the maximum lawful rate shall be considered a payment in reduction
of principal or, at the sole election of the Bank, shall be returned to the
Company.
Section 2.3 Fees.
----
Section 2.3.1 UNUSED FEE. The Company agrees to pay to the
Bank a fee (the "Unused Fee") on the average daily unused portion of the
Commitment Amount from the Closing Date until the Scheduled Maturity Date at a
per annum rate determined daily by reference to the Rating as follows:
(i) (i) If the Rating is A-/A3, then the per annum rate
shall be seventeen and one-half basis points (17.5bp); and
(ii) If the Rating is BBB+/Baa1, then the per annum rate
shall be twenty basis points (20bp); and
(iii) If the Rating is BBB/Baa2, then the per annum rate shall
be twenty-two and one-half basis points (22.5bp); and
(iv) If the Rating is BBB-/Baa3, then the per annum rate
shall be twenty-five basis points (25bp); and
(v) If the Rating is less than BBB-/Baa3, then the per annum
rate shall be fifty basis points (50bp).
The Unused Fee shall be payable in arrears on (i) the last day of each quarter
commencing on December 31, 1996 and continuing on each December 31, March 31,
June 30 and September 30 thereafter, (ii) the Scheduled Maturity Date, (iii) the
acceleration of the Obligations and (iv) the termination of this Agreement.
Section 2.3.2 CALCULATION OF FEES. All Fees shall, except as
otherwise provided in this Agreement, be calculated on
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the basis of a three hundred sixty (360) day year and according the actual
number of days elapsed in each accrual period.
Section 2.4 General Terms Applicable to the Credit Facility.
-----------------------------------------------
Section 2.4.1 DIRECT DEBIT. The Company hereby authorizes the
Bank to automatically debit, charge against and collect from the Company's
demand deposit account established with the Bank any and all principal,
interest, fees, charges, expenses and other amounts due and payable under this
Agreement as when the same become due and payable.
Section 2.4.2 OVERDUE PAYMENTS. Overdue principal (whether at
maturity, by reason of acceleration or otherwise) and, to the extent permitted
by applicable law, overdue interest and fees and any other amounts payable
hereunder and under the Note shall bear interest from and including the due date
thereof until paid, compounded monthly and payable on demand, at a rate per
annum equal to the Default Rate.
Section 2.4.3 MANNER AND TIME OF PAYMENTS BY THE COMPANY. All
payments made by the Company hereunder on account of principal, interest, and
fees and expenses shall be made in United States funds on their respective due
dates to the Bank in immediately available funds without setoff or counterclaim
not later than 11:00 a.m. (New York, New York time) at the head office of the
Bank or at such other address as the Bank may from time to time specify in
writing. Each such payment will be applied, first, on account of fees and
expenses which may be due and payable hereunder, second, on account of the
interest then due and owing, and third, on account of the principal then due and
owing.
Section 2.4.4 Increased Costs and Capital Adequacy.
------------------------------------
(a) If any change in any law, regulation, order, decree,
treaty, directive or bulletin or in the interpretation or application thereof
after the date hereof by any court or administrative or governmental authority
charged with the administration thereof, or if the Bank's or Bank Affiliate's
compliance with any request or directive (whether or not having the force of
law) from any central bank or monetary authority or other governmental
authority, agency or instrumentality enacted or adopted after the date hereof,
shall in any such case:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against any credit extended by the Bank
or any Bank Affiliate under this Agreement; or
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(ii) impose on the Bank or any Bank Affiliate or its
parent company any other condition regarding this Agreement,
and the result of any event referred to in the preceding clause (i) or (ii)
above shall be to increase the cost to the Bank or any Bank Affiliate or such
parent company of issuing, funding or maintaining the Loans (which increase in
cost shall be determined by the Bank's reasonable allocation of the aggregate of
such cost increases resulting from such event),
then, upon written request by the Bank (a "Request"), the Company shall pay to
the Bank from time to time as specified by the Bank, additional amounts which
shall be sufficient to compensate the Bank for such increased cost from the date
of such change. The Request shall include a certificate as to such increased
cost incurred as a result of any event mentioned in clause (i) or (ii) above
prepared in reasonable detail (which shall include the method employed by the
Bank in determining the allocation of such costs to the Company) and otherwise
in accordance with this subsection (a), submitted by the Bank, shall be
conclusive evidence, absent manifest error, as to the amount thereof.
(b) (i) In addition to the foregoing, if any change in any
domestic or foreign law, regulation, order, decree, treaty, directive or
bulletin or in the interpretation or application thereof after the date hereof
by any court or administrative or governmental authority charged with the
administration thereof, or if the Bank's or Bank Affiliate's compliance with any
request or directive (whether or not having the force of law) from any central
bank or monetary authority or other governmental authority, agency or
instrumentality enacted or adopted after the date hereof, shall in any such
case:
(A) subject the Bank or Bank Affiliate to any new or
additional tax or change in any tax with respect to the Notes or the Line of
Credit, or change the basis of taxation of payments to the Bank or Bank
Affiliate of principal, commitment fee, interest, premium, or any other amount
payable under the Notes; or
(B) impose, modify or hold applicable or change any
reserve (including, without limitation, basic, supplemental, marginal and
emergency reserves) on an industry-wide special deposit, capital adequacy,
compulsory loan or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, advances or other credit extended
by, or any other acquisition of funds for loans by (including, without
limitation, all Eurocurrency funding by all "Eurocurrency liabilities" as
defined in Regulation D of the Board of Governors of the Federal Reserve System,
as amended) any office of the Bank or Bank Affiliate; or
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(C) impose on the Bank or Bank Affiliate any other
condition or change therein;
and the result of any of the foregoing is to increase the cost to the Bank or
Bank Affiliate of making, renewing or maintaining advances or extensions of
credit or to reduce any amount receivable thereon then, in any such case, the
Company shall promptly pay the Bank, upon a Request, such amounts as will
compensate the Bank or Bank Affiliate for such additional cost or reduced amount
receivable. Upon the failure of the Company to compensate the Bank or the Bank
Affiliate for the amounts set forth herein within ten (10) Business Days of a
Request, then, at the Bank's option, the obligation of the Bank or any Bank
Affiliates to make, convert and maintain advances hereunder as loans under which
the Interest Rate is the LIBOR Rate, and the right of the Company to elect that
the Interest Rate be the LIBOR Rate, shall forthwith be unavailable and the
Interest Rate hereunder shall be automatically converted to the Prime Rate.
(ii) If the Bank or Bank Affiliate becomes entitled to claim
any additional amounts payable pursuant to this subsection (b), the Bank shall
promptly submit to the Company a Request with respect to such entitlement. A
certificate as to any additional amounts payable pursuant to the foregoing
submitted by the Bank (and signed by an authorized officer of the Bank) to the
Company shall, absent manifest error, be conclusive.
(iii) If a Request is given, the Company shall have the
option, exercisable by notice to the Bank given within five (5) Business Days'
after the Company's receipt of such notice, to convert the Interest Rate to the
LIBOR Rate, or the Prime Rate, as applicable; provided, however, that if the
Company makes such election, or if the Interest Rate is converted to another
Interest Rate pursuant to this subsection (b), the Company shall pay any
Breakage Costs incurred in making any such conversion to the Bank for the
account of the Bank or Bank Affiliate. The Bank shall certify such costs to the
Company, which certification may be based on certifications submitted to the
Bank, and such certification shall be binding absent manifest error.
(c) If the Bank shall have determined that (i) the
applicability of any law, rule, regulation or guideline adopted pursuant to or
arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards", (ii) the adoption after the date
hereof of any applicable law, rule or regulation regarding capital adequacy, or
any change therein, or (iii) any change in the interpretation or administration
thereof, or compliance by the Bank or its parent company with any requirement or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency,
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except any such adoption or change or any such compliance with a request or
directive which applies or has been applied solely to the Bank or its parent
company by reason of events or conditions relating solely to the Bank, has the
effect of reducing the rate of return on the Bank's or its parent bank holding
company's capital as a consequence of its commitment hereunder to a level below
that which the Bank or its parent company could have achieved but for such
adoption, change or compliance by an amount deemed by the Bank to be material
(for which reduction of the rate of return shall be determined by the Bank's or
the parent company's reasonable allocation of such reduction of the rate of
return resulting from such event) then, upon the submission of a Request by the
Bank, the Company shall pay to the Bank, from time to time as specified by the
Bank, such additional amount or amounts which shall be sufficient to compensate
the Bank for such reduction. A certificate as to such increased cost incurred by
the Bank as a result of any event mentioned in this subsection (c), prepared in
reasonable detail (which shall include the method employed by the Bank in
determining the allocation of such costs to the Company) and otherwise in
accordance with this subsection (c) submitted by the Bank to the Company, shall
be conclusive evidence, absent manifest error, as to the amount thereof.
(d) Except as otherwise specifically provided in this
Section, amounts payable by the Company pursuant to this Section shall be
payable within ten (10) Business Days of receipt by the Company of a Request.
(e) Any certificate relating to a Request shall provide
reasonable supporting documentation relative to the calculation of any amounts
set forth thereon.
(f) Notwithstanding any provision of this Section 2.4.4. to
the contrary, prior to giving any Request, the Bank shall first use its best
efforts (which shall not require additional costs or administrative burdens on
the Bank) to take such steps (including, without limitation, changing its head
office or Eurodollar Office) as would eliminate or reduce any cost or expense to
be borne by the Company under this Section 2.4.4.
(g) In lieu of paying any Request, the Company shall have
the right, within thirty (30) Business Days of the delivery of such Request, to
terminate the Commitment by prepaying the entire principal amount due and
payable under this Agreement, the Note and the Other Documents in accordance
with Section 2.4.6. hereof. In such an event, the Company shall have no
liability to pay any Request.
(h) Notwithstanding any provision of this Section 2.4.4. to
the contrary, in no event shall the Company be
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obligated to pay any Request which relates to any income, excise or franchise
taxes imposed or sought to be imposed on the Bank.
Section 2.4.5 WITHHOLDING TAX EXEMPTION. The Bank agrees to deliver to
the Company (if it has not already done so or if the same have expired or become
obsolete), at least three (3) Business Days before interest or fees first become
payable hereunder for the account of the Bank, two (2) duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, in either case
certifying whether the Bank is entitled to receive payments under this Agreement
and the Note without deduction or withholding of any United States Federal
income taxes. The Bank further undertakes to deliver to the Company two (2)
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Company, in each case certifying whether the Bank is entitled
to receive payments under this Agreement and the Note without deduction or
withholding of any United States Federal income taxes, unless 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 the
Bank from duly completing and delivering any such form with respect to it and
the Bank advises the Company that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.
Section 2.4.6 PREPAYMENTS OF THE LOANS. The Company may upon at least
three (3) Business Days' notice to the Bank in the case of LIBOR Loans and upon
at least two (2) Business Days' notice in the case of Prime Rate Loans prepay
any Revolving Loan in whole by paying the entire principal amount of such Loan
together with accrued and unpaid interest thereon to the date of such prepayment
and, in the case where the Bank will be required to break a LIBOR funding
contract by reason of such prepayment, any Breakage Costs. Any such prepayment
hereunder shall be applied first to any Breakage Costs and other amounts due
with respect to the Revolving Loan being prepaid, then to accrued and unpaid
interest and finally to the principal due in respect thereof. Any and all
prepayments shall not affect the obligation, if any, to pay the regular
installments required hereunder, until all Obligations have been paid in full.
