<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended 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 1-9028
NATIONWIDE HEALTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 95-3997619
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
610 NEWPORT CENTER DRIVE, SUITE 1150
NEWPORT BEACH, CALIFORNIA 92660
(Address of principal executive offices)
(714) 718-4400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---- ----
Shares of registrant's common stock, $.10 par value, outstanding at March 31,
1997 -- 41,803,924.
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NATIONWIDE HEALTH PROPERTIES, INC.
FORM 10-Q
MARCH 31, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I--FINANCIAL INFORMATION
PAGE
----
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets.............................. 2
Condensed Consolidated Statements of Operations.................... 3
Condensed Consolidated Statements of Cash Flows.................... 4
Notes to Condensed Consolidated Financial Statements............... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................ 7
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................... 9
</TABLE>
1
<PAGE>
PART I
NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
----------- ------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Investments in real estate
Real estate properties:
Land............................... $ 80,765 $ 75,252
Buildings and improvements......... 619,694 576,757
-------- --------
700,459 652,009
Less accumulated depreciation...... (94,392) (89,967)
-------- --------
606,067 562,042
Mortgage loans receivable, net........ 171,891 160,464
-------- --------
777,958 722,506
Cash and cash equivalents................. 13,578 11,709
Receivables............................... 4,058 4,321
Other assets.............................. 7,232 6,448
-------- --------
$802,826 $744,984
======== ========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C>
Bank borrowings........................... $ 63,000 $ 32,300
Senior notes due 2000-2015................ 215,000 190,000
Convertible debentures.................... 64,720 64,920
Notes and bonds payable................... 9,209 9,229
Accounts payable and accrued liabilities.. 23,552 19,947
Stockholders' equity:
Preferred stock $1.00 par value;
5,000,000 shares authorized;
none issued or outstanding
Common stock $.10 par value;
100,000,000 shares authorized;
issued and outstanding: 1997 -
41,803,924, 1996 - 41,785,001...... 4,180 4,179
Capital in excess of par value........ 462,839 462,534
Cumulative net income................. 314,834 300,079
Cumulative dividends.................. (354,508) (338,204)
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Total stockholders' equity...... 427,345 428,588
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$ 802,826 $ 744,984
========= =========
</TABLE>
See accompanying notes.
2
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------
1997 1996
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<S> <C> <C>
Revenues
Minimum rent............................... $18,278 $16,167
Interest and other income.................. 4,723 3,956
Additional rent and additional interest.... 3,301 2,808
------- -------
26,302 22,931
Expenses:
Interest & amortization of
deferred financing costs.................. 6,101 5,431
Depreciation and non-cash charges.......... 4,558 4,112
General and administrative................. 888 809
------- -------
11,547 10,352
------- -------
Net income...................................... $14,755 $12,579
======= =======
Net income per share............................ $ 0.35 $ .32
======= =======
Dividends paid per share........................ $ 0.39 $ .37
======= =======
Weighted average shares outstanding............. 41,800 38,727
======= =======
</TABLE>
See accompanying notes.
3
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Cash flow from operating activities:
Net income......................................... $ 14,755 $ 12,579
Depreciation and non-cash charges.................. 4,558 4,112
Amortization of deferred financing costs........... 187 270
Net decrease in other assets and liabilities....... 2,731 3,013
-------- --------
Net cash provided by operating activities...... 22,231 19,974
Cash flow from investing activities:
Acquisition of real estate properties.............. (48,450) (15,586)
Investment in mortgage loans receivable............ (11,550) ( 3,000)
Principal payments on mortgage loans receivable.... 515 3,252
-------- --------
Net cash used in investing activities.......... (59,485) (15,334)
Cash flow from financing activities:
Bank borrowings.................................... 68,900 27,100
Repayment of bank borrowings....................... (38,200) (36,000)
Issuance of senior unsecured debt.................. 25,000 30,000
Dividends paid..................................... (16,304) (14,330)
Principal payments on notes and bonds.............. (20) (1,272)
Other, net......................................... (253) (247)
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Net cash provided by financing activities....... 39,123 5,251
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Increase in cash and cash equivalents.................. 1,869 9,891
Cash and cash equivalents, beginning of period......... 11,709 7,937
-------- --------
Cash and cash equivalents, end of period............... $ 13,578 $ 17,828
======== ========
</TABLE>
See accompanying notes.
