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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 27, 1995
AMERICAN HEALTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-9381 95-4084878
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6400 SOUTH FIDDLER'S GREEN CIRCLE, SUITE 1800
ENGLEWOOD, COLORADO 80111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 796-9793
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Item 5. Other Events.
On December 27, 1995, the Company established a new $150,000,000
three-year unsecured revolving credit facility. The new bank facility replaces
an existing $100,000,000 line. It is led by Wells Fargo Bank with Banque
Paribas, First Union National Bank and NationsBank, as Co-Agents. Other
participants are BHF-Bank, Banque Nationale de Paris, Colorado National Bank,
Fleet National Bank and Kleinwort Benson Limited.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
10.1 Credit Agreement dated as of December 27, 1995 among American
Health Properties, Inc., the financial institutions listed
therein, Banque Paribas, as Co-Agent, First Union Bank of
North Carolina as Co-Agent, NationsBank of Texas, N.A. as
Co-Agent and Wells Fargo Bank, N.A. as Arranger, Agent and
Facing Bank
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 hereunto duly authorized.
Date: January 5, 1995 AMERICAN HEALTH PROPERTIES,
INC.
(Registrant)
By: /s/ Michael J. McGee
Michael J. McGee
Treasurer
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INDEX TO EXHIBITS
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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10.1 Credit Agreement dated as of December 27, 1995 among American
Health Properties, Inc., the financial institutions listed
therein, Banque Paribas, as Co-Agent, First Union Bank of
North Carolina as Co-Agent, NationsBank of Texas, N.A. as
Co-Agent and Wells Fargo Bank, N.A. as Arranger, Agent and
Facing Bank
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EXECUTION COPY
===============================================
CREDIT AGREEMENT
DATED AS OF DECEMBER 27, 1995
AMONG
AMERICAN HEALTH PROPERTIES, INC.,
THE FINANCIAL INSTITUTIONS LISTED HEREIN,
BANQUE PARIBAS, AS CO-AGENT,
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, AS CO-AGENT,
NATIONSBANK OF TEXAS, N.A., AS CO-AGENT,
AND
WELLS FARGO BANK, N.A.
AS ARRANGER, AGENT AND FACING BANK
=================================================
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CONTENTS
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1. Definitions and Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.3. Other Referential Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.4. Types of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2. Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1. Commitment to Make Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.2. Conversion or Continuation of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3. Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.4. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.5. Reductions of Commitments Irrevocable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.6. Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.7. Several Obligations; Remedies Independent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.8. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.9. Scheduled Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.10. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.11. Mandatory Prepayments and Reductions of Commitments . . . . . . . . . . . . . . . . . . . . . . . . 24
2.12. Voluntary Reductions of Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . . 25
2.13. Clean-Down Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.14. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2. Issuance of the Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.3. Reimbursement of Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.4. Interest on Outstanding Reimbursement Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.5. Reimbursement Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.6. Indemnification Regarding Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.7. Limitation of Liability of the Facing Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4. Other Credit Commitment Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.1. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.2. Extension of Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.3. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.4. Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.5. Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.6. Minimum Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.7. Certain Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.8. Non-receipt of Funds by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.9. Participations of Letter of Credit Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.10. Sharing of Payments. Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5. Additional Costs; Yield Protection; Capital Adequacy; Taxes . . . . . . . . . . . . . . . . . . . . . . . . 37
5.1. Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.2. Limitation on Types of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.3. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.4. Treatment of Affected Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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5.5. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.1. Initial Extensions of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.2. Initial and Subsequent Extensions of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.1. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.2. Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.3. Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.4. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.5. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.6. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.7. Federal Reserve Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.8. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.9. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.10. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.11. Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.12. Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.13. Environmental and Safety Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.14. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.15. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.16. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.17. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.18. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.19. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.20. Necessary Authorizations and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.21. Not Prohibited Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.22. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.23. Customers of the Company and its Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.1. Financial Statements and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.2. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.3. Corporate Existence. Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.4. REIT Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.6. Obligations and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.7. Maintaining Records; Access to Properties and Inspections . . . . . . . . . . . . . . . . . . . . . 60
8.8. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.9. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.10. Environmental and Safety Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.11. Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.12. Phase I Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.13. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.14. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.15. Maintenance of Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.1. Prohibition of Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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9.2. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.3. Indebtedness of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.4. Subsidiary Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.5. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.6. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.7. Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.8. Sales and Lease-Backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.9. Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.10. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.11. Execution and Modifications of Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.12. Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.13. Restrictive Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.14. Prepayment of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.15. Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.16. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.1. Maintenance of Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.2. Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.3. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
11. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.1. Payments under Credit Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.2. Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.3. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.4. Other Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.5. Ability to Pay Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.6. Voluntary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.7. Involuntary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.8. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11.9. ERISA Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
11.10. Termination of Credit Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12. The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
12.1. Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
12.2. Reliance by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
12.3. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.4. Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.5. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.6. Non-Reliance on the Agent or Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.7. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
12.8. Resignation or Removal of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
12.9. Consents under Credit Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
12.10. Collateral Sub-Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
12.11. Liability of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.12. Transfer of Agency Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.13. The Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
13.1. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
13.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
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13.3. Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.4. Amendments. Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
13.5. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
13.6. Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
13.7. Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
13.8. Confidentiality of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
13.9. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
13.10. Table of Contents; Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
13.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
13.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
13.13. Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
13.14. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
13.15. Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
</TABLE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Form of Subsidiary Guaranty
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Letter of Credit Request
Exhibit D-1 Form of Notice of Borrowing
Exhibit D-2 Form of Notice of Conversion
Exhibit D-3 Form of Notice of Continuation
Exhibit E Form of Opinion of Counsel
Exhibit F Form of Compliance Certificate
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Continuing Agreement
Exhibit I Prospectus Supplement of the Company
</TABLE>
SCHEDULES
<TABLE>
<S> <C>
Schedule I Revolving Credit Commitments
Schedule 7.4 Authorizations, Approvals and Consents
Schedule 7.6 Litigation
Schedule 7.8 ERISA Plans
Schedule 7.12 Indebtedness, Material Contracts, Labor Matters
Schedule 7.13 Environmental Matters
Schedule 7.14 Subsidiaries
Schedule 7.16 Existing Liens
Schedule 9.5 Existing Investments
Schedule 9.6 PG Sites
Schedule 9.10 Existing Affiliate Transactions
Schedule 9.12 Existing Classes of Preferred Stock
</TABLE>
-iv-
<PAGE> 6
DEFINITIONS
Additional Costs, 37
Affiliate, 1
Agent's Account, 21
Aggregate Available Revolving Commitments, 2
Applicable Lending Office, 2
Assignment and Acceptance, 83
Bankruptcy Code, 2
Base Rate, 2
Base Rate Loans, 3
Business Day, 3
Capital Expenditures, 3
Capital Lease Obligations, 3
Casualty Event, 3
CERCLA, 3
CERCLIS, 3
Closing Date, 3
Co-Agents, 3
Code, 3
Commitments, 4
Consolidated Subsidiary, 4
Consolidated Tangible Net Worth, 4
Construction and Development Investment, 4
Continuation, 4
Continue, 4
Continued, 4
Continuing Agreement, 4
Conversion, 4
Convert, 4
Converted, 4
Credit Documents, 4
Credit Event, 5
Default Rate, 5
Disposition, 5
Dollar, 5
Dollars, 5
Drawing, 5
Duff and Phelps, 5
EBITDAR, 5
Employee Benefit Plan, 5
Environmental and Safety Laws, 6
Environmental Claim, 5
Equity Issuance, 6
ERISA, 6
ERISA Affiliate, 6
ERISA Event, 6
Eurodollar Base Rate, 7
-v-
<PAGE> 7
Eurodollar Loans, 7
Eurodollar Rate, 7
Event of Default, 71
Federal Funds Rate, 7
Fee Letter, 31
Fees, 7
Financing Plan, 7
Funded Debt, 7
GAAP, 8
Governmental Agency, 8
Guarantee, 8
Hazardous Materials, 8
Health Care Facility, 8
Historical Financial Statements, 45
Indebtedness, 8
Insufficiency, 9
Intangible Assets, 9
Interest Coverage Ratio, 9
Interest Expense, 9
Interest Period, 9
Interest Rate Protection Agreement, 10
Investment, 10
Investment Security, 10
Letter of Credit, 10
Letter of Credit Reserve Account, 10
Letter of Credit Subcommitment, 10
Leverage Ratio, 10
Lien, 10
Loans, 11
Margin Stock, 48
Material Acquisition, 11
Material Adverse Effect, 11
Material Contract, 11
Maturity Date, 11
Moody's, 11
Multiemployer Plan, 11
Necessary Authorizations, 54
Net Available Proceeds, 11
Net Income, 12
Notes, 12
Notice of Borrowing, 34
Obligations, 74
Other Taxes, 42
Participant, 85
PBGC, 12
Permitted Investments, 13
Permitted Liens, 13
-vi-
<PAGE> 8
Permitted Subsidiary, 14
Person, 14
PG Assets, 14
PG Excess Proceeds, 15
PG Indebtedness, 15
PG Sites, 15
PG Stock, 15
Plan, 15
Preferred Stock, 15
Prime Rate, 15
Principal Office, 15
Pro Rata Share, 16
Projected Financial Statements, 15
Property, 16
Purchase Money Lien, 14
RCRA, 16
Redeemable Stock, 16
Regulations D, G, T, U and X, 16
Regulatory Change, 16
Reimbursement Obligations, 16
REIT, 16
Release, 16
Rentals, 16
Required Lenders, 17
Requirement of Law, 17
Reserve Requirement, 17
Restricted Payment, 17
Revolving Credit Commitment, 17
Revolving Credit Loans, 21
Revolving Credit Notes, 23
S&P, 18
Senior Long Term Debt, 18
Senior Long Term Debt Rating, 18
Senior Notes, 18
Stated Amount, 18
Subsidiary, 18
Subsidiary Guarantors, 18
Subsidiary Guaranty, 19
Taxes, 42
Type, 20
UCC, 19
Unmatured Default, 19
Wells Fargo, 19
Wholly-Owned Subsidiary, 19
Working Capital Loans, 19
-vii-
<PAGE> 9
This CREDIT AGREEMENT is dated as of December 27, 1995 among American
Health Properties, Inc. (the "Company"); each of the banks listed on the
signature pages hereto or which, pursuant to Section 13.6., shall become a
"Lender" hereunder (individually, a "Lender" and, collectively, the "Lenders");
Banque Paribas, as Co-Agent, First Union National Bank of North Carolina, as
Co-Agent, NationsBank of Texas, N.A., as Co-Agent and Wells Fargo Bank, N.A.,
as agent for the Lenders (in such capacity, together with its successors in
such capacity, the "Agent"), as arranger of the facilities provided hereby (in
such capacity, the "Arranger"), and as the issuer of the Letters of Credit (in
such capacity, together with its successors in such capacity, the "Facing
Bank").
The Company has requested that the Lenders make loans and provide
letters of credit to the Company in an aggregate principal amount up to but not
exceeding $150,000,000 at any one time outstanding, and the Lenders are
prepared to make such loans and letters of credit available to the Company upon
the terms hereof and subject to the conditions contained herein.
Accordingly, the parties hereto agree as follows:
1. DEFINITIONS AND ACCOUNTING MATTERS
1.1. CERTAIN DEFINED TERMS
As used herein, the following terms shall have the following meanings
(all terms defined in this Section 1.1 or in other provisions of this Agreement
in the singular to have the same meanings when used in the plural and vice
versa):
"Affiliate" shall mean, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person and, if such Person is an individual, any member of
the immediate family (including parents, spouse and children) of such
individual, any trust whose principal beneficiary is such individual or one or
more members of such individual's immediate family and any Person who is
controlled by any such member or trust. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management or policies of the subject
Person (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise); provided that, in any event,
any Person which owns directly or indirectly 10% or more of the securities
having ordinary voting power for the election of directors or other governing
body of a corporation or 10% or more of the partnership or other ownership
interests of any other Person (other than as a limited partner of such other
Person) will be deemed an Affiliate of such corporation or other Person.
<PAGE> 10
"Aggregate Available Revolving Commitments" shall mean, on any date of
determination thereof: (a) the Revolving Credit Commitments in effect on such
date minus (b) the sum of (i) the aggregate outstanding principal amount of
Loans on such date, (ii) the aggregate Stated Amounts of all Letters of Credit
then outstanding and (iii) the aggregate amount of outstanding Reimbursement
Obligations on such date.
"Applicable Lending Office" shall mean, foreach Lender and for each
Type of Loan, the "Lending Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or such
other office of such Lender (or of an affiliate of such Lender) as such Lender
may from time to time specify to the Agent and the Company as the office by
which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean, for any Base Rate or Eurodollar Loan,
the per annum rate set forth in the following table opposite the Company's
Senior Long Term Debt Rating:
<TABLE>
<CAPTION>
Senior Long Term Debt Applicable Margin for Applicable Margin for
Rating Eurodollar Loans Base Rate Loans
<S> <C> <C>
A-/A3 0.375% 0.000%
BBB+/Baa1 0.500% 0.000%
BBB/Baa2 0.750% 0.000%
BBB-/Baa3 0.875% 0.000%
less than BBB-/Baa3 or 1.250% 0.250%
not rated
</TABLE>
For purposes hereof, in the event two or more rating agencies shall assign
different ratings to the Company's Senior Long Term Debt, the lower(est) rating
shall apply. A change in any Applicable Margin shall be effective as of the
date of such change in rating.
"Bankruptcy Code" means the United States Bankruptcy Code of 1978, as
amended from time to time, or any successor federal statute.
"Base Rate" shall mean, for any day, the higher of (a) the Federal
Funds Rate for such day plus 1/2 of 1% per annum and (b) the Prime Rate for
such day. Each change in any interest rate provided for herein based upon the
Base Rate resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate. If for any reason the Agent shall have
determined that it is unable to ascertain the Federal Funds Rate for such day,
including, without limitation, the inability or failure of the Agent to obtain
sufficient bids or publications as contemplated by the definition of the
Federal Funds Rate, the Base Rate for such day shall be the Prime Rate.
-2-
<PAGE> 11
"Base Rate Loans" shall mean Loans which bear interest at rates based
upon the Base Rate.
"Business Day" shall mean any day on which commercial banks are not
authorized or required to close in San Francisco and, if such day relates to a
borrowing of, a payment or prepayment of principal of or interest on, or a
Conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice
by the Company with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Expenditures" shall mean, for any period, expenditures
(including the aggregate amount of Capital Lease Obligations incurred during
such period) made or committed to be made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP.
"Capital Lease Obligations" shall mean, as to any Person, the
obligations of such Person with respect to any lease of (or other agreement
conveying the right to use) any Property (whether real, personal or mixed)
which is or should be classified and accounted for as a capital lease on a
balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board) and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"Casualty Event" shall mean any loss of or damage to, or any
condemnation or other taking of, any Property of the Company and its
Subsidiaries that results in the receipt of insurance proceeds, proceeds of a
condemnation award or other compensation.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, or any
successor federal statute.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Inventory System.
"Closing Date" shall mean the date upon which the conditions precedent
to the initial extension of credit hereunder set forth in Article 6. have been
satisfied and the initial extension of credit hereunder made, but in no event
later than January 15, 1996, unless otherwise agreed to by the parties hereto.
"Co-Agents" shall mean each of Banque Paribas, First Union National
Bank of North Carolina, and NationsBank of Texas, N.A., in their respective
capacities as Co-Agents hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute.
-3-
<PAGE> 12
"Commitments" shall mean the Revolving Credit Commitments.
"Consolidated Real Estate Assets" shall mean on any date of
determination, the real estate investments of the Company and its Consolidated
Subsidiaries determined in accordance with GAAP, as shown on the most recent
consolidated balance sheet of the Company delivered to the Lenders pursuant to
Section 8.1 hereof.
"Consolidated Subsidiary" shall mean, as to any Person, each
Subsidiary of such Person (whether now existing or hereafter created or
acquired) the financial statements of which shall be (or should be)
consolidated with the financial statements of such Person in accordance with
GAAP.
"Consolidated Tangible Net Worth" shall mean, on the date any
determination thereof is to be made, the amount calculated as the difference
of: (a) the Company's consolidated stockholders' equity (calculated before
provision for the foreign currency exchange reserves, if any, required under
Financial Accounting Standards Board Statement No. 52), determined on a
consolidated basis; minus (b) any treasury stock to the extent any of the same
is included in the Company's consolidated stockholders' equity minus (c) the
Intangible Assets of the Company and its Subsidiaries, determined on a
consolidated basis.
"Construction and Development Investment" shall mean, any Investment
made, directly or indirectly, for the construction and development of any
Health Care Facility owned entirely by the Company or a Permitted Subsidiary,
so long as: (a) such Health Care Facility has been in existence less than
twenty-four months following the receipt of a certificate of occupancy or an
initial license with respect thereto; and (b) the revenues received by the
operator of such Health Care Facility in respect of such facility for any
fiscal quarter are not greater than the Rentals and interest expense payable by
such operator in respect of such facility for such fiscal quarter.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.2. of a Eurodollar Loan from one Interest
Period to the next succeeding Interest Period.
"Continuing Agreement" shall mean a Continuing Standby Letter of
Credit Agreement dated on or before the date hereof by and between the Company
and the Facing Bank and substantially in the form of Exhibit H hereto.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.2. of Base Rate Loans into Eurodollar Loans or of
Eurodollar Loans into Base Rate Loans, which may be accompanied by the transfer
by a Lender (at its sole discretion) of a Loan from one Applicable Lending
Office to another.
"Credit Documents" shall mean, collectively, this Agreement, the
Notes, the Subsidiary Guaranty, any Letter of Credit, the Continuing Agreement
and any application for a Letter of Credit.
-4-
<PAGE> 13
"Credit Event" shall mean each extension, Continuation or Conversion
of a Loan and each issuance, extension or other modification of a Letter of
Credit.
"Default Rate" a rate per annum equal at all times to 2% per annum
above the rate per annum required to be paid pursuant to Section 2.4.(a);
provided, however, that in no event shall such rate be less than 2% plus the
rate per annum in effect at the time of the occurrence of any Event of Default.
"Disposition" shall mean any sale, assignment, transfer or other
disposition (including a ground lease or other long term obligation which under
GAAP is the equivalent of a sale of such Property) of any Property (whether now
owned or hereafter acquired) of the Company or any of its Subsidiaries other
than inventory in the ordinary course of business.
"Dollars", "Dollar" and "$" shall mean lawful money of the United
States of America.
"Drawing" shall mean a drawing under a Letter of Credit.
"Duff and Phelps" shall mean Duff and Phelps Credit Rating Co., an
Illinois corporation, and its successors, provided that, if such corporation
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, then "Duff and Phelps" shall mean any other
nationally recognized securities agency designated by the Required Lenders by
notice to the Agent and the Company.
"EBITDAR" shall mean, for any period, the sum of the following
(determined without duplication) for the Company and its Consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP; (i)
Net Income (or loss) for such period, plus (ii) to the extent reflected in Net
Income (or loss) for such period, the aggregate for such period of (A) Interest
Expense, (B) provision for income taxes, (C) depreciation expense, (D)
amortization expense, (E) other non-cash charges, and (F) Rental Expense, minus
(iii) to the extent reflected in Net Income (or loss) for such period,
extraordinary gain (or plus any extraordinary loss) for such period plus (iv)
to the extent reflected in Net Income (or loss) for such period, losses (or
minus gains) during such period respecting Dispositions.
"Employee Benefit Plan" shall mean any employee benefit plan within
the meaning of Section 3(3) of ERISA maintained or contributed to by the
Company or any of its ERISA Affiliates, other than a Multiemployer Plan.
"Environmental Claim" shall mean, with respect to any Person, any
notice, claim, demand or other communication (whether written or oral) alleging
or asserting such Person's liability for investigatory costs, cleanup costs,
governmental response costs, damages to natural resources or other Property,
personal injuries, fines or penalties arising out of, based on or resulting
from (a) the presence, handling, generation, treatment, storage, disposal,
Release or threatened Release into the environment of any Hazardous
-5-
<PAGE> 14
Material at any location, whether or not owned by such Person, or (b)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental and Safety Law.
"Environmental and Safety Laws" shall mean any and all federal, state,
local and foreign statutes, laws, regulations, ordinances and similar
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and common law
concerning public health or safety, worker health or safety or pollution or
protection of the environment, including without limitation those relating to
any emissions, discharges or Releases of Hazardous Materials to ambient air,
surface water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
control, clean-up or handling of Hazardous Materials.
"Equity Issuance" means any issuance or sale by the Company or any of
its Subsidiariesof its capital stock or any warrants, options or similar rights
to acquire, or securities convertible into or exchangeable for, such capital
stock.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor statute.
"ERISA Affiliate" of any Person shall mean any corporation or trade or
business which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as such Person or which is under
common control (within the meaning of Section 414(c) of the Code) with such
Person.
"ERISA Event" with respect to any Person shall mean (a) the occurrence
of a reportable event, within the meaning of Section 4043 of ERISA, with
respect to any Plan of such Person or any of its ERISA Affiliates, unless the
30- day notice requirement with respect to such event has been waived by the
PBGC; (b) the provision by the administrator of any Plan of such Person or any
of its ERISA Affiliates of a notice of intent to terminate such Plan pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a
plan amendment referred to in Section 4041(a)(2) of ERISA); (c) the cessation
of operations at a facility of such Person or any of its ERISA Affiliates in
the circumstances described in Section 4062(e) of ERISA with respect to a Plan;
(d) the withdrawal by such Person or any of its ERISA Affiliates from a Plan
during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (e) the failure by such Person or any of its ERISA
Affiliates to make a payment to a Plan required under Section 302(f)(1) of
ERISA; (f) the adoption of an amendment to a Plan of such Person or any of its
ERISA Affiliates requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to
terminate a Plan of such Person or any of its ERISA Affiliates pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition described in
Section 4042 of ERISA that could constitute grounds for the termination of, or
the appointment of a trustee to administer, such Plan.
-6-
<PAGE> 15
"Eurodollar Base Rate" shall mean, with respect to any Eurodollar Loan
for any Interest Period therefor, the arithmetic mean (rounded upwards, if
necessary, to the nearest 1/16 of 1%), as determined by the Agent, of the rates
per annum offered to the Agent at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) on the date two Business Days prior to the
first day of such Interest Period for Dollar deposits in the London interbank
market having a term comparable to such Interest Period and in an amount
comparable to the principal amount of such Eurodollar Loan.
"Eurodollar Loans" shall mean Loans which bear interest at rates based
upon the Eurodollar Base Rate.
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any Interest
Period therefor, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined by the Agent to be equal to the Eurodollar Base
Rate for such Loan for such Interest Period multiplied by a fraction, the
numerator of which is 1 and the denominator of which is 1 minus the Reserve
Requirement for such Loan for such Interest Period.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/16 of 1%) 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 on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is
to be determined is not a Business Day, the Federal Funds Rate for such day
shall be the Federal Funds Rate for the immediately preceding Business Day, and
(ii) if such rate is not so published for any Business Day, the Federal Funds
Rate for such day shall be the average rate charged by three federal funds
brokers of recognized standing selected by the Agent on such day for such
transactions as determined by the Agent.
"Fees" shall mean the fees owing by the Company pursuant to Section
4.1.
"Financing Plan" shall mean a written statement certified by the chief
executive officer or the chief financial officer of the Company and reasonably
acceptable in form and substance to the Required Lenders, setting forth with
respect to a Material Acquisition: (a) the source and use of funds necessary to
consummate such acquisition, including the amount and timing of the borrowing
contemplated in connection with such acquisition; (b) the time schedule and
plan for arranging and executing a refinancing transaction repaying (whether
through equity or long term debt offerings or otherwise) any borrowing
referenced under clause (a) above; and (c) such other matters as the Required
Lenders may reasonably request.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness
of such Person which by its terms or by the terms of any instrument or
agreement relating thereto matures, or which is otherwise payable or unpaid,
more than one year from, or is directly or indirectly renewable or extendible
at the option of the debtor to a date more than one year (including an option
of the debtor under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of more than one year) from,
the date of the creation thereof, including, without limitation, all payments
in respect
-7-
<PAGE> 16
thereof that are required to be made within one year from the date of any
determination of Funded Debt, whether or not included in current liabilities of
such Person determined in accordance with GAAP.
"GAAP" shall have the meaning ascribed to such term in Section 1.2.(a)
hereof.
"Governmental Agency" shall mean any federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantee", "Guaranty", "Guaranteed", and the like, shall refer to a
guarantee, an endorsement, a contingent agreement to purchase or to furnish
funds for the payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, any Indebtedness or other
obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) Property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of its obligations or an
agreement to assure a creditor against loss, and including, without limitation,
causing a bank to issue a letter of credit for the benefit of another Person,
but excluding endorsements for collection or deposit in the ordinary course of
business.
"Hazardous Materials" shall mean, collectively, any polychlorinated
biphenyls, petroleum or petroleum derived substance, friable asbestos, and any
toxic or otherwise hazardous waste, material or substance, including, without
limitation, all substances with respect to which liability or standards of
conduct may be imposed pursuant to RCRA, CERCLA or any other Environmental and
Safety Law.
"Health Care Facility" shall mean any nursing home, assisted living
facility (including assisted living facilities providing care primarily or
exclusively to Persons suffering from Alzheimer's disease, senility or other
forms of dementia), rehabilitation hospital, acute care hospital, medical
office building or other facility offering medical services similar to those
offered by or in connection with the foregoing facilities, and other facilities
and structures related to the foregoing such as parking facilities; provided
that, the term "Health Care Facility" shall not include any psychiatric
hospital, clinic or office or any other health care facility offering
exclusively or primarily psychiatric or psychological services.
"Indebtedness" shall mean, without duplication, as to any Person (a)
indebtedness created, issued or incurred by such Person for borrowed money
(whether by loan or the issuance or sale of debt securities) whether or not
recourse is limited to specific assets of such Person; (b) obligations of such
Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable arising in the ordinary course of
business so long as such trade accounts payable are not for borrowed money and
are paid within 60 days of the date the respective goods are delivered or the
respective services are rendered (unless such trade account payable is being
contested in good faith); (c) Indebtedness of others secured by a Lien on the
Property of such Person,
-8-
<PAGE> 17
whether or not the Indebtedness so secured has been assumed by such Person; (d)
reimbursement obligations of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial
institutions for the account of such Person; (e) Capital Lease Obligations of
such Person; (f) Indebtedness of others Guaranteed by such Person; and (g)
obligations or exposures of such Person under Interest Rate Protection
Agreements.
"Insufficiency" shall mean, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Intangible Assets" shall mean that portion of the book value of any
Person's assets which would be treated as intangibles under GAAP, including all
items such as goodwill, trademarks, trade names, brand names, trade secrets,
customer lists, computer software, copyrights, patents, licenses, franchises,
franchise conversion rights, covenants not to compete, research and development
expense, and rights with respect to any of the foregoing and all unamortized
debt discount and expenses.
"Interest Coverage Ratio" shall mean, for any period, the ratio of
EBITDAR for such period to the sum of Interest Expense for such period plus
Rental Expense for such period.
"Interest Expense" shall mean, for any period, the sum of the
following for the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP: (a) all interest in respect of Indebtedness
accrued or which is, or in accordance with GAAP should be, capitalized during
such period (whether or not actually paid during such period), (b) the net
amounts payable under Interest Rate Protection Agreements accrued during such
period (whether or not actually paid during such period), and (c) the aggregate
amount of Fees accrued during such period pursuant to Section 4.1.(b), (c) or
(d).
"Interest Period" shall mean, with respect to any Eurodollar Loan,
each period commencing on the date such Eurodollar Loan is made (including
pursuant to Conversion from a Base Rate Loan) or the last day of the next
preceding Interest Period for such Eurodollar Loan and ending on the
numerically corresponding day in the first, third or sixth calendar month
thereafter, as the Company may select as provided in Section 4.7., except that
each Interest Period which commences on the last Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of
the appropriate subsequent calendar month. Notwithstanding the foregoing, (i)
no Interest Period may end after the Maturity Date; (ii) each Interest Period
which would otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day (or, if such next succeeding Business Day falls in
the next succeeding calendar month, on the next preceding Business Day), and
(iii) no Interest Period shall have a duration of less than one month and, if
the Interest Period for any Eurodollar Loan would otherwise be a shorter
period, such Loan shall not be available hereunder.
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<PAGE> 18
"Interest Rate Protection Agreement" shall mean, as to any Person, an
interest rate hedge agreement between such Person and a financial institution
providing for the transfer or mitigation of interest risks either generally or
under specific contingencies. For purposes hereof, the "exposure" at any time
of any Person under an Interest Rate Protection Agreement to which such Person
is a party shall be determined at such time in accordance with the standard
methods of calculating such exposure under similar arrangements as prescribed
from time to time by the Agent taking into account the respective termination
provisions set forth herein, the notional principal amount and term thereof and
assuming that U.S. Treasury rates generally are equal to the per annum rate of
interest which the Agent at such time determines to be the most probable lowest
U.S. Treasury rate to occur in the relevant period following such date.
"Investment" shall mean any investment, made in cash or by delivery of
Property, by the Company or any Subsidiary:
(a) in any Person, whether by acquisition of stock,
indebtedness or other obligation or Investment Security, or by loan,
Guarantee, advance, capital contribution or otherwise; or
(b) in any Property.
The amount of any Investment shall be its cost (the amount of cash or the fair
market value of other Property given in exchange therefor).
"Investment Security" shall mean "security" as defined in Section 2(1)
of the Securities Act of 1933, as amended.
"Letter of Credit Reserve Account" shall mean the special collateral
account, if any, established by the Company with the Agent pursuant to the
provisions of Article 11. hereof.
"Letter of Credit Subcommitment" shall mean $15,000,000 (as the same
may be reduced from time to time pursuant to Section 2.11. or Section 2.12.).
"Letters of Credit" shall mean the letters of credit issued pursuant
to Article 3. hereof.
"Leverage Ratio" shall mean, for any period, the ratio of Funded Debt
of the Company and its Subsidiaries as of the end of such period to
Consolidated Tangible Net Worth as of the end of such period, in each case
determined on a consolidated basis in accordance with GAAP.
"Lien" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind whatsoever in
respect of such asset. For purposes of this Agreement, the Company or any of
its Subsidiaries shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a
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<PAGE> 19
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Loans" shall mean, collectively, the Revolving Credit Loans.
"Material Acquisition" shall mean any acquisition or potential
acquisition of assets by any one or more of the Company and its Subsidiaries,
whether directly or through the acquisition of a Subsidiary, where the value of
the total consideration (whether in the form of cash, deferred payment
obligations issued by the Company or any of its Subsidiaries, or assets paid in
kind or exchanged) paid, or agreed or contemplated to be paid, by the Company
or any of its Subsidiaries for such acquisition or in the aggregate for such
acquisition and any related series of acquisitions is equal to or exceeds
$75,000,000.
"Material Adverse Effect" shall mean any event, circumstance or
condition that, individually or when aggregated with all other similar events,
circumstances or conditions, could reasonably be expected to have a material
adverse effect on (a) the business, Property, assets, liabilities, condition
(financial or otherwise), operations, results of operations or prospects of the
Company and its Subsidiaries, taken as a whole; (b) the ability of the Company
or one of its Subsidiaries to perform its respective obligations under any of
the Credit Documents to which it is a party; (c) the validity or enforceability
of any of the Credit Documents; or (d) the rights and remedies of the Lenders,
the Facing Bank and the Agent under any of the Credit Documents.
"Material Contract" shall mean, with respect to the Company and its
Subsidiaries, each of those contracts and agreements listed on Schedule 7.12.
hereto.
"Maturity Date" shall mean December 27, 1998 or as otherwise extended
pursuant to Section 4.2. hereof.
"Moody's" shall mean Moody's Investors Service, Inc., a Delaware
corporation, and its successors; provided that, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, then "Moody's" shall mean any other nationally
recognized securities rating agency designated by the Required Lenders by
notice to the Agent and the Company.
"Multiemployer Plan" of any Person shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions have been made
by such Person or any ERISA Affiliate of such Person and which is covered by
Title IV of ERISA.
"Net Available Proceeds" shall mean:
(i) (A) in the case of any Disposition, the aggregate
amount of all cash payments received (including, without limitation, all cash
payments received by way of deferred payment of principal or interest pursuant
to a note or installment receivable or otherwise, but only as and when
received) by the Company or one of its Subsidiaries in connection with such
Disposition, directly or indirectly, or (B) in the case of any Casualty Event,
the aggregate amount of cash proceeds of insurance, condemnation awards and
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<PAGE> 20
other compensation received by the Company or one of its Subsidiaries in
respect of such Casualty Event, in each case net of (a) the amount of any
out-of-pocket legal, title and recording tax expenses, commissions and other
fees and expenses reasonably incurred by the Company or such Subsidiary in
connection with such Disposition or Casualty Event, (b) any federal, state and
local income taxes reasonably estimated in good faith to be payable by the
Company or one of its Subsidiaries in connection with such Disposition or
Casualty Event and other taxes thereon to the extent such other taxes are
actually paid by the Company or such Subsidiary, (c) any repayments by the
Company or such Subsidiary of Indebtedness to the extent that such Indebtedness
is secured by a Lien on the Property that is the subject of such Disposition
and the transferee of (or holder of a Lien on) such Property requires that such
Indebtedness be repaid as a condition to the Disposition of such Property, and
(d) any repayments by the Company or such Subsidiary of Indebtedness to the
extent that such Indebtedness is secured by a Lien on the Property that is the
subject of such Casualty Event, and the holder of the Lien on such Property
assert its prior right (if appropriate) to such proceeds; and
(ii) in the case of any Equity Issuance, the aggregate
amount of all cash received by the Company in respect of such Equity Issuance
net of fees, commissions and expenses (including attorneys' fees) reasonably
incurred by the Company in connection therewith; and
(iii) in the case of the incurrence of Indebtedness, the
aggregate amount of the cash proceeds of such Indebtedness received by the
Company or one of its Subsidiaries net of fees, commissions and expenses
(including attorneys' fees) reasonably incurred by the Company or such
Subsidiary in connection therewith;
provided however, Net Available Proceeds of a Disposition by a Permitted
Subsidiary which is not a Wholly-Owned Subsidiary shall mean the product
obtained when the percentage of the equity of such Subsidiary (owned directly
or indirectly by the Company) is multiplied by the amount of the Net Available
Proceeds determined pursuant to paragraph (i) above.
"Net Income" shall mean with respect to any Person, the net income
(loss) of such Person for any period determined in accordance with GAAP;
provided, that there shall be excluded therefrom: (a) the income (loss) of any
other Person accrued prior to the date it either becomes a Subsidiary of such
Person, is merged into or consolidated with such Person, or such other Person's
assets are acquired by such Person, and (b) the income (loss) of any other
Person (except for a Subsidiary of such Person) in which such Person has an
ownership interest, except to the extent that any such income has actually been
received by such person in the form of dividends or similar distributions
during such period.