Section 3 REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make the
Loans, the Company makes the following representations and warranties to the
Bank, which, except as specifically provided below, shall be deemed made as of
the
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Closing Date and as of the date each Revolving Loan is made which shall survive
the execution and delivery hereof and each performance hereunder. Any knowledge
acquired by the Bank shall not diminish its right to rely upon such
representations and warranties.
Section 3.1 ORGANIZATION, POWER AND AUTHORITY. Meditrust is a
self-administered REIT, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts, and is qualified to do business in each
jurisdiction in which such qualification is necessary in view of its business
and operations or the ownership of its properties, except where the failure to
so qualify would not have a Material Adverse Effect.
Section 3.2 AUTHORITY. The execution, delivery and performance by
the Company of this Agreement, the Note and the Other Documents are within
Meditrust's trust powers, have been duly authorized by all necessary action, and
do not and will not (a) require any consent or approval of the shareholders of
the Company not obtained, (b) contravene Meditrust's Declaration of Trust, (c)
violate any provision of any Legal Requirement (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System) presently
in effect having applicability to the Company, the violation of which would have
a Material Adverse Effect, (d) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Company is a party or by which it or its properties may
be bound or affected, the default under or breach of which would have a Material
Adverse Effect, or (e) result in, or require, the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any of the properties now
owned or hereafter acquired by the Company. The Company is not in default under
any such Legal Requirement or any such indenture, agreement, lease or
instrument, which default would result in or cause any Material Adverse Effect.
Section 3.3 NO BREACH. Neither the execution nor delivery of this
Agreement or the Note, nor the offering, issuance and sale of the Note, nor
fulfillment of nor compliance with the terms and provisions hereof and of the
Note will 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, or
result in the creation of any Lien upon any of the properties or assets of the
Company pursuant to, the Declaration of Trust of Meditrust or any agreement
(including any agreement with stockholders), instrument or Legal Requirements to
which the Company is subject which would have a Material Adverse Effect.
Meditrust is not a party to, or otherwise subject to any provisions contained
in, any instrument evidencing Indebtedness of the Company, any agreement
relating thereto or any other
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contract or agreement (including its Declaration of Trust) which limits the
amount of, or otherwise imposes restrictions on the incurring of, Indebtedness
of the Company of the type to be evidenced by the Note except as set forth in
the Declaration of Trust and the agreements listed in Schedule 3.3. attached
hereto.
Section 3.4 QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST.
Meditrust qualified as a REIT under the provisions of the Code, as applicable
for its fiscal years ended December 31, 1988 through December 31, 1993.
Appropriate Federal income tax returns for the fiscal years through December 31,
1993 have been filed by the Company with the Internal Revenue Service (the
"IRS") and no previously filed return has been examined and reported on by the
IRS. Meditrust is in a position to qualify for the 1994 and 1995 fiscal years as
a REIT under the provisions of the Code. The Company has not incurred any
liability for excise taxes pursuant to Section 4981 of the Code.
Section 3.5 BINDING OBLIGATIONS. This Agreement, the Note and the
Other Documents, when issued and delivered for value received, constitute the
legal, valid and binding obligations of the Company enforceable against it in
accordance with their respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally or general principles of equity.
Section 3.6 PERMITS. The Company possesses all material permits,
authorizations, licenses, approvals, waivers and consents, the failure of which
to possess would have a Material Adverse Effect, all of which are in full force
and effect.
Section 3.7 NO CONSENTS. The execution, delivery and performance of
the Agreement, the Note and the Other Documents did not and does not require any
approval, consent or waiver under any material agreement, document, or
instrument to which the Company is a party or by which it or its properties or
assets may be bound or affected. No approval, authorization, consent, waiver or
order of, or registration, application or filing with, any Tribunal was or is
required in connection with the transactions contemplated by the Agreement, the
Note or the Other Documents.
Section 3.8 FINANCIAL STATEMENTS. Meditrust has furnished to the
Bank its audited consolidated Financial Statements for the fiscal year ending
December 31, 1995. All Financial Statements of the Company heretofore delivered
to the Bank present fairly in all material respects the financial condition and
results of business operations of the Company for the periods indicated in
accordance with GAAP. The Company has no material direct or contingent
liabilities, liabilities for taxes, unusual commitments or unrealized or
unanticipated losses not disclosed
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in such Financial Statements which when taken together would have a Material
Adverse Effect. Since the date of the latest dated balance sheet included in the
Financial Statements, there has been no material adverse change in the business
operations or financial condition of the Company from that set forth in the
balance sheet contained in such Financial Statements except as disclosed in such
Financial Statements or in Schedule 3.8.
attached hereto.
Section 3.9 FINANCIAL INFORMATION. All written data, reports and
information which the Company has supplied to the Bank or caused to be so
supplied by a third party on its behalf in connection with this Agreement are
complete and accurate in all material respects and contain no material omission
or misstatement except such as have been corrected in a writing delivered to the
Bank.
Section 3.10 INTENTIONALLY LEFT BLANK.
Section 3.11 USE OF PROCEEDS. Meditrust is not an "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended (15 U.S.C. ss.ss.80(a)(1) et seq.). Meditrust
(i) is not a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (ii) is not subject to
regulation under the Federal Power Act, the Investment Company Act of 1940 or
the Interstate Commerce Act, nor is subject to any other statute or regulation
which regulates the incurring of Indebtedness by Meditrust, other than Federal
and State securities laws. The Company does not own any margin security as that
term is defined in Regulation U of the Board of Governors of the Federal Reserve
System. None of the proceeds of the Loans will be used, or have been used,
directly or indirectly, for the purpose of reducing or retiring any Indebtedness
which was originally incurred to purchase or carry any margin security or for
any other purpose which might constitute any of the Loans a "purpose credit"
within the meaning of said Regulation U or Regulations G or X of the Federal
Reserve Board.
Section 3.12 TITLE TO REAL AND PERSONAL PROPERTY. Unless otherwise
disclosed to the Bank, the Company or a Subsidiary of the Company has good and
marketable fee or leasehold title to all its real property, including all
Facilities owned by the Company, a Subsidiary of the Company, a Company Limited
Partnership or a Controlled Limited Partnership, and good and marketable title
to all the other property and assets, including Mortgages, reflected in the
Financial Statements referred to in Section 3.8. hereof or acquired by the
Company subsequent to such date, free of all Liens except (a) property and
assets sold or otherwise disposed
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of subsequent to such date; (b) Permitted Liens; and (c) imperfections of title
and other Liens not otherwise insured against that do not materially detract
from the value of the property or have a Material Adverse Effect. All Mortgages
have been properly recorded in the jurisdictions necessary in order to perfect
the Company's or a Subsidiary of the Company's Liens therein. No financing
statement under any Uniform Commercial Code or other law which names the Company
or any Subsidiary of the Company as a debtor relating to any Facility has been
filed in any jurisdiction and neither the Company nor any Subsidiary of the
Company has signed any financing statement or any security agreement authorizing
any secured party thereunder to file any such financing statement relating to
any Facility except for Permitted Liens or as set forth on Schedule 3.12.
attached hereto.
Section 3.13 STATUTORY COMPLIANCE. Except where noncompliance would
not have a Material Adverse Effect, the Company is in material compliance with
all material Laws existing on the date hereof of all Tribunals applicable to it,
its properties and assets and the business conducted by it, including, without
limitation, (i) the provisions of the Code (Sections 856 through 860) relating
to the organization of REITs and their qualification and maintenance as such,
(ii) all SEC and state "blue sky" laws relating to the offering its securities,
(iii) ERISA, (iv) the United States Occupational Safety and Health Act of 1970
and (v) all Environmental Laws.
Section 3.14 EVENTS OF DEFAULT. No Event of Default has occurred
and/or is continuing and no Default would occur as a result of the execution and
delivery by the Company of this Agreement, the Note and the Other Documents, or
the making of any Revolving Loan.
Section 3.15 OTHER DEFAULTS. The Company is not in default, after
giving effect to any applicable notice, grace or cure periods, in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any indenture, mortgage, deed of trust,
lease, agreement, document or instrument to which it is a party or by which it
or its properties and assets are bound, where such default would have a Material
Adverse Effect.
Section 3.16 TAXES. The Company has filed all tax returns and reports
required to be filed by them with any and all Federal, state or local
governmental bodies, instrumentalities or agencies and has paid in full, made
adequate provisions or established adequate reserves for or is contesting in
good faith in appropriate proceedings, the payment of all taxes, interest,
penalties, assessments or deficiencies shown to be due or claimed to be due on
or in respect to such tax returns and reports.
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Section 3.17 SOLVENCY. The Company is currently, and after giving
effect to the transactions contemplated by this Agreement will be, Solvent and
is not contemplating either the filing of a petition under any Federal or state
bankruptcy or insolvency law or the liquidating of all or a major portion of its
properties and assets, and the Company has no knowledge of any Person
contemplating the filing of any such petition against it.
Section 3.18 RANKING OF LOAN. Except as permitted by Section 7.2. or
as set forth in Schedule 3.18. attached hereto, no Indebtedness of the Company
is secured by or otherwise benefits from any Lien on or with respect to the
whole or any part of the Company's properties or assets, present or future. The
Revolving Loans and other sums payable by the Company hereunder and under the
Note rank at least equal in terms of seniority and priority with all Unsecured
Indebtedness of the Company and at least pari passu with the Fleet Bank Credit
Facility. There exists no default or event or condition which, with the giving
of notice or passage of time, or both, would constitute a default under the
provisions of any instrument evidencing such Indebtedness or of any agreement
relating thereto.
Section 3.19 LITIGATION. Except as set forth on Schedule 3.19.
attached hereto or in the Company's filings with the United States Securities
and Exchange Commission, there are no actions, suits or proceedings by or before
any Tribunal or any arbitration or alternate dispute resolution proceeding,
pending or, to the knowledge of the Company or any of its officers, threatened
against the Company, its Subsidiaries or their properties or assets, which if
adversely determined, would have a Material Adverse Effect.
Section 3.20 GUARANTEES. Except as permitted in Schedule 1.90. or as
set forth in the Financial Statements referred to in Section 3.8. hereof and
Schedule 3.20. attached hereto, the Company is not a party to any Guarantee or
other similar type of agreement, and the Company has not offered its endorsement
to any Person which would in any way create a contingent liability (except by
endorsement of negotiable instruments payable at sight for deposit or collection
or similar banking transactions in the Company's ordinary course of business).
Section 3.21 ERISA. The Company and each member of the Controlled
Group have fulfilled their obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and are in compliance in all
material respects with the currently applicable provisions of ERISA and the
Code, and have not incurred any liability to the PBGC or a Plan under Title IV
of ERISA.
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Section 3.22 ENVIRONMENTAL PROTECTION. Except as set forth on
Schedule 3.22. attached hereto, to the best of the Company's knowledge, after
due inquiry and investigation:
(a) The business operations of the Company, each Subsidiary
of the Company and each Facility comply in all material respects with all
applicable Environmental Laws except where noncompliance would not have a
Material Adverse Effect or result in a material decrease in the value of a
Facility.
