EXHIBIT 10.1
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CREDIT AGREEMENT
dated as of April 29, 1998
among
VENTAS REALTY, LIMITED PARTNERSHIP,
NATIONSBANK, N.A.,
as a Bank and as Administrative Agent for the Banks,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as a Bank and as Documentation Agent for the Banks,
BANQUE PARIBAS,
THE BANK OF NOVA SCOTIA,
CREDIT LYONNAIS NEW YORK BRANCH,
CREDIT SUISSE FIRST BOSTON,
FLEET NATIONAL BANK,
THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH,
PNC BANK, NATIONAL ASSOCIATION,
SOCIETE GENERALE,
THE TORONTO-DOMINION BANK,
WACHOVIA BANK, N.A.,
each as a Bank and as a Senior Managing Agent,
ABN AMRO BANK N.V.,
BANK ONE, KENTUCKY, N.A.,
COMERICA BANK,
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH,
NATIONAL CITY BANK OF KENTUCKY,
each as a Bank and as a Managing Agent,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
THE BANK OF NEW YORK,
THE FIRST NATIONAL BANK OF CHICAGO,
U.S. BANK,
UNION BANK OF CALIFORNIA,
each as a Bank and as a Co-Agent
and
THE BANKS LISTED HEREIN,
and
▇▇ ▇▇▇▇▇▇ SECURITIES INC.
AND
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC,
as Co-Arrangers
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS................................. 1
Section 1.1. Definitions.................................................... 1
Section 1.2. Accounting Terms and Determinations............................ 27
Section 1.3. Types of Borrowings............................................ 27
ARTICLE II
THE CREDITS................................ 28
Section 2.1. Commitments to Lend............................................ 28
Section 2.2. Notice of Borrowing............................................ 32
Section 2.3. Intentionally Omitted.......................................... 34
Section 2.4. Notice to Banks; Funding of Loans.............................. 35
Section 2.5. Notes.......................................................... 36
Section 2.6. Maturity of Loans.............................................. 37
Section 2.7. Interest Rates................................................. 37
Section 2.8. Fees........................................................... 40
Section 2.9. Mandatory Termination.......................................... 41
Section 2.10. Mandatory Prepayment........................................... 42
Section 2.11. Optional Prepayments........................................... 43
Section 2.12. General Provisions as to Payments.............................. 46
Section 2.13. Funding Losses................................................. 47
Section 2.14. Computation of Interest and Fees............................... 48
Section 2.15. Method of Electing Interest Rates.............................. 48
Section 2.16. Letters of Credit.............................................. 50
Section 2.17. Letter of Credit Usage Absolute................................ 54
ARTICLE III
CONDITIONS................................. 55
Section 3.1. Closing........................................................ 55
Section 3.2. Borrowings..................................................... 58
Section 3.3. Additional Real Property Assets................................ 60
ARTICLE IV
REPRESENTATIONS AND WARRANTIES....................... 62
Section 4.1. Existence and Power............................................ 62
Section 4.2. Power and Authority............................................ 62
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Section 4.3. No Violation; Government Approvals; Licenses................... 63
Section 4.4. Financial Information.......................................... 64
Section 4.5. Litigation..................................................... 64
Section 4.6. Compliance with ERISA.......................................... 65
Section 4.7. Environmental Compliance....................................... 65
Section 4.8. Taxes.......................................................... 67
Section 4.9. Full Disclosure................................................ 67
Section 4.10. Solvency....................................................... 67
Section 4.11. Use of Proceeds; Margin Regulations............................ 67
Section 4.12. Investment Company Act; Public Utility
Holding Company Act.......................................... 68
Section 4.13. Closing Date Transactions...................................... 68
Section 4.14. Representations and Warranties in Loan Documents............... 68
Section 4.15. Patents, Trademarks, etc....................................... 68
Section 4.16. No Default..................................................... 69
Section 4.17. Compliance With Law............................................ 69
Section 4.18. Brokers' Fees.................................................. 69
Section 4.19. Labor Matters.................................................. 69
Section 4.20. Organizational Documents....................................... 70
Section 4.21. Principal Offices.............................................. 70
Section 4.22. Ownership of Property.......................................... 70
Section 4.23. Insurance...................................................... 70
Section 4.24. "Year 2000" Compliance......................................... 70
Section 4.25. REIT Status.................................................... 71
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS..................... 71
Section 5.1. Information.................................................... 71
Section 5.2. Payment of Obligations......................................... 76
Section 5.3. Maintenance of Property; Insurance............................. 76
Section 5.4. Conduct of Business............................................ 77
Section 5.5. Compliance with Laws........................................... 77
Section 5.6. Inspection of Property, Books and Records...................... 77
Section 5.7. Existence...................................................... 78
Section 5.8. Financial Covenants............................................ 78
Section 5.9. Restriction on Fundamental Changes;
Operation and Control......................................... 80
Section 5.10. Fiscal Year; Fiscal Quarter.................................... 81
Section 5.11. Margin Stock................................................... 82
Section 5.12. Development Activities......................................... 82
Section 5.13. Interest Rate Protection....................................... 82
Section 5.14. Investments in Non-Healthcare Related Assets................... 82
Section 5.15. Investments in Minority Holdings............................... 83
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Section 5.16. Use of Proceeds................................................ 83
Section 5.17. Sale of Unencumbered Asset Pool Properties..................... 84
Section 5.18. Limitations On Subsidiary Debt................................. 84
Section 5.19. Restrictions on Pledge......................................... 84
Section 5.20. Release of Properties.......................................... 85
Section 5.21. REIT Status.................................................... 85
Section 5.22. Affiliate Transactions......................................... 86
Section 5.23. Leases......................................................... 86
Section 5.24. New Subsidiaries............................................... 89
Section 5.25. Borrower's Restructuring....................................... 89
ARTICLE VI
DEFAULTS.................................. 90
Section 6.1. Events of Default.............................................. 90
Section 6.2. Rights and Remedies............................................ 94
Section 6.3. Notice of Default.............................................. 94
Section 6.4. Actions in Respect of Letters of Credit........................ 95
ARTICLE VII
THE AGENTS................................. 98
Section 7.1. Appointment and Authorization.................................. 98
Section 7.2. Agent and Affiliates........................................... 98
Section 7.3. Action by Agents............................................... 98
Section 7.4. Consultation with Experts...................................... 98
Section 7.5. Liability of Agents............................................ 99
Section 7.6. Indemnification................................................ 99
Section 7.7. Credit Decision................................................ 99
Section 7.8. Successor Agents...............................................100
ARTICLE VIII
CHANGE IN CIRCUMSTANCES..........................101
Section 8.1. Basis for Determining Interest Rate
Inadequate or Unfair..........................................101
Section 8.2. Illegality.....................................................101
Section 8.3. Increased Cost and Reduced Return..............................102
Section 8.4. Taxes..........................................................104
Section 8.5. Base Rate Loans Substituted for Affected
Euro-Dollar Loans.............................................107
Section 8.6. Substitution of Banks..........................................108
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ARTICLE IX
MISCELLANEOUS...............................110
Section 9.1. Notices.......................................................110
Section 9.2. No Waivers....................................................110
Section 9.3. Expenses; Indemnification.....................................111
Section 9.4. Sharing of Set-Offs...........................................112
Section 9.5. Amendments and Waivers........................................114
Section 9.6. Successors and Assigns........................................115
Section 9.7. Governing Law; Submission to Jurisdiction.....................118
Section 9.8. Marshaling; Recapture.........................................119
Section 9.9. Counterparts; Integration; Effectiveness......................119
Section 9.10. WAIVER OF JURY TRIAL..........................................119
Section 9.11. Survival......................................................119
Section 9.12. Domicile of Loans.............................................120
Section 9.13. Limitation of Liability.......................................120
Exhibit A-1 Form of Note..................................................A-1
Exhibit A-2 Form of Swing Note............................................A-1
Exhibit B Unencumbered Asset Pool Properties............................B-1
Exhibit C Preapproved Development Properties............................C-1
Exhibit D Assignment and Assumption Agreement...........................D-1
Schedule 3.1 - Exceptions to Section 3.1
Schedule 4.3 - Exceptions to Section 4.3
Schedule 4.5 - Litigation
Schedule 4.19 - Labor Matters
Schedule 4.22 - Real Property Assets
Schedule 5.8 - Indemnified Contingent Obligations
Schedule 5.22 - Existing Affiliate Agreements
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of April 29, 1998, among VENTAS REALTY,
LIMITED PARTNERSHIP (the "Borrower"), NATIONSBANK, N.A., as a Bank and as
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Administration Agent for the Banks, MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as a Bank and as Documentation Agent for the Banks, the SENIOR MANAGING AGENTS
listed on the cover page hereof, the MANAGING AGENTS listed on the cover page
hereof, the CO-AGENTS listed on the cover page hereof, the BANKS listed on the
signature pages hereof (the "Banks"), and ▇▇ ▇▇▇▇▇▇ SECURITIES INC. and
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NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC as Co-Arrangers.
W I T N E S S E T H:
- - - - - - - - - -
The parties hereto agree as follows:
ARTICLE II
DEFINITIONS
Section 2.2 Definitions. The following terms, as used herein, have
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the following meanings:
"Administrative Agent" means NationsBank, N.A. in its capacity as
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Administrative Agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
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administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Affiliate" means any Person (other than a Subsidiary) directly or
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indirectly controlling, controlled by or under common control with Borrower;
provided, however, that during the period following the spin-off of Vencor,
Inc., common share ownership between Guarantor and Vencor, Inc. shall not be
deemed to make either entity an Affiliate of the other. As used in this
definition, the term "control" means possession, directly or indirectly, of the
power to vote 10% or more of any class of voting securities of a Person or to
direct or
cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agents" means the Administrative Agent and the Documentation Agent.
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"Agreement" means this Credit Agreement as the same may from time to
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time hereafter be modified, supplemented or amended.
"Annual EBITDA" means, measured as of the last day of each calendar
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quarter, an amount equal to (i) total revenues relating to the Guarantor and its
Consolidated Subsidiaries for the previous four consecutive calendar quarters
including the quarter then ended, on an accrual basis with adjustments to remove
the effect of the straight-lining of rents, plus (ii) interest and other income
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of the Guarantor and its Consolidated Subsidiaries, including, without
limitation, real estate service revenues, for such period, less (iii) total
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operating expenses and other expenses relating to Real Property Assets for such
period (other than interest, taxes, depreciation, amortization, and other non-
cash items), less (iv) total corporate operating expenses (including general
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overhead expenses) and other expenses of the Guarantor and its Consolidated
Subsidiaries (other than interest, taxes, depreciation, amortization and other
non-cash items), for such period.
"Applicable Interest Rate" means the lesser of (x) the rate at which
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the interest rate applicable to any floating rate Debt could be fixed, at the
time of calculation, by the Borrower entering into an interest rate swap
agreement, and (y) the rate at which the interest rate applicable to such
floating rate Debt is actually capped, at the time of calculation, if the
Borrower has entered into an interest rate cap agreement with respect thereto or
if the documentation for such Debt contains a cap.
"Applicable Lending Office" means, with respect to any Bank, (i) in
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the case of its Base Rate Loans, its Domestic Lending Office, and (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
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"Applicable Margin" means, with respect to each Euro-Dollar Loan and
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each Base Rate Loan, the respective percentages per annum determined, at any
time, based on the range into which the Maximum Total Debt Ratio then falls, in
accordance with the table set forth below. Any change in the Maximum Total Debt
Ratio shall occur on the date on which the Guarantor delivers, or was required
to have delivered, the certificate pursuant to Section 5.1(e) hereof, whichever
is earlier, and shall be effective as of the date on which the Maximum Total
Debt Ratio is calculated.
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Maximum Total Maximum Total Maximum Total
Debt Ratio less Debt Ratio equal Debit Ratio
than 40%. to or greater greater than
than 40% but 50%.
less than or
equal to 50%.
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Applicable Base Tranche A: 1.75% Tranche A: 1.75% Tranche A: 2.00%
Rate Margin Tranche B: 1.00% Tranche B: 1.25% Tranche B: 1.50%
Tranche C: 1.25% Tranche C: 1.25% Tranche C: 1.50%
Tranche D: 1.75% Tranche D: 1.75% Tranche D: 2.00%
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Applicable Euro- Tranche A: 2.75% Tranche A: 2.75% Tranche A: 3.00%
Dollar Margin Tranche B: 2.00% Tranche B: 2.25% Tranche B: 2.50%
Tranche C: 2.25% Tranche C: 2.25% Tranche C: 2.50%
Tranche D: 2.75% Tranche D: 2.75% Tranche D: 3.00%
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"Assignee" has the meaning set forth in Section 9.6(c).
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"Bank" means each bank listed on the signature pages hereof, each
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Assignee which becomes a Bank pursuant to Section 9.6(c), and their respective
successors.
"Bankruptcy Code" means Title 11 of the United States Code, entitled
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"Bankruptcy", as amended from time to time, and any successor statute or
statutes.
"Base Rate" means, for any day, a rate per annum equal to the higher
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of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds Rate
plus .50%.
"Base Rate Borrowing" means a Borrowing comprised of Base Rate Loans.
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"Base Rate Loan" means a Loan to be made by a Bank as a Base Rate Loan
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in accordance with the
3
applicable Notice of Borrowing, Notice of Interest Rate Election or pursuant to
Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan
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within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means Ventas Realty, Limited Partnership, a Delaware
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limited partnership, and its successors.
"Borrowing" has the meaning set forth in Section 1.3.
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"Cash or Cash Equivalents" means (i) cash, (ii) direct obligations of
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the United States Government, including, without limitation, treasury bills,
notes and bonds, (iii) interest bearing or discounted obligations of Federal
agencies and Government sponsored entities or pools of such instruments offered
by banks rated AA or better by S&P or Aa2 by ▇▇▇▇▇'▇ and dealers, including,
without limitation, Federal Home Loan Mortgage Corporation participation sale
certificates, Government National Mortgage Association modified pass-through
certificates, Federal National Mortgage Association bonds and notes, Federal
Farm Credit System securities, (iv) time deposits, domestic and Eurodollar
certificates of deposit, bankers acceptances, commercial paper rated at least
A-1 by S&P and P-1 by ▇▇▇▇▇'▇, and/or guaranteed by an entity having an Aa
rating by ▇▇▇▇▇'▇, an AA rating by S&P, or better rated credit, floating rate
notes, other money market instruments and letters of credit each issued by banks
which have a long-term debt rating of at least AA by S&P or Aa2 by ▇▇▇▇▇'▇, (v)
obligations of domestic corporations, including, without limitation, commercial
paper, bonds, debentures, and loan participations, each of which is rated at
least AA by S&P, and/or Aa2 by ▇▇▇▇▇'▇, and/or unconditionally guaranteed by an
AA rating by S&P, an Aa2 rating by ▇▇▇▇▇'▇, or better rated credit, (vi)
obligations issued by states and local governments or their agencies, rated at
least MIG-1 by ▇▇▇▇▇'▇ and/or SP-1 by S&P and/or guaranteed by an irrevocable
letter of credit of a bank with a long-term debt rating of at least AA by S&P or
Aa2 by ▇▇▇▇▇'▇, (vii) repurchase agreements with major banks and primary
government securities dealers fully secured by U.S. Govern-
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ment or agency collateral equal to or exceeding the principal amount on a daily
basis and held in safekeeping, (viii) real estate loan pool participations,
guaranteed by an entity with an AA rating given by S&P or an Aa2 rating given by
▇▇▇▇▇'▇, or better rated credit, and (ix) shares of any mutual fund that has its
assets primarily invested in the types of investments referred to in clauses
(i) through (viii).
"Closing Date" means the date on which the Documentation Agent shall
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have received the documents specified in or pursuant to Section 3.1.
"Commitment" means, with respect to each Bank, the amount committed by
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such Bank pursuant to this Agreement with respect to any Loans as set forth on
the signature pages hereof, as such amount may be reduced from time to time
pursuant to Sections 2.9 and 2.10.
"Consolidated Subsidiary" means at any date any Subsidiary or other
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entity which is consolidated with the Guarantor or Borrower, as applicable, in
accordance with GAAP.
"Consolidated Tangible Net Worth" means at any date the consolidated
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stockholders' equity of the Guarantor (determined on a book basis) less its
consolidated Intangible Assets, all determined as of such date. For purposes of
this definition "Intangible Assets" means with respect to any such intangible
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assets, the amount (to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups subsequent to the Closing Date in the
book value of any asset owned by the Borrower or a Consolidated Subsidiary and
(ii) goodwill, patents, trademarks, service marks, trade names, anticipated
future benefit of tax loss carry forwards, copyrights, organization or
developmental expenses and other intangible assets.
"Contingent Obligation" as to any Person means, without duplication,
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(i) any contingent obligation of such Person required to be shown on such
Person's balance sheet in accordance with GAAP, and (ii) any obligation required
to be disclosed in the footnotes to such Person's financial statements,
guaranteeing partially or in whole any non-recourse Debt, dividend or other
obligation, exclusive of contractual indemnities (including, without limitation,
any indemnity or price-adjustment
5
provision relating to the purchase or sale of securities or other assets) and
guarantees of non-monetary obligations (other than guarantees of completion)
which have not yet been called on or quantified, of such Person or of any other
Person. "Contingent Obligations" shall not include those Contingent Obligations
set forth on Schedule 5.8 hereof for which there exists an indemnification by a
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third party in favor of Guarantor.
"Debt" of any Person means, without duplication, (A) as shown on such
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Person's consolidated balance sheet (i) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property and, (ii) all
indebtedness of such Person evidenced by a note, bond, debenture or similar
instrument (whether or not disbursed in full in the case of a construction
loan), (B) the face amount of all letters of credit issued for the account of
such Person and, without duplication, all unreimbursed amounts drawn thereunder,
(C) all Contingent Obligations of such Person, and (D) all payment obligations
of such Person under any interest rate protection agreement (including, without
limitation, any interest rate swaps, caps, floors, collars and similar
agreements) and currency swaps and similar agreements which were not entered
into specifically in connection with Debt set forth in clauses (A), (B) or (C)
hereof. For purposes of this Agreement, Debt (other than Contingent
Obligations) of the Borrower or Guarantor shall be deemed to include only the
Borrower's or Guarantor's pro rata share (such share being based upon the
Borrower's or Guarantor's percentage ownership interest as shown on the
Borrower's or Guarantor's annual audited financial statements) of the Debt of
any Person in which the Borrower or Guarantor, directly or indirectly, owns an
interest, provided that such Debt is nonrecourse, both directly and indirectly,
to the Borrower or Guarantor, as applicable. Notwithstanding anything
contained herein to the contrary, in no event shall "Debt" be deemed to
include debt evidenced by bonds issued by Guarantor to tenants of residential
units of New Pond Village in Walpole, Massachusetts evidencing the obligation
to repay at the end of their tenancies amounts paid by them at the beginning of
their tenancies, provided that the aggregate outstanding principal amount of all
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bonds referred to in this clause shall not at any time exceed $35,000,000.
"Default" means any condition or event which constitutes an Event of
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Default or which with the giving
6
of notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
"Documentation Agent" means ▇▇▇▇▇▇ Guaranty Trust Company of New York,
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in its capacity as Documentation Agent for the Banks hereunder, and its
successors in such capacity.
"Domestic Business Day" means any day except a Saturday, Sunday or
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other day on which commercial banks in New York City and Los Angeles are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located
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within the United States at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Domestic
Lending Office) or such other office within the United States as such Bank may
hereafter designate as its Domestic Lending Office by notice to the Borrower and
the Administrative Agent; provided that no Bank shall be permitted to change its
Domestic Lending Office if at the time of such change either (i) pursuant to the
provisions of Section 8.1 or Section 8.2, Borrower would be unable to maintain
any Loans as Euro-Dollar Loans; or (ii) Borrower would be required to make any
payment to such Bank pursuant to the provisions of Section 8.3 or Section 8.4.
"Environmental Affiliate" means any partnership, or joint venture,
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trust or corporation in which either a controlling equity interest is owned by
the Borrower, either directly or indirectly or an equity interest is owned by
the Borrower either directly or indirectly, of such a nature that the Borrower
could be found to be liable under applicable Environmental Laws.
"Environmental Approvals" means any permit, license, approval, ruling,
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variance, exemption or other authorization required under applicable
Environmental Laws.
"Environmental Claim" means, with respect to any Person, any notice,
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claim, demand or similar communication (written or oral) by any other Person
alleging potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damage, property damage, personal
injuries, fines or
7
penalties arising out of, based on or resulting from (i) the presence, or
release into the environment, of any Material of Environmental Concern at any
location, whether or not owned by such Person or (ii) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law, in each
case as to which could reasonably be expected to have a Material Adverse Effect.
"Environmental Laws" means any and all federal, state, local and
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foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Material of
Environmental Concern or hazardous wastes into the environment including,
without limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, Material
of Environmental Concern or hazardous wastes or the clean-up or other
remediation thereof.
"Environmental Report" has the meaning set forth in Section 4.7.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended, or any successor statute.
"ERISA Group" means the Borrower, the Guarantor, any Subsidiary and
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all members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower or any Subsidiary, are treated as a single employer under Section 414
of the Internal Revenue Code.
"Euro-Dollar Borrowing" has the meaning set forth in Section 1.3.
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"Euro-Dollar Business Day" means any Domestic Business Day on which
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commercial banks are open for international business (including dealings in
dollar deposits) in London.
8
"Euro-Dollar Lending Office" means, as to each Bank, its office,
--------------------------
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent; provided that no Bank shall be
permitted to change its Euro-Dollar Lending Office if at the time of such change
either (i) pursuant to the provisions of Section 8.1 or Section 8.2, Borrower
would be unable to maintain any Loans as Euro-Dollar Loans; or (ii) Borrower
would be required make any payment to such Bank pursuant to the provisions of
Sections 8.3 or Section 8.4.
"Euro-Dollar Loan" means a Loan to be made by a Bank as a Euro-Dollar
----------------
Loan in accordance with the applicable Notice of Borrowing or notice pursuant
to Section 2.2(b) or Notice of Interest Rate Election.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
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2.7(b).
"Event of Default" has the meaning set forth in Section 6.1.
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"Existing Affiliate Agreements" means those agreements between the
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Guarantor and its Affiliates listed on Schedule 5.22 hereof.
"Existing Credit Agreements" means credit agreements relating to (A)
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10-1/8% Senior Subordinate Hillhaven Notes in the remaining amount of
$3,300,000, (B) BGM Enterprises mortgage loan in amount of $1.2 million, (C)
Versnick mortgage in amount of $60,000, and (D) the Pro Data unsecured loan in
amount of $1,500,000.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
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upward, if necessary, to the nearest 1/100th 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 Domestic Business Day
next succeeding such day; provided that (i) if such day is not a Domestic
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Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on
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the next preceding Domestic Business Day as so published on the next succeeding
Domestic Business Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for such day shall be
the average rate quoted to the Administrative Agent on such day on such
transactions as determined by the Administrative Agent.
"FFO" means "funds from operations," defined to mean net income (or
---
loss) (computed in accordance with GAAP), excluding gains (or losses) from debt
restructurings and sales of properties, plus depreciation and amortization.
"Federal Reserve Board" means the Board of Governors of the Federal
---------------------
Reserve System as constituted from time to time.
"FMV Cap Rate" means 10.75%.
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"Fronting Bank" shall mean NationsBank, N.A., PNC Bank, National
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Association, National City Bank of Kentucky, Bank of America National Trust &
Savings Association and Bank of Nova Scotia or such other Bank which Borrower,
such Bank and the Administrative Agent agree may be a Fronting Bank and which is
designated by Borrower in its Notice of Borrowing as the Bank which shall
issue a Letter of Credit with respect to such Notice of Borrowing.
"G&A Percentage" means the percentage equal to the percentage that
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general overhead and administrative expenses of the Guarantor and its
Consolidated Subsidiaries bears to the total revenues of Guarantor and its
Consolidated Subsidiaries, which initially shall be deemed to be 5%, and from
and after September 30, 1999 shall be calculated based upon the preceding four
(4) fiscal quarters.
"GAAP" means generally accepted accounting principles recognized as
----
such in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and Board or in such
other statements by such other entity as may be approved by a significant
segment of the accountant profession, which are applicable to the circumstances
as of the date of determination.
10
"Governmental Authority" means any Federal, state or local government
----------------------
or any other political subdivision thereof or agency exercising executive,
legislative, judicial, regulatory or administrative functions having
jurisdiction over the Borrower or the Guarantor.
"Group of Loans" means, at any time, a group of Loans consisting of
--------------
(i) all Loans which are Base Rate Loans at such time, or (ii) all Loans which
are Euro-Dollar Loans having the same Interest Period at such time; provided
--------
that, if a Loan of any particular Bank is converted to or made as a Base Rate
Loan pursuant to Section 8.2 or 8.4, such Loan shall be included in the same
Group or Groups of Loans from time to time as it would have been in if it had
not been so converted or made.
"Guarantor" means Ventas, Inc., a Delaware corporation and the sole
---------
general partner of the Borrower, and its successors.
"Guaranty" means the Guaranty of Payment, dated as of even date
--------
herewith, by the Guarantor and the Vencor Subsidiaries for the benefit of the
Documentation Agent on behalf of the Banks.
"Indemnitee" has the meaning set forth in Section 9.3(b).
----------
"Interest Period" means: (1) with respect to each Euro-Dollar
---------------
Borrowing, the period commencing on the date of such Borrowing or the date of
any conversion or continuation as specified in any Notice of Interest Election
with respect to such Borrowing and ending one, two, three or six months
thereafter, as the Borrower may elect in the applicable Notice of Borrowing or
Notice of Interest Election; provided that:
--------
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period shall
end on the next preceding Euro-Dollar Business Day;
11
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Dollar Business Day of a
calendar month; and
(c) any Interest Period that would other wise end after the
Maturity Date shall end on the Maturity Date.