"Notes" shall mean the Revolving Credit Notes.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
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<PAGE> 21
"Permitted Investments" of any Person shall mean: (a) direct
obligations of the United States of America or of any agency thereof, or
obligations guaranteed as to principal and interest by the United States of
America or of any agency thereof, in either case maturing not more than 1 year
from the date of acquisition thereof by such Person; (b) marketable direct
obligations issued by any State of the United States of America or any
political subdivision of any such State or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having the highest or second highest rating obtainable from
either S&P or Moody's; (c) commercial paper maturing no more than one year from
the date of the creation thereof and, at the time of acquisition, having the
highest or second highest rating obtainable from either S&P or Moody's; (d) any
Dollar denominated (i) certificates of deposit, (ii) time deposits, (iii)
repurchase agreements or (iv) bankers' acceptances maturing within one year
from the date of acquisition thereof issued by any Lender or by any bank or
trust company organized under the laws of the United States of America or any
state thereof and having capital, surplus and undivided profits of at least
$1,000,000,000; and (e) money market funds organized under the laws of the
United States of America or any State thereof that invest not less than 90% of
their funds in any of the Investments permitted under subparagraphs (a), (b),
(c), (d) or (e).
"Permitted Liens" shall mean:
(a) Liens imposed by any Governmental Agency for taxes,
assessments or charges not yet due or which are being contested in good faith
and with due diligence and with respect to which adequate reserves have been
established;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business not
yet delinquent or which are being contested in good faith and with due
diligence and with respect to which adequate reserves have been established;
(c) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than a trade contract which constitutes Indebtedness), leases
(other than Capital Lease Obligations), statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(e) easements, rights-of-way, zoning restrictions and
other similar encumbrances of record on real property incurred in the ordinary
course of business which, in the aggregate, are not material in dollar amount,
and which do not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries;
(f) Liens existing on the date hereof and disclosed on
Schedule 7.16. hereto;
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<PAGE> 22
(g) Purchase Money Liens and Liens pursuant to Capital
Lease Obligations which secure Debt permitted pursuant to Section 9.3. hereof;
(h) any attachment or judgment Lien either in existence
less than 30 calendar days after the entry thereof, or with respect to which
execution has been stayed, or with respect to which payment in full above any
deductible is covered by insurance (so long as no reservation of rights has
been made by the insurer in connection with such coverage); and
(i) renewals of any of the foregoing Liens in connection
with the refinancings, renewals or extensions of Indebtedness in accordance
with Section 9.3.(i).
For purposes of this definition, the term "Purchase Money Lien" shall mean any
Lien on fixed assets, plant or equipment (and any intangible assets associated
therewith) acquired by the Company or any of its Subsidiaries securing the
payment of all or a portion of the purchase price therefor or Liens to which
such purchased assets are subject at the time of such acquisition and not
created in anticipation thereof; provided, however, that (i) the transaction in
which any Purchase Money Lien is proposed to be created or assumed is permitted
by this Agreement; (ii) any Purchase Money Lien shall attach only to the assets
acquired (and any applicable insurance thereon) in such transaction and shall
not extend to or cover any other assets of the Company or any of its
Subsidiaries; (iii) the Indebtedness secured or covered by any Purchase Money
Lien shall not exceed the cost (including reasonable costs directly incurred in
connection with such acquisition) to the Company or any of its Subsidiaries of
the assets acquired; and (iv) such Indebtedness is either (x) incurred within
30 days following the date of the acquisition of the assets so acquired or (y)
incurred for the purpose of refinancing or refunding any Indebtedness secured
by a Purchase Money Lien provided the unpaid balance is not thereby increased.
"Permitted Subsidiary" shall mean any Subsidiary of the Company (i)
which existed on the Closing Date, or (ii) that has (A) executed the Subsidiary
Guaranty and (B) that is either Wholly-Owned or is otherwise permitted by
Section 9.5.(j).
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"PG Assets" means (a) the PG Sites to the extent such Property, plant,
and equipment constitute assets of the Company or its consolidated
Subsidiaries, (b) any Indebtedness owed to the Company or its consolidated
Subsidiaries and secured by any PG Site, and (c) any Indebtedness owed to the
Company or its consolidated Subsidiaries by the owner or operator, other than
an owner or operator who is an Affiliate of the Company, of any PG Site as a
result of operating advances made by the Company or any of its consolidated
Subsidiaries to such owner or operator in connection with the operation or
maintenance of such PG Site.
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<PAGE> 23
"PG Excess Proceeds" means at any time the amount, if any, by which
(a) the cumulative Net Available Proceeds of the Disposition of PG Assets made
on or before such time exceeds (b) the outstanding balance of the PG
Indebtedness at such time plus the cumulative repayments of PG Indebtedness
made on or before such time.
"PG Indebtedness" means the following Indebtedness of the Company
allocated by the Company to the acquisition, maintenance, and operation of the
PG Assets: (a) $9,175,000 in fixed rate Indebtedness and (b) up to $8,750,000
in variable rate Indebtedness, reflected as liabilities in that portion of
financial statements of the Company entitled "Psychiatric Group Condensed
Balance Sheets."
"PG Sites" means the five psychiatric hospital sites listed on
Schedule 9.6. hereto and all Property, plant, and equipment with respect to
such sites.
"PG Stock" means the class of Preferred Stock of the Company having
the rights, restrictions, and other attributes set forth in Schedule 9.12.
"Plan" of the Company or any of its Subsidiaries shall mean an
employee benefit or other plan established or maintained by such Person or any
ERISA Affiliate of such Person and which is covered by Title IV of ERISA, other
than a Multiemployer Plan of such Person.
"Preferred Stock" shall mean, for any corporation, any class or series
of equity securities of such corporation which is entitled, upon any
distribution of such corporation's assets, whether by dividend or by
liquidation, to a preference over another class or series of equity securities
of such corporation, and which by its terms is either: (a) entitled to receive
cash distributions (or asset distributions or distributions of securities other
than distributions in kind of preferred stock of the same class and series) of
such corporation's or any of its Subsidiaries, assets, whether by dividend or
by liquidation; or (b) mandatorily redeemable or redeemable at the option of
the issuer or holder thereof for cash (or assets or securities other than
distributions in kind of preferred stock of the same class and series) by such
corporation or any of its Subsidiaries, or is convertible or exchangeable,
mandatorily or at the option of the issuer or holder thereof, into Indebtedness
of such corporation or any of its Subsidiaries.
"Prime Rate" shall mean the rate of interest from time to time
announced by Wells Fargo in San Francisco as its prime commercial lending rate.
"Principal Office" shall mean the principal office of Wells Fargo,
presently located at 420 Montgomery Street, San Francisco, California 94163.
"Projected Financial Statements" shall mean (i) projected consolidated
statements of cash flows of the Company and its Subsidiaries for each fiscal
year and (ii) projected consolidated income statements and balance sheets of
the Company and its Subsidiaries for each fiscal year, as required in Sections
8.1.(k) and (l) hereof.
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<PAGE> 24
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means the fraction of each Lender's Commitment
divided by the aggregate amount of all Commitments, converted into a
percentage.
"RCRA" shall mean the Resource Conservation and Recovery Act of 1976,
as amended.
"Redeemable Stock" shall mean any capital stock that by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable or any other agreement) or upon the happening of any event matures
or is or will become mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, or is exchangeable for or convertible into a security of
a Person other than the issuer of such capital stock or into Indebtedness.
"Regulations D, G, T, U and X" shall mean, respectively, Regulations
D, G, T, U and X of the Board of Governors of the Federal Reserve System (or
any successor), as the same may be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect toany Lender, any change
enacted or adopted after the date of this Agreement in United States federal,
state or foreign law or regulations (including, without limitation, Regulation
D) or the adoption or publication after the date of this Agreement of any
interpretations, directives or requests (whether or not having the force of
law) applying to a class of banks including such Lender of or under any United
States federal, state or foreign law or regulations by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Reimbursement Obligations" shall mean, at any time, all obligations
of the Company to the Facing Bank, and to the Lenders to the extent of their
participation therein, in respect of the Letters of Credit, and shall consist
of all amounts which have been paid by the Facing Bank pursuant to the Letters
of Credit, if and to the extent the Facing Bank has not received reimbursement
therefor from the Company.
"REIT" shall mean a Person qualifying for treatment as a "real estate
investment trust" under the Code.
"Release" shall mean any "release" as such term is defined in 42
U.S.C. Section 9601(22), or any successor federal statute or analogous state
law.
"Rental Expense" shall mean, with respect to any Person for any fiscal
period, the aggregate rent expense of such Person with respect to all
obligations of such Person for the payment of rent for any real or personal
property under leases or agreements to lease other than Capital Lease
Obligations.
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<PAGE> 25
"Rentals" shall mean all fixed rents payable by any Person as lessee
or sublessee under a lease of any asset, but shall be exclusive of any amounts
required to be paid by such Person (irrespective of whether designated as rents
or additional rents) on account of maintenance, repairs, insurance, taxes and
similar charges. Fixed rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be paid
by the lessee regardless of sales volume or gross revenues.
"Required Lenders" shall mean Lenders holding in excess of 51% of the
outstanding Loans, Reimbursement Obligations and Letters of Credit (or, if no
Loans, Reimbursement Obligations or Letters of Credit are outstanding, in
excess of 51% of the outstanding Commitments).
"Requirement of Law" shall mean, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Agency, in each case applicable to or binding upon the Person or
any of its Property or to which the Person or any of its Property is subject.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion Dollars
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the Eurodollar Base Rate is to be
determined as provided in the definition of "Eurodollar Base Rate" in this
Section 1.1, or (ii) any category of extensions of credit or other assets which
includes Eurodollar Loans.
"Restricted Payment" shall mean (i) dividends by or on behalf of the
Company (in cash, Property or obligations, but excluding dividends payable
solely in shares of capital stock other than Redeemable Stock) or any
Subsidiary on, or other payments or distributions on account of or with respect
to, or the setting apart of money for a sinking or other analogous fund for, or
the purchase, redemption, retirement or other acquisition of, any shares of any
class of capital stock of the Company or such Subsidiary, (ii) any prepayment
by the Company or any of its Subsidiaries of principal, optional redemption,
purchase, retirement prior to stated maturity, defeasance, or similar optional
prepayment with respect to any Indebtedness for borrowed money other than the
Loans, or (iii) any loans, advances or any other payments by the Company or any
of its Affiliates to, or transactions by the Company or any of its Affiliates
with, any Affiliate of such Person, except in the case of transactions (other
than loans, advances or other payments) which are no less favorable to the
Company or its Subsidiaries than transactions negotiated at arms length with
nonaffiliated third parties.
"Revolving Credit Commitment" shall mea, as to each Lender, the
obligation ofsuch Lender to make Revolving Credit Loans and Letters of Credit
available to the
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<PAGE> 26
Company in an aggregate amount at any one time outstanding up to but not
exceeding the amount set forth opposite the name of such Lender on Schedule I
hereto under the caption "Revolving Credit Commitment" (as the same may be
reduced from time to time pursuant to Section 2.12. or Section 2.11.).
"S&P" shall mean Standard & Poor's Corporation, a New York
corporation, and its successors; provided that, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, then "S&P" shall mean any other nationally recognized
securities rating agency designated by the Required Lenders by notice to the
Agent and the Company.
"Senior Long Term Debt" means all outstanding Indebtedness of the
Company which by its terms matures more than one year from the date of its
creation or is extendible for such a period at the option of the Company and
which has not been subordinated in right of payment to any other Indebtedness
of the Company.
"Senior Long Term Debt Rating" means the rating given from time to
time by S&P, Moody's or Duff and Phelps with respect to the outstanding Senior
Long Term Debt of the Company.
"Senior Notes" shall mean, collectively: (a) the $5,000,000 11.33%
Series A Notes, due May 31, 1996, and the $96,000,000 11.40% Series B Notes,
due May 31, 1999, issued in each case by the Company pursuant to the terms and
conditions of the Note Agreement, dated as of May 1, 1989, executed by the
Company; and (b) the $100,000,000 10.41% Senior Notes due September 15, 2000,
issued by the Company pursuant to the terms and conditions of the Note
Agreement, dated as of September 1, 1990, executed by the Company.
"Stated Amount" means the maximum amount available to be drawn under a
Letter of Credit from time to time in accordance with its terms, without regard
to whether any conditions to a drawing could then be met.
"Subsidiary" shall mean, as to any Person, any corporation,
partnership or joint venture, whether now existing or hereafter organized or
acquired: (i) in the case of a corporation, of which at least a majority of the
outstanding shares of stock having by the terms thereof ordinary voting power
to elect a majority of the board of directors of such corporation (other than
stock having such voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by such Person and/or
one or more of its Subsidiaries or (ii) in the case of a partnership or joint
venture, in which such Person or a Subsidiary of such Person is a general
partner or joint venturer or of which a majority of the partnership or other
ownership interests are at the time owned by such Person and/or one or more of
its Subsidiaries.
"Subsidiary Guarantors" means: (a) each of those Subsidiaries of the
Company in existence on the Closing Date other than those set forth on Schedule
7.14. hereto and (b)
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<PAGE> 27
each Subsidiary of the Company which becomes a guarantor under a Subsidiary
Guaranty following the Closing Date.
"Subsidiary Guaranty" means that certain Guaranty Agreement, dated as
of the Closing Date, executed by the Subsidiary Guarantors in favor of the
Agent and the Lenders and each such agreement executed by a Permitted
Subsidiary after the Closing Date, in each case substantially in the form of
Exhibit A hereto.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of California.
"Unmatured Default" shall mean an event which with notice or lapse of
time or both would become an Event of Default.
"Wells Fargo" shall mean Wells Fargo Bank, N.A.
"Wholly-Owned Subsidiary" shall mean any corporation, association or
other business entity of which l00% of the outstanding shares of all classes of
capital stock or other ownership interests is at the time owned directly or
indirectly by, such Person or one or more of the other Wholly-Owned
Subsidiaries of such Person or a combination thereof.
"Working Capital Loans" means working capital loans made by the
Company in connection with Section 9.5.(d), which loans will be secured by a
first priority security interest in the accounts generated from the operation
of such facility to the extent consistent with Requirements of Law.
1.2. ACCOUNTING TERMS AND DETERMINATIONS
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, all calculations for
purposes of determining compliance with the terms of this Agreement shall be
made, and all financial statements and certificates and reports as to financial
matters required to be delivered to the Lenders hereunder shall be prepared in
accordance with generally accepted accounting principles applied in the United
States and practices which are recognized as such by the American Institute of
Certified Public Accountants ("GAAP") applied for all periods to the extent
practicable on a basis consistent with that used in the preparation of the
Historical Financial Statements, so as to present fairly the financial
condition and the results of operations of the applicable Person. In the event
of a change in GAAP that is applicable to the Company, compliance with the
financial covenants contained herein shall continue to be determined in
accordance with GAAP as in effect prior to such change; provided, however, that
the Company and the Required Lenders will thereafter negotiate in good faith to
revise such covenants to the extent necessary to conform such covenants to GAAP
as then in effect.
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(b) To enable the ready and consistent determination of compliance
with the covenants set forth in Article 9. and Article 10., the Company will
not change the last day of its fiscal year from December 31 of each year or the
last days of the first three fiscal quarters in each of its fiscal years from
the last day in March, June and September of each year, respectively.
1.3. OTHER REFERENTIAL PROVISIONS
All terms in this Agreement, the Exhibits and Schedules hereto shall
have the same defined meanings when used in any other Credit Documents, unless
the context shall require otherwise. Except as otherwise expressly provided
herein, all accounting terms not specifically defined or specified herein shall
have the meanings generally attributed to such terms under GAAP including,
without limitation, applicable statements and interpretations issued by the
Financial Accounting Standards Board and bulletins, opinions, interpretations
and statements issued by the American Institute of Certified Public Accountants
or its committees. All personal pronouns used in this Agreement, whether used
in the masculine, feminine or neuter gender, shall include all other genders;
the singular shall include the plural, and the plural shall include the
singular. The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provisions of this Agreement. Titles of Articles and
Sections in this Agreement are for convenience only, do not constitute part of
this Agreement and neither limit nor amplify the provisions of this Agreement,
and all references in this Agreement to Articles, Sections, subsections,
paragraphs, clauses, subclauses, Schedules or Exhibits shall refer to the
corresponding Article, Section, subsection, paragraph, clause or subclause of,
or Schedule or Exhibit attached to, this Agreement, unless specific reference
is made to the articles, sections or other subdivisions or divisions of, or to
schedules or exhibits to, another document or instrument. Each definition of a
document in this Agreement shall include such document as amended, modified,
supplemented or restated from time to time in accordance with the terms of this
Agreement. Except where specifically restricted, reference to a party to a
Credit Document includes that party and its successors and assigns permitted
hereunder or under such Credit Document. Unless otherwise specifically stated,
whenever a time is referred to in this Agreement or in any other Loan
Document, such time shall be the local time in the city in which the principal
office of the Agent is located. Whenever the phrase "to the knowledge of the
Company" or words of similar import relating to the knowledge of the Company
are used herein, such phrase shall mean and refer to (i) the actual knowledge
of the President or chief financial officer of the Company or (ii) the
knowledge that such Persons would have obtained if they had engaged in good
faith in the diligent performance of their duties, including the making of such
reasonable specific inquiries as may be necessary of the appropriate persons in
a good faith attempt to ascertain the accuracy of the matter to which such
phrase relates.
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<PAGE> 29
1.4. TYPES OF LOANS
Loans hereunder are distinguished by "Type". The "Type" of a Loan
refers to whether such Loan is a Base Rate Loan or a Eurodollar Loan, each of
which constitutes a Type.
2. REVOLVING CREDIT LOANS
2.1. COMMITMENT TO MAKE REVOLVING CREDIT LOANS
Each Lender severally (but not jointly) agrees, on the terms and
subject to the conditions contained herein, to make loans to the Company during
the period from and including the Closing Date to but not including the
Maturity Date in an aggregate principal amount at any one time outstanding of
up to but not exceeding the amount of the Revolving Credit Commitment of such
Lender as in effect from time to time (such Loans being herein called
"Revolving Credit Loans"); provided, however, that in no event shall the
aggregate principal amount of all Revolving Credit Loans exceed the aggregate
amount of the Revolving Credit Commitments as in effect from time to time,
minus the aggregate Stated Amounts of all outstanding Letters of Credit and all
outstanding Reimbursement Obligations. Subject to the terms contained herein,
the Company may borrow, repay and reborrow the Revolving Credit Loans.
2.2. CONVERSION OR CONTINUATION OF LOANS
The Company may Convert Loans of one Type into Loans of another Type
or Continue Loans of one Type as Loans of the same Type, provided that (i) the
Company shall give the Agent notice of each such Conversion or Continuation as
provided in Section 4.7.; (ii) Eurodollar Loans may be prepaid or Converted
only on the last day of an Interest Period for such Loans; (iii) no Loan may be
Converted into or Continued as a Eurodollar Loan during the continuance of an
Unmatured Default or an Event of Default; and (iv) no more than 8 separate
Interest Periods in respect of Eurodollar Loans from any Lender may be
outstanding at any one time.
2.3. BORROWINGS
The Company shall give the Agent (which shall promptly notify the
Lenders) notice of each borrowing hereunder as provided in Section 4.7., which
notice when given shall be irrevocable. Not later than 11:00 a.m. (San
Francisco time) on the date specified for each borrowing hereunder, each Lender
shall make available the amount of the Loan to be made by it on such date to
the Agent, at account number 4518 049 994 maintained
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by the Agent at the Principal Office (the "Agent's Account"), in immediately
available funds, for account of the Company. The amounts so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Company by depositing the same, in immediately available
funds, in an account of the Company maintained at the Principal Office.
2.4. INTEREST
(a) The Company agrees to pay to the Agent for the account of each
Lender in accordance with Sections 4.3. and 4.5. interest on the unpaid
principal amount of each Loan made by such Lender for the period from and
including the date of such Loan to but excluding the date such Loan shall be
paid in full, at the following rates per annum:
(i) during the periods that such Loan is a Base Rate
Loan, the Base Rate (as in effect from time to time) plus the
Applicable Margin; and
(ii) during the periods that such Loan is a Eurodollar
Loan, for each Interest Period relating thereto, the Eurodollar Rate
for such Loan for such Interest Period plus the Applicable Margin.
Accrued interest on each Loan shall be payable (i) in the case of a
Base Rate Loan, quarterly in arrears on the last Business Day of each calendar
quarter and on the Maturity Date, (ii) in the case of a Eurodollar Loan, on the
last day of each Interest Period thereof (except that interest shall be payable
at the end of each three-month period in the case of an Interest Period of
greater than three months), (iii) in the case of each Eurodollar Loan, upon the
payment or prepayment thereof or the Conversion of such Eurodollar Loan to a
Loan of another Type (but only on the principal amount so paid, prepaid or
Converted), and (iv) in the case of each Base Rate Loan, following the payment
thereof or the Conversion of such Base Rate Loan to a Loan of another Type on
the first to occur of the Maturity Date or the last Business Day of the
calendar quarter in which such payment or Conversion occurred.
(b) If an Event of Default shall have occurred and be continuing,
the Company agrees to pay to the Agent for the account of each Lender interest
on the unpaid principal amount of each Loan owing to each Lender (and, to the
extent permitted by law, on the unpaid amount of all interest, Fees and other
amounts payable hereunder or under the Credit Documents that is not paid when
due) at the Default Rate on demand.
2.5. REDUCTIONS OF COMMITMENTS IRREVOCABLE
The Commitments once terminated or reduced may not be reinstated or
increased.
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<PAGE> 31
2.6. LENDING OFFICES
The Loans of each Type made by each Lender shall be made and maintained
at such Lender's Applicable Lending Office for Loans of such Type.
2.7. SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT
The failure of any Lender to make any Loan to be made by it on the
date specified therefor shall not relieve any other Lender of its obligation to
make its Loan on such date, but neither any Lender nor the Agent shall be
responsible for the failure of any other Lender to make a Loan to be made by
such other Lender. Nothing herein shall affect the obligation of any Lender
pursuant to any commitment issued by such Lender with respect to the financing
contemplated hereby prior to the initial Loans hereunder; provided, however,
that all such commitments shall be superseded by this Agreement upon the making
of such initial Loans. The amounts payable by the Company at any time
hereunder and under the Notes to each Lender shall be a separate and
independent debt and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and the Notes, and it shall not be
necessary for any other Lender or the Agent to consent to, or be joined as an
additional party in, any proceedings for such purposes.
2.8. NOTES
(a) The Revolving Credit Loans made by each Lender shall be
evidenced by a single promissory note to be executed by the Company in
substantially the form of Exhibit B hereto, dated the date hereof, payable to
such Lender in a principal amount equal to the amount of its Revolving Credit
Commitment as originally in effect and otherwise duly completed. As used
herein, the term "Revolving Credit Notes" shall mean the promissory notes
provided for by this subsection.
(b) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Loan made by each Lender to the Company, and
each payment made on account of, the principal thereof, shall be recorded by
such Lender on its books and, prior to any transfer of the Note evidencing the
Loans held by it, endorsed by such Lender on the schedule attached to such Note
or any continuation thereof; provided that the failure of such Lender to make
any such recordation or endorsement shall not affect the obligations of the
Company to make a payment when due of any amount owing under such Note.
(c) No Lender shall be entitled to have its Revolving Credit Note
subdivided by exchange for promissory notes of lesser denominations or
otherwise, except in connection with a permitted assignment of all or any
portion of such Lender's Revolving Credit Loans pursuant to Section 13.6.(b).
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<PAGE> 32
2.9. SCHEDULED REPAYMENTS
Revolving Credit Loans shall be due and payable in full on the
Maturity Date.
2.10. OPTIONAL PREPAYMENTS
Subject to Section 4.6., the Company may prepay (a) Base Rate Loans at
any time or from time to time, without premium or penalty and (b) Eurodollar
Loans, (i) on the last day of the Interest Period applicable thereto without
premium or penalty or (ii) at any time during an Interest Period or in
connection with a prepayment of all outstanding Loans and the termination of
all Commitments, in which case the Company as a condition to such prepayment
shall pay all amounts contemplated by Article 5. (including, but not limited
to, Section 5.5. with respect to optional prepayments) in connection with such
prepayment. All prepayments of Eurodollar Loans made pursuant to this Section
shall include the payment of interest accrued to the date of such prepayment.
2.11. MANDATORY PREPAYMENTS AND REDUCTIONS OF COMMITMENTS
The Company will apply Net Available Proceeds described in subsections
(a) through (d) of this Section 2.11. as provided in subsection (e) of this
Section 2.11.
(a) Casualty Events. 100% of the Net Available Proceeds of any
Casualty Event other than a Casualty Event whose Net Available Proceeds are
applied toward replacement, restoration or repair of the damaged Property
within 90 days after the receipt of such Net Available Proceeds, or if such
replacement, restoration or repair cannot reasonably be completed within 90
days, within such longer period as is reasonable, but in no event more than 6
months after receipt of such Net Available Proceeds.
(b) Sale of Assets. (i) 100% of the Net Available Proceeds of any
Disposition other than (x) a Disposition described in (a) above, (y) a
Disposition of any PG Assets or (z) a Disposition of obsolete assets or assets
which results in Net Available Proceeds in an amount less than $1,000,000 that
are applied toward the purchase of replacement assets within 90 days after such
Disposition, and (ii) the lesser of (x) 100% of the Net Available Proceeds
arising from the Disposition of any PG Assets pursuant to Section 9.9.(b) and
(y) the outstanding amount of the PG Indebtedness as of the date of such
Disposition.
(c) Incurrence of Indebtedness. 100% of the Net Available
Proceeds resulting from (i) the incurrence by the Company of any Indebtedness
of the type specified in Section 9.3.(i) or (ii) the incurrence by the Company
of any Indebtedness by issuance of debt securities in a private placement or in
the public markets to the extent the same are permitted by Section 9.3. hereof.
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<PAGE> 33
(d) Equity Issuance. 100% of the Net Available Proceeds resulting
from any Equity Issuance.
(e) Application. Net Available Proceeds described in subsections
(a) through (d) of this Section 2.11. shall be applied as follows:
(i) Prior to Unmatured Default. So long as no Unmatured
Default or Event of Default has occurred and is continuing, such Net
Available Proceeds shall be applied to the prepayment of Revolving
Credit Loans promptly, but in no event longer than 3 Business Days,
after receipt thereof (in each case with Base Rate Loans being prepaid
prior to Eurodollar Loans).
(ii) After an Unmatured Default. If an Unmatured Default or
an Event of Default has occurred, and so long as the same is
continuing, promptly, but in no event longer than 3 Business Days,
after receipt thereof, such Net Available Proceeds shall be applied as
follows.
(A) first, to prepayment of Revolving Credit Loans
and outstanding Reimbursement Obligations, (in each case with Base
Rate Loans and outstanding Reimbursement Obligations being prepaid
prior to Eurodollar Loans) with a corresponding permanent reduction in
the Revolving Credit Commitments;
(B) second, to the Letter of Credit Reserve Account,
to the extent of the aggregate Stated Amounts of the outstanding
Letters of Credit; and
(C) third, to the extent Net Available Proceeds are
retained by the Company after the payment or application provided for
in clauses (A) and (B), the Revolving Credit Commitments, including
any unused portion of the Letter of Credit Subcommitment will be
reduced by an amount equal to such retained Net Available Proceeds.
(f) Minimum Amounts. Notwithstanding any other provisions of this
Section 2.11., no mandatory prepayment pursuant to subsection (e) of this
Section 2.11. shall be required until such time as the aggregate amount subject
to recapture pursuant to such subsection equals $1,000,000, at which time such
amount shall be applied as set forth in Section 2.11.(e) in integral multiples
of $50,000 in excess thereof.
2.12. VOLUNTARY REDUCTIONS OF REVOLVING CREDIT COMMITMENTS
The Company shall have the right to terminate or reduce the
aggregateamount of the Revolving Credit Commitments, including any unused
portion of the Letter of Credit Subcommitment; at any time or from time to
time; provided that: (i) the Company shall give notice of each such termination
or reduction as provided in Section 4.7., which notice when given shall be
irrevocable; (ii) each partial reduction shall be in an aggregate amount at
least equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof; and (iii) in no event shall any reduction reduce the aggregate amount
of
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<PAGE> 34
Revolving Credit Commitments below the sum of (x) the aggregate principal
amount of the outstanding Revolving Credit Loans, (y) the aggregate Stated
Amounts of all outstanding Letters of Credit, and (z) the aggregate amount of
all Reimbursement Obligations then outstanding.
2.13. CLEAN-DOWN PERIOD
The Company agrees that there shall be a period of 30 consecutive days
during each fiscal year of the Company during which the aggregate principal
amount of the outstanding Loans plus the aggregate amount of any outstanding
Reimbursement Obligations does not exceed $50,000,000 at any time.
2.14. USE OF PROCEEDS
The proceeds of the Loans shall be used by the Company for (i)
acquisitions of and Investments in Health Care Facilities as described in
Section 9.5., (ii) for general corporate purposes (including the payment of
dividends described in Section 9.6.(d)), but initially only an amount
sufficient to pay dividends due for one fiscal quarter, and thereafter during
any fiscal quarter only to the extent the Company made repayments or
prepayments (other than prepayments made pursuant to Section 2.11. hereof) of
Loans during such fiscal quarter and the next preceding fiscal quarter in
excess of Loans made during such fiscal quarters for purposes permitted in this
clause (ii) , and (iii) refinancing up to initially $50,000,000 of Indebtedness
of the Company existing on the Closing Date or incurred thereafter, and
refinancing of additional Indebtedness of the Company to the extent of
prepayments of Loans made pursuant to Section 2.11.(c) or (d).
3. LETTERS OF CREDIT.
3.1. LETTERS OF CREDIT
(a) Subject to the terms and conditions of this Agreement, the
Facing Bank, on behalf of the Lenders, agrees to issue and amend (including,
without limitation to extend or renew) for the account of the Company for the
period from and including the Closing Date to, but excluding, the Maturity Date
one or more Letters of Credit in such form and containing such terms as may be
requested from time to time by the Company and acceptable to the Facing Bank up
to a maximum aggregate Stated Amounts of all Letters of Credit at any one time
outstanding equal to the lesser of (i) the Letter of Credit Subcommitment, or
(ii) the Aggregate Available Revolving Commitments; provided, however, that the
Facing Bank will have no obligation to issue a Letter of Credit if the issuance
thereof would conflict with any legal or regulatory restriction applicable to
the
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<PAGE> 35
Facing Bank or any Lender as notified by such Lender before the date of
issuance of the Letter of Credit.
(b) The Letters of Credit shall be standby letters of credit
required by the Company or its Subsidiaries in the ordinary course of business.
(c) At the time of issuance, the amount and the terms and
conditions of each Letter of Credit shall be subject to approval by the Facing
Bank and the Company. In no event may the expiration date of any Letter of
Credit issued hereunder extend longer than one year from the date of issuance
thereof or later than the Maturity Date. Any Letter of Credit containing an
automatic renewal provision shall also contain a provision pursuant to which,
notwithstanding any other provisions thereof, it shall have a final expiration
date no later than the Maturity Date.
3.2. ISSUANCE OF THE LETTERS OF CREDIT
(a) Notice of Issuance. The Company shall give the Facing Bank
written notice (or telephonic notice confirmed in writing) by 10:00 o'clock
A.M. San Francisco time at least 2 Business Days prior to the requested date of
issuance of a Letter of Credit, such notice to be in substantially the form of
Exhibit C hereto (a "Letter of Credit Request"). The Company shall also
execute and deliver the Continuing Agreement and such other customary letter of
credit application forms as requested from time to time by the Facing Bank.
(b) Issuance. Provided the Company has given notice prescribed by
Section 3.2.(a) and subject to the other terms and conditions of this
Agreement, including the satisfaction of any applicable conditions precedent
set forth in Article 6., the Facing Bank shall issue the requested Letter of
Credit on the requested date of issuance as set forth in the applicable Letter
of Credit Request on behalf of the Lenders for the benefit of the stipulated
beneficiary named therein and shall deliver the original of such Letter of
Credit to such beneficiary at the address specified in the Company's notice.
At the request of the Company, the Facing Bank shall deliver a copy of each
Letter of Credit to the Company within a reasonable time after the date of
issuance thereof. Upon the written request of the Company, the Facing Bank
shall deliver to the Company a copy of any Letter of Credit proposed to be
issued hereunder prior to the issuance thereof.
(c) Reporting to Lenders. The Facing Bank shall report to the
Agent which shall report to the Lenders monthly any change in the Stated Amount
of any Letter of Credit, the aggregate Stated Amounts of all Letters of Credit
then outstanding and such other information concerning the Letters of Credit as
a Lender shall reasonably request. The Facing Bank shall, at the request of a
Lender, deliver copies of any Letter of Credit issued hereunder to such
Lender. Other than as set forth in this subsection, the Facing Bank shall have
no duty to notify the Agent or the Lenders regarding the issuance or other
matters regarding Letters of Credit hereunder. The failure of the Facing Bank
to perform its requirements under this subsection shall not relieve the
reimbursement obligation of any Lender under Section 4.9.
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<PAGE> 36
3.3. REIMBURSEMENT OF DRAWINGS
(a) Notice. The Facing Bank shall promptly notify the Agent of
each Drawing honored by it under any Letter of Credit (although any failure or
delay in the giving of such notice shall not diminish or impair the obligation
of any Lender to fund its Pro Rata Share of such Drawing, or diminish or impair
the Company's obligation to pay the Reimbursement Obligations in connection
with such Drawing). At such time as the Agent shall be so notified by the
Facing Bank, the Agent shall promptly notify the Company and each Lender, by
telephone or telecopy, of the amount of the Drawing and, in the case of each
Lender, such Lender's Pro Rata Share of such Drawing.
(b) Reimbursement by the Company. The Company agrees to reimburse
the Facing Bank as follows for Drawings under a Letter of Credit honored by the
Facing Bank:
(i) The Company agrees to pay to the Agent, for the
account of the Facing Bank, no later than 3:00 p.m. (San Francisco
time) on the first Business Day following the date on which the Facing
Bank notifies the Company of a Drawing in an amount equal to the
amount of each such Drawin; or
(ii) if (A) the Company has not reimbursed the Facing Bank
pursuant to subsection (i) above and (B) the applicable conditions set
forth in Article 6. have been fulfilled and (C) the Aggregate
Available Revolving Commitments in effect at such time exceed the
amount of the Drawing to be reimbursed, the Company agrees to cause
the Facing Bank to be reimbursed with the proceeds of a Revolving
Credit Loan.
(c) Reimbursement by Loans. Unless the Company notifies the Agent
and the Facing Bank to the contrary, the Company shall be deemed to have
requested that a Drawing be reimbursed with the proceeds of a Revolving Credit
Loan in the amount of such Drawing as provided in (b)(ii) above. Unless the
Company complies with the applicable notice requirements as set forth in
Section 4.7., which compliance shall not be necessary, any Loan used to repay
any Reimbursement Obligation shall initially be a Base Rate Loan.
3.4. INTEREST ON OUTSTANDING REIMBURSEMENT OBLIGATIONS
All outstanding Reimbursement Obligations in respect of any Letter of
Credit shall bear interest as if such Reimbursement Obligation were a Base Rate
Loan, and shall bear interest (a) from and including the date on which the
corresponding Drawing is honored by the Facing Bank to and through the date
such Reimbursement Obligation is due and payable pursuant to Section 3.3.(b),
and (b) thereafter shall bear interest at a per annum rate equal to the Default
Rate otherwise applicable to Base Rate Loans hereunder until paid, with such
interest being due and payable on demand.