4
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
(i) The condensed consolidated financial statements included herein have
been prepared by the Company, without audit, and include all adjustments which
are, in the opinion of management, necessary for a fair presentation of the
results of operations for the three-month periods ended March 31, 1997 and 1996
pursuant to the rules and regulations of the Securities and Exchange Commission.
All of such adjustments are of a normal recurring nature. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. Although the Company believes
that the disclosures in such financial statements are adequate to make the
information presented not misleading, these condensed consolidated financial
statements should be read in conjunction with the Company's financial statements
and the notes thereto included in the Company's 1996 Annual Report on Form 10-K
filed with the Securities and Exchange Commission. The results of operations for
the three-month periods ended March 31, 1997 and 1996 are not necessarily
indicative of the results for a full year.
(ii) Net income per share is calculated by dividing net income by the
weighted average common shares outstanding during the period. The effect of
common stock options is immaterial, and the effect of convertible debentures is
anti-dilutive.
(iii) The Company qualifies as a real estate investment trust under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended. The Company
intends to continue to qualify as such and therefore to distribute at least 95
percent of its taxable income to its stockholders. Accordingly, no provision
has been made for federal income taxes.
(iv) The Company invests in health care related real estate and, as of March
31, 1997, had investments in 243 facilities, including 188 long-term health care
facilities, 53 assisted living facilities and two rehabilitation hospitals.
The Company's facilities which are owned and leased under "net" leases
are accounted for as operating leases. The leases have initial terms ranging
from 10 to 19 years, and the leases generally have two or more multiple-year
renewal options. The Company earns fixed monthly minimum rents and may earn
periodic additional rents. The additional rent payments are generally computed
as a percentage of facility net patient revenues in excess of base amounts
and/or increases in the Consumer Price Index. The base amounts, in most cases,
are net patient revenues for the first year of the lease. Certain of the leases
contain provisions such that the percentage of further revenue increases due to
the Company as additional rent is limited to 1% at such time as additional rent
exceeds 41% of base rent. Under the terms of the leases, the lessee is
responsible for all maintenance, repairs, taxes and insurance on the leased
properties. Forty-five of the facilities were leased to and operated by
subsidiaries of Beverly Enterprises, Inc.
(v) During the three-month period ended March 31, 1997, the Company acquired
seven assisted living facilities and three long-term health care facilities in
eight separate transactions for an aggregate purchase price of $41,307,000. The
acquisitions were funded by bank borrowings on the Company's bank line of credit
and cash on hand. The facilities were concurrently leased under terms generally
similar to the Company's existing leases.
In addition, the Company provided new construction financing of
approximately $4,853,000 for six assisted living facilities and two long-term
health care facilities and capital improvement funding in the aggregate amount
of approximately $1,616,000 in accordance with certain existing lease
agreements.
5
<PAGE>
During the three-month period ended March 31, 1997, the Company provided
two mortgage loans secured by two long-term health care facilities in two
separate transactions in the aggregate amount of $11,550,000. The loans were
funded by bank borrowings under the Company's bank line of credit and cash on
hand.
During the three months ended March 31, 1997, the Company issued
$25,000,000 in medium term notes. The notes bear fixed interest at a weighted
average rate of 7.41% and have a weighted average maturity of 10 years. The
proceeds were used to reduce borrowings on the Company's bank line of credit.
6
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1997
OPERATING RESULTS
Three Months 1997 Compared to Three Months 1996
Revenues for the three-months ended March 31, 1997 increased $3,371,000 or
15% over the same period in 1996. The increase is due to increased minimum rent
and interest income resulting from additional investments in real estate
properties and mortgage loans receivable during the last twelve months. The
increase was also attributable to increased additional rent and additional
interest earned under the Company's existing leases and mortgage loans
receivable based on increases in the facility revenues and the Consumer Price
Index.
Total expenses for the three-month period increased $1,195,000 or 12% over
the same period in 1996. The increase is due to increased depreciation in
connection with the acquisition of additional facilities during the last twelve
months and to increased interest expense as a result of the issuance of fixed
rate medium term notes during the last twelve months.