In addition, if, within thirty (30) days of the date on which an Interest Period
ends, there is a Required Amortization Payment or Tranche D Amortization
Payment due hereunder, then Borrower may elect for that portion of such
Euro-Dollar Loan that will be paid down by such Required Amortization Payment or
Tranche D Amortization Payment, in the applicable Notice of Interest Election,
an Interest Period shorter than one month but in no case less than seven (7)
days.
(ii) with respect to each Base Rate Borrowing, the period commencing
on the date of such Borrowing or Notice of Interest Rate Election and ending on
the date on which another Notice of Interest Rate Election is delivered with
respect thereto.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
---------------------
amended, or any successor statute.
"Investment Grade Rating" means a rating for a Person's senior long-
-----------------------
term unsecured debt of BBB- or better from S&P, and a rating of Baa3 or better
from Moody's, if ratings from both Rating Agencies are obtained.
"Letter(s) of Credit" has the meaning provided in Section 2.2(c).
-------------------
"Letter of Credit Collateral" has the meaning provided in Section 6.4.
---------------------------
"Letter of Credit Collateral Account" has the meaning provided in
-----------------------------------
Section 6.4.
"Letter of Credit Documents" has the meaning provided in Section 2.17.
--------------------------
12
"Letter of Credit Usage" means at any time the sum of (i) the
----------------------
aggregate maximum amount available to be drawn under the Letters of Credit then
outstanding, assuming compliance with all requirements for drawing referred to
therein, and (ii) the aggregate amount of the Borrower's unpaid reimbursement
obligations under this Agreement in respect of the Letters of Credit.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind. For the purposes of this
Agreement, each of the Borrower and any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan" means a loan made by a Bank pursuant to Section 2.1; provided
---- --------
that, if any such loan or loans (or portions thereof) are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term "Loan" shall refer to
the combined principal amount resulting from such combination or to each of the
separate principal amounts resulting from such subdivision, as the case may be.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
--------------
Pledge, the Letter(s) of Credit, the Letter of Credit Documents, any Subsidiary
guaranty or pledge executed pursuant to Section 5.24 hereof and any related
------------
documents.
"London Interbank Offered Rate" has the meaning set forth in Section
-----------------------------
2.7(b).
"Margin Stock" shall have the meaning provided such term in Regulation
------------
U of the Federal Reserve Board.
"Master Lease" has the meaning set forth in Section 5.23 hereof.
------------
"Material Adverse Effect" means a material adverse effect upon (i) the
-----------------------
business, operations, proper ties or assets of the Borrower, the Guarantor and
their Subsidiaries taken as a whole or (ii) the ability of the Borrower, the
Guarantor and their Subsidiaries
13
taken as a whole to perform their obligations hereunder or under the Guaranty in
all material respects, including to pay interest and principal.
"Material Lease" means, with respect to any Real Property Asset, any
--------------
lease entered into by Borrower or any Subsidiary with a third party for more
than 15,000 square feet of space affecting such Real Property Asset.
"Material of Environmental Concern" means and includes pollutants,
---------------------------------
contaminants, hazardous wastes, and toxic, radioactive, caustic or otherwise
hazardous sub stances, including petroleum, its derivatives, by-products and
other hydrocarbons, or any substance having any constituent elements displaying
any of the foregoing characteristics.
"Material Plan" means at any time a Plan having aggregate Unfunded
-------------
Liabilities in excess of $5,000,000.
"Maturity Date" has the meaning set forth in Section 2.9.
-------------
"Maximum Total Debt Ratio" means the ratio, as of the date of
------------------------
determination, of (i) the Debt of the Borrower, the Guarantor and their
Consolidated Subsidiaries to (ii) Tangible FMV.
"Minority Holdings" means partnerships, limited liability companies
-----------------
and corporations held or owned by the Borrower which are not consolidated with
the Borrower on its financial statements.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
-------
thereto.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, in its
------
individual capacity.
"Multiemployer Plan" means at any time an employee pension benefit
------------------
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
14
"NationsBank" means NationsBank, N.A., in its individual capacity.
-----------
"Net Offering Proceeds" means all cash received by the Borrower or the
---------------------
Guarantor as a result of the sale of common shares of beneficial interest,
preferred shares of beneficial interest, partnership interests, limited
liability company interests, or other ownership or equity interests in the
Borrower or the Guarantor (or evidence of indebtedness of the Borrower or the
Guarantor convertible into any of the foregoing) less customary costs and
----
discounts of issuance paid by the Borrower or the Guarantor.
"Net Operating Cash Flow" means, as of any date of determination with
-----------------------
respect to all Real Property Assets, Property Income with respect thereto for
the previous four (4) consecutive quarters, including the quarter then ended,
but less (x) Property Expenses with respect thereto for the previous four (4)
consecutive quarters, including the quarter then ended.
"New Subsidiary" has the meaning set forth in Section 5.24.
--------------
"Non-Recourse Debt" means Debt of the Borrower, the Guarantor or any
-----------------
of their Subsidiaries on a consolidated basis for which the right of recovery
of the obligee thereof is limited to recourse against the Real Property Assets
securing such Debt (subject to such limited exceptions to the non-recourse
nature of such Debt such as fraud, misappropriation, misapplication and
environmental indemnities, as are usual and customary in like transactions at
the time of the incurrence of such Debt).
"Notes" means, collectively, the promissory notes of the Borrower
-----
evidencing the obligation of the Borrower to repay the Tranche A Loan, the
Tranche B Loans, the Tranche C Loan, and the Tranche D Loan (each substantially
in the form of Exhibit A-1 attached hereto, and in the case of Swing Loans, the
-----------
promissory note of the Borrower evidencing the obligation of the Borrower to
repay the Swing Loans (substantially in the form of Exhibit A-2 hereto), and
-----------
"Note" means any one of such promissory notes issued hereunder.
-----
15
"Notice of Borrowing" has the meaning set forth in Section 2.2.
-------------------
"Notice of Interest Election" has the meaning set forth in Section
---------------------------
2.15(a).
"Obligations" means all obligations, liabilities and indebtedness of
-----------
every nature of the Borrower from time to time owing to any Bank under or in
connection with this Agreement or any other Loan Document, including, without
limitation, (i) the outstanding principal amount of the Loans at such time,
plus (ii) the Letter of Credit Usage at such time.
"Outstanding Balance" means the sum of (i) the aggregate outstanding
-------------------
and unpaid principal balance of all Loans and (ii) the Letter of Credit Usage.
"Parent" means, with respect to any Bank, any Person controlling such
------
Bank.
"Participant" has the meaning set forth in Section 9.6(b).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means (a) Liens to secure the performance of
---------------
statutory obligations, surety or appeal bonds, performance bonds, completion
bonds, government contracts or other obligations of a like nature, including
Liens in connection with workers' compensation, unemployment insurance and other
types of statutory obligations or to secure the performance of tenders, bids,
leases, contracts (other than for the repayment of Debt) and other similar
obligations incurred in the ordinary course of business; (b) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided, that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (c) Liens on property of the Borrower or any Subsidiary
thereof in favor of the Federal or any state government to secure certain
payments pursuant to any contract, statute or regulation; (d) easements
(including, without limitation,
16
reciprocal easement agreements and utility agreements), rights of way,
covenants, consents, reservations, encroachments, variations and zoning and
other restrictions, charges or encumbrances (whether or not recorded), which do
not interfere materially with the ordinary conduct of the business of the
Borrower or any Subsidiary thereof or any lessee under a Material Lease and
which do not materially detract from the value of the property to which they
attach or materially impair the use thereof by the Borrower or any Subsidiary
thereof or any lessee under a Material Lease; (e) statutory Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other Liens
imposed by law and arising in the ordinary course of business, for sums not then
due and payable (or which, if due and payable, are being contested in good
faith and with respect to which adequate reserves are being maintained to the
extent required by GAAP); and (f) the interests of lessees and lessors under
leases of real or personal property made in the ordinary course of business
which would not have a Material Ad verse Effect.
"Person" means an individual, a corporation, a partnership, a limited
------
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan (other than
----
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pledge" means that certain Pledge and Security Agreement dated as of
------
the date hereof by the Guarantor and the Borrower in favor of the Documentation
Agent.
"Prime Rate" means the rate of interest per annum established from
----------
time to time by NationsBank in Charlotte, North Carolina as its prime rate,
which rate
17
may not be the lowest rate of interest charged by NationsBank to its customers.
"Pro Forma Debt Service" means, for any period, the amount determined
----------------------
by applying a twenty-five (25) year mortgage amortization schedule to the amount
of Loans outstanding under any tranche during the applicable measuring period,
using an assumed annual interest rate equal to the greater of (x) the then-
applicable interest rate for such Loans, or (y) the then-applicable Treasury
Rate plus 2.50%, determined on an annualized basis for the applicable measuring
period.
"Property Expenses" means, when used with respect to any Real Property
-----------------
Asset, the costs of maintaining such Real Property Asset which are the
responsibility of the owner thereof and that are not paid directly by the
tenant thereof, including, without limitation, taxes, insurance, repairs and
maintenance, but provided that if such tenant is more than 90 days in arrears in
the payment of base or fixed rent, then such costs will also constitute
"Property Expenses", but excluding depreciation, amortization and interest
costs.
"Property Income" means, when used with respect to any Real Property
---------------
Asset, cash rents and other cash revenues received in the ordinary course
therefrom, including, without limitation, revenues from any parking leases and
lease termination fees amortized over the remaining term of the lease for which
such termination fee was received (other than the paid rents and revenues and
security deposits except to the extent applied in satisfaction of tenants'
obligations for rent).
"Proxy Statement" means that certain proxy statement of Guarantor
---------------
filed with the Securities and Exchange Commission on March 25, 1998.
"Purchasing Banks" has the meaning set forth in Section 8.6 hereof.
----------------
"Qualified Development Property Leases" means leases by Borrower or
-------------------------------------
any of its Consolidated Subsidiaries to Vencor Operating, Inc. or any of its
Subsidiaries covering the Real Property Assets listed on Exhibit C attached
---------
hereto and made a part hereof, which Real Property Assets Borrower or any of
its Consolidated Subsidiaries will have purchased for no more than 115% of the
18
purchase price for each such Real Property Asset set forth on Exhibit C, and
---------
which leases provide for (i) a minimum term of at least 12 years, (ii) an annual
rental not less than 90% of the annual rentals set forth on Exhibit C with
---------
respect to the applicable Real Property Assets, (iii) "triple net" lease terms
with respect to all property related expenses, and (iv) liquidated dam ages
equal to the net present value (discounted at a factor no greater than the Prime
Rate) of the remaining rent thereunder through the stated maturity date (without
any stated obligation on the part of the landlord to mitigate damages) in the
event of a termination of the lease.
"Real Property Assets" means as of any time, the real property assets
--------------------
owned directly or indirectly by the Guarantor, the Borrower or their
Consolidated Subsidiaries at such time.
"Recourse Debt" shall mean Debt of the Borrower, the Guarantor or any
-------------
Subsidiary that is not Non-Recourse Debt.
"Reference Bank" means the principal London offices of NationsBank.
--------------
"Refunded Swing Loan" has the meaning set forth in Section 2.1(e)(ii).
-------------------
"Regulation U" means Regulation U of the Board of Governors of the
------------
Federal Reserve System, as in effect from time to time.
"Release" means any release, spill, emission, leaking, pumping,
-------
pouring, dumping, emptying, deposit, discharge, leaching or migration.
"Required Amortization Payment" has the meaning set forth in Section
-----------------------------
2.10(b) hereof.
"Required Banks" means, at any time, Banks having at least fifty-one
--------------
percent (51%) of the aggregate amount of the Commitments or, if the Commitments
shall have been terminated, holding Notes evidencing at least fifty-one percent
(51%) of the aggregate unpaid principal amount of the Loans.
19
"Requirements" means all present and future laws, statutes, codes,
------------
ordinances, orders, judgments, decrees, injunctions, rules, regulations and
requirements of every Governmental Authority having jurisdiction over any Real
Property Asset and all restrictive covenants applicable to any Real Property
Asset.
"Secured Debt" means Debt of a Person which is secured by a Lien.
------------
"Selling Bank" has the meaning set forth in Section 8.6 hereof.
------------
"Senior Officer" means, with respect to the Guarantor, such entity's
--------------
president, vice president, chief financial officer, chief accounting officer,
secretary or treasurer.
"Solvent" means, with respect to any Person, that the fair saleable
-------
value of such Person's assets exceeds the Debts of such Person.
"Subsidiary" means any corporation or other entity of which securities
----------
or other ownership interests representing either (i) ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions or (ii) a majority of the economic interest therein, are at the time
directly or indirectly owned by the Borrower or Guarantor, as applicable.
"Super-Majority Banks" means, at any time, Banks having at least
--------------------
seventy-five percent (75%) of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, holding Notes evidencing at least
seventy-five percent (75%) of the aggregate unpaid principal amount of the
Loans.
"Swing Lender" means NationsBank, N.A., in its capacity as the Swing
------------
Lender under the Swing Loan facility described in Section 2.1(e), and its
successors in such capacity.
"Swing Loan" means a Loan made by the Swing Lender pursuant to Section
----------
2.1(e).
"Swing Loan Commitment" means the lesser of (a) $5,000,000 and (b) the
---------------------
aggregate amount of the unused
20
Tranche B Commitments, as such amount may be reduced from time to time pursuant
to Section 2.11.
"Swing Loan Refund Amount" has the meaning set forth in Section
------------------------
2.1(e)(ii).
"S&P" means Standard & Poor's Ratings Services, a division of The
---
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereof.
"Tangible FMV" means the sum of (x) (A) initially, the aggregate
------------
value of the Real Property Assets of the Borrower, Guarantor and their
Consolidated Subsidiaries, as determined by ▇▇▇▇▇▇▇ & Wakefield pursuant to
the valuations thereof dated March 13, 1998, and (B) commencing as of June 30,
1998 through June 30, 1999, the lesser of (1) the sum of (x) the aggregate value
of the Real Property Assets owned by the Borrower, Guarantor and their
Consolidated Subsidiaries as of the Closing Date, as determined by ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ pursuant to the valuations thereof dated March 13, 1998, and (y) with
respect to all Real Property Assets acquired by the Borrower, Guarantor and
their Consolidated Subsidiaries after the Closing Date, the quotient of (i) the
Net Operating Cash Flow with respect thereto on an annualized basis, less an
amount equal to the product of the G&A Percentage and such Net Operating Cash
Flow, and (ii) the FMV Cap Rate, and (2) the quotient of Annual EBITDA from the
period commencing on the Closing Date through the date of determination, on an
annualized basis, and the FMV Cap Rate, and (C) commencing as of September 30,
1999, with respect to the sum of (i) those Real Property Assets owned by the
Borrower, Guarantor and their consolidated Subsidiaries for a period of not
less than four (4) fiscal quarters, the quotient of the Annual EBITDA with
respect thereto, and the FMV Cap Rate, and (ii) with respect to those Real
Property Assets owned by the Borrower, Guarantor and their Consolidated
Subsidiaries for a period of less than four (4) fiscal quarters, an amount equal
to the quotient of (1) the Net Operating Cash Flow with respect thereto, on an
annualized basis, less an amount equal to the product of the G&A Percentage and
such Net Operating Cash Flow, and (2) the FMV Cap Rate, and (y) Cash or Cash
Equivalents of Borrower, Guarantor and their Consolidated Subsidiaries as of the
date of determination.
21
"Term" has the meaning set forth in Section 2.9.
----
"Title Company" means a title insurance company of recognized national
-------------
standing.
"Title Commitment" means, for each Unencumbered Asset Pool Property,
----------------
an ALTA fee or leasehold title commitment or title policy issued by the Title
Company at the time of acquisition by the Borrower, the Guarantor or, if
applicable, a Subsidiary of either.
"Total Debt Service" means, as of the last day of each calendar
------------------
quarter, an amount equal to interest (whether accrued, paid or capitalized)
actually payable by Guarantor, Borrower or its Consolidated Subsidiaries on its
Debt for the previous four consecutive quarters including the quarter then ended
(or determined on an annualized basis in the case of Debt outstanding for less
than four quarters).
"Tranche A Bank" means any Bank that has committed to fund a portion
--------------
of the Tranche A Loan.
"Tranche A Loan Commitment" means, with respect to each Bank, the
-------------------------
amount committed by such Bank pursuant to this Agreement with respect to the
Tranche A Loan as set forth on the signature pages hereto, as such amount may be
reduced from time to time pursuant to Sections 2.10 and 2.11.
"Tranche A Loan" means the bridge loan to be made to Borrower for the
--------------
purposes set forth in Section 5.16 hereof.
"Tranche A Loan Amount" has the meaning set forth in Section 2.1.
---------------------
"Tranche A Notes" means the promissory notes of Borrower, each
---------------
substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
-----------
Borrower to repay the Tranche A Loan, and "Tranche A Note" means any one of such
--------------
promissory notes issued hereunder.
"Tranche B Bank" means any Bank that has committed to fund a portion
--------------
of the Tranche B Loan.
22
"Tranche B Loan Commitment" means, with respect to each Bank, the
-------------------------
amount committed by such Bank pursuant to this Agreement with respect to the
Tranche B Loan as set forth on the signature pages hereto, as such amount may be
reduced from time to time pursuant to Sections 2.10 and 2.11.
"Tranche B Loan" means the revolving credit loan or loans to be made
--------------
to Borrower for the purposes set forth in Section 5.16 hereof.
"Tranche B Loan Amount" has the meaning set forth in Section 2.1.
---------------------
"Tranche B Notes" means the promissory notes of Borrower, each
---------------
substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
-----------
Borrower to repay the Tranche B Loan, and "Tranche B Note" means any one of such
--------------
promissory notes issued hereunder.
"Tranche C Bank" means any Bank that has committed to fund a portion
--------------
of the Tranche C Loan.
"Tranche C Loan Commitment" means, with respect to each Bank, the
-------------------------
amount committed by such Bank pursuant to this Agreement with respect to the
Tranche C Loan as set forth on the signature pages hereto, as such amount may be
reduced from time to time pursuant to Sections 2.10 and 2.11.
"Tranche C Loan" means the term loan to be made to Borrower for the
--------------
purposes set forth in Section 5.16 hereof.
"Tranche C Loan Amount" has the meaning set forth in Section 2.1.
---------------------
"Tranche C Notes" means the promissory notes of Borrower, each
---------------
substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
-----------
Borrower to repay the Tranche C Loan, and "Tranche C Note" means any one of such
--------------
promissory notes issued hereunder.
"Tranche D Amortization Payment" has the meaning set forth in Section
------------------------------
2.10(c).
"Tranche D Bank" means any Bank that has committed to fund a portion
--------------
of the Tranche D Loan.
23
"Tranche D Loan Commitment" means, with respect to each Bank, the
-------------------------
amount committed by such Bank pursuant to this Agreement with respect to the
Tranche D Loan as set forth on the signature pages hereto, as such amount may be
reduced from time to time pursuant to Sections 2.10 and 2.11.
"Tranche D Loan" means the term loan to be made to Borrower for the
--------------
purposes set forth in Section 5.16 hereof.
"Tranche D Loan Amount" has the meaning set forth in Section 2.1.
---------------------
"Tranche D Notes" means the promissory notes of Borrower, each
---------------
substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
-----------
Borrower to repay the Tranche D Loan, and "Tranche D Note" means any one of such
--------------
promissory notes issued hereunder.
"Treasury Rate" means, as of any date, a rate equal to the annual
-------------
yield to maturity on the U.S. Treasury Constant Maturity Series with a ten
(10) year maturity, as such yield is reported in Federal Reserve Statistical
Release H.15 -- Selected Interest Rates, published most recently prior to the
date the applicable Treasury Rate is being determined. Such yield shall be
determined by straight line linear interpolation between the yields reported in
Release H.15, if necessary. In the event Release H.15 is no longer published,
the Administrative Agent shall select, in its reasonable discretion, an
alternate basis for the determination of Treasury yield for U.S. Treasury
Constant Maturity Series with ten (10) year maturities.
"Unencumbered Asset Pool Net Operating Cash Flow" means, as of any
-----------------------------------------------
date of determination with respect to the Unencumbered Asset Pool Properties,
Property Income with respect thereto for the previous four (4) consecutive
quarters, including the quarter then ended, but less (x) Property Expenses with
respect thereto for the previous four (4) consecutive quarters, including the
quarter then ended (determined on an annualized basis for the applicable
measuring period in the case of Unemcumbered Asset Pool Properties owned by
the Borrower or Guarantor or any of their Consolidated Subsidiaries for less
than four (4) consecutive quarters).
24
"Unencumbered Asset Pool Properties" means, as of any date, the Real
----------------------------------
Property Assets listed in Exhibit B attached hereto and made a part hereof, each
---------
of which is open for business and operating and each of which is 100% owned in
fee (or leasehold in the case of assets listed as such on Exhibit B) by the
---------
Borrower or Guarantor or any of their Consolidated Subsidiaries and each of
which is not subject to any Lien (other than Permitted Liens), subject to
adjustment as set forth herein, together with all Real Property Assets which
have become part of the Unencumbered Asset Pool Properties as of such date in
accordance herewith.
"Unencumbered Asset Pool Properties Value" means:
----------------------------------------
(i) as of the Closing Date, an amount equal to the aggregate
value thereof, as determined by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ pursuant to the
valuations thereof, dated March 13, 1998;
(ii) for the period commencing as of June 30, 1998 and ending
as of June 30, 1999, an amount equal to the sum of (I) with respect to
those Unencumbered Asset Pool Properties set forth on Exhibit B hereto, an
---------
amount equal to the lesser of (x) the aggregate value thereof, as
determined by ▇▇▇▇▇▇▇ & Wakefield pursuant to the valuations thereof, dated
March 13, 1998, and (y) an amount equal to the quotient of (A) Net
Operating Cash Flow with respect to each Unencumbered Asset Pool Property,
less an amount equal to the product of the G&A Percentage and such
Net Operating Cash Flow, and (B) the FMV Cap Rate, and (II) with respect to
those Unencumbered Asset Pool Properties acquired by the Borrower or
Guarantor and their Consolidated Subsidiaries after the Closing Date, an
amount equal to the quotient of (A) Net Operating Cash Flow with respect to
each Unencumbered Asset Pool Property, less an amount equal to the product
of the G&A Percentage and such Net Operating Cash Flow, and (B) the FMV
Cap Rate; and
(iii) thereafter, (A) with respect to the Unencumbered Asset
Pool Properties owned by the Borrower or Guarantor or any of their
Consolidated Subsidiaries for a period of at least four (4) fiscal
quarters, the quotient of (x) the
25
Unencumbered Asset Pool Net Operating Cash Flow with respect to each
Unencumbered Asset Pool Property less an amount equal to the product of the
G&A Percentage and such Unencumbered Asset Pool Net Operating Cash Flow and
(y) the FMV Cap Rate, and (B) with respect to Unen cumbered Asset Pool
Properties owned by the Borrower or Guarantor or any of their Consolidated
Subsidiaries for a period of less than four (4) fiscal quarters, the
quotient of (x) Unencumbered Asset Pool Net Operating Cash Flow with
respect to each Unencumbered Asset Pool Property, on an annualized basis
based upon the Unencumbered Asset Pool Net Operating Cash Flow for the
period of such Person's ownership of the Unencumbered Asset Pool Property
in question less an amount equal to the product of the G&A Percentage and
such Unencumbered Asset Pool Net Operating Cash Flow, and (y) the FMV Cap
Rate.
"Unencumbered Debt Service Coverage Ratio" means, as of any date of
----------------------------------------
determination, the ratio of Unencumbered Asset Pool Net Operating Cash Flow to
Pro Forma Debt Service.
"Unfunded Liabilities" means, with respect to any Plan at any time,
--------------------
the amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed
by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including the
-------------
States and the District of Columbia, but excluding its territories and
possessions.
"Unsecured Debt" means Debt not secured by a Lien on any Real Property
--------------
Asset.
"Unsecured Debt Ratio" means, as of any date of determination, the
--------------------
ratio of the aggregate amount of Unsecured Debt of the Borrower, the Guarantor
and their
26
Consolidated Subsidiaries outstanding as of such date of determination, to the
Unencumbered Asset Pool Properties Value as of the date of determination.
"Vencor Subsidiaries" means First Healthcare Corporation, Nationwide
-------------------
Care, Inc., Vencor Hospitals Illinois, Inc., Vencor Hospitals East, Inc.,
Personacare of Rhode Island, Inc., Care Venture Partners, L.P., Health Haven
Associates, L.P., Oak Hill Nursing Associates, L.P., Hillhaven/Indiana
Partnership, San Marcos Nursing Home Partnership, St. ▇▇▇▇▇▇ Nursing Home L.P.,
New Pond Village Associates, Hahnemann Hospital, Inc., and Northwest Healthcare,
Inc. and "Vencor Subsidiary" means any one of the foregoing entities.
-----------------
Section 2.2 Accounting Terms and Determinations. Unless otherwise
------------------------------------
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP,
applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower or Guarantor delivered to the
Administrative Agent and the Banks; provided that, if the Borrower notifies the
--------
Administrative Agent and the Banks that the Borrower wishes to amend any
covenant in Article V to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Banks wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
Section 2.3 Types of Borrowings. The term "Borrowing" denotes the
------------------- ---------
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article II (or a Swing Loan made solely by the Swing Lender) on the same date,
all of which Loans are of the same type (subject to Article VIII) and, except in
the case of Base Rate Loans, have the same Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the pricing of
Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
----
27
comprised of Euro-Dollar Loans) or by reference to the provisions of Article II
under which participation therein is determined (i.e., a "Borrowing" is a
----
Borrowing under Section 2.1 in which all Banks participate in proportion to
their Commitments, and a Borrowing is a Swing Borrowing if such Loans are Swing
Loans).
ARTICLE IV
THE CREDITS
Section 4.1 Commitments to Lend.