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<PAGE> 37
3.5. REIMBURSEMENT OBLIGATIONS ABSOLUTE
The Company agrees that any action taken or omitted to be taken by the
Facing Bank in connection with the Letter of Credit, except for such actions or
omissions as shall constitute gross negligence or willful misconduct on the
part of such Facing Bank, shall be binding on the Company as between the
Company and the Facing Bank, and shall not result in any liability of the
Facing Bank to the Company. The obligation of the Company to reimburse the
Facing Bank for a Drawing under a Letter of Credit or to repay the Lenders for
advances made by them to the Facing Bank on account of Drawings made under the
Letters of Credit shall be absolute, unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances whatsoever, including, without limitation, the following
circumstances:
(a) Any lack of validity or enforceability of any Credit Document;
(b) Any amendment or waiver of or consent to any departure from
any or all of the Credit Documents;
(c) Any improper use which may be made of the Letter of Credit or
any improper acts or omissions of any beneficiary or transferee of the Letter
of Credit in connection therewith;
(d) The existence of any claim, set-off, defense or any right
which the Company may have at any time against any beneficiary or any
transferee of any Letter of Credit (or Persons for whom any such beneficiary or
any such transferee may be acting), the Agent, the Facing Bank or any Lender or
any other Person, whether in connection with a Letter of Credit, any
transaction contemplated by any Letter of Credit, this Agreement, or any other
Credit Document, or any unrelated transaction;
(e) Any statement or any other documents presented under any
Letter of Credit proving to be insufficient, forged, fraudulent or invalid in
any respect or any statement therein being untrue or inaccurate in any respect
whatsoever, provided that such payment shall not have constituted gross
negligence or willful misconduct of the Facing Bank, although the Company shall
be subrogated to the rights of the Facing Bank with respect to any such
forgery, fraud, invalidity, insufficiency, untruth or inaccuracy;
(f) The insolvency of any Person issuing any documents in
connection with the Letter of Credit;
(g) Any breach of any agreement between the Company and any
beneficiary or transferee of any Letter of Credit;
(h) Any irregularity in the transaction with respect to which a
Letter of Credit is issued, including any fraud by the beneficiary or any
transferee of such Letter of Credit;
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<PAGE> 38
(i) Any errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, wireless or otherwise,
whether or not they are in code;
(j) Any act, error, neglect or default, omission, insolvency or
failure of business of any of the correspondents of the Facing Bank;
(k) Any other circumstances arising from causes beyond the control
of the Facing Bank;
(l) Payment by the Facing Bank under a Letter of Credit against
presentation of a sight draft or a certificate which does not comply with the
terms of such Letter of Credit, provided that such payment shall not have
constituted gross negligence or willful misconduct of the Facing Bank; and
(m) Any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, provided that such other circumstances or
happenings shall not have been the result of gross negligence or willful
misconduct of any Lender or the Agent.
3.6. INDEMNIFICATION REGARDING LETTERS OF CREDIT
The Company will indemnify and hold harmless the Agent, the Facing
Bank and each other Lender and each of their respective employees,
representatives, officers and directors from and against any and all claims,
liabilities, obligations, losses (other than loss of profits), damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including reasonable attorneys' fees, but excluding
taxes) which may be imposed on, incurred by or asserted against the Agent, the
Facing Bank or any such other Lender in any way relating to or arising out of
the issuance of a Letter of Credit, except that the Company shall not be liable
to the Agent, the Facing Bank or any such Lender for any portion of such
claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements resulting from the gross
negligence or willful misconduct of the Agent, the Facing Bank or such Lender,
as the case may be, as determined by a non-appealable judicial order. This
Section 3.6. shall survive termination of this Agreement.
3.7. LIMITATION OF LIABILITY OF THE FACING BANK
The Facing Bank shall not be liable for failure to collect on the
Reimbursement Obligations, or any part thereof, or for any delay in so doing.
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4. OTHER CREDIT COMMITMENT PROVISIONS
4.1. FEES
(a) Arranger's, Agent's and Upfront Fees. In consideration for
the arrangement of the financial accommodations evidenced hereby and for acting
as Agent, the Company shall pay to the Agent each of those fees listed in that
certain Fee Letter dated November 9, 1995, executed by the Company and
addressed to the Agent (the "Fee Letter").
(b) Facility Fee. The Company shall pay to the Agent for the
account of each Lender a fee equal to the per annum percentage (as set forth in
the following table opposite the Company's Senior Long Term Debt Rating) of the
Commitments in effect from time to time. The amount of the Commitments shall
be determined as of each day in the quarterly period specified below without
regard to the amount of outstanding Loans, Stated Amounts of Letters of Credit
or Reimbursement Obligations but shall reflect any reductions made pursuant to
Article 2 hereof.
<TABLE>
<CAPTION>
Senior Long Term Debt Rating Effective Per Annum
Facility Fee Rate
<S> <C>
A-/A3 0.200%
BBB+/Baa1 0.250%
BBB/Baa2 0.250%
BBB-/Baa3 0.250%
less than BBB-/Baa3 or if not rated 0.375%
</TABLE>
For purposes hereof, in the event two or more rating agencies shall assign
different ratings to the Company's Senior Long Term Debt, the lower(est) rating
shall apply. A change in any Effective Per Annum Facility Fee Rate shall be
effective as of the date of such change in rating. Such fee will be payable
for the period from the Closing Date to the first to occur of
(i) the Maturity Date or
(ii) the date on which all Commitments have been terminated
pursuant to Sections 2.11. and 2.12. and no Letters of Credit or Reimbursement
Obligations remain outstanding,
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<PAGE> 40
quarterly in arrears on the last day of each calendar quarter and on the
Maturity Date.
(c) Utilization Fee. If, during any fiscal quarter of the Company
(or a portion thereof) the daily sum of (i) the aggregate principal amount of
the Loans and (ii) the aggregate Reimbursement Obligations outstanding exceeds
$110,000,000, the Company shall pay to the Agent for the account of each Lender
a fee of 0.25% per annum of such daily sum. Such fee will be payable quarterly
in arrears on the last day of each of March, June, September and December
during the term hereof and on the Maturity Date.
(d) Letter of Credit Fees. The Company shall pay to the Agent for
the account of each Lender a per annum fee equal to the Applicable Margin for
Eurodollar Loans multiplied by the aggregate Stated Amounts of all Letters of
Credit outstanding. Such fee shall be payable during the term hereof (i) with
respect to each Letter of Credit, on its date of issue for the fiscal quarter
of the Company in which it is issued and (ii) with respect to all Letters of
Credit outstanding on the first day of any fiscal quarter of the Company,
quarterly in advance on the first day of each of January, April, July and
October for the fiscal quarter beginning on such date. For the purpose of any
such quarterly payment, the fee will be determined based upon the aggregate
Stated Amounts of the Letters of Credit outstanding on such payment date
without regard to any reductions to the Stated Amounts of the Letters of Credit
outstanding occurring during such fiscal quarter. In addition the Company
shall pay to the Facing Bank, in consideration for the issuance of the Letters
of Credit, fronting, amendment, transfer, negotiation and administrative fees,
as determined by the Facing Bank in accordance with its then current fee
policies of general application.
4.2. EXTENSION OF MATURITY DATE
If the Company wishes to obtain an extension of the then effective
Maturity Date, the Company shall provide the Agent with a written notice to
such effect not more than 90 days and not less than 60 days prior to the then
effective Maturity Date. If no Unmatured Default or Event of Default then
exists or is continuing, the Lenders may, by unanimous vote, each Lender voting
in its sole and absolute discretion, by written notice to the Agent, the Facing
Bank and the Company, extend the Maturity Date by one year; provided that any
Lender that does not vote for any such extension may be replaced in accordance
with the terms of Section 13.7. The Lenders' failure to provide written notice
of extension to the Company by the then effective Maturity Date, shall be
deemed to be a rejection of the Company's request for an extension. Only two
such extensions to the Maturity Date will be permitted.
4.3. PAYMENTS
(a) Except to the extent otherwise provided herein, all payments
of principal, interest and other amounts to be made by the Company under this
Agreement and the Notes and, except to the extent otherwise provided therein,
all payments to be made by
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<PAGE> 41
the Company under any other Credit Document, shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to the
Agent's Account, not later than 12:00 noon San Francisco time on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day).
(b) The Company shall, at the time of making each payment under
this Agreement or any Note, specify to the Agent the Loans, Reimbursement
Obligations or Fees to which such payment is to be applied (and in the event
that it fails to so specify, or if an Event of Default has occurred and is
continuing, the Agent may distribute such payment to the Lenders in such manner
as it or the Required Lenders may determine to be appropriate, subject to
Section 4.4.).
(c) Each payment actually received by the Agent under this
Agreement or any Note for the account of a Lender shall be made available
promptly to such Lender, in immediately available funds, for account of such
Lender's Applicable Lending Office for the Loan in respect of which such
payment is made.
(d) If the due date of any payment under this Agreement or any
Note would otherwise fall on a day which is not a Business Day, such date shall
be extended to the next succeeding Business Day and interest shall be payable
for any principal so extended for the period of such extension.
4.4. PRO RATA TREATMENT
Except to the extent otherwise provided herein: (a) each borrowing
from the Lenders under Article 2. shall be made from the Lenders, each payment
of Fees under Section 4.1. shall be made for the account of the relevant
Lenders, each funding of the Letters of Credit under Article 3. shall be made
by the Lenders, and each termination or reduction of the amount of the
Commitments under Section 2.12. or Section 2.11. shall be applied to the
respective Commitments of the Lenders, pro rata according to the amounts of
their respective Commitments; (b) the making, Conversion and Continuation of
Loans of a particular Type shall be made pro rata among the Lenders according
to the amounts of their respective Commitments (in the case of making of Loans)
or Loans (in the case of Conversions and Continuations of Loans) and the
then-current Interest Period for each simultaneous Eurodollar Loan shall be
coterminous; (c) each payment or prepayment of principal of Loans shall be made
for the account of the Lenders pro rata in accordance with the respective
unpaid principal amounts of the Loans held by the Lenders; and (d) each payment
of interest on Loans shall be made for the account of the Lenders pro rata in
accordance with the amounts of such interest due and payable to the respective
Lenders.
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4.5. COMPUTATIONS
Interest on all Loans, Reimbursement Obligations and Fees shall be
computed on the basis of a year of 360 days and actual days elapsed (including
the first day but excluding the last day) occurring in the period for which
such amounts are payable.
4.6. MINIMUM AMOUNTS
Except for Conversions or prepayments made pursuant to Section 5.4.,
(i) each borrowing of Eurodollar Loans (including a Continuation of, or
Conversion into, Eurodollar Loans) shall be in an amount at least equal to
$1,000,000 and incremental multiples of $500,000 in excess thereof, (ii) except
for Loans made pursuant to Section 3.3. hereof, each borrowing of Base Rate
Loans (including a Continuation of, or Conversion into, Base Rate Loans) shall
be in an amount at least equal to $1,000,000 and integral multiples of $500,000
in excess thereof, and (iii) each voluntary prepayment of Loans shall be in an
amount at least equal to $1,000,000 and incremental multiples of $500,000 in
excess thereof (borrowings, prepayments or Conversions of Loans into Loans of
different Types or, in the case of Eurodollar Loans, having different Interest
Periods to be deemed separate borrowings, prepayments or Conversions for
purposes of the foregoing, one for each Type or Interest Period). Anything in
this Agreement to the contrary notwithstanding, the aggregate principal amount
of Eurodollar Loans having the same Interest Period shall be at least equal to
$1,000,000 and, if any Eurodollar Loans would otherwise be in a lesser
principal amount for any period, such Loans shall be Base Rate Loans during
such period.
4.7. CERTAIN NOTICES
Notwithstanding anything contained in Section 13.2. to the contrary,
notices by the Company to the Agent of borrowings (which shall be in the form of
Exhibit D-1 hereto, each a "Notice of Borrowing"), Conversions (which shall be
in the form Exhibit D-2 hereto, each a "Notice of Conversion"), Continuations
(which shall be in the form of Exhibit D-3 hereto, each a "Notice of
Continuation"), optional terminations or reductions of Commitments, and
optional prepayments of Loans and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the Agent in writing or
by telephone promptly confirmed in writing or telecopy not later than 10:00
a.m. San Francisco time on the number of Business Days prior to the date of the
relevant optional termination, reduction, borrowing, Conversion, Continuation
or prepayment or the first day of such Interest Period specified below:
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<PAGE> 43
<TABLE>
<CAPTION>
Number of
Business
Notice Days Prior
------ ----------
<S> <C>
Initial Borrowing on Closing Date 3
Termination or reduction of Commitments 5
Borrowing or prepayment of, or Conversions into,
Base Rate Loans 0
Borrowing or prepayment of, Conversions into,
Continuations as, or duration of Interest Period
for Eurodollar Loans 3
</TABLE>
Subject to Section 2.12., each such notice of optional termination or
reduction of Commitments shall specify the amount of Commitments to be
terminated or reduced. Each Notice of Borrowing, Conversion, Continuation or
optional prepayment shall specify the Loans to be borrowed, Converted,
Continued or prepaid and the amount (subject to Section 4.6.) and Type of each
Loan to be borrowed, Converted, Continued or prepaid and the date thereof
(which shall be a Business Day), and each Notice of Borrowing shall also state
the purpose for which the Loan shall be used. Each such notice of the duration
of an Interest Period shall specify the Loans to which such Interest Period is
to relate. The Agent shall promptly notify the Lenders of the contents of each
such notice. In the event that the Company fails to select the Type of Loan,
or the duration of any Interest Period for any Eurodollar Loan, within the time
period and otherwise as provided in this Section 4.7., such Loan (if
outstanding as a Eurodollar Loan) will be automatically Converted into a Base
Rate Loan on the last day of the then-current Interest Period for such Loan or
(if outstanding as a Base Rate Loan) will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan.
4.8. NON-RECEIPT OF FUNDS BY THE AGENT
Unless the Agent shall have received notice (which notice shall be
effective upon receipt) from a Lender prior to the date of any Loan that such
Lender will not make available to the Agent such Lender's ratable portion of
such Loan, the Agent may assume that such Lender has made such portion
available to the Agent on the date of such Loan in accordance with Sections
2.3. or 3.3.(c) above, and the Agent may (but shall not be required to), in
reliance upon such assumption, make available to the Company on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Agent, such Lender and the Company
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, from the date such amount is made
available to the Company until the date such amount is repaid to the Agent, at
(i) in the case of the Company, the interest rate payable at such time under
Section 2.4. with respect to such Loans and (ii) in the case of such Lender,
the Federal Funds Rate if paid within 2 Business Days from the date such amount
is due and the Base Rate plus 2% if paid thereafter.
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<PAGE> 44
4.9. PARTICIPATIONS OF LETTER OF CREDIT LENDERS
Immediately upon the issuance or amendment by the Facing Bank of any
Letter of Credit in accordance with Article 3., each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from the Facing
Bank, without recourse or warranty, an undivided interest and participation, to
the extent of such Lender's Pro Rata Share of the liability of the Facing Bank
with respect to such Letter of Credit (including, without limitation, all
obligations of the Company with respect thereto, other than amounts owing to
the Facing Bank consisting of fees owing to the Facing Bank) and all
Reimbursement Obligations. Upon any failure of the Company to pay any
Reimbursement Obligation when due and owing, or to reimburse the Facing Bank
for any Drawing pursuant to Section 3.3., or if the Facing Bank is required at
any time to return to the Company or to a trustee, receiver, liquidator,
custodian or other Person any portion of any payment by the Company of any
reimbursement of any Letter of Credit or any other Reimbursement Obligation,
each Lender severally agrees that it shall be unconditionally and irrevocably
liable, without regard to the occurrence of any Unmatured Default or Event of
Default or any condition precedent whatsoever, to the extent of such Lender's
Pro Rata Share, to reimburse the Facing Bank on demand in immediately available
funds in Dollars for the amount of each such recapture, Drawing or other
Reimbursement Obligation. Each Lender (except the Facing Bank to the extent it
is also a Lender), shall, not later than the Business Day it receives notice
from the Facing Bank to such effect, if such notice is received before 11:00
a.m. (San Francisco time), or not later than the following Business Day, if
such notice is received after such time, pay to the Facing Bank an amount equal
to its Pro Rata Share of the amount of such Reimbursement Obligation, together
with interest on such amount accrued from the date payment of such amount was
paid by the Facing Bank to the date of such payment by the Lender at a rate per
annum equal to (x) from the date of such amount was made by the Facing Bank to
the date two Business Days after payment by such Lender is due hereunder, the
Federal Funds Rate for each such day and (y) from the date two Business Days
after such payment is due from such Lender to the date such payment is made by
such Lender the Base Rate in effect for each such day. Each such Lender shall
thereafter be entitled to receive its Pro Rata Share of each payment received
on the relevant Drawing or other Reimbursement Obligation and of interest paid
thereon, with the Facing Bank retaining its Pro Rata Share thereof as a Lender
hereunder. The failure of any Lender to honor its obligations hereunder shall
not relieve any other Lender of its duty to comply with this Section.
4.10. SHARING OF PAYMENTS. ETC.
(a) The Company agrees that, upon the occurrence and
during the continuation of an Event of Default, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its option, to offset
balances held by it for the account of any of the Company and its Subsidiaries
at any of its offices, in Dollars or in any other currency, against any
principal of or interest on any of such Lender's Loans and Pro Rata Share of
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<PAGE> 45
Reimbursement Obligations, or any other amount payable to such Lender hereunder
(regardless of whether such balances are then due to the Company), in which
case it shall promptly notify the Company and the Agent thereof, provided that
such Lender's failure to give such notice shall not affect the validity
thereof.
(b) If any Lender shall obtain from the Company or any of
its Subsidiaries payment of any principal of or interest on any Loan owing to
it or on its Pro Rata Share of any Reimbursement Obligation or payment of any
other amount under this Agreement or any Note held by it or any other Credit
Document through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise (other than from the Agent as
provided herein) and, as a result of such payment, such Lender shall have
received a greater percentage of the principal, interest or other amounts then
due hereunder by the Company to such Lender than the percentage received by any
other Lenders, it shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans or Pro Rata Share of Reimbursement Obligations or other
amounts owing to such other Lenders (or in interest due thereon, as the case
may be) in such amounts, and make such other adjustments from time to time as
shall be equitable, to the end that all the Lenders shall share the benefit of
such excess payment (net of any expenses which may be incurred by such Lender
in obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal and/or interest on the Loans or other amounts (as the case may
be) owing to each of the Lenders. To such end, all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.
Notwithstanding the foregoing, to the extent that the Facing Bank has not been
reimbursed by any Lender or Lenders with respect to Drawing as required by
Section 3.6, the Facing Bank is entitled to receive the entire amount of such
non-participating Lenders' Pro Rata Share of any payment referred to in the
first sentence of this subsection (b).
(c) The Company agrees that any Lender purchasing such a
participation (or direct interest) may exercise all rights of set-off, bankers'
lien, counterclaim or similar rights with respect to such participation as
fully as if such Lender were a direct holder of Loans or other amounts (as the
case may be) owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Company. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a set-off to which this Section 4.10. applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 4.10. to share in the benefits of any recovery on such
secured claim.
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<PAGE> 46
5. ADDITIONAL COSTS; YIELD PROTECTION; CAPITAL ADEQUACY; TAXES
5.1. ADDITIONAL COSTS
(a) Events Entitling aLender to Receive Compensation.
The Company shall pay directly to each Lender (through the Agent) from time to
time such amounts as such Lender may determine in good faith to be necessary to
compensate it for any costs which such Lender determines are attributable to
its making or maintaining any Eurodollar Loans or its obligation to make any
Eurodollar Loans hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any of such Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"Additional Costs") resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable tosuch Lender
under this Agreement or its Note in respect of any of such Loans
(other than taxes imposed on or measured by the overall net income of
such Lender or of its Applicable Lending Office for any of such Loans
by the jurisdiction in whichsuch Lender has its principal office or
such Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, suchLender (including any of such Loans or any
deposits referred to in the definition of Eurodollar Base Rate in this
Agreement), or any commitment ofsuch Lender (including the
Commitment(s) ofsuch Lender hereunder); or
(iii) imposes any other condition affecting the interests of anyLender under
this Agreement or its Notes (or any of such extensions of credit or
liabilities) or its Commitment.
If any Lender requests compensation from the Company under this
Section 5.1.(a), the Company may, by notice to such Lender (with a copy to the
Agent), (i) suspend the obligation of such Lender to make or Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until
the Regulatory Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.4. shall be applicable) or (ii) require
such Lender to designate another of its existing facilities as the Applicable
Lending Office for making Eurodollar Loans or take other reasonable action if
such designation or other action would avoid the need for, or reduce the amount
of, compensation pursuant to this Section 5.1.(a) and would not in such
Lender's good faith judgment be disadvantageous to such Lender.
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<PAGE> 47
(b) Right ofa Lender to Terminate Obligation to Make
Eurodollar Loans. Without limiting the effect of the provisions of Section
5.1.(a), in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes Eurodollar
Loans or (ii) becomes subject to restrictions on the amount of any such
category of liabilities or assets which it may hold, then, if such Lender so
elects (through the Agent) by notice to the Company, the obligation of such
Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar
Loans hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 5.4. shall be applicable).
Notwithstanding the foregoing, the obligation of any Lender to make or
Continue, or Convert Base Rate Loans into, Eurodollar Loans shall not be
affected by any other Lender's suspension of its obligations as set forth in
this Section 5.1.(b).
(c) Determination of Amount of Compensation; Capital
Adequacy. Without limiting the effect of the foregoing provisions of this
Section 5.1. (but without duplication), the Company shall pay directly to each
Lender (through the Agent) from time to time on request such amounts as such
Lender may determine in good faith to be necessary to compensate such Lender
(or, without duplication, the bank holding company of which such Lender is a
subsidiary) for any increased costs which it determines are attributable to the
maintenance by such Lender (or any Applicable Lending Office or such bank
holding company) of capital in respect of its Commitment or Loans pursuant to
any law or regulation or any interpretation, directive or request (whether or
not having the force of law) of any court or governmental or monetary authority
(i) following any Regulatory Change or (ii) implementing any risk-based capital
guideline or requirement (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) heretofore or hereafter
issued by any government or governmental or supervisory authority implementing
at the national level the Basle Accord (including, without limitation, the
Final Risk-Based Capital Guidelines of the Board of Governors of the Federal
Reserve System (12 CFR Part 208, Appendix A; 12 CFR Part 225, Appendix A) and
the Final Risk- Based Capital Guidelines of the Office of the Comptroller of
the Currency (12 CFR Part 3, Appendix A)), such compensation to include,
without limitation, an amount equal to any reduction of the rate of return on
assets or equity of such Lender (or any Applicable Lending Office or such bank
holding company) to a level below that which such Lender (or any Applicable
Lending Office or such bank holding company) could have achieved but for such
law, regulation, interpretation, directive or request. For purposes of this
Section 5.1.(c), "Basle Accord" shall mean the proposals for risk-based capital
framework described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended,
modified and supplemented and in effect from time to time or any replacement
thereof.
(d) Notice of the Occurrence of an Event Entitling a
Lender to Compensation. Each Lender (through the Agent) shall notify the
Company of any event occurring after
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<PAGE> 48
the date of this Agreement that will entitle such Lender to compensation under
Section 5.1.(a) or (c) as promptly as practicable, but in any event within 90
days after such Lender obtains actual knowledge thereof; provided, however,
that if any Lender fails to give such notice within 90 days after it obtains
actual knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 5.1. in respect of any costs
resulting from such event, only be entitled to payment under this Section 5.1.
for costs incurred from and after the date 90 days prior to the date that such
Lender does give such notice. Each Lender (through the Agent) will furnish to
the Company a certificate setting forth the basis and amount of each request by
such Lender for compensation under Section 5.1.(a) or (c). Determinations and
allocations by any Lender for purposes of this Section 5.1. of the effect of
any Regulatory Change pursuant to Section 5.1.(a) or (b), of the effect of
capital maintained pursuant to Section 5.1.(c) on its costs or rate of return
of maintaining Loans or its obligation to make Loans or on amounts receivable
by it in respect of Loans, and of the amounts required to compensate such
Lender under this Section 5.1., shall be made in a manner consistent with that
applied by such Lender in similar contexts and shall be conclusive in the
absence of manifest error.
5.2. LIMITATION ON TYPES OF LOANS
Anything herein to the contrary notwithstanding, if on or prior to the
determination of any Eurodollar Base Rate for any Interest Period:
(a) the Agent determines (which determination shall be conclusive)
that quotations of interest rates for the relevant deposits referred to in the
definition of "Eurodollar Base Rate" are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining rates of
interest for Eurodollar Loans as provided herein; or
(b) if the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the relevant rates of interest
referred to in the definition of Eurodollar Base Rate in this Agreement upon
the basis of which the rate of interest for Eurodollar Loans for such Interest
Period is to be determined are not likely to adequately cover the cost to such
Lenders of making or maintaining Eurodollar Loans for such Interest Period;
then the Agent shall give the Company and each Lender notice thereof, and so
long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, to Continue Eurodollar Loans or
to Convert Base Rate Loans into Eurodollar Loans, and the Company shall, on the
last day(s) of the then-current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Loans or Convert such Loans into Base Rate
Loans in accordance with Section 2.2.
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<PAGE> 49
5.3. ILLEGALITY
Notwithstanding any other provision of this Agreement, in the event
that it becomes unlawful forany Lender or its Applicable Lending Office to
honor its obligation to make or maintain Eurodollar Loans hereunder, then such
Lender (through the Agent) shall promptly notify the Company thereof and such
Lender's obligation to make or Continue, or to Convert Base Rate Loans into,
Eurodollar Loans shall be suspended until such time as such Lender may again
make and maintain Eurodollar Loans (in which case the provisions of Section
5.4. shall be applicable). Notwithstanding the foregoing, the obligation of
any Lender to make, Continue or Convert Base Rate Loans into Eurodollar Loans
shall not be affected by any other Lender's suspension of its obligations as
set forth in this Section 5.3.
5.4. TREATMENT OF AFFECTED LOANS
If the obligation ofany Lender to make, Continue or Convert Base Rate
Loans into Eurodollar Loans shall be suspended pursuant to Sections 5.1. or
5.3., such Lender's Eurodollar Loans shall be automatically Converted into Base
Rate Loans on the last day(s) of the then-current Interest Period(s) for such
Eurodollar Loans (or, in the case of a Conversion required by Sections 5.1.(b)
or 5.3., on such earlier date as such Lender may specify to the Company with a
copy to the Agent) and, unless and until such Lender gives notice as provided
below that the circumstances specified in Sections 5.1. or 5.3. which gave rise
to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal which would otherwise be
applied to such Lender's Eurodollar Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans which would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans and all Base Rate Loans of such Lender which would otherwise be Converted
into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the Agent
that the circumstances specified in Sections 5.1. or 5.3. which gave rise to
the Conversion of such Lender's Eurodollar Loans pursuant to this Section 5.4.
no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans are
outstanding, such Lender's Base Rate Loans shall be automatically Converted
(and the outstanding Eurodollar Loans extended by the remaining Lenders
proportionately reduced), on the first day(s) of the next succeeding Interest
Period(s) (if any) for such outstanding Eurodollar Loans, to the extent
necessary so that, after giving effect thereto, all Loans held by the Lenders
holding Eurodollar Loans (if any) commencing on the first day(s) of such
Interest Period(s) and by such Lender are held pro rata (as to prin-
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<PAGE> 50
cipal amounts, Types and Interest Periods) in accordance with their respective
Commitments.
5.5. COMPENSATION
The Company shall pay to the Agent for account of each Lender, upon
the request of such Lender through the Agent, such amount or amounts as shall
be sufficient to compensate it for any loss, cost, or expense which such Lender
determines in good faith is attributable to:
(a) any payment, prepayment or Conversion of a Eurodollar Loan
(whether voluntary or mandatory) made by such Lender for any reason
(including, without limitation, the acceleration of the Loans pursuant to
Article 11.) on a date other than the last day of the Interest Period for such
Loan; or
(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in Article
6. to be satisfied) to borrow a Eurodollar Loan from such Lender on the date
for such borrowing specified in the relevant Notice of Borrowing given pursuant
to Section 2.3.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then-current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan which would have commenced on the date specified
for such borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the amount of interest which would otherwise have accrued
on such principal amount at a rate per annum equal to the interest rate such
Lender would have bid in the London interbank market for Dollar deposits of
leading banks in amounts comparable to such principal amount and with
maturities comparable to such period (as determined in good faith by such
Lender).
5.6. TAXES
(a) Any and all payments by the Company hereunder shall be paid
(except to the extent required by law) free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding franchise
taxes and taxes based on net income imposed on the Agent or any Lender by the
United States or the jurisdiction (or any political subdivision thereof) in
which the Agent or such Lender, as the case may be, has its principal office or
Applicable Lending Office (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Company shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to the Lenders or the Agent (i) the
sum payable by the Company
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<PAGE> 51
shall be increased by the amount necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 5.6.) such Lender or the Agent (as the case may be) shall receive
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Company shall make such deductions, and (iii) the Company shall
pay the full amount deducted to the relevant taxing authority or other
Governmental Agency in accordance with applicable law.
(b) In addition, the Company agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Credit Document (hereinafter referred to as "Other
Taxes").
(c) The Company will indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 5.6.) paid by
such Lender or the Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within five Business Days after the date of
receipt of a written demand therefor from such Lender or the Agent, as the case
may be.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Company in respect of any payment to any Lender or the
Agent, the Company will furnish to the Agent, at its address referred to in
Section 13.2., the original or a certified copy of a receipt evidencing payment
thereof.
(e) Any Lender or the Agent, as the case may be, claiming any
additional amounts payable pursuant to this Section 5.6. shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested by the Company if the making of
such a filing would avoid the need for or reduce the amount of any such
additional amounts which may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
(f) Each Lender that is incorporated or organized under the laws
of any jurisdiction other than the United States or any State thereof agrees
that, on or prior to the date the initial payment is due to be made to it
hereunder, it will furnish to the Agent:
(i) two valid, duly completed copies of Internal Revenue
Service Form 4224 or Internal Revenue Form 1001 or successor
applicable form, as the case may be, certifying in each case that such
Lender is entitled to receive payments under this Agreement without
deduction or withholding of any federal income taxes, and
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(ii) a valid, duly completed Internal Revenue Service Form
W-8 or W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding tax.
Each Lender which so delivers to the Agent a Form 1001 or 4224 and Form W-8 or
W-9 (or successor applicable forms) agrees to deliver to the Agent updated
forms, or other manner of certification acceptable to the Agent, on or before
the date that any such form expires or becomes obsolete or otherwise is
required to be resubmitted as a condition to obtaining an exemption from
withholding tax, or after the occurrence of any event requiring a change in the
most recent form previously delivered by it, and such extensions or renewals
thereof as may reasonably be requested by the Agent, unless in any such case an
event (including any changes in any law) 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 Lender from duly completing and
delivering any such form with respect to it and such Lender advises the Agent
that it is not capable of receiving payments without any deduction or
withholding of federal income tax.
6. CONDITIONS PRECEDENT
6.1. INITIAL EXTENSIONS OF CREDIT
The obligation of any Lender to make its initial extension of credit
hereunder or the obligations of the Facing Bank to issue any Letter of Credit
hereunder is subject to the condition precedent that the Company deliver to the
Agent each of the following, each of which shall be satisfactory in form and
substance to the Agent and the Agent's counsel:
(a) Corporate Documents. Each of the following documents, each
certified as indicated below:
(i) a copy of the charter, as amended, of each of the
Company and the Subsidiary Guarantors, certified as of a recent date
by the Secretary of State of the state of its organization, and a
certificate as of a recent date from such Secretary of State as to the
good standing of the Company and the Subsidiary Guarantors;
(ii) a certificate of the secretary of each of the Company
and the Subsidiary Guarantors, dated the Closing Date and certifying
(A) that attached thereto is a true and complete copy of their
respective bylaws as in effect on the date of such certificate, (B)
that attached thereto is a true and complete copy of resolutions duly
adopted by their respective boards of directors authorizing the
execution, delivery and performance of (to the extent it is a party
thereto) this Agreement, the Notes, and each of the other Credit
Documents and the extensions of credit hereunder, and that such
resolutions have not been modified, rescinded
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or amended and are in full force and effect, (C) that their respective
charters have not been amended since the date of the certification
thereto furnished pursuant to subsection (i) above, and (D) as to the
incumbency and specimen signature of each of their respective officers
executing this Agreement, the Notes, and each of the Credit Documents
to the extent it is a party thereto and each other document to be
delivered by the Company and the Subsidiary Guarantors from time to
time in connection therewith (andthe Agent and each Lender may
conclusively rely on such certificate until the Agentreceives notice
in writing from the Company to the contrary); and
(iii) a certificate of another officer of each of the
Company and the Subsidiary Guarantors as to the incumbency and
specimen signature of the secretary of each such corporation.
(b) Notes. The Notes, duly completed and executed by the Company.
(c) Subsidiary Guaranty. The Subsidiary Guaranty, duly executed
by each Subsidiary Guarantor.
(d) Opinion of Counsel. The opinion of Davis, Graham & Stubbs,
L.L.C., counsel to the Company and the Subsidiary Guarantors, substantially in
the form of Exhibit E hereto.
(e) Financial Statements. The following financial statements in
form and substance satisfactory to the Lenders: audited consolidated balance
sheets and statements of operations and cash flows of the Company and its
Subsidiaries for the fiscal years ended December 31, 1993 and 1994 and
unaudited consolidated balance sheets and statements of operations and cash
flows of the Company and its Subsidiaries for the nine months ended September
30, 1995 (collectively, the "Historical Financial Statements").
(f) Fees, Expenses and Other Consideration. The Agent, the Facing
Bank and each of the Lenders shall have received all amounts payable by the
Company in respect of Fees and expenses, including attorney's fees, to the
extent due and payable on or prior to the making of the initial Loans
hereunder, and the Agent, the Facing Bank and each of the Lenders shall have
received all other consideration due from the Company and its Subsidiaries in
connection therewith.
(g) Officer's Certificate. A Certificate executed by the chief
executive officer and chief financial officer of the Company, stating that: (a)
on such date, and after giving effect to the transaction contemplated hereby,
no Unmatured Default or Event of Default has occurred and is continuing; (b) no
material adverse change in the financial condition or operations of the
business of the Company or any of its Subsidiaries or the projected cash flow
of the Company and its Subsidiaries has occurred; (c) the representations and
warranties set forth in Article 7. are true and correct in all material
respects on and as of such date with the same effect as though made on and as
of such date; and (d) the
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Company on such date is in compliance with all the terms and provisions set
forth in this Agreement on its part to be observed and performed.
(h) Compliance Certificate. A Compliance Certificate (as
hereinafter defined) executed by the chief financial officer of the Company.
(i) Consents. Copies of all consents, approvals, authorizations,
registrations or filings required to be made or obtained by the Company and its
Subsidiaries in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby.
(j) Accountant's Letter. A letter authorizing the independent
certified public accountants of the Company to communicate with the Agent and
the Lenders.