The Company expects increased rental revenues and interest income due to
the addition of facilities to its property base and mortgage loans receivable
over the last twelve months. The Company also expects increased additional rent
and additional interest because the Company's leases and mortgages generally
contain provisions under which additional rents or interest income increase with
increases in facility revenues and/or increases in the Consumer Price Index.
Historically, revenues at the Company's facilities and the Consumer Price Index
generally have increased; although, there are no assurances that they will
continue to increase in the future. Sales of facilities or repayments of
mortgages would serve to offset the aforementioned revenue increases. Additional
investments in health care facilities would also increase rental and/or interest
income. As additional investments in facilities are made, depreciation and/or
interest expense could also increase. Any such increases, however, are expected
to be more than offset by rents or interest income associated with the
investments.
Statement of Financial Accounting Standards ("SFAS") No. 128 Earnings per
Share and SFAS No. 129 Disclosure of Information about Capital Structure were
issued in February 1997 and are effective for periods ending after December 15,
1997. The Company will adopt SFAS No. 128 and SFAS No. 129 for the period
ending December 31, 1997 and anticipates that such adoption will not materially
impact the Company's financial statements.
LIQUIDITY AND CAPITAL RESOURCES
During the three-month period ended March 31, 1997, the Company acquired
seven assisted living facilities and three long-term health care facilities in
eight separate transactions for an aggregate purchase price of $41,307,000. The
acquisitions were funded by bank borrowings under the Company's bank line of
credit and cash on hand. The facilities were concurrently leased under terms
generally similar to the Company's existing leases.
In addition, the Company provided new construction financing of
approximately $4,853,000 for six assisted living facilities and two long-term
health care facilities and capital improvement funding in the aggregate amount
of approximately $1,616,000 in accordance with certain existing lease
agreements. New construction and capital improvements were funded by cash on
hand and bank borrowings on the Company's bank line of credit.
7
<PAGE>
During the three-month period ended March 31, 1997, the Company provided
two mortgage loans secured by two long-term health care facilities in two
separate transactions in the aggregate amount of $11,550,000. The loans were
funded by bank borrowings under the Company's bank line of credit and cash on
hand.
During the three months ended March 31, 1997, the Company issued
$25,000,000 in medium term notes. The notes bear fixed interest at a weighted
average of 7.41% and have a weighted average maturity of 10 years. The proceeds
were used to reduce borrowings on the Company's bank line of credit.
At March 31, 1997, the Company had $37,000,000 available under its
$100,000,000 bank line of credit. The Company has effective shelf registrations
on file with the Securities and Exchange Commission under which the Company may
issue (a) up to $85,000,000 in aggregate principal amount of medium term notes
and (b) up to $333,122,000 of securities including debt, convertible debt,
common and preferred stock. The Company anticipates issuing securities under
such shelf registrations to repay borrowings under the Company's bank line of
credit.
On April 1, 1997, the Company's $100,000,000 bank line of credit was
amended to, among other things, extend its maturity to March 31, 2000 and reduce
its current LIBOR borrowing margin from .90% to .70%.
The Company anticipates making additional investments in health care
related facilities. Financing for such future investments may be provided by
borrowings under the Company's bank line, private placements or public offerings
of debt or equity, and the assumption of secured indebtedness. The Company
believes it has sufficient liquidity and financing capability to finance future
investments as well as repay borrowings at or prior to their maturity.
STATEMENT REGARDING FORWARD LOOKING DISCLOSURE
Certain information contained in this report includes forward looking
statements, which can be identified by the use of forward looking terminology
such as "may," "will," "expect," "should" or comparable terms or the negative
thereof. These statements involve risks and uncertainties that could cause
actual results to differ materially from those described in the statements.
These risks and uncertainties include (without limitation) the following: the
effect of economic and market conditions and changes in interest rates, changes
in the health industry, government regulations, including changes in Medicare
and Medicaid payment levels, changes in the ratings of the Company's debt
securities, the amount of any additional investments and access to capital
markets.
8
<PAGE>
OTHER INFORMATION
PART II
ITEM 4. NONE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
10.1 Amendment Number Five to Credit Agreement dated April 1, 1997
between the Company and Wells Fargo Bank, National Association,
The Sumitomo Bank Limited, The Bank of New York, Sanwa Bank
California and BHF-Bank Aktiengesellschaft.