(b) Neither the Company nor, to the Company's knowledge, any
Subsidiary of the Company or any Operator has received any notice or claim to
the effect that it is or may be liable to any Person as a result of the Release
or threatened Release of any Hazardous Materials or any letter or request for
information under CERCLA or any other Environmental Laws which would have a
Material Adverse Effect or result in a material decrease in the value of a
Facility, and, neither the Company, any Subsidiary of the Company, any Operator
nor any Facility are the subject of any investigation by a Federal, state or
local governmental instrumentality, body or agency evaluating whether any
remedial action is needed to respond to a Release or threatened Release of any
Hazardous Material or claim, or threatened lawsuit or claim arising under or
related to any Environmental Law which would have a Material Adverse Effect or
result in a material decrease in the value of a Facility.
(c) Neither the Company, any Subsidiary of the Company nor,
to the Company's knowledge, any Operator or any Facility are, nor are any of
their properties, assets and operations, subject to any outstanding written
order or agreement with any Federal, state or local governmental
instrumentality, body or agency or private party respecting any Environmental
Laws which would have a Material Adverse Effect or result in a material decrease
in the value of a Facility.
(d) Neither the Company, any Subsidiary of the Company, any
Operator nor any Facility has filed any notice under any Environmental Law
indicating past or present treatment or disposal of Hazardous Materials except
where non-compliance would not have a Material Adverse Effect or result in a
material decrease in the value of a Facility, and all of the operations of the
Company, any Subsidiary of the Company, any Operator or any Facility which
involve the generation, transportation, treatment, storage or disposal of
Hazardous Materials are in substantial and material compliance with all
Environmental Laws except where noncompliance would not have a Material Adverse
Effect or result in a material decrease in the value of a Facility.
(e) No Hazardous Material exists on, under or about any of
the Facilities, in a manner that could give rise to any claim or suit against
the Company, any Subsidiary of the Company,
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or any Operator, which would have a Material Adverse Effect or result in a
material decrease in the value of a Facility, and neither the Company, any
Subsidiary of the Company, any Operator nor any Facility has filed any notice or
report of a Release of any Hazardous Materials that could give rise to any such
claim or suit against the Company, any Subsidiary of the Company or any Operator
which would have a Material Adverse Effect or result in a material decrease in
the value of a Facility.
Section 3.23 FACILITIES AND OPERATORS. Each Subsidiary of the Company
which is the owner or operator of a Facility and, to the knowledge of the
Company, each Operator is in compliance in all material respects with all
applicable Laws pertaining to the ownership or operation of health care
facilities of the types owned by a Subsidiary of the Company or any Operator.
Section 3.24 MATERIAL SUBSIDIARIES. All Subsidiaries of Meditrust are
listed on Schedule 3.24. attached hereto.
Section 3.25 MATERIALITY. Nothing has come to the attention of the
Company that causes it to believe that any documents or agreements delivered or
caused to be delivered by it, or any statements made by the Company or its
agents or representatives, to the Bank or its agents or representatives
regarding the transactions contemplated hereby, contains an untrue statement of
a material fact or omits to state a material fact necessary to make the
statements therein not misleading.
Section 3.26 INTERCOMPANY INDEBTEDNESS. All Indebtedness of any
Subsidiary of the Company to the Company or to another Subsidiary of the Company
is evidenced by an intercompany promissory note. All Indebtedness of any
Subsidiary of the Company which relates to any Investment is subject to terms
and conditions, including rates of interest and terms of repayment, which are
substantially similar to the terms and conditions of the underlying Investment
in all material respects.
Section 4 CONDITIONS TO OBLIGATIONS OF THE BANK
The Bank shall have no obligations under this Agreement unless and until
it is satisfied, in its reasonable credit judgment, that all of the following
conditions shall have been fulfilled prior to or on the Closing Date:
Section 4.1 AUTHORIZATIONS. The Bank shall have received:
(i) evidence satisfactory to the Bank to verify the
authority of the Person or Persons signing this Agreement, the Note and the
Other Documents to legally bind the Company, and the authority of each Person
who will sign the other statements, reports, certificates and documents called
for by the terms of
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this Agreement and will otherwise act under this Agreement and the Note for and
on behalf of the Company; and
(ii) the specimen signature of each Person named pursuant to
clause (i) of this Section 4.1. certified by an appropriate officer of the
Company to be a true specimen thereof.
Section 4.2 REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties contained in Section 3 of this Agreement are true and correct in
all material respects, and the Company shall have so certified to the Bank.
Section 4.3 PERFORMANCE AND COMPLIANCE. The Company shall have
performed and complied in all material respects with all covenants, agreements
and conditions in this Agreement, the Note and the Other Documents which are
required to be performed or complied with by the Company on or prior to the
Closing Date, and the Company shall have so certified to the Bank.
Section 4.4 DELIVERY OF DOCUMENTS. The Company shall have duly
executed and delivered to the Bank, in form and substance satisfactory to the
Bank and its legal counsel, this Agreement, the Note, the Other Documents and
all further documents as they may request to evidence the Obligations. In
addition, the Bank shall have received or agreed to waive or delay the receipt
of:
Section 4.4.1 A certificate of a duly authorized officer of
Meditrust certifying as to (A) the resolutions of the Trustees of Meditrust
approving this Agreement, the Note and the Other Documents to which it is a
party, (B) Meditrust's Declaration of Trust and (C) all documents evidencing
other necessary action and governmental approvals, if any, with respect to the
transactions contemplated by this Agreement.
Section 4.4.2 A certificate from the Secretary of the
Commonwealth of Massachusetts certifying as to the Declaration of Trust of
Meditrust.
Section 4.4.3 A certificate from the Secretary of the
Commonwealth of Massachusetts certifying as to the good standing of Meditrust.
Section 4.4.4 The Company shall deliver a certificate executed
by a duly authorized officer that the Company, after giving effect to the
transactions contemplated by the Agreement, is Solvent on the Closing Date.
Section 4.4.5 The Company's legal counsel shall deliver to the
Bank an opinion as to certain matters relating to the transactions contemplated
by this Agreement, the Note and the Other Documents, such opinion to be
substantially in the form attached hereto as Exhibit E.
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Section 4.4.6 Fleet Bank, as Agent under the Fleet Bank Credit
Facility, shall have executed and delivered to the Bank a letter acknowledging
and agreeing as to the pari passu nature of payments and borrowings under the
Line of Credit and the Fleet Bank Credit Facility.
Section 4.4.7 Such further documents, instruments and
agreements as the Bank shall reasonably request, all reasonably satisfactory in
form and substance to the Bank and its legal counsel.
Section 5 CONDITIONS TO MAKING REVOLVING LOANS
The Bank shall have no obligation to make Revolving Loans unless and
until it is satisfied, in its sole and absolute discretion, that all of the
following conditions shall have been fulfilled prior to or contemporaneously
with the making of such Revolving Loan.
Section 5.1 NOTICE OF BORROWING. The Bank shall have received, in a
timely manner, a Notice of Borrowing in a form reasonably satisfactory to the
Bank.
Section 5.2 NO ADVERSE CHANGE. No event, circumstance, or condition
shall exist or shall have occurred and be continuing which has a Material
Adverse Effect and Meditrust shall have so certified.
Section 5.3 TRUTH OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties set forth in Section 3 hereof shall be true and
correct in all material respects as of the date of the requested Revolving Loan
and Meditrust shall have so certified.
Section 5.4 NO DEFAULT. No event which constitutes an Event of
Default has occurred and is continuing, or would occur as a result of the making
of the requested Revolving Loan and Meditrust shall have so certified.
Section 5.5 PAYMENT OF FEES. The Company shall have paid any fees
and expenses due and payable to the Bank under this Agreement and the Other
Documents.
Section 5.6 AUTHORITY. To the extent necessary, the authority
referred to in Section 4.1. shall remain in full force and effect and the
incumbency of officers shall be as stated in the certificates of incumbency
delivered pursuant to Section 4.1. or as subsequently reflected in a new
certificate of incumbency delivered to the Bank in connection with the requested
Revolving Loan.
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Section 6 AFFIRMATIVE COVENANTS OF COMPANY
The Company covenants and agrees that from the Closing Date until the
payment and performance in full of the Obligations, unless the Bank otherwise
consents in writing:
Section 6.1 Financial Statements and Reporting Requirements.
-----------------------------------------------
(a) QUARTERLY REPORTS. As soon as available and in any event
within fifty (50) days after the end of each of the first three fiscal quarters
of each fiscal year, the Company shall provide a consolidated Financial
Statement to the Bank, including consolidated balance sheets as of the end of
such quarter, consolidated statements of income and statements of cash flow for
the period commencing as of the end of the previous fiscal year and ending with
such fiscal quarter (it being understood that for so long as the Company files
reports on Form 10-Q with the SEC, copies of said Form 10-Q shall satisfy its
obligations hereunder), together with a certificate of a duly authorized officer
of Meditrust stating that as of the date of such certificate, to the best of
such officer's knowledge, after reasonable inquiry, no Event of Default or
Default has occurred, or, if an Event of Default or a Default has occurred and
is continuing, a statement as to the nature thereof and the action which the
Company has taken or proposes to take with respect thereto, and further setting
out in such detail as is reasonably required by the Bank.
(b) ANNUAL REPORTS. As soon as available and in any event
within one hundred (100) days after the end of each fiscal year, the Company
shall provide a consolidated Financial Statement to the Bank for such fiscal
year audited without qualification by Coopers & Lybrand L.L.P. or such an
independent certified public accountant of recognized standing and acceptable to
the Bank, which Financial Statement shall include the consolidated balance
sheets as of the end of such fiscal year, consolidated statements of income and
statements of cash flow for such year and a consolidated statement of
shareholders' equity (it being understood that for so long as the Company files
reports on Form 10-K with the SEC, copies of said Form 10-K shall satisfy its
obligations hereunder), together with a certificate of a duly authorized officer
of Meditrust stating that, as of the date of such certificate, to the best of
such officer's knowledge and after reasonable inquiry, no Event of Default or
Default has occurred, or, if an Event of Default or a Default has occurred and
is continuing, a statement as to the nature thereof and the action which the
Company has taken or proposes to take with respect thereto further setting out
in such detail as is reasonably requested by the Bank.
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(c) BORROWING BASE REPORT. As soon as available but in any
event within fifty (50) days of the end of each fiscal quarter, the Company
shall furnish to the Bank a report in the form of Exhibit F attached hereto
setting forth a computation of the Borrowing Base, a listing of all Investments
which are thirty (30) days or more delinquent in payments to the Company and
such other information in respect of the Borrowing Base as the Bank may
reasonably require (the "Borrowing Report").
(d) COVENANT COMPLIANCE. The Company shall submit with any
quarterly or annual reports required under subsections (a) or (b) above, a
report executed by a duly authorized officer of Meditrust certifying as to the
Company's compliance with the financial covenants set forth in Section 8 hereof
in a form reasonably acceptable to the Bank.
(e) OTHER REPORTS. The Company shall also submit with any
quarterly or annual reports required under subsections (a) or (b) above, a
report as to any material litigation relating to the Company not previously
disclosed to the Bank and such other information as the Bank may reasonably
require.
(f) SEC REPORTS. As soon as available, the Company shall
provide the Bank with copies of any and all reports and filings required to be
made by the Company with the SEC, including Form 10-Q and Form 10-K.