(k) Continuing Agreement. A fully executed copy of the Continuing
Agreement.
(l) Additional Equity. Evidence satisfactory to the Agent that
the Company has received not less than $50,000,000 from the sale of its common
stock in 1995.
(m) Other Documents. The Agent shall have received such other
documents as the Agent or any Lender or counsel to the Lenders may reasonably
request.
6.2. INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT
The obligation of each Lender to make any Loan (including the initial
Loan) or the obligation of the Facing Bank to issue any Letter of Credit
hereunder is subject to the further conditions precedent that, both immediately
prior to such Loan, or the issuance of such Letter of Credit, and also after
giving effect thereto:
(a) no Unmatured Default or Event of Default shall have occurred
and be continuing;
(b) the representations and warranties made by the Company and its
Subsidiaries in Article 7. and by each party in each of the other Credit
Documents shall be, in accordance with Section 13.9.(b) hereof, true, complete
and correct in all material respects on and as of the date of the making of
such extension of credit with the same force and effect as if made on and as of
such date (or, in the case of any such representation and warranty made only as
of a particular date, as of such particular date);
(c) the Agent shall have timely received a duly executed Notice of
Borrowing or a Letter of Credit Request, as the case may be.
Each Notice of Borrowing, Notice of Conversion, Notice of Continuation
and Letter of Credit Request hereunder shall constitute a certification by the
Company and
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each of its Subsidiaries to the effect set forth in subsections (a) and (b)
above (both as of the date of such notice and as of the date of such extension
of credit).
7. REPRESENTATIONS AND WARRANTIES
The Company, on behalf of itself and each of its Subsidiaries,
represents and warrants to theAgent, the Facing Bank and the Lenders that:
7.1. CORPORATE EXISTENCE
Each of the Company and the Subsidiary Guarantors (a) is a corporation
duly organized and validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate power, and
has all governmental licenses, authorizations, consents and approvals,
necessary to own its assets and carry on its business as now being or as
proposed to be conducted and to consummate the transactions contemplated by the
Credit Documents; and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would have a Material Adverse Effect.
7.2. AUTHORIZATION; NO CONFLICT
The execution, delivery and performance by the Company and the
Subsidiary Guarantors of each of the Credit Documents (to the extent it is a
party thereto) (a) have been duly authorized by all requisite corporate and, if
required, stockholder action on the part of each of the Company and the
Subsidiary Guarantors and (b) will not (i) violate any provision of law,
statute, rule or regulation, any order of any Governmental Agency applicable to
the Company or any Subsidiary Guarantor or any provision of the certificate of
incorporation or bylaws of the Company or the Subsidiary Guarantors, (ii)
violate, conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default or an event of default under any
indenture, agreement, mortgage, deed of trust, note, lease, contract or other
instrument to which the Company or a Subsidiary Guarantor is a party or by
which the Company or a Subsidiary Guarantor or any of its Property is or may be
bound, or (iii) result in the creation or imposition of any Lien upon any
Property or assets of any of the Company and the Subsidiary Guarantors.
7.3. ENFORCEABILITY
This Agreement and each other Credit Document has been duly executed
and delivered by the Company and each Subsidiary Guarantor (to the extent it is
a party thereto) and constitute the legal, valid and binding obligations of the
Company and each such
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Subsidiary Guarantor, as the case may be, enforceable against the Company or
such Subsidiary Guarantor in accordance with their respective terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of whether considered
in a proceeding in equity or at law).
7.4. APPROVALS
No authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Agency are necessary for the execution,
delivery or performance by the Company and each Subsidiary Guarantor of the
Credit Documents to which it is a party or for the validity or enforceability
thereof, except for such authorizations, approvals, consents, filings or
registrations as shall have been obtained and set forth on Schedule 7.4.
7.5. FINANCIAL CONDITION
The Historical Financial Statements are complete and correct in all
material respects and fairly present the financial condition and results of
operations of the Company and its consolidated Subsidiaries as of and for the
periods covered thereby. Since December 31, 1994, there has been no material
adverse change in the business, Property, assets, liabilities, condition
(financial or otherwise), operations, results of operations or prospects of the
Company and its Subsidiaries.
7.6. LITIGATION
Except as set forth on Schedule 7.6 there are no actions, suits or
proceedings at law or in equity by or before any Governmental Agency now
pending or, to the best knowledge of the Company or any Subsidiary, threatened
against or affecting the Company or any Subsidiary or its respective business,
Property or rights (i) which involve any Credit Document or (ii) which, if
adversely determined would, individually or in the aggregate, result in a
Material Adverse Effect. There exists no judgment, order, injunction or other
restraint issued or filed which is material to the Company or any Subsidiary or
its business, Property or rights.
7.7. FEDERAL RESERVE REGULATIONS
None of the extensions of credit to be provided hereunder will be used
in violation of Regulations G, T, U or X. Neither the Company nor any
Subsidiary is engaged in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying Margin Stock.
No part of the proceeds of any extension of credit hereunder, whether directly
or indirectly, and whether immediately, incidentally or ultimately, will be
used (i) to purchase or carry Margin Stock or to extend credit to others for
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the purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose, or (ii) for any purpose which entails a
violation of, or which is inconsistent with, the provisions of the Regulations
of the Board of Governors of the Federal Reserve System, including Regulations
G, T, U or X. As used herein, the term "Margin Stock" shall mean margin stock
within the meaning of Regulations G, T, U and X.
7.8. ERISA
(a) Neither the Company nor any Subsidiary maintains or
contributes to any Employee Benefit Plan or Multiemployer Plan other than those
identified on Schedule 7.8.
(b) The Company and each Subsidiary are in compliance in all
material respects with all applicable provisions of ERISA and the Code with
respect to all Employee Benefit Plans. Each Employee Benefit Plan that is
intended to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified, and each trust related to
such Plan has been determined to be exempt from federal income tax under
Section 501(a) of the Code. The actuarial present value of all accumulated
benefit obligations under each Plan, as disclosed in the most recent actuarial
report with respect to such Plan, do not exceed the fair market value of the
assets of such Plan. No material liability has been incurred by the Company or
any Subsidiary or any of their ERISA Affiliates which remains unsatisfied for
any taxes, penalties or other amount (other than contributions in the ordinary
course) with respect to any Employee Benefit Plan or any Multiemployer Plan,
and to the best knowledge of the Company no such material liability is expected
to be incurred.
(c) Neither the Company nor any Subsidiary has: (i) engaged in a
nonexempt prohibited transaction described in Section 406 of ERISA or Section
4975 of the Code; (ii) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid; (iii) failed to make a required contribution
or payment to a Multiemployer Plan; or (iv) failed to make a required
installment or other required payment under Section 412 of the Code.
(d) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan or Multiemployer Plan maintained or contributed to by
the Company or any Subsidiary.
(e) No material proceeding, claim (other than routine claims for
benefits), lawsuit and/or investigation is existing or, to the Company's
knowledge, threatened concerning or involving any Employee Benefit Plan or
Multiemployer Plan maintained or contributed to by the Company or any
Subsidiary.
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7.9. TAXES
(a) The Company and each Subsidiary have filed all federal income
tax returns and all other tax returns and reports, domestic and foreign,
required to be filed by it and has paid all taxes, assessments, fees and other
governmental charges payable by it which have become due, other than those not
yet delinquent. All such returns are true and correct in all material
respects. The Company and each Subsidiary have paid or, in the case of taxes
which are not yet due and payable, has provided adequate reserves for the
payment of, all federal, state and foreign taxes applicable for all prior
fiscal years and for the current fiscal year to the date hereof. To the best
knowledge of the Company and each Subsidiary, there is no proposed tax
assessment against the Company or any Subsidiary, except as disclosed under the
heading "OPERATING RESULTS" in the Company's Prospectus Supplement dated
October 17, 1995 on page S-17, a copy of which is attached hereto as Exhibit
I.
(b) No United States Federal income tax returns of the "affiliated
group" (as defined in the Code) of which the Company is a member have been
examined and closed. The members of such affiliated group have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by any of them. The
charges, accruals and reserves on the books of the Company and its Subsidiaries
in respect of taxes or other governmental charges are, in the opinion of the
Company, adequate.
(c) The Company was organized to be and has been and is being
operated in accordance with the rules for qualification as a REIT under the
provisions of the Code and presently qualifies as a REIT under the Code.
(d) Neither the Company nor any of the Subsidiary Guarantors has
incurred any liability for excise taxes pursuant to Section 4981 of the Code.
7.10. INVESTMENT COMPANY ACT
Neither the Company nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
7.11. PUBLIC UTILITY HOLDING COMPANY ACT
Neither the Company nor any Subsidiary is a "holding company" or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
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7.12. MATERIAL AGREEMENTS
Other than this Agreement and the other Credit Documents, and except
as set forth on Schedule 7.12., neither the Company nor any Subsidiary is a
party to or otherwise bound or affected by (a) any credit agreement, loan
agreement, indenture, purchase agreement, guarantee or other arrangement
providing for or otherwise relating to any Indebtedness or any extension of
credit (or commitment for any extension of credit) to, or guarantee by, the
Company or any Subsidiary, or (b) any Material Contract, or (c) any collective
bargaining agreement, management agreement, employment agreement or consulting
agreement. Neither the Company nor any Subsidiary is a party to any agreement
or instrument or subject to any corporate restriction that has resulted or
could reasonably be expected to result in a Material Adverse Effect. The
representations and warranties in subsections (b) and (c) of the first sentence
of this Section 7.12. are made as of the Closing Date only.
7.13. ENVIRONMENTAL AND SAFETY MATTERS
Except as set forth on Schedule 7.13. hereto:
(a) The Company and each Subsidiary have obtained all permits,
licenses and other authorizations which are required to be obtained by them
under Environmental and Safety Laws (collectively "Permits").
(b) The Company and each Subsidiary have complied and are in
compliance with the terms and conditions of all Permits and with all
Environmental and Safety Laws which are applicable to the Company or any
Subsidiary.
(c) With respect to the Company and each Subsidiary, no notice,
notification, demand, request for information, citation, summons or order has
been issued and delivered to the Company or any Subsidiary, no complaint has
been filed and served on the Company or any Subsidiary, no penalty has been
assessed and no investigation is pending against the Company or any Subsidiary
of which the Company has knowledge, or, to the Company's best knowledge,
threatened by any Person with respect to any alleged failure to obtain any
Permits or any violation of any Environmental and Safety Laws, or with respect
to the generation, treatment, storage, recycling, transportation, discharge or
dis posal, or any Release or threatened Release, of any Hazardous Materials.
(d) No Property or facility now or previously owned or operated by
the Company and each Subsidiary has been or is presently operated in a manner
which requires permitting as a hazardous waste treatment, storage or disposal
facility for purposes of RCRA or any analogous state law.
(e) None of the following is presently in violation of any
applicable Environmental and Safety Laws at any Property or facility now or
previously owned or operated by the Company or any Subsidiary: (i)
polychlorinated biphenyls contained in
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electrical or other equipment; (ii) asbestos-containing insulation or building
material; or (iii) active or inactive underground storage tanks.
(f) No Hazardous Materials have been released into the environment
at or from any Property or facility now or previously owned or operated by the
Company or any Subsidiary so as to give rise to any present or future material
liability or obligation under any Environmental and Safety Laws.
(g) Neither the Company nor its Subsidiaries have transported or
arranged for the transportation of any Hazardous Material to any location which
is on the CERCLA National Priorities List (or proposed for such listing), the
CERCLIS list or any similar state list or which is the subject of federal,
state or local enforcement actions or other investigations which may lead to
claims against the Company or any Subsidiary under any Environmental and
Safety Laws.
(h) No oral or written notification of a Release of a Hazardous
Material has been made by or on behalf of the Company or any Subsidiary and no
Property or facility now or previously owned or operated by the Company or any
Subsidiary is on the CERCLA National Priorities List (or proposed for such
listing), the CERCLIS list or any similar state list.
(i) No Liens have arisen under or pursuant to any Environmental
and Safety Laws on any Property or facility now or previously owned or operated
by the Company or any Subsidiary, no governmental actions have been taken or
are in process which could subject any such Property or facility to such Liens,
and neither the Company nor its Subsidiaries have been required to place any
notice or restriction relating to the presence of Hazardous Materials in any
deed to such Property or facility.
(j) To the Company's best knowledge, there have been no
environmental investigations, studies, audits, tests, reviews or other analyses
of any Property or facility now or previously owned or operated by the Company
or any Subsidiary which have not been provided to the Lenders.
(k) Neither the Company nor its Subsidiaries have assumed or
succeeded to by agreement or, to the best knowledge of the Company and each
Subsidiary, otherwise become liable (contingently or otherwise) for the
obligations of any other Person pursuant to Environmental and Safety Laws, by
operation of law or otherwise.
(l) Without limiting the generality of the foregoing, to the best
knowledge of the Company and each Subsidiary, there are no other facts, events
or conditions relating to the past or present operations, properties or
facilities of the Company or any Subsidiary which may give rise to any
liability under any Environmental and Safety Laws.
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7.14. SUBSIDIARIES
Except as set forth on Schedule 7.14., (a) the Company has no
Subsidiaries other than Permitted Subsidiaries and (b) all Subsidiaries of the
Company are Subsidiary Guarantors.
7.15. COMPLIANCE WITH LAW
The Company and each Subsidiary are in compliance with all applicable
laws, rules, regulations and orders of, and all applicable restrictions imposed
by, all Governmental Agencies in respect of the conduct of their respective
businesses and the ownership of their respective properties (including
applicable laws, rules, regulations, orders and restrictions relating to
environmental standards and controls), except such noncompliance as would not,
individually or in the aggregate, have a Material Adverse Effect.
7.16. TITLE TO PROPERTIES
The Company and each Subsidiary have good, indefeasible and insurable
title to, or valid leasehold interests in, all its real properties and good
title to its other assets, free and clear of all Liens other than Permitted
Liens.
7.17. FINANCIAL CONDITION
The Company and its Subsidiaries are not entering into the
arrangements contemplated by this Agreement and the other Credit Documents with
actual intent to hinder, delay or defraud either present or future creditors.
On and as of the Closing Date on a pro forma basis after giving effect to the
transactions contemplated by the Credit Documents and to all debts incurred or
to be created in connection herewith and on the date of each Credit Event:
(a) the present fair salable value of the assets of the Company
and each Subsidiary, respectively, (on a going concern basis) will exceed the
probable liability of the Company and each Subsidiary on its respective debts
(including its contingent obligations);
(b) neither the Company nor any Subsidiary has incurred, nor does
it intend to or believe that it will incur, debts (including contingent
obligations) beyond its ability to pay such debts as such debts mature (taking
into account the timing and amounts of cash to be received from any source, and
of amounts to be payable on or in respect of debts); and the amount of cash
available to the Company and each Subsidiary after taking into account all
other anticipated uses of funds is anticipated to be sufficient to pay all such
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amounts on or in respect of its respective debts, when such amounts are
required to be paid; and
(c) the Company and each Subsidiary will have sufficient capital
with which to conduct their respective present and proposed businesses and the
Property of the Company or such Subsidiary does not constitute unreasonably
small capital with which to conduct their respective present or proposed
business.
For purposes of this Section 7.17. "debt" means any liability on a (i)
right to payment whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured; or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such a right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured,
or unsecured.
7.18. FULL DISCLOSURE
No representation or warranty contained in this Agreement or in any
other document furnished from time to time pursuant to the terms of this
Agreement, contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make the statements
herein or therein not misleading in any material respect as of the date made or
deemed to be made. Except as may be set forth herein, there is no fact known to
the Company or any Subsidiary which has had, or is reasonably expected to have,
a Material Adverse Effect.
7.19. INSURANCE
The Company and each Subsidiary currently maintain or cause their
respective lessees to maintain insurance with respect to their respective
properties and business, with financially sound and reputable insurers, having
coverages against losses or damages of the kinds customarily insured against by
reputable companies in the same or similar businesses, such insurance being in
amounts no less than those amounts which are customary for such companies under
similar circumstances. The Company, on its behalf and on behalf of its
Subsidiaries, has paid or caused their respective lessees to pay all material
amounts of insurance premiums now due and owing with respect to such insurance
policies and coverages, and such policies and coverages are in full force and
effect.
7.20. NECESSARY AUTHORIZATIONS AND PERMITS
To the best of the Company's knowledge, after due diligence, inquiry
and investigation, the Company and each Subsidiary have secured all Necessary
Authorizations, except as the failure to have any such Necessary Authorizations
would not have a Material Adverse Effect. As used herein, the term "Necessary
Authorizations" shall mean all authorizations, consents, approvals, permits,
licenses and exemptions of, filings and
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registrations with, and reports to, any Governmental Agency, which are
necessary or required for the lawful ownership, leasing or operation of any
properties or assets owned, leased or operated by the Company.
7.21. NOT PROHIBITED TRANSACTIONS
The execution, delivery and performance of this Agreement, and the
borrowing and repayment of amounts hereunder, do not and will not constitute
"prohibited transactions" under ERISA or the Code.
7.22. NO DEFAULT
No Unmatured Default or Event of Default has occurred and is
continuing.
7.23. CUSTOMERS OF THE COMPANY AND ITS SUBSIDIARIES
To the Company's knowledge, no Person which leases any Property from
the Company or a Subsidiary Guarantor or in which the Company or any Subsidiary
Guarantor has made an Investment (excluding any such Person which is a Wholly-
Owned Subsidiary) has since December 31, 1994, except as reflected in the
Historical Financial Statements, and under the heading "PSYCHIATRIC GROUP
DEVELOPMENTS" of the Prospectus Supplement of the Company dated October 17,
1995, on page S-20, a copy of which is attached hereto as Exhibit I
experienced any event, circumstance or condition that, individually or when
aggregated with all other similar events, circumstances or conditions, could
reasonably be expected to have a material adverse effect on the business,
Property, assets, liabilities, condition (financial or otherwise), operations,
results of operations or prospects of such Person.
8. AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any of the
Commitments are in effect or the principal or interest on any Loan or
Reimbursement Obligation shall remain unpaid, or any Letter of Credit shall
remain outstanding, the Company will, and (as applicable) will cause each
Subsidiary to:
8.1. FINANCIAL STATEMENTS AND OTHER INFORMATION
Deliver to each of the Lenders:
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(a) as soon as available and in any event within 95 days after the
end of each fiscal year of the Company, audited consolidated statements of
income, retained earnings and cash flow of the Company and its Consolidated
Subsidiaries for such fiscal year and the related audited consolidated balance
sheets as of the end of such fiscal year, setting forth in each case in
comparative form the corresponding consolidated figures (i) for such fiscal
year as set forth in the Historical Financial Statements and (ii) for the
preceding fiscal year, and accompanied by a report of the Company's independent
auditors, which report shall state that such consolidated financial statements
fairly present the consolidated financial condition and results of operations
of the Company and its Consolidated Subsidiaries in accordance with GAAP
without material qualification;
(b) as soon as available and in any event within 50 days after the
end of each of the first three quarterly fiscal periods of each fiscal year of
the Company, consolidated statements of income, and cash flow of the Company
and its Consolidated Subsidiaries for such quarterly period (consolidated
statements of income, only) and for the period from the beginning of the
current fiscal year to the end of such period (both consolidated statements of
income and cash flow), and the related consolidated balance sheets as of the
end of such period, setting forth in each case in comparative form the
corresponding consolidated figures (i) for such periods as set forth in the
Historical Financial Statements and (ii) for the corresponding periods in the
preceding fiscal year, and accompanied by a certificate of the chief financial
officer of the Company, which certificate shall state that such consolidated
financial statements fairly present the consolidated financial condition and
results of operations of the Company and its Consolidated Subsidiaries in
accordance with GAAP (subject to normal year-end adjustments and absence of
full footnote disclosures);
(c) simultaneously with the delivery of the annual financial
statements referred to in Section 8.1.(a), a report of the independent auditors
who audited such statements stating that, in connection with their audit of
such statements (and without conducting any procedures other than those
customarily conducted in a year-end audit), such auditors have obtained no
knowledge of any condition or event which constitutes an Unmatured Default or
Event of Default, or if such auditors shall have obtained knowledge of any
such condition or event, specifying in such report each such condition or event
of which they have knowledge and the nature and status thereof; provided,
however, that such auditors shall not be liable by reason of any failure to
obtain knowledge of any condition or event which constitutes an Unmatured
Default or Event of Default that would not be disclosed in the course of their
audit examination;
(d) simultaneously with the delivery of any financial statements
pursuant to Sections 8.1.(a) and (b), a certificate of the chief financial
officer of the Company substantially in the form of Exhibit F (the "Compliance
Certificate") (i) to the effect that no Unmatured Default or Event of Default
has occurred and is continuing (or, if any Unmatured Default or Event of
Default has occurred and is continuing, describing the same in reasonable
detail and describing the action that the Company (or such other Person, as
appropriate) has taken and proposes to take with respect thereto) and (ii)
setting forth in reasonable detail the computations necessary to determine
whether the
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Company is in compliance with Section 2.11., the Sections contained in Article
10., and Sections 9.3., 9.4, 9.5. and 9.6. (as applicable), in each case as of
the end of the period for which such financial statements are delivered;
(e) promptly upon the receipt thereof, copies of all "management
letters" received by the Company or any Subsidiary from its independent
accountants;
(f) as soon as possible, and in any event within thirty days after
the Company or any Subsidiary knows or has reason to know that any of the
events or conditions specified below have occurred or exist, a statement signed
by the chief financial officer of the Company setting forth details respecting
such event or condition and the action, if any, which the Company or such
Subsidiary or its ERISA Affiliate proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or given to the PBGC by
the Company or any Subsidiary or any of its ERISA Affiliates as of such date
with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b)
of ERISA and the regulations issued thereunder, with respect to a Plan
of the Company or any Subsidiary or any of its ERISA Affiliates, as to
which the PBGC has not by regulation waived the requirement of Section
4043 (a) of ERISA that it be notified within 30 days of the occurrence
of such event (provided that a failure to meet the minimum funding
standard of Section 412 of the Code or Section 302 of ERISA shall be a
reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan of the Company or any Subsidiary or any
of its ERISA Affiliates or the termination of any such Plan;
(iii) the institution by the PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan of the Company or any Subsidiary or
any of its ERISA Affiliates, or the receipt by the Company or any
Subsidiary or any of its ERISA Affiliates of a notice from a
Multiemployer Plan of the Company or any Subsidiary or any of its
ERISA Affiliates that such action has been taken by the PBGC with
respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal by the Company or
any Subsidiary or any of its ERISA Affiliates under Section 4201 or
4204 of ERISA from a Multiemployer Plan, or the receipt by the Company
or any Subsidiary or any such ERISA Affiliate of notice from such a
Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA or that it intends to terminate or
has terminated under Section 4041A of ERISA, which in any such case
could reasonably be expected to result in the imposition of withdrawal
liability upon the Company or any Subsidiary or any of its ERISA
Affiliates;
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(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any Subsidiary or any of
its ERISA Affiliates to enforce Section 515 of ERISA, which proceeding
is not dismissed within 30 days; and
(vi) If the fair market value of the assets of any Plan
does not equal or exceed the accumulated benefit obligations with
respect to such Plan, as disclosed on the most recent actuarial report
with respect to such Plan.
(g) promptly after any Unmatured Default or Event of Default has
occurred, a notice of such Unmatured Default or Event of Default describing the
same in reasonable detail together with a description of the action that the
Company (or such other appropriate party, as the case may be) has taken and
proposes to take with respect thereto;
(h) promptly after receipt of written request from the Agent, such
other information regarding the business, affairs or financial condition of the
Company or any Subsidiary as the Agent may reasonably request;
(i) as soon as possible, and in any event within three Business
Days after the Company or any Subsidiary receives notice or otherwise has
actual knowledge that any of the following events have occurred or exist, a
statement signed by the chief financial officer of the Company setting forth
details regarding such event or condition and the action, if any, which the
Company or such Subsidiary proposes to take with respect thereto (along with
all relevant documentation): (i) any violation by the Company or any
Subsidiary of any Environmental and Safety Laws; (ii) any request for
information or notice of potential responsibility under Environmental and
Safety Laws with respect to cleanup of any Property or facility of the Company
or any Subsidiary or any offsite location; (iii) the imposition of any Lien on
any assets of the Company or any Subsidiary under Environmental and Safety
Laws; (iv) the commencement of any litigation, enforcement action or
investigation with respect to the Company or any Subsidiary under Environmental
and Safety Laws; or (v) any Release or threatened Release of any Hazardous
Material at or from any Property or facility of the Company or any Subsidiary;
(j) promptly upon their becoming available, copies of any
statements, reports and other communications, if any, which the Company or any
Subsidiary shall have provided to its stockholders or filed with the
Securities and Exchange Commission (or any governmental agency substituted
therefor), any national securities exchange or the National Association of
Securities Dealers, Inc.;
(k) as soon as practicable and, in any event, on or before the
date which is forty-five days prior to the close of each fiscal year of the
Company, the Projected Financial Statements for the Company and its
Subsidiaries for each of the next three years;
(l) as soon as practicable, a copy of each Financing Plan in
respect of a Material Acquisition, together with an update, as necessary, of
any of the Projected Financial Statements delivered by the Company pursuant to
Section 8.1.(k) reflecting the effects of such Financing Plan and Material
Acquisition;
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(m) promptly upon their becoming available, copies of all material
notices respecting the Senior Notes received by the Company from any holder (or
trustee, agent, or representative of any holder) thereof and sent to the
Company pursuant to the provisions of any instrument or agreement evidencing
such Indebtedness or pursuant to which such Indebtedness was issued;
(n) promptly upon becoming available, each quarterly operational
and statistical report on the Company's Investments in Health Care Facilities,
similar in form and content to such reports as provided to the Company's Board
of Directors; and
(o) promptly after request of any Lender, such other information
and data with respect to the Company or any of its Subsidiaries as from time to
time may be reasonably requested by such Lender by notice to the Agent, the
Company and the other Lenders.
8.2. LITIGATION
Promptly (and in any event within three Business Days of receipt) give
to the Agent notice of the filing or commencement of, or any written notice of
intention of any Person to file or commence, any action, suit or proceeding
affecting the Company or any Subsidiary, whether at law or in equity by or
before any Governmental Agency which if adversely determined would result in
liability to the Company or any Subsidiary of $2,000,000 or more (unless
covered by insurance) or would otherwise have a Material Adverse Effect, and of
any adverse development in respect of such legal or other proceedings.
8.3. CORPORATE EXISTENCE. ETC.
Except as expressly permitted by this Agreement: preserve and maintain
its corporate existence, and all of its material rights, privileges and
franchises; comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of all Governmental Agencies;
maintain all of its material properties used in its business in good working
order and condition, ordinary wear and tear excepted; and preserve and enforce
its rights (including rights to indemnification) under any Material Contracts.
8.4. REIT STATUS
Maintain at all times (a) its qualifications as a REIT and (b) the
applicability of the method of taxation provided for in Section 857(b) of the
Code (as such section is from time to time amended or supplemented).
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8.5. INSURANCE
(a) Maintain or cause to be maintained, with financially sound and
reputable insurers satisfactory to the Agent, insurance with respect to its
assets and businesses and the assets and businesses of its Subsidiaries against
loss or damage of the kinds as are reasonable and appropriate for their
respective businesses, and in such amounts as are reasonable and appropriate
for their respective businesses; provided that in no event shall such insurance
be for a Dollar amount less than the greater of (i) the replacement cost of the
assets so insured and (ii) the Dollar amount of any Indebtedness which such
insured assets secure.
(b) Notwithstanding anything to the contrary contained in Section
8.5.(a), if, in connection with any lease entered into between the Company or
any of its Subsidiaries and a third Person respecting any Health Care Facility
of the Company or any such Subsidiary, such third Person is contractually
obligated to provide insurance with respect to such Health Care Facility or any
of the Company's or any of such Subsidiary's assets located therein, then the
Company shall and shall cause any such Subsidiary to require that any such
insurance be maintained with financially sound and reputable insurers (i)
against loss or damage of the kinds as are customarily insured against by
Persons engaged in such business or in the operation of such assets and (ii) in
such amounts as are customary in such business; provided that any such third
party lessee may provide self-insurance with respect to such Health Care
Facility or any of the Company's or any of its Subsidiaries' assets located
therein so long as: (A) the board of directors of the Company or any such
Subsidiary, as applicable, shall determine that permitting such self-insurance
is prudent and sufficient in light of other available sources of insurance, and
(B) so long as such self-insurance provides insurance (1) against loss or
damage of the kinds as are customarily insured against by Persons engaged in
such business or in the operation of such assets and (2) in such amounts as are
customary in such business.
(c) Without limiting the obligations of the Company under the
foregoing provisions of this Section 8.5., in the event the Company or any
Subsidiary shall fail to maintain in full force and effect insurance as
required by the foregoing provisions of this Section 8.5., then the Agent may,
but shall have no obligation to, procure insurance covering the interests of
the Lenders and the Agent in such amounts and against such risks as the Agent
(or the Required Lenders) shall deem appropriate, and the Company shall
reimburse the Agent in respect of any premiums paid by the Agent as provided in
Section 13.3.(c).
8.6. OBLIGATIONS AND TAXES
Pay its Indebtedness and other obligations in accordance with their
terms and pay and discharge promptly all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect
of its Property, and in any event before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might give rise to a Lien upon such properties or
any part thereof; provided, however, that such payment and
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discharge shall not be required so long as the validity or amount thereof shall
be contested in good faith by appropriate proceedings which effectively stay
the execution of any such Lien and the Company shall (or shall cause its
Subsidiaries to) set aside on its books adequate reserves in accordance with
GAAP with respect thereto.
8.7. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS
Maintain all financial records in accordance with GAAP and permit any
representatives designated by theAgent to visit and inspect the properties of
the Company or any Subsidiary and to inspect their financial and business
records and make extracts therefrom and copies thereof, all at reasonable times
and in a manner so as not to unreasonably disrupt the operations of the Company
or such Subsidiary and as often as reasonably requested, and permit any
representatives designated by the Agent to discuss the affairs, finances and
condition of the Company or any Subsidiary with the officers thereof and
independent accountants therefor.
8.8. COMPLIANCE WITH LAWS
The Company shall comply, and shall cause each Subsidiary to comply,
in all material respects with all Requirements of Law of any Governmental
Agency having jurisdiction over it or its business (including the Federal Fair
Labor Standards Act), except such as may be contested in good faith with due
diligence and so long as enforcement thereof against the Company or such
Subsidiary (i) is stayed or as to which a bona fide dispute may exist or (ii)
would not have a Material Adverse Effect upon the Company or such Subsidiary.
8.9. COMPLIANCE WITH ERISA
The Company shall, and shall cause each of its ERISA Affiliates to:
(a) maintain each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law; (b)
cause each Plan which is qualified under Section 401(a) of the Code to maintain
such qualification; and (c) make all required contributions to any Plan subject
to Section 412 of the Code.
8.10. ENVIRONMENTAL AND SAFETY MATTERS
(a) Comply with all Environmental and Safety Laws in all material
respects.
(b) Keep its properties and facilities free from any Liens arising
under any Environmental and Safety Laws.
(c) Respond promptly to any Release or threatened Release of any
Hazardous Materials in a manner which complies in all material respects with
all Environmental and
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Safety Laws and mitigates any associated risk to human health or the
environment to the maximum extent commercially practicable.
(d) If the Agent at any time has reason to believe that any
Property or facility owned or operated by the Company or any Subsidiary has
been or may be either (i) operated in violation of any Environmental and Safety
Laws; (ii) contaminated with any Hazardous Materials; or (iii) subject to any
government-imposed obligation to conduct any environmental investigation or
clean-up, any of which, in the good faith judgment of the Required Lenders may
impair in any material respect the ability of the Company or such Subsidiary to
satisfy any of the obligations, the Company shall, upon the written request of
the Required Lenders, at the Company's sole cost and expense, conduct or cause
such Subsidiary to conduct such investigation or study, through retention of a
consulting firm reasonably satisfactory to the Required Lenders, as is
necessary in the good faith judgment of the Required Lenders to demonstrate
that no such impairment could reasonably be expected to have a Material Adverse
Effect.
8.11. SUBSIDIARY GUARANTY
Promptly upon any Person becoming one of its Subsidiaries, the Company
shall cause such Person to become a party to the Subsidiary Guaranty.
8.12. PHASE I REPORTS
Obtain Phase I reports (and if such Phase I report indicates further
inquiry would be prudent, reports of such further inquiry) from reputable
consultants with respect to each Health Care Facility acquired by the Company
or any of its Subsidiaries following the Closing Date, and deliver to the Agent
copies of such reports promptly after receipt of a written request therefor.
8.13. FURTHER ASSURANCES
At any time or from time to time upon the request of the Agent, the
Company shall and shall cause each of its Subsidiaries to execute and deliver
such further documents and do such other acts and things as the Agent may
reasonably request in order to effect fully the purposes of each of the Credit
Documents and to provide for payment of the Loans, Reimbursement Obligations
and other Obligations hereunder, with interest thereon in accordance with the
terms of this Agreement and the Notes.
8.14. MAINTENANCE OF PROPERTIES
Maintain or cause to be maintained (which requirement may be met by
causing the lessees of a Health Care Facility to comply with the terms and
conditions of the applicable lease) in good repair, working order, and
condition all of those assets useful or necessary to
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its businesses or the businesses of each of its Subsidiaries or which are used
in connection therewith or related thereto, except for assets which in the
aggregate are not material to the business or operations of the Company and its
Subsidiaries, taken as a whole. From time to time, the Company shall make or
cause to be made, consistent with past practices, all appropriate repairs,
renewals, and replacements thereto and thereof. Notwithstanding the foregoing,
the Company and its Subsidiaries shall not be required to comply with the
requirements of this Section 8.14. to the extent that compliance therewith
would not be economical and the failure to so comply would not have a Material
Adverse Effect on the Company and its Subsidiaries.
8.15. MAINTENANCE OF RATINGS
The Company shall cause at least two nationally recognized rating
agencies to maintain and issue ratings on the Senior Long Term Debt of the
Company.
9. NEGATIVE COVENANTS
The Company covenants and agrees that, so long as any of the
Commitments are in effect or the principal or interest on any Loan or
Reimbursement Obligation shall remain unpaid, or any Letter of Credit shall
remain outstanding, the Company will not, nor will it permit any Subsidiary to:
9.1. PROHIBITION OF FUNDAMENTAL CHANGES
Effect any of the following: (i) any transaction of merger,
consolidation, recapitalization, reorganization, liquidation or dissolution
(other than the merger of a Permitted Subsidiary with and into the Company
pursuant to which the Company is the surviving corporation or with and into any
other Permitted Subsidiary); (ii) the acquisition of any business or assets
(other than Investments), except for purchases of inventory and supplies to be
used in the ordinary course of business; (iii) any Investments other than
Investments permitted under Section 9.5.; (iv) any Disposition except as
provided in Section 9.9.; or (v) engage in any line of business other than
those engaged in on the Closing Date.
9.2. LIMITATION ON LIENS
(a) Create, incur, assume or suffer to exist any Lien upon any of
its Property, assets or revenues, whether now owned or hereafter acquired,
except Permitted Liens; and
(b) Other than in any document or agreement existing on the date
hereof and listed in part (a) of Schedule 7.12., enter into, assume, or permit
to exist any agreement
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which prohibits the Company or its Subsidiaries from granting Liens in favor of
the Agent or the Lenders.