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the three-
month period ended March 31, 1997.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: April 29, 1997
NATIONWIDE HEALTH PROPERTIES, INC.
By /s/ MARK L. DESMOND
----------------------------------------------
Mark L. Desmond
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
10
<PAGE>
EXHIBIT 10.1
AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT
-----------------------------------------
This AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT, dated as of April 1,
1997 (this "Amendment"), is entered into among NATIONWIDE HEALTH PROPERTIES,
INC., a Maryland corporation (the "Borrower"), the financial institutions which
are signatories to the Credit Agreement (each a "Bank" and, collectively, the
"Banks"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as agent for the Banks
thereunder (in such capacity, the "Agent").
WHEREAS, the Borrower has requested that the Banks amend certain
provisions of the Credit Agreement to provide for, among other things, the
extension of the Termination Date, the reduction of certain fees and interest
rates, and the revision of certain covenants.
WHEREAS, subject to the terms and conditions contained herein, the
Banks are willing to amend such provisions of the Credit Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, conditions,
and provisions hereinafter set forth, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS FOR THIS AMENDMENT;
------------------------------
AMENDMENT OF ARTICLE I OF THE CREDIT AGREEMENT
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1.1 Definitions for this Amendment. Any and all initially
------------------------------
capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement unless specifically defined herein. For purposes of this
Amendment, the following initially capitalized terms shall have the following
meanings:
"Agent" shall have the meaning set forth in the introduction to this
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Amendment.
"Amendment" means this Amendment Number Five to Credit Agreement among
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the Borrower, the Banks, and the Agent.
"Bank" and "Banks" shall have the respective meanings set forth in the
---- -----
introduction to this Amendment.
"Borrower" shall have the meaning set forth in the introduction to
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this Amendment.
"Credit Agreement" means that certain Credit Agreement, dated as of
----------------
May 20, 1993, among the Borrower, the Banks, and the Agent, as amended by
that certain Amendment Number One to Credit Agreement dated as of April 28,
1994, that certain Amendment Number Two to Credit Agreement dated as of
July 11, 1995, that certain Amendment Number Three to Credit Agreement
dated as of January 22, 1996, and that
<PAGE>
certain Amendment Number Four and Waiver to Credit Agreement dated as of
December 10, 1996.
1.2 Amendment of Section 1.1 of the Credit Agreement. Section 1.1 of
------------------------------------------------
the Credit Agreement is hereby amended by (a) deleting the following defined
terms in their entireties: "Applicable Eurodollar Rate Margin" and "Termination
Date"; and (b) inserting the following defined terms:
"Applicable Eurodollar Rate Margin" means, for each Eurodollar Rate
---------------------------------
Portion of Loans outstanding prior to the Termination Date,
(i) 1.50%, if Borrower has at least two of the following long-
term senior debt ratings: (A) Ba1 or less as determined by Moody's
Investors Service ("Moody's"), (B) BB+ or less as determined by Standard
and Poor's Corporation ("S&P"), and (C) BB+ or less as determined by Duff &
Phelps Inc. ("Duff");
(ii) 0.95%, if Borrower has at least two of the following long-
term senior debt ratings: (A) Baa3 or better as determined by Moody's, (B)
BBB- or better as determined by S&P, and (C) BBB- or better as determined
by Duff;
(iii) 0.75%, if the Borrower has at least two of the following
long-term senior debt ratings: (A) Baa2 or better as determined by
Moody's, (B) BBB or better as determined by S&P, and (C) BBB or better as
determined by Duff; or
(iv) 0.50%, if the Borrower has at least two of the following
long-term senior debt ratings: (A) Baa1 or better as determined by
Moody's, (B) BBB+ or better as determined by S&P, and (C) BBB+ or better as
determined by Duff.
In the event that the Borrower satisfies more than one of the ratings
requirements clauses in the preceding sentence, the Applicable Eurodollar
Rate Margin shall be the lowest applicable percentage amount. In the event
that the Borrower does not satisfy any of the ratings requirements clauses
in the preceding sentence (due to the unavailability of any such ratings or
otherwise), the Applicable Eurodollar Rate Margin shall be 1.50%. Each
change in the Applicable Eurodollar Rate Margin based on a change in such
long-term senior debt rating shall be effective for each Interest Period of
each Eurodollar Rate Portion of the Loans commencing on or after the second
Business Day after the date that the Borrower provides written notice to
the Agent of such rating change.