(g) ADDITIONAL REPORTS. The Company shall provide the Bank
with the following additional reports:
(i) as soon as available and in any event within a
reasonable time after the close of each fiscal year of Meditrust
copies of the portions of any and all auditor's letters to the
trustees of Meditrust or to any Subsidiary of the Company
regarding any material weakness of the various accounting
practices and control procedures used by Meditrust or any
Subsidiary of the Company;
(ii) promptly after the Company becomes aware of the
commencement thereof, notice of all actions, suits and
proceedings against the Company or any Subsidiary of the Company
before any Tribunal which are not fully covered by insurance
without the applicability of any coinsurance provisions or which
have not been bonded and in which either (a) the amount in
controversy exceeds THREE MILLION AND NO/100 DOLLARS
($3,000,000.00) for any single proceeding or FIVE MILLION AND
NO/100 DOLLARS ($5,000,000.00) in the aggregate or (b) the
results thereof may have a Material Adverse Effect;
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(iii) promptly after becoming aware of a claim by any Person
that the Company or any Subsidiary of the Company is in default
under any agreement entered into in connection with the
borrowing of money in excess of ONE MILLION AND NO/100 DOLLARS
($1,000,000.00), notice of any such claim or default;
(iv) notice of any material adverse change in the conduct of
the business operations or financial condition of the Company,
any Subsidiary of the Company, or any Company Limited
Partnership taken as a whole promptly upon the Company, any
Subsidiary of the Company or any Company Limited Partnership
becoming aware of any such change;
(v) notice of any Release or any danger of a Release
resulting from a condition which exists on any Facility which
could form a basis for a claim pursuant to Environmental Laws or
of any notification having been filed with regard to a Release
on or into any Facility under any Environmental Laws but only if
the foregoing may result in a material decrease in the value of
such Facility and such notice shall indicate the steps the
Company has or will take to remediate all hazardous
environmental conditions and the reserves it has or expects to
establish in its Financial Statements for such purposes;
(vi) notice of any Facilities which have not provided the
Company with financial and operating reports for a period of
ninety (90) days from the date specified for the delivery
thereof promptly upon the passage of such ninetieth day; and
(vii) promptly after the request of the Bank, a description of
any Indebtedness referred to in Section 7.1(d).
(h) The Company shall provide the Bank, as soon as possible,
but in any event not later than one hundred (100) days after the end of each
fiscal year of Meditrust, a certificate of a duly authorized officer of
Meditrust stating that Meditrust qualified as a REIT under Sections 856 through
860 of the Code (or any successor provisions thereto) for such fiscal year and
that it is in a position to qualify as such REIT for its current fiscal year.
(i) The Company shall also provide the Bank with such other
information relating to the Company or any of its Subsidiaries (including,
without limitation, any Plan) as the Bank may from time to time reasonably
request.
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(j) To the extent the Bank is obligated to do so by
applicable Law, it may deliver to any Tribunal having jurisdiction over it,
copies of the reports and other information provided by the Company to the Bank
pursuant to this Section 6.1.
(k) The Company shall notify the Bank immediately upon the
amendment or modification of the Fleet Bank Credit Facility and the Bank shall
have a period of five (5) Business Days in which to determine whether or not
they wish to make a corresponding amendment or modification to this Agreement.
Section 6.2 APPRAISALS. The Company shall, from time to time and
upon the request of the Bank, deliver a Qualified Appraisal with respect to each
Facility included in the Borrowing Base and, notwithstanding the foregoing, the
Bank may, at the Company's expense, obtain an updated Qualified Appraisal with
respect to any Facility included in the Borrowing Base; provided, however, that,
unless an Event of Default has occurred and is continuing beyond any applicable
grace or cure period, the Company shall not have to pay for a new or updated
Qualified Appraisal for which the existing appraisal is less than eighteen (18)
months old or expend more than FIFTY THOUSAND ($50,000.00) in any twelve (12)
month period in respect of appraisals.
Section 6.3 Maintenance of Property.
-----------------------
(a) The Company covenants, on behalf of itself and each of its
Subsidiaries, to keep and maintain, or to use all reasonable legal remedies to
cause the Operator of each Facility to keep and maintain, all of their
respective material property in good repair, working order and condition
reasonable wear and tear excepted, and from time to time to make, or use all
reasonable legal remedies to cause to be made, all proper repairs, renewals or
replacements, betterments and improvements thereto so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times.
(b) The Company covenants, on behalf of itself and each of its
Subsidiaries, to procure and maintain, or use all reasonable legal remedies to
cause the Operator of each Facility to procure and maintain, (i) all necessary
licenses and permits and (ii) if operating hospital facilities, all
accreditations or health care facilities accredited, as appropriate, by the
Accreditation Association for Ambulatory Care and the Joint Commission on
Accreditation of Healthcare Organizations (or any successors thereto).
(c) The Company, on behalf of itself and each of its Subsidiaries,
covenants to (i) keep all of its respective insurable properties insured, or to
use all reasonable legal remedies to cause the Operator of each Facility to keep
such property insured, against loss or damage by theft, fire, smoke,
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sprinklers, riot and explosion, such insurance (the "Insurance") to be in such
form, in such amounts and against such other risks and hazards as are
customarily maintained by other Persons operating similar business and having
similar properties in the same general areas in which the Company or its
Subsidiaries presently own Facilities, including but not limited to liability
coverage; (ii) with respect to Facilities operated pursuant to Leases or
Mortgages in effect on the date of this Agreement, to use all reasonable legal
remedies to cause the Operators of such Facilities to place the Insurance on
each such Facility with an insurer which is financially sound and reputable, and
(iii) with respect to any Facility operated pursuant to a Lease or Mortgage
entered into after the date of this Agreement, to include in such Lease or
Mortgage contractual provisions requiring the Operator thereunder to at all
times have Insurance in effect with respect to such Facility, carried by an
insurer which is financially sound and reputable, and the Company covenants to
use all reasonable legal remedies to enforce such contractual provisions. The
Company further covenants, on behalf of itself and each of its Subsidiaries,
that it shall require, or use its best efforts to cause the Operator of each
Facility to require, that the insurer with respect to each such Insurance policy
provide for thirty (30) days' advance written notice to the Company of any
cancellation or termination of, or other change of any nature whatsoever in, the
coverage provided under any such policy.
Section 6.4 MAINTENANCE OF EXISTENCE. (a) Meditrust shall preserve
and maintain (i) its qualifications as a REIT under Sections 856 through 860 of
the Code (and any successor provisions thereto) and (ii) the applicability to
the Company and its shareholders of the method of taxation provided for in
Section 857(b) of the Code (and any successor provision thereto).
(b) Meditrust shall preserve and maintain its existence as a
Massachusetts business trust and all of its rights, franchises and privileges as
a business trust and shall cause each of its Subsidiaries to preserve and
maintain its existence as a corporation or partnership in the state in which it
is incorporated or organized and all of its rights, franchises and privileges as
a corporation or partnership. Notwithstanding the foregoing provisions of this
subsection (b), (i) Meditrust may change its existence as a Massachusetts
business trust with the prior written consent of the Bank, which consent shall
not be unreasonably withheld, conditioned or delayed, if such change does not,
in the reasonable opinion of the Bank and its counsel, have a Material Adverse
Effect and (ii) any Subsidiary or Controlled Limited Partnership may be
dissolved if it no longer possesses any assets.
Section 6.5 TAXES AND OTHER ASSESSMENTS. The Company shall pay and
discharge, and maintain adequate reserves for the payment and discharge of, all
taxes, assessments, government charges or
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levies, or claims for labor, supplies, rent or other obligations made against it
or its properties and assets which, if unpaid, might become a Lien against the
Company, any Subsidiaries of the Company or their properties and assets, except
liabilities which are being contested in good faith in appropriate proceedings
or with respect to which the Company has made adequate provision or established
adequate reserves, except that the Company shall pay all such taxes,
assessments, government charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any Lien that may have attached as
security therefor.
Section 6.6 INSPECTION. The Company shall permit the Bank or any of
its officers, agents, attorneys or accountants, at its expense and at any time
during normal business hours and upon reasonable prior notice (or if an Event of
Default shall have occurred and is continuing, at any time and without prior
notice), to (i) examine and take abstracts from the books and records of the
Company and any Subsidiary of the Company; and (ii) discuss the affairs,
finances and business operations of the Company and any Subsidiary of the
Company with its and their appropriate officers, employees and accountants;
provided, however, that the right of inspection under this Section 6.6. is
subject to the contractual provisions contained in the Leases and Mortgages and
the legal rights of patients in Facilities.
Section 6.7 NOTICES OF DEFAULT. Upon becoming aware of the
occurrence of any Default or Event of Default the Company shall promptly notify
the Bank thereof in writing.
Section 6.8 MAINTENANCE OF BOOKS AND RECORDS. The Company and its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of their business and financial
transactions, and such entries will be made in accordance with GAAP including
the maintenance of adequate reserves for depreciation of property, if such
reserves are required by GAAP.
Section 6.9 MAINTENANCE OF PERMITS. The Company and its Subsidiaries
shall obtain and/or maintain in full force and effect all material permits,
authorizations, licenses, approvals, waivers and consents which they presently
possesses and are advisable to maintain or which may become necessary in the
future to conduct their business operations.
Section 6.10 USE OF PROCEEDS. The Company will use the proceeds of
the Loans solely for the purposes set forth in Section 2.1.2. hereof.
Section 6.11 CHANGE OF OFFICES. The Company shall give the Bank
prompt written notice of any change or relocation of its chief executive office.
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Section 6.12 COMPLIANCE WITH LAWS. (a) The Company and its
Subsidiaries will, or will use all reasonable legal remedies to cause the
Operators of each of the Facilities to, comply in all material respects with all
Legal Requirements applicable to such Operators or to the Company or any
Subsidiary of the Company as owner or mortgagee of health care facilities, such
compliance to include, without limitation, compliance with all applicable Laws
pertaining to the operation of health care facilities of the types owned by the
Company or its Subsidiaries, paying before the same become delinquent all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or its properties, and paying all its properties, except to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the nonpayment thereof
and with respect thereof, and except to the extent that payment of such items or
compliance with the relevant Legal Requirements is the responsibility of the
Operator of the Facility, where the Company or any of its Subsidiaries is using
all reasonable legal remedies to enforce its rights against such Operator and to
obtain compliance by such Operator with the relevant Legal Requirements, and
except where the nonpayment or noncompliance would not have a Material Adverse
Effect.
Section 6.13 COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) The Company shall promptly advise the Bank in writing
and in reasonable detail of (i) any Release of any Hazardous Material required
to be reported to any Tribunal under any applicable Environmental Laws which
would have a Material Adverse Effect or result in a material decrease in the
value of a Facility; (ii) any and all written communications received by the
Company or any of its Subsidiaries with respect to claims or suits under such
Environmental Laws or any Release of Hazardous Materials required to be reported
to any Tribunal which would have a Material Adverse Effect or result in a
material decrease in the value of a Facility; or (iii) any remedial action taken
by the Company or any of its Subsidiaries, each Operator or any other Person in
response to any Hazardous Materials on, under or about the properties or assets
of the Company or any of its Subsidiaries or any Facility, the existence of
which could give rise to a claim or suit which would have a Material Adverse
Effect, result in a material adverse change of any Operator's business
operations or financial condition or result in a material decrease in the value
of a Facility.
(b) The Company shall, and shall use all reasonable efforts
to insure that each of its Subsidiaries, each Facility and each Operator, comply
in all material respects with all Environmental Laws and establish and maintain
policies and procedures to ensure and monitor continued compliance with all
Environmental Laws. The Company shall, and shall use all reasonable efforts to
insure that each of its Subsidiaries,
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Facilities and Operators, to the extent required by any Environmental Law,
promptly take any and all necessary remedial action in connection with the
presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on, under or about its business premises or any Facility.