-------------------
(a) Tranche A Loan. Each Tranche A Bank severally agrees, on the
--------------
terms and conditions set forth in this Agreement, to make the Tranche A Loan on
the Closing Date to Borrower in an amount such that the aggregate principal
amount of the Tranche A Loan by such Bank at any one time outstanding shall not
exceed the amount of its Tranche A Loan Commitment. The aggregate amount of the
Tranche A Loan to be made hereunder shall not exceed Four Hundred Million
Dollars ($400,000,000) (the "Tranche A Loan Amount");
---------------------
(b) Tranche B Loans. Each Tranche B Bank severally agrees, on the
---------------
terms and conditions set forth in this Agreement, to make Tranche B Loans to
Borrower and participate in Letters of Credit issued by the Fronting Bank on
behalf of Borrower pursuant to this Section 2.1(b) from time to time during the
Term in amounts such that the aggregate principal amount of Tranche B Loans by
such Bank at any one time outstanding together with such Bank's pro rata share
--------
of Letter of Credit Usage with respect to Borrower shall not exceed the amount
of its Tranche B Commitment. The aggregate amount of Tranche B Loans to be made
hereunder together with the Letter of Credit Usage with respect to Borrower
shall not exceed at any one time Two Hundred Fifty Million Dollars
($250,000,000) (the "Tranche B Loan Amount"). Each Euro-Dollar Borrowing under
---------------------
this subsection (b) shall be in an aggregate principal amount of at least
$5,000,000, or an integral multiple of $1,000,000 in excess thereof, and each
Base Rate Borrowing under this subsection (b) shall be in an aggregate principal
amount of at least $1,000,000, or an integral multiple of $100,000 in excess
thereof, and in each case shall be made from the several Banks ratably in
28
proportion to their respective Tranche B Commitments. Subject to the
limitations set forth herein, any Tranche B Loan amounts repaid may be
reborrowed.
(c) Tranche C Loan. Each Tranche C Bank severally agrees, on the
--------------
terms and conditions set forth in this Agreement, to make the Tranche C Loan on
the Closing Date to Borrower in an amount such that the aggregate principal
amount of the Tranche C Loan by such Bank at any one time outstanding shall not
exceed the amount of its Tranche C Commitment. The aggregate amount of Tranche
C Loans to be made hereunder shall not exceed Two Hundred Million Dollars
($200,000,000) (the "Tranche C Loan Amount").
---------------------
(d) Tranche D Loan. Each Tranche D Bank severally agrees, on the
--------------
terms and conditions set forth in this Agreement, to make the Tranche D Loan on
the Closing Date to Borrower during the Term in an amount such that the
aggregate principal amount of Tranche D Loans by such Bank at any one time
outstanding shall not exceed the amount of its Tranche D Commitment. The
aggregate amount of Tranche D Loans to be made hereunder shall not exceed Three
Hundred Fifty Million Dollars ($350,000,000) (the "Tranche D Loan Amount").
---------------------
(e) Swing Loans. (i) Subject to the satisfaction of the conditions
-----------
precedent set forth in Section 3.2 hereof, during the Term, the Swing Lender
agrees, on the terms and conditions set forth in this Agreement, to make loans
to the Borrower pursuant to this Section 2.1(e)(i) from time to time in amounts
such that the aggregate principal amount of Swing Loans does not at any time
exceed the Swing Loan Commitment. Each Borrowing under this Section 2.1(e)(i)
shall be in an aggregate principal amount of $1,000,000 or any larger multiple
of $100,000 (except that any such Borrowing may be in the aggregate available
amount of Swing Loans determined in accordance with the immediately preceding
sentence). Within the foregoing limits, the Borrower may borrow under this
Section 2.1(e)(i), repay or, to the extent permitted by Section 2.11, prepay
Swing Loans and reborrow at any time during the Term under this Section
2.1(e)(i).
(ii) Conversion of Swing Loans to Tranche B Loans. The Swing Lender
--------------------------------------------
shall, on behalf of the Borrower (which hereby irrevocably directs the Swing
Lender to act
29
on its behalf), on notice given by the Swing Lender no later than 1:00 P.M.
(Eastern time), on the Domestic Business Day immediately following the funding
of any Swing Loan, request each Tranche B Bank to make, and each Tranche B Bank
hereby agrees to make, a Base Rate Loan, in an amount (with respect to each
Tranche B Bank, its "Swing Loan Refund Amount") equal to such Tranche B Bank's
------------------------
ratable share of the aggregate Tranche B Commitments with respect to the
aggregate principal amount of the Swing Loans (the "Refunded Swing Loans")
--------------------
outstanding on the date of such notice, to repay the Swing Lender. Unless any of
the events described in clause (f) or (g) of Section 6.1 with respect to the
Borrower shall have occurred and be continuing (in which case the procedures of
Section 2.1(e)(iii) shall apply), each Tranche B Bank shall make such Base Rate
Loan available to the Administrative Agent at its address specified in or
pursuant to Section 9.1 in immediately available funds, not later than 1:00 P.M.
(Eastern time), on the Domestic Business Day immediately following the date of
such notice. The Administrative Agent shall pay the proceeds of such Base Rate
Loans to the Swing Lender, which shall immediately apply such proceeds to repay
Refunded Swing Loans. Effective on the day such Base Rate Loans are made, the
portion of the Swing Loans so paid shall no longer be outstanding as Swing
Loans, shall no longer be due as Swing Loans under the Note held by the Swing
Lender, and shall be due as Base Rate Loans under the respective Notes issued to
the Tranche B Banks (including the Swing Lender) in accordance with their
ratable share of the aggregate Commitments. The Borrower authorizes the Swing
Lender to charge the Borrower's accounts with the Administrative Agent (up to
the amount available in each such account) in order to immediately pay the
amount of such Refunded Swing Loans to the extent amounts received from the
Tranche B Banks are not sufficient to repay in full such Refunded Swing Loans.
(iii) Purchase of Participations in Swing Loans. If, prior to the
-----------------------------------------
time Loans would have otherwise been made pursuant to Section 2.1(e)(ii), one of
the events described in clause (f) or (g) of Section 6.1 with respect to the
Borrower shall have occurred and be continuing, each Tranche B Bank shall, on
the date such Loans were to have been made pursuant to the notice referred to in
Section 2.1(a)(ii) (the "Refunding Date"), purchase an undivided participating
--------------
interest in the Swing Loans in an amount equal to such Tranche B Bank's Swing
Loan Refund Amount. On the Refunding Date, each Tranche B Bank shall transfer
to the Swing Lender, in immediately available funds, such Tranche B Bank's Swing
30
Loan Refund Amount, and upon receipt thereof the Swing Lender shall deliver to
such Tranche B Bank a Swing Loan participation certificate dated the date of the
Swing Lender's receipt of such funds and in the Swing Loan Refund Amount of such
Tranche B Bank.
(iv) Payments on Participated Swing Loans. Whenever, at any time after
------------------------------------
the Swing Lender has received from any Tranche B Bank such Tranche B Bank's
Swing Loan Refund Amount pursuant to Section 2.1(a)(iii), the Swing Lender
receives any payment on account of the Swing Loans in which the Tranche B Banks
have purchased participations pursuant to Section 2.1(a)(iii), the Swing Lender
will promptly distribute to each such Tranche B Bank its ratable share
(determined on the basis of the Swing Loan Refund Amounts of all of the Tranche
B Banks) of such payment (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Tranche B Bank's
participating interest was outstanding and funded); provided, however, that in
-------- -------
the event that such payment received by the Swing Lender is required to be
returned, such Tranche B Bank will return to the Swing Lender any portion
thereof previously distributed to it by the Swing Lender.
(v) Obligations to Refund or Purchase Participations in Swing Loans
---------------------------------------------------------------
Absolute. Each Tranche B Bank's obligation to transfer the amount of a Loan to
--------
the Swing Lender as provided in Section 2.1(a)(ii) or to purchase a
participating interest pursuant to Section 2.1(a)(iii) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Tranche B Bank, the Borrower or any other Person may have against the
Swing Lender or any other Person, other than the Swing Lender's gross
negligence or willful misconduct in connection with making any such Swing Loan,
(ii) the occurrence or continuance of a Default or an Event of Default at the
time of such transfer or purchase or the termination or reduction of the
Tranche B Commitments, provided, however, that if the Swing Lender has knowledge
-------- -------
of the continuance of a De fault or Event of Default pursuant to receiving a
notice of the occurrence thereof pursuant to Section 6.3 hereof at the time the
Swing Lender makes the Swing Loan,
31
then no Tranche B Bank shall be obligated to transfer the amount of a Loan to
the Swing Lender as provided in Section 2.1(a)(ii) or to purchase a
participating interest pursuant to Section 2.1(a)(iii), (iii) any adverse change
in the condition (financial or otherwise) of the Borrower or any other Person,
(iv) any breach of this Agreement by the Borrower, any other Tranche B Bank or
any other Person, or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
Section 4.2 Notice of Borrowing. (a) With respect to Tranche B
-------------------
Loans, the Borrower shall give the Administrative Agent notice (a "Notice of
---------
Borrowing") not later than (A) 12:00 Noon (Eastern Time) (x) on the date of each
---------
Base Rate Borrowing or (y) the third Euro-Dollar Business Day before each Euro-
Dollar Borrowing, or (B) 2:00 P.M. (Eastern Time) on the date of each Borrowing
of a Swing Loan, specifying:
(1) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business
Day in the case of a Euro-Dollar Borrowing,
(2) the aggregate amount of such Borrowing,
(3) whether the Loans comprising such Borrowing are to be Base
Rate Loans, Swing Loans, or Euro-Dollar Loans,
(4) whether the Loans comprising the Borrowing are to be project
loans and/or acquisition loans,
(5) in the case of a Euro-Dollar Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period,
(6) the portion of such Borrowing that is intended to be used
for working capital purposes, together with the aggregate amount of
Borrowings to date that have been used for working capital purposes, and
32
(7) that both before and after giving effect to the proposed
Borrowing, no Default or Event of Default has occurred or is continuing.
(b) The Borrower shall give the Administrative Agent notice not later
than 12:00 Noon (Eastern Time) (x) one Domestic Business Day before the Closing
Date or (y) the third Euro-Dollar Business Day before the Closing Date,
specifying:
(1) whether the Loans comprising the Tranche A Borrowing, the
Tranche C Borrowing and the Tranche D Borrowing are to be Base Rate Loans
or Euro-Dollar Loans,
(2) whether the Loans comprising the Tranche A Borrowing, the
Tranche C Borrowing and the Tranche D Borrowing are to be project loans
and/or acquisition loans,
(3) in the case of a Euro-Dollar Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period, and
(4) that no Default or Event of Default has occurred or is
continuing.
(c) Borrower shall give the Administrative Agent, and the designated
Fronting Bank, written notice in the event that it desires to have Letters of
Credit (each, a "Letter of Credit") issued hereunder no later than 10:00 a.m.,
----------------
Eastern Time, at least four (4) Domestic Business Days prior to the date of such
issuance. Each such notice shall specify (i) the designated Fronting Bank, (ii)
the aggregate amount of the requested Letters of Credit, (iii) the individual
amount of each requested Letter of Credit and the number of Letters of Credit to
be issued, (iv) the date of such issuance (which shall be a Domestic Business
Day), (v) the name and address of the beneficiary, (vi) the expiration date of
the Letter of Credit (which in no event shall be later than twelve (12) months
after the issuance of such Letter of Credit or five Domestic Business Days prior
to the Maturity Date of the Tranche B Loan, whichever is earlier), (vii) the
purpose and circumstances for which such Letter of Credit is being issued,
(viii) the terms upon which each such Letter of Credit may be drawn down (which
terms shall not
33
leave any discretion to Fronting Bank) and (ix) the aggregate amount of all
Letters of Credit then outstanding. Each such notice may be revoked
telephonically by the Borrower to the applicable Fronting Bank and the
Administrative Agent any time prior to the date of issuance of the Letter of
Credit by the applicable Fronting Bank, provided such revocation is confirmed in
writing by the Borrower to the Fronting Bank and the Administrative Agent within
one (1) Domestic Business Day by facsimile. No later than 10:00 a.m., Eastern
Time, on the date that is four (4) Domestic Business Days prior to the date of
issuance, the Borrower shall specify a precise description of the documents and
the verbatim text of any certificate to be presented by the beneficiary of such
Letter of Credit, which if presented by such beneficiary prior to the expiration
date of the Letter of Credit would require the Fronting Bank to make a payment
under the Letter of Credit; provided, that the Fronting Bank may, in its
--------
reasonable judgment, require changes in any such documents and certificates only
in conformity with changes in customary and commercially reasonable practice or
law and, provided further, that no Letter of Credit shall require payment
-------- -------
against a conforming draft to be made thereunder on the following Domestic
Business Day that such draft is presented if such presentation is made later
than 10:00 A.M. Eastern Time (except that if the beneficiary of any Letter of
Credit requests at the time of the issuance of its Letter of Credit that payment
be made on the same Domestic Business Day against a conforming draft, such
beneficiary shall be entitled to such a same day draw, provided such draft is
presented to the applicable Fronting Bank no later than 10:00 A.M. Eastern Time
and provided further the Borrower shall have requested to the Fronting Bank and
the Administrative Agent that such beneficiary shall be entitled to a same day
draw). In determining whether to pay on such Letter of Credit, the Fronting Bank
shall be responsible only to determine that the documents and certificates
required to be delivered under the Letter of Credit have been delivered and
that they comply on their face with the requirements of that Letter of Credit.
Section 4.3 Intentionally Omitted.
---------------------
34
Section 4.4 Notice to Banks; Funding of Loans.
---------------------------------
(a) Upon receipt of a Notice of Borrowing, the Administrative Agent
shall promptly notify each Bank of the contents thereof and of such Bank's share
of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than (i) 2:00 P.M. (Eastern Time) on the date of each
Base Rate Borrowing (including, without limitation, each Swing Borrowing) and
(ii) 1:00 P.M. (Eastern Time) on the date of each Euro-Dollar Borrowing, each
Bank (or, in the case of a Swing Loan, the Swing Lender) shall make available
its share of such Borrowing, in Federal or other funds immediately available
in Charlotte, North Carolina, to the Administrative Agent at its address
referred to in Section 9.1. The Administrative Agent will make the funds so
received from the Banks available to the Borrower at the Administrative Agent's
aforesaid address. If the Borrower has requested the issuance of a Letter of
Credit, no later than 12:00 Noon (Eastern Time) on the date of such issuance as
indicated in the notice delivered pursuant to Section 2.2(b), the Fronting Bank
shall issue such Letter of Credit in the amount so requested and deliver the
same to the Borrower with a copy thereof to the Administrative Agent.
Immediately upon the issuance of each Letter of Credit by the Fronting Bank,
such Fronting Bank shall be deemed to have sold and transferred to each other
Bank, and each such other Bank shall be deemed, and hereby agrees, to have
irrevocably and unconditionally purchased and received from the Fronting Bank,
without recourse or warranty, an undivided interest and a participation in such
Letter of Credit, any drawing thereunder, and the obligations of the Borrower
hereunder with respect thereto, and any security therefor or guaranty pertaining
thereto, in an amount equal to such Bank's ratable share thereof (based upon the
ratio its Tranche B Commitment bears to the aggregate of all Tranche B
Commitments). Upon any change in any of the Commitments in accordance herewith,
there shall be an automatic adjustment to such participations to reflect such
changed shares. The Fronting Bank shall have the primary obligation to fund any
and all draws made with respect to such Letter of Credit notwithstanding any
failure of a participating Bank to fund its ratable share of any such draw. The
35
Administrative Agent will instruct the Fronting Bank to make such Letter of
Credit available to the Borrower and the Fronting Bank shall make such Letter of
Credit avail able to the Borrower at the Borrower's aforesaid address or at
such address in the United States as Borrower shall request on the date of the
Borrowing.
(c) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of this Section 2.4 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Administrative Agent, such Bank and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, (provided, however, that in the
case of any Swing Loan Borrowing, with respect to the Borrower only, interest
thereon shall commence to accrue only from the date which is one (1) Domestic
Business Day after the date on which the Administrative Agent shall inform the
Borrower that any such Tranche B Bank shall have failed to fund its Swing Loan
Refund Amount) at (i) in the case of the Borrower, a rate per annum equal to the
higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.7 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Tranche B Loan
included in such Borrowing for purposes of this Agreement.
Section 4.5 Notes.
-----
(a) The Loans shall be evidenced by the Notes, each of which shall be
payable to the order of each Bank for the account of its Applicable Lending
Office in an amount equal to each such Bank's Commitments.
36
(b) Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type, including Swing Loans, be
evidenced by a separate Note in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in substantially the
form of Exhibit A-1 hereto, as applicable, and with respect to the Swing Lender,
-----------
in the form of Exhibit A-2 hereto, with appropriate modifications to reflect
-----------
the fact that it evidences solely Loans of the relevant type. Each reference in
this Agreement to the "Note" of such Bank shall be deemed to refer to and
----
include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note, the Administrative Agent shall
forward such Note to such Bank. Each Bank shall record the date, amount, type
and maturity of each Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto, and may, if such Bank so
elects in connection with any transfer or enforcement of its Note, endorse on
the schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding; provided
--------
that the failure of any Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Notes. Each
Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and
to attach to and make a part of its Note a continuation of any such schedule as
and when required.
(d) There shall be no more than fifteen (15) Euro-Dollar Borrowings
outstanding at any one time pursuant ant to this Agreement.
Section 4.6 Maturity of Loans. Each Loan shall mature, and the
-----------------
principal amount thereof shall be due and payable, on the Maturity Date
applicable thereto.
Section 4.7 Interest Rates.
--------------
(a) Each Base Rate Loan with respect to each Tranche A Borrowing,
Tranche B Borrowing, Tranche C Borrowing or Tranche D Borrowing, as applicable,
shall bear interest on the outstanding principal amount thereof, for each day
from the date such Loan is made until it is repaid, at a rate per annum equal to
the sum
37
of the Applicable Margin plus the Base Rate for such day. Such interest shall be
payable for each Interest Period on the last day of each calendar month during
such Interest Period.
(b) Each Swing Loan shall bear interest on the outstanding principal
amount thereof at the rate applicable to Base Rate Loans, and in the case of
any amount of overdue Swing Loan, overdue interest thereon at a rate per annum
for each day equal to the sum of two percent (2%) plus the rate applicable to
Base Rate Loans for such day and shall be payable on the last day of each
calendar month.
(c) Each Euro-Dollar Loan with respect to each Tranche A Borrowing,
Tranche B Borrowing, Tranche C Borrowing or Tranche D Borrowing, as applicable,
shall bear interest on the outstanding principal amount thereof, for each day
during the Interest Period applicable thereto, at a rate per annum equal to
the sum of the Applicable Margin plus the London Interbank Offered Rate for such
day. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at intervals
of three months after the first day thereof.
"London Interbank Offered Rate" means, with respect to any Euro-Dollar
-----------------------------
Loan for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Telerate Page 3750, the applicable rate shall be the arithmetic mean of all such
rates. If, for any reason, such rate is not available, the term "London
Interbank Offered Rate" shall mean, with respect to any Euro-Dollar Loan for the
Interest Period applicable thereto, the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on
38
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates.
(d) For so long as any Bank maintains reserves against "Eurocurrency
liabilities" (or any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a non-
United States office of such Bank to United States residents), and as a result
the cost to such Bank (or its Euro-Dollar Lending Office) of making or
maintaining its Euro-Dollar Loans is in creased, then such Bank may require
Borrower to pay, contemporaneously with each payment of interest on the Euro-
Dollar Loans, additional interest on the related Euro-Dollar Loan of such Bank
at a rate per annum up to but not exceeding the amount by which (x) (A) the
applicable London Interbank Offered Rate divided by (B) one minus the Euro-
Dollar Reserve Percentage exceeds (y) the applicable London Interbank Offered
Rate. Any Bank wishing to require payment of such additional interest (i) shall
so notify Borrower and the Administrative Agent, in which case such additional
interest on the Euro-Dollar Loans of such Bank shall be payable to such Bank at
the place indicated in such notice with respect to each Interest Period
commencing at least three Euro-Dollar Business Days after such notice is given
and (ii) shall furnish to Borrower, at least five (5) Euro-Dollar Business Days
prior to each date on which interest is payable on the Euro-Dollar Loans, an
officer's certificate setting forth the amount to which such Bank is then
entitled under this Section.
"Euro-Dollar Reserve Percentage" means for any day that percentage
------------------------------
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The London Interbank Offered Rate shall be adjusted
automatically on and as of the
39
effective date of any change in the Euro-Dollar Reserve Percentage.
(e) In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, the outstanding principal amount of the Loans,
and, to the extent permitted by law, overdue interest in respect of all Loans as
well as other amounts not paid when due hereunder, shall bear interest at the
annual rate equal to the sum of two percent (2%) plus the rate applicable to
Base Rate Loans payable on demand; provided, however, that if an Event of
-------- -------
Default is waived by the applicable Banks in accordance with the terms of this
Credit Agreement then the provisions of this subsection (e) shall be deemed
waived as well.
(f) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the Banks of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of manifest
error.
(g) The Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If the
Reference Bank does not furnish a timely quotation, the provisions of Section
8.1 shall apply.
Section 4.8 Fees.
----
(a) Commitment Fee. During the Term, the Borrower shall pay to the
--------------
Administrative Agent for the account of the Tranche B Banks ratably in
proportion to their respective Tranche B Commitments, in arrears on each
March 31, June 30, September 30 and December 31 during the Term and on the date
any such commitment is terminated, a commitment fee on the daily average undrawn
and uncancelled Tranche B Commitments less an amount equal to the daily average
outstanding Letter of Credit Usage in any given quarter at the respective
percentages per annum based upon the range into which the Maximum Total Debt
Ratio then falls in accordance with the following table:
40
Maximum Total Debt Ratio Applicable Commitment Fee
(% per annum)
------------------------------------------------------
less than 40% 0.30%
------------------------------------------------------
equal to or greater than 0.375%
40% but equal to or less
than 50%
------------------------------------------------------
greater than 50% 0.50%
------------------------------------------------------
(b) Letter of Credit Fee. During the Term, the Borrower shall pay to
--------------------
the Administrative Agent, for the account of the Tranche B Banks in proportion
to their interests in respective undrawn issued Letters of Credit, a fee (a
"Letter of Credit Fee") in an amount, provided that no Event of Default shall
---------------------
have occurred and be continuing, equal to a rate per annum equal to the
Applicable Margin with respect to Tranche B Euro-Dollar Loans on the daily
average of such issued and undrawn Letters of Credit, which fee shall be
payable, in arrears, on each December 31, March 31, June 30 and September 30
during the Term. From the occurrence, and during the continuance, of an Event
of Default, such fee shall be increased to be equal to two percent (2%) per
annum plus the Applicable Margin on the daily average of such issued and undrawn
Letters of Credit; provided, however, that if an Event of Default is waived by
-------- -------
the applicable Banks in accordance with the terms of this Credit Agreement then
the provisions of this subsection (b) permitting an increase in the Letter of
Credit Fee shall be deemed waived as well.
(c) Fronting Bank Fee. The Borrower shall pay any Fronting Bank, for
-----------------
its own account, a fee (a "Fronting Bank Fee") at a rate per annum to be agreed
-----------------
upon with the applicable Fronting Bank, which fee shall be in addition to and
not in lieu of, the Letter of Credit Fee. The Fronting Bank Fee shall be payable
in arrears on each March 31, June 30, September 30 and December 31 during the
Term.
(d) Fees Non-Refundable. All fees set forth in this Section 2.8 shall
-------------------
be non-refundable. The obligation of the Borrower to pay such fees in
accordance with the provisions hereof shall be binding upon the Borrower and
shall inure to the benefit of the Administrative Agent, the Fronting Bank and
the Tranche B Banks regardless of whether any Loans are actually made.
41
Section 4.9 Mandatory Termination. The term (the "Term") of the
--------------------- ----
Commitments and the Swing Loan Commitment and Loans hereunder shall terminate
and expire, and the Borrower shall return or cause to be returned all
Letters of Credit to the Fronting Bank and repay all Loans hereunder, as follows
(in each case, the "Maturity Date"):
-------------
Loan Maturity Date
---- -------------
Tranche A Loan October 30, ▇▇▇▇
▇▇▇▇▇▇▇ ▇ Loans/
Letters of Credit/
Swing Loans April 30, 2001
Tranche C Loan April 30, 2001
Tranche D Loan April 30, 2003
Section 4.10 Mandatory Prepayment. (a) In the event that an
--------------------
Unencumbered Asset Pool Property is sold, transferred or released from the
restrictions of Section 5.17 hereof, the Borrower shall, simultaneously with
such sale or transfer, prepay the Loans in such amount as shall be required for
the Borrower to remain in compliance with this Agreement. Notwithstanding the
foregoing, a simultaneous like-kind exchange under Section 1031 of the
Internal Revenue Code will not be subject to the provisions of this Section
2.10(a), provided that the exchanged property has qualified as an Unencumbered
Asset Pool Property. Sale of an Unencumbered Asset Pool Property in violation
of this Section 2.10(a) shall constitute an Event of Default. Prepayments made
under this Section 2.10(a) shall be applied to the amounts outstanding under the
Tranche B Loan and, in the event there are no amounts outstanding thereunder,
then such prepayments shall be applied pro rata to amounts outstanding under
the Tranche A Loan, the Tranche C Loan and the Tranche D Loan.
(b) In addition to the payments of interest required to be made
hereunder for each Tranche C Loan and Tranche D Loan, Borrower shall pay to the
Administrative Agent for the benefit of the Tranche C Banks and the Tranche D
Banks, an amount equal to (1) $5,000,000 on June 30, 1998, (2) $20,000,000 on
September 30, 1998, and (3) $25,000,000 on December 31, 1998 (each, a "Required
--------
Amortization Payment") in partial prepayment of the Tranche C Loan and the
--------------------
Tranche D Loan. The Required Amortization Payments shall be applied pro rata to
42
prepayment of the amounts outstanding under each of the Tranche C Loan and the
Tranche D Loan. Any individual Tranche D Bank may waive application of its pro
rata share of the Required Amortization Payment to the Tranche D Loan by
notifying the Administrative Agent at least thirty (30) days prior to the date
of such Required Amortization Payment, in which event, any such payment shall be
applied by the Administrative Agent to prepayment, pro rata, of amounts
outstanding under the Tranche C Loan.