"Applicable Facility Fee Rate" means, for each calendar quarter,
----------------------------
(i) 0.35% per annum, if Borrower has at least two of the
following long-term senior debt ratings: (A) Ba1 or less as determined by
Moody's, (B) BB+ or less as determined by S&P, and (C) BB+ or less as
determined by Duff;
(ii) 0.30% per annum, if Borrower has at least two of the
following long-term senior debt ratings: (A) Baa3 or better as determined
by Moody's,
-2-
<PAGE>
(B) BBB- or better as determined by S&P, and (C) BBB- or better as
determined by Duff;
(iii) 0.28% per annum, if the Borrower has at least two of the
following long-term senior debt ratings: (A) Baa2 or better as determined
by Moody's, (B) BBB or better as determined by S&P, and (C) BBB or better
as determined by Duff;
(iv) 0.38% per annum, if the Borrower has at least two of the
following long-term senior debt ratings: (A) Baa1 or better as determined
by Moody's, (B) BBB+ or better as determined by S&P, and (C) BBB+ or better
as determined by Duff; or
(v) 0.25% per annum, if the Borrower has at least two of the
following long-term senior debt ratings: (A) A3 or better as determined by
Moody's, (B) A- or better as determined by S&P, and (C) A- or better as
determined by Duff.
In the event that the Borrower satisfies more than one of the ratings
requirements clauses in the preceding sentence, the Applicable Facility Fee
Rate shall be the percentage amount applicable to the highest ratings
requirement clause met by the Borrower. In the event that the Borrower
does not satisfy any of the ratings requirements clauses in the preceding
sentence (due to the unavailability of any such ratings or otherwise), the
Applicable Facility Fee Rate shall be 0.35%. Each change in the Applicable
Facility Fee Rate based on a change in such long-term senior debt rating
shall be effective for the calendar quarter commencing on or after the date
that the Borrower provides written notice to the Agent of such rating
change.
"Net Real Estate Property Assets" means the Borrower's gross
-------------------------------
investment in real estate properties (excluding mortgage loan receivables)
less the accumulated depreciation on such gross investment.
----
"Termination Date" means, unless extended pursuant to Section 4.1(b),
---------------- --------------
March 31, 2000.
ARTICLE 2
AMENDMENT OF CERTAIN PROVISIONS
-------------------------------
OF THE CREDIT AGREEMENT
-----------------------
2.1 Amendment of Section 3.3 of the Credit Agreement. Section 3.3 of
------------------------------------------------
the Credit Agreement is amended by deleting subsection (a) therefrom in its
entirety and substituting therefor the following subsection:
(a) Facility Fee. The Borrower agrees to pay to the Agent for the
------------
account of each Bank a facility fee on such Bank's Commitment as in effect
from time to time from the date that each Bank executes this Agreement (as
set forth below such Bank's name on the signature pages hereof) until the
Termination Date at the Applicable Facility Fee
-3-
<PAGE>
Rate, payable quarterly in arrears on the last Business Day of March, June,
September and December in each year, commencing on the first such date
after the date of this Agreement, and on the earlier of the date such
Bank's Commitment is terminated hereunder or the Termination Date.
2.2 Amendment of Section 9.1(b) of the Credit Agreement. Section
---------------------------------------------------
9.1(b) of the Credit Agreement is amended by (a) renumbering clause (xii)
thereof to be clause (xiv) and (b) by inserting the following new clauses
immediately following clause (xi) thereof:
(xii) within five Business Days after any long-term senior debt
rating change by Moody's, S&P or Duff with respect to the Borrower, written
notice setting forth such rating change;
(xiii) promptly after consummation of any purchase of a
Healthcare Property for a purchase price (including the estimated costs of
any renovations committed at the time of purchase) greater than or equal to
$15,000,000, a description of such transaction, in reasonable detail,
together with copies of all materials presented to the Borrower's Board of
Directors in connection with the approval of such transaction; and
2.3 Amendment of Section 9.4(f) of the Credit Agreement. Section
---------------------------------------------------
9.4(f) of the Credit Agreement is amended by deleting clauses (iii) and (v)
therefrom in their entireties and substituting therefor the following clauses:
(iii) additional purchases of Healthcare Properties of other
Persons and any renovation of the subject Healthcare Properties committed
at the time of purchase, the consideration (whether in cash or in kind) for
which together with the estimated costs of any such committed renovation or
expansion (exclusive of expenditures permitted under subsection (g)) does
not exceed (A) $30,000,000 individually and (B) $200,000,000 in aggregate
in any fiscal year (or such greater amounts as shall be approved by the
prior written consent of the Majority Banks); provided that, after giving
--------
effect to such purchase, no Default shall have occurred and be continuing;
(v) investments in development or construction projects
(including new construction and renovations); provided that the aggregate
--------
amount thereof, as of the end of any fiscal quarter of the Borrower, shall
not exceed ten percent (10%) of the Net Real Estate Property Assets during
the four (4) fiscal quarters then ended.