Section 6.14 BUSINESS OF THE BORROWER. The Company, on a consolidated
basis, will continue to operate the same primary business as those in which it
currently operates (i.e., investing in and financing Facilities).
Section 6.15 RANKING OF LOAN. The obligations of the Company to the
Bank under this Agreement and the Note shall rank at least equal in seniority
and priority with all other Unsecured Indebtedness of the Company and, in the
event that any of such other Indebtedness shall be secured, the obligations to
the Bank hereunder shall be secured likewise so as to continue to rank at least
equal in seniority and priority with such other secured Indebtedness.
Section 6.16 INTERCOMPANY INDEBTEDNESS. All Indebtedness of any
Subsidiary of the Company to the Company or any other Subsidiary shall be
evidenced by an intercompany promissory note executed within 30 days after the
incurrence of such Indebtedness. All Indebtedness of any Subsidiary of the
Company which relates to any Investment shall be subject to terms and
conditions, including rates of interest and terms of repayment, which are
substantially similar to the terms and conditions of the underlying Investment
in all material respects.
Section 7 NEGATIVE COVENANTS
The Company covenants and agrees that from the date hereof until the
payment and performance in full of the Obligations, unless the Bank otherwise
consents in writing:
Section 7.1 LIMITATION ON INDEBTEDNESS. Neither the Company nor any
of its Subsidiaries shall create, incur or assume any Indebtedness other than
the following ("Permitted Indebtedness"):
(a) Indebtedness of the Company or any of its Subsidiaries to the
Bank or any Bank Affiliates;
(b) Indebtedness existing as of the date of this Agreement and
disclosed on Schedule 7.1 hereto or in the Financial Statements referred to in
Section 3.8. hereof;
(c) Indebtedness under the Fleet Bank Credit Facility; and
(d) Indebtedness of the Company which satisfies the following
conditions:
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(1) the additional Indebtedness must conform in all
material respect with the restrictions contained in Section 7.2.
hereof regarding additional Liens;
(2) the terms and provisions of the instrument or
instruments controlling the covenants, events of default and
acceleration of maturity provisions of such additional
Indebtedness may not be less favorable to the Company than the
comparable terms and provisions set forth in this Agreement;
provided, however, that the Company or its Subsidiaries may
incur additional Indebtedness which does not exceed FIFTY
MILLION AND NO/100 DOLLARS ($50,000,000.00) in the aggregate at
any one time outstanding, plus the amount outstanding pursuant
to Section 7.1(f), on terms and provisions which are less
favorable to the Company than the comparable terms and
provisions hereof;
(3) the additional Indebtedness and the instrument or
instruments controlling the creation, assumption or issuance
thereof shall satisfy the requirements of Section 6.15. hereof;
(4) any additional Indebtedness otherwise permitted by this
Section 7.1. shall not affect the Company's obligation to
prepay outstanding Loans pursuant to Section 2.1.11 hereof; and
(5) the proceeds of such additional Indebtedness shall be
used to prepay outstanding Loans as required by said
Section 2.1.11; and
(e) Indebtedness of any Subsidiary of the Company to the Company
the proceeds of which are used to fund Investments in the ordinary
course of the business of the Company; and
(f) Indebtedness relating to $3,475,000 Manatee County,
Florida First Mortgage Revenue Refunding Bonds, Series 1995 (Meditrust
Project) or any refinancing thereof in an amount not to exceed THREE
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($3,500,000.00) and
Northwood Nursing Home, Bedford, New Hampshire, CFHA Project No.
024-43039-PM or any refinancing thereof in an amount not to exceed
SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($7,500,000.00).
Section 7.2 NEGATIVE PLEDGE/ENCUMBRANCES. Neither the Company nor
any of its Subsidiaries shall not create, incur, assume or suffer to exist any
Lien on any of its properties and assets, or assign or otherwise convey any
right to receive income with respect to, any of its properties and assets except
the following ("Permitted Liens"):
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(a) Liens for taxes, assessments and governmental charges not yet
due and payable or which are being actively contested in good faith by
appropriate proceedings or for which adequate reserves have been
established in accordance with GAAP,
(b) other Liens incidental to the conduct of the Company's or any
Subsidiary's business or the ownership of its property and assets which
were not incurred in connection with the borrowing of money or the
obtaining of advances or credit, and which do not in the aggregate
materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business,
(c) existing Liens securing Indebtedness of the Company or any its
Subsidiaries that is outstanding on the Closing Date and set forth in
Schedule 7.1. attached hereto or as otherwise described in the Financial
Statements (including, for this purpose, any substitute Lien required to
be created to secure such Indebtedness where (i) either the existing
Lien was released to enable the Company or any such Subsidiary to comply
with the option provisions under a Facility Lease, which permits the
lessee thereunder to purchase the Facility covered by such Lease, or the
substitution provisions under a Facility Lease, which permit the lessee
of such Facility to substitute one property for another under the
relevant Lease, and (ii) a Qualified Appraisal has been obtained which
shows that the property covered by such substitute Lien is of equivalent
value to the property it has replaced, and (iii) the Board of Trustees
of Meditrust has made a good faith determination that the property
subject to such substitute Lien is of equivalent value to the property
it has replaced, and (iv) the failure to create such Lien would create a
default under the terms of the instrument governing such Indebtedness);
provided, that neither the Company nor any of its Subsidiaries may
create, assume, incur or suffer to exist any Lien upon any of its
property or assets to secure any Indebtedness set forth in Schedule 7.1.
or as is otherwise described in the Financial Statements that is
hereafter renewed, refunded, extended or refinanced,
(d) Liens incurred in connection with the borrowing of money not
otherwise permitted provided that immediately after creation of such
Lien, the total amount of Indebtedness secured by Liens permitted by
this Agreement will not exceed 15% of the shareholders' equity in the
Company; provided, further, that (A)
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nothing in this subsection (d) shall be deemed to permit any transaction
which would otherwise be prohibited by this Agreement and (B)
shareholders' equity shall, for the purpose of all calculations thereof
under this subsection (d) only, be reduced by the amount by which the
Company's intangible assets exceed five percent (5%) of shareholders'
equity,
(e) Liens (other than those permitted by subsections (a) through (d)
of this Section 7.2.) securing Indebtedness in an aggregate principal
amount at any time outstanding not exceeding ONE HUNDRED THOUSAND AND
NO/100 DOLLARS ($100,000.00) for the Company and its Subsidiaries taken
as a whole, and
(f) Liens on property of the Company or any of its Subsidiaries
other than those permitted by subsections (a) through (e) of this
Section 7.2., provided that the Indebtedness incurred under this
Agreement shall be equally and ratably secured, on a pari passu and pro
rata basis, with any and all Indebtedness hereinafter incurred by the
Company or any of its Subsidiaries and secured by such Lien.
Section 7.3 INVESTMENTS. Neither the Company nor any Subsidiary
shall make or permit to remain outstanding any loan or advance to, or own,
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person, except that the
Company and any Subsidiary may:
(a) invest in Permitted Investments and, to the extent permitted by
Section 7.6., Gross Real Estate Investments and, to the extent permitted
by Section 7.7., Construction Investments;
(b) make or permit to remain outstanding loans and advances to any
Subsidiary;
(c) own, purchase or acquire stock, obligations or securities of, or
any other interest in, a Subsidiary or another Person which immediately
after such purchase or acquisition will be a Subsidiary;
(d) acquire and own stock, obligations or securities, or other
interests, received in settlement of debts (created in the ordinary
course of business) owing to the Company or any Subsidiary, provided,
that such stock, obligations, securities or other interests shall be
carried on the books of the Company at the lesser of book value or fair
market value, such valuation to be as determined by the board of
trustees of Meditrust in
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good faith, in the case of any debt in an aggregate principal amount
equal to or exceeding ONE MILLION AND NO/100 DOLLARS ($1,000,000.00);
(e) make or permit to remain outstanding travel and other like
advances to officers and employees in the ordinary course of business;
(f) own, purchase or acquire stock, obligations or securities of any
Person, including, without limitation, making mortgage loans, entering
into sale and leaseback transactions not otherwise prohibited by this
Agreement, or investing in partnerships, to the extent that any such
investments are in the ordinary course of business and not prohibited by
Meditrust's Declaration of Trust, as the same may from time to time be
amended; and
(g) own, purchase or acquire stock, obligations or securities of any
REIT; provided, however, that the Company shall not purchase or acquire
stock, obligations or securities of any REIT which, when aggregated with
all other existing REIT investments of the Company, exceeds five percent
(5%) of the Company's total assets as defined by GAAP.
Section 7.4 ERISA. Neither the Company nor any member of the
Controlled Group shall terminate any Plan so as to result in any material
liability to the Company or any Subsidiary to the PBGC or permit to exist any
occurrence of any "reportable event" (as defined in Title IV of ERISA), or any
other event or condition, which presents a material risk of such a termination
by the PBGC of any Plan.
Section 7.5 FISCAL YEAR. The Company shall not change its fiscal
year end.
Section 7.6 GROSS REAL ESTATE INVESTMENTS. The Company and its
Subsidiaries shall not have Gross Real Estate Investments relating to a single
Operator which exceed, in the aggregate, thirty percent (30%) of the Company's
and its Subsidiaries' Gross Real Estate Investments.
Section 7.7 CONSTRUCTION INVESTMENTS. The Company and its
Subsidiaries shall not permit the Construction Investments of the Company and
its Subsidiaries to exceed twenty-five percent (25%) of Gross Real Estate
Investments. In addition, neither the Company nor any Subsidiary shall make a
Construction Investment for a Facility unless (i) there is included in the terms
thereof an agreement for the conversion of the Company's or such Subsidiary's
interests in the Facility upon the completion thereof into full ownership, a
mortgage interest or majority
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partnership interest and (ii), if a mortgage interest, the Company or a
Subsidiary of the Company shall receive or retain a first Lien in such Facility
and otherwise satisfy all Legal Requirements.
Section 7.8 INTEREST RATE PROTECTION. The Company shall not permit
more than twenty-five percent (25%) of its consolidated Total Capital to bear
interest at other than fixed rates; provided, however, that if and to the extent
that any of such consolidated Total Capital is subject to an interest rate
protection agreement approved by the Bank (which approval shall not be
unreasonably withheld, conditioned or delayed), such consolidated Total Capital
shall be deemed to bear interest at a fixed rate.
Section 7.9 DIVIDENDS. Meditrust shall not pay or declare any
Dividend on any of its shares of beneficial interest or make any other
distribution on account thereof, or redeem or otherwise acquire, directly or
indirectly, any of its shares of beneficial interest if such action by Meditrust
would constitute an Event of Default or Default, or an event of default or
default under any other material agreement to which Meditrust is a party. This
Section 7.9. shall not apply to the payment or distribution made in the form of
shares of beneficial interest of Meditrust.
Section 7.10 AMENDMENT OF DECLARATION OF TRUST. Meditrust shall not
amend its Declaration of Trust except if (a) such amendment is required by
applicable law or (b) the Bank consents to such amendment, which consent shall
not be unreasonably withheld. In the event of any such amendment, Meditrust
shall promptly forward copies thereof to the Bank.
Section 7.11 FUTURE LEASES. Neither the Company nor any Subsidiary
shall become a party to any Lease after the Closing Date except for a Lease
where the obligations of the lessee to make payments under such Lease cover
fully the Company's or such Subsidiary's obligations to make principal, interest
and other payments on the Indebtedness relating to the Facility which is the
subject of such Lease, if any, including, without limitation, all interest rate
adjustments or escalations, prepayment penalties and similar payments.