(c) Commencing January 1, 1999, in addition to the payments of
interest required to be made hereunder with respect to the Tranche D Loan and
the payments required under Section 2.10(b), Borrower shall pay annually to
the Administrative Agent for the benefit of the Tranche D Banks, an amount equal
to one percent (1%) of the original principal amount of the Tranche D Loan
Amount (each, a "Tranche D Amortization Payment"), payment of which amount
------------------------------
shall be made in equal quarterly amounts, on the first Business Day of each
calendar quarter, on each January 1, April 1, July 1 and October 1 during the
Term, in partial prepayment of the Tranche D Loan.
(d) In the event the Borrower issues commercial mortgage backed
securities as described in the Proxy Statement with respect to those Real
Property Assets demised under that certain Master Lease identified on Schedule
5.23 hereof, the proceeds of such transaction shall be applied to amounts
outstanding under the Tranche A Loan as of the date of the closing of such
transaction. In the event further prepayments are required under Section 2.10(a)
as a result of such transaction, then such prepayments shall be applied as set
forth in Section 2.10(a) hereof.
Section 4.11 Optional Prepayments.
--------------------
(a) The Borrower may, upon notice to the Administrative Agent or Swing
Lender, as applicable, not later than 12:00 Noon (Eastern Time) on the date of
prepayment (which notice shall specify whether the Loans so being prepaid
constitute a part of a Tranche A Borrowing, a Tranche B Borrowing, a Tranche C
Borrowing or a Tranche D Borrowing and whether such Loans are acquisition
and/or project Loans), prepay to the Administrative Agent for the account of the
applicable
43
Banks, or the Swing Lender, as applicable, any Base Rate Borrowing or
Swing Loan Borrowing in whole at any time, or from time to time in part in
amounts aggregating One Million Dollars ($1,000,000), or an integral multiple
of One Hundred Thousand Dollars ($100,000) in excess thereof or, if less, the
outstanding principal balance, by paying the principal amount to be prepaid
together with (except in the case of Base Rate Loans and Swing Loans which shall
be paid in accordance with Section 2.7(a)) accrued interest thereon to the date
--------------
of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the applicable several Banks included in such Borrowing.
(b) Except as provided in Section 8.2, the Borrower may not prepay all
or any portion of the principal amount of any Euro-Dollar Loan prior to the
maturity thereof unless the Borrower shall also pay any applicable expenses
pursuant to Section 2.13. Any such prepayment shall be upon at least three (3)
Euro-Dollar Business Days' notice to the Administrative Agent. Any notice of
prepayment delivered pursuant to this Section 2.11(b) shall set forth the amount
of such prepayment which is applicable to any Loan made for working capital
purposes, as well as whether the Loans so being prepaid constitute a part of a
Tranche A Borrowing, a Tranche B Borrowing, a Tranche C Borrowing or a Tranche D
Borrowing). Each such optional prepayment shall be in amounts aggregating Five
Million Dollars ($5,000,000), or an integral multiple of One Million Dollars
($1,000,000) in excess thereof, or, if less, the outstanding principal balance.
Each such optional prepayment shall be applied to prepay ratably the Loans of
the applicable Banks included.
(c) In the event that any Loans being prepaid in accordance with
Section 2.11(a) or (b) above constitute a Tranche D Loan, then any such
prepayment (i) during the period from the Closing Date through the first
anniversary thereof, shall be in an amount which is equal to 102% of the amount
of such Tranche D Loan being prepaid, in addition to any other amounts which
may then be owing, including pursuant to Section 2.13, (ii) during the period
after the first anniversary of the Closing Date through the date which is the
eighteenth (18/th/) month anniversary of the Closing Date, shall be in an amount
which is equal to 101% of the amount of such Tranche D Loan being prepaid, in
addition to any other amounts
44
which may then be owing, including pursuant to Section 2.13, and (iii) during
the period from the date which is the eighteen (18) month anniversary of the
Closing Date and thereafter, shall be in an amount which is equal to 100% of the
amount of such Tranche D Loan being repaid, in addition to any other amounts
which may then be owing, including pursuant to Section 2.13. Notwithstanding
anything contained herein to the contrary, Borrower may, in accordance with the
notice provisions set forth in subparagraphs (a) and (b) above, prepay any
Tranche D Loans in whole, or in part, in the event that Borrower has requested
from the Super-Majority Banks and has been denied a waiver from the restrictions
contained in Section 5.14 hereof.
(d) The Borrower may at any time return any undrawn Letter of Credit
to the Fronting Bank in whole, but not in part, and the Fronting Bank shall give
the Administrative Agent and each of the Banks notice of such return.
(e) The Borrower may at any time and from time to time cancel all or
any part of the Tranche B Commitments in amounts aggregating Ten Million
Dollars ($10,000,000), or an integral multiple of One Million Dollars
($1,000,000) in excess thereof, or Swing Loan Commitments in amounts aggregating
$1,000,000, or an integral multiple of $1,000,000 in excess thereof, by the
delivery to the Administrative Agent and the Banks of a notice of cancellation
upon at least three (3) Domestic Business Days' notice to Administrative Agent,
the Banks and the Swing Lender, whereupon, all or such portion of the Tranche B
Commitments shall terminate as to the Banks, pro rata on the date set forth in
--------
such notice of cancellation (or, in the case of the Swing Loan Commitment, all
or such portion of the Swing Loan Commitment shall terminate as to the Swing
Lender on the date set forth in such notice of cancellation), and, if there are
any Loans or Swing Loans then outstanding in an aggregate amount which exceeds
the aggregate Commitments or Swing Loan Commitment (after giving effect to any
such reduction), the Borrower shall prepay to the Administrative Agent, for
the account of the Banks or the Swing Lender, as applicable, all or such portion
of the Tranche B Loans or Swing Loans outstanding on such date in accordance
with the requirements of Sections 2.11(a) and (b). In no event shall the
Borrower be permitted to cancel Tranche B Commitments for which a Letter of
Credit
45
has been issued and is outstanding unless the Borrower returns (or causes to be
returned) such Letter of Credit to the Fronting Bank. The Borrower shall be
permitted to designate in its notice of cancellation which Loans, if any, are to
be prepaid.
(f) Upon receipt of a notice of prepayment or cancellation or a return
of a Letter of Credit pursuant to this Section, the Administrative Agent shall
promptly, and in any event within one (1) Domestic Business Day, notify each
Bank of the contents thereof and of such Bank's ratable share (if any) of such
prepayment or cancellation and such notice shall not thereafter be revocable by
the Borrower.
(g) Any amounts so prepaid pursuant to this Section 2.11 and
attributable to Tranche B Loans may be reborrowed subject to the other terms of
this Agreement. In the event that the Borrower elects to cancel all or any
portion of the Tranche B Commitments pursuant to Section 2.11(f) hereof, such
amounts may not be reborrowed. Any amounts so prepaid pursuant to this Section
2.11 and attributable to Tranche A Loans, Tranche C Loans or Tranche D Loans may
not be reborrowed.
Section 4.12 General Provisions as to Payments.
---------------------------------
(a) The Borrower shall make each payment of principal of, and interest
on, the Loans and of fees hereunder, not later than 1:00 p.m. (Eastern Time) on
the date when due, without regard to any rights of setoff or counterclaim,
recoupment or other deduction, in Federal or other funds immediately available
in Charlotte, North Carolina, to the Administrative Agent at its address
referred to in Section 9.1. The Administrative Agent will distribute to each
Bank its ratable share of each such payment received by the Administrative Agent
and attributable to such Bank's Loans for the account of the Banks on the same
day as received by the Administrative Agent if received by the Administrative
Agent by 2:00 p.m. (Eastern Time), or, if received by the Administrative Agent
after 2:00 p.m. (Eastern Time), on the immediately following Domestic Business
Day. If the Administrative Agent shall fail to distribute to a Bank its
ratable share of a payment on the same day it is received or the immediately
following Domestic Business Day, as applicable in accordance with the
immediately
46
preceding sentence, the Administrative Agent shall pay to such Bank the interest
accrued on such payment at the Federal Funds Rate, commencing on the day the
Administrative Agent should have made the payment to such Bank and ending on the
day prior to the date payment is actually made. Whenever any payment of
principal of, or interest on, the Base Rate Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day. If the date for
any payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Rate.
Section 4.13 Funding Losses. (a) If the Borrower makes any payment of
--------------
principal with respect to any Euro-Dollar Loan (pursuant to Article II, VI or
VIII or otherwise, and specifically including any payments made pursuant to
Sections 2.10 or 2.11) on any day other than the last day of the Interest Period
applicable thereto, or if the Borrower fails to borrow, prepay, convert or
continue any Euro-Dollar Loans, after notice has been given to any Bank in
accordance with Section
47
2.4(a), the Borrower shall reimburse each applicable Bank for any resulting loss
or expense incurred by it (or by an existing Participant in the related Loan;
provided that no Participant shall be entitled to receive more than the Bank
with respect to which such Participant is a Participant would be entitled to
receive under this Section 2.13), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or failure to
borrow, convert or prepay.
(b) Each Bank wishing to demand compensation pursuant to this Section
shall, within fifteen Domestic Business Days after the relevant payment or
conversion or failure to borrow, prepay, convert or continue occurs, notify the
Administrative Agent that it demands such compensation and deliver to the
Administrative Agent a certificate as to the amount of compensation which such
Bank is entitled to receive pursuant to subsection (a) of this Section, showing
the calculation thereof in reason able detail. Such certificate shall be
conclusive in the absence of manifest error. Promptly after the end of such
period of fifteen Domestic Business Days, the Administrative Agent shall
notify Borrower of all demands for such compensation received by it during such
period and deliver to Borrower copies of the supporting certificates received by
it from the Banks. Within 15 days thereafter, Borrower shall pay to the
Administrative Agent the aggregate amount properly demanded by the Banks
pursuant to this Section and, upon receipt thereof, the Administrative Agent
shall distribute such amount to the Banks entitled thereto.
Section 4.14 Computation of Interest and Fees. Interest based on the
--------------------------------
Prime Rate and all commitment fees hereunder shall be computed on the basis of
a year of 365 days (or 366 days in a leap year) and paid for the actual number
of days elapsed (including the first day but excluding the last day). All other
inter est and Letter of Credit Fees shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed (including the first day
but excluding the last day).
48
Section 4.15 Method of Electing Interest Rates.
---------------------------------
(a) The Loans included in each Borrowing shall bear interest initially
at the type of rate specified by the Borrower in the applicable Notice of
Borrowing or notice delivered pursuant to Section 2.2(b). Thereafter, the
Borrower may from time to time elect to change or continue the type of interest
rate borne by each Group of Loans (subject in each case to the provisions of
Article VIII and except for any Swing Loans), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or elect to continue such Loans as
Euro-Dollar Loans for an additional Interest Period, in each case effective
on the last day of the then current Interest Period applicable to such
Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
------------------
Rate Election") to the Administrative Agent not later than 12:00 Noon (Eastern
-------------
Time) at least three (3) Euro-Dollar Business Days before the conversion or
continuation selected in such notice is to be effective (unless the relevant
Loans are to be continued as Base Rate Loans, in which case such notice shall
be delivered to the Administrative Agent no later than 12:00 Noon (Eastern Time)
on the Domestic Business Day on which such continuation is to be effective). A
Notice of Interest Rate Election may, if it so specifies, apply to only a
portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
--------
such Group, (ii) the portion to which such notice applies, and the remaining
portion to which it does not apply, are each $5,000,000 or any larger multiple
of $1,000,000 (if such portion is comprised of Euro-Dollar Loans) or at least
$1,000,000 or any larger multiple of $100,000 (if such portion is comprised on
Base Rate Loans), (iii) there shall be no more than fifteen (15) Borrowings
comprised of Euro-Dollar Loans outstanding at any time under this Agreement,
(iv) no Loan may be continued as, or converted into, a Euro-Dollar Loan when
49
any Event of Default has occurred and is continuing, and (v) no Interest Period
shall extend beyond the applicable Maturity Date.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if such new Loans are Euro-Dollar Loans, the
duration of the initial Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for
an additional Interest Period, the duration of such additional Interest
Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall notify
each Bank on the same day as it receives such Notice of Interest Rate Election
of the contents thereof and such notice shall not thereafter be revocable by the
Borrower. If the Borrower fails to deliver a timely Notice of Interest Rate
Election to the Administrative Agent for any Group of Euro-Dollar Loans, such
Loans shall be converted into Base Rate Loans on the last day of the then
current Interest Period applicable thereto.
Section 4.16 Letters of Credit. (a) Subject to the terms contained
-----------------
in this Agreement and the other Loan Documents, upon the receipt of a notice in
accordance with Section 2.2(c) requesting the issuance of a Letter of Credit,
the Fronting Bank shall issue a Letter of Credit or Letters of Credit in such
form as is reasonably acceptable to the Borrower and in an amount or
50
amounts equal to the amount or amounts requested by the Borrower.
(b) The Letter of Credit Usage shall be no more than Twenty-Five
Million Dollars ($25,000,000) at any one time.
(c) In the event of any request for a drawing under any Letter of
Credit by the beneficiary thereunder, the Fronting Bank shall endeavor to notify
the Borrower and the Administrative Agent (and the Administrative Agent shall
endeavor to notify each Bank thereof) on or before the date on which the
Fronting Bank intends to honor such drawing, and, except as provided in this
subsection (c), the Borrower shall reimburse the Fronting Bank, in an amount
equal to the amount of such drawing, in immediately available funds, before 3:00
P.M. (Eastern Time) (x) if such Fronting Bank notifies Borrower of such drawing
before 11:00 A.M. (Eastern Time) on such date or (y) on the date such notice is
given, if such notice is given after the date of such drawing; provided that any
notice given to Borrower after 11:00 A.M. (Eastern Time) on any day shall be
deemed for purposes of the foregoing clause (y) to have been given on the next
succeeding Domestic Business Day. Notwithstanding anything contained herein
to the contrary, however, unless the Borrower shall have notified the
Administrative Agent, and the Fronting Bank prior to 11:00 a.m. (Eastern Time)
on the Domestic Business Day immediately prior to the date of such drawing that
the Borrower intends to reimburse the Fronting Bank for the amount of such
drawing with funds other than the proceeds of the Loans, the Borrower shall be
deemed to have timely given a Notice of Borrowing pursuant to Section 2.2 to
the Administrative Agent, requesting a Borrowing of Base Rate Loans on the date
on which such drawing is honored and in an amount equal to the amount of such
drawing. Each Bank (other than the Fronting Bank) shall, in accordance with
Section 2.4(b), make available its share of such Borrowing to the
Administrative Agent, the proceeds of which shall be applied directly by the
Administrative Agent to reimburse the Fronting Bank for the amount of such draw.
In the event that any such Bank fails to make available to the Fronting Bank
the amount of such Bank's participation on the date of a drawing, the Fronting
Bank shall be entitled to recover such amount on demand from such Bank together
with interest at the Federal Funds Rate commencing on the date such drawing is
honored.
51
(d) If, after the date hereof, any change in any law or regulation or
in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, or participations in any letter of credit, upon any Bank
(including the Fronting Bank) or (ii) impose on any Bank any other condition
regarding this Agreement or such Bank (including the Fronting Bank) as it
pertains to the Letters of Credit or any participation therein and the result of
any event referred to in the preceding clause (i) or (ii) shall be to increase,
by an amount deemed by the Fronting Bank or such Bank to be material, the cost
to the Fronting Bank or any Bank of issuing or maintaining any Letter of Credit
or participating therein then the Borrower shall pay to the Fronting Bank or
such Bank, within 15 days after written demand by such Bank (with a copy to the
Administrative Agent), which demand shall be accompanied by a certificate
showing, in reasonable detail, the calculation of such amount or amounts, such
additional amounts as shall be required to compensate the Fronting Bank or such
Bank for such increased costs or reduction in amounts received or receivable
hereunder.
(e) The Borrower hereby agrees to protect, indemnify, pay and save
the Fronting Bank and the Banks harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees and disbursements) which the Fronting Bank or the
Banks may incur or be subject to as a result of (i) the issuance of the Letters
of Credit, other than as a result of the gross negligence or wilful misconduct
of the Fronting Bank or (ii) the failure of the Fronting Bank to honor a drawing
under any Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
-- ---- -- -----
Governmental Authority (collectively, "Governmental Acts"), other than as a
-----------------
result of the gross negligence or wilful misconduct of the Fronting Bank. As
between the Borrower, the Fronting Bank and the Banks, the Borrower assumes all
risks of the acts and omissions of, or misuses of, the Letters of Credit issued
by the Fronting Bank, by the beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Fronting Bank shall not
52
be responsible (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of such Letters of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or insufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of any such Letter of Credit to comply fully with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
message, by mail, cable, telegraph, telex, facsimile transmission, or otherwise;
(v) for errors in interpretation of any technical terms; (vi) for any loss or
delay in the transmission or otherwise of any documents required in order to
make a drawing under any such Letter of Credit or of the proceeds thereof; (vii)
for the misapplication by the beneficiary of any such Letter of Credit of the
proceeds of such Letter of Credit; and (viii) for any consequence arising from
causes beyond the control of the Fronting Bank, including any Government Acts,
in each case other than as a result of the gross negligence or willful
misconduct of the Fronting Bank. None of the above shall affect, impair or
prevent the vesting of the Fronting Bank's rights and powers hereunder.
(f) If the Fronting Bank or the Administrative Agent is required at
any time, pursuant to any bankruptcy, insolvency, liquidation or reorganization
law or otherwise, to return to the Borrower any reimbursement by the Borrower of
any drawing under any Letter of Credit, each Bank shall pay to the Fronting Bank
or the Administrative Agent, as the case may be, its share of such payment, but
without interest thereon unless the Fronting Bank or the Administrative Agent is
required to pay interest on such amounts to the person recovering such payment,
in which case with interest thereon, computed at the same rate, and on the same
basis, as the interest that the Fronting Bank or the Administrative Agent is
required to pay.
(g) The Fronting Bank shall furnish to the Administrative Agent upon
request such information as the
53
Administrative Agent shall reasonably request in order to calculate (i) Letter
of Credit Usage existing from time to time and (ii) the amount of any fee
payable for the account of the Banks under Section 2.08(b).
Section 4.17. Letter of Credit Usage Absolute. The obligations of the
-------------------------------
Borrower under this Agreement in respect of any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement (as the same may be amended from time to time) and any
Letter of Credit Documents (as hereinafter defined) under all circumstances,
including, without limitation, to the extent permitted by law, the following
circumstances:
(a) any lack of validity or enforceability of any Letter of Credit or
any other agreement or instrument relating thereto (collectively, the "Letter of
---------
Credit Documents") or any Loan Document;
----------------
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Borrower in respect of the
Letters of Credit or any other amendment or waiver of or any consent by the
Borrower to departure from all or any of the Letter of Credit Documents or any
Loan Document; provided, that the Fronting Bank shall not consent to any such
--------
change or amendment unless previously consented to in writing by the Borrower;
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the obligations of the Borrower in respect of the Letters of
Credit;
(d) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Administrative Agent, the Fronting Bank or any
Bank (other than a defense based on the gross negligence or wilful misconduct of
the Administrative Agent, the Fronting Bank or such Bank) or any other Person,
whether in connection with the Loan Documents, the transactions
54
contemplated hereby or by the Letters of Credit Documents or any unrelated
transaction;
(e) any draft or any other document presented under or in connection
with any Letter of Credit or other Loan Document proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; provided, that payment by the
--------
Fronting Bank under such Letter of Credit against presentation of such draft or
document shall not have constituted gross negligence or wilful misconduct of the
Fronting Bank;
(f) payment by the Fronting Bank against presentation of a draft or
certificate that does not comply with the terms of the Letter of Credit;
provided, that such payment shall not have constituted gross negligence or
--------
wilful misconduct of the Fronting Bank; and
(g) any other circumstance or happening whatsoever other than the
payment in full of all obligations hereunder in respect of any Letter of Credit
or any agreement or instrument relating to any Letter of Credit, whether or not
similar to any of the foregoing, that might otherwise constitute a defense
available to, or a discharge of, the Borrower; provided, that such other
--------
circumstance or happening shall not have been the result of gross negligence or
wilful misconduct of the Fronting Bank.
ARTICLE VI
CONDITIONS
Section 6.1. Closing. The closing hereunder shall occur on the date
-------
(the "Closing Date") when each of the following conditions is satisfied, each
------------
document to be dated the Closing Date unless otherwise indicated:
(a) the Borrower shall have executed and delivered to the
Documentation Agent a Tranche A Note for the account of each Tranche A Bank
dated on or before the Closing Date complying with the provisions of Section
2.5;
(b) the Borrower shall have executed and delivered to the
Documentation Agent a Tranche B Note for
55
the account of each Tranche B Bank dated on or before the Closing Date complying
with the provisions of Section 2.5;
(c) the Borrower shall have executed and delivered to the
Documentation Agent a Tranche C Note for the account of each Tranche C Bank
dated on or before the Closing Date complying with the provisions of Section
2.5;
(d) the Borrower shall have executed and delivered to the
Documentation Agent a Tranche D Note for the account of each Tranche D Bank
dated on or before the Closing Date complying with the provisions of Section
2.5;
(e) the Borrower shall have executed and delivered to the
Documentation Agent a duly executed original of this Agreement;
(f) the Guarantor and all parties named in the Guaranty shall have
executed and delivered to the Documentation Agent a duly executed original of
the Guaranty;
(g) The Guarantor and the Borrower shall have executed and delivered
to the Documentation Agent a duly executed original of the Pledge;
(h) the Documentation Agent shall have received an opinion of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Borrower acceptable to the Administrative
Agent, the Banks and their counsel;
(i) the Documentation Agent shall have received all documents the
Documentation Agent may reasonably request relating to the existence of the
Borrower and the Guarantor, the authority for and the validity of this Agreement
and the other Loan Documents, and any other matters relevant hereto, all in form
and substance reasonably satisfactory to the Documentation Agent. Such
documentation shall include, without limitation, the articles of incorporation
and by-laws of the Borrower, as amended, modified or supplemented to the Closing
Date, each certified to be true, correct and complete by a senior officer of the
Guarantor as of a date not more than forty-five (45) days prior to the Closing
Date, together with a good standing certificate
56
from the Secretary of State (or the equivalent thereof) of the State of Delaware
with respect to the Borrower and the State of Delaware with respect to the
Guarantor, and a good standing certificate from the Secretary of State (or the
equivalent thereof) of each other State in which the Borrower or the Guarantor
is required to be qualified to transact business and where failure to be so
qualified could be reasonably expected to have a Material Adverse Effect, each
to be dated not more than forty-five (45) days prior to the Closing Date;
(j) the Documentation Agent shall have received all certificates,
agreements and other documents and papers referred to in this Section 3.1 and
Section 3.2, unless otherwise specified, in sufficient counterparts,
satisfactory in form and substance to the Documentation Agent in its sole
discretion;
(k) the Borrower and the Guarantor each shall have taken all actions
required to authorize the execution and delivery of this Agreement and the other
Loan Documents and the performance thereof by the Borrower;
(l) the Documentation Agent shall have received the Proxy Statement,
which such Proxy Statement shall include an unaudited pro forma consolidated
balance sheet and income statement of the Guarantor and its Consolidated
Subsidiaries for the fiscal year ended December 31, 1997;
(m) the Documentation Agent shall have received wire transfer
instructions in connection with the Loans to be made on the Closing Date;
(n) the Documentation Agent shall have received, for its and any
other Bank's account, all fees due and payable pursuant to Section 2.8 hereof on
or before the Closing Date;
(o) except for those consents, licenses and approvals more
particularly described on Schedule 3.1 hereto, the Documentation Agent shall
------------
have received copies of all consents, licenses and approvals, if any, required
in connection with the execution, delivery and performance by the Borrower and
the Guarantor, and the validity and enforceability against the Borrower, of the
Loan Documents, or in connection with any of the
57
transactions contemplated thereby to occur on or prior to the Closing Date and
such consents, licenses and approvals shall be in full force and effect;
(p) the Documentation Agent shall have received certified copies of
each Material Lease and all guaranties executed in connection therewith, in form
and substance satisfactory to the Banks;
(q) the representations and warranties of the Borrower contained in
this Agreement shall be true and correct in all material respects on and as of
the Closing Date both before and after giving effect to the making of any Loans;
(r) receipt by the Documentation Agent and the Banks of a certificate
of a Senior Officer of the Borrower certifying that the Borrower is in
compliance with all covenants of the Borrower contained in this Agreement, which
certificate shall include pro forma calculations, as of the Closing Date,
indicating compliance with the covenants set forth Section 5.8;
(s) all credit agreements of the Borrower and the Guarantor for
borrowed money other than the Existing Credit Agreements shall have been
terminated and all amounts outstanding thereunder repaid in full;
(t) the Documentation Agent (i) shall have completed all due
diligence investigations and examinations, including review of the Master Leases
and verification of the representations and warranties contained herein, (ii)
shall be satisfied with the terms of the spin-off of Vencor, Inc., and (iii)
shall have confirmed the successful tender of the Guarantor's 8 5/8% senior
subordinated notes; and
(u) all conditions set forth in Section 3.1 of the $1,000,000,000
Credit Agreement dated of even date herewith among Vencor Operating, Inc.,
Vencor, Inc., the Lenders, Swingline Bank, LC Issuing Banks, Senior Managing
Agents, Managing Agents and Co-Agents named therein, the Documentation Agent and
the Administrative Agent shall have been satisfied or waived.
The Documentation Agent shall promptly notify the Borrower and the Banks of the
Closing Date, and such
58
notice shall be conclusive and binding on all parties hereto.