2.4 Amendment of Section 9.4(g) of the Credit Agreement. Section 9.4
---------------------------------------------------
of the Credit Agreement is amended by deleting subsection (g) therefrom in its
entirety and substituting therefor the following subsection:
(g) Capital Expenditures. Without the prior written consent of the
--------------------
Majority Banks, the Borrower will not, and will not permit any of its
Subsidiaries to, make any expenditures (exclusive of investments permitted
under clauses (iii) and (v) of
-4-
<PAGE>
subsection (f)) for fixed or capital assets, including obligations under
Capital Leases, in an aggregate amount in excess of $5,000,000 in any
fiscal year.
ARTICLE 3
MISCELLANEOUS
-------------
3.1 Address for Notices. Pursuant to Section 12.2 of the Credit
-------------------
Agreement, the Borrower hereby provides notice to the Agent and the Banks (and
the Agent and the Banks hereby acknowledge receipt of such notice) that the
address and telecopier number of the Borrower have been changed to the
following:
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
Attn.: Mark L. Desmond
Telecopier No. (714) 759-6887
3.2 Loan Documents. This Amendment shall be one of the Loan
--------------
Documents.
3.3 Execution. This Amendment may be executed in any number of
---------
counterparts, each of which when so executed and delivered shall be deemed an
original. All of such counterparts shall constitute but one and the same
instrument. Delivery of an executed counterpart of the signature pages of this
Amendment by telecopier shall be equally effective as delivery of a manually
executed counterpart. Any party delivering an executed counterpart of the
signature pages of this Amendment by telecopier shall thereafter also promptly
deliver a manually executed counterpart, but the failure to deliver such
manually executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
3.4 Effectiveness. This Amendment shall be effective as of the date
-------------
first written above, when one or more counterparts hereof shall have been
executed by the Borrower, the Banks, and the Agent and shall have been delivered
to the Agent.
3.5 No Other Amendment. Except as expressly amended hereby, the
------------------
Credit Agreement shall remain unchanged and in full force and effect. To the
extent any terms or provisions of this Amendment conflict with those of the
Credit Agreement, the terms and provisions of this Amendment shall control.
This Amendment shall be deemed a part of and is hereby incorporated in the
Credit Agreement.
3.6 Governing Law. This Amendment shall be governed by, and
-------------
construed and enforced in accordance with, the laws of the State of California.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered as of the date first above written.
WELLS FARGO BANK, NATIONAL SANWA BANK CALIFORNIA
ASSOCIATION, in its individual
capacity and as Agent
By /s/ KAY MATHERLY By /s/ JOHN LINDER
------------------------------ -----------------------------
Title: Vice President Title: Vice President
THE SUMITOMO BANK, LIMITED BHF-BANK AKTIENGESELLSCHAFT
By /s/ YVONNE K. TSO By /s/ THOMAS LEISSL
------------------------------ -----------------------------
Title: Vice President Title: Vice President
By /s/ BRADFORD E. CHAMBERS By /s/ DAN DOBRJANSKYJ
------------------------------ ---------------------------
Title: Vice President Title: Assistant Vice President
THE BANK OF NEW YORK
By /s/ LISA BROWN
------------------------------
Title: Vice President
NATIONWIDE HEALTH PROPERTIES, INC.
By /s/ MARK L. DESMOND
------------------------------
Title: Senior Vice President
& Chief Financial Officer
-6-
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