9.3. INDEBTEDNESS OF THE COMPANY
Create, incur or suffer to, exist any Indebtedness of the Company
except:
(a) Indebtedness to the Lenders created hereunder and under the
Credit Documents;
(b) Indebtedness existing on the Closing Date and described in
part (a) of Schedule 7.12.;
(c) Indebtedness under any Interest Rate Protection Agreements;
(d) Indebtedness secured by Liens permitted under subsection (g)
of the definition of "Permitted Liens" herein in an aggregate amount not to
exceed $1,000,000 outstanding at any time;
(e) Indebtedness incurred pursuant to Guaranties permitted
pursuant to Section 9.7.;
(f) Indebtedness of the Company to its Wholly-Owned Subsidiaries;
(g) Indebtedness secured by Permitted Liens other than those
described in subsection (g) of the definition of "Permitted Liens";
(h) Other Indebtedness of the Company so long as: (i) such
Indebtedness (A) has a term (after giving effect to any rights of the obligee
of such Indebtedness to accelerate the maturity of such Indebtedness other than
as a result of the occurrence of an event of default thereunder) of five years
or more, (B) does not require, directly or indirectly, the amortization of
principal thereof (or provide a sinking fund in respect thereto) during such
five year period, and (C) is subject to covenants (including financial
covenants) and events of default contained in the agreements related thereto
(including the applicable definitions) which are not materially less favorable
to the Company than those contained herein or set forth in those agreements
listed on Schedule 7.12.; and (ii) both before and after giving effect to the
incurrence of such Indebtedness, no Unmatured Default or Event of Default shall
occurred and be continuing hereunder; and
(i) Indebtedness resulting from the refinancings, renewals or
extensions of Indebtedness permitted under subparagraphs (b) through (h) of
this Section (and continuance or renewal of Permitted Liens associated
therewith) so long as: (i) the terms and conditions of such refinancings,
renewals, or extensions do not materially impair the prospects of repayment of
the Loans or the Letters of Credit by the Company; (ii) the net cash proceeds
of such refinancings, renewals or extensions do not result in an increase in
the aggregate principal amount of the Indebtedness so refinanced, renewed, or
extended;
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and (iii) such refinancings, renewals, refundings, or extensions do not result
in a shortening of the average weighted maturity (at the time of refinancing,
renewal, or extension) of the Indebtedness so refinanced, renewed, or extended.
9.4. SUBSIDIARY INDEBTEDNESS
Create, incur, or suffer to exist any Indebtedness of any Subsidiary
of the Company except:
(a) Indebtedness of Subsidiary Guarantors to the Lenders created
under the Credit Documents;
(b) Indebtedness existing on the Closing Date and described in
part (b) of Schedule 7.12.;
(c) Indebtedness incurred pursuant to Guaranties permitted
pursuant to Section 9.7.;
(d) Indebtedness secured by Permitted Liens other than those
described in subsection (g) of the definition of "Permitted Liens";
(e) Indebtedness owed to the Company to the extent permitted by
Section 9.5.; and
(f) Indebtedness secured by the Property of a Permitted Subsidiary
described in Section 9.5.(j) hereof in aggregate amount not to exceed
$10,000,000; provided that no such Indebtedness shall have been incurred upon
or in anticipation of the acquisition of such Property.
9.5. INVESTMENTS
Make or permit to remain outstanding any Investments except:
(a) Permitted Investments;
(b) Investments existing on the date hereof and set forth on
Schedule 9.5.;
(c) the ownership of the capital stock of Wholly-Owned Permitted
Subsidiaries by the Company or its Subsidiaries;
(d) Working Capital Loans made by the Company to operators of
Health Care Facilities in an amount not to exceed $10,000,000 to any single
operator of a Health Care Facility and in an aggregate amount at any one time
outstanding not to exceed $15,000,000;
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(e) (i) Loans from Wholly-Owned Subsidiaries to the Company
permitted pursuant to Section 9.3.(f); (ii) loans from the Company to
Wholly-Owned Subsidiaries (other than to any Subsidiary owning any PG Assets);
and (iii) loans from the Company to Wholly-Owned Subsidiaries owning PG Assets
in an aggregate principal amount not to exceed the PG Indebtedness;
(f) Investments by the Company or a Subsidiary in Health Care
Facilities so long as (i) the amount of any Investment made pursuant to this
Section 9.5.(f)(i) in any Health Care Facility does not exceed $75,000,000 and
(ii) immediately before and immediately after the consummation of such
Investment, after giving effect thereto, no Unmatured Default or Event of
Default shall exist or would exist;
(g) Construction and Development Investments;
(i) the aggregate amount of which do not exceed
$75,000,000 at any one time, of which no more than $30,000,000 may be
invested in any one Person and its Affiliates or in any one Health
Care Facility as a Construction and Development Investment; and
(ii) the Board of Directors or other governing body of the
Person in which any such Investment is made approves the making of
such Investment;
(h) Supplies and other similar inventory purchased by the Company
in the ordinary course of business; and
(i) Investments by Subsidiaries owning PG Assets used for the
repair, maintenance and improvement of PG Assets and the related equipment to
the extent that the aggregate cost thereof does not exceed the PG Indebtedness;
and
(j) Investments in Permitted Subsidiaries that are not
Wholly-Owned Subsidiaries and which are not described in Schedule 9.5. hereof,
in an aggregate amount not to exceed 10% of the Consolidated Real Estate Assets
immediately prior to the date such Subsidiary is acquired or created, so long
as:
(i) such Subsidiaries are corporations, limited
partnerships or limited liability companies;
(ii) the Company or one or more Wholly-Owned Subsidiaries
owns at least 80%, but less than 100%, of the outstanding capital
stock, partnership or other ownership interest of such Subsidiary;
(iii) the Company or a Wholly-Owned Subsidiary is (A) the
sole general partner of any such Subsidiary that is a limited
partnership or (B) a member of any such Subsidiary that is a limited
liability company; and
(iv) the business of such Subsidiary will not cause the
Company to violate Section 8.4. hereof.
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Anything in this Section 9.5. to the contrary notwithstanding, any Investment
in a Health Care Facility which is not in the form of a loan secured by such
Health Care Facility may be made only if such Health Care Facility is owned
entirely by the Company or a Permitted Subsidiary.
9.6. RESTRICTED PAYMENTS
Make any Restricted Payment; provided, however, that
(a) any Affiliate of the Company who is an individual may serve as
a director, officer or employee of the Company or any of its Subsidiaries and
receive reasonable compensation for his or her services in such capacity,
(b) the Company's Subsidiaries may make any dividend or other
distribution to the Company or to another Wholly-Owned Subsidiary of the
Company to make a similar dividend or distribution ultimately resulting in the
Company's receipt thereof;
(c) the Company may pay dividend or other distribution to the
holders of its common stock consisting of shares of its common stock or rights
to acquire its common stock;
(d) the Company may make, as long as no Unmatured Default or Event
of Default then exists or is continuing or would result from the making
thereof, cash dividends or other distributions in an aggregate amount not to
exceed, during the period from January 1, 1995 to the date any determination is
to be made thereof, $5,000,000 plus (i) the greater of (A) 95% of the sum of
(1) EBITDAR minus (2) Interest Expense minus (3) Rental Expense, plus (4) gains
during such period respecting Dispositions (of any asset other than PG Assets);
and (B) the minimum amount required for the Company to maintain its status as a
REIT under the Code, and (ii) in the case of the PG Stock only, the lesser of
(A) the PG Excess Proceeds and (B) $30,000,000 in the aggregate for all such
dividends and distributions made in respect of the PG Stock made at any time,
and $15,000,000 in the aggregate for all such cash or other distributions made
in respect of the PG Stock in any calendar year; and
(e) the Company's Subsidiaries described in Section 9.5 (j) and
identified as less than Wholly-Owned Subsidiaries on Schedule 9.5. may make
distributions or other payments to holders of equity interests therein in an
aggregate amount up to $500,000 in any fiscal year of the Company.
9.7. GUARANTEES
Create or become liable, directly or indirectly, with respect any
Guarantee except:
(a) Guarantees resulting from the endorsement of instruments for
collection in the ordinary course of business;
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(b) Guarantees disclosed in the Historical Financial Statements or
reflected on Schedule 7.12. and any refinancing, renewals, or extensions of
such Guarantee on terms substantially similar to the original terms thereof;
and
(c) Guarantees of the Company respecting obligations of the
Subsidiaries of the Company incurred in the ordinary course of business in an
aggregate amount not to exceed $10,000,000 at any one time outstanding.
9.8. SALES AND LEASE-BACKS
Become liable, directly or indirectly, as lessee or as guarantor or
other surety with respect to any lease whether an operating lease or a Capital
Lease, of any assets, whether now owned or hereafter acquired:
(a) which the Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person; or
(b) which the Company or any of its Subsidiaries intends to use
for substantially the same purpose as any other asset which has been or is to
be sold or transferred by the Company or any such Subsidiaries to any Person in
connection with such lease, unless such sale or transfer is permitted pursuant
to Section 9.9., without aggregation.
9.9. SALE OF ASSETS
Make any Disposition except for:
(a) the Disposition by the Company or its Subsidiaries of assets,
other than PG Assets for not less than the fair market value thereof, in an
aggregate Dollar amount not to exceed, during the term of this Agreement, 25%
of the average aggregate Dollar value of the Company's assets. For purposes of
the preceding sentence, the average aggregate Dollar value of the Company's
assets shall be measured over any period of 12 consecutive months selected by
the Company occurring after the Closing Date. Such average aggregate Dollar
value shall be the total assets of the Company, determined on a consolidated
basis in accordance with GAAP, less any PG Assets, as shown on the Company's
balance sheet as of the end of each such month;
(b) the sale or other disposition of any of the PG Assets by the
Company or any of its Subsidiaries for not less than the fair market value
thereof;
(c) involuntary sales or other dispositions of any of the
businesses or assets of the Company or its Subsidiaries;
(d) Dispositions of obsolete assets; or
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(e) Dispositions (whether individually or in a series of related
transactions) of assets at not less than their fair value which produce Net
Available Proceeds of not more than $1,000,000.
At the time of any sale or other disposition under clause (a) or (b)
of this Section 9.9., the Company shall deliver to the Agent a certificate,
duly executed by the chief executive officer or the chief financial officer of
the Company, setting forth in detail the determination of the Net Available
Proceeds of such sale or other disposition, and such other information as is
necessary to demonstrate compliance with clause (a) or (b) of this Section
9.9., as applicable.
9.10. TRANSACTIONS WITH AFFILIATES
Except for the transactions existing on the Closing Date and described
in Schedule 9.10., enter into any transaction or series of transactions,
whether or not related or in the ordinary course of business with any Affiliate
of the Company, other than pursuant to the reasonable requirements of the
Company's or such Subsidiary's business and on terms and conditions no less
favorable to the Company than would be obtainable by the Company at the time in
a comparable arm's-length transaction with a Person not an Affiliate of the
Company.
9.11. EXECUTION AND MODIFICATIONS OF CERTAIN DOCUMENTS
Amend its certificate of incorporation or bylaws in a manner adverse
to the Lenders, including but not limited to any amendment to the designations
of the Preferred Stock of the Company; or amend, modify, cancel, terminate,
waive any default under or breach of, in any manner whatsoever, any Material
Contract other than in the ordinary course of business; or enter into any new
agreement that is inconsistent with the obligations of the Company or any
Subsidiary under any Credit Document.
9.12. ISSUANCE OF SECURITIES
(a) Issue any capital stock or any rights to acquire, or any
securities exchangeable for such capital stock, except that the Company may
effect Equity Issuances so long as any cash consideration for each such
issuance is applied in the manner set forth in Section 2.11.; or
(b) Other than is existing on the Closing Date and disclosed in
Schedule 9.12 hereof, create or issue any class of Preferred Stock.
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9.13. RESTRICTIVE AGREEMENTS
Enter into any agreement which restricts the ability of any Subsidiary
of the Company to make payments to the Company by way of dividends, advances,
reimbursements, or otherwise.
9.14. PREPAYMENT OF INDEBTEDNESS
Prepay, redeem or purchase any Indebtedness (other than intercompany
Indebtedness), nor enter into or modify any agreement in a way which would be
materially adverse to the interests of the Lenders or as a result of which the
terms of payment of any of the foregoing Indebtedness are accelerated, except
that the Company shall be entitled to perform its obligations provided for in
each of the Credit Documents.
9.15. ACCOUNTING
Change its accounting methods or practices (except as to conform to
changes in GAAP). If any preparation of the financial statements referred to
in Section 8.1. hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting
Standards Board or the American Institute of Certified Public Accounts (or
successors thereto or agencies with similar functions) result in a material
change in the method of calculation of financial covenants, standards or terms
found in this Agreement, the Company, the Agent and the Required Lenders agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria for evaluating
the Company's consolidated financial condition shall be the same after such
changes as if such changes had not been made. Unless and until such provisions
have been so amended, the provisions of this Agreement shall govern.
9.16. SUBSIDIARIES
Create or permit to exist any Subsidiary other than a Permitted
Subsidiar.
10. FINANCIAL COVENANTS
The Company covenants and agrees that, so long as any of the
Commitments are in effect or the principal or interest on any Loan or
Reimbursement Obligation shall remain unpaid, or any Letter of Credit shall
remain outstanding, the Company will, and (as applicable) will cause each
Subsidiary to:
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10.1. Maintenance of Tangible Net Worth
Cause its Consolidated Tangible Net Worth to be at least $260,000,000
plus 75% of the aggregate Net Available Proceeds of any Equity Issuance
consummated by the Company after September 30, 1995 and on or before the time
as of which Consolidated Tangible Net Worth is being determined.
10.2. INTEREST COVERAGE RATIO
Cause the Interest Coverage Ratio for the 12 consecutive fiscal months
ending on the last day of each fiscal quarter to be at least equal to
2.50:1.00.
10.3. LEVERAGE RATIO
Cause the Leverage Ratio at all times to be equal to or less than
1.10:1.00.
11. Events of Default
If one or more of the following events (herein collectively called
"Events of Default" and singularly called an "Event of Default") shall occur
and be continuing:
11.1. PAYMENTS UNDER CREDIT DOCUMENTS
The Company shall default in the payment when due of (a) any principal
of any Loan or any Reimbursement Obligation, (b) any interest on any Loan,
Reimbursement Obligation or other Obligation or (c) any Fee or any other
Obligations payable by it hereunder or under any other Credit Document, which
default in the case of a payment other than a payment of principal or interest
shall continue for a period of two Business Days.
11.2. OTHER INDEBTEDNESS
The Company or any Subsidiary shall default in the payment when due of
any principal of or interest on any of its Indebtedness (other than the
obligations under the Credit Documents) in an aggregate principal amount of
$5,000,000 or more; or any event specified in any note, agreement, indenture or
other document evidencing or relating to any Indebtedness of the Company or any
Subsidiary in an aggregate amount of $5,000,000 or more shall occur if the
effect of such event is to cause, or to permit the holder thereof to cause
(with the giving of notice or lapse of time or both), such
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Indebtedness to become due or to be required to be prepaid (whether by
redemption, purchase or otherwise) prior to its stated maturity.
11.3. REPRESENTATIONS AND WARRANTIES
Any representation, warranty or certification made or deemed to be
made in any Credit Document by the Company or any Subsidiary or any
certificate, financial statement or other information furnished in writing to
any Lender, the Facing Bank or the Agent pursuant to the provisions hereof or
thereof, shall prove to have been false or misleading in any material respect
as of the time made or deemed to be made.
11.4. OTHER OBLIGATIONS
(i) The Company or any Subsidiary shall default in the performance
of any of their respective obligations under Section 2.14., Section 8.1. (which
default shall continue for five Business Days), Article 9. or Article 10.; or
(ii) the Company or any Subsidiary shall default in the performance of any of
its other obligations in this Agreement, or any other Credit Document and such
default shall continue unremedied for a period of 20 days after the Company or
such Subsidiary receives notice or otherwise has actual knowledge thereof.
11.5. ABILITY TO PAY DEBTS
The Company or any Subsidiary shall admit in writing its inability to,
or be generally unable to, pay its debts as such debts become due.
11.6. VOLUNTARY PROCEEDINGS
The Company or any Subsidiary shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its Property, (ii)
make a general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts, (v) fail to controvert in
a timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code, or (vi) take any
corporate action for the purpose of effecting any of the foregoing.
11.7. INVOLUNTARY PROCEEDINGS
A proceeding or case shall be commenced against the Company or any
Subsidiary, without its application or consent, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment
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of its debts, (ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of all or any substantial part of its assets, or (iii)
similar relief under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days; or an order for relief
against the Company or any Subsidiary shall be entered in an involuntary case
under the Bankruptcy Code.
11.8. JUDGMENTS
(a) A judgment or judgments for the payment of money in excess of
$2,000,000 in the aggregate shall be rendered by a court or courts against the
Company or any Subsidiary and the same shall not be vacated, bonded or
discharged (or provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within 30 days from the date of entry
thereof; or
(b) A judgment creditor shall obtain possession of any of the
assets of the Company or its Subsidiaries which assets constitute a material
portion of the assets of the Company or any Subsidiary by any means, including
levy, distraint or self-help.
11.9. ERISA EVENT
(a) Any ERISA Event shall have occurred with respect to the
Company or any Subsidiary and the sum of the Insufficiency of such Plan
(determined as of the date of occurrence of such ERISA Event) and the
Insufficiency of any and all other Plans (determined as of the date of
occurrence of such ERISA Event) of the Company or any Subsidiary with respect
to which an ERISA Event shall have occurred (or the liability of the Company or
any Subsidiary or its ERISA Affiliates related to such ERISA Event) exceeds
$100,000; or (b) the Company or any Subsidiary or any of its ERISA Affiliates
shall have been notified by a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan and the imposition of such
liability is reasonably likely to be incurred in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Company or any Subsidiary and its ERISA Affiliates as withdrawal liability
(determined as of the date of such notification indemnification), requires
payments exceeding $100,000 per annum or $250,000 in the aggregate; (c) the
Company or any Subsidiary or any of its ERISA Affiliates shall have been
notified by a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of such Person and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $100,000 or
(d) the assets of the Company at any time constitute assets, within the meaning
of ERISA, the Code and
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the respective regulations promulgated thereunder, of any ERISA Plan or
Non-ERISA Plan.
11.10. TERMINATION OF CREDIT DOCUMENTS
Any of the Credit Documents shall cease to be in full force and
effect, or any Subsidiary Guarantor shall repudiate the Subsidiary Guaranty,
for any reason other than: (i) a release or termination thereof upon the full
and indefeasible payment and satisfaction of the Indebtedness due herewith, or
under the Notes or pursuant to the Reimbursement Obligations or any other
Obligation owing hereunder; or (ii) upon the written consent of the Required
Lenders.
THEN: (1) In the case of an Event of Default, other than an Event of Default
referred to in Section 11.6. or Section 11.7., the Agent may (and shall at the
request of the Required Lenders), by notice to the Company, cancel the
Commitments and/or declare the then-outstanding principal amount of, and the
accrued interest on, the Loans and all other obligations payable by the Company
hereunder and under the Notes including, without limitation, any amounts
payable under Section 5.1. (collectively, such principal, interest, obligations
and other amounts being referred to as the "Obligations"), and all
Reimbursement Obligations to be forthwith due and payable, whereupon such
amounts shall be immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company; and (2) in the case of the occurrence of an Event of
Default referred to in Section 11.6. or Section 11.7. above, the Commitments
shall automatically be canceled and the then-outstanding principal amount of,
and the accrued interest on, the Loans and all other Obligations payable by the
Company hereunder and all Reimbursement Obligations shall automatically become
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company. In regard to the Letters of Credit insofar as presentment for honor
shall not have occurred at the time of any acceleration of the Obligations
pursuant to the provisions of this Article 11., the Company shall promptly upon
demand by the Agent deposit in a Letter of Credit Reserve Account opened by the
Agent for the benefit of the Facing Bank an amount equal to the aggregate then
undrawn and unexpired Stated Amounts of Letters of Credit. Amounts held in
such Letter of Credit Reserve Account shall be applied by the Agent to the
reimbursement of the Facing Bank for draws honored by it under the Letters of
Credit, and the unused portion thereof after such Letters of Credit shall have
expired or been fully drawn upon, if any, shall be applied to repay other
Obligations of the Company in the manner set forth in Section 2.11. hereof.
Pending the application of such deposit to the payment of the Reimbursement
Obligations of the Company in respect of the Letters of Credit, the Agent
shall, to the extent reasonably practicable, invest such deposit in an interest
bearing open account or similar available savings deposit account and all
interest accrued thereon shall be held with such deposit as additional security
for such Reimbursement Obligations. After the Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied, and all other Obligations shall have been paid in full, the balance,
if any, in such Letter of Credit
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Reserve Account shall be returned to the Company. Except as expressly provided
hereinabove, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Company.
12. The Agent
12.1. APPOINTMENT, POWERS AND IMMUNITIES
Each Lender hereby irrevocably (but subject to removal by the Required
Lenders pursuant to Section 12.8.) appoints and authorizes the Agent to act as
its agent hereunder and under the other Credit Documents with such powers as
are specifically delegated to the Agent by the terms of this Agreement and of
the other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this sentence and in
Section 12.5. and the first sentence of Section 12.6. shall include its
Affiliates, officers, directors, employees and agents and its Affiliates'
respective officers, directors, employees and agents): (a) shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents, and shall not by reason of this Agreement or
any other Credit Document be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any other Credit Document, or in
any certificate or other document referred to or provided for in, or received
by any of them under, this Agreement or any other Credit Document, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Credit Document or any other document referred to
or provided for herein or therein or for any failure by the Company or any
other Person to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Credit Document; and (d) shall not be
responsible for any action taken or omitted to be taken by it hereunder or
under any other Credit Document or under any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence or willful misconduct. The
Agent may employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected
by it in good faith.
12.2. RELIANCE BY THE AGENT
The Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telex, telegram or
cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by it.
The Agent may deem and treat each Lender as the holder of
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Loans made by it for all purposes hereof unless and until a notice of
assignment or transfer thereof satisfactory to the Agent signed by such Lender
shall have been furnished to the Agent, but the Agent shall not be required to
deal with any Person who has acquired a participation in any Loan from a
Lender. As to any matters not expressly provided for by this Agreement or any
other Credit Document, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder or thereunder in accordance
with instructions given by the Required Lenders or all of the Lenders as is
required in such circumstance, and such instructions of such Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders. The Agent makes no warranty or representation to any Lender and shall
not be responsible to any Lender for any statements, warranties, or
representations made in or in connection with any of the Credit Documents. The
Agent shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants, or conditions of any of the
Credit Documents on the part of any Person party thereto or to inspect any
asset (including the books and records) of the Company or any of its
Subsidiaries. The Agent shall not be responsible to any Lender for the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of any of the Credit Documents, or any other instrument or document
furnished pursuant thereto.
12.3. DEFAULTS
The Agent shall not be deemed to have knowledge or notice of the
occurrence of an Unmatured Default (other than the non-payment of principal of
or interest on Loans, Reimbursement Obligations or Fees to the extent the same
is required to be paid to the Agent for the account of the Lenders) unless the
Agent has received notice from a Lender or the Company specifying such
Unmatured Default and stating that such notice is a "Notice of Default." In
the event that the Agent receives such a notice of the occurrence of an
Unmatured Default, the Agent shall give prompt notice thereof to the Lenders
(and shall give each Lender prompt notice of each such non-payment). The Agent
shall (subject to Section 12.7.) take such action with respect to such
Unmatured Default as shall be directed by the Required Lenders; provided that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Unmatured Default as it shall deem advisable and
in the best interest of the Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not be taken, only with the
consent or upon the authorization of the Required Lenders or all of the
Lenders; and provided further that the Agent in any case shall not be required
to take any such action which it determines to be contrary to law.
12.4. RIGHTS AS A LENDER
With respect to its Commitment, the Loans made by it in its capacity
as a Lender, and the Letters of Credit issued by it in its capacity as the
Facing Bank, Wells Fargo (and any successor acting as Agent) shall have the
same rights and powers hereunder as any
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other Lender and may exercise the same as though it were not acting as the
Agent or the Facing Bank, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent and the Facing Bank in its
individual capacity. Wells Fargo (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other business with the Company and any of its Subsidiaries or Affiliates as
if it were not acting as the Agent or the Facing Bank hereunder, and Wells
Fargo and its Affiliates may accept fees and other consideration from such
Persons for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders. Although the Agent and its
Affiliates may in the course of such relationships acquire information about
the Company and its Affiliates, the Agent shall have no duty to disclose such
information to the Lenders.
12.5. INDEMNIFICATION
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 13.3., but without limiting the obligations of the Company under
such Section 13.3.) ratably in accordance with the aggregate principal amount
of the Loans and Reimbursement Obligations held by the Lenders (or, if no Loans
or Reimbursement Obligations are at the time outstanding, ratably in accordance
with their respective Commitments), 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 (including by any Lender) arising out
of or by reason of any investigation or in any way relating to or arising out
of this Agreement or any other Credit Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby (including, without limitation, the costs and expenses
which the Company are obligated to pay under Section 13.3., but excluding,
unless an Umatured Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or
of any such other documents, provided that no Lender shall be liable for any of
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
12.6. NON-RELIANCE ON THE AGENT OR OTHER LENDERS
Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the Company and its
Subsidiaries and has made an independent decision to enter into this Agreement
and that it will, independently and without reliance upon the Agent or any
other Lender, 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 any of the other Credit
Documents. The Agent shall not be required to keep itself informed as to the
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performance or observance by the Company of this Agreement or any of the other
Credit Documents or any other document referred to or provided-for herein or
therein or to inspect the properties or books of the Company and its
Subsidiaries. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of the Company or any Subsidiary Guarantor (or any of their
Affiliates) which may come into the possession of the Agent or any of its
Affiliates.
12.7. LIABILITY OF AGENT
Except for action expressly required of the Agent hereunder and under
the other Credit Documents, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder and thereunder unless it shall receive
further assurances to its satisfaction from the Lenders of their
indemnification obligations under Section 12.5. against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. Neither the Agent nor any of its affiliates nor any of
their respective directors, officers, agents or employees shall be liable for
any action taken or not taken by the Agent in connection with any of the Loan
Documents in the absence of its own gross negligence or willful misconduct.
12.8. RESIGNATION OR REMOVAL OF THE AGENT
Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by giving notice thereof to
the Lenders and the Company, and the Agent may be removed at any time with or
without cause by the Required Lenders. Upon any such resignation or removal,
the Required Lenders (after consultation with the Company) shall have the right
to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or
the Required Lenders' removal of the retiring Agent, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which shall be a bank
or trust company organized under the laws of the United States of America or
any state thereof and having capital, surplus and undivided profits of at least
$1,000,000,000 which has its headquarters in the United States. Upon the
acceptance of any appointment as the Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article 12. shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.
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12.9. CONSENTS UNDER CREDIT DOCUMENTS
The Agent may, with the prior written consent of the Required Lenders
and subject to Section13.4. (but not otherwise), consent to any modification,
supplement or waiver under any of the Credit Documents.
12.10. COLLATERAL SUB-AGENTS
Each Lender by its execution and delivery of this Agreement agrees
that, in the event it shall hold any Permitted Investments, such Permitted
Investments shall be held in the name and under the control of such Lender, and
such Lender shall hold such Permitted Investments as a collateral sub-agent for
the Agent thereunder. The Company by its execution and delivery of this
Agreement hereby consents to the foregoing.
12.11. LIABILITY OF THE AGENT
The Agent shall not have any liability or responsibility to the
Company on account of the failure of any Lender to perform its obligations
hereunder or to any Lender on account of the failure of the Company to perform
its obligations hereunder or under any other Credit Document, except as may
result from the Agent's own gross negligence or willful misconduct.
12.12. TRANSFER OF AGENCY FUNCTION
Without the consent of the Company or any Lender, the Agent may at any
time or from time to time transfer its functions as Agent hereunder to any of
its offices wherever located in the continental United States, provided that
the Agent shall promptly notify the Company and the Lenders of such transfer.
12.13. THE CO-AGENTS
No Co-Agent, as such, shall have any duties or obligations whatsoever
under this Agreement or any other Credit Document or any other document or any
matter related hereto or thereto, but shall nevertheless be entitled to all of
the indemnities and other protection afforded to the Agent under this Article
12.
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13. Miscellaneous
13.1. WAIVER
No failure on the part of the Agent or any Lender to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under this Agreement or any Note or other Credit Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
13.2. NOTICES
All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and
delivered personally, mailed by certified or registered mail, return receipt
requested and postage prepaid, sent via a nationally recognized overnight
courier, or sent via facsimile. Such notices, demands and other communications
will be sent to the address indicated below:
To the Company:
American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Michael J. McGee
Vice President, Treasurer and Controller
Telephone No: (303) 796-9793
Telecopy No: (303) 796-9708
With copies to:
Davis, Graham & Stubbs, L.L.C.
370 Seventeenth Street, Suite 4700
P.O. Box 185
Denver, Colorado 80201-0185
Attention: Brian T. Dolan, Esq.
Telephone No: (303) 892-9400
Telecopy No: (303) 893-1379
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To the Agent or the Facing Bank:
Wells Fargo Bank, N.A.
420 Montgomery Street, 9th Floor
MAC 0101-091
San Francisco, California 94163
Attention: Mr. Brian S. O'Melveny
Telephone No: (415) 396-4065
Telecopy No:(415) 421-1352
With a copy to:
Alston & Bird
One Atlantic Center
1201 West Peachtree Street, N.W.
Atlanta, Georgia 30309-3424
Attention: H. Sadler Poe, Esq.
Telephone No: (404) 881-7564
Telecopy No: (404) 881-7777
To any Lender:
At its address set forth on the signature pages hereto.
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party;
provided, however, that the failure to deliver copies of notices as indicated
above shall not affect the validity of any notice. Any such communication
shall be deemed to have been received (i) when delivered, if personally
delivered, or sent by nationally-recognized overnight courier or sent via
facsimile or (ii) on the third Business Day following the date on which the
piece of mail containing such communication is posted if sent by certified or
registered mail.
13.3. EXPENSES, ETC.
(a) Agreement to Pay and Reimburse. The Company agrees to pay or
reimburse the Agent and the Facing Bank, for: (a) all out-of pocket costs and
expenses (including, without limitation, the reasonable fees and expenses of
Alston & Bird, special counsel to the Agent and the Facing Bank, and allocated
costs of the Agent's internal counsel) in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement and the other Credit
Documents and the extension of credit hereunder and (ii) any amendment,
modification or waiver of any of the terms of this Agreement or any of the
other Credit Documents; (b) all costs and expenses of the Lenders, the Facing
Bank and the Agent (including reasonable counsels' fees) in connection with (i)
any Unmatured Default and any enforcement or collection proceedings resulting
therefrom and (ii) the enforcement of this Section 13.3.; and (c) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in
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respect of this Agreement or any of the other Credit Documents or any other
document referred to herein or therein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
this Agreement or any other Credit Document or any other document referred to
herein or therein.
(b) Indemnity. The Company agrees to indemnify the Agent, the
Facing Bank, each Lender and their respective directors, officers, employees
and agents for, and hold each of them harmless against, any and all losses,
liabilities, claims (including Environmental Claims), damages or expenses
incurred by any of them (including any and all losses, liabilities, claims,
damages or expenses incurred by the Agent or the Facing Bank to any Lender)
arising out of or by reason of any investigation or litigation or other
proceedings (including any threatened investigation or litigation or other
proceedings) relating to the extensions of credit hereunder or any actual or
proposed use by the Company of the proceeds of any of the extensions of credit
hereunder or the past, present or future business activities of the Company
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation or litigation or other
proceedings (but excluding any such losses, liabilities, claims, damages or
expenses that are determined pursuant to a final, non-appealable order of a
court of competent jurisdiction to have resulted solely from the gross
negligence or willful misconduct of the Person to be indemnified).
(c) Expenses Paid On Behalf of the Company. If the Company fails
to pay when due any costs, expenses or other amounts payable by it under any
Credit Document, including, without limitation, fees and expenses of counsel,
indemnities and insurance premiums, such amount may be paid on behalf of the
Company by the Agent, in its sole discretion. Immediately upon the making of
each such payment, the Agent shall be deemed to have sold and transferred to
each Lender, and each Lender shall be deemed to have purchased and received
from the Agent, in each case irrevocably and without any further action by any
party, an undivided interest and participation in such payment and the
obligations of the Company under this Agreement in respect thereof in an amount
equal to the product of (x) a fraction the numerator of which is the amount of
the Revolving Credit Commitment of such Lender and the denominator of which is
the aggregate amount of all Commitments then outstanding, multiplied by (y) the
amount of such payment. Any such payment by the Agent shall constitute for all
purposes of this Agreement the making by the Agent of a Loan, which shall be a
Base Rate Loan, in the amount of such payment (but without any requirement for
compliance with the conditions set forth in Article 6.). In the event that
such payment is not reimbursed by the Company by 11:00 A.M. San Francisco time)
on the first Business Day after such payment, the Agent shall promptly notify
each other Lender. Each such Lender shall, notwithstanding the then unused
amount of its Commitment or any termination thereof, on the first Business Day
following such notification, make a Loan, which shall be a Base Rate Loan, in
an amount equal to the amount of its participation in such payment (pursuant to
Section 4.4.) to reimburse the Agent (but without any requirement for
compliance with the applicable conditions set forth in Article 6.) and shall
make available for the account of its Applicable Lending Office to the Agent
for its own account, by deposit to the
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Agent's Account, in same day funds, the amount of such Loan. If and to the
extent that any Lender shall not have so made the amount of such Loan available
to the Agent, such Lender and the Company severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date such payment is made by the Agent until the date such amount is
paid to the Agent, at (i) in the case of the Company, the Default Rate with
respect to Base Rate Loans and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall pay to the Agent such amount, such amount so
paid shall constitute such Lender's Loan for purposes of this Agreement.
13.4. AMENDMENTS. ETC.
Except as otherwise expressly provided in this Agreement, any
provision of this Agreement (including, without limitation, any of the
Schedules hereto) may be amended or modified only by an instrument in writing
signed by the Company and the Agent acting with the consent of the Required
Lenders, and any provision of this Agreement may be waived by the Required
Lenders or by the Agent acting with the consent of the Required Lenders;
provided, however, that no amendment, modification or waiver shall, unless by
an instrument signed by all of the Lenders or by the Agent acting with the
consent of all of the Lenders: (i) increase or extend the term, or extend the
time or waive any requirement for the reduction or termination, of any of the
Commitments, (ii) extend the date fixed for the payment of principal of or
interest on any Loan, Fee, Letter of Credit, or any Reimbursement Obligation
hereunder, (iii) reduce the amount of any such payment of principal, (iv)
reduce the rate at which interest is payable thereon or any Fee or other
obligation of the Company or any of its Subsidiaries is payable hereunder
(except that the Required Lenders may waive application of the Default Rate),
(v) alter the rights or obligations of the Company to prepay Loans (except that
the Required Lenders may waive the application of any of the provisions of
Section 2.11.(e)), (vi) alter the terms of this Section 13.4. or Section
13.6.(a), (vii) waive any of the conditions precedent set forth in Article 6.;
(viii) amend the definition of the term "Required Lenders"; (ix) extend the
Maturity Date pursuant to Section 4.2. or (x) release a Subsidiary from the
Subsidiary Guaranty or terminate the Subsidiary Guaranty prior to the
termination of this Agreement; and provided further, that any amendment of
Article 12. shall require the consent of the Agent.