Section 6.2. Borrowings. The obligation of any Bank to make a Loan,
----------
other than a Refunded Swing Loan, on the occasion of any Borrowing or to
participate in any Letter of Credit issued by the Fronting Bank and the
obligation of the Fronting Bank to issue, extend or renew a Letter of Credit is
subject to the satisfaction of the following conditions:
(a) the Closing Date shall have occurred on or prior to May 15, 1998;
(b) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.2, 2.4 or 2.5;
(c) immediately after such Borrowing or issuance, extension or
renewal of any Letter of Credit, the Outstanding Balance will not exceed the
aggregate amount of the Commitments and with respect to each Bank, such Bank's
pro rata portion of the Loans and Letter of Credit Usage will not exceed such
--------
Bank's Commitment;
(d) immediately before and after such Borrowing or issuance,
extension or renewal of any Letter of Credit, no Default or Event of Default
shall have occurred and be continuing both before and after giving effect to the
making of such Loans or issuing, extending or renewing any Letter of Credit;
(e) the representations and warranties of the Borrower, the Guarantor
and their Subsidiaries contained in this Agreement and the other Loan Documents
(other than representations and warranties which speak as of a specific date,
which representations and warranties shall have been true as of such date) shall
be true and correct in all material respects on and as of the date of such
Borrowing or issuance, extension or renewal of any Letter of Credit, both before
and after giving effect to the making of such Loans or issuing, extending or
renewing any Letter of Credit;
(f) no law or regulation shall have been adopted, no order, judgment
or decree of any governmental authority shall have been issued, and no
litigation shall be pending or threatened, which does or, with respect to
59
any threatened litigation, seeks to enjoin, prohibit or restrain, the making or
repayment of the Loans, the issuance of any Letter of Credit or any
participations therein or the consummation of the transactions contemplated
hereby; and
(g) no event, act or condition shall have occurred after the Closing
Date which, in the reasonable judgment of the Required Banks of Tranche B, has
had or is likely to have a Material Adverse Effect.
Each Borrowing or issuance, extension or renewal of any Letter of Credit
hereunder shall be deemed to be a representation and warranty by the Borrower on
the date of such Borrowing or issuance, extension or renewal of any Letter of
Credit, as to the facts specified in clauses (c) through (g) of this Section
(except that with respect to clause (f), such representation and warranty shall
be deemed to be limited to laws, regulations, orders, judgments, decrees and
litigation affecting the Borrower and not solely the Banks).
Section 6.3 Additional Real Property Assets.
-------------------------------
(a) Any Real Property Asset other than those set forth on Exhibits B
----------
and C hereto desired by the Borrower to be included as an Unencumbered Asset
-
Pool Property will require the approval of the Super-Majority Banks. The
Borrower shall submit to the Administrative Agent the materials set forth below
(the "Due Diligence Package") relating to each Real Property Asset that the
---------------------
Borrower desires to be added to the Unencumbered Asset Pool Properties. The Due
Diligence Package shall include (i) a description of the Real Property Asset,
(ii) two (2) years of historical cash flow operating statements, if available,
(iii) five (5) years of cash flow projections of the Borrower's interest in the
Real Property Asset (including capital expenditures), (iv) a map and site plan,
if available, (v) to the extent obtained by the Borrower, the Guarantor or, as
applicable, a Subsidiary of either, evidence of zoning compliance (which
evidence can include a "lawyer's letter" from a local counsel engaged by
Borrower, the Guarantor or, as applicable, a Subsidiary of either at the time of
acquisition), (vi) a copy of any engineer's inspection report obtained by the
Borrower, the Guarantor or, if applicable, a Subsidiary of either in connection
with the Real Property Asset, (vii) a copy of the Title
60
Commitment obtained by the Borrower, the Guarantor or, if applicable, a
Subsidiary that owns or leases (or will own or lease) such Real Property Asset,
(viii) a copy of an environmental report for such Real Property Asset indicating
that such Real Property Asset and the use thereof each complies in all material
respects with all applicable Environmental Laws and is free from contamination
by any Material of Environmental Concern or, if the environmental report
indicates that any remediation or other environmental work is recommended or
required, and, in the case of asbestos containing materials, such materials are
friable or are not otherwise encapsulated, the Borrower shall either (A) obtain
a guaranty as to the completion of such remediation or work from a Person (other
than the Borrower, the Guarantor and their Affiliates) having an Investment
Grade Rating or, if such a rating is unavailable, having a regional or national
reputation, or (B) furnish to the Documentation Agent Cash or Cash Equivalents
(or other security satisfactory to the Administrative Agent) in an amount equal
to 100% of the reasonably estimated cost of completing such remediation or other
work, (ix) copies of the lease agreements for each of the tenants of such Real
Property Asset, together with an abstract or summary of each lease for any
tenant which occupies more than 15% of such Real Property Asset or accounts for
more than 15% of the base rentals of such Real Property Asset and (x) such
additional information with respect to each Real Property Asset, the tenants of
such Real Property Asset and, if applicable, the Subsidiary that owns or leases
such Real Property Asset, as the Documentation Agent or any Bank shall
reasonably request.
(b) The Borrower shall distribute a copy of each item constituting
the Due Diligence Package by overnight mail to the Administrative Agent, with
sufficient copies for each of the Banks for review and approval by the Super-
Majority Banks, which approval shall not be unreasonably withheld. Failure to
respond to the Administrative Agent in writing by any Bank within ten (10)
Domestic Business Days after receipt of the Due Diligence Package, shall be
deemed to be an approval by such Bank of such Real Property Asset for inclusion
as a Unencumbered Asset Pool Property.
(c) The Borrower and the Guarantor shall permit (and shall cause
their respective Subsidiaries to permit) the Documentation Agent at all
reasonable times
61
and upon reasonable prior notice to the Guarantor and its Subsidiaries and the
operator of the facility to make an inspection of any Real Property Asset.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and each of the other
Banks which are or may become a party to this Agreement to make the Loans, the
Borrower makes the following representations and warranties as of the date
hereof. Such representations and warranties shall survive the effectiveness of
this Agreement, the execution and delivery of the other Loan Documents and the
making of the Loans.
Section 8.1. Existence and Power. Each of the Borrower and the
-------------------
Guarantor is duly organized, validly existing and in good standing as a limited
partnership or corporation, as applicable, under the laws of the State of
Delaware and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
likely to have a Material Adverse Effect.
Section 8.2. Power and Authority. Each of the Borrower, the Guarantor
-------------------
and their Subsidiaries has the partnership or corporate power and authority, as
applicable, to execute, deliver and carry out the terms and provisions of each
of the Loan Documents to which it is a party and has taken all necessary action
to authorize the execution and delivery on behalf of the Borrower, the Guarantor
or such Subsidiary and the performance by the Borrower, the Guarantor and their
Subsidiaries of such Loan Documents. Each of the Borrower, the Guarantor and
their Subsidiaries has duly executed and delivered each Loan Document to which
it is a party, and each such Loan Document constitutes the legal, valid and
binding obligation of the Borrower, the Guarantor and their Subsidiaries a party
thereto, enforceable in accordance with its terms, except as enforceability may
be limited by applicable insolvency,
62
bankruptcy or other laws affecting creditors rights generally, or general
principles of equity, whether such enforceability is considered in a proceeding
in equity or at law.
Section 8.3. No Violation; Government Approvals; Licenses. Except as
--------------------------------------------
set forth on Schedule 4.3 hereof, neither the execution, delivery or performance
------------
by or on behalf of the Borrower, the Guarantor or any Subsidiary of either of
the Loan Documents, nor compliance by the Borrower, the Guarantor or any of
their Subsidiaries with the terms and provisions thereof nor the consummation of
the transactions contemplated by the Loan Documents, (i) will contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality applicable to
Borrower, Guarantor or any of their Subsidiaries, (ii) will conflict with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of the Borrower, the Guarantor or any of their Subsidiaries pursuant to
the terms of any material indenture, mortgage, deed of trust, or other agreement
or other instrument to which the Borrower, the Guarantor or any of their
Subsidiaries (or of any partnership of which the Borrower, the Guarantor or any
of their Subsidiaries is a partner) is a party or by which it or any of its
property or assets is bound or to which it is subject, (iii) will cause a
default by the Borrower or the Guarantor under any organizational document of
either of them or any of their Subsidiaries, or (iv) will require any order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, to authorize delivery and performance
of any Loan Document or the consummation of any of the transactions contemplated
thereby other than those that have already been duly made or obtained and remain
in full force and effect. The Borrower, the Guarantor and each of their
Subsidiaries has obtained and holds in full force and effect, all franchises,
licenses, permits, certificates, including certificates of need, authorizations,
qualifications, accreditations, easements, rights of way and other consents and
approvals which are necessary for the operation of its businesses
63
as presently conducted, the absence of which is likely (to the extent that the
Borrower, the Guarantor and each Subsidiary can now reasonably foresee) to have
a Material Adverse Effect.
Section 8.4 Financial Information.
---------------------
(a) The unaudited pro forma consolidated balance sheet of the
Guarantor and its Consolidated Subsidiaries as of December 31, 1997, as
delivered in the Proxy Statement fairly present, in conformity with GAAP, the
consolidated pro forma financial position of the Guarantor and its Consolidated
Subsidiaries as of such date and their pro forma consolidated results of
operations for such fiscal year.
(b) Since December 31, 1997, on a pro forma basis (i) there has been
no material adverse change in the business, financial position or results of
operations of the Guarantor and its Consolidated Subsidiaries and (ii) except as
previously disclosed to the Documentation Agent and each Bank, the Guarantor and
its Consolidated Subsidiaries have not incurred any material indebtedness or
guaranty.
Section 8.5. Litigation.
----------
(a) Except as identified on Schedule 4.5, there is no action, suit or
------------
proceeding pending against, or to the knowledge of the Borrower or the
Guarantor, threatened against or affecting, (i) the Borrower, the Guarantor or
any of their Subsidiaries, (ii) the Loan Documents or any of the transactions
contemplated by the Loan Documents or (iii) any of their assets, in any case
before any court or arbitrator or any governmental body, agency or official
which could reasonably be expected to have a Material Adverse Effect or which in
any manner draws into question the validity of this Agreement or the other Loan
Documents.
(b) There are no final nonappealable judgments or decrees in an
aggregate amount of Five Million Dollars ($5,000,000) or more entered by a court
or courts of competent jurisdiction against the Borrower, the Guarantor or any
of their Subsidiaries holding Unencumbered Asset Pool Properties which remain
unpaid and there are no final nonappealable judgments or decrees against any
Subsidiaries other than those holding
64
Unencumbered Asset Pool Properties which would have a Material Adverse Effect
(in each case, other than any judgment as to which, and only to the extent, a
reputable insurance company has acknowledged coverage of such claim in writing).
Section 8.6 Compliance with ERISA.
---------------------
(a) Except as previously disclosed to the Documentation Agent in
writing, each member of the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Internal Revenue Code with respect to
each Plan and is in compliance in all material respects with the presently
applicable provisions of ERISA and the Internal Revenue Code with respect to
each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect of
any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security under
ERISA or the Internal Revenue Code or (iii) incurred any liability under Title
IV of ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.
(b) Except for each "employee benefit plan" (as such term is defined
in Section 3(3) of ERISA) that is maintained, or contributed to, by one or more
members of the ERISA Group, no member of the ERISA Group is a "party in
interest" (as such term is defined in Section 3(14) of ERISA or a "disqualified
person" (as such term is defined in Section 4975(e)(2) of the Internal Revenue
Code) with respect to any funded employee benefit plan and none of the assets of
any such plans have been invested in a manner that would cause the transactions
contemplated by the Loan Documents to constitute a nonexempt prohibited
transaction (as such term is defined in Section 4975 of the Internal Revenue
Code or Section 406 of ERISA).
Section 8.7. Environmental Compliance. To the best of Borrower's
------------------------
knowledge, (i) there are in effect all Environmental Approvals which are
required to be obtained under all Environmental Laws with respect to the
Property, except for such Environmental Approvals the
65
absence of which would not have a Material Adverse Effect, (ii) the Borrower and
each Subsidiary is in compliance in all material respects with the terms and
conditions of all such Environmental Approvals, and is also in compliance in all
material respects with all other Environmental Laws or any plan, order, decree,
judgment, injunction, notice or demand letter issued, entered or approved
thereunder, except to the extent failure to comply would not have a Material
Adverse Effect.
Except as set forth in the Environmental Reports or otherwise
disclosed to the Documentation Agent as of the Closing Date, to Borrower's
actual knowledge:
(i) There are no Environmental Claims or investigations pending
or threatened by any Governmental Authority with respect to any alleged
failure by the Borrower or its Subsidiaries to have any Environmental
Approval required in connection with the conduct of the business of the
Borrower or its Subsidiaries on any of the Unencumbered Asset Pool
Properties, or with respect to any generation, treatment, storage,
recycling, transportation, Release or disposal of any Material of
Environmental Concern generated by the Borrower or its Subsidiaries or any
lessee on any of the Unencumbered Asset Pool Properties;
(ii) No Material of Environmental Concern has been Released at
the Property to an extent that it may reasonably be expected to have a
Material Adverse Effect;
(iii) No Environmental Claims have been filed with a
Governmental Authority with respect to any of the Unencumbered Asset Pool
Properties, and none of the Unencumbered Asset Pool Properties is listed or
proposed for listing on the National Priority List promulgated pursuant to
CERCLA, on CERCLIS or on any similar state list of sites requiring
investigation or clean-up;
(iv) There are no Liens arising under or pursuant to any
Environmental Laws on any of the Unencumbered Asset Pool Properties, and no
government actions have been taken or are in process
66
which could subject any of the Unencumbered Asset Pool Properties to such
Liens; and
(v) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by, or which are in the
possession of, the Borrower or its Subsidiaries in relation to any of the
Unencumbered Asset Pool Properties which have not been made available to
the Documentation Agent at the Guarantor's principal place of business.
Section 8.8. Taxes. The initial tax year of the Borrower for federal
-----
income tax purposes is 1998. The Borrower, the Guarantor and their Subsidiaries
have filed all United States Federal income tax returns or extensions thereto
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 the Borrower, the Guarantor or any of their Subsidiaries except
those being contested in good faith. The charges, accruals and reserves on the
books of the Borrower, the Guarantor and their Subsidiaries in respect of taxes
or other governmental charges are, in the opinion of the Borrower, adequate.
Section 8.9. Full Disclosure. All information heretofore furnished by
---------------
the Borrower or the Guarantor to the Documentation Agent or any Bank for
purposes of or in connection with this Agreement or any transaction contemplated
hereby is true and accurate in all material respects on the date as of which
such information is stated or certified. The Borrower and the Guarantor have
disclosed to the Banks in writing any and all facts known to the Borrower or the
Guarantor which materially and adversely affect or are likely to materially and
adversely affect (to the extent the Borrower or the Guarantor can now reasonably
foresee), the business, operations or financial condition of the Borrower, the
Guarantor and their Subsidiaries considered as one enterprise or the ability of
the Borrower, the Guarantor and their Subsidiaries to perform its obligations
under this Agreement or the other Loan Documents.
Section 8.10. Solvency. On the Closing Date and after giving effect
--------
to the transactions contemplated by the Loan Documents occurring on the Closing
Date, the Borrower is Solvent.
67
Section 8.11. Use of Proceeds; Margin Regulations. All proceeds of
-----------------------------------
the Loans will be used by the Borrower only in accordance with the provisions
hereof. No part of the proceeds of any Loan will be used by the Borrower or any
Subsidiaries to purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock. Neither the making
of any Loan nor the use of the proceeds thereof will violate or be inconsistent
with the provisions of Regulations T, U or X of the Federal Reserve Board.
Section 8.12. Investment Company Act; Public Utility Holding Company
------------------------------------------------------
Act. Neither the Borrower, the Guarantor nor any of their Subsidiaries are (x)
---
an "investment company" or a company "controlled" by an "investment company",
------------------ ---------- ------------------
within the meaning of the Investment Company Act of 1940, as amended, (y) a
"holding company" or a "subsidiary company" of a "holding company" or an
---------------- ------------------ ---------------
"affiliate" of either a "holding company" or a "subsidiary company" within the
--------- --------------- ------------------
meaning of the Public Utility Holding Company Act of 1935, as amended, or (z)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
Section 8.13. Closing Date Transactions. On the Closing Date and
-------------------------
immediately prior to or concurrently with the making of the Loans, the
transactions (other than the making of the Loans) intended to be consummated on
the Closing Date pursuant to this Agreement and described in the Proxy Statement
will have been consummated in accordance with all applicable laws.
Section 8.14. Representations and Warranties in Loan Documents. All
------------------------------------------------
representations and warranties made by the Borrower, the Guarantor and their
Subsidiaries in the Loan Documents are true and correct in all material
respects.
Section 8.15. Patents, Trademarks, etc. The Borrower and each of its
-------------------------
Subsidiaries has obtained and holds in full force and effect all patents,
trademarks, service marks, trade names, copyrights and other such rights, free
from burdensome restrictions, which are necessary for the operation of its
business as presently conducted, the impairment of which is likely to have a
Material Adverse Effect. To the Borrower's knowledge, no
68
material product, process, method, substance, part or other material presently
sold by or employed by the Borrower in connection with such business infringes
any patent, trademark, service ▇▇▇▇, trade name, copyright, license or other
such right owned by any other Person. There is not pending or, to the
Borrower's knowledge, threatened any claim or litigation against or affecting
the Borrower or any of its Subsidiaries contesting its right to sell or use any
such product, process, method, substance, part or other material.
Section 8.16. No Default. No Default or Event of Default exists under
----------
or with respect to any Loan Document. The Borrower is not in default in any
material respect beyond any applicable grace period under or with respect to any
other material agreement, instrument or undertaking to which it is a party or by
which it or any of its property is bound in any respect, the existence of which
default is likely (to the extent that the Borrower can now reasonably foresee)
to result in a Material Adverse Effect.
Section 8.17. Compliance With Law. The Borrower, the Guarantor and
-------------------
their Subsidiaries are in compliance with all laws, rules, regulations, orders,
judgments, writs and decrees, including, without limitation, all building and
zoning ordinances and codes, the failure to comply with which is likely (to the
extent that the Borrower can now reasonably foresee) to have a Material Adverse
Effect.
Section 8.18. Brokers' Fees. Except as otherwise disclosed in the
-------------
Proxy Statement, the Borrower has not dealt with any broker or finder with
respect to the transactions contemplated by the Loan Documents (except with
respect to the acquisition or disposition of Real Property Assets) or otherwise
in connection with this Agreement, and the Borrower has not done any acts, had
any negotiations or conversation, or made any agreements or promises which will
in any way create or give rise to any obligation or liability for the payment by
the Borrower of any brokerage fee, charge, commission or other compensation to
any party with respect to the transactions contemplated by the Loan Documents
(except with respect to the acquisition or disposition of Real Property Assets),
other than the fees payable hereunder.
69
Section 8.19. Labor Matters. Except as set forth on Schedule 4.19
------------- -------------
attached hereto and made a part hereof, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of the Borrower and the
Borrower has not suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five (5) years.
Section 8.20. Organizational Documents. The documents delivered
------------------------
pursuant to Section 3.1(i) constitute, as of the Closing Date, all of the
organizational documents (together with all amendments and modifications
thereof) of the Borrower. The Borrower represents that it has delivered to the
Documentation Agent true, correct and complete copies of each of the documents
set forth in this Section 4.20.
Section 8.21. Principal Offices. The principal office, chief
-----------------
executive office and principal place of business of the Borrower is 3300 Aegon
Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Section 8.22. Ownership of Property. The Borrower owns, directly or
---------------------
indirectly, fee simple title (or leasehold title if so designated on Schedule
--------
4.22 hereto) to each of the Real Property Assets, as more particularly set forth
----
on Schedule 4.22 hereto, which schedule also sets forth the owner/lessee of each
-------------
Real Property Asset.
Section 8.23. Insurance. The Borrower currently maintains, or causes
---------
to be maintained pursuant to the provisions of each Material Lease, insurance at
100% replacement cost insurance coverage in respect of each of the Real Property
Assets, as well as comprehensive general liability insurance against claims for
personal, and bodily injury and/or death, to one or more persons, or property
damage, as well as workers' compensation insurance, in each case with respect to
the Real Property Assets with insurers having an A.M. Best policyholders' rating
of not less than A-V, or an S&P rating of A or the equivalent thereto, in
amounts that prudent owner of assets such as the Real Property Assets would
maintain.
Section 8.24. "Year 2000" Compliance. The Borrower and Guarantor have
---------------------
(i) initiated a review and assessment of all areas within their and each of
their
70
Subsidiaries' business and operations (including those affected by suppliers and
vendors) that could be adversely affected by the "Year 2000 Problem" (that is,
the risk that computer applications used by the Borrower or Guarantor or any of
their Subsidiaries (or their suppliers and vendors) may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. The Borrower and
Guarantor reasonably believe that all computer applications (including those of
their suppliers and vendors) that are material to their or any of their
Subsidiaries' business and operations will, on a timely basis, be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure
to do so could not reasonably be expected to have a Material Adverse Effect.
Section 8.25. REIT Status. From and after January 1, 1999, the
-----------
Guarantor will qualify and intends to continue thereafter to qualify as a real
estate investment trust under the Internal Revenue Code.
ARTICLE X
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Bank has any
Commitment hereunder or any Obligations remain unpaid:
Section 10.1. Information. The Borrower will, subject to the final
-----------
paragraph of this Section 5.1, deliver to the Administrative Agent sufficient
copies for each of the Banks (if requested by the Administrative Agent) of the
following information which the Administrative Agent shall promptly forward to
the Banks:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Guarantor and its Consolidated Subsidiaries, an
audited consolidated balance sheet of the Guarantor and its Consolidated
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of cash flow
71
and operations for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, if available, audited by Ernst &
Young LLP or other independent public accountants of similar standing;
(b) to the extent prepared by Borrower, and in such event within 90
days after the end of each fiscal year of the Borrower, an audited consolidated
balance sheet of the Borrower (or unaudited, if no audited balance sheet is
prepared) as of the end of such fiscal year and the related consolidated
statements of cash flow and operations for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, if
available, audited by Ernst & Young LLP or other independent public accountants
of similar standing;
(c) as soon as available and in any event within 45 days after the
end of each quarter of each fiscal year (other than the last quarter in any
fiscal year) of the Guarantor and its Consolidated Subsidiaries a statement of
the Guarantor and its Consolidated Subsidiaries prepared in accordance with GAAP
setting forth the operating income and operating expenses of the Guarantor and
its Consolidated Subsidiaries, as well as the related statements of cash flow
and operations for such quarter, and a balance sheet relating to such quarter,
all in sufficient detail so as to calculate Unencumbered Asset Pool Net
Operating Cash Flow of the Guarantor and its Consolidated Subsidiares for the
immediately preceding quarter;
(d) commencing June 30, 1998 and thereafter as soon as available and
in any event within 90 days after the end of each quarter of each fiscal year
(other than the last quarter in any fiscal year) of the Borrower, a statement of
the Borrower, prepared in accordance with GAAP, setting forth the operating
income and operating expenses of the Borrower and a consolidated balance sheet
of the Borrower as of the end of such fiscal quarter and the related
consolidated statements of cash flow and operations for such fiscal quarter;
(e) simultaneously with the delivery of each set of financial
statements referred to in clauses (a), (b), (c) and (d) above, a certificate of
a Senior Officer of the Guarantor (i) setting forth in reasonable detail
72
the calculations required to establish whether the Borrower was in compliance
with the requirements of Section 5.8 on the date of such financial statements;
(ii) stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto; and (iii)
certifying (x) that such financial statements fairly present the financial
condition and the results of operations of the Guarantor and its Consolidated
Subsidiaries as of the dates and for the periods indicated, in accordance with
GAAP, subject, in the case of interim financial statements, to normal year-end
adjustments, and (y) that such officer has reviewed the terms of the Loan
Documents and has made, or caused to be made under his or her supervision, a
review in reasonable detail of the business and condition of the Borrower during
the period beginning on the date through which the last such review was made
pursuant to this Section 5.1(c) and ending on a date not more than ten (10)
Domestic Business Days prior to the date of such delivery and that on the basis
of such review of the Loan Documents and the business and condition of the
Borrower, to the best knowledge of such officer, no Default or Event of Default
under any other provision of Section 6.1 occurred or, if any such Default or
Event of Default has occurred, specifying the nature and extent thereof and, if
continuing, the action the Borrower proposes to take in respect thereof;
(f) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a letter from the firm of
independent public accountants that reported on such statements stating (i)
whether anything has come to their attention in the course of their normal audit
procedures to cause them to believe that any Default or Event of Default existed
on the date of such financial statements and (ii) whether in their opinion the
calculations set forth in the officer's certificate delivered pursuant to clause
(e) above, to the extent derived from data contained in the accounting records
of Guarantor and its Consolidated Subsidiaries, have been determined in
accordance with the relevant provisions of this Agreement;
(g) (i) within five (5) days after the president, chief financial
officer, treasurer, controller or other executive officer of the Borrower
obtains
73
knowledge of any Default, if such Default is then continuing, a certificate of
the chief financial officer or the president of the Borrower setting forth the
details thereof and the action which the Borrower is taking or proposes to take
with respect thereto; (ii) promptly and in any event within ten (10) days after
the Borrower obtains knowledge thereof, notice of (x) any litigation or
governmental proceeding pending or threatened against the Borrower which is
likely to individually or in the aggregate, result in a Material Adverse Effect,
and (y) any other event, act or condition which is likely to result in a
Material Adverse Effect;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is required or
proposes to take;
74
(i) promptly and in any event within five (5) Domestic Business Days
after the Borrower obtains actual knowledge of any of the following events, a
certificate of the Borrower executed by an officer of the Borrower specifying
the nature of such condition and the Borrower's, if the Borrower has actual
knowledge thereof, or the Environmental Affiliate's proposed initial response
thereto: (i) the receipt by the Borrower, or, if the Borrower has actual
knowledge thereof, any of the Environmental Affiliates, of any communication
(written or oral), whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Borrower, or, if the Borrower has
actual knowledge thereof, any of the Environmental Affiliates, is not in
compliance with applicable Environmental Laws, and such noncompliance is likely
to have a Material Adverse Effect, (ii) the Borrower shall obtain actual
knowledge that there exists any Environmental Claim which is likely to have a
Material Adverse Effect pending or threatened against the Borrower or any
Environmental Affiliate or (iii) the Borrower obtains actual knowledge of any
release, emission, discharge or disposal of any Material of Environmental
Concern that is likely to form the basis of any Environmental Claim against the
Borrower or any Environmental Affiliate, and such Environmental Claim is likely
to have a Material Adverse Effect;
(j) promptly and in any event within five (5) Domestic Business Days
after receipt of any material notices or correspondence from any company or
agent for any company providing insurance coverage to the Borrower relating to
any material loss or loss of the Borrower with respect to any of the
Unencumbered Asset Pool Properties, copies of such notices and correspondence;
and
(k) promptly upon the mailing thereof to the shareholders of the
Guarantor, copies of all financial statements, reports and proxy statement so
mailed;
(l) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower or the Guarantor shall have filed with the
Securities and Exchange Commission;
75
(m) immediately upon knowledge thereof, notice of any material
default by the tenant under any Material Lease;
(n) simultaneously with delivery of the information required by
Sections 5.1(a) and (b), a statement of Unencumbered Asset Pool Net Operating
Cash Flow with respect to each Unencumbered Asset Pool Property or each group
thereof and a list of all Unencumbered Asset Pool Properties; and
(o) from time to time such additional information regarding the
financial position or business of the Borrower as the Administrative Agent, at
the request of any Bank, may reasonably request.