Section 7.12 LEASES. Neither the Company nor any of its Subsidiaries
shall create or suffer to exist any obligations for the payment of rent by the
Company or such Subsidiary for any property under leases (other than capitalized
lease obligations included as Indebtedness of the Company or such Subsidiary)
except for the following:
(i) ground leases for Facilities existing on the Closing
Date;
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(ii) ground leases for terms no less than ten (10) years in
connection with sale/leaseback transactions of Facilities;
(iii) office leases in the ordinary course of business; and
(iv) office equipment and automobile leases in the ordinary
course of business.
Section 7.13 PROHIBITED TRANSACTIONS. Neither the Company nor any of
its Subsidiaries shall engage in any prohibited transactions as such term is
defined in Section 857(b)(6) of the Code (except that the Company or a
Subsidiary may sell, transfer or otherwise dispose of a Facility within four (4)
years after the acquisition thereof so long as (i) such disposition, including
the excise taxes attributable thereto, will not have a Material Adverse Effect
and (ii) the trustees of Meditrust have theretofore made a good-faith
determination that such disposition is in the best interests of the Company, nor
shall the Company or a Subsidiary incur any material liability for excise taxes
pursuant to Section 4981 of the Code.
Section 7.14 MERGERS. Neither the Company nor any of its Subsidiaries
shall merge or consolidate with, or sell, assign, lease or otherwise dispose of
(whether in one transaction or a series of transactions) all or substantially
all of its properties and assets (whether now owned or hereafter acquired) to
any Person, except that (i) any Subsidiary may dispose of its properties and
assets (subject to the limitations of Section 7.13. hereof) to Meditrust or any
Subsidiary, (ii) any Subsidiary may dispose of its properties and assets to any
Person other than Meditrust or any Subsidiary if the proceeds of such
disposition are applied in accordance with the provisions of Section 2.1.11. and
(iii) notwithstanding Sections 7.16. and 7.17. to the contrary, Meditrust or a
Subsidiary may merge or consolidate with any other Person if in such transaction
Meditrust or the Subsidiary is the surviving entity.
Section 7.15 CHANGE IN BUSINESS. The Company shall not make any
material change in the nature of its business as conducted as of the Closing
Date.
Section 7.16 ISSUANCE OF STOCK BY SUBSIDIARIES. The Company shall not
permit any Subsidiary to issue, sell or dispose of any shares of its stock of
any class (including any warrants, rights or options to purchase or otherwise
acquire stock or other securities exchangeable for or convertible into stock) or
any of its partnership or other equity interests, except to Meditrust or any
wholly-owned Subsidiary, and except (i) for the purpose of qualifying directors
and (ii) to the extent that holders of
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minority interests may be entitled to purchase stock by reason of validly
pre-existing preemptive rights.
Section 7.17 SALE OF STOCK AND INDEBTEDNESS. The Company shall not
sell or otherwise dispose of, or part with control of, any shares of stock or
Indebtedness of any Subsidiary, except to another Subsidiary, and except that
all shares of stock and Indebtedness of any Subsidiary at the time owned by or
owed to the Company and any Subsidiaries may be sold as an entirety for a cash
consideration which represents the fair value (as determined in good faith by
the trustees of Meditrust) at the time of sale of the shares of stock and such
Indebtedness; provided, that the assets of such Subsidiary do not constitute,
when aggregated with all sales during the four (4) most recently completed
fiscal quarters, ten percent (10%) of the Company's consolidated total assets
(as defined by GAAP) or ten percent (10%) of the Company's Operating Cash Flow;
and provided further, that at the time of such sale, such Subsidiary shall not
own, directly or indirectly, any shares of stock or Indebtedness of any other
Subsidiary (unless all of the shares of stock and Indebtedness of such other
Subsidiary are being sold simultaneously as permitted by this Section 7.17.).
Section 7.18 TRANSACTIONS WITH AFFILIATES. Neither the Company nor
any Subsidiary shall directly or indirectly, purchase, acquire or lease any
property from, or sell, transfer or lease any property to, exchange any property
with, render any service to or otherwise deal with, (i) any Affiliate, (ii) any
Person owning, beneficially or of record, directly or indirectly, either
individually or together with all other Persons to whom such Person is related
by blood, adoption or marriage, equity securities of the Company aggregating ten
percent (10%) or more of the voting power of the Company or (iii) any Person
related by blood, adoption or marriage to any Person described or coming within
the provisions of clause (i) or (ii) of this Section 7.18., provided that the
Company may sell to or purchase (within the limitations of Section 7.18.) from
any such Person shares of equity securities of, or other interests in, the
Company; provided, however, that this Section shall not prohibit transactions
which are in the ordinary course of business of the Company or its Subsidiaries,
and which are made upon fair and reasonable terms no less favorable to the
Company or its Subsidiaries involved than could be obtained in a comparable
arm's-length transaction with a Person which is not an Affiliate.
Section 8 FINANCIAL COVENANTS
The Company covenants and agrees that from the date hereof, until the
payment and performance in full of the Obligations, unless the Bank otherwise
consents in writing:
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Section 8.1 CASH FLOW COVERAGE. Meditrust shall not permit the ratio
of (x) its Operating Cash Flow plus its Interest Expense to (y) its Interest
Expense to be less than 2.0 to 1.0 at the end of each fiscal quarter.
Meditrust's compliance with said ratio shall be calculated on a year-to-date
basis.
Section 8.2 MODIFIED CASH FLOW COVERAGE. Meditrust shall not permit
the ratio of (x) its Modified Operating Cash Flow plus its Interest Expense to
(y) its Interest Expense plus its Dividends plus its Balloon Payments to be less
than 1.0 to 1.0 at the end of each fiscal quarter. Meditrust's compliance with
said ratio shall be calculated on a year-to-date basis.
Section 8.3 TOTAL LIABILITIES TO TANGIBLE NET WORTH. Meditrust shall
not permit the ratio of (x) its Total Liabilities to (y) its Tangible Net Worth
to be greater than 1.75 to 1.0 at any time.
Section 8.4 TANGIBLE NET WORTH. Meditrust shall maintain a Tangible
Net Worth at all times of at least ONE BILLION EIGHTY MILLION AND NO/100 DOLLARS
($1,080,000,000.00) plus seventy-five percent (75%) of the net amount received
by Meditrust from the sale of equity securities, the exercise of warrants and
the conversion of debentures to equity after the Closing Date.
Section 8.5 ESTABLISHMENT OF COVENANTS. The Company acknowledges
that the foregoing covenants were established by the Company and the Bank on the
basis of financial information and forecasts provided to the Bank by the Company
in connection with the Bank's evaluation and underwriting of the Line of Credit
after leaving a margin in favor of the Company which the Company and the Bank
have mutually agreed is fair. Accordingly, the Company and the Bank have
mutually agreed that the Company's failure to comply with the express terms of
any financial covenant shall be deemed material for the purposes of this
Agreement.
Section 9 DEFAULT
Section 9.1 EVENTS OF DEFAULT. The occurrence and continuance of any
of the following events after any applicable cure period shall constitute a
default under this Agreement, the Note and the Other Documents (an "Event of
Default"):
(a) the Company shall fail to pay when due and payable,
whether at the due date thereof, at a date fixed for prepayment thereof, by
acceleration thereof or otherwise, (i) any outstanding principal amount of any
Loan; (ii) any amount of accrued and unpaid interest thereon; or (iii) any fees,
expenses or other amounts payable under this Agreement, the Note or the Other
Documents and, in the case of clauses (ii) and (iii) above,
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such default shall continue unremedied for (5) Business Days from the date
specified for payment; or
(b) the Company shall fail to perform any term, covenant or
agreement contained in Section 7 of this Agreement; or
(c) the Company shall fail to perform any other term,
covenant or agreement contained in this Agreement (other than in respect of
terms, covenants or agreements covered elsewhere in this Section 9) and such
nonperformance shall continue unremedied for thirty (30) days after written
notice of such nonperformance shall have been received or deemed received by the
Company from the Bank; or
(d) any written representation or warranty of the Company
made in or in connection with this Agreement, the Note or the Other Documents or
in any certificate or report or any other document or instrument delivered
hereunder or thereunder, shall prove to have been false in any material respect
upon the date when made or deemed to have been made; or
(e) any monetary default (unless duly waived in writing by
the obligee) shall occur with respect to any Unsecured Indebtedness of the
Company in excess of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) or any
amount of recourse secured Indebtedness of the Company under any agreements
under which any Indebtedness may be issued by the Company and such default shall
continue for more than the grace period, if specified therein, after all
required notices have been given, and any other default under such agreements if
the effect of such other default under such agreements is to accelerate the
maturity of such Indebtedness or to permit the holder thereof (or any
representative on behalf of such holder) to cause the same to become due prior
to its stated maturity or if any such Indebtedness shall not be paid when due or
accelerated and such default shall continue for more than the period of grace,
if any, therein specified, all required notices having been given or if the
Company fails to make payment within five (5) days after demand is made for
payment of any Indebtedness which is due on demand; or
(f) one or more final judgments or orders for the payment of
money which would have a Material Adverse Effect shall be rendered against the
Company or any Subsidiary and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order, or (ii) a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect for any period of ten (10) consecutive
Business Days; or
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(g) Meditrust or any of its Subsidiaries having assets which
in the aggregate exceed FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00)
shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official or it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors or shall fail
generally to pay its debts as they become due, or shall take any action to
authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be
commenced against Meditrust or any of its Subsidiaries having assets which in
the aggregate exceed FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00) seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or an
order for relief shall be entered against the Company under the federal
bankruptcy laws as now or hereafter in effect and remain undischarged for ninety
(90) days; or
(i) there shall have occurred and be continuing, thirty (30)
days after knowledge or notice thereof shall have been given to Meditrust by the
Bank, any event which would allow for the termination of any Plan and the then
current value of such Plan's benefits guaranteed under Title IV of ERISA exceeds
the then current fair market value of such Plan's assets allocable to such
benefits by more than ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) (or in the
case of such a termination event involving the withdrawal of a substantial
employer, the withdrawing employer's proportionate share of such excess exceeds
such amount); or
(j) the Company should fail to terminate the Commitment and
prepay the entire principal amount due and payable under this Agreement, the
Note and the Other Documents within forty-five (45) days after any sale,
transfer, assignment or other permanent disposition of an Operator that
represents more than twenty percent (20%) of Gross Real Estate Investments, such
percentage being based on the Company's most recent Borrowing Report and
quarterly Financial Statements; or
(k) the Company should fail to terminate the Commitment and
prepay the entire principal amount due and payable under this Agreement, the
Note and the Other Documents within
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forty-five (45) days after the accumulation of fifteen percent (15%) or more of
the voting stock of Meditrust by a Person or group of affiliated Persons; or
(l) the occurrence of an "event of default" (after giving
effect to any applicable grace period) under any of the Other Documents, as such
term is defined or used therein.
Section 9.2 REMEDIES. Upon the occurrence of an Event of Default,
the Bank may, in its sole discretion, by notice to the Company (i) terminate the
obligation of the Bank to make Revolving Loans and such obligation shall
thereupon terminate, and (ii) declare the Note (together with accrued interest
thereon) to be, and the Note shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company; provided that in the case of any of the Events
of Default specified in subsection (g) or (h) of Section 9.1 hereof with respect
to the Company, without any notice to the Company or any other act by the Bank,
the obligation of the Bank to make Revolving Loans shall thereupon terminate and
the Note (together with accrued interest thereon) shall become immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company. The rights and the remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law, in equity or in the Other Documents.