13.5. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
13.6. ASSIGNMENTS AND PARTICIPATIONS
(a) The Company may not assign its rights or obligations hereunder
or under the other Credit Documents without the prior consent of all of the
Lenders.
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(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing
to it and the Notes held by it, which assignment may be of a varying percentage
of such the Lender's rights and obligations, it being understood that such the
Lender may assign to any assignee any portion of any or all of its Revolving
Credit Loans or Revolving Credit Commitment) upon payment to the Agent of an
assignment fee of $3,500 provided, however, that (i) such assignment is in a
minimum amount of $5,000,000; (ii) except in the case of an assignment to a
Lender or an Affiliate of a Lender, the Agent must consent to such assignment
(which consent shall not be unreasonably withheld), and (iii) the parties to
each such assignment shall execute and deliver to the Agent (with a copy to the
Company) an assignment and acceptance agreement evidencing such assignment,
substantially in the form of Exhibit G hereto (an "Assignment and Acceptance").
Upon acceptance pursuant to Section 13.6.(d), from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and
Acceptance, shall have the rights and obligations of a Lender under this
Agreement and (B) the assigning Lender thereunder shall, to the extent provided
in such assignment, 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 Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) other than
the representation and warranty that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim, such
assigning Lender 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,
any other Credit Document or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Company or any Subsidiary or the performance or observance by the Company of
any of its obligations under this Agreement, any other Credit Document or any
other instrument or document furnished pursuant hereto; (iii) 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 8.1. and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee 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 under this Agreement as
are reasonably incidental thereto; and (vi) such
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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 Lender.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee together with the Note or Notes
subject to such assignment and the assignment fee referred to in paragraph (b)
above, the Agent shall (subject to the consent of the Agent to such assignment,
if required) (i) accept such Assignment and Acceptance, and (ii) give prompt
notice thereof to the Company. Within five Business Days after receipt of such
notice, the Company, at its own expense, shall execute and deliver to the
Agent, in exchange for the surrendered Note or Notes, a new Note or Notes to
the order of such assignee in a principal amount equal to the applicable Loans
and/or Commitments assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained Loans and/or Commitments, a new Note
or Notes to the order of such assigning Lender in a principal amount equal to
the applicable Loan and/or Commitments retained by it. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Notes; such new Notes shall be dated the date of the
surrendered Notes which they replace and shall otherwise be in substantially
the form of Exhibit B hereto. Canceled Notes shall be returned to the Company.
(e) A Lender may sell or agree to sell to one or more other
Persons (a "Participant") a participation in all or any part of any Loans held
by it, in which event the Participant's rights in respect of such participation
shall be those set forth in the agreements executed by such Lender in favor of
the Participant; provided, however, that such participation is in a minimum
amount of $5,000,000. Such Participant shall have no direct right under the
Credit Documents. All amounts payable by the Company to any Lender under
Article 5. in respect of Loans held by it shall be determined as if such Lender
had not sold or agreed to sell any participations in such Loans and as if such
Lender were funding each of such Loans in the same way that it is funding the
portion of such Loan in which no participations had been sold. In no event
shall a Lender that sells a participation agree with the Participant to take or
refrain from taking any action hereunder or under any other Credit Document,
except that such Lender may agree with the Participant that it will not,
without the consent of the Participant, agree to (i) increase or extend the
term, or extend the time or waive any requirement for the reduction or
termination, of such Lender's related Commitments, (ii) extend the date fixed
for the payment of principal of or interest on the related Loan(s) or the
portion of any fee hereunder payable to the Participant, (iii) reduce the
amount of any such payment of principal, (iv) reduce the rate at which interest
is payable thereon, or any fee hereunder payable to the Participant, to a level
below the rate at which the Participant is entitled to receive such interest or
fee (v) extend the Maturity Date pursuant to Section 4.2., or (vi) release a
Subsidiary from the Subsidiary Guaranty or terminate the Subsidiary Guaranty
prior to the termination of this Agreement.
(f) A Lender may furnish any information concerning the Company or
any Subsidiary in the possession of such Lender from time to time to assignees
and Participants (including prospective assignees and
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Participants) in accordance with Section 13.8.
13.7. REPLACEMENT OF LENDERS
If the Company is obligated to pay to any Lender (other than the Agent
or the Facing Bank) any amount under Sections 5.1., 5.5., or 5.6. or if such
Lender requests that its Eurodollar Loans be converted into Base Rate Loans
pursuant to Section 5.3., or if such Lender refuses to extend the Maturity Date
following a request to do so by the Company pursuant to Section 4.2., the
Company may, so long as no Unmatured Default or Event of Default then exists,
replace such Lender with another lender acceptable to the Agent and the Facing
Bank, and such Lender hereby agrees to be so replaced subject to the following:
(a) The obligations of the Company hereunder to such Lender to be
replaced (including such increased or additional costs incurred from the date
of notice to the Company through the date such Lender is replaced hereunder)
shall be paid in full to such Lender concurrently with such replacement.
(b) The replacement Lender (i) shall be a bank or other financial
institution that is not subject to the increased or additional costs arising
under such Sections which may have effectuated the Company's election to
replace any Lender hereunder or (ii) shall approve the extension of the
Maturity Date requested by the Company. Each such replacement Lender shall
execute and deliver to the Agent an Assignment and Assumption Agreement
executed by all parties pursuant to which such replacement Lender is to become
a party hereto with a Revolving Credit Commitment equal to that of the Lender
being replaced and shall make a Loan or Loans in the aggregate principal amount
equal to the aggregate outstanding principal amount of the Loan or Loans of the
Lender being replaced and shall purchase a participation in all outstanding
Letters of Credit as provided in Section 4.9. hereof.
(c) Upon the execution of such documents referred to in subsection
(b) and repayment of the amounts referred to in subsection (a), the replacement
Lender shall be a "Lender" with a Revolving Credit Commitment as specified
hereinabove and the Lender being replaced shall cease to be a "Lender"
hereunder, except with respect to indemnification provisions under this Credit
Agreement, which shall survive as to such replaced Lender.
(d) The Agent shall reasonably cooperate in effectuating the
replacement of any Lender under this Section 13.7., but at no time shall the
Agent be obligated to initiate any such replacement.
(e) Upon payment of a fee of $3,500 to the Agent by the Company,
any Lender replaced under this Section 13.7. shall be replaced at the Company's
sole cost and expense and at no cost or expense to the Agent or the Facing
Bank.
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13.8. CONFIDENTIALITY OF INFORMATION
The Agent and each Lende, severally and not jointly, agree to use
their respective best efforts to hold in confidence and not disclose any
written information (other than information (i) which was publicly known or
otherwise known to it, at the time of disclosure (except pursuant to disclosure
in connection with this Agreement), (ii) which subsequently becomes publicly
known through no act or omission by them, or (iii) which otherwise becomes
known to it, other than through disclosure by the Company or a Subsidiary)
delivered or made available by or on behalf of the Company or any Subsidiary to
it (including without limitation any non-public information obtained pursuant
to Section 8.1.) in connection with or pursuant to this Agreement which is
proprietary in nature and clearly marked or labeled as being confidential
information, provided that nothing herein shall prevent the Agent or any Lender
from delivering copies of any financial statements and other documents
delivered to the Agent or such Lender, and disclosing any other information
disclosed to the Agent or such Lender, by or on behalf of the Company or any
Subsidiary to (i) the Agent's or such Lender's Affiliates, directors,
officers, employees, agents and professional consultants, (ii) any other
Lender, (iii) any Person to which such Lender offers to assign its Note or
Commitment or any part thereof (which Person agrees to be bound by the
provisions of this Section 13.8.), (iv) any Person to which such Lender sells
or offers to sell a Participation in all or any part of its Note or Commitment
(which Person agrees to be bound by the provisions of this Section 13.8.), (v)
any federal or state regulatory authority having jurisdiction over the Agent or
such Lender, and (vi) any other Person to which such delivery or disclosure may
be necessary or appropriate (a) to effect compliance with any law, rule,
regulation or order applicable to the Agent or such Lender, (b) in response to
any subpoena or other legal process, (c) in connection with any litigation to
which the Agent or such Lender is a party or (d) in order to protect such
Lender's investment in its Note.
13.9. SURVIVAL
(a) The obligations of the Company and its Subsidiaries under
Sections 5.1., 5.5., 7.9. and 13.3. and the obligations of the Lenders under
Section 12.5. shall survive the repayment of the Loans and the termination of
the Commitments. No Lender shall be deemed to have waived, by reason of making
any extension of credit hereunder, any Unmatured Default which may arise by
reason of any representation or warranty made or deemed made herein proving to
have been false or misleading, notwithstanding that such Lender or the Agent
may have had notice or knowledge or reason to know that such representation or
warranty was false or misleading at the time such extension of credit was made.
(b) All representations and warranties made under this Agreement
shall be deemed to be made, and shall be true and correct, at and as of the
Closing Date and at and as of the date of each Loan, except to the extent (a)
previously fulfilled in accordance with the terms hereof, (b) subsequently
inapplicable, or (c) modified as a result of
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activities of the Company or its Subsidiaries or changes in circumstances, in
any case as permitted hereunder or consented to in accordance with the
provisions hereof. All representations and warranties made under this
Agreement shall survive, and not be waived by, the execution hereof by the
Agent or the Lenders, any investigation or inquiry by the Agent or the Lenders,
or by the making of any Loan under this Agreement.
13.10. TABLE OF CONTENTS; DESCRIPTIVE HEADINGS
The table of contents and captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
13.11. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which need not contain the signature of more than one party and all of which
taken together shall constitute one and the same original instrument.
13.12. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE DOMESTIC LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF
CALIFORNIA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. IN FURTHERANCE OF
THE FOREGOING, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA SHALL CONTROL THE
INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN THOUGH UNDER THAT
JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW
OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.
13.13. CONSENT TO JURISDICTION
Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the courts of the State of California
or of the United States for the Northern District or Central District of
California, and by execution and delivery of this Agreement, each of the
Company, the Agent, the Facing Bank and the Lenders consents, for itself and in
respect of its Property, to the non-exclusive jurisdiction of those courts.
Each of the Company, the Agent, the Facing Bank and the Lenders irrevocably
waives any objection, including any objection to the laying of venue or based
on the grounds of forum non conveniens, which it may now or hereafter have to
the bringing of any action or proceeding in such jurisdiction in respect of
this Agreement or any document related hereto. The Company, the Agent, the
Facing Bank and the Lenders each waive personal service of any summons,
complaint or other process which may be made by any other means permitted by
California law.
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13.14. WAIVER OF JURY TRIAL
EACH OF THE COMPANY, THE ARRANGER, THE AGENT, THE FACING BANK AND THE
LENDERS HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY
IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING
OUT OF THIS AGREEMENT, ANY NOTE, OR ANY OTHER CREDIT DOCUMENT OR THE VALIDITY,
PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF; AND THE COMPANY
HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO
INTERPOSE ANY SETOFF OR COUNTERCLAIM OR CROSS-CLAIM IN CONNECTION WITH ANY SUCH
LITIGATION, IRRESPECTIVE OF THE NATURE OF SUCH SETOFF, COUNTERCLAIM OR
CROSS-CLAIM EXCEPT TO THE EXTENT THAT THE FAILURE SO TO ASSERT ANY SUCH SETOFF,
COUNTERCLAIM OR CROSS-CLAIM WOULD PERMANENTLY PRECLUDE THE PROSECUTION OF OR
RECOVERY UPON THE SAME. NOTWITHSTANDING ANYTHING CONTAINED IN THE AGREEMENT TO
THE CONTRARY, NO CLAIM MAY BE MADE BY THE COMPANY AGAINST THE AGENT, THE FACING
BANK OR ANY LENDER FOR ANY LOST PROFITS OR ANY SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR WRONGFUL CONDUCT (OTHER THAN
WILLFUL MISCONDUCT CONSTITUTING ACTUAL FRAUD) IN CONNECTION WITH, ARISING OUT
OF OR IN ANYWAY RELATED TO THE TRANSACTIONS CONTEMPLATED HEREUNDER, THE NOTES
OR UNDER THE OTHER CREDIT DOCUMENTS, OR ANY ACT, OMISSION OR EVENT OCCURRING IN
CONNECTION THEREWITH; AND THE COMPANY HEREBY WAIVES, RELEASES AND AGREES NOT TO
SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES. THE COMPANY AGREES THAT THIS
SECTION 13.14. IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND
ACKNOWLEDGES THAT THE LENDERS WOULD NOT EXTEND TO THE COMPANY ANY LOAN AND THE
FACING BANK WOULD NOT ISSUE ANY LETTER OF CREDIT ON BEHALF OF THE COMPANY
HEREUNDER IF THIS SECTION 13.14. WERE NOT PART OF THIS AGREEMENT.
13.15. ACKNOWLEDGMENTS
The Company hereby acknowledges that: (a) it has been advised by
counsel in the negotiation, execution and delivery of this Agreement and the
other Credit Documents to which it is a party; (b) except as expressly provided
in this Agreement or any of the Credit Documents, neither the Agent, the Facing
Bank nor any Lender has any fiduciary relationship with or duty to the Company,
and the relationship between the Agent, the Facing Bank and the Lenders on one
hand, and the Company on the other hand, is solely that of debtor and creditor;
and (c) no joint venture exists between the Agent, the Facing Bank and the
Lenders on one hand, and the Company on the other hand.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above WRITTEN.
AMERICAN HEALTH PROPERTIES, INC.
By: /s/ Michael J. McGee
-------------------------------
Name: Michael J. McGee
--------------------------
Title: Treasurer
-------------------------
[Signatures continued on following page]
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[Continuation of the signature pages to the Credit Agreement]
WELLS FARGO BANK, N.A., as Arranger, Agent,
Lender and Facing Bank
By: /s/ Brian S. O'Melveny
-------------------------------------------
Name: Brian S. O'Melveny
---------------------------------------
Title: Assistant Vice President
--------------------------------------
Revolving Credit Commitment: $24,000,000 of
which $2,400,000 shall be the initial Pro Rata
Share of the Letter of Credit Subcommitment
Applicable Lending Office:
Wells Fargo Bank, N.A.
420 Montgomery Street, 9th Floor
MAC 0101-091
San Francisco, California 94163
Attention: Mr. Brian O'Melveny
Telecopy No. (415) 362-5081
(Base Rate and Eurodollar Loans):
same as above
[Signature pages continued on following page]
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[Continuation of the signature pages to the Credit Agreement]
BANQUE PARIBAS, as Co-Agent and Lender
By: /s/ Clare Bailhe
-------------------------------------------
Name: Clare Bailhe
---------------------------------------
Title: Vice President
--------------------------------------
By: /s/ C. David Yates
-------------------------------------------
Name: C. David Yates
---------------------------------------
Title: General Manager
--------------------------------------
Revolving Credit Commitment: $20,000,000 of
which $2,000,000 shall be the initial Pro Rata
Share of the Letter of Credit Subcommitment
Applicable Lending Office:
Banque Paribas
101 California Street, Suite 3150
San Francisco, California 94111
Attention: Ms. Claire O'Donnell Bailhe
Telecopy No. (415) 398-4240
(Base Rate and Eurodollar Loans):
same as above
[Signature pages continued on following page]
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[Continuation of the signature pages to the Credit Agreement]
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Co-Agent and Lender
By: /s/ Ann M. Dodd
-------------------------------------------
Name: Ann M. Dodd
---------------------------------------
Title: Senior Vice President
--------------------------------------
Revolving Credit Commitment: $20,000,000 of
which $2,000,000 shall be the initial Pro Rata
Share of the Letter of Credit Subcommitment
Applicable Lending Office:
First Union National Bank of North Carolina
301 South College Street
One First Union Center
NC0735
Charlotte, North Carolina 28288
Attention: Ms. Tess Whelpley
Telecopy No. (704) 383-9144
(Base Rate and Eurodollar Loans):
same as above
[Signature pages continued on following page]
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[Continuation of the signature pages to the Credit Agreement]
NATIONSBANK OF TEXAS, N.A., as Co-Agent
and Lender
By: /s/ Brad W. DeSpain
-------------------------------------------
Name: Brad W. DeSpain
---------------------------------------
Title: Vice President
--------------------------------------
Revolving Credit Commitment: $20,000,000 of
which $2,000,000 shall be the initial Pro Rata
Share of the Letter of Credit Subcommitment
Applicable Lending Office:
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Ms. Kay Hibbs
Telecopy No. (214) 508-0944
(Base Rate and Eurodollar Loans):
same as above
[Signature pages continued on following page]
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[Continuation of the signature pages to the Credit Agreement]
BHF-BANK, AKTIENGESELLSCHAFT, as
Lender
By: /s/ David Frankel
-------------------------------------------
Name: David Frankel
---------------------------------------
Title: Vice President
--------------------------------------
By: /s/ Maria V. Busby
-------------------------------------------
Name: Maria V. Busby
---------------------------------------
Title: Assistant Vice President
--------------------------------------
Revolving Credit Commitment: $14,000,000 of
which $1,400,000 shall be the initial Pro Rata
Share of the Letter of Credit Subcommitment
Applicable Lending Office:
BHF-Bank, Aktiengesellschaft
590 Madison Avenue, 30th Floor
New York, New York 10022
Attention: Ms. Renata Boston
Telecopy No. (212) 756-5536
(Base Rate and Eurodollar Loans):
same as above
[Signature pages continued on following page]
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[Continuation of the signature pages to the Credit Agreement]
BANQUE NATIONALE DE PARIS, as
Lender
By: /s/ Clive Bettles
-------------------------------------------
Name: Clive Bettles
---------------------------------------
Title: Senior Vice President & Manager
--------------------------------------
By: /s/ Mitchell M. Ozawa
-------------------------------------------
Name: Mitchell M. Ozawa
---------------------------------------
Title: Vice President
--------------------------------------
Revolving Credit Commitment: $14,000,000 of
which $1,400,000 shall be the initial Pro Rata
Share of the Letter of Credit Subcommitment
Applicable Lending Office:
Banque Nationale de Paris
180 Montgomery Street
San Francisco, California 94104
Attention: Mr. Don Hart
Telecopy No. (415) 989-9041
with a copy to:
Banque Nationale de Paris
725 South Figueroa Street, Suite 2090
Los Angeles, California 90017
Attention: Mr. Mitchell Ozawa
Telecopy No. (213) 488-9602
(Base Rate and Eurodollar Loans):
same as above
[Signature pages continued on following page]
-96-
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[Continuation of the signature pages to the Credit Agreement]
COLORADO NATIONAL BANK, as Lender
By: /s/ ROBERT M. SWARTZ
-------------------------------------------
Name: Robert M. Swartz
---------------------------------------
Title: Vice President
--------------------------------------
Revolving Credit Commitment: $14,000,000 of
which $1,400,000 shall be the initial Pro Rata
Share of the Letter of Credit Subcommitment
Applicable Lending Office:
Colorado National Bank
918 Seventeenth Street, Suite 200
Denver, Colorado 80202
Attention: Ms. Joni Fish
Telecopy No. (303) 585-4135
(Base Rate and Eurodollar Loans):
same as above
[Signature pages continued on following page]
-97-
<PAGE> 106
[Continuation of the signature pages to the Credit Agreement]
FLEET NATIONAL BANK OF
MASSACHUSETTS, as Lender
By: /s/ GINGER STOLZENTHALER
-------------------------------------------
Name: Ginger Stolzenthaler
---------------------------------------
Title: Vice President
--------------------------------------
Revolving Credit Commitment: $14,000,000 of
which $1,400,000 shall be the initial Pro Rata
Share of the Letter of Credit Subcommitment
Applicable Lending Office:
Fleet National Bank of Massachusetts
75 State Street
MA BOFO4A
Boston, Massachusetts 02109
Attention: Ms. Ginger Stolzenthaler
Telecopy No. (617) 346-1634
(Base Rate and Eurodollar Loans):
same as above
[Signature pages continued on following page]
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<PAGE> 107
[Continuation of the signature pages to the Credit Agreement]
KLEINWORT BENSON LIMITED, as
Lender
By: /s/ PATRICK DONELAN
-------------------------------------------
Name: Patrick Donelan
---------------------------------------
Title: Director
--------------------------------------
Revolving Credit Commitment: $10,000,000 of
which $1,000,000 shall be the initial Pro Rata
Share of the Letter of Credit Subcommitment
Applicable Lending Office:
Kleinwort Benson Limited
20 Fenchurch Street
London EC3P 3DB ENGLAND
Attention: Robin Tilbury, Loans Administration
Telecopy: 011-44-171-956-6150
with a copy to:
Kleinwort Benson Limited
200 Park Avenue, 25th Floor
New York, New York 10166
Attention: Ms. Abbie Baynes
Telecopy: (212) 983-5981
(Base Rate and Eurodollar Loans):
same as above
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<PAGE> 108
EXHIBIT A
FORM OF GUARANTY
THIS GUARANTY is dated as of December 27, 1995 executed and delivered
by each of AMIREIT (Frye), Inc., a North Carolina corporation, AMIREIT
(Kendall), Inc., a Florida corporation, AMIREIT Lucy Lee, Inc., a Missouri
corporation, AMIREIT (North Fulton), Inc., a Georgia corporation, AMIREIT (Palm
Beach Gardens), Inc., a Florida corporation, AHE of California, Inc., a
California corporation, AHE of Irvine, Inc., a California corporation, American
Health Properties of Arizona, Inc., an Arizona corporation, AHP of Colorado,
Inc., a Colorado corporation, AHP of Fayetteville, Inc., an Arkansas
corporation, AHP of Illinois, Inc., an Illinois corporation, AHP of Kansas,
Inc., a Kansas corporation, AHP of New Orleans, Inc., a Louisiana corporation,
AHP of South Carolina, Inc., a South Carolina corporation, AHP of Sunrise, Inc.,
a Florida corporation, AHP of Tarpon Springs, Inc., a Florida corporation, AHP
of Texas, Inc., a Texas corporation, AHP of Washington, Inc., a Washington
corporation, AHP of West Virginia, Inc., a West Virginia corporation, and AHP of
Utah, Inc., a Utah corporation, together with the Subsidiaries of the Company
that may from time to time become a party hereto (each a "Guarantor", and,
collectively, the "Guarantors") in favor of Wells Fargo Bank, N.A., in its
capacity as agent (the "Agent"), and in its capacity as the Facing Bank (the
"Facing Bank"), in favor of Banque Paribas, in its capacity as Co-Agent ("Banque
Paribas"), in favor of First Union National Bank of North Carolina in its
capacity as Co-Agent ("First Union"), in favor of NationsBank of Texas, N.A., in
its capacity as Co-Agent ("NationsBank") and in favor of each Lender (present
and future) under the Credit Agreement (as hereinafter defined) (the Lenders,
NationsBank, First Union, Banque Paribas, the Facing Bank and the Agent being
collectively referred to herein as the "Guaranteed Parties").
PREAMBLE:
The Lenders, Banque Paribas, as Co-Agent, First Union National Bank of
North Carolina, as Co-Agent, NationsBank of Texas, N.A., as Co-Agent, Wells
Fargo Bank, N.A., as Arranger, Agent and Facing Bank, and American Health
Properties, Inc., (the "Company") have entered into a Credit Agreement dated as
of the date hereof. That Credit Agreement as it may be amended, modified,
supplemented, or extended from time to time shall be referred to herein as the
"Credit Agreement". Capitalized terms used herein and not defined herein are
used herein with the respective meanings given such terms in the Credit
Agreement.
Pursuant to the Credit Agreement, the Lenders and the Facing Bank have
made available to the Company certain financial accommodations on the terms and
conditions set forth in the Credit Agreement. Also pursuant to the Credit
Agreement, Permitted Subsidiaries created or acquired hereafter shall execute
and deliver this Guaranty in consideration of such continuing financial
accomodations.
The Company owns at least 80% of the issued and outstanding ownership
interests of each of the Guarantors.
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Each Guarantor will benefit, as a Subsidiary of the Company, from the
making of the Loans and the issuance of the Letters of Credit under the Credit
Agreement.
Each Guarantor is therefore willing to guarantee the payment in full of
the principal of, and interest on, all Guaranteed Obligations (as defined below)
owing by the Company to the Agent and the other Guaranteed Parties under the
Credit Agreement and otherwise.
It is a condition precedent to the Agent and the other Guaranteed
Parties making such financial accommodations to the Company that each Guarantor
execute and deliver this Guaranty.
Accordingly, in consideration of the foregoing and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Guarantors, each Guarantor agrees as follows.
SECTION 1. GUARANTY. Each Guarantor hereby jointly and severally,
irrevocably and unconditionally, guarantees the due and punctual payment and
performance when due, whether at stated maturity, by acceleration or otherwise,
of the following (the following collectively referred to as the "Guaranteed
Obligations"): (a) the Loans, and the obligation of the Company to repay the
same and the accrued interest thereon in accordance with the Credit Agreement;
(b) the Letters of Credit and the obligation of the Company to reimburse drafts
and drawings paid pursuant thereto and any accrued interest thereon in
accordance with the Credit Agreement; (c) the Reimbursement Obligations; (d) the
Fees and all other Obligations of the Company under the Credit Agreement; (e)
all other indebtedness and obligations now or hereafter owing by the Company to
the Agent, the Facing Bank or the other Guaranteed Parties, whenever and however
incurred or evidenced, whether direct or indirect, absolute or contingent, or
due or to become due (including, but not limited to, any other loans or advances
from time to time extended by the Agent or any other Guaranteed Party to the
Company under any agreement whether or not evidenced by promissory notes or
otherwise); and (f) any and all extensions, renewals, modifications, amendments
or substitutions of the foregoing.
SECTION 2. GUARANTY OF PAYMENT AND NOT OF COLLECTION. This Guaranty is
a guaranty of payment, and not of collection, and a debt of each Guarantor for
its own account. Accordingly, the Guaranteed Parties shall not be obligated or
required before enforcing this Guaranty against any Guarantor: (a) to pursue any
right or remedy any Guaranteed Party may have against the Company, any Guarantor
or any other guarantor of the Guaranteed Obligations or commence any suit or
other proceeding against the Company, any Guarantor or any other guarantor of
the Guaranteed Obligations in any court or other tribunal; (b) to make any claim
in a liquidation or bankruptcy of the Company, any Guarantor or any other
guarantor of the Guaranteed Obligations; or (c) to make demand of the Company or
any other guarantor of the Guaranteed Obligations or to enforce or seek to
enforce or realize upon any collateral security held by the Agent or any Lender
which may secure any of the Guaranteed Obligations. In this connection, each
Guarantor hereby
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waives any right it may have to require any holder of the Guaranteed Obligations
to take action against the Company.
SECTION 3. GUARANTY ABSOLUTE. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
documents evidencing the same, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Guaranteed Party with respect thereto. The liability of each
Guarantor under this Guaranty shall be joint and several and absolute and
unconditional and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including, without limitation,
the following (whether or not such Guarantor consents thereto or has notice
thereof):
(a) (i) any change in the amount, interest rate or due date or other
term of any Guaranteed Obligations, or (ii) any change in the time, place or
manner of payment of all or any portion of the Guaranteed Obligations, or (iii)
any amendment or waiver of, or consent to the departure from or other indulgence
with respect to, the Credit Agreement, any Credit Document, or any other
document or instrument evidencing any Guaranteed Obligations, or (iv) any
renewal, extension, addition, or supplement to, or deletion from, or any other
action or inaction under or in respect of, the Credit Agreement, the other
Credit Documents, or any other documents, instruments or agreements relating to
the Guaranteed Obligations or any other instrument or agreement referred to
therein or evidencing any Guaranteed Obligations or any assignment or transfer
of any of the foregoing;
(b) any lack of validity or enforceability of the Credit Agreement, the
other Credit Documents, or any other document, instrument or agreement referred
to therein or evidencing any Guaranteed Obligations or any assignment or
transfer of any of the foregoing;
(c) any furnishing to the Guaranteed Parties of any security for the
Guaranteed Obligations, or any sale, exchange, release or surrender of, or
realization on, any collateral security for the Guaranteed Obligations;
(d) any settlement or compromise of any of the Guaranteed Obligations,
any security therefor, or any liability of any other party with respect to the
Guaranteed Obligations, or any subordination of the payment of the Guaranteed
Obligations to the payment of any other liability of the Company;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to any
Guarantor or the Company or any other Person, or any action taken with respect
to this Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(f) any non perfection of any security interest or lien on any
collateral securing any of the Guaranteed Obligations;
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(g) any application of sums paid by the Company or any other Person
with respect to the liabilities of the Company to the Guaranteed Parties,
regardless of what liabilities of the Company remain unpaid;
(h) any defect, limitation or insufficiency in the borrowing powers of
the Company or in the exercise thereof;
(i) any act or failure to act by any Guaranteed Party which may
adversely affect any Guarantor's subrogation rights, if any, against the Company
to recover payments made under this Guaranty;
(j) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, any Guarantor.
SECTION 4. ACTION WITH RESPECT TO GUARANTEED OBLIGATIONS. The Agent or
any other Guaranteed Party may, at any time and from time to time, without the
consent of, or notice to, the Guarantors, and without discharging any Guarantor
from its obligations hereunder take any and all actions described in Section 3
above and may otherwise: (a) amend, modify, alter or supplement the terms of any
of the Guaranteed Obligations, including, but not limited to, extending or
shortening the time of payment of any of the Guaranteed Obligations or
increasing, decreasing or otherwise changing the interest rate or fees that may
accrue on any of the Guaranteed Obligations; (b) amend, modify, alter or
supplement the Credit Agreement or any other Credit Document or any other
document evidencing any Guaranteed Obligations; (c) sell, exchange, release or
otherwise deal with all, or any part, of any property of the Company that may
become collateral; (d) release any Person liable in any manner for the payment
or collection of the Guaranteed Obligations; (e) exercise, or refrain from
exercising, any rights against the Company or any other Person (including,
without limitation, any other guarantor of the Guaranteed Obligations); and (f)
apply any sum, by whomsoever paid or however realized, to the Guaranteed
Obligations in such order as such Guaranteed Party shall elect.
SECTION 5. WAIVER. Each Guarantor, to the fullest extent permitted by
law, hereby irrevocably waives each of the following, to the extent permitted by
applicable law:
(a) promptness, diligence, notice of acceptance and any other notice
with respect to any of the Guaranteed Obligations or this Guaranty;
(b) any duty on the part of any Guaranteed Party to disclose to any
Guarantor any matter, fact or thing relating to the business, operation or
condition of the Company or its assets now known or hereafter known by the
Guaranteed Parties;
(c) all rights and defenses of each such Guarantor under Section 580a
of the California Code of Civil Procedure;
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(d) all rights and defenses arising out of an election of remedies by
any Guaranteed Party, even though that election of remedies has destroyed any
Guarantor's rights of subrogation and reimbursement against the Company by the
operation of Section 580d of the California Code of Civil Procedure and;
(e) without limiting the generality of the foregoing or any other
provision hereof, any rights and benefits that might otherwise be available to
any Guarantor under California Civil Code Sections 2809, 2810, 2815, 2819, 2821,
2839, 2845, 2848, 2849, 2850, 2899 and 3433, or any successor provisions.
Each Guarantor understands and agrees that the foregoing waivers and the other
waivers, consents, releases and agreements contained in this Guaranty will,
among other things, adversely and materially effect, and under certain
circumstances may eliminate entirely, such Guarantor's rights or ability to
collect monies from the Company that the Guarantor paid to the Guaranteed
Parties on the Company's behalf and defenses that such Guarantor might have to
payment of the Guaranteed Obligations. This result may often occur because of
the actions of the Guaranteed Parties, such as electing certain remedies and
foregoing or delaying others, releasing security, or modifying the Guaranteed
Obligations, all without notice to or consent from any Guarantor.
SECTION 6. INABILITY TO ACCELERATE LOAN. If any Guaranteed Party or the
holder of any of the Guaranteed Obligations is prevented under any Requirement
of Law or otherwise from demanding or accelerating payment thereof by reason of
any automatic stay or otherwise, the Guaranteed Party or such holder shall be
entitled to receive from the Guarantors, jointly and severally, upon demand
therefor, the sums which otherwise would have been due had such demand or
acceleration occurred.
SECTION 7. REINSTATEMENT OF GUARANTEED OBLIGATIONS. If claim is ever
made upon any Guaranteed Party for repayment or recovery of any amount or
amounts received in payment or on account of any of the Guaranteed Obligations,
and any Guaranteed Party repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction over the Guaranteed Party or any of its property, or (b) any
settlement or compromise of any such claim effected by the Guaranteed Party with
any such claimant (including the Company or a trustee in bankruptcy for the
Company), then, and in such event, each Guarantor agrees that any such judgment,
decree, order, settlement or compromise shall be binding on it, notwithstanding
any revocation hereof or the cancellation of the Credit Agreement, the other
Credit Documents, or any other instrument evidencing any liability of the
Company, and such Guarantor shall be and remain liable to the Guaranteed Party
for the amounts so repaid or recovered to the same extent as if such amount had
never originally been paid to the Guaranteed Party.
SECTION 8. WAIVER OF SUBROGATION. . Each Guarantor hereby irrevocably
waives any claims and other rights that it now has or may hereafter acquire
against the Company, any Guarantor or any other guarantor that arise from the
existence, payment, performance or enforcement of any Guarantor's obligations
under this Guaranty or any other Credit
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Document, including any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of any Guaranteed Party against the Company, any Guarantor or any
collateral that any Guarantor now has or hereafter acquires, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including the right to take or receive from the Company, directly or
indirectly, in cash or other property, by setoff or in any other manner, payment
or security on account of any such claim or other right. If any amount is paid
to any Guarantor in violation of the preceding sentence and the Guaranteed
Obligations have not been paid in full, such amounts shall be deemed to have
been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Guaranteed Parties and shall be forthwith paid to the Agent to
be credited and applied to the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Documents. Each Guarantor
acknowledges that it has received and will receive direct and indirect benefits
from the financing arrangements contemplated by the Credit Agreement and that
the waiver set forth in this Section 8 is knowingly made in contemplation of
such benefits. This waiver of subrogation is for the benefit of the Company and
the Guaranteed Parties and the foregoing waiver may not be revoked by any
Guarantor without the prior, written consent of the Agent on behalf of the other
Guaranteed Parties.
SECTION 9. PAYMENTS FREE AND CLEAR. All sums payable by the Guarantors
hereunder, whether of principal, interest, fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever (including any withholding tax or liability
imposed by any governmental agency or authority, wherever located, or any
statute, rule or regulation promulgated thereby), and in the event that any
Guarantor is required by such applicable law or by such governmental agency or
authority to make any such deduction or withholding, each Guarantor jointly and
severally agrees that the Guarantors shall pay to the Guaranteed Parties such
additional amount as will result in the receipt by the Agent on behalf of the
Guaranteed Parties of the full amount payable hereunder had such deduction or
withholding not occurred or been required.