Information required to be delivered pursuant to clauses (a), (b), (c) or (d) of
this Section shall be deemed to have been delivered on the date on which
Borrower provides notice to the Administrative Agent (which the Administrative
Agent shall promptly forward to the Banks) that such information has been posted
on Borrower's website on the Internet at the website address listed on the
signature pages hereof, at ▇▇▇.▇▇▇/▇▇▇▇▇/▇▇▇▇▇▇▇▇.▇▇▇ or at another website
identified in such notice and accessible by the Banks without charge; provided
that (i) such notice may be included in a certificate delivered pursuant to
subsection (e) hereof and (ii) Borrower shall deliver paper copies of the
information referred to in subsection (a), (b), (c) and (d) of this Section to
any Bank which requests such delivery.
Section 10.2. Payment of Obligations. The Borrower will, and shall
----------------------
cause its Subsidiaries to, pay and discharge, at or before maturity, all its
material obligations and liabilities including, without limitation, any
obligation pursuant to any agreement by which it or any of its properties is
bound and any tax liabilities, in any case, where failure to do so will likely
result in a Material Adverse Effect except (i) such tax liabilities may be
contested in good faith by appropriate proceedings, and will maintain in
accordance with GAAP, appropriate reserves for the accrual of any of the same;
or (ii) such obligation or liability as may be contested in good faith by
appropriate proceedings.
76
Section 10.3. Maintenance of Property; Insurance.
----------------------------------
(a) The Borrower will, and will cause its Subsidiaries to, keep, or
cause to be kept, each of its Real Property Assets in good repair, working order
and condition, subject to ordinary wear and tear.
(b) The Borrower shall, and will cause its Subsidiaries to, (a)
maintain, or cause to be maintained, insurance as specified in Section 4.23
hereof with insurers meeting the qualifications described therein, which
insurance shall in any event not provide for materially less coverage than the
insurance in effect on the Closing Date, and (b) furnish to the Administrative
Agent from time to time, upon written request, copies of the policies under
which such insurance is issued, certificates of insurance and such other
information relating to such insurance as such Bank may reasonably request. The
Borrower will, and will cause its Subsidiaries to, deliver to the Banks (i) upon
request of any Bank through the Administrative Agent from time to time, full
information as to the insurance carried, (ii) within five (5) days of receipt of
notice from any insurer, a copy of any notice of cancellation or material change
in coverage from that existing on the date of this Agreement and (iii)
forthwith, notice of any cancellation or nonrenewal of coverage by the Borrower
or any Subsidiary.
Section 10.4. Conduct of Business. The Borrower's primary business
-------------------
will continue to be acquiring, owning, developing (to the extent permitted in
this Agreement), and leasing healthcare related properties.
Section 10.5. Compliance with Laws. Except with respect to those
--------------------
matters set forth on Schedule 4.3, the Borrower will, and will cause its
------------
Subsidiaries to, comply in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws, all zoning and building
codes and ERISA and the rules and regulations thereunder) except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings.
77
Section 10.6. Inspection of Property, Books and Records. The Borrower
-----------------------------------------
will, and will cause its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries shall be made of all dealings
and transactions in relation to its business and activities; and will permit
representatives of any Bank at such Bank's expense to visit and inspect any of
its properties to examine and make abstracts from any of its books and records
and to discuss its affairs, finances and accounts with its officers and
employees, all at such reasonable times, upon reasonable notice, and as often as
may reasonably be desired.
Section 10.7. Existence.
---------
(a) The Borrower shall, and shall cause its Subsidiaries holding
Unencumbered Asset Pool Properties to, do or cause to be done all things
necessary to preserve and keep in full force and effect its partnership or
corporate existence, as applicable.
(b) The Borrower shall, and shall cause its Subsidiaries to, do or
cause to be done all things necessary to preserve and keep in full force and
effect its patents, trademarks, servicemarks, tradenames, copyrights,
franchises, licenses, permits, certificates, including certificates of need,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals the nonexistence of which is likely to have
a Material Adverse Effect.
Section 10.8 Financial Covenants.
-------------------
(a) Total Debt to Tangible FMV. As of June 30, 1998 and the last day
--------------------------
of each of the four (4) full calendar quarters following the Closing Date, the
Maximum Total Debt Ratio will not be greater than 55%. As of the last day of
each calendar quarter thereafter, the Maximum Total Debt Ratio will not be
greater than 50%
(b) EBITDA Interest Coverage. As of the last day of each calendar
------------------------
quarter, the ratio of (i) Annual EBITDA to (ii) Total Debt Service, will not be
less than 2.25:1.
78
(c) EBITDA Debt Service Coverage. As of June 30, 1998 and the last
----------------------------
day of each of the four (4) full calendar quarters following the Closing Date,
the ratio of (x) Annual EBITDA (on an annualized basis in the case of the
Closing Date and the first three such calendar quarters), to (y) the sum of (i)
Total Debt Service on an annualized basis, (ii) scheduled payments of principal
on any Debt (as described in clause (A) of the definition thereof) of the
Guarantor, the Borrower or any Consolidated Subsidiary, whether or not paid by
the Guarantor, Borrower or any such Consolidated Subsidiary (excluding balloon
payments) on an annualized basis, provided, however, that in the case of
scheduled payments of principal pursuant to this Agreement, the actual principal
amounts scheduled to be paid hereunder, rather than annualized amounts shall be
included for purposes of this clause, for the previous four consecutive quarters
including the quarter then ended, plus the Borrower's pro rata share of
scheduled payments of principal on any Debt of any Minority Holding, whether or
not paid by the Borrower (excluding balloon payments) for the previous four
consecutive quarters including the quarter then ended, and (iii) dividends or
other payments payable by the Guarantor with respect to any preferred stock
issued by the Guarantor and distributions or other payments payable by the
Borrower with respect to any preferred partnership units of the Borrower, will
not be less than 1.50:1. As of the last day of each calendar quarter thereafter,
such ratio will be not less than 2.00:1.
(d) Unencumbered Debt Service Coverage Ratio. As of June 30, 1998 and
----------------------------------------
the last day of the each of the four (4) full calendar quarters following the
Closing Date, the Unencumbered Debt Service Coverage Ratio will not be less than
2.15:1. Thereafter, the Unencumbered Debt Service Coverage Ratio, as of the last
day of each calendar quarter, shall not be less than 2.20:1.
(e) Unsecured Debt Ratio.
--------------------
(i) As of June 30, 1998, the last day of each of the four (4) full
calendar quarters following the Closing Date, the Unsecured Debt Ratio,
expressed as a percentage, shall not exceed 55%;
79
(ii) As of the last day of each calendar quarter thereafter, for the
period beginning with the fifth (5/th/) full calendar quarter from the Closing
Date and ending on the last day of the last calendar quarter in 1999, the
Unsecured Debt Ratio expressed as a percentage shall not exceed 50%; and
(iii) Thereafter, as of the last day of each calendar quarter, the
Unsecured Debt Ratio expressed as a percentage shall not exceed 45%.
(f) Limitation on Secured Debt. Secured Debt of the Borrower and its
--------------------------
Consolidated Subsidiaries shall at no time exceed twenty-five percent (25%) of
Tangible FMV.
(g) Dividends. The Borrower will not, as determined on an aggregate
---------
basis for each fiscal year, make any distributions in excess of 90% of its
consolidated FFO for such year, except to the extent required so that the
Guarantor shall have sufficient cash so as to permit it to pay such dividends as
shall be required to maintain its status as a real estate investment trust. Upon
the occurrence and during the continuance of an Event of Default, the Borrower
will not make any distributions except as shall be required to maintain its
status as a real estate investment trust.
(h) Minimum Consolidated Tangible Net Worth. The Consolidated
---------------------------------------
Tangible Net Worth will at no time be less than the sum of (i) ($110,000,000)
plus (ii) 90% of all Net Offering Proceeds.
(i) Limitation on Recourse Debt. Neither the Borrower, the Guarantor
---------------------------
nor any Subsidiary of either shall, at any time, create, incur, assume,
guaranty, suffer to exist or otherwise become or remain directly or indirectly
liable with respect to any Recourse Debt (other than the Obligations) exclusive
of (A) Interest Rate ▇▇▇▇▇▇ with respect to floating rate Debt (as set forth in
clause (A) of the definition thereof) of the Borrower, (B) intercompany Debt
between Guarantor or the Borrower and their Consolidated Subsidiaries, (C)
secured Recourse Debt existing with respect to any Real Property Assets at the
time of acquisition by any Subsidiary of Borrower provided that such Recourse
Debt shall be
80
nonrecourse with respect to the Borrower and the Guarantor and not incurred in
contemplation of any such acquisition, (D) Recourse Debt incurred in connection
with equipment leasing provided that the annual aggregate rent payments
thereunder shall not exceed $500,000, (E) Debt outstanding under the Existing
Credit Agreements, and (F) Contingent Obligations as set forth on Schedule 5.8
------------
hereof.
Section 10.9. Restriction on Fundamental Changes; Operation and
-------------------------------------------------
Control. Guarantor shall carry on its business operations through Borrower and
-------
its Subsidiaries. Neither the Guarantor, the Borrower nor any Subsidiary of
either holding Unencumbered Asset Pool Properties shall enter into any merger or
consolidation, unless the Guarantor or the Borrower or another Subsidiary of
either Borrower or Guarantor which holds Unencumbered Asset Pool Properties, as
the case may be, is the surviving entity, or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution), discontinue its business or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its business or property, whether
now or hereafter acquired, hold an interest in any subsidiary which is not
controlled by Borrower or Guarantor, without the prior written consent of the
Required Banks, except for joint ventures in which Borrower's aggregate
ownership interest shall be less than 15% of the fair market value of the Real
Property Assets owned by Borrower as of the date hereof. For purposes hereof,
"fair market value" shall mean the quotient of (x) Net Operating Cash Flow with
respect to the Real Property Assets as of the date hereof (on an annualized
basis in the case of Real Property Assets that have been owned by Borrower or
Guarantor or their Consolidated Subsidiaries for a period of less than four (4)
fiscal quarters) less an amount equal to the product of the G&A Percentage and
such Net Operating Income, and (y) the FMV Cap Rate.
(b) The Borrower shall not amend its articles of limited partnership
in any material respect, without the consent of the Required Banks, which shall
not be unreasonably withheld or delayed; provided, however, that the Borrower
may amend its agreement of limited partnership in connection with the admission
of
81
additional limited partners in connection with the acquisition of additional
Real Property Assets without the prior consent of the Required Banks. The
failure of any Bank to respond to any request for consent as set forth above
within ten (10) Domestic Business Days after receipt of the request for such
consent, shall be deemed to be an approval by such Bank of such amendment to the
Borrower's articles of limited partnership.
Section 10.10. Fiscal Year; Fiscal Quarter. The Borrower shall not,
---------------------------
nor shall it permit any Subsidiary to, change its fiscal year or any of its
fiscal quarters without the consent of the Required Banks, which shall not be
unreasonably withheld or delayed.
Section 10.11. Margin Stock. None of the proceeds of the Loan will be
------------
used, directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any Margin Stock.
Section 10.12. Development Activities. The Borrower shall not, nor
----------------------
shall it permit any Subsidiary to, engage in any development activities except
for development in connection with the expansion and/or repositioning or
restoration following a casualty or condemnation of existing improvements on
Real Property Assets. Notwithstanding the foregoing, the Borrower may, and may
allow its Subsidiaries to, engage in all other development activities where
there is construction completion risk provided that in no event shall the value
at completion (determined in accordance with the book value thereof, in
accordance with GAAP) of the Real Property Assets under such other type of
development exceed ten percent (10%) of the Tangible FMV.
Section 10.13. Interest Rate Protection. The Borrower shall maintain
------------------------
Interest Rate ▇▇▇▇▇▇ on a notional amount of the Debt referred to in clause
(A)(i) and (ii) of the definition of "Debt", of the Borrower and its
Subsidiaries which, when added to the aggregate principal amount of the Debt of
the Borrower and its Subsidiaries which bears interest at a fixed rate, equals
or exceeds 75% of the aggregate principal amount of all Debt referred to in
clause (A)(i) of the definition of
82
such term, of the Borrower and its Subsidiaries. "Interest Rate ▇▇▇▇▇▇" shall
--------------------
mean interest rate exchange, collar, cap, swap, adjustable strike cap,
adjustable strike corridor or similar agreements having terms, conditions and
tenors reasonably acceptable to the Documentation Agent entered into by the
Borrower and/or its Subsidiaries in order to provide protection to, or minimize
the impact upon, the Borrower and/or its Subsidiaries of increasing floating
rates of interest applicable to Debt.
Section 10.14. Investments in Non-Healthcare Related Assets. The
--------------------------------------------
aggregate amount of the investments of the Borrower and its Consolidated
Subsidiaries in any non-healthcare related assets will at no time exceed five
percent (5%) of the Tangible FMV.
Section 10.15. Investments in Minority Holdings. The quotient of the
--------------------------------
Net Operating Cash Flow attributable to the Borrower's interest in all Minority
Holdings, and the FMV Cap Rate, will at no time exceed $25,000,000.
Section 10.16. Use of Proceeds. (a) The Borrower shall use the
---------------
proceeds of the Loans for the purposes of financing acquisitions of additional
Real Property Assets or equity interests in entities owning Real Property
Assets, refinancing outstanding Debt in connection with such other acquisitions
and/or refinancing Debt incurred for any of the foregoing purposes and for other
general corporate purposes of the Borrower and its Subsidiaries (including
acquiring mortgages on Real Property Assets which are healthcare facilities),
and for their working capital requirements (including payment of distributions),
provided, however, that the aggregate amount of the Loans that may be used for
working capital purposes shall not exceed $50,000,000 in the aggregate.
(b) Provided that the Borrower shall have given the Administrative
Agent notice at the time of a Tranche B Loan prepayment pursuant to Section
2.11(a) hereof, that the Borrower intends to reborrow all or a portion of the
amount so prepaid by the end of the quarter during which such prepayment was
made in order to make distributions to its partners, the Borrower shall be
83
permitted to reborrow such amounts prior to the end of the next succeeding
quarter for the purpose of making distributions relating to such quarter without
the same being deemed to be an advance for working capital purposes. If the
Borrower fails to reborrow such amounts prior to the end of the quarter
following which the Borrower made such prepayments, the Borrower shall not have
the right to reborrow such funds for the purpose of making distributions without
it being deemed for working capital purposes.
(c) Until such time as all Unencumbered Asset Pool Properties set
forth on Exhibit B hereto are owned in fee (or leasehold in the case of the
---------
Unencumbered Asset Pool Properties described as such in Exhibit B) by the
---------
Borrower, the Borrower may loan or distribute proceeds of the Loans to Guarantor
or any Vencor Subsidiary for use by such entities as set forth in subsection (a)
above.
Section 10.17. Sale of Unencumbered Asset Pool Properties. Prior to
------------------------------------------
the sale or transfer of any Unencumbered Asset Pool Property, the Borrower shall
(i) deliver prior written notice to the Administrative Agent and the Banks, (ii)
deliver to the Administrative Agent and the Banks a certificate from a Senior
Officer certifying that at the time of such sale or other disposal (based on
pro-forma calculations for the previous period assuming that such Unencumbered
Asset Pool Property was not an Unencumbered Asset Pool Property for the relevant
period) all of the covenants contained in Sections 5.8 through 5.14 and 5.16
through 5.21 are and after giving effect to the transaction shall continue to be
true and accurate in all respects, and (iii) pay to the Administrative Agent an
amount equal to that required pursuant to Section 2.10(a).
Section 10.18. Limitations On Subsidiary Debt. Any Subsidiary which
------------------------------
owns any of the Real Property Assets in the Unencumbered Asset Pool shall not at
any time incur any Debt, and except as contemplated hereby, the Borrower shall
not pledge its interest in such Subsidiary nor shall the Borrower or such
Subsidiary enter into any negative pledge with respect thereto. Notwithstanding
the foregoing, any such Subsidiary may (i) incur Debt from either the Borrower
or Guarantor, provided that such
84
intercompany Debt is, by its terms, subordinate in right of payment to repayment
of the Obligations, and (ii) incur Debt and enter into negative pledges in
connection with equipment leasing to the extent otherwise permitted hereunder
provided that the annual aggregate rent payments thereunder shall not exceed
$500,000 and the negative pledge applies only to the equipment leased.
Section 10.19. Restrictions on Pledge. The Borrower will not, nor
----------------------
will it permit any of its Subsidiaries or the Guarantor to, enter into any
agreement (other than this Agreement and the other Loan Documents) prohibiting
the creation or assumption of any Lien upon their properties or interests under
the Master Leases (other than with respect to any mortgage on a particular
property), revenues or assets, whether now owned or hereafter acquired, or
restricting the ability of the Borrower to amend or modify this Agreement or any
other Loan Document. In addition, the Borrower will not, nor will it permit any
of its Subsidiaries or the Guarantor to (other than this Agreement and the other
Loan Documents) enter into any agreement prohibiting an agreement prohibiting
the creation or assumption of any Lien upon their properties (other than with
respect to any mortgage on a particular property), revenues or assets, whether
now owned or hereafter acquired, or restricting the ability of the Borrower to
amend or modify this Agreement or any other Loan Document. The restrictions of
this Section 5.19 shall not apply to a pledge by the Borrower, Guarantor or any
Subsidiary of either thereof entered into in connection with the issuance of
commercial mortgage backed securities as contemplated and more particularly
described in the Proxy Statement or in connection with the secured purchase
money financing of personal property.
Section 10.20. Release of Properties. Borrower or Guarantor or their
---------------------
Consolidated Subsidiaries may obtain a release of any Unencumbered Asset Pool
Property from the terms of this Agreement provided that prior to or
simultaneously with such release (i) the Borrower shall deliver to the
Administrative Agent and the Banks a certificate from a Senior Officer
certifying that at the time of such release (based on pro-forma calculations for
the previous period assuming that such Unencumbered Asset Pool Property was not
an Unencumbered
85
Asset Pool Property for the relevant period) all of the covenants contained in
Sections 5.8 through 5.14 and 5.16 through 5.21 are and after giving effect to
the release shall continue to be true and accurate in all respects, (ii) the
Borrower or Guarantor or their Consolidated Subsidiaries shall pay to the
Administrative Agent any amounts due pursuant to Section 2.10, and (iii) no
Default or Event of Default has occurred and is then continuing or will occur as
a result thereof.
Section 10.21. REIT Status. (i) The Guarantor shall elect status as a
-----------
self-directed and self-administered real estate investment trust under the
Internal Revenue Code as of January 1, 1999, and (ii) at all times thereafter,
Guarantor shall (x) maintain its status as a self-directed and self-administered
real estate investment trust under the Internal Revenue Code, and (y) remain a
publicly traded company listed on the New York Stock Exchange.
Section 10.22. Affiliate Transactions. The Borrower will not, nor
----------------------
will it permit any Subsidiary to, enter into any transaction with or make any
payment to any Affiliates. Notwithstanding the foregoing, the Borrower or any
Subsidiary may enter into transactions with Affiliates (other than purchases or
sales of real property, or loan transactions) which involve (i) underwriting or
placement agent agreements as to which no amounts are payable by the Borrower
other than expenses payable to third parties or indemnity obligations, in each
case not less favorable to the Borrower or any Subsidiary than those which are
generally available in the market, (ii) collective insurance agreements, (iii)
investments in Minority Holdings (subject to Section 5.15 hereof), (iv)
customary employment and compensation agreements, (v) the Existing Affiliate
Agreements, and (vi) any other contract which contains terms that are not less
favorable to the Borrower or Guarantor or any of their Subsidiaries than those
which are generally available in the market.
Section 10.23. Leases. (a) Except for the Master Leases and Qualified
------
Development Property Leases, the Borrower shall not, nor shall the Borrower
permit any Subsidiary to, enter into any lease, management agreement, or
guaranty of either thereof, or option or
86
participation agreements relating to any Unencumbered Asset Pool Property which
does not provide for (i) a minimum term of at least twelve (12) years, (ii) a
market rate rent, (iii) "triple net" terms with respect to all property related
expenses, and (iv) liquidated damages equal to the net present value (discounted
at a factor no greater than the Prime Rate) of the remaining rent thereunder
through the stated maturity date (without any stated obligation on the part of
the landlord to mitigate damages) in the event of a termination of the lease,
without the prior consent of the Administrative Agent and Documentation Agent,
which consent shall be given in such Agents' sole discretion.
(b) Except as permitted in subsection (c) below, the Borrower shall
not, nor shall the Borrower permit any Subsidiary to, amend, modify or
supplement any lease of any Unencumbered Asset Pool Properties, including,
without limitation, the four (4) leases existing as of the date hereof (each, a
"Master Lease") and the Qualified Development Property Leases, management
------------
agreement, or guaranty relating to either thereof, where such amendment,
modification or supplement (i) substitutes or deletes the description of Real
Property Asset(s) subject to such lease or management agreement (other than to
add a parcel thereto) which are Unencumbered Asset Pool Properties (provided
that Borrower or Guarantor may, and may permit their Subsidiaries to, without
the requirement for consent under this Section 5.23(b), exchange, replace or
substitute Real Property Assets subject to any lease or management agreement
which are Unencumbered Asset Pool Properties, provided, however, that (A) in the
-------- -------
case of adding Unencumbered Asset Pool Properties to a lease, such Unencumbered
Asset Pool Properties are being transferred from any Vencor Subsidiaries to
Borrower and are set forth on Exhibit B hereto, and (B) in all cases other than
---------
as set forth in the preceding clause (A), Borrower or such Subsidiary complies
with the provisions of Section 3.3 hereof), or (ii) materially adversely affects
the provisions for rent or other fees or charges payable thereunder, timing
provisions, the term, assignment and subletting provisions, triple net
provisions, personal property buy-back provisions, and license transfer
provisions, without the prior consent of the Administrative Agent and the
Documentation Agent;
87
provided, however that where any of the foregoing restrictions contained in
-------- -------
clause (i) above relate to a Master Lease or Qualified Development Property
Lease, the prior consent required hereunder shall be that of 100% of the Banks,
not to be unreasonably withheld, and provided, further, that where any of the
-------- -------
foregoing restrictions contained in clause (ii) above relate to a Master Lease
or Qualified Development Property Lease, the prior consent required hereunder
shall be that of the Super-Majority Banks, not to be unreasonably withheld. The
Borrower shall not, nor permit any party thereto, to terminate any Master Lease
covering any Unencumbered Asset Pool Property (including in the case of a
default thereunder) without the prior consent of 100% of the Banks. Any
deviation from the provisions of this Section 5.23 shall require the consent of
the Super-Majority Banks except where such deviation concerns a matter hereunder
requiring the consent of 100% of the Banks in which event such deviation shall
require the consent of 100% of the Banks.
(c) Prior to the date of the issuance of commercial mortgage backed
securities as contemplated by and more particularly described in the Proxy
Statement, Unencumbered Asset Pool Properties with an aggregate value of at
least Forty Million Dollars ($40,000,000), as determined by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
pursuant to the valuations thereof, dated March 13, 1998, shall be (or shall
have been) released from the Master Lease with the underlying Real Property
Assets that are subject to the mortgage loans that are so securitized, and the
other three Master Leases shall be amended to demise such Real Property Assets,
provided, that (i) at least Twenty Million Dollars ($20,000,000) in value, as
--------
calculated above, of such Real Property Assets shall consist of nursing home
properties, (ii) such Real Property Assets shall be approved by the
Administrative Agent and the Documentation Agent, and (iii) the determination of
which of such Real Property Assets shall be demised under which of the three (3)
Master Leases shall be approved by the Administrative Agent and the
Documentation Agent.
(d) The Borrower shall only enter into a transaction involving the
issuance of commercial mortgage backed securities with respect to those Real
Property Assets demised under that certain Master Lease identified
88
on Schedule 5.23 hereof and no other Master Lease without the prior consent of
-------------
100% of the Banks.
(e) If the consent of the Borrower, Guarantor or any Vencor
Subsidiary is required under either Section 25.1 or Section 22.6 of any Master
Lease with respect to any assignment (whether in connection with a foreclosure
of a leasehold mortgage, assignment or transfer in lieu thereof, or an
assignment by the tenant thereunder, including as a result of a change of
control) of such Master Lease or subletting of any portion of the premises
demised under such Master Lease, the Borrower shall not consent thereto without
the prior consent of 100% of the Banks hereunder, which consent shall not be
unreasonably withheld provided that the proposed assignee or sublessee, as
applicable, meets the criteria set forth in Section 22.6(b) or Section 25.1.2 of
the Master Lease, as applicable.