Section 10 ASSIGNMENT
Section 10.1 Assignment.
----------
(a) The Bank may assign to one or more Persons all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment and the same portion of the Loans at the time
owing to it); provided, however, that (i) Meditrust must give its prior written
consent to such assignment (which consent shall not be unreasonably withheld
although it shall be reasonable for consent to be withheld, among other reasons,
if the proposed assignment is to a competitor of Meditrust or if Meditrust, in
its reasonable discretion, believes that such assignment would increase its
costs under Section 2.4.4. or 11.6. hereof); (ii) each such assignment shall be
of a constant, and not a varying, percentage of all the Bank's interests, rights
and obligations under this Agreement; (iii) the amount of the Commitment and the
Loans of the Bank subject to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall not be less
than FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00); (iv) the parties to
each such assignment shall execute and deliver an assignment and acceptance in
the form of Exhibit H attached hereto (the "Assignment and
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Acceptance") and a processing and recordation fee in the amount of THREE
THOUSAND AND NO/100 DOLLARS ($3,000.00); and (v) the assignee shall be a bank or
financial institution of recognized standing and in the business of making the
types of loans contemplated in this Agreement. Upon such execution, delivery,
acceptance and recording pursuant to Section 10.2. hereof, 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, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Bank under this Agreement (including, without limitation, the benefit of the
cost protection provisions) to the same extent as if it were the Bank; and (B)
the Bank shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
the Bank's interests, rights and obligations under this Agreement, the Bank
shall cease to be a party hereto but shall continue to be entitled to the
benefits of any indemnity, waiver, release or limitation of liability contained
herein, as well as to any Fees accrued for its account and not yet paid).
(b) By executing and delivering an Assignment and
Acceptance, the Bank thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the Company as follows: (i) the Bank
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and that its Commitment and
the outstanding balances of its Loans, in each case without giving effect to
assignments thereof which have not become effective, are as set forth in such
Assignment and Acceptance; (ii) except as set forth in subsection (i) above, the
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, the Note,
the Other Documents or any other agreement, document or instrument furnished
pursuant hereto or thereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent Financial Statements delivered pursuant to Section
6.1. hereof 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; (v) such assignee will independently and without
reliance upon the 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; (vi) such assignee appoints
and
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authorizes the Bank to take such action as agent on its behalf; and (vii) such
assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are required to be performed by
it as the Bank to the extent of the interest assigned pursuant to the Assignment
and Acceptance.
Section 10.2 MAINTENANCE OF A REGISTER. The Bank shall maintain at
its principal office a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of the names and addresses of each assignee,
and the Commitment and the principal amount of the Loans owing to each assignee
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive in the absence of manifest error and the
Company and the Bank may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Bank hereunder, to extent of the
interest assigned pursuant to the Assignment and Acceptance, for all purposes of
this Agreement. The Register shall be available for inspection by the Company at
any reasonable time and from time to time upon reasonable prior notice. Upon its
receipt of a duly completed Assignment and Acceptance and the written consent of
the Company to such assignment, the Bank shall (i) record the information
contained in the Assignment and Acceptance in the Register, and (ii) give prompt
notice thereof to the Company.
Section 10.3 SALE OF PARTICIPATIONS. The Bank may, without the
consent of the Company, sell participations to one or more banks, financial
institutions or other entities in all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the same
portion of the Loans owing to the Bank); provided, however, that (i) the Bank's
obligations under this Agreement shall remain unchanged; (ii) the Bank shall
remain solely responsible to the Company for the performance of such
obligations; (iii) the participating banks, financial institutions or other
entities shall be entitled to the benefit of the cost protection provisions
contained in this Agreement to the same extent as if they were the Bank although
such participating banks may not increase any costs which shall be payable by
the Company; and (iv) the Company shall continue to deal solely and directly
with the Bank in connection with the Bank's rights, interests and obligations
under this Agreement, and the Bank shall retain the sole right to enforce the
obligations of the Company relating to the Loans and to approve any amendment,
modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any Fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans or changing or extending the Commitment).
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Section 10.4 DISCLOSURE OF INFORMATION. The Bank or any participant
may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section, disclose to the assignee or
participant, or proposed assignee or participant, any information relating to
the Company furnished to the Bank by or on behalf of the Company; provided,
however, that prior to any such disclosure of information designated by the
Company as confidential, each such assignee or participant or proposed assignee
or participant shall be advised of the confidential nature of such information.
Section 10.5 ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE COMPANY. If
any assignee Bank is an Affiliate of the Company, then any such assignee Bank
shall have no right to vote as a Bank hereunder or under any of the Other
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to this Agreement or any of the
Other Documents, and the determination of the Bank shall, for all purposes of
this Agreement and the Other Documents, be made without regard to such assignee
Bank's interest in any of the Loans. If the Bank sells a participating interest
in any of the Loans to a participant, and such participant is the Company or an
Affiliate of the Company, then the determination of the Bank shall for all
purposes of this Agreement and the Other Documents be made without regard to the
interest of such participant.
Section 10.6 MISCELLANEOUS ASSIGNMENT PROVISIONS. If any assignee
Bank is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable under this Agreement or any of the Other Documents for its account,
deliver to the Company and the Bank certification as to its exemption from
deduction or withholding of any United States federal income taxes. Anything
contained in this Section 10 to the contrary notwithstanding, any Bank
(including an assignee Bank) may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any portion of its
Note) to any of the twelve (12) Federal Reserve Banks organized under Section 4
of the Federal Reserve Act. No such pledge or the enforcement thereof shall
release the pledgor Bank from its obligations under this Agreement or any of the
Other Documents.
Section 10.7 NO ASSIGNMENT OR DELEGATION BY THE COMPANY. The Company
shall not assign or delegate any of its rights or duties under this Agreement,
and any attempted assignment by the Company shall be null and void and without
legal effect.
Section 11 MISCELLANEOUS
Section 11.1 CONFIDENTIALITY. In handling any financial or business
information provided under this Agreement by the Company, the Bank and its
officers, agents, attorneys,
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accountants or designees shall exercise the same degree of care that such Person
exercises with respect to its own proprietary information of the same types to
maintain the confidentiality of any non-public information thereby received
except that disclosure of such information may be made (i) to Bank Affiliates in
connection with their present or prospective business relations with the
Company; (ii) with the prior consent of the Company, to prospective assignees,
transferees or purchasers of an interest in the Obligations (which consent shall
not be unreasonably withheld although it shall be reasonable for the Company to
withhold such consent if the prospective assignee, transferee or purchaser is a
competitor of the Company); (iii) as required by any Law or order, subpoena,
judicial order or similar order; and (iv) as may be required in connection with
the examination, audit or similar investigation of the Bank.
Section 11.2 Waivers.
-------
Section 11.2.1 The Company waives presentment, demand, notice,
protest, notice of acceptance, notice of loans made, credit extended, collateral
received or delivered or other action taken in reliance hereon and all other
demands and notices of any description. With respect to the Obligations, the
Company assents to any extension or postponement of the time of payment or any
other indulgence, to any substitution, exchange or release of any collateral, to
the addition or release of any party or Person primarily or secondarily liable
therefor, to the acceptance of partial payments thereon and the settling,
compromising or adjusting of any of the foregoing, all in such manner and at
such time or times as the Bank may deem advisable in its sole and absolute
discretion. The Bank shall have no duty, other than to act in a commercially
reasonable manner, as to the collection or protection of collateral or any
income thereon, as to the preservation of rights or remedies against prior
parties, or as to the preservation of any rights and remedies pertaining thereto
beyond the safe custody thereof. The Bank may exercise its rights and remedies
with respect to any collateral without resorting or regard to other collateral
or sources of reimbursement for liability. The Bank shall not be deemed to have
waived any of its rights and remedies with respect to the Obligations or any
collateral unless such waiver shall be in writing and signed by the Bank. No
delay or omission on the part of the Bank in exercising any right or remedy
shall operate as a waiver of such right or remedy or any other right or remedy.
A waiver on any one occasion shall not be construed as a bar to any subsequent
enforcement by the Bank. All rights and remedies of the Bank with respect to the
Obligations or any collateral shall be cumulative and may be exercised
singularly or concurrently.
Section 11.2.2 THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF
WHICH THIS AGREEMENT IS A PART IS A COMMERCIAL
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TRANSACTION AND HEREBY WAIVES ITS RIGHTS TO NOTICE AND HEARING UNDER ANY
APPLICABLE LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE BANK MAY DESIRE
TO USE.
Section 11.2.3 THE COMPANY HEREBY WAIVES TRIAL BY JURY IN ANY
COURT IN ANY SUIT, ACTION OR PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH
OR IN ANY WAY RELATED TO THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART
AND/OR IN THE ENFORCEMENT BY THE BANK OF ANY OF ITS RIGHTS AND REMEDIES
HEREUNDER OR UNDER APPLICABLE LAW. THE COMPANY ACKNOWLEDGES THAT IT MAKES THIS
WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS
OF THIS WAIVER WITH ITS ATTORNEY.
Section 11.2.4 In addition to (and without limitation of) any
right of setoff, bankers' lien or counterclaim that the Bank may have, the Bank
shall be entitled, at its option, to the fullest extent permitted by law, to
setoff and apply any and all balances and deposits (general or special, time or
demand, provisional or final) at any time held and all other indebtedness owing
by such Bank to or for the credit or account of the Company (whether or not such
balances, deposits or other indebtedness are then due to the Company) against
any and all of the Obligations upon the failure of the Company to pay when due
any amount owing pursuant to this Agreement or the Note. The Bank shall give the
Company prompt notice of its exercise of any right under this Section 11.2.4;
provided, however, that any failure to give such notice shall not affect the
validity of any such action.
Section 11.2.5 The Company does hereby waive any claims, causes
of action, losses, damages or expenses, in tort, contract or otherwise which the
Company may have against the Bank, or any Bank Affiliate which has arisen out of
the relationship between it and the Bank or any Bank Affiliate which the Company
may have as of the Closing Date. The Company acknowledges that it makes this
waiver and release knowingly, voluntarily and only after considering the
ramifications of this waiver and release with its attorneys.
Section 11.3 NOTICES. All notices, requests, demands or other
communications required by this Agreement shall be made in writing and shall be
(i) personally delivered, (ii) transmitted by postage prepaid registered mail,
return receipt requested, (iii) transmitted by telex (with postage prepaid mail
confirmation), (iv) transmitted by telecopier or facsimile or (v) transmitted by
internationally recognized courier service with provision for receipt (with
charges prepaid) and unless otherwise specifically provided herein, shall be
deemed to have been duly given on the first to occur of (i) the date of delivery
if delivered personally, (ii) seven (7) days following posting if transmitted by
mail, (iii) the date of transmission with confirmed answer back if transmitted
by telex, or (iv) the date
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of receipt if transmitted by telecopier or by internationally recognized courier
service if addressed as follows or to such other address as either party may
designate in writing:
If to the Company:
Meditrust
197 First Avenue
Needham, MA 02194
Attn: David F. Benson, President
Telephone: (617) 433-6000
Telecopier: (617) 433-1290
with a copy to:
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110-2699
Attn: Paul R. Eklund, Esq.