SECTION 10. SET-OFF. Each Guarantor authorizes the Agent and the other
Guaranteed Parties at any time and from time to time, without notice to any
Guarantor, which notice each Guarantor hereby expressly waives, to set off and
apply any and all deposits (whether general or special, time or demand,
provisional or final, including any negotiable or non-negotiable certificate of
deposit now or hereafter issued by the Agent or the other Guaranteed Parties to
any Guarantor) or other indebtedness owing by such Agent or Guaranteed Party to
any Guarantor, to the then outstanding Guaranteed Obligations then due and
payable. The Agent or any other Guaranteed Party may exercise this right of
setoff whether or not such Agent or Guaranteed Party has made demand for, or
accelerated, any Guaranteed Obligations. The rights of the Agent and the other
Guaranteed Parties under this Section are in addition to, and not in limitation
or substitution of, other rights and remedies (including, but not limited to,
other rights of set-off) that the Agent and the other Guaranteed Parties may
have.
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SECTION 11. SUBORDINATION OF THE COMPANY'S OBLIGATIONS TO THE
GUARANTORS. As an independent covenant, each Guarantor hereby expressly
covenants and agrees for the benefit of the Guaranteed Parties that all
obligations and liabilities owing by the Company to such Guarantor of whatsoever
description including, without limitation, all intercompany receivables owing to
each Guarantor from the Company ("Junior Claims") shall be subordinate and
junior in right of payment to all obligations of the Company to the Agent and
other Guaranteed Parties under the terms of the Credit Agreement and the other
Credit Documents ("Senior Claims").
If an Event of Default shall occur, then, unless and until such Event
of Default shall have been cured, waived, or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities by setoff or
otherwise) shall be made by the Company to any Guarantor on account of or in any
manner in respect of any Junior Claim and no Guarantor shall receive or accept
any such direct or indirect payment.
In the event of a Proceeding (as hereinafter defined), all Senior
Claims shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities by setoff or otherwise) shall be
made to any Guarantor on account of or in any manner in respect of any Junior
Claim. For the purposes of the previous sentence, "Proceeding" means the Company
or any Guarantor shall commence a voluntary case concerning itself under the
Bankruptcy Code of 1978, as amended (the "Bankruptcy Code") or any other
applicable bankruptcy laws; or any involuntary case is commenced against the
Company or any Guarantor; or a custodian (as defined in the Bankruptcy Code or
any other applicable bankruptcy laws) is appointed for, or takes charge of, all
or any substantial part of the property of the Company or any Guarantor, or the
Company or any Guarantor commences any other proceedings under any
reorganization arrangement, adjustment of debt, relief of debtor, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Company or any Guarantor, or any such
proceeding is commenced against the Company or any Guarantor, or the Company or
any Guarantor is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or the Company or
any Guarantor suffers any appointment of any custodian or the like for it or any
substantial part of its property; or the Company or any Guarantor makes a
general assignment for the benefit of creditors; or the Company or any Guarantor
shall fail to pay, or shall state that it is unable to pay, or shall be unable
to pay, its debts generally as they become due; or the Company or any Guarantor
shall call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; or the Company or any Guarantor shall by any act or
failure to act indicate its consent to, approval of or acquiescence in any of
the foregoing; or any corporate action shall be taken by the Company or any
Guarantor for the purpose of effecting any of the foregoing.
In the event any direct or indirect payment or distribution is made to
the Guarantor in contravention of this Section 11, such payment or distribution
shall be deemed received in trust for the benefit of the Agent and other
Guaranteed Parties and shall be immediately paid over to the Agent for
application against the Guaranteed Obligations in accordance with the terms of
the Credit Agreement.
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Each Guarantor agrees to execute such additional documents as the Agent
may reasonably request to evidence the subordination provided for in this
Section 11.
SECTION 12. AUTOMATIC ACCELERATION IN CERTAIN EVENTS. Upon the
occurrence of an Event of Default specified in Section 11.6 or Section 11.7 of
the Credit Agreement, all Guaranteed Obligations shall automatically become
immediately due and payable by the Guarantors, jointly and severally, without
notice or other action on the part of the Agent or other Guaranteed Parties, and
regardless of whether payment of the Guaranteed Obligations by the Company has
then been accelerated. In addition, if any event of the Events of Default
described in Section 11.6 or Section 11.7 of the Credit Agreement should occur
with respect to any Guarantor, then the Guaranteed Obligations shall
automatically become immediately due and payable by the Guarantors, jointly and
severally, without notice or other action on the part of the Agent or other
Guaranteed Parties, and regardless of whether payment of the Guaranteed
Obligations by the Company has then been accelerated.
SECTION 13. LIMITATION ON GUARANTOR LIABILITY. (a) It is the intent of
the Guarantors and the Guaranteed Parties that any Guarantor's maximum liability
hereunder shall be, but not in excess of:
(i) in a Proceeding commenced by or against any Guarantor
under the Bankruptcy Code on or within one year from the date on which
any of the Guaranteed Obligations are incurred, the maximum amount
which would not otherwise cause the Guaranteed Obligations (or any
other obligations of such Guarantor to the Guaranteed Parties) to be
avoidable or unenforceable against such Guarantor under (A) Section 548
of the Bankruptcy Code or (B) any state fraudulent transfer or
fraudulent conveyance act or statute applied in such case or proceeding
by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a Proceeding commenced by or against any Guarantor
under the Bankruptcy Code subsequent to one year from the date on which
any of the Guaranteed Obligations are incurred, the maximum amount
which would not otherwise cause the Guaranteed Obligations (or any
other obligations of such Guarantor to the Guaranteed Parties) to be
avoidable or unenforceable against such Guarantor under any state
fraudulent transfer or fraudulent conveyance act or statute applied in
any such case or proceeding by virtue of Section 544 of the Bankruptcy
Code; or
(iii) in a Proceeding commenced by or against any Guarantor
under any law, statute or regulation other than the Bankruptcy Code
(including, without limitation, any other bankruptcy, reorganization,
arrangement, moratorium, readjustment of debt, dissolution, liquidation
or similar debtor relief laws), the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other obligations of
such Guarantor to the Guaranteed Parties) to be avoidable or
unenforceable against such Guarantor under such law, statute or
regulation
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including, without limitation, any state fraudulent transfer or
fraudulent conveyance act or statute applied in any such case or
proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of any Guarantor to the
Guaranteed Parties) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 13(a), but only to the extent that
the Guaranteed Obligations would otherwise be subject to avoidance under the
Avoidance Provisions if any Guarantor is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for the Guaranteed
Obligations, or if the Guaranteed Obligations would render any Guarantor
insolvent, or leave any Guarantor with an unreasonably small capital to conduct
its business, or cause any Guarantor to have incurred debts (or to have intended
to have incurred debts) beyond its ability to pay such debts as they mature, in
each case as of the time any of the Guaranteed Obligations are deemed to have
been incurred under the Avoidance Provisions, the maximum Guaranteed Obligations
for which any such Guarantor shall be liable hereunder shall be reduced to that
amount which, after giving effect thereto, would not cause the Guaranteed
Obligations (or any other obligations of such Guarantor to the Guaranteed
Parties), as so reduced, to be subject to avoidance under the Avoidance
Provisions.
(c) This Section 13 shall be applicable only in connection with a
Proceeding brought by or against a Guarantor and is intended solely to preserve
the rights of the Guaranteed Parties hereunder to the maximum extent that would
not cause the Guaranteed Obligations of such Guarantor to be subject to
avoidance under the Avoidance Provisions in connection with any such Proceeding.
Neither the Guarantors nor any other Person shall have any right or claim under
this Section 13 as against the Guaranteed Parties that would not otherwise be
available to the Guarantors or such other Person outside of any Proceeding.
(d) Notwithstanding anything in this Guaranty to the contrary, the
maximum liability of any Guarantor that is not a Wholly-Owned Subsidiary of the
Company shall be such amount as set forth next to its signature hereto, together
with interest thereon, fees and costs of collection.
SECTION 14. INFORMATION. The Guarantors assume all responsibility for
being and keeping informed of the Company's financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks that the Guarantors
assume and incur hereunder, and agree that none of the Guaranteed Parties will
have any duty to advise the Guarantors of information known to it or any of them
regarding such circumstances or risks.
SECTION 15. REPRESENTATIONS AND WARRANTIES OF GUARANTORS. Each
Guarantor represents and warrants as follows:
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(a) Corporate Existence and Power. Such Guarantor: (i) is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation; (ii) has the power and authority
and all governmental licenses, authorizations, consents, and approvals to own
its assets, carry on its business, and execute, deliver, and perform its
obligations under this Guaranty; (iii) is duly qualified as a foreign
corporation, and licensed and in good standing, under the laws of each
jurisdiction where its ownership, lease, or operation of assets or the conduct
of its business requires such qualification or license; and (iv) is in
compliance with all Requirements of Law; except, in each case referred to in
subsection (iii) or subsection (iv) of this Section 15(a), to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect on Company and its Subsidiaries, taken as a whole.
(b) Corporate Authorization; No Contravention; No Default. The
execution, delivery, and performance by each Guarantor of this Guaranty have
been duly authorized by all necessary corporate action by such Guarantor, and do
not and will not: (i) contravene the terms of any Guarantor's articles of
incorporation or bylaws; (ii) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any Material Contract to
which any Guarantor is a party or any order, injunction, writ, or decree of any
Governmental Agency to which any Guarantor or its assets are subject; or (iii)
violate any applicable law, ordinance, rule, or regulation in a manner which
materially adversely affects or could reasonably be expected to have a Material
Adverse Effect on Company and its Subsidiaries, taken as a whole. No Guarantor
is in default under or with respect to any contractual obligation in any respect
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect on Company and its Subsidiaries,
taken as a whole.
(c) Binding Effect. This Guaranty constitutes the legal, valid, and
binding obligations of each Guarantor, enforceable against each Guarantor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
(d) Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of each Guarantor, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Agency, against such Guarantor or any of its assets which (i) purport to affect
or pertain to this Guaranty, any other Credit Document, or any of the
transactions contemplated hereby or thereby; or (ii) if determined adversely to
such Guarantor would reasonably be expected to have a Material Adverse Effect on
Company and its Subsidiaries, taken as a whole.
(e) Regulated Entity. Neither any Guarantor nor any Person controlling
any Guarantor is (i) an "investment company" within the meaning of the
Investment Company Act of 1940; or (ii) subject to regulation under any federal
or state statute or regulation limiting any Guarantor's ability to incur its
obligations hereunder.
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(f) No Burdensome Restrictions. No Guarantor nor any of its
Subsidiaries is a party to or bound by any contractual obligation, or subject to
any charter or corporate restriction, or any applicable law, ordinance, rule, or
regulation which could reasonably be expected to have a Material Adverse Effect
on Company and its Subsidiaries, taken as a whole.
(g) No Action Required. No consent, license, permit, approval or
authorization or, exemption by, notice or report to, or registration, filing, or
declaration with any Governmental Agency or of, to, or with any other Person, is
or will be required for (i) the execution, delivery, or performance of this
Guaranty by any Guarantor or (ii) the exercise by any Guaranteed Party of any of
its rights and remedies provided for herein.
(h) Changes Affecting the Guaranteed Obligations. Each Guarantor has
taken and is taking all steps in its opinion necessary or appropriate to be
informed on a continuing basis of changes or potential changes affecting the
Guaranteed Obligations.
(i) Financial Condition of Company. This Guaranty is not made by any
Guarantor in reliance on any representation or warranty, express or implied, by
any Guaranteed Party concerning the financial condition of Company, the nature,
value, or extent or any security for the Guaranteed Obligations, or any other
matter. Each Guarantor is presently informed of the financial condition or
Company and or all other circumstances which a diligent inquiry would reveal and
which bear upon the risk of nonpayment of the Guaranteed Obligations.
(j) Accuracy and Completeness of Supplied Information; Full Disclosure.
All information herein is, and all information hereafter supplied to any
Guaranteed Party by or on behalf of any Guarantor in connection herewith will
be, accurate and complete in all material respects. None of the representations
or warranties made by any Guarantor herein as of the date such representations
and warranties are made or deemed made, and none of the statements contained in
each exhibit, report, statement or certificate furnished by or on behalf of any
Guarantor in connection with any of the Credit Documents, contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
SECTION 16. COVENANTS OF THE GUARANTORS. Until the Guaranteed
Obligations have been indefeasibly paid and performed in full, each Guarantor
hereby covenants and agrees with the Guaranteed Parties that:
(a) such Guarantor shall comply with all Requirement of Laws to which
it or its properties is subject;
(b) such Guarantor shall not merge or consolidate with any other Person
or sell, lease or transfer or otherwise dispose of all or a substantial portion
of its assets to any
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Person or entity or permit any Subsidiary to do any of the foregoing, except as
otherwise permitted by the Credit Agreement.
SECTION 17. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 18. CONSENT TO JURISDICTION. Any legal action or proceeding
with respect to this Guaranty, the Credit Agreement or any other Credit Document
may be brought in the courts of the State of California or of the United States
for the Northern District or Central District of California, and by execution
and delivery of this Agreement, each of the Guarantors consents, for itself and
in respect of its property, to the non-exclusive jurisdiction of those courts.
Each of the Guarantors irrevocably waives any objection, including any objection
to the laying of venue or based on the grounds of forum non conveniens, which it
may now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Guaranty, any Credit Document or any document
related hereto. The Guarantors each waive personal service of any summons,
complaint or other process which may be made by any other means permitted by
California law.
SECTION 19. WAIVER OF JURY TRIAL. EACH OF THE GUARANTORS HEREBY WAIVES,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN
ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS GUARANTY,
THE CREDIT AGREEMENT, OR ANY OTHER CREDIT DOCUMENT OR THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF; AND EACH GUARANTOR HEREBY
WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO INTERPOSE ANY
SETOFF OR COUNTERCLAIM OR CROSS-CLAIM IN CONNECTION WITH ANY SUCH LITIGATION,
IRRESPECTIVE OF THE NATURE OF SUCH SETOFF, COUNTERCLAIM OR CROSS-CLAIM EXCEPT TO
THE EXTENT THAT THE FAILURE SO TO ASSERT ANY SUCH SETOFF, COUNTERCLAIM OR
CROSS-CLAIM WOULD PERMANENTLY PRECLUDE THE PROSECUTION OF OR RECOVERY UPON THE
SAME. NOTWITHSTANDING ANYTHING CONTAINED IN THIS GUARANTY OR THE CREDIT
AGREEMENT TO THE CONTRARY, NO CLAIM MAY BE MADE BY ANY GUARANTOR AGAINST THE
AGENT, THE FACING BANK OR ANY LENDER FOR ANY LOST PROFITS OR ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR WRONGFUL CONDUCT
(OTHER THAN WILLFUL MISCONDUCT CONSTITUTING ACTUAL FRAUD) IN CONNECTION WITH,
ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED HEREUNDER,
THE CREDIT AGREEMENT OR UNDER THE OTHER CREDIT DOCUMENTS, OR ANY ACT, OMISSION
OR EVENT OCCURRING IN CONNECTION THEREWITH; AND THE COMPANY HEREBY WAIVES,
RELEASE AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES.
SECTION 20. LOAN ACCOUNTS. The Agent on behalf of the other Guaranteed
Parties may maintain books and accounts setting forth the amounts of principal,
interest and other sums paid and payable with respect to the Guaranteed
Obligations, and in the case of any dispute relating to any Guaranteed
Obligation, the entries in such account shall be binding upon the Guarantors as
to the outstanding amount of such Guaranteed Obligations and the amounts paid
and payable with respect thereto absent manifest error. The failure of the
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Agent to maintain such books and accounts shall not in any way relieve or
discharge any Guarantor of any of its obligations hereunder.
SECTION 21. WAIVER OF REMEDIES. No delay or failure on the part of the
Agent or any other Guaranteed Party in the exercise of any right or remedy it
may have against any Guarantor hereunder or otherwise shall operate as a waiver
thereof, and no single or partial exercise by the Lenders of any such right or
remedy shall preclude other or further exercise thereof or the exercise of any
other such right or remedy.
SECTION 22. SUCCESSORS AND ASSIGNS. Each reference herein to the Agent
or any other Guaranteed Party shall be deemed to include the Agent's and such
other Guaranteed Party's successors and assigns (including, but not limited to,
any holder of the Guaranteed Obligations) in whose favor the provisions of this
Guaranty also shall inure, and each reference herein to any Guarantor shall be
deemed to include such Guarantor's executors, administrators, successors and
assigns, upon whom this Guaranty also shall be binding. The Agent and any other
Guaranteed Party may assign, transfer or sell any Guaranteed Obligation, or
grant or sell participation in any Guaranteed Obligations, pursuant to the terms
of the Credit Documents, to any Person or entity without the consent of, or
notice to, the Guarantors and without releasing, discharging or modifying the
Guarantors' obligations hereunder. Each Guarantor hereby consents to the
delivery by the Agent or any other Guaranteed Party to any assignee, transferee
or participant of any financial or other information regarding the Company or
the Guarantors. The Guarantors may not assign or transfer any obligations
hereunder to any Person or entity.
SECTION 23. JOINT AND SEVERAL GUARANTEED OBLIGATIONS. This Guaranty
shall be continuing, absolute and unconditional and shall remain in full force
and effect as to all Guarantors hereunder, despite the fact that a Guarantor
shall become dissolved or liquidated or shall otherwise be released or
discharged from its obligations hereunder; the obligation of the Guarantors
being joint and several and each of the Guarantors is liable for the full amount
of the Guaranteed Obligations.
SECTION 24. SURVIVAL OF AGREEMENT. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the Credit Agreement, the making of the Loans and the execution and delivery
of the other Credit Documents.
SECTION 25. AMENDMENTS. This Guaranty may not be amended except in
writing signed by the Agent and the Guarantors.
SECTION 26. PAYMENTS/EXPENSES. All payments made by any Guarantor
pursuant to this Guaranty shall be made in the lawful currency of the United
States of America, in immediately available funds to the main office of the
Agent, not later than 11:00 a.m., San Francisco time, on the date three business
days after demand therefor. The Guarantors hereby jointly and severally agree to
pay, on demand, all costs and expenses incurred by the Guaranteed Parties in the
collection and enforcement of this Guaranty including the fees
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and disbursements of counsel to the Guaranteed Parties if collection is sought
by or through an attorney.
SECTION 27. NOTICES. All notices, demands or other communications to
any Guarantor hereunder shall be in writing and shall be mailed or hand
delivered or sent via facsimile transmission to the address for such Guarantor
set forth below its signature hereto. All such notices, demands and
communications shall be deemed received by a Guarantor (a) if personally
delivered or by messenger or overnight courier or delivered via facsimile
transmission, on the date of delivery thereof or (b) if through the United
States mail, on the earlier of (i) the date three days after the posting thereof
and (ii) the date of actual receipt by such Guarantor.
SECTION 28. SEVERABILITY. In case any provision of this Guaranty shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 29. HEADINGS. Section headings used in this Guaranty are for
convenience only and shall not affect the construction of this Guaranty.
SECTION 30. REVIEW OF CREDIT AGREEMENT/CREDIT DOCUMENTS. Each Guarantor
acknowledges that, prior to the execution and delivery of this Guaranty, such
Guarantor has had the opportunity to review and ask questions regarding the
Credit Agreement and the other Credit Documents referred to therein and to
discuss the same and this Guaranty with its counsel.
[Signatures begin on following page]
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<PAGE> 122
IN WITNESS WHEREOF, the Guarantors have duly executed and delivered
this Guaranty as of the date and year first written above.
AMIREIT (FRYE), INC.
By: /s/ Michael J. McGee
--------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AMIREIT (Frye), Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AMIREIT (KENDALL), INC.
By: /s/ Michael J. McGee
--------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AMIREIT (Kendall), Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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[Signatures of Guaranty continued]
AMIREIT LUCY LEE, INC.
By: /s/ Michael J. McGee
------------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AMIREIT Lucy Lee, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AMIREIT (NORTH FULTON), INC.
By: /s/ Michael J. McGee
------------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AMIREIT (North Fulton), Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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[Signatures of Guaranty continued]
AMIREIT (PALM BEACH GARDENS), INC.
By: /s/ Michael J. McGee
-------------------------------
Michael J. McGee
Vice President
Address for Notices:
AMIREIT (Palm Beach Gardens), Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AHE OF CALIFORNIA, INC.
By: /s/ Michael J. McGee
-------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHE of California, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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<PAGE> 125
[Signatures of Guaranty continued]
AHE OF IRVINE, INC.
By: /s/ Michael J. McGee
----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHE of Irvine, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AMERICAN HEALTH PROPERTIES OF
ARIZONA, INC.
By: /s/ Michael J. McGee
-----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
American Health Properties of Arizona, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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<PAGE> 126
[Signatures of Guaranty continued]
AHP OF COLORADO, INC.
By: /s/ Michael J. McGee
-----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Colorado, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AHP OF FAYETTEVILLE, INC.
By: /s/ Michael J. McGee
-----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Fayetteville, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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[Signatures of Guaranty continued]
AHP OF IDAHO, INC.
By: /s/ Michael J. McGee
-----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Idaho, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AHP OF ILLINOIS, INC.
By: /s/ Michael J. McGee
-----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Illinois, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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<PAGE> 128
[Signatures of Guaranty continued]
AHP OF KANSAS, INC.
By: /s/ Michael J. McGee
----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Kansas, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AHP OF NEW ORLEANS, INC.
By: /s/ Michael J. McGee
----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of New Orleans, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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<PAGE> 129
[Signatures of Guaranty continued]
AHP OF SOUTH CAROLINA, INC.
By: /s/ Michael J. McGee
----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of South Carolina, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AHP OF SUNRISE, INC.
By: /s/ Michael J. McGee
----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Sunrise, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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<PAGE> 130
[Signatures of Guaranty continued]
AHP OF TARPON SPRINGS, INC.
By: /s/ Michael J. McGee
--------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Tarpon Springs, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AHP OF TEXAS, INC.
By: /s/ Michael J. McGee
--------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Texas, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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[Signatures of Guaranty continued]
AHP OF WASHINGTON, INC.
By: /s/ Michael J. McGee
----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Washington, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
AHP OF WEST VIRGINIA, INC.
By: /s/ Michael J. McGee
----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of West Virginia, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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[Signatures of Guaranty continued]
AHP OF UTAH, INC.
By: /s/ Michael J. McGee
----------------------------------------
Michael J. McGee
Vice President
Address for Notices:
AHP of Utah, Inc.
c/o American Health Properties, Inc.
6400 South Fiddler's Green Circle, Suite 1800
Englewood, Colorado 80111
Attention: Mr. Michael J. McGee
Telephone Number:(303) 796-9793
Telecopy Number:(303) 796-9708
[Signatures continued on following page]
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<PAGE> 133
[Signatures of Guaranty continued]
Signature Page for Non-Wholly-Owned Subsidiary
Limit on Guarantor Liability [NON-WHOLLY-OWNED
SUBSIDIARY GUARANTOR]
$
----------------------------
[Insert Investment* of Company in By:
---------------------------
Subsidiary] Title:
---------------------
Address for Notices:
------------------------------
------------------------------
------------------------------
Attention:
--------------------
Telephone Number:
-------------
Telecopy Number:
--------------
* The amount to be inserted in the foregoing blank is the book value of the
Company's investment (whether direct or indirect) in the Subsidiary.
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<PAGE> 134
EXHIBIT B
FORM OF REVOLVING CREDIT NOTE
$
------------------
San Francisco, California
December 27, 1995
FOR VALUE RECEIVED, the undersigned, AMERICAN HEALTH PROPERTIES, INC.,
a Delaware corporation (the "Maker"), hereby promises to pay to the order of
______________________________[LENDER] (the "Lender"), at the office of WELLS
FARGO BANK, N.A. (the "Agent"), at 420 Montgomery Street, 9th Floor, San
Francisco, California 94163, on the Maturity Date (as defined in the Credit
Agreement dated as of December 27, 1995, as the same may be amended, modified,
restated or supplemented from time to time (the "Credit Agreement"), among the
Maker, the Lenders named therein, Banque Paribas, as Co-Agent, First Union
National Bank of North Carolina, as Co-Agent, NationsBank of Texas, N.A., as
Co-Agent and Wells Fargo Bank, N.A., as Arranger, Agent and Facing Bank) the
lesser of the principal sum of _________________DOLLARS ($________) and the
aggregate unpaid principal amount of all outstanding Revolving Credit Loans made
by the Lender to the Maker pursuant to the Credit Agreement, in lawful money of
the United States of America in immediately available funds, and to pay interest
from the date hereof on the principal amount hereof from time to time
outstanding, in like funds, at said office, at a rate or rates per annum and
payable on such dates and at such times and in such amounts as determined
pursuant to the terms of the Credit Agreement.
The Maker promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
the Default Rate, determined as set forth in the Credit Agreement.
The Maker hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever, other than as expressly required by the Credit
Agreement. The non exercise by the holder of any of its rights hereunder in any
particular instance shall not constitute a waiver thereof in that or any
subsequent instance.
The date, amount, Type, interest rate and (if applicable) duration of
Interest Period (as such terms are defined in the Credit Agreement) applicable
to all borrowings evidenced by this Revolving Credit Note and all payments and
prepayments of the principal hereof and interest hereon and the respective dates
thereof shall be recorded by such holder in its internal records and, prior to
any transfer of this Revolving Credit Note, endorsed by the holder on the
schedule attached hereto or any continuation thereof; provided, however, that
the failure of the holder hereof to make such a notation or any error in such a
notation shall not in any manner affect the obligation of the Maker to make
payments of principal and interest in accordance with the terms of this
Revolving Credit Note and the Credit Agreement.
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<PAGE> 135
This Revolving Credit Note is one of the Notes referred to in the
Credit Agreement, which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events, for
optional and mandatory prepayment of the principal hereof prior to the maturity
hereof and for the amendment or waiver of certain provisions of the Credit
Agreement, all upon the terms and conditions therein specified.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
This Revolving Credit Note is entitled to the benefits of the Credit
Documents (as defined in the Credit Agreement).
AMERICAN HEALTH PROPERTIES, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
[CORPORATE SEAL]
B-2
<PAGE> 136
EXHIBIT A
LOANS AND PAYMENTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
DURATION OF
INTEREST UNPAID NAME OF PERSON
INTEREST PERIOD PAYMENTS OF PRINCIPAL MAKING
DATE AMOUNT TYPE RATE (IF APPLICABLE) PRINCIPAL BALANCE OF NOTE NOTATION
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 137
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
[Date]
Wells Fargo Bank, N.A., as Facing Bank
420 Montgomery Street
San Francisco, California 94163
Attention: Mr. Brian O'Melveny
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of December
27, 1995 (as it may be amended, modified, restated or supplemented from time to
time, the "Credit Agreement"; capitalized terms used herein, and not otherwise
defined herein, shall have their respective defined meanings as set forth in the
Credit Agreement) among American Health Properties, Inc. (the "Company"),
certain other financial institutions initially a signatory thereto together with
those assignees pursuant to Section 13.6 thereof (the "Lenders"), Banque
Paribas, as Co-Agent, First Union National Bank of North Carolina, as Co-Agent,
NationsBank of Texas, as Co-Agent and Wells Fargo Bank, N.A., as Arranger, Agent
and Facing Bank (in its capacity as Facing Bank, the "Facing Bank").
Pursuant to Section 3.2(a) of the Credit Agreement, the Company hereby
requests that the Facing Bank issue a Letter of Credit an amount equal to
$_____________ for the benefit of ___________________ (the "Beneficiary") for
the purpose of ____________________.
The Company requests that the Letter of Credit be made available to the
Beneficiary on __________, 199__.
The Company hereby further certifies that (i) as of the date hereof,
(ii) as of the date of the requested Letter of Credit, and (iii) after giving
effect to the Letter of Credit requested hereby:
(a) No Event of Default or Unmatured Default has occurred and is
continuing;
(b) The representations and warranties set forth in Article 7 of the
Credit Agreement remain true, complete and correct on and as of the date hereof
except to the extent that either: (i) such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier
date), (ii) an event or condition has occurred that would render such
representations or warranties untrue but that is expressly permitted by the
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terms of the Credit Agreement, or (iii) an event or condition has occurred that
would render such representations or warranties untrue but that has been
previously disclosed in writing to the Lenders and does not constitute, or would
not reasonably foreseeably have, a Material Adverse Effect;
(c) The use of the proceeds of such extension of credit shall not
violate any Requirement of Law applicable to or binding upon the Company or
Section 3.1(b) of the Credit Agreement; and
(d) Attached hereto is a properly completed letter of credit
application of the Facing Bank relating to the issuance of the proposed Letter
of Credit.
If notice of this Letter of Credit Request has been given previously by
telephone, then this notice should be considered a written confirmation of such
telephone notice as required by Section 3.2(a) of the Credit Agreement.
AMERICAN HEALTH PROPERTIES, INC.
By:
---------------------------
Title:
---------------------
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EXHIBIT D-1
FORM OF NOTICE OF BORROWING
[Date]
Wells Fargo Bank, N.A., as Agent
420 Montgomery Street
San Francisco, California 94163
Attention: Mr. Brian O'Melveny
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of December
27, 1995 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") among American Health Properties, Inc. (the
"Company"), the Lenders from time to time parties thereto, Banque Paribas, as
Co-Agent, First Union National Bank of North Carolina, as Co-Agent, NationsBank
of Texas, as Co-Agent and Wells Fargo Bank, N.A., as Arranger, Agent and Facing
Bank (in its capacity as Agent, the "Agent"). Capitalized terms used herein, and
not otherwise defined herein, have their respective meanings given them in the
Credit Agreement.
Pursuant to Section 4.7 of the Credit Agreement, the Company hereby
gives you irrevocable notice that the Company hereby requests a Loan under the
Credit Agreement, and in that connection sets forth below the information
relating to such Loan (the "Proposed Borrowing") as required by Section 4.7 of
the Credit Agreement.
(a) The Business Day of the Proposed Borrowing is ______________.
(b) The amount of the Proposed Borrowing is $______________.
(c) The Type of the Proposed Borrowing is [Base Rate Loan][Eurodollar
Loan].
(d) If a Eurodollar Loan, the Interest Period of the Proposed Borrowing
is [one][three][six] months.
(e) The proceeds of the Loan will be used for _________________________
[reference one of approved uses described in Section 2.14].
Choose the appropriate statement:
(i) If the proceeds of the Loan are being used pursuant to Section
2.14(ii):
(A) The Proposed Borrowing is an initial Loan permitted pursuant to
Section 2.14(ii), and the principal amount of such initial Loan is not greater
than the
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dividends due with respect to the immediately preceding fiscal quarter
of the Company; or
(B) The Proposed Borrowing is being made pursuant to Section
2.14(ii). The Proposed Borrowing is not an initial Loan permitted pursuant to
that Section; however, the amount of the Proposed Borrowing, together with other
similar Borrowings made pursuant to Section 2.14(ii) during the current fiscal
quarter do not exceed the aggregate amount of payments or prepayments of Loans
made during the next preceding fiscal quarter (other than prepayments made
pursuant to Section 2.11 of the Credit Agreement).
(ii) If the proceeds of the Loan are being used pursuant to
Section 2.14(iii):
(A) The Proposed Borrowing is an initial Loan permitted
pursuant to Section 2.14(ii), and the aggregate principal amount of all such
initial Loans is not greater than $50,000,000; or
(B) The Proposed Borrowing is being made pursuant to Section
2.14(iii). The Proposed Borrowing is not an initial Loan permitted pursuant to
that Section; however, the amount of the Proposed Borrowing, together with other
similar Borrowings made pursuant to Section 2.14(iii) do not exceed the
aggregate amount of payments or prepayments of Loans made pursuant to Section
2.11(c) or (d).
The Company hereby further certifies that (i) as of the date hereof,
(ii) as of the date of the requested borrowing, and (iii) after giving effect to
the requested borrowing:
(a) No Unmatured Default or Event of Default has occurred and is
continuing;
(b) The representations and warranties set forth in Article 7 of the
Credit Agreement remain true, complete and correct on and as of the date hereof
except to the extent that either: (i) such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier
date), (ii) an event or condition has occurred that would render such
representations or warranties untrue but that is expressly permitted by the
terms of the Credit Agreement, or (iii) an event or condition has occurred that
would render such representations or warranties untrue but that has been
previously disclosed in writing to the Lenders and does not constitute, or would
not reasonably foreseeably constitute, a Material Adverse Change; and
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(c) The use of the proceeds of such extension of credit shall not
violate any Requirement of Law applicable to or binding upon the Company or
Section 2.14 of the Credit Agreement.
AMERICAN HEALTH PROPERTIES, INC.
By:
---------------------------
Name:
----------------------
Title:
---------------------
D-1-3
<PAGE> 142
EXHIBIT D-2
FORM OF NOTICE OF CONVERSION
[Date]
Wells Fargo Bank, N.A., as Agent
420 Montgomery Street
San Francisco, California 94163
Attention: Mr. Brian O'Melveny
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of December
27, 1995 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") among American Health Properties, Inc. (the
"Company"), the Lenders from time to time parties thereto, Banque Paribas, as
Co-Agent, First Union National Bank of North Carolina, as Co-Agent, NationsBank
of Texas, N.A., as Co-Agent and Wells Fargo Bank, N.A., as Arranger, Agent and
Facing Bank (in its capacity as Agent, the "Agent"). Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.
Pursuant to Section 2.2 of the Credit Agreement, the Company hereby
irrevocably requests a Conversion of Loans of one Type into Loans of another
Type under the Credit Agreement, and in that connection sets forth below the
information relating to such Conversion (the "Proposed Conversion") as required
by Section 4.7 of the Credit Agreement:
(a) The requested date of the Proposed Conversion is _____________,
199__.
(b) The Type of Loans subject to the Proposed Conversion are presently
[Base Rate Loans][Eurodollar Loans].
(c) [All of such Loans are subject to the Proposed Conversion][The
aggregate principal amount of such Loans subject to the Proposed Conversion is
$___________ (the "Conversion Amount")].
(d) [The Conversion Amount ][Each of the Loans] is to be converted into
[Base Rate Loans][Eurodollar Loans], each having an initial Interest Period of
[one][three][six] months.
The Company hereby further certifies that (i) as of the date hereof,
(ii) as of the date of the Proposed Conversion, and (iii) after giving effect to
the Proposed Conversion:
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(a) No Unmatured Default or Event of Default has occurred and is
continuing;
(b) The representations and warranties set forth in Article 7 of the
Credit Agreement remain true, complete and correct on and as of the date hereof
except to the extent that either: (i) such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such earlier
date), (ii) an event or condition has occurred that would render such
representations or warranties untrue but that is expressly permitted by the
terms of the Credit Agreement, or (iii) an event or condition has occurred that
would render such representations or warranties untrue but that has been
previously disclosed in writing to the Lenders and does not constitute, or would
not reasonably foreseeably constitute, a Material Adverse Change; and
(c) The use of the proceeds of such extension of credit shall not
violate any Requirement of Law applicable to or binding upon the Company.
AMERICAN HEALTH PROPERTIES, INC.