Section 10.24. New Subsidiaries. Borrower covenants and agrees that
----------------
upon the formation of any corporation, partnership or other entity that is a
Subsidiary of the Borrower, or upon the acquisition of any stock, partnership or
other equity interests in any corporation, partnership or other entity, as
applicable, which would render such entity a Subsidiary of the Borrower, which
in either case owns or leases Unencumbered Asset Pool Properties or upon the
acquisition, or upon the acquisition or leasing by any existing Subsidiary of
any Unencumbered Asset Pool Properties (in each case, a "New Subsidiary"), then
--------------
Borrower shall promptly deliver to the Documentation Agent (i) a duly executed
pledge of Borrower's interest in such New Subsidiary in form substantially
similar to the Pledge, but providing for the release of such New Subsidiary from
the terms of such pledge in the event such New Subsidiary no longer owns or
leases any Unencumbered Asset Pool Properties, (ii) a duly executed guaranty by
such Subsidiary in form substantially similar to the Guaranty, (iii) if such New
Subsidiary is a corporation, the original stock certificates accompanied by
stock powers duly executed in blank, and (iv) an opinion of counsel of the
Borrower with respect to the due authorization and execution of the guaranty and
the pledge agreement and the creation of a valid, perfected
89
security interest in the Borrower's interest in such New Subsidiary.
Section 10.25. Borrower's Restructuring. The Borrower and the
------------------------
Guarantor will exercise all reasonable efforts to cause the Vencor Subsidiaries
to obtain all necessary governmental and other consents and to be merged or
consolidated in accordance with applicable statutory provisions therefor into or
with Guarantor and immediately thereafter to transfer all Real Property Assets
owned by such entities to the Borrower (or, in the case of leased Real Property
Assets, the leases therefor to be assigned to the Borrower) by July 1, 1998,
except to the extent that failures to obtain such consents and approvals could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
ARTICLE XII
DEFAULTS
Section 12.1. Events of Default. Each of the following shall
-----------------
constitute an event of default under this Agreement (an "Event of Default"):
----------------
(a) the Borrower shall fail to pay when due any principal of any
Loan, or shall fail to reimburse the Fronting Bank for a drawing under a Letter
of Credit for which Borrower has, pursuant to Section 2.16(c) hereof, notified
the Administrative Agent and the Fronting Bank that it intends to reimburse the
Fronting Bank, or the Borrower shall fail to pay within three (3) Domestic
Business Days after the same is due any interest on any Loan or any fees or
other amounts payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.8 to 5.23, inclusive, subject to any applicable grace
periods set forth therein;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b)
90
above) for 30 days after written notice thereof has been given to the Borrower
by the Administrative Agent;
(d) any representation, warranty, certification or statement made by
the Borrower or the Guarantor in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement, or by the
Guarantor in the Guaranty, shall prove to have been incorrect in any material
respect when made (or deemed made);
(e) the Borrower, the Guarantor or any Subsidiary of either owning
Unencumbered Asset Pool Properties shall default in the payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) of any amount owing in respect of any Debt or Debt guaranteed by the
Borrower, the Guarantor, or any Subsidiary owning Unencumbered Asset Pool
Properties (other than the Obligations) individually or in aggregate in an
outstanding principal amount in excess of $10,000,000, or with respect to any
Secured Debt of any Subsidiary other than one owning Unencumbered Asset Pool
Properties in excess of $25,000,000, and such default shall continue beyond the
giving of any required notice and the expiration of any applicable grace period
(as the same may be extended by the applicable lender) and such default shall
not be waived by the applicable lender (which waiver shall serve to reinstate
the applicable loan), or the Borrower or Guarantor shall default in the
performance or observance of any obligation or condition with respect to any
such Debt or any other event shall occur or condition exist beyond the giving of
any required notice and the expiration of any applicable grace period (as the
same may be extended by the applicable lender), if in any such case as a result
of such default, event or condition, the lender thereof shall accelerate the
maturity of any such Debt or shall permit (without any further requirement of
notice or lapse of time) the holder or holders thereof, or any trustee or agent
for such holders, to accelerate the maturity of any such Debt and such default
shall not be waived by the applicable lender (which waiver shall serve to
reinstate the applicable loan), or any such Debt shall become or be declared to
be due and payable prior to its stated maturity other than as a result of a
regularly scheduled payment;
91
(f) the Borrower, the Guarantor or any Subsidiary of either that owns
any Unencumbered Asset Pool Properties shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Borrower, the Guarantor or any Subsidiary of either that owns any
Unencumbered Asset Pool Properties, seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower, the Guarantor or any Subsidiary of
either that owns any Unencumbered Asset Pool Properties, under the federal
bankruptcy laws as now or hereafter in effect;
(h) the Borrower shall default in its obligations under any Loan
Document other than this Agreement beyond any applicable notice and grace
periods;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $1,000,000 which it shall have become
liable to pay under Title IV of ERISA, or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing, or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for
92
premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan, or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated, or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause one or
more members of the ERISA Group to incur a current payment obligation in excess
of $1,000,000;
(j) one or more final nonappealable judgments or decrees in an
aggregate amount exceeding Five Million Dollars ($5,000,000) shall be entered by
a court or courts of competent jurisdiction against the Borrower or the
Guarantor (other than any judgment as to which, and only to the extent, a
reputable insurance company has acknowledged coverage of such claim in writing
or related to those obligations identified on Schedule 5.8 hereof as to which
Vencor, Inc. has assumed liability as primary obligor and as to which it has
indemnified the Borrower) and (i) any such judgments or decrees shall not be
stayed, discharged, paid, bonded or vacated within thirty (30) days (or bonded,
vacated or satisfied within thirty (30) after any stay is lifted) or (ii)
enforcement proceedings shall be commenced by any creditor on any such judgments
or decrees;
(k) (i) any Environmental Claim shall have been asserted against the
Borrower or any Environmental Affiliate and the same shall have been found to be
accurate, if such Environmental Claim is contested by Borrower or any
Environmental Affiliate, (ii) any release, emission, discharge or disposal of
any Material of Environmental Concern shall have occurred, and such event is
reasonably likely to form the basis of an Environmental Claim against the
Borrower or any Environmental Affiliate, or (iii) the Borrower or the
Environmental Affiliates shall have failed to obtain any Environmental Approval
necessary for the ownership, or operation of its business, property or assets or
any such Environmental Approval shall be revoked, terminated, or otherwise cease
to be in full force and effect, in the case of clauses (i), (ii) or (iii) above,
if the
93
existence of such condition has had or is reasonably likely to have a Material
Adverse Effect;
(l) a Person or an Affiliated group of Persons shall acquire fifteen
percent (15%) or more of any class of the voting stock of the Guarantor and the
Borrower shall not have repaid the Loans in full, returned any outstanding
Letters of Credit and terminated this Agreement within forty-five (45) days
after such Person or group of Persons shall have acquired such percentage of
such stock;
(m) the Guarantor shall cease to be the sole general partner of the
Borrower or shall cease to own 90% or more of the equity interests in the
Borrower;
(n) an "Event of Default" (as defined in the Pledge) shall occur
under the Pledge;
(o) any representation, warranty, certification or statement made by
the Guarantor or any party identified as a guarantor under the Guaranty shall
prove to have been incorrect in any material respect when made (or deemed made);
and
(p) at any time, for any reason the Borrower, the Guarantor or any
Subsidiary seeks to repudiate its obligations under any Loan Document.
Section 12.2. Rights and Remedies. Upon the occurrence of any Event
-------------------
of Default described in Sections 6.1(f) or (g), the unpaid principal amount of,
and any and all accrued interest on, the Loans and any and all accrued fees and
other Obligations hereunder shall automatically become immediately due and
payable, with all additional interest from time to time accrued thereon and
without presentation, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower and
Guarantor; and upon the occurrence and during the continuance of any other Event
of Default, the Documentation Agent may (and, upon the instructions of the
Required Banks, shall) exercise any of its rights and remedies hereunder and by
written notice to the
94
Borrower, terminate the Tranche B Commitments, declare the unpaid principal
amount of and any and all accrued and unpaid interest on the Loans and any and
all accrued fees and other Obligations hereunder to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentation, demand, or protest or other
requirements of any kind other than as provided in the Loan Documents
(including, without limitation, valuation and appraisement, diligence,
presentment, and notice of intent to demand or accelerate), all of which are
hereby expressly waived by the Borrower.
Section 12.3. Notice of Default. Upon the occurrence of a Default or
-----------------
an Event of Default, the Documentation Agent shall promptly give notice thereof
to the Banks and the Swing Lender. If the Documentation Agent shall not already
have given any notice to the Borrower under Section 6.1, the Documentation Agent
shall give notice to the Borrower under Section 6.1 promptly upon being
requested to do so by the Required Banks and shall thereupon notify all the
Banks thereof.
Section 12.4. Actions in Respect of Letters of Credit. If, at any
---------------------------------------
time and from time to time, any Letter of Credit shall have been issued
hereunder and an Event of Default shall have occurred and be continuing, then,
upon the occurrence and during the continuation thereof, the Documentation Agent
may, whether in addition to the taking by the Documentation Agent of any of the
actions described in this Article or otherwise, make a demand upon the Borrower
to, and forthwith upon such demand (but in any event within ten (10) days after
such demand) the Borrower shall, pay to the Documentation Agent, on behalf of
the Banks, in same day funds at the Documentation Agent's office designated in
such demand, for deposit in a special cash collateral account (the "Letter of
---------
Credit Collateral Account") to be maintained in the name of the Documentation
-------------------------
Agent (on behalf of the Banks) and under its sole dominion and control at such
place as shall be designated by the Documentation Agent, an amount equal to the
amount of the Letter of Credit Usage under the Letters of Credit. Interest
shall accrue on the Letter of Credit Collateral Account at a rate equal to the
rate on overnight funds.
95
(b) The Borrower hereby pledges, assigns and grants to the
Documentation Agent, as agent for its benefit and the ratable benefit of the
Banks a lien on and a security interest in, the following collateral (the
"Letter of Credit Collateral"):
---------------------------
(i) the Letter of Credit Collateral Account, all cash deposited
therein and all certificates and instruments, if any, from time to time
representing or evidencing the Letter of Credit Collateral Account;
(ii) all notes, certificates of deposit and other instruments
from time to time hereafter delivered to or otherwise possessed by the
Administrative Agent or the Documentation Agent for or on behalf of the
Borrower in substitution for or in respect of any or all of the then
existing Letter of Credit Collateral;
(iii) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Letter of
Credit Collateral; and
(iv) to the extent not covered by the above clauses, all
proceeds of any or all of the foregoing Letter of Credit Collateral.
The lien and security interest granted hereby secures the payment of all
obligations of the Borrower now or hereafter existing hereunder and under any
other Loan Document.
(c) The Borrower hereby authorizes the Documentation Agent for the
ratable benefit of the Banks to apply, from time to time after funds are
deposited in the Letter of Credit Collateral Account, funds then held in the
Letter of Credit Collateral Account to the payment of any amounts, in such order
as the Documentation Agent may elect, as shall have become due and payable by
the Borrower to the Banks in respect of the Letters of Credit.
96
(d) Neither the Borrower nor any Person claiming or acting on behalf
of or through the Borrower shall have any right to withdraw any of the funds
held in the Letter of Credit Collateral Account, except as provided in Section
6.4(h) hereof.
(e) The Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the Letter of Credit Collateral or (ii) create or
permit to exist any lien, security interest or other charge or encumbrance upon
or with respect to any of the Letter of Credit Collateral, except for the
security interest created by this Section 6.4.
(f) If any Event of Default shall have occurred and be continuing:
(i) The Documentation Agent may, in its sole discretion, without
notice to the Borrower except as required by law and at any time from time
to time, charge, set off or otherwise apply all or any part of first, (x)
-----
amounts previously drawn on any Letter of Credit that have not been
reimbursed by the Borrower and (y) any Letter of Credit Usage described in
clause (ii) of the definition thereof that are then due and payable and
second, any other unpaid Obligations then due and payable against the
------
Letter of Credit Collateral Account or any part thereof, in such order as
the Documentation Agent shall elect. The rights of the Documentation Agent
under this Section 6.4 are in addition to any rights and remedies which any
Bank may have.
(ii) The Documentation Agent may also exercise, in its sole
discretion, in respect of the Letter of Credit Collateral Account, in
addition to the other rights and remedies provided herein or otherwise
available to it, all the rights and remedies of a secured party upon
default under the Uniform Commercial Code in effect in the State of New
York at that time.
(g) The Documentation Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Letter of Credit
Collateral if the Letter of Credit Collateral is accorded treatment
97
substantially equal to that which the Documentation Agent accords its own
property, it being understood that, assuming such treatment, the Documentation
Agent shall not have any responsibility or liability with respect thereto.
(h) At such time as all Events of Default have been cured or waived
in writing, all amounts remaining in the Letter of Credit Collateral Account
shall be promptly returned to the Borrower. Absent such cure or written waiver,
any surplus of the funds held in the Letter of Credit Collateral Account and
remaining after payment in full of all of the Obligations of the Borrower
hereunder and under any other Loan Document after the Maturity Date shall be
paid to the Borrower or to whomsoever may be lawfully entitled to receive such
surplus.
ARTICLE XIV
THE AGENTS
Section 14.1. Appointment and Authorization. (a) Each Bank
-----------------------------
irrevocably appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
hereof or thereof, together with all such powers as are reasonably incidental
thereto.
(b) Each Bank irrevocably appoints and authorizes the Documentation
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the
Documentation Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
Section 14.2. Agent and Affiliates. NationsBank and ▇▇▇▇▇▇ shall have
--------------------
the same rights and powers under this Agreement as any other Bank and may
exercise or refrain from exercising the same as though it were not the
Administrative Agent or Documentation Agent, respectively, and NationsBank and
▇▇▇▇▇▇ and their affiliates may accept deposits from, lend money to, and
98
generally engage in any kind of business with the Borrower or any subsidiary or
affiliate of the Borrower as if it were not the Administrative Agent or
Documentation Agent, respectively, hereunder, and the term "Bank" and "Banks"
shall include each of NationsBank and ▇▇▇▇▇▇ in their individual capacity.
Section 14.3 Action by Agents. The obligations of the Agents
----------------
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agents shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
Section 14.4. Consultation with Experts. The Agents may consult with
-------------------------
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
Section 14.5. Liability of Agents. Neither the Agents nor any of
-------------------
their affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or, where
required by the terms of this Agreement, all of the Banks, or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agents
nor any of their directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the covenants
or agreements of the Borrower; (iii) the satisfaction of any condition specified
in Article III, except receipt of items required to be delivered to the Agents;
or (iv) the validity, effectiveness or genuineness of this Agreement, the other
Loan Documents or any other instrument or writing furnished in connection
herewith. The Agents shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement, or other writing (which may be a
bank wire, telex or similar
99
writing) believed by it in good faith to be genuine or to be signed by the
proper party or parties.
Section 14.6. Indemnification. Each Bank shall, ratably in accordance
---------------
with its Commitment (or, if the Commitments have expired, in accordance with
such Bank's outstanding Loans), indemnify each Agent, its affiliates and its
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from such
indemnitee's gross negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with this Agreement, the other Loan Documents or
any action taken or omitted by such indemnitees hereunder.
Section 14.7. Credit Decision. Each Bank acknowledges that it has,
---------------
independently and without reliance upon the Agents or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agents or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
Section 14.8. Successor Agents. The Agents may resign at any time
----------------
upon thirty (30) days prior written notice by giving notice thereof to the Banks
and the Borrower. Upon any such resignation, the Required Banks shall have the
right to appoint successor Agents with the consent of the Borrower provided that
no Event of Default shall have occurred and be continuing. If no successor Agent
shall have been so appointed by the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $50,000,000. Upon the acceptance of its
appointment as an Agent hereunder by a successor Agent, such successor
100
Agent shall thereupon succeed to and become vested with all the rights and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder first accruing or arising after the
effective date of such retirement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was the Agent.
ARTICLE XVI
CHANGE IN CIRCUMSTANCES
Section 16.1. Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If on or prior to the first day of any Interest Period for any Euro-
------
Dollar Borrowing:
(a) the Administrative Agent is advised by the Reference Bank that
deposits in dollars (in the applicable amounts) are not being offered to the
Reference Bank in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the affected
Loans advise the Administrative Agent that the London Interbank Offered Rate as
determined by the Administrative Agent will not adequately and fairly reflect
the cost to such Banks of funding their Euro-Dollar Loans for such Interest
Period, the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligations of the Banks to make Euro-Dollar Loans, or to continue or
convert outstanding Loans as or into Euro-Dollar Loans, as the case may be,
shall be suspended, and each outstanding Euro-Dollar Loan shall be converted
into a Base Rate Loan on the last day of the then current Interest Period
applicable thereto. Unless the Borrower notifies the Administrative Agent at
least two (2) Domestic Business Days before the date of any Euro-Dollar
Borrowing for which a Notice of Borrowing has previously been given that it
elects not to borrow on
101
such date, such Borrowing shall instead be made as a Base Rate Borrowing.
Section 16.2 Illegality. If, after the date of this Agreement, the
----------
adoption of any applicable law, rule or regulation, or any change in any
existing applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund its Euro-Dollar Loans or to participate in any Letter of Credit issued
by the Fronting Bank, or, with respect to the Fronting Bank, to issue any Letter
of Credit, and such Bank shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make or convert Euro-Dollar Loans
or to participate in any Letter of Credit issued by the Fronting Bank or, with
respect to the Fronting Bank, to issue any Letter of Credit, shall be suspended.
Before giving any notice to the Administrative Agent pursuant to this Section,
such Bank shall designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such
Bank shall determine that it may not lawfully continue to maintain and fund any
of its outstanding Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower
shall borrow a Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate
Loan.
102
Section 16.3 Increased Cost and Reduced Return.
---------------------------------
(a) If, after the date hereof, in the case of any Loan or any
obligation to make Loans the adoption of any applicable law, rule or regulation,
or any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System (but excluding
with respect to any Euro-Dollar Loan any such requirement reflected in an
applicable Euro-Dollar Reserve Percent age)), special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Applicable Lending Office)
or shall impose on any Bank (or its Applicable Lending Office) or on the London
interbank market any other condition affecting its Euro-Dollar Loans, its Note,
or its obligation to make Euro-Dollar Loans, and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Administrative Agent), which demand shall be
accompanied by a certificate showing, in reasonable detail, the calculation of
such amount or amounts, the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by
103
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Administrative Agent), which
demand shall be accompanied by a certificate show ing, in reasonable detail, the
calculation of such amount or amounts, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its Parent) for
such reduction; provided that Borrower shall not be liable to any Bank in
respect of any such increased cost or reduction with respect to any period of
time more than three (3) months before Borrower receives the notice required by
the first sentence of Section 8.3(c) or more than six months before Borrower
receives the relevant certificate referred to in the second sentence of Section
8.3(c).
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section and setting forth the addi
tional amount or amounts to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
104
Section 16.4 Taxes.
-----
(a) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each Bank
---------
and the Administrative Agent, taxes imposed on its net income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such Bank or
the Administra tive Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise or similar taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof (and, if
different from the jurisdiction of such Bank's Applicable Lending Office, the
jurisdiction of the domicile of its Loans either established by the Bank
pursuant to Section 9.12 or determined by the applicable taxing authorities)(all
such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
-----
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note or Letter of Credit or participation
therein to any Bank or the Administrative Agent, (i) the sum payable shall be
increased as neces sary so that after making all required deductions (in
cluding deductions applicable to additional sums payable under this Section 8.4)
such Bank, the Fronting Bank or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Administrative Agent, at its address referred to in Section 9.1,
the original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar
105
levies which arise from any payment made hereunder or under any Note or
Letter of Credit or participation therein or from the execution or delivery of,
or otherwise with respect to, this Agreement or any Note or Letter of Credit
or participation therein (hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower agrees to indemnify each Bank, the Fronting Bank and
the Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 8.4) paid by such Bank, the
Fronting Bank or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Any payment required under this indemnification shall be made within
15 days from the date such Bank, the Fronting Bank or the Administrative Agent
(as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with (i) Internal Revenue Service form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service, certifying that
such Bank is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest under the Loan Documents or certifying that the income receivable
pursuant to the Loan Documents is effectively connected with the conduct of a
trade or business in the United States or (ii) if such Bank is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code,
Internal Revenue Service form W-8 or any successor form presecribed by the
Interal Revenue Service claiming complete exemption from, or a reduced rate of,
withholding tax on payments of interest under the Loan Documents. If the form
provided by a Bank at the time
106
such Bank first became a party to this Agreement or at any time thereafter
(other than solely by reason of a change in United States law or a change in the
terms of any treaty to which the United States is a party after the date hereof)
indicates a United States interest withholding tax rate in excess of zero (or
would have indicated such a withholding tax rate if such form had been submitted
and completed accurately and completely and either was not submitted or was not
completed accurately and completely), or if a Bank otherwise is subject to
United States interest withholding tax at a rate in excess of zero at any time
for any reason (other than solely by reason of a change in United States law or
regulation or a change in any treaty to which the United States is a party after
the date hereof), withholding tax at such rate shall be considered excluded from
"Taxes" as defined in Section 8.4(a). In addition, any amount that otherwise
would be considered "Taxes" or "Other Taxes" for purposes of this Section 8.4
shall be excluded therefrom if the Bank either has transferred the domicile of
its Loans pursuant to Section 9.12 or changed the Applicable Lending Office with
respect to such Loans and such amount would not have been incurred had such
transfer or change not been made.
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.4(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be provided), such Bank
shall not be entitled to indemnification under Section 8.4(a) with respect to
Taxes imposed by the United States; provided, however, that should a Bank, which
-------- -------
is otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank shall reasonably request to
assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.4, then such Bank will change
the jurisdiction of its Applicable Lending Office so as to eliminate or reduce
any such additional payment which
107
may thereafter accrue if such change, in the judgment of such Bank, is not
otherwise disadvantageous to such Bank.
(g) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
Section 8.04 shall survive the payment in full of the principal of and interest
on the Loans.
Section 16.5 Base Rate Loans Substituted for Affected Euro-Dollar
----------------------------------------------------
Loans. (a) If (i) the obligation of any Bank to make, or convert outstanding
-----
Loans to, Euro-Dollar Loans has been suspended pursuant to Sections 8.1 or 8.2
or (ii) any Bank has demanded compensation under Section 8.3 or 8.4 with respect
to its Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Administrative Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist, all Loans
which would otherwise be made by such Bank as Euro-Dollar Loans shall be made
instead as Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
after each of its Euro-Dollar Loans has been repaid, all pay ments of principal
which would otherwise be applied to repay such Euro-Dollar Loans shall be
applied to repay its Base Rate Loans instead.
(b) If any Bank notifies Borrower that the circumstances giving rise
to the notice referred to in paragraph (a) above no longer apply, the principal
amount of each such Base Rate Loan shall be converted into a Euro-Dollar Loan on
the first day of the next succeed ing Interest Period applicable to the related
Euro-Dollar Loans of the other Banks.
Section 16.6 Substitution of Banks. (a) If any Bank (a "Selling
---------------------
Bank") gives notice pursuant to Section 8.2 that it is unlawful or impossible
for such Bank to make, maintain or fund its Euro-Dollar Loans or demands
compensation under Section 8.3 or 8.4, Borrower shall have the right, with the
assistance of the Documentation Agent and the Administrative Agent, to seek
108
one or more banks or other institutions (collectively, the "Purchasing Banks")
willing to purchase the outstanding Loans of the Selling Bank and its
participation in any outstanding Letters of Credit and to assume the Selling
Bank's Commitment and its participation in any outstanding Letters of Credit
on the terms specified in this Section 8.6; provided that any such purchase and
--------
assumption by a Purchasing Bank that is not already a Bank shall be subject to
the consent of the Administrative Agent and each Fronting Bank (which consents
shall not be unreasonably withheld). The Selling Bank shall be obligated to
sell its outstanding Loans and its participation in any outstanding Letters of
Credit to such Purchasing Bank or Banks (which may include one or more of the
Banks) within fifteen (15) days after receiving notice from Borrower requiring
it to do so, at an aggregate price equal to the outstanding principal amount
thereof plus unpaid interest accrued thereon up to but excluding the date of
sale.
(b) In connection with any such sale, and as a condition thereof,
Borrower shall pay to the Selling Bank all facility fees and letter of credit
fees accrued for its account hereunder to but excluding the date of such sale,
plus, if demanded by the Selling Bank at least two (2) Domestic Business Days
prior to such sale, (i) the amount of any compensation which would be due to the
Selling Bank under Section 2.13 if Borrower had prepaid the outstanding Euro-
Dollar Loans of the Selling Bank on the date of such sale and (ii) any
additional compensation accrued for its account under Section 2.13 to but
excluding said date.
(c) Upon any such sale, the Purchasing Bank or Banks shall assume the
Selling Bank's Commitment and its participation in any outstanding Letters of
Credit, and the Selling Bank shall be released from its obligations hereunder to
a corresponding extent. The Selling Bank, as assignor, such Purchasing Bank, as
assignee, the Administrative Agent and each Fronting Bank shall enter into an
appropriate assignment and assumption agreement, whereupon (x) if such
Purchasing Bank is already one of the Banks, its Commitment shall be increased
by an amount equal to its ratable share of the Selling Bank's Commitment and
its participations in the outstanding Letters of Credit shall be increased by
its ratable share
109
of the Selling Bank's participations therein or (y) if such Purchasing Bank is
not already one of the Banks, it shall become a Bank party to this Agreement,
shall be deemed to be an Assignee hereunder and shall have all the rights and
obligations of a Bank with a Commitment equal to its ratable share of the
Selling Bank's Commitment and with a participation in the outstanding Letters of
Credit equal to its ratable share of the Selling Bank's participation in such
Letters of Credit.
(d) Upon the consummation of any sale pursuant to this Section 8.6,
the Selling Bank, the Administrative Agent and Borrower shall make appropriate
arrangements so that, if required, each Purchasing Bank receives new Notes
complying with the provisions of Section 2.5 hereof.