Telephone: (617) 439-2303
Telecopier: (617) 973-9748
If to the Bank:
Via Banque
10, rue Volney
75061 Paris Cedex 02
FRANCE
Attn: Christel Prot, Sous-Directeur
Telephone: 011-33-1-49-26-26-26
Telecopier: 011-33-1-49-26-29-93
with a copy to:
Pavia & Harcourt
600 Madison Avenue
New York, New York 10022
Attn: Stephen D. Kramer, Esq.
Telephone: (212) 980-3500
Telecopier: (212) 980-3185
Section 11.4 FEES AND EXPENSES. The Company will pay on demand all
reasonable out-of-pocket expenses incurred by the Bank in connection with (i)
any amendment or modification of this Agreement or the Other Documents requested
by the Company; (ii) any prepayment, refinancing or other restructuring of this
Agreement; (iii) any Qualified Appraisal subject to the provisions of Section
6.2. hereof and (iv) the Bank's exercise, preservation or enforcement of any of
its rights and remedies under this Agreement and the Other Documents from and
after the occurrence of a Default or Event of Default, including, without
limitation, reasonable fees and expenses of outside legal
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<PAGE> 76
counsel, accounting, appraisal, auditing, consulting, or other similar
professional fees or expenses, and the amount of all such expenses shall, until
paid, bear interest at the rate applicable to principal hereunder (including any
default rate).
Section 11.5 TERM OF AGREEMENT. This Agreement shall continue in
force and effect so long as the Bank has any commitment to make Revolving Loans
hereunder or any of the Obligations shall be outstanding.
Section 11.6 Taxes.
-----
(a) All payments made by the Company on account of this
Agreement shall be made free and clear of, and without deduction for or on
account of, any present or future stamp or other taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, restrictions or conditions of any
nature whatsoever now or hereafter imposed, levied, collected, withheld or
assessed by the United States of America (or by any political subdivision or
taxing authority thereof or therein), excluding income, excise and franchise
taxes now or hereafter imposed by the United States of America or any political
subdivision or taxing authority thereof or therein (such nonexcluded taxes being
called "Taxes"). If any Taxes are required to be withheld from any amounts
payable to the Bank pursuant to this Agreement or the Other Documents, then the
amounts so payable to the Bank shall be increased to the extent necessary to
yield to the Bank (after payment of all Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified herein.
Whenever any Tax is payable by the Company, as promptly as possible thereafter,
the Company shall send the Bank an original official receipt showing payment
thereof. The Company shall indemnify the Bank for any incremental taxes,
interest or penalties that may become payable by it as a consequence of the
failure of the Company to pay any Taxes or the failure of the Company to deliver
to the Bank an original official receipt therefor.
(b) The Company shall indemnify the Bank for and hold the
Bank harmless from any present or future claim of liability for any registration
charge or any stamp, excise or similar taxes, including any interest
equalization tax, and any penalties or interest with respect thereto, that may
be imposed by any jurisdiction in connection with this Agreement.
Section 11.7 SCHEDULES AND EXHIBITS. The Schedules and Exhibits which
are attached hereto are and shall constitute a part of this Agreement.
Section 11.8 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement,
the Note and the Other Documents, and the rights and obligations of the parties
hereunder and thereunder, shall be governed by and construed and interpreted in
accordance with, the
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<PAGE> 77
laws of the State of New York (or, if any portion of any collateral is located
in another state, by the laws of such state to the extent necessary for the
enforcement of the Bank's remedies under this Agreement). The Company agrees
that any suit for the enforcement of this Agreement, the Note or the Other
Documents may be brought in the courts of the State of New York or any federal
court sitting in the Borough of Manhattan in the City and State of New York and
consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon the Company by mail at the address
referred to in Section 11.3. hereof.
Section 11.9 SURVIVAL OF REPRESENTATIONS. All representations,
warranties, covenants and agreements contained in this Agreement, the Note or
the Other Documents shall survive the Closing Date, and continue in full force
and effect until all of the payment and the performance of the Obligations in
full.
Section 11.10 AMENDMENTS. No modification or amendment of this
Agreement, the Note or the Other Documents shall be effective unless same shall
be in writing and signed by the Company and the Bank.
Section 11.11 COUNTERPARTS. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures hereto and thereto
were upon the same instrument.
Section 11.12 NO AGENCY RELATIONSHIP. The Bank is not the agent or
representative of the Company nor is the Company the agent or the representative
of the Bank and this Agreement shall not make the Bank liable to any third
party, including, but not limited to, the Company's existing shareholders,
directors, officers, creditors or any other party in interest.
Section 11.13 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
Section 11.14 HEADINGS. All article, section and subsection headings
in this Agreement, the Note and the Other Documents are included for convenience
of reference only and shall not constitute a part of this Agreement, the Note or
the Other Documents for any other purpose.
Section 11.15 BROKERS. No broker or finder has brought about the
obtaining, making or closing of, and no broker's or finder's fees or commissions
will be payable by the Company or the Bank to any Person in connection with, the
transactions
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<PAGE> 78
contemplated by this Agreement, and, except as to Fees due to the Bank under
this Agreement, each party hereunder shall indemnify and hold the other harmless
from and against any and all cost, claim, liability, damage or expense
(including but not limited to reasonable attorneys' fees) in connection with any
broker's or finder's fees or commissions claimed to be due hereunder as a result
of such indemnifying party's actions.
Section 11.16 REINSTATEMENT. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Bank in respect of the Obligations is rescinded or must
otherwise be restored or returned by the Bank upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or upon the
appointment of any intervenor or conservator of, or trustee or similar official
for, the Company or substantial part of its properties or assets, or otherwise,
all as though such payments had not been made.
Section 11.17 INTERPRETATION AND CONSTRUCTION. The following rules
shall apply to the interpretation and construction of this Agreement, the Note
and the Other Documents unless the context requires otherwise: (a) the singular
includes the plural and the plural includes the singular; (b) words importing
any gender include the other genders; (c) references to statutes are to be
construed as including all statutory provisions consolidating, amending or
replacing the statute to which reference is made and all regulations promulgated
pursuant to such statutes; (d) references to "writing" shall include printing,
photocopy, typing, lithography and other means of reproducing words in a
tangible, visible form; (e) the words "including", "includes" and "include"
shall be deemed to be followed by the words "without limitation"; (f) references
to the introductory paragraph, preliminary statements, articles, sections (or
subdivisions of sections), exhibits or schedules are to those of this Agreement
unless otherwise indicated; (g) references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications to such instruments, but only to the extent that such amendments
and other modifications are permitted or not prohibited by the terms of this
Agreement; (h) references to Persons include their respective permitted
successors and assigns; and (i) "or" is not exclusive.
Section 11.18 INDEMNIFICATION. The Company hereby indemnifies and
holds the Bank and any Bank Affiliate (an "Indemnified Party"), harmless from
and against any and all claims, actions, causes of action, damages, losses,
obligations, payments, liabilities, costs, fees or expenses (including
reasonable legal fees and expenses) which the Indemnified Party may incur or
which may be claimed against the Indemnified Party by any Person by reason of or
in connection with the execution,
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<PAGE> 79
delivery, operation, enforcement or termination of this Agreement, the Note or
the Other Documents or in any manner in connection with or related to this
Agreement, the Note or the Other Documents or the transactions contemplated
hereby or thereby; PROVIDED, HOWEVER, that the Company shall not be required to
indemnify the Indemnified Party for any claims, actions, causes of action,
damages, losses, obligations, payments, liabilities, costs, fees or expenses to
the extent, but only to the extent, caused by the Indemnified Party's gross
negligence or willful misconduct or if the Company shall be the prevailing party
in any such claim, action or cause of action. Nothing in this Section is
intended to limit the Company's obligations hereunder. In case any claim is
asserted or any action or proceeding is brought against an Indemnified Party,
the Indemnified Party shall promptly notify the Company of such claim, action or
proceeding and, at the option of the Indemnified Party, (i) such Indemnified
Party may retain legal counsel, reasonably satisfactory to the Company, to
represent it in such defense and the Company shall reimburse such Indemnified
Party for its reasonable fees and expenses of such legal counsel or (ii) the
Company shall resist, settle or defend with counsel reasonably acceptable to
such Indemnified Party, such claim, action or proceeding. The Bank shall
cooperate and join with the Company, at the expense of the Company, as may be
required in connection with any action taken or defended by the Company as
provided herein.
Section 11.19 LIMITATION OF LIABILITY. The Declaration of Trust of
Meditrust, a copy of which is duly filed in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name "Meditrust" refers to the
Trustees under the Declaration of Trust collectively as Trustees, but not
individually or personally; and that no trustee, officer, shareholder, employee
or agent of Meditrust shall be held to any personal liability, jointly or
severally, for any obligation of, or claim against, Meditrust. All persons
dealing with Meditrust, in any way, shall look only to the assets of Meditrust
and the collateral pledged as security for the Note, if any, for the payment of
any sum or the performance of any obligation of Meditrust under the Note or
otherwise.
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<PAGE> 80
IN WITNESS WHEREOF, the Company and the Bank have executed this
Agreement as of the date first set forth above.
THE COMPANY:
MEDITRUST
By: /s/ David F. Benson
---------------------------------
Name: David F. Benson
Its: President
THE BANK
VIA BANQUE
By: /s/ Roland de Montlivault
---------------------------------
Name: Roland de Montlivault
Its: Director General
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<PAGE> 1
EXHIBIT 11
MEDITRUST
<TABLE>
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(000 omitted except for per share amounts)
<CAPTION>
Quarter ended
March 31,
1997 1996
------- -------
<S> <C> <C>
PRIMARY
Weighted average shares 61,442 55,153
Dilutive effect of:
Stock options 221 172
------- -------
Weighted average number of shares and
equivalent shares outstanding 61,663 55,325
======= =======
Net income $41,053 $35,533
======= =======
Per Share:
Net income (A) $ 0.67 $ 0.64
======= =======
(A) This calculation is submitted in accordance with Regulation
S-K item 601(b) (11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
<CAPTION>
<S> <C> <C>
FULLY DILUTED
Weighted average shares 61,442 55,153
Assumed conversion of debentures 8,132 8,680
Dilutive effect of:
Stock options 221 172
------- -------
Weighted average shares
and equivalent shares outstanding 69,795 64,005
======= =======
Net income $41,053 $35,533
Interest and debt amortization on
assumed conversion of debentures 5,633 6,060
------- -------
Adjusted net income for fully diluted calculation $46,686 $41,593
======= =======
Per Share:
Net income (B) $ 0.67 $ 0.65
======= =======
(B) This calculation is submitted in accordance with Regulation
S-K item 601(b)(11) although it is contrary to paragraph 40 of
APB Opinion No. 15 because it produces anti-dilutive results.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997 AND THE CONSOLIDATED STATEMENT
OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1997 OF MEDITRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 5,666
<SECURITIES> 0
<RECEIVABLES> 22,013
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,155,399
<DEPRECIATION> 104,054
<TOTAL-ASSETS> 2,386,372
<CURRENT-LIABILITIES> 0
<BONDS> 942,649
0
0
<COMMON> 1,524,344
<OTHER-SE> (137,934)
<TOTAL-LIABILITY-AND-EQUITY> 2,386,372
<SALES> 0
<TOTAL-REVENUES> 67,965
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,115
<INCOME-PRETAX> 41,053
<INCOME-TAX> 0
<INCOME-CONTINUING> 41,053
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,053
<EPS-PRIMARY> .67
<EPS-DILUTED> .67
</TABLE>