By:
---------------------------
Title:
---------------------
D-2-2
<PAGE> 144
EXHIBIT D-3
FORM OF NOTICE OF CONTINUATION
[Date]
Wells Fargo Bank, N.A., as Agent
420 Montgomery Street
San Francisco, California 94163
Attention: Mr. Brian O'Melveny
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of December
27, 1995 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") among American Health Properties, Inc. (the
"Company"), the Lenders from time to time parties thereto, Banque Paribas, as
Co-Agent, First Union National Bank of North Carolina, as Co-Agent, NationsBank
of Texas, N.A., as Co-Agent and Wells Fargo Bank, N.A., as Arranger, Agent and
Facing Bank (in its capacity as Agent, the "Agent"). Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.
Pursuant to Section 2.2 of the Credit Agreement, the Company hereby
irrevocably requests a Continuation of a Loan under the Credit Agreement, and in
that connection sets forth below the information relating to such Continuation
(the "Proposed Continuation") as required by Section 4.7 of the Credit
Agreement:
(a) The requested date of the Proposed Continuation is ____________,
199__;
(b) The aggregate amount of the Loans subject to such Continuation is
$________________________; and
(c) The duration of the selected Interest Period for the Loans which
are the subject of such Continuation is: __________________________.
The Company hereby further certifies that (i) as of the date hereof,
(ii) as of the date of the Proposed Continuation, and (iii) after giving effect
to the Proposed Continuation:
(a) No Unmatured Default or Event of Default has occurred and is
continuing;
(b) The representations and warranties set forth in Article 7 of the
Credit Agreement remain true, complete and correct on and as of the date hereof
except to the extent that either: (i) such representations and warranties
expressly relate solely to an
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earlier date (in which case such representations and warranties shall have been
true and accurate on and as of such earlier date), (ii) an event or condition
has occurred that would render such representations or warranties untrue but
that is expressly permitted by the terms of the Credit Agreement, or (iii) an
event or condition has occurred that would render such representations or
warranties untrue but that has been previously disclosed in writing to the
Lenders and does not constitute, or would not reasonably foreseeably constitute,
a Material Adverse Change; and
(c) The use of the proceeds of such extension of credit shall not
violate any Requirement of Law applicable to or binding upon the Company.
AMERICAN HEALTH PROPERTIES, INC.
By:
---------------------------
Title:
---------------------
D-3-2
<PAGE> 146
EXHIBIT E
FORM OF OPINION OF COUNSEL
December 27, 1995
Wells Fargo Bank, N.A.
as Arranger, Agent and Facing Bank
420 Montgomery Street
San Francisco, California 94163
and
The financial institutions that have or may
become Lenders under the Credit
Agreement described below
RE: Credit Agreement dated as of December 27, 1995, among American
Health Properties, Inc., the financial institutions that are
signatories thereto, Banque Paribas, as Co-Agent, First Union
National Bank of North Carolina, as Co-Agent, NationsBank of
Texas, N.A., as Co-Agent and Wells Fargo Bank, N.A., as
Arranger, Agent and Facing Bank
Ladies and Gentlemen:
We have acted as counsel to American Health Properties, Inc., a
Delaware corporation (the "Company"); AMIREIT (Frye), Inc., a North Carolina
corporation ("Frye"); AMIREIT (Kendall), Inc., a Florida corporation
("Kendall"); AMIREIT Lucy Lee, Inc., a Missouri corporation ("Lucy Lee");
AMIREIT (North Fulton), Inc., a Georgia corporation ("North Fulton"); AMIREIT
(Palm Beach Gardens), Inc., a Florida corporation (Palm Beach Gardens"); AHE of
California, Inc., a California corporation ("California"); AHE of Irvine, Inc.,
a California corporation ("Irvine"); American Health Properties of Arizona,
Inc., an Arizona corporation ("Arizona") ; AHP of Colorado, Inc., a Colorado
corporation ("Colorado"), AHP of Fayetteville, an Arkansas corporation
('Fayetteville"); AHP of Illinois, Inc., an Illinois corporation ("Illinois");
AHP of Kansas, Inc., a Kansas corporation ("Kansas"); AHP of New Orleans, a
Louisiana corporation ("New Orleans"); AHP of South Carolina, Inc., a South
Carolina corporation ("South Carolina"), AHP of Sunrise, Inc., a Florida
corporation ("Sunrise"); AHP of Tarpon Springs, Inc., a Florida corporation
("Tarpon Springs"); AHP of Texas, Inc., a Texas corporation ("Texas"); AHP of
Washington, Inc., a Washington corporation ("Washington"), AHP of West Virginia,
Inc., a West Virginia corporation ("West Virginia"); and AHP of Utah, Inc., a
Utah corporation ("Utah")(Frye, Kendall, Lucy Lee,
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North Fulton, Palm Beach Gardens, California, Irvine, Arizona, Colorado,
Fayetteville, Illinois, Kansas, New Orleans, South Carolina, Sunrise, Tarpon
Springs, Texas, Washington, West Virginia and Utah are herein collectively
referred to as the "Guarantors" and the Guarantors and the Company are herein
collectively referred to as the "Credit Parties"). This opinion is being
delivered to you pursuant to Section 6.1 of the Credit Agreement.
In these capacities we have reviewed the following:
(a) the Credit Agreement;
(b) the Subsidiary Guaranty; and
(c) the Notes.
Capitalized terms used in this opinion which are defined in the Credit Agreement
have the meaning specified therein, unless otherwise defined herein.
In addition to the foregoing, we have reviewed the articles of incorporation and
by-laws of each of the Credit Parties and certain resolutions of the boards of
directors of each of the Credit Parties (collectively, the "Organizational
Documents"). We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records, and other
instruments, and made such other investigations of law and fact, as we have
deemed necessary or advisable for the purposes of rendering this opinion. In our
examination of documents, we assumed the genuineness of all signatures on
documents presented to us as originals (other than signatures on behalf of the
Credit Parties on the Credit Documents) and the conformity to originals of
documents presented to us as conformed or reproduced copies.
Based on the foregoing, and subject to the assumptions and
qualifications set forth below, we are of the opinion that:
1. Each of the Credit Parties (i) is an existing corporation and in
good standing under the laws of its jurisdiction of incorporation and (ii) has
the corporate power to execute, deliver and perform the Credit Documents to
which it is a party, to own and use its assets, and to conduct its business as
presently conducted and as proposed to be conducted immediately following the
consummation of the transactions contemplated by the Credit Agreement.
2. Each of the Credit Parties has duly authorized the execution and
delivery of the Credit Documents to which it is a party and all performance by
it thereunder. Each of the Credit Parties has duly executed and delivered such
Credit Documents.
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3. The execution, delivery and performance by each Credit Party of each
Credit Document to which it is a party (i) require no action or consent by or in
respect of, or filing with, any governmental body, agency or official of the
State of Colorado or of the federal government of the United States and (ii) do
not contravene, or constitute a default under, any provision of applicable
Colorado or United States federal law or regulation or of the Organizational
Documents or Material Contracts of such Credit Party, or, to the best of our
knowledge of any judgment, injunction, order, decree or other instrument binding
on such Credit Party or result in the creation or imposition of any Lien on any
asset of any Credit Party.
4. If the Credit Documents were governed by the laws of the State of
Colorado, each of the Credit Documents would constitute the legal, valid and
binding obligation of each Credit Party a party thereto, enforceable against
such Credit Party in accordance with its terms.
5. None of the Credit Parties is (a) an "investment company" or a
company "controlled, by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, (b) a "holding company" or a
"subsidiary company" of 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 or restricted in its ability
to borrow money or to consummate the transactions contemplated by the Credit
Documents or to perform its obligations under any Credit Document by the Public
Utility Holding Company Act of 1935, as amended, or (c) subject to any other
applicable law which purports to regulate or restrict its ability to borrow
money or to consummate the transactions contemplated by the Credit Agreement or
to perform its obligations under any Credit Document to which it is a party.
6. Assuming that the Company applies the proceeds of the Loans and the
Letters of Credit as provided in the Credit Agreement, the transactions
contemplated by the Credit Agreement do not violate the provisions of
Regulations G, T, U or X of the Board of Governors of the Federal Reserve.
7. The consideration to be paid to the Arranger, the Agent, the Facing
Bank and the Lenders for the financial accommodations to be provided to the
Company pursuant to the Credit Agreement do not violate any law of the State of
Colorado relating to interest and usury.
8. No taxes, including, but not limited to, intangible or documentary
stamp taxes, shall be payable to the State of Colorado or any jurisdiction
therein on account of the execution or delivery of the Credit Documents.
9. In a properly presented and argued case, a Colorado state court or a
federal court sitting in Colorado as the forum state, applying Colorado conflict
of laws principles should enforce the choice of law provisions in the Credit
Documents.
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10. Each of the Credit Parties has met the requirements for
qualification as a REIT pursuant to the Code for the taxable years ended
December 31, 19__ through December 31, 1994 and each of the Credit Party's
present method of operations and its assets and contemplated income are such
that each Credit Party is in a position to so qualify for the taxable year
ending December 31, 1995.
11. To the best of our knowledge, there does not exist any litigation
or governmental proceedings, pending or threatened against any of the Credit
Parties which purport to affect the legality, validity, binding effect or
enforceability of any of the Credit Documents or which are likely to have a
material adverse effect upon the financial condition or operations of the
Company or its Subsidiaries.
12. The Notes may be executed and delivered in the manner contemplated
by the Credit Agreement without registration under the Securities Act of 1933,
as amended, or qualification of an indenture in respect thereof under the Trust
Indenture Act of 1939, as amended.
This opinion is subject to the following assumptions and
qualifications:
(i) To the extent matters of fact are involved in the opinions set
forth above, we have, with your permission, relied upon
certificates of public officials or of officers of the
Company, copies of which are attached hereto.
(ii) The opinions rendered in Paragraph 4 above relating to the
enforceability of the Credit Documents are subject to and
limited by the following: (i) applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws
now or hereafter affecting the enforcement of creditors'
rights and generally and (ii) general equitable principles,
including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing (regardless of
whether the issue of enforceability is considered in a
proceeding in equity or at law) and (iii) public policies
which may affect the enforceability of certain remedies or
rights provided for in the Credit Documents.
(iii) The opinions with respect to enforceability of the agreements
referred to herein and as to no conflict or breach of any
federal or Colorado statute are subject to fraudulent
conveyance laws.
(iv) In rendering the opinions set forth in paragraph 3 above, we
have, with your permission, assumed that each Lender is making
the Loans for its own account in the ordinary course of its
commercial business and not with a view to or for sale in
connection with any distribution of the Notes,
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and that each Lender has had the opportunity to obtain and
review any information regarding the Loans as such Lender has
requested.
The opinions set forth above are limited to the effect of the laws of
the State of Colorado, the federal laws of the United States of America and the
general corporation law of the States of Delaware, North Carolina, Florida,
Missouri, Georgia, California, Arizona, Arkansas, Illinois, Kansas, Louisiana,
South Carolina, Texas, Washington, West Virginia and Utah. We express no opinion
with respect to the laws of any other jurisdiction.
This opinion is furnished to the Agent, the Facing Bank and the
Lenders. This opinion may not be relied on by any other person other than the
Arranger, the Agent, the Facing Bank, the Lenders, and Alston & Bird, counsel to
the Arranger, the Agent and the Facing Bank.
Sincerely yours,
------------------------------
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EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
This certificate is furnished pursuant to Section [8.1][6.1] of that
certain Credit Agreement dated as of December 27, 1995 (the "Credit Agreement")
by and among American Health Properties, Inc. (the "Company"), the lenders named
therein (the "Lenders"), Banque Paribas, as Co-Agent, First Union National Bank
of North Carolina, as Co-Agent, NationsBank of Texas, N.A., as Co-Agent and
Wells Fargo Bank, N.A., as Arranger, Agent and Facing (in its capacity as Agent,
the "Agent"). This certificate is made with respect to the Company's fiscal
quarter ended _______, 19__ (the "Fiscal Quarter"). All capitalized terms used
herein and not defined herein have the respective meanings specified in the
Credit Agreement.
The undersigned, being the chief financial officer of the Company,
hereby certifies to the Agent and the Lenders that on the date hereof:
I. REPRESENTATIONS.
(1) Attached hereto are the financial statements required to be
delivered by the Company pursuant to Section [8.1][6.1].
(2) On the date hereof, no Unmatured Default or Event of Default has
occurred and is continuing. [If any Unmatured Default or Event of Default has
occurred and is continuing, describe the same in reasonable detail and describe
the action that the Company (or such other Person, as appropriate) has taken and
proposes to take with respect thereto.]
(3) [For the first Compliance Certificate only] The Company has
received not less than $50,000,000 from the sale of its common stock in 1995.
II. SET FORTH BELOW ARE THE COMPUTATIONS NECESSARY TO DETERMINE THAT
THE COMPANY IS IN COMPLIANCE WITH SECTION 2.11 OF THE CREDIT AGREEMENT:
A. SECTION 2.11 (A) CASUALTY EVENTS. Complete the following as
appropriate:
(1) During the Fiscal Quarter, the Company has received gross proceeds
of $_____________ from Casualty Events.
(2) Of the foregoing, Net Available Proceeds were $_____________.
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(3) Of the foregoing Net Available Proceeds, $______ were derived from
events in which the Net Available Proceeds were applied toward replacement,
restoration or repair of the damaged property within 90 days after the receipt
of such Net Available Proceeds, or within such longer periods as is reasonable,
but in no event more than 6 months after receipt of such Net Available Proceeds.
(4) After deducting the amount of Net Available Proceeds referred to in
(3) above from the total Net Available Proceeds referred to in (2) above, the
remaining Net Available Proceeds in the amount of $__________________ were used
to prepay the Loans on ________, 19__.
B. SECTION 2.11(B)(I) SALE OF ASSETS. Complete the following as
appropriate:
(1) Other than from a Disposition (a) described in IIA above, (b) of PG
Assets or (c) of obsolete assets which results in Net Available Proceeds in an
amount less than $1,000,000 that are applied toward the purchase of replacement
assets within 90 days after such Disposition, during the Fiscal Quarter, the
Company received proceeds from the following Dispositions:
DESCRIPTION AND DATE OF TRANSACTION GROSS PROCEEDS RECEIVED
A)
B)
C)
TOTAL
(2) Of the foregoing, Net Available Proceeds were $_______________.
(3) The Net Available Proceeds in the amount of $__________________
were used to prepay the Loans in respect of any such Disposition as follows:
DATE RECEIVED AND AMOUNT OF NET DATE AND AMOUNT OF PREPAYMENT
AVAILABLE PROCEEDS
A)
B)
C)
D) TOTAL
C. SECTION 2.11(B)(II) SALE OF ASSETS. Complete the following as
appropriate:
(1) During the Fiscal Quarter, the Company received proceeds from the
following Dispositions of PG Assets pursuant to Section 9.9(b):
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DESCRIPTION AND DATE OF GROSS PROCEEDS AND NET AVAILABLE OUTSTANDING PG
TRANSACTION DATE RECEIVED PROCEEDS INDEBTEDNESS AT
SUCH DATE
A)
B)
C)
TOTAL
(2) The lesser of 100% of the Net Available Proceeds or the amount of
the Outstanding PG Indebtedness was used to prepay the Loans in respect of any
such Disposition as follows:
DATE AND AMOUNT OF PREPAYMENT
A)
B)
C)
D) TOTAL
D. SECTION 2.11(C) INCURRENCE OF INDEBTEDNESS. During the Fiscal
Quarter, the Company or its Subsidiaries incurred Indebtedness for borrowed
money resulting from (x) the incurrence by the Company of Indebtedness permitted
by Section 9.3(i) of the Credit Agreement and (y) the incurrence by the Company
of any Indebtedness by issuance of debt securities in a private placement or in
the public markets to the extent the same are permitted by Section 9.3 of the
Credit Agreement as follows:
DESCRIPTION AND DATE OF INCURRENCE NET AVAILABLE PROCEEDS OF INDEBTEDNESS
INCURRED
A)
B)
C)
and prepayments of the Loans were made on the dates set forth in the foregoing
table and in the amounts of the Net Available Proceeds set opposite such dates.
D. SECTION 2.11(D) EQUITY ISSUANCE. During the Fiscal Quarter the
Company issued the following Equity Issuances:
DESCRIPTION AND DATE OF EQUITY NET AVAILABLE PROCEEDS OF EQUITY
ISSUANCE ISSUANCE
A)
B)
C)
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and prepayments of the Loans were made on the dates set forth in the foregoing
table and in the amounts of the Net Available Proceeds set opposite such dates.
III. SET FORTH BELOW ARE THE COMPUTATIONS NECESSARY TO DETERMINE THAT
THE COMPANY IS IN COMPLIANCE WITH THE SECTIONS CONTAINED IN ARTICLE 10 OF THE
CREDIT AGREEMENT:
A. SECTION 10.1 TANGIBLE NET WORTH. The following amounts shall be
determined as of the end of the Fiscal Quarter:
(1) Company's consolidated stockholders' $________________
equity
(2) Intangible Assets of the Company $________________
and its consolidated Subsidiaries
(3) Treasury stock of the Company $________________
to the extent included in (1) above
(4) Consolidated Tangible Net Worth $________________
((1) minus (2) minus (3))
(5) Net Available Proceeds of any Equity $________________
Issuance by the Company after
September 30, 1995
(6) Required Consolidated Tangible Net Worth $________________
($260,000,000 plus 75% of (5))
B. SECTION 10.2 INTEREST COVERAGE RATIO. The following amounts
shall be determined for the period of 12 consecutive fiscal months ended as of
the end of the Fiscal Quarter:
(1) Net Income (loss) of the Company and its $_________________
Consolidated Subsidiaries
(2) Interest Expense of the Company and its $_________________
Consolidated Subsidiaries
(3) Income taxes $_________________
(4) Depreciation and amortization expense $_________________
(5) Other non-cash charges $_________________
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(6) Rental Expense of the Company and its $_________________
Consolidated Subsidiaries
(7) Extraordinary gain (loss) $_________________
(8) Losses (gains) respecting Dispositions $_________________
(9) EBITDAR (the sum of items (1) through $_________________
(6) minus (7) plus (8))
(10) Interest Coverage Ratio _________________
((9) divided by the sum of (2) and (6))
(11) Required Interest Coverage Ratio 2.50:1.00
pursuant to Section 10.2
C. SECTION 10.3 LEVERAGE RATIO. The following amounts shall be
determined as of the end of the Fiscal Quarter:
(1) Funded Debt of the Company and its $_________________
Subsidiaries
(2) Consolidated Tangible Net Worth $_________________
(A(4) from above)
(3) Leverage Ratio __________________
((1) divided by (2))
(4) Leverage Ratio required 1.10:1.00
pursuant to Section 10.3
IV. SET FORTH BELOW ARE THE COMPUTATIONS NECESSARY TO DETERMINE THAT
THE COMPANY IS IN COMPLIANCE WITH CERTAIN SECTIONS OF ARTICLE 9 OF THE CREDIT
AGREEMENT:
A. SECTION 9.3 INDEBTEDNESS OF THE COMPANY.
(1) During the Fiscal Quarter, except for Indebtedness permitted
pursuant to Section 9.3(a), (b), (f) and (g), the Company created, incurred, or
suffered to exist the Indebtedness listed below by amount, date and type:
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<TABLE>
<CAPTION>
TYPE OF INDEBTEDNESS DATE AMOUNT AMOUNT
INCURRED INCURRED OUTSTANDING
<S> <C> <C> <C>
A) Indebtedness under Interest Rate Protection
Agreements
B) Indebtedness secured by Liens permitted
under subsection (g) of the definition of
"Permitted Liens"
C) Indebtedness incurred pursuant to Guaranties
permitted pursuant to Section 9.7
D) Other Indebtedness of the Company
E) Any renewal or refinancing of Indebtedness
permitted pursuant to 9.3(b)-(h)
</TABLE>
(2) There was no other Indebtedness incurred other than referred to in
(1).
(3) The aggregate amount of Indebtedness outstanding pursuant to
subsection (d) of Section 9.3 is $_____________, which is less than $1,000,000.
(4) The Indebtedness referred to in (1)(d) above (a) has a terms of
five years or more, (b) does not require directly or indirectly, the
amortization of principal thereof during such five year period, and (c) is
subject to covenants (including financial covenants) and events of default
contained in the agreements related thereto which are not materially less
favorable to the Company than those contained in the Credit Agreement or set
forth on those agreements listed on Schedule 7.12. Both before and after giving
effect to the incurrence of such Indebtedness, no Unmatured Default or Event of
Default shall have occurred and be continuing under the Credit Agreement.
B. SECTION 9.3 INDEBTEDNESS OF THE SUBSIDIARIES.
(1) During the Fiscal Quarter, except for Indebtedness permitted
pursuant to Section 9.4(a), (b) and (d) the Subsidiaries of the Company created,
incurred, or suffered to exist the Indebtedness listed below by amount, date and
type:
<TABLE>
<CAPTION>
TYPE OF INDEBTEDNESS DATE AMOUNT AMOUNT
INCURRED INCURRED OUTSTANDING
<S> <C> <C> <C>
</TABLE>
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<PAGE> 157
A) Indebtness incurred pursuant to Guaranties
permitted pursuant to Section 9.7
B) Indebtedness owed to the Company to the
extent permitted by Section 9.5
C) Indebtedness secured by the Property of a
Permitted Subsidiary described in Section 9.5(j)
(2) There was no other Indebtedness incurred other than referred to in
(1).
(3) No Indebtedness permitted pursuant to Section 9.5(j) was incurred
in anticipation of the acquisition of the Property to which it is associated.
(4) The aggregate outstanding amount of Indebtedness which is permitted
pursuant to Section 9.5(j) is $_________________.
C. SECTION 9.5 INVESTMENTS.
(1) The aggregate amount of outstanding Working Capital Loans the
Company has made to operators of Health Care Facilities is $___________________;
and no single operator of a Health Care Facility has received more than
$10,000,000 in such Working Capital Loans from the Company.
(2) The aggregate outstanding amount of loans to Wholly-Owned
Subsidiaries owning PG Assets is $_______________, which amount does not exceed
the PG Indebtedness.
(3) Neither the Company nor any Subsidiary made any Investment in any
Health Care Facility (i) which was greater than $75,000,000 and (ii) if
immediately before and after the consummation of such Investment, after giving
effect thereto, an Unmatured Default or Event of Default existed or would exist.
(4) The Company or a Permitted Subsidiary entirely owns each Health
Care Facility in which Investments, which are not in the form of a loan secured
by such Health Care Facility, are made.
(5) The Company and its Subsidiaries have an aggregate amount of
$_____________ in Construction and Development Investments, of which no more
than $30,000,000 is invested in any one Person and its Affiliates or in any one
Health Care Facility; and the Board of Directors or other governing body of the
Person in which any such Investment is made approved the making of such
Investment.
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<PAGE> 158
(6) The Investments made by Subsidiaries owning PG Assets for the
repair, maintenance and improvement of PG Assets and the related equipment do
not exceed the PG Indebtedness.
(7) Since the [Closing Date][date of the last Compliance Certificate],
the Company has made the following Investments in Permitted Subsidiaries that
are not Wholly-Owned:
DESCRIPTION OF INVESTMENT DATE AND AMOUNT OF PERCENTAGE OF OWNERSHIP
INVESTMENT
A)
B)
C)
(i) Each such Subsidiary is a corporation, limited partnership or
limited liability company;
(ii) the Company or one or more Wholly-Owned Subsidiaries owns at least
80%, but less than 100%, of the outstanding capital stock, partnership or other
ownership interest of such Subsidiary;
(iii) the Company or a Wholly-Owned Subsidiary is (A) the sole general
partner of any such Subsidiary that is a limited partnership or (B) a member of
any such Subsidiary that is a limited liability company;
(iv) the business of such Subsidiary will not cause the Company to
violate Section 8.4 of the Credit Agreement; and
(v) The aggregate amount of all such Investments is $______________,
which does not exceed 10% of the Consolidated Real Estate Assets immediately
prior to the most recent date listed on the table contained in this paragraph
(7).
(8) There are no other Investments other than the ones listed in (1)
through (7) above and those listed in subsections (a), (b), (c), (e)(i), (e)(ii)
and (h) of Section 9.5.
D. SECTION 9.6 RESTRICTED PAYMENTS.
(1) The Company has realized $______________ in gains from January 1,
1995 through the end of the Fiscal Quarter with respect to Dispositions (of any
asset other than PG Assets).
(2) The amount of dividends the Company was entitled to make from
January 1, 1995 through the end of the Fiscal Quarter pursuant to Section
9.6(d)(i)(A) is $____________________ ($5,000,000 plus 95% of the sum of (1)
EBITDAR from
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<PAGE> 159
January 1, 1995 through the end of the Fiscal Quarter minus (2) Interest Expense
from January 1, 1995 through the end of the Fiscal Quarter minus (3) Rental
Expense from January 1, 1995 through the end of the Fiscal Quarter plus (4) the
amount stated in (1) above).
(3) The minimum amount of dividends required by the Company to make
from January 1, 1995 through the end of the Fiscal Quarter in order to maintain
its status as a REIT under the Code plus $5,000,000 is $___________________.
(4) The Company declared $_______________ in dividends from January 1,
1995 through the end of the Fiscal Quarter with respect of its stock.
(5) The PG Excess Proceeds as of the end of the Fiscal Quarter is
$______________________.
(6) The Company has declared $_____________________ in dividends with
respect to PG Stock from January 1, 1995 pursuant to Section 9.6(d)(ii) of the
Credit Agreement. [Must be no more than the lesser of (5) above and
$30,000,000].
(7) The Company has declared $_________________ in the aggregate in
dividends with respect to PG Stock pursuant to Section 9.6(d)(ii) of the Credit
Agreement in the current calendar year. [Should be no more than $15,000,000].
(8) The less than Wholly-Owned Subsidiaries of the Company described in
Section 9.5(j) have declared an aggregate amount of $___________________ in
dividends to the holders of equity interests pursuant to Section 9.6(e) of the
Credit Agreement in the current fiscal year of the Company. [Should be no more
than $500,000].
(9) Other than the Restricted Payments described in Section 9.6(a), (b)
and (c), the Company has made no other Restricted Payments than those described
in items (1) through (8) above.
IN WITNESS WHEREOF, this Certificate is duly executed and delivered
this ___________ day of ________________, _____.
______________________________________
[title of chief financial officer]
American Health Properties, Inc.
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<PAGE> 160
EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance"),
dated as of _______________, 19___, is entered into between
_____________________ ("Assignor") and ______________________ ("Assignee"), with
reference to the following:
WHEREAS, Assignor is a signatory to that certain Credit Agreement,
dated as of December 27, 1995 (as amended, the "Credit Agreement"), among
American Health Properties, Inc., a Delaware corporation ("Company"), the
financial institutions signatory thereto (collectively, "Lenders," and,
individually, a "Lender"), Banque Paribas, as Co-Agent, First Union National
Bank of North Carolina, as Co-Agent, NationsBank of Texas, as Co-Agent, and
Wells Fargo Bank, N.A., as Arranger, Agent and Facing Bank (as such terms are
defined in the Credit Agreement); and
WHEREAS, on the terms and conditions contained herein, Assignor has
agreed to sell and assign to Assignee, and Assignee has agreed to purchase, the
Assigned Percentage (as defined in Section 3 hereof) of Assignor's rights and
obligations as a Lender under the Credit Agreement as of the Effective Date (as
defined in Section 6 hereof).
NOW, THEREFORE, in consideration of the mutual premises, covenants,
representations, and warranties set forth herein and for other good and valuable
consideration, the parties hereto mutually agree as follows:
1. Definitions. All terms used herein which are defined in the Credit
Agreement shall have the meaning set forth therein, unless specifically defined
herein.
2. Construction. Unless the context of this Assignment and Acceptance
clearly requires otherwise, references to the plural include the singular and to
the singular include the plural, the part includes the whole, the term
"including" is not limiting, and the term "or" has the inclusive meaning
represented by the phrase "and/or". The words "hereof," "herein", "hereby,"
"hereunder," and other similar terms in this Assignment and Acceptance refer to
this Assignment and Acceptance as a whole and not exclusively to any particular
provision of this Assignment and Acceptance. Article, section, subsection,
exhibit, and schedule references are to this Assignment and Acceptance unless
otherwise specified.
3. Assignment. Assignor hereby sells and assigns to Assignee, WITHOUT
RECOURSE, and Assignee hereby purchases and assumes from Assignor,
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<PAGE> 161
$_____________, a ____ percent (___%)(1) interest (the "Assigned Percentage") of
Assignor's rights and obligations as a Lender under the Credit Agreement as of
the Effective Date (including the Assigned Percentage of (a) Assignor's
Commitment and its rights and obligations with respect to Letters of Credit as
in effect on the Effective Date, (b) each of the Loans owing to Assignor on the
Effective Date, and (c) the promissory notes issued to and held by Assignor
pursuant to Article II of the Credit Agreement, if any (the "Notes"), held by
Assignor on the Effective Date.
4. Representations and Warranties of Assignor. Assignor: (a) represents
and warrants that, as of the date hereof, its Commitment (without giving effect
to assignments thereof which have not yet become effective) is
$________________; (b) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (c) represents and warrants
that the Assigned Percentage of Assignor's rights as a Lender under the Credit
Agreement as of the Effective Date is equal to or greater than the minimum
amount permitted to be assigned under Section 13.6 of the Credit Agreement; (d)
makes no representations or warranty and assumes no responsibility with respect
to any statements, warranties, or representations made in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency, or value of the Credit Agreement, the Notes, or any of
the other Credit Documents; [and] (e) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of Company or
any of its Subsidiaries or any guarantor or the performance or observance by
Company or any of its Subsidiaries or any guarantor of any of their obligations
under the Credit Agreement, the Notes, or any of the other Credit Documents
[;and (f) attaches the Notes referred to in paragraph 3 herein and requests that
Administrative Agent (exchange such Note for] [cause Company to issue) (a new
Note, dated _______________, 19___ in the original face amount of ____________
Dollars ($_____________), executed by Company and payable to the order of
Assignee] [new Notes as follows: a Note, dated _______________, 19___ in the
original face amount of __________________ Dollars ($_________________) payable
to the order of Assignee, and a Note, dated _______________, 19___, in the
original face amount of _______________ Dollars ($__________________) executed
by Company and payable to the order of Assignor].(2)
5. Representations and Warranties of Assignee. Assignee: (a) confirms
that it has received a copy of the Credit Agreement, together with copies of
such other
- ------------------------
(1) Specify percentage of Assignor's interest only in total facility which is
being assigned in nine (9) decimal points.
(2) Use alternative provisions depending on whether Assignor is retaining an
interest in the facility. Delete references to any Notes which are not
outstanding on the Effective Date of the assignment or if Notes have not been
issued pursuant to Article 2 of the Credit Agreement.
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<PAGE> 162
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (b) agrees
that it will, independently and without reliance upon the Agent or any Lender,
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 any of the Credit Documents; (c) appoints and authorizes the Agent to take
such action as agents on its behalf and to exercise such powers under the Credit
Documents as are delegated to the Agent; (d) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Documents are required to be performed by it as a Lender; (e) agrees
that, from and after the Effective Date, it shall be bound by any amendments,
modifications, terminations, waivers, or consents to any of the Credit Documents
(to the extent effected in accordance with the terms thereof) effected prior to
the Effective Date; and (f) specifies as its Applicable Lending Office (and
address for notices) the offices set forth beneath its name on the signature
page hereof.
6. Effective Date. The effective date for this Assignment and
Acceptance shall be __________________ (the "Effective Date").3 Following the
execution of this Assignment and Acceptance: (a) Assignor shall deliver a fully
executed version of this Assignment and Acceptance to the Agent for acceptance
and registration by the Agent; and (b) the Agent shall have received a
registration and processing fee of $3,500.
7. Rights upon Assignment. Upon such acceptance and recording, an of
the Effective Date: (a) Assignee shall be a party to the Credit Agreement and
shall be entitled to the rights and benefits of each of the Credit Documents
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder; and (b) Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under each of the Credit Documents.
8. Rights Concerning Payments. Upon such acceptance and recording, from
and after the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby (including
all payments of principal, interest, and commitment fees with respect thereto)
to Assignee. Assignor and Assignee shall make all appropriate adjustments in
payments under each of the Credit Documents for periods prior to the Effective
Date directly between themselves.
9. Choice of Law; Consent to Jurisdiction. EXCEPT AS OTHERWISE PROVIDED
BY THE CREDIT AGREEMENT, THE VALIDITY OF THIS
- ------------------------
(3) Such date shall be at least two (2) Business Days after the execution of
this Assignment and Acceptance and shall in no event take place before the
satisfaction of both of the conditions not forth in the second sentence of
Section 6 hereof.
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<PAGE> 163
ASSIGNMENT AND ACCEPTANCE, ITS CONSTRUCTION, INTERPRETATION AND ENFORCEMENT, AND
THE RIGHTS OF THE PARTIES HERETO, SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND DETERMINED ONLY IN THE COURTS
OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OR
CENTRAL DISTRICT OF CALIFORNIA. TO THE MAXIMUM EXTENT PERMITTED BY LAW, ASSIGNOR
AND ASSIGNEE EACH WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION.
10. Headings. Section and subsection headings in this Assignment and
Acceptance are included herein for convenience of reference only and shall not
constitute a part of this Assignment and Acceptance or be given any substantive
effect.
11. Severability. In case any provision in or obligation under this
Assignment and Acceptance shall be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
12. Counterparts. This Assignment and Acceptance may be executed in one
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Any party may effect
execution and delivery of this Assignment and Acceptance by executing a
counterpart hereof and sending the signature page bearing its signature to the
other parties hereto by telefacsimile and, thereafter, promptly sending by mail
such original signature page to such other parties, provided that the failure to
deliver such original signature page shall not affect the validity,
enforceability, or binding effect of this Assignment and Acceptance.
13. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH
OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OR ANY
ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO THIS ASSIGNMENT AND ACCEPTANCE, OR IN ANY WAY CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE DEALINGS OF THE PARTIES WITH RESPECT TO THIS ASSIGNMENT
AND ACCEPTANCE, OR THE TRANSACTIONS RELATED HERETO, IN EACH CAUSE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE. TO THE MAXIMUM
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<PAGE> 164
EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO HEREBY AGREES THAT ANY SUCH
ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OF PROCEEDING SHALL BE DECIDED BY A
COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE
OF THE CONSENT OF THE OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF THE
OTHER PARTY HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
[Signatures on following page]
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<PAGE> 165
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
and Acceptance to be duly executed and delivered by their officers thereunto
duly authorized as of the date first written above.
[NAME OF ASSIGNOR]
By
--------------------------------
Title:
----------------------------
[NAME OF ASSIGNEE]
By
--------------------------------
Title:
----------------------------
Applicable Lending Office
----------------------------------
----------------------------------
----------------------------------
(Base Rate and Eurodollar Loans)
----------------------------------
----------------------------------
----------------------------------
[Signatures continued on following page]
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<PAGE> 166
Accepted this ____ day of ______________, 19___:
WELLS FARGO BANK, N.A.,
as Agent
By:_________________________________
Title:______________________________
AMERICAN HEALTH PROPERTIES, INC.,
a Delaware corporation
By:_________________________________
Title:______________________________
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