ARTICLE XVIII
MISCELLANEOUS
Section 18.1 Notices. All notices, requests and other communications
-------
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such party:
(x) in the case of the Borrower or the Administrative Agent, at its address or
telecopy number set forth on the signature pages hereof, together with copies
thereof, in the case of the Borrower, to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.; Telephone: (212) 558-
3548, Telecopy: (212) 58-3588, and in the case of the Administrative Agent, to
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq., Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇, (y) in the case of any Bank, at its address or telecopy number
set forth on the signature pages hereof or in its Administrative Questionnaire
or (z) in the case of any party, such other address or telecopy number as such
party may hereafter specify for the purpose by notice to the Administrative
Agent, the Banks and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section, (ii) if
110
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when delivered at the address specified in this Section; provided
--------
that notices to the Administrative Agent under Article II or Article VIII shall
not be effective until received.
Section 18.2 No Waivers. No failure or delay by the Administrative
----------
Agent, Documentation Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
Section 18.3 Expenses; Indemnification.
-------------------------
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses
of the Administrative Agent and the Documentation Agent (including, without
limitation, reasonable fees and disbursements of special counsel Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP), in connection with the preparation and
administration of this Agreement, the Loan Documents and the documents and
instruments referred to therein, the syndication of the Loans, any waiver or
consent hereunder or any amendment or modification hereof or any Default or
alleged Default hereunder and (ii) if an Event of Default occurs, all out-of-
pocket expenses incurred by the Administrative Agent, the Documentation Agent
and each Bank, including, without limitation, reasonable fees and disbursements
of counsel (including, without limitation, the allocated costs and expenses of
internal counsel) for the Administrative Agent and the Documentation Agent, in
connection with the enforcement (including any "workout") of the Loan Documents
and the instruments referred to therein and such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent, the
Documentation Agent and each
111
Bank, their respective affiliates and the respective directors, officers, agents
and employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
----------
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel and settlements and settlement costs, which may be
incurred by such Indemnitee in connection with any investigative, administrative
or judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) that may at any time (including, without limitation, at any time
following the payment of the Obligations) be imposed on, asserted against or
incurred by any Indemnitee as a result of, or arising out of, or in any way
related to or by reason of, (i) any of the transactions contemplated by the Loan
Documents or the execution, delivery or performance of any Loan Document
(including, without limitation, the Borrower's actual or proposed use of
proceeds of the Loans, whether or not in compliance with the provisions hereof),
(ii) any violation by the Borrower or the Environmental Affiliates of any
applicable Environmental Law, (iii) any Environmental Claim arising out of the
management, use, control, ownership or operation of property or assets by the
Borrower or any of the Environmental Affiliates, including, without limitation,
all on-site and off-site activities involving Material of Environmental Concern,
(iv) the breach of any environmental representation or warranty set forth
herein, (v) the grant to the Administrative Agent, the Documentation Agent and
the Banks of any Lien in any property or assets of the Borrower or any stock or
other equity interest in the Borrower, and (vi) the exercise by the
Administrative Agent, the Documentation Agent and the Banks of their rights and
remedies (including, without limitation, foreclosure) under any agreements
creating any such Lien (but excluding, as to any Indemnitee, any such losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements incurred solely by reason of (i) the
gross negligence or willful misconduct of such Indemnitee as finally determined
by a court of competent jurisdiction or (ii) any investigative, administrative
or judicial proceeding imposed or asserted against any Indemnitee by any bank
regulatory agency or by any equity holder of such Indemnitee). The Borrower's
obligations
112
under this Section shall survive the termination of this Agreement and the
payment of the Obligations.
(c) The Borrower shall pay, and hold the Administrative Agent, the
Documentation Agent and each of the Banks harmless from and against, any and all
present and future U.S. stamp, recording, transfer and other similar foreclosure
related taxes with respect to the foregoing matters and hold the Administrative
Agent, the Documentation Agent and each Bank harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes.
Section 18.4 Sharing of Set-Offs. In addition to any rights now or
-------------------
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), other than deposits held for the
benefit of third parties, and any other indebtedness at any time held or owing
by such Bank (including, without limitation, by branches and agencies of such
Bank wherever located) to or for the credit or the account of the Borrower
against and on account of the Obligations of the Borrower then due and payable
to such Bank under this Agreement or under any of the other Loan Documents,
including, without limitation, all interests in Obligations purchased by such
Bank. Each Bank agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Note held by it or
Letter of Credit participated in by it, or, in the case of the Fronting Bank,
Letter of Credit issued by it, which is greater than the proportion received by
any other Bank or Letter of Credit issued or participated in by such other Bank,
in respect of the aggregate amount of principal and interest due with respect to
any Note held by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such
113
participations in the Notes held by the other Banks or Letter of Credit issued
or participated in by such other Bank, and such other adjustments shall be
made, as may be required so that all such payments of principal and interest
with respect to the Notes held by the Banks or Letter of Credit issued or
participate din by such other Banks shall be shared by the Banks pro rata;
provided that nothing in this Section shall impair the right of any Bank to
--------
exercise any right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebt edness of the Borrower
other than its indebtedness under the Notes or the Letters of Credit. The
Borrower agrees, to the fullest extent that it may effectively do so under
applicable law, that any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counter claim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
Section 18.5 Amendments and Waivers. Any provision of this Agreement
----------------------
(including any of the financial covenants given by the Borrower pursuant to
Section 5.8), the Notes, the Letters of Credit or other Loan Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Borrower and the Required Banks (and, if the rights or duties of
the Administrative Agent are affected thereby, by the Administrative Agent);
provided that if such amendment or waiver affects only the Banks of any single
--------
tranche, then only the Required Banks within that tranche shall be required to
sign such amendment or waiver; provided, further that no such amendment or
-----------------
waiver shall (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, without the prior written consent of each Bank affected
thereby, (ii) reduce the principal of or rate of interest on any Loan or any
fees specified herein without the prior written consent of each Bank affected
thereby, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for any reduction or termination
of any Commitment, without the prior written consent of each
114
Bank affected thereby, (iv) increase any of the Tranche A Loan Amount, the
Tranche B Loan Amount, the Tranche C Loan Amount or the Tranche D Loan Amount
unless signed by all the Banks in the affected tranche, (v) release the
Guarantor or any Subsidiary a party to the Guaranty from its obligations under
the Guaranty or otherwise release any other collateral unless signed by all the
Banks, (vi) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks which shall be required
for the Banks or any of them to take any action under this Section or any other
provisions of this Agreement, (vii) amend or modify the provisions of Section
5.23 hereof or this Section 9.5, or (viii) amend the definition of "Required
Banks" or "Super-Majority Banks", unless signed by all the Banks. In addition,
no such amendment or waiver shall, unless signed by the Swing Lender and each
other Bank affected thereby, increase the Swing Loan Commitment, postpone the
date fixed for the termination of the Swing Loan Commit ment or otherwise affect
any of its rights or obligations hereunder relating to the Swing Loan Commitment
or the Swing Loans.
Section 18.6 Successors and Assigns.
----------------------
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement or the other Loan Documents without the prior
written consent of all Banks. Any purported or attempted assignment or transfer
in contravention of the preceding sentence shall be null and void.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
-----------
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this
115
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
--------
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii), (iii) or
(iv) of Section 9.5 without the consent of the Participant. The Borrower agrees
that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Article VIII with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all (in the
--------
case of each Assignee, equivalent to an initial Commitment of not less than Five
Million Dollars ($5,000,000) or such lesser amount as shall equal any Bank's
entire Commitment), of its rights and obligations under this Agreement as they
relate to any one or more tranches, the Notes and the other Loan Documents, and
such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit D
---------
attached hereto executed by such Assignee and such transferor Bank, with (and
subject to) the subscribed consent of the Documentation Agent and the
Administrative Agent, which consent shall not be unreasonably withheld, and,
provided no Event of Default shall have occurred and be continuing, the
Borrower, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, however, no consent shall be required in
connection with any assignment of rights and obligations hereunder as they
relate to any one or more tranches to a Person that is already a Bank hereunder,
to an affiliate of the assignor. Upon execution, delivery and recordation in
the Register of such instrument and pay ment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
116
transferor Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment relating to the tranche under which Assignee's Commitment was
assigned as set forth in such instrument of assumption, and the transferor Bank
shall be released from its obligations hereunder as they relate to the
assigned tranche to a corresponding extent, and no further consent or action by
any party shall be required. Upon the consum mation of any assignment pursuant
to this subsection (c), the transferor Bank, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note or
Notes are issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Administrative Agent an administrative fee
for processing such assignment in the amount of $2,500. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Administrative Agent certification as
to exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.4.
(d) The Administrative Agent (acting, for this purpose only, as agent
for the Borrower) shall maintain at its address at which notices are to be given
to it pursuant to the terms of Section 9.1 hereof a copy of each instrument of
assignment delivered to it pursuant to subsection (c) of this Section and a
register for the recordation of the names and addresses of the Banks, their
respective Commitments and principal amounts of their respective Loans
outstanding from time to time (the "Register"). The entries in the Register
--------
shall be conclusive, in the absence of manifest error, and the Borrower, the
Guarantor, the Agents and the Banks may treat each person whose name is recorded
in the Register as a Bank for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Bank at any reasonable
time and from time to time upon reasonable prior notice.
(e) Any Bank may at any time assign all or any portion of its Loans or
its Note as security to a Federal Reserve Bank. Any Tranche C Bank or Tranche D
Bank may pledge any of its Tranche C Loans or Tranche D Loans, as
117
applicable, or its Note to any trustee with respect to a pool of collateralized
loan obligations which includes such Tranche C Loans or Tranche D Loans;
provided that any foreclosure or similar action by such trustee shall be subject
--------
to the provisions of this Section concerning assignments and shall be void
unless it complies with such provisions. No such assignment or pledge shall
release the transferor Bank from its obligations hereunder.
(f) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note and the Letter(s) of Credit participated in by
such Bank or, in the case of the Fronting Bank, issued by it, to a Federal
Reserve Bank. No such assignment shall release the transferor Bank from its
obligations hereunder.
(g) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.3 or 8.4 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
Section 18.7 Governing Law; Submission to Jurisdiction.
-----------------------------------------
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
(b) Any legal action or proceeding with respect to this Agreement or
any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
118
and in respect of its property, generally and unconditionally, the non-
exclusive jurisdiction of the aforesaid courts and appellate courts from any
thereof. The Borrower irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the hand
delivery, or mailing of copies thereof by registered or certified mail, postage
prepaid, to the Borrower at its address set forth below. The Borrower hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Agreement or any other Loan Document brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of the Administrative Agent, any Bank or any holder of a Note
to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower in any other jurisdiction.
Section 18.8 Marshaling; Recapture. Neither the Administrative Agent
---------------------
nor any Bank shall be under any obligation to marshal any assets in favor of the
Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent any Bank receives any payment by or on behalf of the
Borrower, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
the Borrower or its estate, trustee, re ceiver, custodian or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the Obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of the Borrower to such Bank as of the date such initial payment, reduction or
satisfaction occurred.
Section 18.9 Counterparts; Integration; Effectiveness. This Agreement
----------------------------------------
may be signed in any number of counterparts, each of which shall be an origi
nal, with the same effect as if the signatures
119
thereto and hereto were upon the same instrument. This Agreement constitutes the
entire agreement and understanding among the parties hereto and supersedes any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof. This Agreement shall become effective upon receipt by the
Documentation Agent of counterparts hereof signed by each of the parties hereto
(or, in the case of any party as to which an executed counterpart shall not have
been received, re ceipt by the Documentation Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such party of execution of
a counterpart hereof by such party).
Section 18.10 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
--------------------
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 18.11 Survival. All indemnities set forth herein shall
--------
survive the execution and delivery of this Agreement and the other Loan
Documents and the making and repayment of the Loans hereunder.
Section 18.12 Domicile of Loans. Subject to the provisions of Article
-----------------
VIII, each Bank may transfer and carry its Loans at, to or for the account of
any domestic or foreign branch office, subsidiary or affiliate of such Bank.
Section 18.13 Limitation of Liability. No claim may be made by the
-----------------------
Borrower or any other Person against the Administrative Agent, the Documentation
Agent or any Bank or the affiliates, directors, officers, employees, attorneys
or agent of any of them for any consequential or punitive damages in respect of
any claim for breach of contract or any other theory of liability arising out of
or related to the transactions contem plated by this Agreement or by the other
Loan Documents, or any act, omission or event occurring in connection therewith;
and the Borrower hereby waives, releases and agrees not to ▇▇▇ upon any claim
for any such damages, whether or not accrued and whether or not known or sus
pected to exist in its favor.
120
Section 18.14 Confidentiality. Each Bank agrees to keep the
---------------
information contained herein and any other non-public information delivered or
made available by Borrower to it confidential and to use such informa tion only
for the purpose of evaluating, approving, structuring and administering the
Loans and Letters of Credit; provided that nothing herein shall prevent any Bank
from disclosing such information (i) to persons employed or retained by such
Bank who are engaged or expected to be engaged in evaluating, approving, struc
turing or administering the Loans and Letters of Credit, (ii) to any other
person if reasonably incidental to the administration of the Loans or Letters of
Credit, (iii) to any other Bank, (iv) pursuant to any subpoena or express
direction of any court or other authorized government agency or as otherwise
required by law, (v) upon the request or demand of any bank regulatory agency,
bank examiner or comparable authority, (vi) which has theretofore been
publicly disclosed or is otherwise available to such Bank on a non-confidential
basis from a source that is not, to its knowledge, subject to a confidentiality
agreement with Borrower, (vii) in connection with any litigation to which any
Bank or its subsidiaries or Parent may be a party, (viii) to the extent
necessary in connection with the exercise of any remedy hereunder, (ix) to such
Bank's affiliates, legal counsel and independent auditors and (x) to any
actual or proposed Participant or Assignee that has signed a written agreement
containing provisions substantially similar to this Section 9.14. Any Bank that
discloses confidential information to other Persons as contemplated by clause
(i), (ii) or (ix) of the foregoing proviso shall inform such other Persons of
the confidential nature of such information and shall instruct them to keep such
informa tion confidential (except for disclosures permitted by the foregoing
proviso). Before any Bank discloses confidential information pursuant to
clause (iv) or (vii) of the foregoing proviso, such Bank shall use its best
efforts, to the extent permitted by law, to advise Borrower of such proposed
disclosure so that Borrower may, in its discretion, and at its sole expense,
seek an appropriate protective order.
121
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
VENTAS REALTY, LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: Ventas, Inc., a Delaware
corporation, its general
partner
By:
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
Commitments
$[specify Tranches] ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as a Bank and as
Documentation Agent
By:
--------------------------
Name:
Title:
Tranche A: $30,000,000 NATIONSBANK, N.A., as a Bank,
Tranche B: $18,750,000 Administrative Agent, and as
Tranche C: $15,000,000 Swing Lender
Tranche D: $258,125,000.00
By:
--------------------------
Name:
Title:
Domestic and Euro-Currency Lending Office:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A-1
-----------
TRANCHE ___ NOTE
$ New York, New York
---------------------
_________, 19__
For value received, VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware
limited partnership (the "Borrower") promises to pay to the order of
--------
_______________ (the "Bank"), for the account of its Applicable Lending Office,
----
the unpaid principal amount of each Loan made by the Bank to the Borrower
pursuant to the Credit Agreement referred to below on the Maturity Date. The
Borrower promises to pay interest on the unpaid principal amount of each such
Loan on the dates and at the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be made in lawful money of
the United States in Federal or other immediately available funds at the office
of Administrative Agent under the Credit Agreement (as defined below).
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
--------
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
dated as of April __, 1998, among the Borrower, the Banks party thereto, ▇▇▇▇▇▇
Guaranty Trust Company of New York, as Documentation Agent, NationsBank, N.A.,
as Administrative Agent, the Senior Managing Agents identified therein, the
Managing Agents identified therein, and the Co-Agents identified therein (as the
same may be amended from time to time, the "Credit Agreement"). Terms
----------------
125
defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
VENTAS REALTY, LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Ventas, Inc., its general
partner
By:
------------------------------
Name:
Title:
126
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
-------------------------------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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-------------------------------------------------------------------------------
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127
EXHIBIT A-1
-----------
SWING NOTE
$ New York, New York
---------------------
_________, 19__
For value received, VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware
limited partnership (the "Borrower") promises to pay to the order of
--------
NATIONSBANK, N.A. (the "Bank"), for the account of its Applicable Lending
----
Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the Maturity
Date. The Borrower promises to pay interest on the unpaid principal amount of
each such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of Administrative Agent under the Credit Agreement (as
defined below).
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such recordation
--------
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
dated as of April __, 1998, among the Borrower, the Banks party thereto, ▇▇▇▇▇▇
Guaranty Trust Company of New York, as Documentation Agent, NationsBank, N.A.,
as Administrative Agent, the Senior Managing Agents identified therein, the
Managing Agents identified therein, and the Co-Agents identified therein (as
the same may be amended from time to time, the "Credit Agreement"). Terms
----------------
128
defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
VENTAS REALTY, LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Ventas, Inc., its general
partner
By:
------------------------------
Name:
Title:
129
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
-------------------------------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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130
EXHIBIT B
---------
UNENCUMBERED ASSET POOL PROPERTIES
131
EXHIBIT C
---------
PREAPPROVED DEVELOPMENT PROPERTIES
C-1
EXHIBIT D
---------
FORM OF ASSIGNMENT AND ASSUMPTION
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
AGREEMENT dated as of __________, 199_ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), VENTAS REALTY, LIMITED PARTNERSHIP
(the "Borrower") and NATIONSBANK, N.A., as Administrative Agent (the "Agent").
W I T N E S S E T H
-------------------
WHEREAS, this Assignment and Assumption Agreement (the "Assignment")
relates to the Credit Agreement dated as of ________ __, 199_ (the "Loan
Agreement") among the Borrower, Ventas, Inc., the Assignor and the other Banks
party thereto, as Banks, and the Agent;
WHEREAS, as provided under the Loan Agreement, the Assignor has a
Commitment to make [Tranche A Loans/Tranche B Loans/Tranche C Loans/Tranche D
Loans] to the Borrower in an aggregate principal amount at any time outstanding
not to exceed $__________;
WHEREAS, [Tranche A Loans/Tranche B Loans/Tranche C Loans/Tranche D
Loans] made to the Borrower by the Assignor under the Loan Agreement in the
aggregate principal amount of $___________ are outstanding at the date hereof;
and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Loan Agreement in respect of a portion of its
[Tranche A/Tranche B/Tranche C/Tranche D] Commitment thereunder in an amount
equal to $__________ (the "Assigned Amount"), together with a corresponding
portion of its outstanding [Tranche A Loans/Tranche B Loans/Tranche C
Loans/Tranche D Loans], and the Assignee proposes to accept assignment of such
rights and assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
-----------
herein shall have the respective meanings set forth in the Loan Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
----------
Assignee all of the rights of the Assignor under the Loan Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Loan Agreement to the extent of the Assigned Amount, including the purchase from
the Assignor of the corresponding portion of the principal amount of the Loans
made by the Assignor or Letters of Credit participated in by Assignor
outstanding at the date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee, the Borrower and the Agent and the payment of the
amounts specified in Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights and be obligated to
perform the obligations of a Bank under the Loan Agreement with a [Tranche
A/Tranche B/Tranche C/Tranche D] Commitment in an amount equal to the Assigned
Amount, and (ii) the [Tranche A/Tranche B/Tranche C/Tranche D] Commitment of the
Assignor shall, as of the date hereof, be reduced by a like amount and the
Assignor released from its obligations under the Loan Agreement to the extent
such obliga tions have been assumed by the Assignee. The assignment provided
for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
--------
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them./1/ It
is understood that Commitment Fees accrued to the date hereof are for the
account of the Assignor and such fees accruing from and including the date
hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Loan Agreement
which is for the
_______________________
/1/ The amount should combine principal together with accrued interest
and breakage compensation, if any, to be paid by the Assignee, net
of any portion of any upfront fee to be paid by the Assignor to the
Assignee. It may be preferable in an appropriate case to specify
these amounts generically or by formula rather than as a fixed sum.
D-2
account of the other party hereto, it shall receive the same for the account of
such other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
SECTION 4. Consent of the Borrower and the Agent. This Agreement is
-------------------------------------
conditioned upon the written consent of the Borrower and the consent of the
Agent pursuant to section 9.6(c) of the Loan Agreement. The execution of this
Agreement by the Borrower and the Agent is evidence of the required consents.
Pursuant to Section 9.6(c) the Borrower agrees to execute and deliver a Note
payable to the order of the Assignee to evidence the assignment and assumption
provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
------------------------
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Loan Agreement or any Note. The Assignee acknowledges that it
has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the external laws of the State of New York
SECTION 7. Counterparts. This Agreement may be signed in any number
------------
of counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
D-3
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By:
------------------------------
Name:
Title:
[ASSIGNEE]
By:
------------------------------
Name:
Title:
CONSENTED TO:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Documentation Agent
By:
------------------------------
Name:
Title:
NATIONSBANK, N.A., as Administrative Agent
By:
------------------------------
Name:
Title:
VENTAS REALTY, LIMITED PARTNERSHIP
By: Ventas, Inc., its general partner
By:
------------------------------
Name:
Title:
D-4
SCHEDULE 3.1
------------
EXCEPTIONS TO SECTION 3.1
1. Hillhaven 10 1/8% Senior Subordinated Notes due 2001.
SCHEDULE 4.3
------------
EXCEPTIONS TO SECTION 4.3
1. Hillhaven 10 1/8% Senior Subordinated Notes due 2001.
SCHEDULE 4.5
------------
LITIGATION
SCHEDULE 4.19
-------------
LABOR MATTERS
1. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. Health Care Employees
Union
2. ▇▇▇▇▇▇ ▇▇▇▇▇ Healthcare/District 1199, N.E. Health Care Employees Union
3. Windsor Rehab & Healthcare Center/District 1199, N.E. Healthcare Employees
Union
4. Country Manor Rehabilitation and Nursing Center/SEIU, Local 285
5. East Bridgewater/SEIU, Local 285
6. Woodridge House Nursing and Rehab Center/SEIU
7. ▇▇▇▇▇▇▇ ▇▇▇▇▇/International Association of Machinists, District Lodge 99
8. Vencor Hospital Detroit/SEIU, Local 79
9. Master Agreement/Hospital and Institutional Workers' Union Local 22,
Health Care Worker's Union, Local 250, and SEIU, Local 399 (7 Facilities)
10. Mountain Valley Care & Rehab Center/United Steelworkers of America, Local
9052
11. Las Vegas Healthcare and Rehab Center/Textile Processors Local 311
12. THC-Seattle/Washington State Nurses Association
13. Pasatiempo/Health Care Workers' Union, Local 250, SEIU (2 Facilities)
14. Hacienda/Health Care Workers' Union, Local 250, SEIU (1 Facility)
15. Santa ▇▇▇▇/Health Care Workers' Union, Local 250, SEIU
16. California Multiple/Health Care Workers' Union, Local 250, SEIU (1 Facility)
17. San Leandro Hospital/International Union of Operating Engineers, Local 39
18. San Leandro Hospital/Local 250, SEIU
19. Talbot Healthcare Center/SEIU, Local 6
20. Omro Care Center/SEIU, Local 150
21. Eastview Medical and Rehab Center/SEIU, Local 150
22. Colonial Manor/SEIU, Local 150
23. Colony Oaks Care Center/SEIU, Local 150
24. North Ridge/SEIU, Local 150
25. Family Heritage/SEIU, Local 150
26. Mount Carmel Health and Rehab Center/SEIU, Local 150
27. THC-Chicago/International Union of Operating Engineers of Chicago, Local 399
Totals 4 Hospitals 29 Nursing Centers (plus two Centers where
we have lost elections
and appeals are pending)
SCHEDULE 4.22
-------------
REAL PROPERTY ASSETS
SCHEDULE 5.8
------------
INDEMNIFIED CONTINGENT OBLIGATIONS
Amount
------
($ in
Obligation millions) Indemnity From:
---------- ---------------
-----------------------------------------------------
949 - Ledgewood 1.8 Vencor Operating,
Health Care Inc.
-----------------------------------------------------
983 - ▇▇▇▇▇ House 3.3 Vencor Operating,
Inc.
-----------------------------------------------------
995 - Starr Farm 2.1 Vencor Operating,
Inc.
-----------------------------------------------------
920 - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 0.8
-----------------------------------------------------
227 - leased IRB 0.4 Vencor Operating,
Inc.
-----------------------------------------------------
3440/7188 - New Pond 34 Atria
Village Communities,
Inc.
-----------------------------------------------------
Omega Healthcare 0.3 Vencor Operating,
Inc.
-----------------------------------------------------
▇▇▇▇▇ Guarantee - Vencor Operating,
Reimb. Agmt Inc.
-----------------------------------------------------
390 - Carmel 5.4 Sun Healthcare
Mountain Group, Inc.
-----------------------------------------------------
SCHEDULE 5.22
-------------
EXISTING AFFILIATE AGREEMENTS
1. Amended and Restated Guarantee Reimbursement Agreement dated as of April 29,
1998, among Vencor, Inc., Vencor Healthcare Inc. and ▇▇▇▇▇ Healthcare
Corporation, Inc.
2. Management Agreements dated as of January 31, 1990 between ▇▇▇▇▇ Healthcare
Corporation (formerly named National Medical Enterprises, Inc.) and Vencor
(as successor by merger to The Hillhaven Corporation) relating to the
following facilities:
Fac. No. Facility Name
-------- -------------------------------
-----------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇
-----------------------------------------
98 Northshore Living Center,
Slidell, Louisiana
-----------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
----------------------------------------
990 Jo ▇▇▇▇▇ ▇▇▇▇▇, New Orleans,
Louisiana
-----------------------------------------
3. Tax Sharing Agreement dated as of January 31, 1990 between ▇▇▇▇▇ Healthcare
Corporation (formerly named National Medical Enterprises, Inc.) and Vencor
(as successor by merger to The Hillhaven Corporation).
4. Insurance Agreement dated as of January 31, 1990 between ▇▇▇▇▇ Healthcare
Corporation (formerly named National Medical Enterprises, Inc.) and Vencor
(as successor by merger to The Hillhaven Corporation).
5. Agreement dated as of August 22, 1995, among Vencor (as successor by merger
to The Hillhaven Corporation), Vencor and ▇▇▇▇▇ Healthcare Corporation.
